ZE PAK SA Capital Group is a significant electricity producer on the Polish market and an important element of the country's energy system. In terms of installed capacity and electricity production, ZE PAK SA Group is the largest private (uncontrolled by the State Treasury) energy group in Poland, consisting of vertically integrated entities operating in the area of lignite mining, electricity production from conventional and renewable sources, and energy trading.
The Group's activity is focused on generating electricity based on its own lignite resources. The Group has two own lignite mines that supply lignite to the Group's power plants, which makes the Group independent of external supplies of this raw material and significantly reduces exposure to fluctuations in energy commodity prices. Biomas is also used as a raw material for energy production. Biomass is burned in a unit dedicated to this purpose located in the Konin Power Plant. In addition to electricity, heat is generated at the Group's power plants. Heat is sold to local customers. Additionally, within the Group, there are companies dealing, among others, in the execution of construction and assembly works, maintenance works, service, production and trade activities aimed at satisfying the needs and comprehensive service of the industry.
The Group's generation assets include three lignite-fired power plants located in central Poland, in Wielkopolskie Voivodeship. These are: Pątnów II, which is equipped with a unit for supercritical parameters, Pątnów I, and Konin, equipped with, among others a unit dedicated for biomass combustion. The total achievable gross electrical capacity of the Group's generation assets is 1695 MW.
Although ZE PAK's activity is mainly focused on the conventional electricity generation segment in the lignite combustion process, the Company is aware of the challenges that the industry will face in the near future. Changing legal and environmental conditions, rising prices of CO2 emission allowances, stricter standards regarding the emission of other substances. The company already significantly reduces its carbon footprint. In recent years, a significant decrease in CO2 can be seen compared to previous years.
Also in absolute terms, i.e. calculated per unit of electricity production, the Group's emissivity has decreased over recent years.
A typical example of energy transformation in the Group is Konin Power Plant, in which a 50 MW biomass unit is currently operated, and that it will soon be expanded by another biomass unit of similar capacity. The equipment used to burn coal will be partially adapted for biomass burning. Thus, the power plant in Konin will become the first coal-fired power plant converted into biomass in the country. In Konin power plant the electrolyser is also planned to be installed to produce hydrogen. Hydrogen will be produced in the process of water electrolysis using renewable energy sources. The basic energy source for this installation will be a biomass block, which will allow the production of so-called "Green hydrogen".
ZE PAK SA also works on a 70MWp solar farm project that is to be located in areas previously used in mining operations.
A number of other ideas were also developed in the field of energy production from renewable sources or energy storage. Some of these projects have already been submitted to a special program under the support of EU funds of regions heavily dependent on coal mining (the so-called "Coal Platform"). The company also joined the "Agreement for a just energy transformation of Eastern WIelkopolska", whose signatories, i.e. representatives of local authorities, non-governmental organizations and entrepreneurs, expressed their willingness to cooperate in order to maximize the use of shared potential in the region's transformation process.
In 2019, the power plants of ZE PAK SA Group generated in total 5.7 TWh of net electricity, which was sold as part of bilateral contracts and framework contracts, as well as on power exchanges and on the balancing market. Together with the energy from resale, the Group's sales in 2019 amounted to 9.4 TWh.
The vast majority of revenues generated by ZE PAK SA Group comes from the sale of electricity (generated by the Group and purchased for the purpose of reselling). Other significant sources of revenue are: revenues from the termination of long-term contracts for the sale of electricity in Pątnów II Power Plant, heat sales, and sale of energy origin rights. The revenue structure is completed by revenues from the activity in the scope of construction and assembly works.
In 2019, sales revenues amounted to PLN 2,878 million and EBITDA was recorded at the level of PLN 393 million. As at December 31, 2019, the book value of ZE PAK SA Group assets amounted totally to PLN 3,118 million.