PGE waiting to drop coal assets and considering building a reserve for price freeze

Polska Grupa Energetyczna is still waiting for the separation of coal assets as part of the reform announced by the government and is considering creating a reserve for freezing energy prices in the second half of the year.

“The new energy voucher regulations, which are not yet in force, include a maximum price of PLN 500. We do not expect any positive or negative impact,” said Piotr Sudoł, Managing Finance Director of Polska Grupa Energetyczna during the presentation of results from the first quarter of 2024. He thus referred to the maximum price set for the second half of this year by the new support mechanism introduced by the government.

“The second element, concerning the tariff change, would be in effect for the next 18 months,” the manager assessed, commenting on the announcement of submitting an early application to the Energy Regulatory Office (URE) for a tariff change by energy suppliers to update it, and ultimately to re-evaluate production costs in order to reduce tariffs on bills.

We have seen a decline in fuel prices reflected in energy prices. The prices of the contract with delivery for 2025 for the first quarter fluctuated around the level of PLN 400-500 per MWh. Currently, prices on the futures market are around PLN 475 per MWh – emphasized PGE president Dariusz Marzec during the presentation of the results.

“We are in talks with the Energy Regulatory Office regarding the actual costs. Today, we are not able to determine the impact of the new tariff and whether it will be even more negative than the current tariffs, as we assessed in 2023. If so, we will think about establishing a reserve at the end of 2024,” said Piotr Sudoł.

PGE is also waiting for a reform allowing it to get rid of coal-fired power plants. “Organizationally, our segment is prepared to separate coal assets. Now we need to conduct analyses that will allow this process to be carried out reliably. We want to come to an agreement on the final solutions. As we have declared, we would like this transaction to take place no later than in 2025,” says Dariusz Marzec.

The Ministry of State Assets has appointed a special team to work on this reform. It is supposed to transfer coal-fired power plants, necessary from the point of view of security of supply, but unprofitable, under the guardianship of the state, so that companies that own them now, including PGE, can invest in the energy transition.

Wojciech Jakóbik / Jedrzej Stachura