In response to the recent developments in the electricity market and in order to better utilise strengths of the PGE Group, a new Strategy of the PGE Capital Group for years 2014-2020 was adopted. Adoption of the strategy was preceded by development of a broad range of possible market scenarios. During these works, an investment portfolio had been reviewed in order to yield the most robust returns to the stakeholders.

The strategy has acknowledged significant changes in the PGE Group’s market environment and is based on understanding of key market trends and on key competences and competitive advantages of PGE Group:

PGE is the largest vertically integrated power utility in Poland
with regard to energy production and installed capacity;

PGE is leading in the cost efficient, base-load generation
technologies in Poland and has the youngest generation asset base.

Strategy of the PGE Capital Group

Financial aspirations
Strategic aspirations of PGE Capital Group

Leading electricity producer in Poland

In order to strengthen the leading position in electricity generation in Poland, PGE Group strategy assumes spendings of approx. PLN 34 billion in 2014-2020 for replacement, modernisation and construction of new generation assets. This value includes modernization and replacement expenditures with regard to existing assets in amount of approx. PLN 16.3 billion and capital expenditures for construction of new capacities in amount of approx. PLN 15.2 billion. PGE Group also plans to spend PLN 1.7 billion for construction of new RES capacities and PLN 0.7 billion for preparation of commencement of nuclear program until 2016.

Key actions in this field include:
Key projects in 2014

Construction of new units in Opole power plant
Construction of new unit in Turów power plant
Construction of new unit in Gorzów CHP
Investment in conventional energy sources - executed in 2014

Cogeneration unit producing electricity and heat powered by internal combustion piston engines - Rzeszów CHP Deployment of an extraction-condensing turboset together with a peak-load and reserve boiler
Investments in renewable energy sources - executed in 2014

Wojciechowo wind farm Oława hydro power plant
Investments in renewable energy sources – in progress

Karwice wind farm Gniewino Lotnisko wind farm Resko II wind farm Kisielice II wind farm After completion of the above investments total installed capacity in PGE Group’s wind farms will reach approx. 530 MW.
Modernisation and replacement projects

Comprehensive modernization of units 7-12 - Bełchatów power plant Modernization of desulphurization installations for units 3-12 - Bełchatów power plant Change in technology of furnace waste storage for units 1-12 – Bełchatów power plant Reduction of NOx emission - units 1, 2 and 4 Opole power plant Construction of desulphurization installations for units 4-6 – Turów power plant Construction of overburden line in Bełchatów Lignite Mine (Szczerców Field)
Preferred and reliable energy supplier

PGE Group plans to reorganise the sales process based on effective trading strategy. In every customer segment the PGE Group will focus on understanding the needs of the customers and improvement of customer service quality. In particular it includes: In the distribution segment, assuring reliability of supply through operational and investment efficiency will be the main goal. PGE Group is committed to improve grid reliability - we intend to achieve a goal of 50% SAIDI reduction by 2020 mainly by refocusing the investment outlays on projects to the largest extent limiting the level of undelivered energy and by increasing operational performance. Total capital expenditures in the distribution segment in years 2014-2020 will amount to approx. PLN 12.3 billion.

Key projects in 2014

Trading strategy update

The following will be developed in the course of the project: Implementation work will be carried out in 2015.
Project of network losses reduction
CRM Billing
The most effective energy group in Poland

PGE Group ambition is to be the most efficient power utility in Poland. It includes improvement of operational efficiency, dialogue with the stakeholders concerning the regulatory environment and implementation of best corporate governance practices. Key actions in this field include:
Key projects in 2014

Optimisation of Conventional Generation business line
Carrying out these initiatives will make it possible for Conventional Generation segment to adapt its operational costs to market changes as necessary, all the while maximising its revenue generating potential.
Operational Efficiency Improvement in PGE Dystrybucja S.A.
The first effects of the programme's implementation are expected in 2015.
Tax Capital Group ("PGK")
Operating model
PGE Group Code
Details of the project are presented in p. 7.2 Changes in management procedures of the Company and the Capital Group.
Cash Management
Cash pooling agreements were concluded on December 22,  2014 between 16 companies from the PGE Capital Group and banks: Powszechna Kasa Oszczędności Bank Polski S.A. and Bank Polska Kasa Opieki S.A.
Human Capital Management Strategy („HCM Strategy”)
HCM Strategy document was adopted in the PGE capital Group in 2014.
Creation of Shared Services Center („SSC”)
As of January 1, 2015 PGE Obsługa Księgowo-Kadrowa sp. z o.o. has commenced providing the finance and accounting services to the selected entities of the PGE Capital Group.
Program SAP
Implementation process of modules: Accounting and Logistics, HCM Strategy and Asset Management will be continued in 2015 in the major companies of the PGE Capital Group.
Group actively developing new business areas

PGE will actively identify and develop new products and business areas. Initially identified growth directions are dual fuel offering (purchase of electricity and gas from one supplier), modern electricity infrastructure (e-mobility infrastructure, distributed generation and storage, electrification of home heating).


Apart from initially identified growth directions, PGE Group will continuously analyse market environment, identify and use innovative solutions to achieve its strategic goals. PGE Group aspiration is to spend at least 1.5 % of annual consolidated net profit as of 2015 on R&D activities with maximization of external financing.

Key projects in 2014

Sector Programme
Cooperation with the National Centre for Research and Development (the "NCBiR")
R&D projects portfolio