Growth impulse
We are one of the largest employers in Poland. We provide stable employment to more than 40 ths people across around 200 locations throughout the country. Most of our personnel are residents of towns in the vicinity of our assets. Taxes that we pay to the municipalities in which we do business often account for a significant part of their local budgets.
Many activities for local communities originate at the initiative of PGE Group companies. PGE is a local patron of sports and culture. PGE Group companies engage in educational and charitable activities.
A large part of our subcontractors are local firms that, by working with us, have an opportunity to develop their business. Our investments constitute a very substantial element of economic development and their implementation helps to improve the quality of life and work for local communities.
Our Baltic Sea offshore energy investment that we are currently working on is an opportunity for many Polish businesses to spread their wings; many of them specialise in the manufacture of components for wind farms and devices accompanying such undertakings.
Close to 800 firms, including more than 500 Polish businesses, participated in April 2022 in information workshops for suppliers, subcontractors and other entities interested in cooperation in the implementation of the Baltica Offshore Wind Farm.
In preparatory works for an operation and maintenance base for the PGE Baltica in Ustka, the company engaged Polish enterprises, which clearly demonstrates that domestic companies could be successfully included in development of offshore wind energy in Poland.
Investments and activities stimulating regions
We are one of the largest domestic investors.
Since the foundation of PGE Group 16 years ago, our capital expenditures have approached PLN 90 billion.
These funds were spent on the construction of new generating capacities, eco-friendly modernisations of existing assets and expansion of power and district heating networks. This is a very large amount, which could have financed, for example, more than 2 000 km of highways in Poland.
90
PLN bn
capital expenditures
7.1
PLN bn
capital expenditures in 2022
In 2022, we invested PLN 7.1 billion. Our investments provide an impetus for the Polish economy – these are not just orders that mostly go to Polish businesses but also thousands of jobs at construction sites and subsequently in operating these new units.
Thanks to the electricity that we supply and our investments in distribution grids, companies can develop their business and search for new opportunities.
In places where we operate we are often the largest or one of the largest employers and our investments constitute additional support for the development of local markets.
Our contribution to local budgets and state budget
PGE Group is one of the largest payers of taxes in Poland. At state and local level, our business in 2022 brought in approx. PLN 7.6 billion* in tax (approx. PLN 8.5 billion in 2021)*.
This amount mainly includes: VAT, taxes and contributions on the remuneration of the Group’s employees, real estate tax, corporate income tax, excise tax and other taxes and fees.
Through its activities, the PGE Group not only supports state, local governments and family budgets, but also has a real impact on the development of the Polish economy. In the current particularly difficult situation on energy markets, as a socially responsible company ensuring energy security for millions of Poles, we are also actively involved in the government's activities aimed at reducing energy bills. The PLN 10 billion that PGE will allocate in 2023 for the operation of the Solidarity Shield is a real strengthening of energy security and financial stability of families, enterprises and sensitive institutions.
Tax impact by each level of government* (PLN million)
PGE Group is a stable payer of taxes that support central and local budgets and contribute to the development of the whole country and individual regions.
The total tax transfers to the budgets by the PGE Group have increased over the years along with the development of the company.
In 2022, there was another increase in tax contributions to the budgets of municipalities, voivodeships and poviats, as well as social security contributions, which resulted mainly from an increase in personal income tax and commercial income tax.
In case of taxes contributing to the state budget, there was a significant increase in income tax, but at the same time the value of VAT decreased, which resulted directly from the VAT reduction on electricity introduced under the Anti-Inflation Shield (from 23% to 5%).
| Municipal budgets | 1,487 |
| County budgets | 82 |
| Voivodship budgets | 620 |
| State Treasury | 3,897 |
| Social Security | 1,554 |
| Total | 7,640 |
*Estimates based on the consolidated financial statements, tax returns and records of other levies paid for the benefit of local governments resulting from the laws in force. The estimated breakdown into individual local government levels was made on basis of information concerning the amounts of taxes paid by individual PGE Group companies, employment at individual companies and voivodships, as well as information about division of income from Personal Income Tax and Corporate Income Tax between the local governments and the State Treasury.
Tax impact - local governments in voivodships* (in PLN million)
As a result of our activities, local governments (municipality, county and district budgets) received close to PLN 1.8 billion in 2022. In the municipality of Kleszczów, which is where the largest lignite-fired power plant in Europe and lignite mine are located, approx. 50% of all expenses incurred by the local government are financed with taxes paid by PGE Group.
Over the last three years, there has been a visible increase in taxes paid to local budgets at the level of municipalities and voivodeships, which results mainly from higher payments for CIT and PIT income taxes and real estate taxes. Traditionally, the highest taxes go to regions where lignite mines are located, due to the scale of employment and taxes related to the operation of open-pit mines.
However, in the abovementioned period, the development of the PGE Group is also particularly visible in the Eastern Region of Poland, where the registered office of PGE (Lublin) and two key companies of the Group are located: PGE Dystrybucja (Lublin) and PGE Obrót (Rzeszów) are located. Over the last three years, the amount of taxes supporting local development in this region increased by PLN 150 million and amounted to over PLN 500 million in 2022.
In line with the PGE Group’s strategy, which designates distribution and trading as key areas of activity, the role and importance of the Eastern Region for PGE will continue to increase.
The outbreak of war in Ukraine in 2022 led to price shocks on the energy raw material markets, which translated into drastic, several-fold increases in energy prices for consumers.
Such an increase in energy prices together with high inflation posed a serious threat to the functioning of the economy and the increase in energy poverty. PGE actively supports the Government Solidarity Shield, which protects from 2022, among others: households, small and medium-sized enterprises and public utilities from sharp increases in electricity prices. In 2023, PGE will contribute PLN 10 billion to the operation of the Solidarity Shield.
Costs related to CO2 emissions under EU ETS reached approx. PLN 20.3 billion in 2022.
EU ETS is a key element of the EU policy on combating climate change and a key tool for reducing greenhouse gas emissions. Proceeds from the sale of emission allowances do not solely go to state budgets but also finance climate protection and energy transition.
PGE Group’s energy transition is being carried out in such a way that the changes taking place take into account and respect, in the process, the interests and needs of the local community, territorial administration, investors and business, the needs of the natural environment, as well as taking into account the creation of new jobs for the employees of today’s coal sector.
The transition projects being implemented by PGE Group in the Łódź and Lower Silesia regions are part of the process of changing Poland’s energy mix towards low- and zero-emission energy. PGE Group has developed a transition concept for the power generation complexes in Bełchatów and Turów. This assumes further development of renewable energy sources (mainly in the area of photovoltaics and onshore wind farms), as well as ambitious investment projects aimed at stabilisation of generation capacities and strengthening of social, economic and territorial cohesion. Regardless of the process of separating coal assets – PGE Group will remain active in today’s coal regions, both as an experienced investor in the energy transition process and as an initiator of activities supporting the economic development of these areas.
PGE Group, which includes PGE Górnictwo i Energetyka Konwencjonalna and subsidiaries providing support services to the power plant and mine, is the largest employer in the Bełchatów region. Currently, more than 7,500 people are employed in the Bełchatów power plant and mine as well as in PGE GiEK’s head office.
In order to narrow the employment gap in the region, which will result from the gradual reduction in the operation of mines and power plants, PGE is planning a number of projects over the next several years, including both renewable energy development and land reclamation projects, as well as pro-social projects such as the Competence Development Centre already in operation.
PGE Group has prepared a concept for the transition that comprehensively presents a plan for investment projects along with their justification and time-frames. In the case of the Łódź region, where the Bełchatów Energy Complex operates, it presents specific investment projects for the years 2021 – 2043 carried out both by PGE Group and complementary projects implemented outside PGE Group, which in total may create more than 15,000 new jobs in modern sectors of the economy. Implementing this ambitious plan depends on the involvement of many entities, also at the country-wide level, as it exceeds the capacities of PGE Group alone.
These are projects such as:
- wind farm projects of up to 100 MW,
- PV farms with a capacity of up to 500 MW
- energy storage systems with a capacity of up to 300 MW,
- establishment of a RES technology centre on the basis of today’s conventional energy support companies, which will be re-focused to implementing renewable projects: production, renovation and recycling and recovery of end-of-life raw materials from renewable sources,
- Competence Development Centre – a dedicated program for power plant and mine workers and local residents that creates opportunities for retraining for work in the renewable energy sector,
- „Virtual Power Plant” program – harnessing IT competences.
According to the Regulation of the European Parliament and of the Council (EU) of 24 June 2021, the Just Transition Fund is earmarked for mitigating the negative social and socio-economic effects of climate and energy transition in the so-called coal regions. PGE SA has been making intensive and numerous efforts for more than two years to have the Łódź region (where the Bełchatów Energy Complex operates) and the Zgorzelec sub-region (with the Turów Energy Complex) recognised by the European Commission (EC) as „coal regions” within the meaning of the Just Transition Fund, thus gaining access to support from the EU Just Transition Fund (and the Mechanism more broadly).
On 5 December 2022, the European Commission approved five Just Transition Plans for Poland. PGE’s involvement, as well as the information provided to the local and state administrations and to the European Commission, including data and forecasts related to the Bełchatów Power Plant’s operations – were crucial in the consultation process with the EC and determined the European Commission’s positive decision on the Łódź region.
The Łódź region has been allocated EUR 369.5 million from the Just Transition Fund. The funds are intended to support, among others, workers currently employed at the Bełchatów Power Plant, as well as in the mining and related sectors. The EC stresses that, among other things, the training will provide employees with new skills and prepare them for work in new 'green sectors’.
In the case of the Lower Silesia region, the European Commission has ruled that funds from the current edition of the Just Transition Fund can only go to regions where there will be any shutdowns of basic generating units by 2030. Given the timetable planned so far for the closure of Elektrownia Turów – the Zgorzelec sub-region will be able to apply for Just Transition Fund funds in the next edition of this fund.
PGE Group intends to successfully implement further ambitious investment and system projects in the Łódź and Lower Silesian Voivodeships both with and independently of the Just Transition Fund funding. PGE also allows for the possibility of modifying the projects it has developed as part of the Just Transition Fund, depending, among other things, on the course of the competition process within the framework of applying for funds from the Just Transition Fund, so that the financing of these projects is as effective as possible from the perspective of PGE Group and at the same time so that these activities serve the regions and the local community in the best possible way.