Business strategy

The PSE strategy is a vision of a modern electricity market. It takes into account 6 major challenges and 17 goals that should be achieved within a 10-year horizon.

Business strategy

Business Strategy 2020-2030

A transformation process has begun in the power industry. Distributed, prosumer generation and storage units geared toward energy self-sufficiency for local communities are being developed.

The European Commission and the Agency for the Cooperation of Energy Regulators are promoting the concept of integrated wholesale electricity markets for the entire Europe. For now, it remains unresolved which electricity market model will dominate the future. Meanwhile, the future built using prosumer energy infrastructure as an alternative way to meet energy needs requires different strategic decisions, including investments, than building a market based on integrating business functions and making own transmission capacity available in the European market.

For PSE as a transmission system operator, the need to ensure day-to-day security of energy supply remains unchanged. We are systematically working on a model of providing services added to the transmission service, which will be a compelling value proposition for customers, and which will raise the standard of security and quality of electricity supply. These services are primarily cybersecurity assurance services for receiving systems, metering information operator - metering data center services, and services to make the power system more resilient to emergencies and failures of various magnitudes. All of the issues listed are fundamental to PSE's strategy and are reflected among our organization's priority initiatives. .

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PSE’s values

PSE's core values are reliability, credibility and accountability.

Reliability

PSE is a reliable partner for energy consumers, generators, distribution system operators, market operators, capacity markets, the regulator and the Polish Government. The Company ensures continuity of electricity supply in the short and long term based on measures to effectively manage threats to the continuity of electricity supply from the transmission grid.

Credibility

By its actions, PSE confirms that it has all the necessary competences to perform the function and mission entrusted to it. The stability of our operations and the sustainability of our relationships with business partners are guaranteed by our organization's strict adherence to corporate governance and internal procedures.

Responsibility

PIn all activities undertaken, PSE cares about future generations, the natural environment, the country's energy security, and the position of the Polish economy in the world.

Defined values of our company give rise to ideas which at the same time are guidelines for conduct for all employees of our organization. These include: modernity, professionalism, partnership, development, openness. Acting in accordance with these ideas allows to work calmly and effectively and to grow professionally and personally in an uninterrupted manner.

Challenges and strategic objectives of PSE

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PSE's New Strategy is a vision of a modern energy market. The Jibility platform was used to design it. In doing so, PSE has stood among the global leaders basing their strategies on an ambitious method of planning according to business capabilities.

PSE's 2020-2030 strategy was prepared using a strategic planning by business capability method called capabilities based planning. This method, developed by the U.S. RAND Institute, involves defining challenges, identifying goals and initiatives, allocating resources to initiatives, and tracking the progress of initiatives and their results.

The PSEs identified 6 major challenges and 17 goals that should be achieved over a 10-year horizon.

For the next ten years, PSE has identified 6 major challenges facing the operator:

Transformation
cost

Climate
neutrality

Import /
Export

Social
acceptance

Excessive
complexity

Generational
change

Transformation cost

The electricity transition in the current model of the European electricity market, where large price zones are treated as a copper plate, where only electricity is traded in the market, and where wind and solar are preferred among non-carbon sources, will put pressure on transmission system operators, including PSE, to bear more risks and costs.

These costs arise from the discrepancy between the market model and its actual implementations, which are significantly affected by physical phenomena. The activity of operators, understood as ensuring the feasibility of electricity flows and securing its supply "of last resort", becomes at the same time the subject of interest from the exchanges, regional coordination centers for safe operation of the system, as well as European regulators: ACER and the European Commission. It is important to note that the cost of not adapting to the coming changes will be primarily a cost to society (households) and the economy (industry). For PSE, the key to proper participation in the electricity transition will be the fair allocation of costs to individual users of the European electricity system. Cost relationships in terms of market infrastructure will also be important, i.e. cost sharing between exchanges, distribution system operators and transmission system operator, and on a pan-European basis between transmission system operators, in terms of a joint effort to keep synchronously interconnected power systems operating by all TSOs.

Increase in the share of non-tariff revenues

PSE is developing new branches of non-tariff services while maintaining the required service quality of the core business.
Integration with RCCs within the SOR based on reservation and verification of RCC functions

PSE's operation is aimed at regionalizing key operator processes and transferring selected ones to regional coordination centers (RCCs).
Improving the accuracy of tariffs

PSE is working on optimizing the process of planning and forecasting volumes necessary to develop the company's tariff for the next period.
Improving the accuracy of budgets

PSE is working to assign budgets to processes (activities and tasks) and projects.
Maintaining the churn rate at a negligible level

PSE seeks to calculate transmission fees for large customers in the transmission grid that reflect the actual costs of providing services to those customers, taking into account the costs of energy transmission and necessary system services.

Climate neutrality

The currently promoted concept of climate neutrality moves away from technology neutrality toward a preference for two types of renewable energy sources: wind farms and photovoltaics, which over time are assumed to be complemented by hydrogen and chemical battery storage. The preferred types of RES will be dispersed and characterized by variability of generation depending on weather conditions, which will result in growing uncertainty as to the level of generation in the transmission grid and distribution networks.

Due to the development of prosumers, the level of demand will also be subject to great uncertainty. Nuclear generation will be an important element in the implementation of climate neutrality, as supporting the operational security of the electricity system due to its ability to operate stably.

Implementation of the Transmission Network Development Plan

The implementation of the baseline scenario for the transmission grid development takes into account the basic requirements and challenges facing the NPS.
Creating balancing mechanisms and system services to support the transition to a low-carbon electric power industry

As conventional sources decline, the system must be much more flexible to accommodate RES generation.

Import/Eksport

The increasing costs of purchasing carbon emission allowances, the increasing share of zero-variable-cost units, and the surplus of renewable electricity generation in neighboring countries have led to a situation where the utilization rate of fossil-fueled generation capacities is declining. For this reason, aging and successively phased out domestic generating units are not fully replaced by new sources that would allow them to meet the power and energy demand of the NPS on their own in the future.

In addition, legal changes at the European level increase the pressure to maximize cross-border exchange opportunities, which may also reduce the use of domestic fossil fuel-fired generation sources in favor of increased imports of cheaper foreign-generated electricity.

The possible division of the market into price zones (as well as the possibility of dividing spheres into smaller spheres) raises legitimate concerns about domestic generating units and their competition within zones for energy market access and interconnection capacities.

It will be a major challenge for PSE to develop its cooperation with neighboring countries in such a way as to ensure the security of system operation in a situation where balancing cannot be achieved with the use of domestic sources alone, and it will not lead to excessive development of the grid and cross-border connections, the role of which may decrease in time.

Ensuring compliance with CEP70

PSE will make inter-area capacity available at the maximum allowable level due to the need to maintain the required reliability and quality parameters of power system operation, while implementing tools to comply with the requirements of Regulation 2019/943.
Ensuring the accuracy of schedules

PSE will implement a methodology for managing the company's human resources and handling a portfolio of investment initiatives to improve their use in the investment process, managing investment risks and their mitigation plans.

Social acceptance

New infrastructure investments are becoming more challenging due to increasing public involvement caused by a lack of acceptance of investment projects or a lack of acceptance of the way the investment projects are implemented.

Therefore, a challenge for PSE is to carry out effective actions aimed at increasing social acceptance for investments in transmission infrastructure among local communities while guaranteeing reliable operation and development of the NPS.

Regulation of legal status of infrastructure

PSE, taking care to regulate the legal status of real properties under its infrastructure, intends to ensure participation of property owners in benefits resulting from locating the infrastructure.
Optimization of capital expenditures

The Company strives to manage its finances so that funds are spent optimally at each stage of investment.

Excessive complexity

European regulations impose a number of new legal requirements on TSOs, deeply interfering in the operator processes realized both at the EU level and at the regional or national level.

The new requirements are aimed at increasing the utilization of the transmission infrastructure and thereby reducing safety margins.

The system is much more likely to be operating at its limits. This approach obviously increases its vulnerability to external threats, including cyber-attacks. Their likelihood is high due to the far-reaching digitization and automation of these processes.

Accounting for uncertainty in planning

The Company intends to improve the efficiency of the system planning process by implementation of probabilistic tools.
Accounting for criticality

PSE is taking steps to develop computational methods whose main task will be to identify the "weakest links" of the NPS.
Provision of internal back-upu for outsourced functions

New EU regulations are aimed at increasing coordination among TSOs by regionalizing key operator processes and transferring them to regional coordination centers.
Reduction of incident management time

The Company ensures maximum quality of service to electricity consumers, including, most importantly, system resilience to disturbances.

Generational change

The labor market is witnessing a generational change that is having a huge impact on how companies operate and how they approach hiring. Representatives of the youngest age group present different attitudes and expectations towards work than older generations of workers. In addition, the labor market has become an employee market, which is also confirmed by the demographic changes occurring in Poland.

The challenge for PSE remains to create an offer that meets employees' expectations regarding terms and conditions of employment and at the same time secures the employer's needs, including in the following areas:

Effective talent management - securing qualified and prepared successors for all key positions.
Changes in incentive systems - in attracting employees, as important as the amount of remuneration is the work atmosphere or development opportunities.
Managing multi-generational teams - diversity management policies should take into account increasingly diversified workforces, also in terms of age.
New technologies - making the work environment more flexible, offering employees a greater sense of freedom while increasing efficiency and providing communication free from the traditional constraints of time and location.
Work-life balance – work should enable reconciliation of professional and private life, which can be done, for example, by providing flexible working hours or remote working.
Employer branding – younger generation employees are guided in their career choices by the image of the organization, hence the need for appropriate employer brand management.

Implementation of a competency model and competitiveness of salaries

The competency model will be the basis and guidepost for new skills and behaviors for employees to assume the responsibilities of their current roles and expected roles.
Building the knowledge-based organization

PSE initiates changes in organizational culture - improving the operating model, changing management systems and practices, and promoting an attitude of openness to change and innovation.