Introducing PSE

We are the only electricity transmission system operator in Poland. We manage the transmission network that feeds the distribution network, through which electricity reaches homes, businesses and institutions all over the country.

As a company that cares about the reliability of electricity supply to all regions of the country, we have a real impact on the development of Polish economy and businesses. We also ensure safe and economic operation of the National Power System as a part of the common European system.

Introducing PSE

Our company in numbers

GRI 102-1 GRI 102-6

We operate nationwide as Polskie Sieci Elektroenergetyczne Spółka Akcyjna (PSE S.A.).

Our clients include:

electric utilities engaged in the generation and trading of electricity,
electric power distribution system operators ( DSO ),
end users connected to the transmission network.

For our customers, we execute agreements on the provision of electricity transmission services and agreements on the provision of access to the National Power System.

PSE: agreements on the provision of electricity transmission services and for the provision of access to the NPS*

PSE: agreements on the provision of electricity transmission services and for the provision of access to the NPS*
Actions taken by PSE	Legal basis for actions
Provision of electricity transmission service. The services are provided on an equal basis to all users under the terms and conditions set forth in the following documents: agreement on the provision of electricity transmission services (hereinafter: transmission agreement), TCMs (Terms, Conditions and Methodologies) adopted under Regulation 2019/943 or the Network Codes, including in particular the TCM developed under Article 18 of Commission Regulation (EU) 2017/2195 of November 23, 2017 establishing a guideline on electricity balancing (GEB), Transmission Network Code (TNC), PSE's tariff for electricity.	Energy Law and secondary legislation issued on its basis
	Regulation (EU) 2019/943 of the European Parliament and of the Council of June 5, 2019 on the internal market for electricity (hereinafter: Regulation 943)
	Network codes, i.e. regulations issued pursuant to Article 59 or Article 61 of Regulation 943
Rendering the service of providing access to the National Power System – on the terms and conditions set forth in the PSE’s tariff for electricity approved by the President of ERO and agreed upon in the transmission agreement or the agreement on the provision of access to the National Power System (hereinafter referred to as the UKDT agreement) concluded with: PSE's contracting parties, such as the distribution system operators (DSO) – the end users with points of delivery from the transmission network, as well as with DSOn, i.e. DSOs without points of delivery from the transmission network (the so-called transition charge)	The Act of June 29, 2007 on the rules for the compensation of costs incurred by generating entities in connection with early termination of long-term power and electricity sales agreements
Performance under the transmission agreements and UKDT agreements concluded with entities connected to the transmission network and with DSOs, respectively, of the obligation to collect a fee related to ensuring availability of electricity from renewable sources in the NPS (the so called RES fee)	The Act on Renewable Energy Sources of February 20, 2015
Performance under the transmission agreements and UKDT agreements concluded with entities connected to the transmission network and with DSOs, respectively, of the obligation to collect a fee related to ensuring availability of electricity from high-efficiency co-generation in the National Power System (the so-called co-generation fee)	The Act of December 14, 2018 on promoting electricity from high-efficiency cogeneration
Performance of the obligation to collect a fee for the payment of remuneration for the performance of capacity obligations (the so-called capacity fee ) under the transmission agreements and UKDT agreements concluded with entities connected to the transmission network and with DSOs, respectively.	The Act of December 8, 2017 on the capacity market

[1] The provisions of the aforementioned agreements are regularly adjusted to changes in legal regulations and other documents regulating the rules of operation on the electricity market, i.e. TNC, TCMs and PSE's tariff for electricity, if the changes to the aforementioned regulations and documents require an amendment to the agreements concluded with the individual groups of PSE's contracting parties.

The scale of PSE operations in numbers

GRI 102-7

EMPLOYMENT
	2020	2019	2018	2017
Number of PSE employees	2 627	2 538	2 376	2 258

FINANCIAL DATA
	2020	2019	2018	2017
Net revenues from sales (in PLN million)	9 178	9 106	10 097	8 887
Net profit (in PLN million)	1 170	729	490	531
Total assets (in PLN million)	22 471	20 640	20 377	19 513
EBITDA (in PLN million)	2 092	1 513	1 188	1 231
TAX EBITDA (in PLN million)	1 905	1 552	1 312	1 328
ROE (net profit / equity)	7.26	4.82	3.37	3.77

NETWORK INFRASTRUCTURE
	2020	2019	2018	2017
Total length of transmission lines (in km)*	15 318	14 822	14 695	14 195
Number of transmission lines (EHV)	281	280	267	258
Number of extra-high voltage substations	109	107	106	106
* The line lengths are given on a per-circuit basis.

SERVICES
	2020	2019	2018	2017
Number of transmission service agreements with the entities:	124	127	127	123
connected to the transmission network	39	37	34	33
operating on the electricity balancing market, but not connected to the transmission network	85	90	93	90

	2020	2019	2018	2017
Number of agreements on the provision of access to the NPS with DSOs not connected to the transmission network	157	157	158	163
Number of concluded agreements on the connection of new sources to the transmission network	32	29	31	35
Total capacity of new generating sources with valid connection agreements Wskaźnik własny	18 007 MW	14 775 MW	15 102 MW	16 098 MW
Number of agreements on the connection of new generating sources to the transmission network, for which PSE has initiated investment tasks aimed at performing the works necessary for the connection	19	20	22	24

100 percent of shares are held by the State Treasury GRI 102-5	100%
The share capital of PSE amounts to PLN (and has been fully paid-up.)	9,605,473,000

Tab. 3. The scale of PSE operations in numbers

In-house indicator

Number of agreements on the provision of demand side response, as requested by TSO, concluded in 2019–2020 by programs

Number of agreements on the provision of demand side response, as requested by TSO, concluded in 2019–2020 by programs
Guaranteed program — payment for readiness and usage; summer package (9 agreements: 5 in the whole country and 4 in the defined areas; provision period: July 1–September 30, 2019) with a guaranteed capacity volume from 593 MW to 715.4 MW in the particular hours	9
Guaranteed program — payment for readiness and usage; winter package (7 agreements: 2 in the whole country and 5 in the defined areas; provision period: October 1–December 31, 2019) with a guaranteed capacity volume from 442.8 MW in the particular hours	7
Guaranteed program — winter package — (covers the entire NPS; provision periods: February 1–March 31, 2020 and October 1–November 30, 2020) with a guaranteed capacity volume of 612 MW in the particular hours	6
Guaranteed program — summer package — (covers the NPS excluding 5 areas; provision period: April 1–September 30, 2020) with a guaranteed capacity volume from 683.7 to 764.5 MW in the particular hours	6
Guaranteed program — summer package — (covers designated areas: Poznań, PAK, Łódź, Lublin–Zamość, Zielona Góra; provision period: April 1–September 30, 2020) with a guaranteed capacity volume from 25.5 MW in the particular hours	7
Current program — payment for performance (July 1–December 31, 2019)	4
Current program — payment for performance (January 1–December 31, 2020)	4
Simplified current program — payment for performance (January 1–December 31, 2020)	4
In total	47

Tab. 4. Number of agreements on the provision of the demand side response, as requested by TSO

Number of agreements on the provision of contingency reduction of power consumption by consumers based on a bidding process, concluded in the 1st half of 2021 by programs

Number of agreements on the provision of contingency reduction of power consumption by consumers based on a bidding process, concluded in the 1st half of 2021 by programs
Contingency reduction of power consumption by consumers based on a bidding process ─ payment for performance (April 1, 2021–March 31, 2022)	6

Tab. 5. Number of agreements on the provision of contingency reduction of power consumption by consumers based on a bidding process

As of January 1, 2021, the capacity market has been implemented. This fact, along with other changes in the country's electricity market, triggered the need to develop and implement a new system service related to the reduction of electricity consumption by consumers with the NPS. This service is the contingency reduction of power consumption by consumers based on a bidding process.. It replaced the existing DSR programs that expired on December 31, 2020.

Beginning in 2021, contracting of services under the Guaranteed Contingency DSR Program is not possible. This follows from point 16(g) of the Capacity Market Notification Decision (European Commission Decision of February 7, 2018 approving a capacity mechanism to guarantee security of electricity supply – capacity market).

As early as on December 28, 2020, PSE launched public proceedings conducted as an open tender for the provision of contingency reduction of power consumption by consumers based on a bidding process, for the period from April 1, 2021 to March 31, 2022. The opening of bids took place on February 4, 2021. A total of 6 potential contractors submitted their bids. After a formal evaluation and verification of the bids on March 1, 2021, PSE resolved the proceedings and decided to accept all correctly submitted bids in the aforementioned proceedings, and concluded agreements with the selected contractors.

PSE Capital Group

GRI 102-45

The PSE Capital Group was established in order to perform the tasks resulting from the Program for the Power Sector adopted by the Council of Ministers on 28 March 2006. The Program assumed equipping the electricity transmission system operator with transmission assets and tools for maintenance, operation and expansion of these assets in the form of specialized companies.

www.pse.pl

PSE Inwestycje SA

100%

PSE Inwestycje SA

A specialized company responsible for the design work, organization and supervision over the implementation of investment tasks related to the construction, expansion and modernization of enclosed buildings for the amenity and office needs, and the technical facilities of the transmission system of PSE S.A. Due to changes in the business strategy regarding the entities of PSE Capital Group, effective January 1, 2019, the company suspended its business activity.

www.pse-inwestycje.pl

PSE Innowacje sp. z o.o.

100%

PSE Innowacje sp. z o.o.

A provider of consulting services for analysis, research, new technologies and IT solutions in the power sector. The company's operations provide support for the safe and economic operation of the NPS.

www.pse-innowacje.pl

Joint Allocation
Office SA

4%

Joint Allocation Office SA

The company, established by 20 TSOs from the CEE and CWE regions and Norway, was created through the merger of the regional auction offices Central Allocation Office GmbH and Capacity Allocation Service Company.eu JAO is currently owned by 25 transmission system operators from 22 countries.

Joint Allocation Office (hereinafter: JAO) is a service company that supports the electricity market by holding auctions for cross-border transmission capacity. It provides, among others, cross-border transmission capacity allocation services to PSE. As required by the Network Codes, they are provided as part of a centralized common European platform operated by JAO.

www.jao.eu

TSCNET Services Gmbh

6,7%

TSCNET Services Gmbh

TSCNET, headquartered in Munich, was established by 10 TSOs from the TSC to improve the quality of inter-operator cooperation as part of the TSC initiative (TSC is a regional initiative bringing together several TSOs from Central Europe, aimed at improving the operational security of the interconnected power systems, including the NPS).

TSCNET began operations on May 1, 2015. The shareholders of the company are 14 TSOs affiliated with TSC. The business of TSCNET Services (hereinafter: TSCNET) includes services to support TSOs in operational planning processes and in developing and implementing new regional processes. TSCNET is, within the meaning of the SOGL regulation, one of the Regional Security Coordinators (RSCs), which, according to the SOGL and CACM/FCA regulations, are to support the five regional processes implemented in 10 Capacity Calculation Regions (CCRs).

According to Article 35.2 of the Clean Energy Package (CEP), effective July 1, 2022, TSCNET will evolve into a Regional Coordination Center (RCC), and – together with Coreso – will provide services to Operators of the Central SOR (System Operation Region covering 3 CCRs: CORE, NIB and SWE).

www.tscnet.eu

*Polskie Sieci Elektroenergetyczne S.A. – parent company. The company has field organizational units of PSE units and field work places of PSE units in Bydgoszcz, Katowice, Poznań, Radom and Warsaw.

Tab. 5. PSE Capital Group as at the report publication date

In the financial statements and equivalent documents, PSE is reported together with ZKO, excluding Capital Group companies.

Economic performance

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We implement our strategic objectives and directions by constantly monitoring the results achieved and the level of achievement of key economic and financial indicators. We prepare projections for a medium-term horizon, which allow us to assess the ability to finance the level of expenditures assumed in the Investment Project Plan, considering full implementation of the strategic objectives and operational activities.

GRI 201-1 GRI 102-7

Direct economic value generated including revenues, operating costs, employee remuneration, subsidies and other community investments, undistributed profit and payments to capital owners and state institutions

Value (in PLN)
	2020	2019*	2018
Revenues (all revenues and profits included in the financial statements):	9 522 394 255	8 966 229 522	9 270 307 269
Net revenues on sales	9 178 228 605	8 801 428 991	9 105 506 738
Other operating revenues	324 060 880	130 523 044	130 523 044
Financial revenues	20 104 770	34 277 487	34 277 487

Operating expenses
	2020	2019*	2018
Operating expenses:	8 075 708 779	8 064 622 038	8 368 699 784
Operating expenses	7 981 538 598	7 962 397 582	8 266 475 329
Other operating expenses	77 062 477	94 602 127	94 602 127
Financial expenses	17 107 704	7 622 329	7 622 329

Operating expenses (after considering the excluded costs)
	2020	2019*	2018
Operating expenses (after considering the excluded costs)	7 290 479 696	7 311 788 488	7 654 073 341
Exclusions: Remuneration, social insurance and other benefits	470 484 824	435 833 392	396 651 288
Taxes and charges	310 543 328	312 472 104	313 447 101
Community investments**	2 226 343	0	0
Interest costs	1 974 588	4 528 054	4 528 054

Payments to investors
	2020	2019*	2018
Payments to investors:	0	0	0
Dividend	0	0	0

Payments to state institutions
	2020	2019*	2018
Payments to state institutions:	714 241 457	598 670 720	599 645 716
Taxes and charges	310 543 328	312 472 104	313 447 101
Interest costs***	1 974 588	4 528 054	4 528 054
Income tax (current liabilities)	217 318 493	172 249 354	172 249 354
Payment from the profit	184 405 048	109 421 207	109 421 207

Retained value
	2020	2019*	2018
Retained value	1 044 961 935	619 936 923	619 936 924
* Due to the company's adoption of new rules for the presentation of costs by type in the 2020 financial statements, the 2019 figures have been updated to ensure data comparability. Including donations to counteract COVID-19. * In 2020, 99 percent of PSE's interest costs went directly to the state budget; similarly, in 2019, 98 percent of PSE's interest costs went directly to the state budget.

GRI 201-4

The total monetary value of financial support received by the organization from the state during the reporting period, including at least the amounts of the following:
	2020	2019	2018
subsidies, investment and development grants, other	579 094 500	218 437 990	36 436 049
other financial benefits received from the state	86 499	243 805	287 924

Membership in organizations

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Learn about the international industry organizations and associations to which PSE belongs

ENTSO-E – European Network of Transmission System Operators for Electricity, which plays an important role in building a common electricity market. It has been operating since 2009, when it took over the tasks of the inter-operator organizations UCTE, NORDEL and ETSO. The core business of the organization is to undertake activities for the reliable operation and development of interconnected power systems, while ensuring security of electricity supply within the common EU electricity market. ENTSO-E plays an important role in the implementation of the EU's third and fourth energy package, taking responsibility for the development of a number of documents – in particular network codes containing provisions necessary for the development of a single EU electricity market.

PSE representatives are involved in the organization's activities at all levels of its structure, i.e. from the General Meeting, through the Management Board and Committees, to groups, task forces and working groups.

GRI-Blad The working structure of ENTSO-E consists of committees. PSE is represented in each of the following:
- Market Committee,
- System Development Committee,
- System Operations Committee,
- Research, Development & Innovation Committee,
- Digital Committee,
- Legal and Regulatory Group.
The active presence of PSE representatives in ENTSO-E structures strengthens the position of the Polish transmission system operator in the international arena.

Polish Committee of Large Electrical Networks (PKWSE) – one of 58 national committees acting on behalf of Conseil International des Grands Réseaux Électriques (CIGRE), the world's largest international association of experts dealing with issues related to the generation, transmission and distribution of electricity. PKWSE acts on behalf of CIGRE by promoting the association's activities in Poland. It currently has 6 supporting members and over 112 regular members.

Cooperation within CCR – Poland is included in three Capacity Calculation Regions (CCR): CORE, Baltic and Hansa, formed at the request of all TSO by the decision of the EU Agency for Cooperation of Energy Regulators (ACER) in November 2016. In the working structures established in the aforementioned regions, representatives of the individual TSOs, including PSE, are conducting works aimed at implementing market mechanisms the design of which will ensure the ability to effectively, freely and securely trade electricity across borders. The actions cover all market segments – from long-term markets, through the Day-Ahead Market (in the form of the Market Coupling mechanism), to the Intraday Market – and are related, among other things, to the implementation of a coordinated transmission capacity calculation process, including the division of costs of countermeasures applied in the process, and the implementation of the Market Coupling mechanism at the NPS interconnections.

CEE Forum (Central Eastern European Forum for Electricity Market Integration) – a forum aimed at providing political support for the process of electricity market integration.

Central Europe Energy Partners (CEEP) – an international non-profit association representing the Central European power sector, which aims at promoting the integration of the Central European power sector within the common EU energy policy. The Chairman of the CEEP Board of Directors is a representative of PSE.

GRI 102-12

Learn about the national industry organizations and associations as well as CSR initiatives to which PSE belongs

Association of Polish Electrical Engineers (SEP) – a non-governmental creative organization of scientific and technical nature, acting for social and public benefit. It is a voluntary association of electricians of all specialties, persons whose professional activity is related to widely understood power engineering, as well as legal persons interested in the association’s activities. The scope of the SEP activities includes: electrical engineering, power engineering, electrical power engineering, electronics, radio technology, optoelectronics, bionics, information technology, computer science, telecommunications, automation, robotics and other related fields.

Polish Power Transmission and Distribution Association (PTPiREE) – an organization whose main objective is to take actions for the comprehensive development and rational use of networks and equipment for transmission and distribution of electricity. The association strives to initiate, promote and utilize technical and organizational progress in the transmission and distribution of electricity, and supports the development of the electricity market.

Partnership for the implementation of Sustainable Development Goals (SDGs)) – an initiative started by the Ministry of Entrepreneurship and Technology and representatives of over 100 entities, including PSE, for the implementation of sustainable development goals. These goals correspond to the content of the United Nations’ 2030 Global Agenda for Sustainable Development, or – in short – the 2030 Agenda, adopted in 2015. The Agenda has set out 17 Sustainable Development Goals (SDGs), the implementation of which is to contribute to building a more sustainable future, in particular to eliminating social and economic inequalities, while ensuring simultaneous development connected with preserving the natural environment in the best possible condition, and limiting the negative effects of climate changes (goal No. 13).

Responsible Business Forum – the largest non-governmental organization in Poland, dealing with CSR (Corporate Social Responsibility). Its mission is to take actions aimed at sustainable development, inspire business that changes the world, and integrate people who change business. The association was founded in 2000 as a result of the initiative of business, academic and non-governmental circles, and has the status of a public benefit organization. Since 2002, the Forum is a national partner of CSR Europe – a network of organizations promoting the concept of responsible business in Europe.

Responsible Energy – an initiative that brings together socially responsible companies in the power sector. Its main idea is to raise awareness of the importance of sustainable development and to popularize good practices among representatives of the power sector, students and representatives of administration and NGOs. Since 2010, as a signatory to a declaration on sustainable development in the power sector, PSE has been implementing projects related to, among others, transparency of operations and effective management, occupational health and safety, promotion of energy-efficient solutions, cooperation with local governments and stakeholder involvement.

Sports and Tourism Society „Sport i Energia” (“Sport and Energy”) – sports organization founded by PSE employees in 1998. The organization pursues its statutory objectives by providing affiliated and non-affiliated employees of PSE with the following: access to sports facilities, opportunities to participate in organized sports competitions and to represent PSE in sports competitions within the power sector, and by supporting the integration of company employees.