Record-breaking energy production from Polenergia wind farms

• PLN 3,813 million of sales revenues in the first half of 2022;
• PLN 211 million result of adjusted EBITDA in the first half of 2022;
• PLN 119 million adjusted net profit in the first half of 2022;
• 51 percent – adjusted EBITDA margin in the first half of 2022 (excluding the trading segment);
• 35 percent – average net productivity of wind farms in the first half of 2022;
• 431 GWh – record net production of energy from wind farms in the first half of 2022;
• 318 MW capacity of renewable energy projects in operation;
• 267 MW capacity of currently built and developed onshore renewable energy projects;

Net production of green energy from Polenergia’s onshore wind farms from January to June 2022 reached a record level of 431 GWh. Compared to the first half of last year, this means an increase by as much as 35%. The net productivity of Polenergia’s wind farms is still over 34% of the market average. The leader of the Group is WF Mycielin, whose productivity in this six-month period was 40 percent. WF Gawłowice recorded a slightly lower result, at the level of 38%, while WF Rajgród, WF Skurpie and WF Szymankowo achieved productivity at the level of 36%.

In the first half of 2022, the onshore wind farm segment recorded an EBITDA result higher by PLN 88 million compared to the previous year, and in the second quarter, the increase in EBITDA compared to the same period in 2021 amounted to PLN 39 million. The increase in results is mainly a consequence of the commissioning of the WF Szymankowo in the second half of 2021, more favourable wind conditions, which directly translated into higher production volumes of other wind farms in operation and higher electricity sales prices at the segment level, as well as the start of the commencement phase of WF Dębsk projects and WF Kostomłoty, which was partially offset by slightly higher operating costs of wind farms.

The EBITDA result of the photovoltaic segment after the first two quarters of 2022 was higher by PLN 5.6 million than the result achieved a year ago. All of this thanks to the launch of two new project portfolios in Sulechów with a total capacity of 22 MWp and better results of PF Sulechów I. Revenues generated under this project were higher by 87% compared to the revenues for the first half of last year. This was due to greater insolation and the sale of some of the energy produced outside the support system at higher market prices.

In the first half of 2022, the EBITDA result of the gas and clean fuels segment decreased by PLN 60.5 million compared to the same period in the last year, and in the second quarter, the decrease amounted to PLN 53.7 million, mainly due to a lower result resulting from optimization operation of Elektrociepłownia Nowa Sarzyna, lower margin on heat sales due to higher gas prices and CO₂ emission allowances, and lower revenues from the capacity market.

Adjusted EBITDA margin excluding the trading and sales segment was 51.4 percent and was by 3.3 pp. lower than the margin recognized a year ago. In the second quarter, the value of this ratio was 45.1 percent and was by 16.7 pp. lower than the margin recognized after six months of last year.

From January to June 2022, the sales revenues of the Polenergia Group reached PLN 3,812.9 million and were higher by as much as PLN 2,600.6 million compared to the same period of the last year. This was mainly due to higher revenues in the trading and sales segment by PLN 2,532.2 million and onshore wind farms by PLN 95.1 million, partially offset by lower revenues in the gas and clean fuels segment by PLN 51.6 million.

Implementation of the Polenergia Group Strategy for 2020-2024

The implementation of the Strategy is progressing without significant disruptions. The Group is currently building and developing onshore renewable energy projects with a total capacity of 267 MW. In addition, Polenergia’s development portfolio includes less advanced photovoltaic and wind projects with a total capacity of over 843 MW.

Works on the 121 MW WF Dębsk, which is the largest renewable energy investment in the history of Polenergia, are nearing the end. Foundations, manoeuvring areas and roads for all 55 turbines were completed. The construction of high voltage lines, medium voltage lines and a power substation have been completed. All turbines have been assembled and energized. The trial run of individual turbines is in progress. The construction of the farm should be completed in the fourth quarter of 2022.

The main construction works have been completed on the WF Kostomłoty with a capacity of 27 MW. Foundations, manoeuvring areas and roads for all 9 turbines were completed. The construction of high voltage lines, medium voltage lines and a power substation have been completed. All turbines have been assembled and energized. The trial run of individual turbines is in progress. The construction of the farm should be completed in the third quarter of this year.

The projects of WF Piekło with a capacity of 13 MW and WF Grabowo with a capacity of 44 MW are implemented according to the schedule.

In the third quarter of this year, Polenergia also plans to launch the Buk Photovoltaic Farms project with a total capacity of nearly 7 MWp. Two photovoltaic projects, PF Świebodzin I and PF Strzelino, with a total capacity of 56 MWp, are being prepared for construction, which were supported under the RES auction held in December 2021.

In the second quarter of 2022, Polenergia Fotowoltaika installed photovoltaic installations with a total capacity of over 12 MWp, while Polenergia Pompy Ciepła installed 149 heat pumps during that time. Polenergia Fotowoltaika sold the product Polenergia 360 based on cooperation with Polenergia Sprzedaż, which resulted in signing the first contracts for the supply and purchase of renewable and zero-emission energy.

The company OWF Bałtyk II submitted a notification application to the President of the Energy Regulatory Office aimed at requesting the President of the Office of Competition and Consumer Protection to issue an opinion on the project of individual support granted for the OWF Bałtyk II project and to issue – after the European Commission issues a decision on compliance with the internal market of public aid granted to the company – decision to change the first decision of the President of the ERO and determination of the price being the basis for covering the negative balance for the project.

The large-scale 100 MW project for the production and storage of hydrogen produced in the water electrolysis process with the participation of its own renewable energy submitted by Polenergia in the competition for projects in the area of ​​hydrogen technologies and systems, after passing formal verification and assessment by the Minister of Development, Labour and Technology and the Minister of Climate and Environment, has been approved for further implementation and is on the path of obtaining notification from the European Commission. The Ministry of Climate and Environment, after approval of the Office of Competition and Consumer Protection, submitted a project under the so-called RHATL wave (Regional Hubs and their Links) for notification to the European Commission. In addition, Elektrociepłownia Nowa Sarzyna is preparing to produce renewable hydrogen and co-firing natural gas with hydrogen, and actively participates in the creation and development of the Subcarpathian Hydrogen Valley. Two gas turbines in ENS with a capacity of 40 MW each were partially modernized at the end of 2021 and prepared for co-firing up to 10%. hydrogen with natural gas.

The impact of the war in Ukraine

In connection with the ongoing armed conflict in Ukraine, events and risk factors that may affect the operations and financial results are monitored and identified on an ongoing basis. Due to the marginal involvement of the Group’s companies in activities in Russia, Belarus and Ukraine and cooperation with partners based in these countries, Polenergia is not directly exposed to the negative effects of this conflict. The trading and sales segment was the only one in the Group that had direct exposure to the Ukrainian market through its subsidiary Polenergia Ukraina. Even before the war started, the company limited the scope of its operating activities.

Polenergia is involved in humanitarian aid for refugees from Ukraine. Over 40 emergency and long-term aid initiatives have already been implemented under the #solidarnizUkrainą campaign. There have been prepared, among others layettes for children, donation collections were organized and additional positions for psychologists, translators and animators working with children at the Mazovian Neuropsychiatry Centre were financed. As part of the “Dach nad głową” campaign, accommodation was adapted and the costs of utilities, food, medicines and other necessary means of living were covered. Together with the Nowa Sarzyna Commune, a holiday stay of Ukrainian children from Kołomyja was organized, and with the Sulechów Commune, Polish language learning was started for Ukrainian citizens who came to Poland as a result of the outbreak of the war.