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Management of non-current and intangible assets
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What does that mean? Management approach Important aspects
Financial capital Financial resources the company has or acquires through financing Creation of shareholder value by building a stable and strong group
  • Relations with customers as the basis for the Group’s long-term growth
  • Stable regulatory asset base
  • Efficient conventional assets
Human capital Employee knowledge, skills, experience and motivation
  • Development of a performance-focused organizational culture
  • Attraction and retention of valuable employees
  • Promotion of an ethical culture and employee engagement
  • Development of employee competence based on the TAURON Group’s values
  • Measures to reduce the number of accidents in the workplace
  • Management of human potential
  • Cooperation with schools and universities (internships, placements, ambassador program)
Natural capital Natural resources the company uses and on which it exerts an impact Responsible, rational, regulated and sustainable exploitation of deposits
  • Implementation of solutions to reduce the consumption of non-renewable resources
  • Striving to implement a circular economy model, efficient waste management
  • Preventing pollution by enriching the offer with highly-efficient energy and heat production in co-generation and energy from renewable sources
  • Operational excellence and energy efficiency
  • Educating the society on environmental issues
Intellectual capital Knowledge-based intangible assets Innovation treated as a strategic pillar of the company’s growth
  • Promotion of research and development
  • Operational efficiency and new products and services; continuous development of the offering in response to customer needs
  • Development of an innovation culture among employees
  • Seeking breakthrough technologies and business models
  • Active cooperation with the academic community
Production capital Tangible assets or goods the company uses to conduct its business Integrated asset management based on processes as a priority for the effective and optimum use of assets
  • Efficient conventional assets:
    • mining
    • generation
  • Stable base of regulated businesses:
    • distribution
    • heat
    • RES
  • Adaptation of generation assets to the changing regulatory and market environment
Kapitał społeczny Ability to share, cultivate good relations and collaborate with stakeholders. Promotion of social engagement and a healthy lifestyle Promotion of relations with stakeholders based on dialogue and trust; taking initiatives to improve quality of life in the areas where the company operates; partnership between the general public and the business community
  • Regular dialog with the community as the basis for building relations; observance of high ethical standards in communication
  • Initiatives to support local communities and electricity access programs
  • Corporate foundation – TAURON Foundation
  • Transparent information policy; regular reporting of non-financial activities

We create shareholder value while bolstering the Group’s strength and stability.

We are achieving this through the a consistent implementation of the Efficiency Improvement Program, well thought-out Strategic Initiatives and the new process-oriented operational model. Looking into the future, we are becoming increasingly more involved in research and development and innovation activity, including projects based on a dedicated Corporate Venture Capital fund. All the capital expenditures in the Group are analyzed in terms of their efficiency. The stable base of regulated distribution assets and the care for the efficiency of conventional assets play a major role in building financial capital. These initiatives could not be effective without regularly cultivating positive customer relations based on integrated service.

 

CAPITAL HIGHLIGHTS

  • Non-current assets: PLN 29.1 billion
  • RAB of the Distribution Segment: PLN 15.6 billion
  • Value of generation assets: PLN 10.9 billion
  • Debt level of debt: PLN 7.7 billion
  • Stable CAPEX: PLN 3.8 billion

 

RESULTS ACHIEVED

  • Number of Sales customers: 5.3 million
  • Number of Distribution customers: 5.5 million
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2016 2015
Sales revenues [PLN billion] 17.6 18.3
EBITDA [PLN billion] 3.3 3.5
EBITDA margin [%] 18.9 19.3
Cash flow from operating activities [PLN billion] 3.1 3.4
Net debt/EBITDA 2.32 2.20
PPE (2013-2015)
execution 139% [PLN billion]
1.2
PPE (2016-2018)
execution 37% [PLN billion]
0.5
Earnings per share 0.21 (1.03)
ROIC [%] 2.95 (6.64)
ROE [%] 2.2 (11.2)
Long-term rating* BBB BBB

* On 14 November 2016, the Fitch rating agency affirmed its long-term ratings of TAURON Polska Energia in local and international currencies at “BBB” and changed the outlook from negative to stable.

 

 

CAPITAL PERFORMANCE MANAGEMENT

  • We maintain financial stability by employing measures to optimize expenditures and our asset structure
  • We have prepared a scenario-based plan to reduce the investment program, taking into account the expected return on our capital expenditures
  • As we implement the investment program, we continue to rationalize our capital expenditures
  • We are consistently implementing the plan to optimize the Group’s financing
  • We are developing a capital partnership through Corporate Venture Capital initiatives
  • We are implementing new business models

The TAURON Group’s human capital is formed by our employees constituting the heart of our organization who through the work they do every day strive to achieve its business targets and contribute to executing the Strategy.

Human resource management in the TAURON Group is based on the PRO values (Partnership, Development, Boldness – Partnerstwo, Rozwój, Odwaga) jointly devised by our employees. We endeavor to follow a consistent approach to employee development, to promote attitudes that blend experience, knowledge and a proactive approach.

 

CAPITAL HIGHLIGHTS

  • Organizational culture based on competence and PRO values supporting performance
  • HR activities and processes supporting TAURON’s business and the execution of its Strategy
  • High occupational health and safety standards

 

RESULTS ACHIEVED

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2016 2015
Number of employees 25 542 24 277
Number of training hours 451 236 356 947
Number of accidents at work 199 183

 

  • 443 employees of TAURON Obsługa Klienta benefited from 46 training courses as part of the Internal Trainer Program
  • Cooperation with more than 50 educational establishments (universities, high schools and vocational schools) across Poland
  • 1,084 people took advantage of the offering of occupational internships and placements in TAURON companies as part of cooperation with education establishments
  • 12 lectures were held as part of the Open University attended by more than 2,000 TAURON Group employees
  • Launch of post-graduate courses for the Group’s employees at Jagiellonian University
  • Fifth edition of the Talent Management Program leading to 60% of the graduates receiving a promotion in the Group’s structures. 49 people participated in 5 editions of the program
  • The Adaptation Program for new employees was launched
  • 20,000 training courses completed by Group employees via the e-learning platform
  • 1,194 of the 1,217 employees authorized to drive a company car successfully completed the e-learning course entitled “Road Safety”

 

CAPITAL PERFORMANCE MANAGEMENT

  • We support our leaders through special development programs
  • We have launched the HR: Partner for Business initiative under which positions were created to support business and the execution of the Group’s Strategy
  • We support the sharing of knowledge and competence through the Internal Trainer Program
  • We collaborate with many educational establishments and offer young people internships and placements in our companies
  • We also conduct expert lectures at the TAURON Group Open University
  • In collaboration with Cracow-based universities, we run post-graduate courses for our employees
  • We administer a group-wide Employee Recruitment, Selection and Adaptation Policy to ensure uniform standards and the quality of our recruitment processes. It calls for internal recruitment to be conducted first
  • Employees with outstanding talents, potential and performance are included in the Talent Management Program
  • New employees participate in the Adaptation Program
  • We provide our employees with an e-learning platform for them to develop their industry knowledge and interpersonal skills

In our business we focus on our responsibility and on minimizing the adverse impact on the natural environment.

We have a stable fuel base to supply our conventional energy assets and external offtakers. The fossil fuel base also guarantees stable production in periods of volatile or extreme weather that destabilize electrical power systems.

 

CAPITAL HIGHLIGHTS

The TAURON Group’s natural capital includes renewable and non-renewable natural resources. Renewable natural resources used by the Group include:

  • water used in run-of-river and pumped storage power plants;
  • wind powering 4 wind farms (Lipniki, Zagórze, Wicko, Marszewo);
  • biomass.

The deposits of non-renewable resources are exploited in a responsible, rational, regulated, ordered and sustainable manner.

 

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Number of deposits Mineral Number of mines Total surface of mining areas
km2
Recoverable reserves
million tons
8 Primary mineral hard coal 3 184.03 206
limestone 1 1.34 85.6
1 Accompanying mineral methane
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2016 2015
[G4-EN1] Net coal (including sludge) [tons] 14 039 500 13  113 044
[G4-EN1] Natural gas [m3] 8 409 358 4 152 804
[G4-EN1] Heating oil [tons] 30 318 32 574
[G4-EN1] Diesel oil [m3] 1 739 1 567
[G4-EN1] Limestone [tons] 2 024 931 2 471 017
[G4-EN1] Biomass (forest and agro) [tons] 545 080 826 450
[G4-EN8] Total consumption of water [m3] 183 880 440 217 559 120
[G4-EN3] Total consumption of energy [GJ]* 9 302 573 7 377 248

* This includes only consumption of electricity and heat for own purposes.

 

RESULTS ACHIEVED

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2016 2015
[G4-EN15] Direct greenhouse gas emissions – CO2 [tons] 14 935 501 16 369 339
[G4-EN21] Nitrogen oxides – NOx [tons] 15 131 19 046
[G4-EN21] Sulfur dioxide – SO2 [tons] 15 595 26 017
[G4-EN21] Total dust 995 1 312
[G4-EN21] Other (such as: HCl, HF, carbon oxide, ammonia, methane, metals) 30 074 12 241
[G4-EN22] Total volume of liquid waste [m3] 164 822 556 198 686 258
[G4-EN23] Total volume of non-hazardous waste (including CBP and MBP)* [tons] 3 172 849 4 803 338
[G4-EN23] Dumpsite waste [tons] 4 969 20 801

* CBP and MBP – combustion by-products and mining by-products.

  • In 2016, we completed the upgrade of an open storage dust removal installation, we reduced noise emissions into the environment and we modernized the crushing station cooling system at the Primary Crushing Plant (“Czatkowice” Mine)
  • We completed the construction of the pre-treatment plant for the acidic efflux from the mining waste treatment facility at ZG Janina (TAURON Wydobycie)

CAPITAL PERFORMANCE MANAGEMENT

  • In order to reduce the consumption of non-renewable resources, we are implementing solutions to save energy and use different energy sources
  • In order to reduce the consumption of natural resources and limit the carbon footprint of our products, we plan to use as much process waste as possible
  • We incorporate highly efficient co-generation of electricity and heat in the primary production volume
  • We constantly expand our offering of energy from renewable and gas-fired sources
  • We are striving to implement a circular economy model
  • We continue to build the 910 MW power unit in the Jaworzno III Power Plant. Its production launch will significantly reduce our emissions into the air of NOx, SO2, CO2 and dust
  • We are modernizing the electrostatic precipitator of Unit 5 in the Jaworzno III Power Plant to reduce the emission of dust
  • We are modernizing the Water Demineralization Plant at the Stalowa Wola Power Plant Branch of TAURON Wytwarzanie
  • We are taking measures to curtail the production of mining waste by producing aggregates
  • We are modernizing our hydropower plants to reduce the risk of contaminating the natural environment with oil
  • We are building protection measures against the contamination of soil and water with petroleum substances
  • We have installed insulation covers on certain elements of transformers and poles to protect birds landing on the support structures of overhead power lines

As we develop the Group, we have in mind the challenges the energy sector will face in the future. Focus on innovation is the key to preserving competitiveness.

We are developing innovation by following two paths: by investing in our internal resources and by collaborating with external partners, such as universities, vocational schools, scientific institutes and start-ups. We align the knowledge and skills of our employees to the functions they discharge. We use modern competence-building tools, including the Tauronet system, to which some 16,000 of our employees have access.

 

CAPITAL HIGHLIGHTS

The TAURON Group’s intellectual capital consists of the following:

  • Strategy focused on creating innovation
  • Our employees’ knowledge and competence
  • The catalogue of the best practices associated with the management systems and internal procedures we have implemented
  • A system to support research, development and innovation guaranteeing expenditures totaling 0.4% of the Group’s consolidated revenues
  • Model of collaborating with universities and vocational schools

 

RESULTS ACHIEVED

  • Strategy for 2016-2025 in which the development of research and development
    and innovation is expected to generate spending of 0.4% of consolidated revenues per annum, constituting roughly PLN 80 million per annum
  • Implementing a new operating model for RDI with a central budget
  • Establishing an NCBiR Sector Program entitled “Research Program for the Electric Power Sector” (PBSE). This program spans research topics in conventional and renewable energy, electrical power grids and new products and services
  • Preparing 18 project applications to participate in the competition under PBSE. 8 applications were filed in 2016 and the others were filed in 2017
  • Launching Poland’s first program under the ScaleUP PARP competition for the acceleration and scouting of startups entitled “Pilot Maker” to respond to the needs of an energy company
  • Setting up and launching the “Innovation Zone” platform to organize competitions to support employee innovations
  • Launching the first competitionfor employees in the „Innovation Zone” entitled “Safe at Work”
  • Launching 3 new international R&D projects

 

CAPITAL PERFORMANCE MANAGEMENT

  • We are implementing R+D+I projects in all our areas of business, focusing on the following areas:
    • customers and their needs;
    • smart grid services;
    • distributed energy;
    • low-emission generation technologies
  • In R+D+I activity, we tap into the intellectual potential of our employees and external partners:
    • we support employee innovations through the Innovation Zone platform;
    • we run regular workshops with the deans of electricity and energy faculties;
    • we cooperate with leading universities and research institutes in Poland and the EU;
    • we support startups through mentoring and making test infrastructure available;
    • we cooperate with Polish and international technology companies;
    • we run domestic and international R&D projects under programs sponsored by NCBiR, Horyzont 2020, KIC InnoEnergy and the RFCS Coal and Steel Research Fund;
    • we hold competitions to support innovation for Group employees;
    • we devise the concepts underlying new businesses, products and services to generate incremental revenue;
    • we strive to obtain additional, external and non-refundable funding for R&D&I projects

The TAURON Group is a vertically-integrated concern operating in all the key segments of the energy market, i.e. in hard coal mining, generation, distribution and supply of electricity and heat.

The total carrying amount of the TAURON Group’s assets exceeds PLN 33 billion.

 

CAPITAL HIGHLIGHTS

  • 3 mines
  • 5 coal-fired power plants
  • 3 combined heat and power plants (2.4 GW of thermal capacity)
  • 34 hydro power plants (installed capacity of 142.7 MW)
  • 4 wind farms (installed capacity of 200.8 MW)
  • 261 thous. km of distribution power lines
  • 58.2 thous. transformers
  • 54.8 thous. MV/LV substations
  • 483 HV/MV substations

 

RESULTS ACHIEVED

  • 6.4 million Mg saleable coal produced in the following grades: pulverized coal; medium grain, thick grain and eco pea grain
  • 16.8 TWh of electricity produced
  • 11.5 PJ of heat produced
  • 49.7 TWh of electricity distributed

 

CAPITAL PERFORMANCE MANAGEMENT

  • We are investing in mining assets to ensure stable and efficient coal production:
    • we are building the “Grzegorz” shaft in the Sobieski Mine along with infrastructure and accompanying underground workings;
    • we are building level 800 m in the Janina Mine;
    • we are running the Brzeszcze Investment Program.
  • We are building modern generation capacity of key importance for our regulated operations, including:
    • a 910 MWe coal-fired unit in the Jaworzno III Power Plant;
    • a 450 MWe combined cycle gas turbine unit in Stalowa Wola;
    • a 66 MWe BC50 coal-fired unit in Tychy (commissioned in 2016).
  • We are developing our heat grid taking into account the Low Emission Source Liquidation Program
  • We are incurring significant expenditures to modernize and replace legacy network assets and connect new electricity customers
  • We are poised for the profitable growth of installed RES capacity

 

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PLN billion 2016 2015
Capital expenditures 3.8 4.2
Depreciation and amortization 1.7 1.8
Impairment losses 0.9 3.6

TAURON Group companies cultivate relations with their local communities, suppliers and universities.

They take actions to enhance work safety, minimize their environmental impact enhance the engagement of employees and local residents who live close to the Group’s facilities.

 

CAPITAL HIGHLIGHTS

  • We have adopted and abide by the TAURON Group’s Code of Business Ethics. We cultivate an ethical culture among our employees
  • We maintain active relations and dialog with the surrounding environment
  • We care about collaboration with our vendors
  • We care about providing equal opportunities in the workplace
  • We engage employees in the firm’s development
  • We promote education and development among all our employees
  • We respond to our customers’ expectations

 

RESULTS ACHIEVED

  • 384 meetings with trade union organizations in Group companies
  • 80% returns to work after completing parental leave
  • Retention ratio after parental leave at 98%
  • Work-related accident incidence of 7.7
  • The efficiency of procurement activities following the introduction of electronic auctions improved by 9.32%, translating into more than PLN 48 billion
  • Regular meetings with local communities in order to convey information about our mining activity and its impact on residents

 

CAPITAL PERFORMANCE MANAGEMENT

  • No discrimination is permitted at work; the Ethical Committee operating in each Group company vigilantly observes the observance of these rules
  • We have implemented and are continuing to develop the Purchasing Organization Support System, also referred to as the TAURON Group Procurement Platform
  • We closely cooperate with trade unions to form a longer-term job outlook
  • We have appointed a Social Dialog Spokesman to oversee our relations with social stakeholders
  • We constantly conduct dialog with stakeholders and actively pursue a good neighbor policy

 

 

White certificates white certificates "White" certificates "white" certificates Certificates confirming the saving of a specific quantum of energy as a result of completing investments to enhance energy efficiency.
Biomass biomass Denotes a biodegradable fraction of products, waste and residue from agricultural and forestry production and related branches of industry, including fishing and aquaculture, and biogas and a biodegradable fraction of industrial and communal waste.
Sub peak power generation units sub peak power generation units Power generation units used during a period when the power system has a higher demand for capacity. Power generation units in this class are used from 2000 to 4000 hours a year.
Peak power generation units peak power generation units Power generation units used only during a period when the power system has the highest demand for capacity. Power generation units in this class are used fewer than 2000 hours a year.
Blue certificates blue certificates "Blue" certificates "blue" certificates Certificates confirming the generation of energy from agricultural biomass.
CAPEX Capital expenditures.
Red certificates red certificates "Red" certificates "red" certificates Certificates confirming the generation of energy in highly-efficient coal co-generation.
Net debt net debt Liabilities for loans and borrowings less cash and cash equivalents.
Dividend dividend Portion of a company’s net earnings per share designated for payment to shareholders.
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization.
Electromobility electromobility Using electric vehicles, both individual vehicles such as an electric car, electric scooter, electric motorcycle and electric bicycle and public transport means: trams, trolleybuses and trains. The assumptions for the Electromobility Development Plan and the domestic framework for the policy of alternative fuel infrastructure development call for there being one million electric vehicles on Polish roads by 2025. TAURON is conducting research and analyses on developing, promoting and disseminating electromobility among Polish nationals, developing the electromobility industry in Poland and in particular collaborating in launching and implementing the findings of scientific and technical work in this area. Moreover, jointly with PGE, Energa and Enea, TAURON has submitted an application to the Office of Competition and Consumer Protection to receive a permit to establish a company called ElectroMobilityPoland to create grounds for developing electromobility.
EMAS EMAS Eco Management and Audit Scheme, an EU instrument to encourage all types of organizations to improve their environmental protection constantly. Functions on the basis of Regulation (EU) no. 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organizations in a Community eco-management and audit scheme (EMAS). The EMAS requirements constitute guidelines for organizations to structure their environmental protection duties, optimize costs and effectively manage energy and resources. EMAS is also a system for reporting an organization’s environmental impact making it easier to conduct dialogue in this area with stakeholders. Registration in the EMAS system means that an organization has satisfied the most rigorous environmental requirements.
Prosumer energy prosumer energy Generation of electricity, chiefly for one’s own needs and on a small-scale in installations harnessing renewable energy sources. Households and businesses that do this are called prosumers, meaning that they simultaneously play the role of energy producer and consumer.
Energy from distributed sources energy from distributed sources energii ze źródeł rozproszonych energetyka rozproszona rozproszone wytwarzanie generacja rozproszona energetyki rozproszonej generacji rozproszonej distributed energy Generation of energy by small generation units or facilities connected directly to distribution grids or located in the user’s electrical energy grid that usually generate electricity from renewable energy sources or non-conventional sources, frequently in cogeneration with the generation of thermal energy (distributed cogeneration). The following parties, for instance, may be part of a distributed generation grid: prosumers, energy cooperatives and municipal power plants.
Purple certificates purple certificates "Purple" certificates "purple" certificates Certificates confirming the generation of energy from methane captured in mines.
grid parity Grid parity Signifies the equivalence of the production costs of renewable energy with the energy generated in conventional power plants.
TGE’s FCM Indices Towarowa Giełda Energii (TGE) is the power exchange running the following markets: electricity (Forward Commodity Market - FCM), Day-Ahead Market - DAM, Intraday Market - IDM) and gas (FCMg, DAMg) and the Property Right Market.
smart metering Smart metering Comprehensive and integrated information system encompassing electrical energy smart meters for users of energy, telecommunication infrastructure, central database and management system. Smart metering systems support two-way communication in real time between information systems and electronic electricity meters installed in customers’ locations. Moreover, they may automate the entire billing process for energy users - from obtaining metering data to processing and aggregating them to issuing invoices.
Stakeholder stakeholder stakeholders Natural or legal entity (individual, community, institution, organization, office etc.) which may affect the company or remain under the influence of its actions.
IoT Internet of Things – concept according to which clearly identified objects may directly or indirectly collect, process or exchange data via computer network.
Emergency Cold Reserve IRZ Mechanism introduced by the transmission system operator in 2016. It involves the TSO paying the owners of generation sources which are planned to be withdrawn for keeping them ready to run in response to the operator’s instruction during the anticipated periods of capacity shortage.
ISO 14001 PN-EN ISO 14001:2005 standard PN-EN 14001 standard One of the ISO standards used in managing environmental protection. This standard designated for all organizations regardless of their type and size defines the requirements whose satisfaction supports the achievement of environmental (for instance preventing the emission of pollutants) and economic objectives.
Covenant covenant Contractual clause, order or ban imposed on a borrower to minimize the risk of its invsolvency. Covenents most frequently constitute protection for sources of debt payment to creditors, e.g. by banning further borrowing or disposing of assets.
Aggregate aggregate Bulk organic or mineral material used mainly to produce construction mortar and concrete and build roads.
HV and MV Lines linii WN i SN sieci WN i SN HV - high voltage grid in which the voltage ranges from 110 kV. This grid is used to transmit electrical energy over large distances. MV - medium voltage grid, i.e. an electrical energy grid in which the electrical voltage ranges from 1 kV to 110 kV. Medium voltage is broadly used in electrical energy grids to transmit electrical energy over medium distances and switch energy. It is used as an intermediate voltage between high voltage and low voltage connected to end-users.
Customer loyalization customer loyalization Strategy to acquire and retain customers in this time of growing competition.
Micro-grid micro-grid Electrical energy micro-grid – set of generation equipment, electrical energy storage and receiver units connected in a joint network to ensure the reliable supply of electrical energy and minimize its cost.
Micro-cogeneration micro-cogeneration Technological process involving the cogeneration of thermal and electrical energy based on the utilization of small-scale equipment and medium capacities. Micro-cogeneration may be employed in all facilities in which there is a concurrent need for electrical and thermal energy. The greatest benefits from employing micro-generation are obtained in facilities in which the demand for these two types of energy does not oscillate much or is constant. That is why individual users, hospitals and educational centers, sports centers, hotels and public utilities are usually the most frequent users of cogeneration systems.
MSCI Emerging Markets Europe 10/40 Index Index comprising key companies listed on emerging markets in Europe.
MSCI Poland Index Index comprising more than 20 key companies listed on the Warsaw Stock Exchange.
Best Available Technology BAT The most efficient and sophisticated level of technology development and methods for conducting a given business. BAT are defined for various branches of industry. In the energy sector BAT forms the basis for determining borderline emission quantities, among others, to eliminate, or if that is not practicable, limit emissions and their overall environmental impact.
Sensitive user sensitive user According to the Act entitled Energy Law, a sensitive user is a person to whom a housing allowance has been awarded and who is a party to a comprehensive agreement or electricity sale agreement and who lives in the place where electrical energy is supplied.
Impairment losses impairment losses Losses because of the impairment of non-current assets taken in accordance with the regulations of international accounting IFRS (MSSF) standard.
Corporate Social Responsibility CSR Corporate Social Responsibility – business philosophy and management strategy calling for an organization to take responsibility for the impact exerted by its decisions and actions on society and the environment. Its foundations are rooted in ethical and transparent conduct, taking into consideration the expectations of stakeholders and cultivating good long-term relations with the overall environment. Corporate social responsibility is one of the key methods of achieving sustainable socio-economic development.
PV cells Photovoltaic cell (PV) – semi-conductor material in which the energy of solar radiation is converted into electrical energy.
omni-channel Omni-channel According to the omni-channel idea, the future of commerce is to conduct online sales while simultaneously encouraging customers to make traditional purchases. Online and offline sales during the digital revolution should fluidly penetrate one another.
Operating Capacity Reserve ORM Mechanism of providing operational reserves by the Centrally Discharged Units (JWCD), where they were able to deliver electricity to the system, but for market reasons were not used. It was implemented in Poland in 2014.
RES Renewable energy sources.
PM-RES Property rights to certificates of energy for electrical energy generated in RES.
Polygeneration polygeneration Parallel generation of energy and chemicals.
RESPECT Index Index consisting of companies listed on the Warsaw Stock Exchange to identify companies managed in a responsible and sustainable manner. It takes into account the quality of reporting, the level of investor relations, corporate governance and liquidity, among others, whereby it simultaneously constitutes a real point of reference to measure the attractiveness of companies as investments.
Balancing market balancing market The balancing market is what is referred to as a technical market. That means it is not a place to sell energy. Its purpose is the physical delivery of the energy purchase/sale agreements executed by participants and balancing the demand for electricity with its generation in real time in the national electrical energy system (KSE). The existence of the balancing market is indispensable for the energy market to function. Entities that buy energy have an obligation to participate in this market.
CATALYST Market Catalyst market Bond market. It is run on the transaction platforms of the Warsaw Stock Exchange and BondSpot.
SAIDI System average interruption duration index in the supply of electricity calculated in minutes per user. It is a reliability index whose value is the sum of the products of interruption duration in energy supply and the number of users affected by the consequences of such an interruption during a year divided by the total number of users connected to a grid.
SAIFI System average interruption frequency index of long interruptions in energy supply. It is a reliability index whose value is the number of users affected by the consequences of all such interruptions during a year divided by the total number of users.
Gangue gangue The rock that is extracted from a deposit of a given mineral that is considered to be unusable waste.
Smart City smart city Smart city is a project involving the implementation of specific solutions exerting a real impact on citizens. One example is supplying tools to urban residents to monitor energy consumption, among others. This is possible thanks to the special platform called eLicznik (eMeter). TAURON supplies smart meters, for instance, under the Smart City Wrocław project.
Smart Home smart home System to control a smart home. SMART HOME technologies control burglar alarms, temperature control and electricity supply systems. This is a real-time power consumption monitoring solution that TAURON offers via a platform to check readings from the smart power meter.
Smart grid smart grid Smart electrical energy grids to facilitate communication between participants on the energy market to supply energy services while cutting costs and enhancing efficiency and integrating distributed sources of energy, including renewable energy.
smart metering Smart metering Smart metering system – electronic system used to measure energy consumption obtaining more information than from a conventional meter, and to send and receive data through electronic communication.
small carbonate sorbent Small carbonate sorbent Fine carbonate sorbent (limestone powder) – is a product derived from the process of dehydrating and profound milling of limestone whose active ingredient is calcium carbonate, CaCO3. Fine carbonate sorbent is used in processes to desulfurize flue gas – to remove SOx.
Enterprise Risk Management System ERM Set of rules, standards and tools to accomplish the fundamental objective of risk management i.e. ensuring the security of the TAURON Group’s operations. This system is regulated by the document entitled Enterprise Risk Management System in the TAURON Group, defining the TAURON Group’s enterprise risk management framework and rules.
Tauronet tauronet TAURON Group’s corporate intranet portal, one of the most important tools of communicating with employees. One of the largest platforms of its type in Poland at the time of publishing this report.
CCS Carbon dioxide capture, transport and geological storage technology.
CCU Capture and use (management) of carbon dioxide, eg. in the the chemical industry.
Smart Technology smart technology Control system in a smart home, among others - it is responsible for the safety and living comfort of residents.
Towarowa Giełda Energii S.A. Polish Power Exchange TGE Towarowa Giełda Energii (TGE) (Polish Power Exchange) is the only licensed power exchange in Poland. Presently, TGE runs the following markets: Day-Ahead Market (DAM), Commodity Forward Market with physical delivery (CFM), Property Rights Market for RES and Cogeneration. TGE also keeps a register of the Certificates of Origin for electrical energy produced in RES and in highly efficient cogeneration sources and the CO2 Emission Allowance Market.
Energy Regulatory Office ERO Government authority regulating the Polish energy market (electricity and gas, among others).
Coal winnings coal winnings The rock material taken from the mine face. It includes the mineral and gangue.
WACC Financial ratio - weighted average cost of capital.
WIBOR Warsaw Inter Bank Offered Rate Warsaw Inter Bank Offered Rate - interest rate used on the Polish interbank market for interbank loans.
WIG Index comprising all the companies listed on the Main Market of the Warsaw Stock Exchange that fulfill the basic criteria for inclusion in its indices.
WIG20 Index comprising the 20 largest and most liquid companies listed on the Main Market of the Warsaw Stock Exchange.
WIG30 Index comprising the 30 largest and most liquid companies listed on the Main Market of the Warsaw Stock Exchange.
WIG-Energy Sectoral index comprising companies participating in the WIG index and simultaneously classified in the energy generation sector.
WIG-Poland National index comprising only the domestic companies listed on the Main Market of the Warsaw Stock Exchange that fulfill the basic criteria for inclusion in its indices.
Underground mining pit underground mining pit Space created as a result of mining works.
Highly-efficient cogeneration high-efficiency cogeneration Generating electrical or mechanical energy and usable thermal energy in cogeneration to save the original energy used in the cogeneration unit in an amount no lower than 10% compared to the generation of electrical energy and thermal energy in separate systems or in a cogeneration unit with an installed electricity capacity under 1 MW compared to the generation of electrical energy and thermal energy in separate systems.
Green certificates green certificates "Green" certificates "green" certificates Certificates of origin, i.e. a document that confirms the generation of electricity with renewable energy sources. The green certificate system has been in force in Poland since 1 October 2005 (and has changed in the new RES Act).
Yellow certificates yellow certificates "Yellow" certificates "yellow" certificates Certificate certifying the origin of energy. Operators of cogeneration units fired with gaseous fuels or with a total installed power source of less than 1 MW may be compensated with yellow certificates.
TPA Third Party Access - TPA is one of the most important principles (besides unbundling) on which the deregulated energy market is founded. TPA gives an energy user the right to buy it from any energy seller of its choosing.
EUA CO2 emission unit.
IFRS International Financial Reporting Standards – standards and their interpretations approved by the International Accounting Standards Board (IASB).
RFX Request for proposal.
Global Reporting Index GRI Independent international organization whose mission is to create a joint global framework for communicating responsibility and sustainable development. The GRI guidelines are an international reporting standard for organizations regardless of size, business sector and venue. Their application gives a guarantee of consistency in terminology and indicators.
International Integrated Reporting Council IIRC The International Integrated Reporting Council is an organization whose purpose is to create globally accepted integrated reporting guidelines based on combining financial, environmental, social and corporate governance reporting in a clear, succinct, coherent and comparable format. It consists of global leaders such as the International Federation of Accountants (IFAC), the International Accounting Standards Board, the United Nations Environmental Program (UNEP), the International Organization of Securities Commissions, the World Business Council for Sustainable Development and the Global Reporting Initiative (GRI).
integrated reporting non-financial reporting standard International integrated reporting standard encompassing financial and non-financial data devised by IIRC.

GRI indicators