Integrated report 2021

21.5 Other provisions

Provision for settlements with prosumers

In 2021, there was a significant increase in prosumer installations, mainly as a result of the „My Electricity” support program. According to the Energy Market Agency, installed PV capacity in Poland grew by 94% to 7.67 GW in 2021 vs. 3.96 GW at the end of 2020. In turn, the Act on Renewable Energy Sources of February 20, 2015 introduced a billing system for prosumers and energy cooperatives that generates losses for the obliged seller (i.e. PGE Obrót S.A.) the higher the percentage of electricity fed into the grid the prosumer or energy cooperative can compensate with its own consumption.

Therefore, the prosumer does not incur any variable costs of distribution services for energy drawn from the grid. On the other hand, the supply company, which is only an intermediary in the sale of distribution services, has to pay the full fee for the electricity consumed by the prosumer to the Distribution Network Operator. Supply companies, although they are not in the business of distribution services, are burdened with the costs related thereto due to the fact that they are a party to the comprehensive contract with the consumer.

The rights to use the current billing system are valid for the prosumer for 15 years. Current prosumers and new prosumers who apply for connection to the electricity grid by March 31, 2022 will be able to settle under the current rules. New regulations abolishing the discount system will come into force from April 1, 2022. As of that date, a net-billing system based on the purchase and sale of energy will be in force, involving the settlement of energy by value. From July 1, 2022, the prosumer will sell energy at an average monthly price. The surplus generated will be collected in the course of the year, but with all charges according to the seller’s tariff, so it will also pay distribution charges (hitherto charged to energy sellers). If, after one year, it obtains an overpayment, it will not pay out more than 20% of the value of the energy injected into the grid in the month to which the overpayment relates.

The necessity to respect the prosumer’s right to use the settlement system based on net-metering in accordance with the currently binding regulations of the Renewable Energy Sources Act for a period of 15 years generates further losses for PGE Obrót S.A. Therefore, a provision of PLN 74 million for agreements creating liabilities within the meaning of IAS 37 was recognised in these statements. The provision has been recognised for losses projected for 2022, i.e. the period of reliably predictable energy price developments.

Provision for potential claims from counterparties

In the second half of 2021, ENESTA sp. z o.o. terminated unfavourable contracts for the supply of electricity and natural gas. As a result, a provision for potential claims from counterparties in the amount of PLN 279 million was created.

In addition, in 2021 the Group created a provision in the amount of PLN 39 million in connection with the sale of shares in PGE EJ1 sp. z o.o. to the State Treasury. Pursuant to the Agreement regulating the liability of the existing Partners for the costs of dispute with Worley Parsons, in case of defeat PGE S.A. may be required to cover the costs of dispute in the amount of up to PLN 98 million. The amount of PLN 59 million is disclosed in contingent liabilities, in note 28.1.

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