Seven temptations of the Polish power sector in 2016

Report on the key challenges faced by the Polish power sector

2%

of the energy consumers in Poland are switching the supplier once a year, in the Great Britain this rate stands at 10%

27%

of more productivity is given by wind energy investments registered by auction-based system

11.000 MW

that’s the average level of the installed capacity from cogeneration sources in 2025

The report presents seven issues which constitute a challenge not only for energy companies, but also for the state, which creates future operating conditions for the industry.

The year 2016 was a time of seeking balance between the goals of investors and those of the state in the area of providing generation capacity in Poland in the long-term perspective.  The challenge for today is to create conditions to ensure that investments in new power plants are profitable.  It is also the time to make decisions about the future of both domestic cogeneration and the future of renewable energy sources.

In an environment characterized by increased competition and growing customer awareness, each company is looking for its own source of competitive advantage.  Innovation is certainly the right direction – but is every company today really capable of absorbing innovation?  Is it possible to build competitive advantage by offering customers as many products as possible?  Or is digitization the guarantee of future success on the market? 

 

#temptation 1:

Withdrawal from the conventional energy market

How to conduct operations to maintain the profitability of generation in the long term and finance investments?

Appropriate regulations are one of the factors that allow maintaining the balance on the market.  Their proper shape allows maintaining profitability of assets, ensuring energy security, and selecting the optimum energy mix and cost of the system’s operation.

 

#temptation 2:

The same support for all cogeneration units

What kind of support does the cogeneration segment need?

The target architecture of the cogeneration segment should allow for differentiating the level of support.  It will make it possible to manage the costs of the support mechanism reasonably and address the aid to entities that actually need it.  Such support should not be available to all cogeneration sources, though.

 

Effects of cogeneration
#temptation 3:

Giving up the renewable sources auction system 

How to provide adequate support for different renewable energy technologies?

The auction-based system of support for renewable energy has many advantages over the green certificate-based system.  One of them is the state’s full control over the development of the installed capacity from renewable energy sources and supervision over the preferred technology and direction of capacity installations in the country.

 

Power & utility companies on the innovation path
#temptation 4

From today on we will be innovative

How to improve innovation effectively across the entire value chain? 

Only companies that combine innovation with business objectives, as well as design and implement an operating model for innovation, will be successful.

 

#temptation 5:

The more products offered to the customer, the better

How to build the offer to achieve real competitive advantage

Customers on the energy market should receive an offer tailored to their expectations.  At the same time, the values of the energy company should be maintained.  The extensive offer of uncomplicated products may be a good solution addressed to a select group of customers.  It should be remembered, however, that this does not guarantee a sustainable competitive advantage.

 

#temptation 6:

We have to be digital

What is the key challenge in power sector digitization?

Digitization of the energy market is necessary.  IT maturity and digital maturity should be built simultaneously.  This can be achieved through major implementation programmes consisting of highly interdependent projects that change the business processes of the whole organizations.  Strong cooperation between business and technology divisions is the key.

#temptation 7:

We have already integrated our group

Does the present model of the relationship between the parent and the group companies effectively promote their competitiveness?

The essence of the integration is effective cooperation between subsidiaries on the operational level, which improves the operational efficiency of the whole group.  Integration is worth continuing, since it is one of the elements that build a sustainable competitive advantage. 

 

Contact us

Dorota Dębińska-Pokorska

Dorota Dębińska-Pokorska

Partner, PwC Poland

Tel: +48 22 746 7150

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