Impact on the economy

We are a guarantor of security and stability of the power system in Poland – today and in the future. We feel responsible for the security of future generations.

Being aware of the condition of national infrastructure, challenges and trends that affect the development of the system, we undertake new build and upgrade projects in order to ensure its stability and security.
Our activities help to improve the operation of the PPS and to optimise energy costs for consumers.

We are an initiator and electricity undertaking implementing solutions that support the execution of national plans related to the power system.

Through our core business and additional activities, we generate positive impulses in the Polish economy. We have a significant contribution to the creation of added value, new jobs, income of the population and, owing to the taxes we pay, to the development of the region.

We make purchases from local Polish suppliers – we run the business locally and thus have a positive influence on the development of the Polish economy.
Thanks to the services provided, PSE supports the development of industry in Poland – we create infrastructure and provide facilities for business development.
We endeavour to ensure that our investments contribute to the development of regions and local communities.

Fig. 2. Organisation of dispatching services in Poland

The TSO's cooperation with transmission system operators of neighbouring countries in network operation management is based on the rules described in ENTSO-E/UCTE Operation Handbook and conditions laid down in bilateral agreements.

DSR Intervention Programmes

At the same time, PSE implemented IT tools supporting the provision of meter data, billing of services and management of the DSR service with regard to activation of services and communication with participants. Based on comments submitted by providers of DSR services and experience gained from mandatory IP-DSR tests performed, changes were introduced, whereby the rules for the provision of the DSR service were refined and presented in a more transparent manner and identified constraints hindering the development of the DSR service market were eliminated.

At the end of 2017, another auction was announced under the developed and refined conditions for the provision of the DSR services.

Fig. 3. ENS and AIT indicators for emergency outages
*The values of the ENS and AIT indicators presented in the table have been calculated for unscheduled (emergency) outages and do not include scheduled outages.

In 2017, one emergency outage occurred, which resulted in a 3-hour interruption of power supply to one of consumers fed from the transmission network. The outage was caused by an emergency manual disconnection of feeder lines. The reason for the power cut was an unauthorised person having climbed a 220 kV power line pylon. The shutting down of other equipment, lines and transformers connected with the incident site was dictated by safety concerns.

In 2016, no incidents were reported, leading to interruptions of power supply to consumers at transmission network supply points, referred to above.

Low levels of the ENS and AIT indicators testify to a high level of operational dependability of the transmission system and the certainty of supply to consumers connected to the network.

ENS GRI EU28, AIT indicators GRI EU29 for planned and emergency outages

Fig. 4. ENS and AIT indicators for all outages (scheduled and emergency)
*The ENS and AIT values presented in the table have been calculated for emergency and scheduled outages resulting from necessary scheduled repair and maintenance work on transmission network elements feeding consumers.

The ENS and AIT values remaining at a steady low level (similar values for 2017 and 2016) has a positive effect on the confidence of consumers connected to the transmission network. We reduce the number and duration of interruptions in electricity supply to consumers due to scheduled outages by implementing systems optimising the schedule of repair and maintenance work on transmission network elements feeding consumers. In the case of scheduled outages, shutdowns are performed at times agreed with consumers, usually in periods of no power consumption declared by consumers. Thanks to this, during outage periods, consumers adjust their demand or use other methods electricity supply (e.g. from the DSO’s network).

Maintaining supply continuity indexes at a high level results from the transmission assets maintenance and repair policy adopted by the TSO.

What we do to maintain continuity of electricity supply to consumers:

• Development of long- and short-term network operation coordination plans.  
  Time schedules of both maintenance work and repair work on network elements and generating units so as to ensure the maintenance of surplus power levels required in a given period, available in excess of forecasted demand, and to ensure compliance with the required secure network operation criteria, including the reliability criterion (n-1).

• Development and implementation of a single maintenance model that allows the state of repair of equipment and its operational environment to be evaluated in a cyclic, standardised and measurable manner. Owing to those activities, the most depreciated and oldest grid assets – the potential source of emergency and fault conditions – are preventively replaced.
• Implementation of the maintenance personnel development programme. It supports continuous competence building of the company's own maintenance personnel, including field personnel.
• Undertaking investment activities.Optimises the loading of transmission lines and eliminates overloads of transmission system elements.
• Systematic standardisation of network equipment and creation of storage facilities. Supports quick and cost-effective necessary replacements.

Our company has been preparing to embark on this ambitious investment process for several years. We have prepared and implemented a new, effective investment model.

GRI 103-2 Network Investment Portfolio

According to the new Project Implementation Model implemented at PSE, we have deployed a tool for the management of the network project implementation process – Network Investment Portfolio.

The projects included in the Portfolio are grouped, categorised, prioritised and sequenced for implementation taking into account specific system conditions related to the possibility of required outages of transmission network elements. The portfolio is subject to quarterly updates, and in each case it requires the acceptance of the Investment Committee.

The Network Investment Portfolio consists of transmission network construction, expansion and upgrade projects for which:

• agreements have been signed with contractors,
• a public contract notice has been published,
• a contract award decision has been made.

Owing to functional interrelations and a common objective of certain investment projects, the projects included in the Network Investment Portfolio have been grouped into investment programmes so as to allow each programme to be assigned a separate meaning reflecting its role in the system and the expected outcome. Projects have been grouped into programmes taking into account the results of system analyses performed at the stage of scoring analysis of investment projects and tasks included in the Investment Projects Plan of PSE S.A. 2017-2021. This way, 5 strategic programmes and 3 area programmes have been created.

GRI 103-2 The network infrastructure maintenance process is based on the grid asset maintenance model. The model, together with the “Instructions for the Organisation and Execution of Maintenance Work on Lines and Substations” is a set of overriding principles that govern the process of grid asset maintenance in the area of organisation, planning, execution, documentation and billing of maintenance work.

The model defines the scopes of work and the rules for the performance of work with reference to laws and regulations as well as statutory obligations imposed on the transmission system operator. Hence it creates conditions for the systematic execution of the optimisation process with regard to the maintenance of grid assets. Arising directly from the maintenance model are detailed rules for equipment maintenance put together in the Instruction on the Organisation and Execution of Maintenance Work on EHV Lines and Substations, as well as the guidelines on the assessment of the state of repair and the repair qualification rules.

We have updated the asset maintenance model based on our previous experience. We have opted out of the Time-Based Maintenance (TBM) process which is based on fixed work cycles resulting directly from O&M manuals of individual equipment units. The new asset maintenance model has been developed on the basis of the PdM (Predictive Maintenance) methodology, , i.e. maintenance technique based on the prediction of needs. it combines regular measurements of the state of repair taking into account expected quality outcomes of work (diagnostics results). The main focus is placed on diagnostic work providing a basis for a measurable result of the state of repair of individual pieces of network equipment.

The outcomes of the work concerned, combined with the experience gained through many years of maintenance of equipment make it possible to assess its state of repair and forecast the rate of deterioration, and consequently to identify the impact of maintenance (inspections, maintenance procedures) on the condition of individual facilities in the future. At the same time, the maintenance model makes it possible to forecast the cost of maintenance of individual equipment units throughout their service life.

GRI 103-1 In the network maintenance process, we use the Asset Management IT process. It covers the entire maintenance process, i.e. a complex database of assets, registration of events, work planning and execution, contract management and warehouse management. Owing to this, all the above-mentioned are performed at a very high level of detail necessary to ensure the expected support to the decision-making process in the grid assets maintenance area.

Owing to the fact that PSE’s assets are dispersed across the country, a geographic information system (GIS) is necessary for its proper management. The Spatial Information System (System Informacji Przestrzennej – SIP) used for the purpose, based on the ArcGIS platform, allows e.g. the impact of the external environment on the transmission network operation to be analysed. It provides key support in identifying the dependability of linear right-of-way facilities and allows precise targeting of inputs and expenditure on PSE’s network infrastructure maintenance in the expected state of repair.

Maintenance of grid assets also requires the support of IT systems, but the core effort of the whole process is based on field teams of our company, based at five field units of the Maintenance Department: in Warsaw, Radom, Katowice, Poznań and Bydgoszcz. Owing to a significant geographical distribution of assets, field units are additionally subdivided into 28 ZES Field Maintenance Divisions. Through their work, ZES employees ensure the security of operating as well as diagnostic and maintenance activities. Through their involvement in protecting and identifying network failure locations, they also serve as a power emergency service for the purposes of the transmission network operator. The competence and specialised skills of the employees of Field Maintenance Divisions are maintained at a high level owing to systematic technological training. On the other hand, owing to the maintenance personnel development programme launched, the training provided to ZES employees is comprehensive and systematic.  

Ensuring the ICT and technical security of the power system

ICT security of the power system is ensured as part of core tasks of dedicated IT units, implementation of the ICT Strategy, and cooperation with other power system operators in developing ICT security solutions.  

The scale of these challenges and the size of utilisation potential of electric cars as a smart element of PPS management is the subject of modelling in the scenarios of development pace of the electric car market in Poland, as prepared by PSE.

The scenarios were based on the analysis of factors that condition consumer choices when buying cars; the costs of purchase and running costs and the comfort of use which depends, among others, on the range of electric cars and availability of charging stations. Based on the forecasts of the increase in the number of electric cars in Poland, we build models of charging demand spread over time, along with optimisation of the location of charging stations in space. These are translated to forecast of capacity and energy demand increase in Poland by 2050. The forecast is prepared on the nationwide scale and for individual metropolitan areas which display the potential for the widespread use of electric buses in public transport.

Knowing the scale in the increase of demand for capacity and energy for electric cars, tools can be designed to manage the electric car charging process to minimise its impact on PPS loading at peak hours and use it to flatten the so-called night demand valley, by offering tariff incentives so that people charge electric cars when demand from households and the industry is the lowest, for example at night, and reduce consumption by charging stations at peak hours or during failures.

The analyses are useful for estimating the scale of investments carried out to develop the distribution network and the charging stations to meet the needs of the growing number of electric cars in Poland. Next year, they will be useful for estimating development of services for electric car users, such as mapping of the available charging stations and payment for provision of electric car batteries as mobile energy stores.

Prosumer Energy Cloud

The changes in the behaviour of electricity users, operating models of electricity suppliers, changes at the producers and the expected major development of electromobility that has been observed will lead to changes in behaviour of energy market participants and thus the operating model of power systems. With the intention to catch up with these changes and the changes expected in the future, we are testing various operating concepts for the energy market and power systems. New elements and system users (distributed energy, electromobility and controlled electricity loads) are no longer treated as passive participants of the energy market, but perceived as major players who are able to support maintenance of the proper operation of such systems.

Our organisation is the initiator of a bold vision, which is an attempt at adapting the cloud concept for power systems, which assumes that the power system is a virtual electricity store with free access for every participant. This vision is a concept of adaptation of the energy cloud for prosumers, i.e. end consumers of electricity connected to the low-voltage network who have their own producing micro-installations.

The energy cloud dedicated for prosumers is called the Prosumer Energy Cloud, PEC. This is a proposal of a new service supplied by network operators to prosumers. In physical terms, PEC implementation consists in recording the volume of electricity introduced to the power system by the micro-installation of the prosumer and recording the volume of electricity consumed by the prosumer from the system. Volumes of the energy introduced and consumed by the prosumer are saved in their portfolio. Treatment of the power system as a virtual store would allow prosumers to virtually store the surplus of energy generated in their micro-installations and freely use the stored energy at any time (not necessary matching the time of production). This is illustrated in figure 7.

Fig. 7. The idea of PEC. Source: prepared by PSE Innowacje.

Introduction of the PEC will allow the prosumers to use the power network, will considerably facilitate settlements between the prosumer and the electricity supplier, will contribute to the further balanced development of local sources of energy installed in prosumer micro-installations and will facilitate implementation of assumptions of the national electromobility programme.

The PEC concept developed to date is the first stage of development. At the next development stages, it is assumed that the command and control over the operation of the equipment in prosumers micro-installations will be supported in the form of sources, controlled receivers and physical energy stores, such as home energy stores or batteries installed in electric cars. Ultimately, PEC will also support aggregation of prosumer resources, which would create brand new opportunities of using them to supply various types of regulatory and system services.

How does the project translate in practice into PPS operational quality?

Training course being implemented for 2018.

Fig. 9. Training course being implemented for 2018.  

Costs of implementation of advisory services and R&D works*

Fig. 10. The costs of implementation of advisory services and R&D works

* Advisory services and R&D works were mostly carried out by PSE Innowacje Sp. z o.o for PSE. In addition, PSE Inwestycje S.A., Joint Allocation Office S.A. and TSCNET Services GmbH provided services to PSE. 

Work carried out in 2017 on the development of the Capacity Market Rules

The Capacity Market Rules were developed by PSE on the basis of Art. 82 and 83 in conjunction with Art. 93 (1) of the Act of 8 December 2017 on the capacity market. The purpose of the Rules is to define detailed terms of cooperation between the operator and other participants of the capacity market on the basis of equal treatment and non-discrimination of capacity providers and in a manner ensuring correct and uniform performance of capacity obligations by all capacity providers in a given period of delivery. The Capacity Market Rules regulate:

1. rights and obligations of the operator and applicants as part of the general certification and its progress,

2. rights and obligations of the operator and capacity providers as part of certification for power auctions and the power auctions, as well as their progress, and in this respect the Rules constitute the conditions of auction as determined by the operator within the meaning of the Civil Code,

3. rights and obligations of the parties to capacity agreements - in this respect, along with the model capacity agreements attached to the Rules for the Capacity Market, the Rules for the Capacity Market constitute a civil law contractual model as established by the operator, within the meaning of the Civil Code,

4. conclusion of capacity agreements as a result of transactions executed between capacity providers as part of secondary trading in the capacity obligation on the secondary market,

5. cooperation of the operator with the clearing manager as regards the performance by the clearing manager of the obligation to pay capacity providers the remuneration for the performance of the capacity obligation,

6. payment of bonuses to capacity providers, as defined by provisions of the Act of 8 December 2017 on the capacity market,

7. cooperation between the operator and distribution system operators to the extent necessary to ensure the proper functioning of the capacity market, in particular in the field of verifying the correct performance of capacity obligations by capacity providers,

8. other matters reserved by Art. 83 of the Act of 8 December 2017 on the capacity market to be governed in the Rules for the Capacity Market.

The Rules for the Capacity Market were approved by the ERO President, in consultation with the Minister of Energy, by decision of the President of ERO of 30 March 2018.

Fig. 11. Visualisation of the input-output model. Source: prepared by Deloitte

Contribution made by PSE to the Polish economy in 2017

Added value

• Direct value added generated by PSE in the branch of electricity generation and transmission was PLN 4.42 bn.
• In the industries where we purchase equipment, materials and services and in the related industries, we contributed to generation of a total of PLN 1.63 bn value added.
• Through cooperation with multiple enterprises and subcontractors of our counterparties (contractors), through remuneration paid to them, we considerably contributed to boosting the demand in the economy, which consequently in 2017 resulted in the induced value added of PLN 0.76 bn.

Fig. 12. Value added generated in the Polish economy as a result of PSE operations in 2017. Source: Deloitte estimates

Fig. 13. Value added generated in various branches as a result of PSE operations in 2017. Source: Deloitte estimates.

Jobs

Through our purchases from other industries and the interdependencies between them, and through the sales of our services, we significantly contribute to retention and creation of new jobs not only at our head office and PSE ZKOs, but also in various sectors of the economy.

More than 15,630 jobs - total number of jobs retained in the Polish economy in 2017 through PSE operations

• In 2017 the average number of persons employed in PSE was 2,089 employees.
• In the industries in which we purchase materials, equipment and services and in the related sectors, we maintain more than 6,800 jobs.
• By awarding contracts for investment, upgrade and repair tasks and by way of cooperation with multiple suppliers and sub-suppliers we ensured, in the induced way, nearly 6,700 jobs in the industries related to our activities.

7,48 - multiplier effect
One job in our company creates more than 6 additional jobs in the entire economy.

Multiplier effect: The multiplier shows how added value, employment and salaries change throughout the economy as a result of changes of those values at PSE. Calculated from the formula: total effect/direct effect.

Fig. 14. Jobs retained in the Polish economy as a result of PSE operations in 2017. Source: Deloitte estimates

Fig. 15. Jobs retained in the individual industries as a result of PSE operations in 2017. Source: Deloitte estimates

Salaries

Salaries are one of the most important measures of household affluence, and at the same time a guarantee of fulfilment of their subsistence needs. By hiring our staff and having indirect influence over contractors, suppliers and subcontractors who hire thousands of persons and pay their salaries, and through the induced contribution, we positively contribute to the generation of additional salaries in many industries of the Polish economy.

PLN 591m – total value of salaries generated in the Polish economy in 2017 through PSE operations

• Total salaries in our company in 2017 were nearly PLN 190m.
• Through procurement with our suppliers and economic relations among various branches, the contractors, suppliers and subcontractors were able to pay total salaries to their employees at over PLN 265m.
• Salaries paid directly in our companies and indirectly in the industries where we purchase materials and services positively contributed to an increase in household consumption. In turn, this created new jobs and salaries generated in the induced way, with a value of over PLN 136m in 2017.

3,12 multiplier effect
Every zloty spent by us on salaries generates more than 2 additional zlotys of salaries in the entire economy.

Fig. 16. Salaries generated in the Polish economy as a result of PSE operations in 2017. Source: Deloitte estimates

Fig. 17. Salaries generated in various branches as a result of PSE operations in 2017. Source: Deloitte estimates

We support public finance

GRI 203-2 As an electricity transmission system operator in Poland we considerably contribute to taxes and fees paid by the energy sector each year. Numerous investments which we financially support by paying fees and taxes involve construction of roads, environmental protection, improvement of the quality and safety of living and greater educational opportunities.

PLN 1.31 bn – total amount of taxes, fees and contributions paid by PSE to the state budget and local government budgets in 2017

Fig. 19. Tax receipts to the central budget. Source: Deloitte estimates

5 greatest tax beneficiaries at the voivodeship level

Fig. 20. 5 greatest tax beneficiaries at the voivodeship level. Source: Deloitte estimates

10 greatest tax beneficiaries at the poviat level

Fig. 21. 10 greatest tax beneficiaries at the poviat level. Source: Deloitte estimates

10 greatest tax beneficiaries at the municipality level

Fig. 22. 10 greatest tax beneficiaries at the municipality level. Source: Deloitte estimates

Table 11. Number of contractors, subcontractors and suppliers with whom partnership has continued for several years (2013-2017)

Fig. 23. Meetings with authorities and institutions related to project implementation

Key figures:

Impact of investment projects on the development of regions

GRI 203-2 Public purpose infrastructure investments, including the construction of electrical substations and EHV lines, significantly contribute to the improvement of living standards throughout the region. They perform a number of functions which are important from the point of view of the region and local communities.

Benefits of power investment projects:

• increasing the investment attractiveness of the region,
• ensuring better access to electricity due to the lack power consumption constraints,
• significant budgetary revenue from taxes paid to communes – each year, a commune receives tax revenue of 2 percent of the value of the investment implemented in its territory,
• growth of local business – employing local companies as subcontractors, services to contractors,
• creating new jobs.

GRI 103-1 GRI 103-2

Educational activities

Issues related to power engineering and our activities as transmission system operator are highly important from the point of view of the economy and electricity consumers. At the same time, they are complicated and often incomprehensible to final consumers. As a socially responsible company, PSE carries out a number of educational actions for primary and lower secondary school pupils, as well as a series of workshops for journalists dealing with the power sector.

Educational actions

PSE's investment projects are accompanied by educational actions targeted at children and school youth, which translates into local communities. The activities help to build knowledge of power engineering and energy security, and to alleviate investment-related concerns. In 2017, PSE held several educational actions which yielded measurable outcomes.

Number of people physically or economically displaced and compensation for displacement

We make all efforts to avoid displacement in consequence of project implementation. In 2017, we recorded two cases of necessary displacement due to the expansion of an electrical substation.

An overarching objective of the projects is to satisfy the current and future needs of society, enterprises and individual consumers. To achieve it, joint efforts are necessary of all interested parties.

GRI EU 22 Number of persons physically or economically displaced and compensations, by project type

Construction nuisance

The preparation and commencement of a line or substation construction or upgrade project sometimes gives rise to unreasonable concern among residents about losses resulting from its implementation. This concerns mainly potential damage to public and private roads, crops, meadows, trees, etc.
In line with our best practice, upon completion of work we carry out necessary reclamation and pay, in agreement with the plot owners, compensation for damage caused. In the absence of an agreement, the appropriate compensation is assessed by a property appraiser.

Impact of electromagnetic fields

All electrical equipment generates an electromagnetic field around it, resulting from the presence of voltage and current flow. Extra-high voltage lines belong to this group of equipment. Low-frequency (50 Hz) electromagnetic field is created around the line, of the same type as that generated by a vacuum cleaner or electrical appliances used in every home. The impact of electromagnetic fields is a common subject of discussions on the potential impact on human health.

The results of surveys carried out so far around the world do not confirm concerns about the negative impact of low-frequency electromagnetic fields on human health and other living organisms, nor do they exclude such impact. It is exactly for this reason that Poland and the whole of the European Union have adopted relevant laws and regulations specifying, with a large safety margin, the acceptable values of impact of power facilities. They are stringently observed by our company. Prior to putting a facility into service, electromagnetic field measurements are performed, which are then subjected to verification by environmental protection bodies, which eliminates the risk of non-compliance. Interested readers are referred to the World Health Organisation (WHO publication "Environmental Health Criteria No 238 - Extremely Low Frequency Fields”, Geneva, Switzerland, 2007).

For each investment project performed, we prepare information guides addressed to local communities, which contain reliable information on the investment concerned, including its environmental impact. Additionally, the impact of electromagnetic fields is always one of the subjects of a programme of regional conferences organised by our contractors in cooperation with us.

GRI 103-1 Noise

The emitted noise level depends on the power line design and on weather conditions (it is much higher during drizzle and rain, which is beyond our control). Noise coming from newly designed lines outside the rights of way does not exceed environmental limits.

The main noise sources at our substations are transformers. We use equipment with a reduced sound power level and advanced cooling solutions. In special cases, noise screens are erected to suppress noise.

GRI 103-1 Landscape values

By assumption, we avoid running power lines across areas of special landscape value. However, the problem of a power line view, even a distant one, from a window is one of the main causes of social protests. Form each project, we aim to integrate the line into the landscape so as to minimise any negative aesthetic effect.

Electric shock or lightning stroke

Our extra-high voltage lines are fitted with ground wires. This means that the risk of lightning stroke in their vicinity is reduced. However, elementary caution is always required to be maintained near a line – in particular when performing work with the use of farming equipment.

Failure removal

Owing to a lack of legal norms governing transmission rights of way for power lines built in previous years, sometimes problems arise on privately-owned land, as repair teams' access to properties concerned is hindered or prevented. Hindering access to a site extends the time to remedy a failure or perform a repair, which causes problems, especially for the local electricity consumers.