TAURON Polska Energia S.A. (TPE.WA) Earnings Call Transcript & Summary

Good morning. I'd like to welcome you on the conference call -- earnings conference call for TAURON Group for the first 3 quarters of this year. Our meeting will traditionally be split in 2 parts. We will start with the presentation of the earnings that will be made by Piotr Golebiowski, the Vice President of Management Board for Trading; Krzysztof Surma, Vice President of Management Board for Finance; Michal Orlowski, the Vice President of the Management Board for Asset Management and Development. Next, we'll move on to the Q&A session for media and analysts that you can ask via form. My name is Justyna Lukawska. I'm responsible for our communications within TAURON Group. So let's start the presentation. I'd like to ask Mr. President, Piotr Golebiowski to take the floor.

Good morning, ladies and gentlemen. I'd like to present before we move on to the financial results of our assets. Let me show you how our assets were used. I'll start into -- split into 2 parts. Let's start with the generation portfolio and then the supply portfolio. Over 9 months have passed, we've increased by observing the increased CDS. This is mainly due to the decline of coal prices, which was partially compensated with the increase of carbon emission allowances. But the principle, the economics of the conventional units have been -- has improved. With respect to low efficiency units, 200-megawatt units, CDS are permanently negative, so nothing much will happen in this area. Another important element that we observe is an increase of spot and next-day market bouncing markets, prices, lower wind conditions, weaker conditions and lower outdoor temperatures that had an impact upon our renewables operations. Unfavorable hydrological conditions. Also due to the 20% less water flows also led to degrading of ability to generate electricity from our hydroelectric power plants. We were dealing also with a relatively higher level of redispatching of renewable sources by the TSO that was about 1 terawatt hours, increased by about 65% -- this is quite a symptomatic event that we'll be observing probably also in the subsequent years, in the subsequent months. And additional element that definitely we felt in many business aspect was the number of negative hours. We had within the first 9 months, 354 on the first fixing versus last year's period, similar period, it was 196. So therefore, we've seen quite a strong growth here. Regarding the electricity generation of our group 7.7 terawatt hours over the 9-month period is an increase by 5% versus the same period of last year. Regarding the split into conventional assets and the renewables assets in the conventional, it was a 5% increase as well in terms of renewables assets, which include wind, solar and water hydro locally speaking. So the level of production was maintained is flat versus the production last year, but we observed an increase of the production from our biomass fire units, which translated into a total increase of production assets, low emission at the level of 5% -- the result of a consequence of increase of production from the conventional units was an increase of consumption of coal, which came in at 3.2 million tonnes. It's a 3% increase versus the 9 months of 2024, an increase of consumption or demand for carbon credits at the level of almost 6.5 million tonnes. It was an increase by 6%. I mentioned the dispatching by the TSO. Ou capacities as far as the share of our unit in dispatching is very low because it's at the level of 1%, which versus what's being dispatched all over Poland. But this is -- major contribution to it is due to our operations related to anticipating the negative hours auto dispatching of our generation units. Wind farms and photovoltaic farms, which meant that we had a saving of around PLN 4.5 million. The dispatchability of the units -- availability of the units, I assess it as a principle as satisfactory in terms of renewable assets, it went up versus 2024. So our photovoltaic farms and wind farms were working very well. The wind farms had a 97% availability rate. And gradually, visibility rate of hydropower plants is going up, went up by 3%, but still, it stays at the level of around 86%. It's worth noting the availability rate of TAURON generation units, 75% of the availability rate caused by the overhaul -- major overhaul of the Lagisza power plant. It took 5 months. It had an impact on availability rate versus last year as well as a level of failure rate that we still have to face at Nowe Jaworzno, but we are still working on. It's too high. With respect to the cogeneration units, an increase of availability rate by 2.5%. We consider it to be a satisfactory level and there are no major reasons except for the partial failures of units for this availability rate to cause any -- me to comment in any way. Let me move on now to the portfolio -- supply portfolio, supply assets. The domestic electricity consumption was declined by 2.5%. During that time, our consumption of electricity on our distribution area remained at a stable level, flat. It didn't go down. We observed an increase by more than 3.4%. With respect to electricity consumption by the households. This was the result of connecting additionally about 50,000 consumers to the grid, that was compensated by about a 1% decline of electricity consumption among the B2B customers, partly caused by the reduction of production in the auto subsector, steelmaking subsector and the mining subsector. In terms of electricity supply, we observed the level of 18 terawatt hours, 9% decline versus last year, but declined by about 1.8 terawatt hours was due to what we already indicated presenting results of first half of the year, putting in order or systematizing our supply portfolio. We are trying to eliminate the low-margin generating contracts, contracts that generate commercial trading risk. But let me be frank here, but also the decline of electricity supplies caused by the partial expansion of our competitive -- competing companies that, in particular, are focusing on SME customers. However, relatively steadfastly, we are observing a decline of this expansion activities. We are trying to protect our markets and this rate of acquiring of customers in our area by competitors went down by more than 50% versus last year. The new energy product supply sales are growing. It's about 1% level now. We have almost 15% of winning level of sales, the total consumption of electricity of customers that have bought our green product versus the total demand of portfolio of customers. The number of customers interested in the new energy, the long-term 9-year product that we're offering at a fixed price went up by 22%. It is now almost 370,000 of such customers. At the same time, we launched in July, new product cheap hours. We are very happy with this product -- on this product now. We have almost 15,000 customers using this product. An important element I'd like to emphasize is the element of our product policy that incorporation of customers generates benefits in energy bills, utility bills that customers took advantage of our dynamic pricing within the first 9 months of this year, they gained an average sales price in the region of [ PLN 420 ]. So let me say that PLN 505 is a benchmark price [indiscernible] excise in the case of customers that are actively managing the demand, this level of price level went down significantly. It's clear indication of how much those products are required, high in demand and that they find a very high demand in this product offering that we are offering. That's all regarding the results of our assets regarding the productivity and operations. So please continue.

Thank you, Piotr. Let me now try to present the financial results after the operational -- operating part. Regarding the key financial date, if we look at the revenue, the revenue year-over-year went down slightly, minus 3%. However, let's remember that a certain portion of this revenue is compensation payment. If we strip out the compensation payments, the sales revenue would go up by close to 4% year-over-year. As a matter of fact, those compensation payments are an effect of price freezing to a large extent, and they depend on the level of the market price and the prices set in the tariff. So now the space between the frozen price and the tariff price is much lower. So the level of compensation payments is much lower year-over-year. The number of consumers is smaller year-over-year. If you look at EBITDA. EBITDA year-over-year went up very significantly markedly in a quarter of very good earnings. We are continuing a good trend in total versus 3 quarters of last year. The EBITDA went up by 23%. Here also we can boast the consensus of the analysts. We beat this consensus in the cumulative quarterly analyst by more than [ PLN 0.5 billion ]. The net profit, PLN 2.9 billion, the net profit, also a record-breaking performance in the history of our group. Here, the key issue versus last year was total rec of impairment charges write-downs. Last year, we booked major write-downs related to conventional assets. As far as CapEx is concerned, close to PLN 3.7 billion. In total, it was very similar, almost flat versus last year. Michal will speak more about that in his section. However, as far as the net debt-to-EBITDA ratio, it currently stands at 1.4x and went down by 1x versus the comparable period of last year. Here, to a large extent, this was impacted by a very good operating earnings, [indiscernible] the decline of nominal debt. If you look at the comparable EBITDA is different this year-over-year is a bit lower. So we are saying that it went up by 15%. And the key aspects such as one-off events that had an impact on the fact that the reported EBITDA differs from the comparable EBITDA are all related to the supply segment and starting from next year -- from last year, we kept repeating it a number of times. We got a positive interpretation regarding the VAT deduction in the payments customers VAT on the [ PLN 125 by PLN 125 ], the individual customers' bills were reduced. The other portion of those one-off events in the supply segment, one can say stems from the nonuniform allocation of revenue costs. This was due to the very nontypical event, so setting the tariff for 1.5 year in 2024. Let us remember that the beginning of July last year, the tariff in the middle of the year was changed, and it was set over a period of another 18 months. So at least that was the assumption that meant that the cost of electricity that already were hedged last year, they were higher than the tariff-based revenue. On the other hand, the cost for the current year were to be lower versus the tariff-based revenue. And this difference is PLN 275 million last year of losses on the margin of the G tariff this year, of course, had it not been for other event, this revenue should be higher accordingly in the 3 quarters by PLN 270 million. And this was mainly -- was the main reason for this comparable EBITDA to be slightly lower than the reported EBITDA. Let's move on to the slide showing the EBITDA and the result of individual segments. Here, invariably, our #1 generating the key part of EBITDA in the group is distribution a year where more than 60% of EBITDA is generated by this segment. The second biggest contributor to EBITDA, it's worth mentioning that a little bit of first 3 quarters in the distribution segment reached more than PLN 8.3 billion. We have the second segment that is key in our case is the Supply and Wholesale Trading segment. Here, the EBITDA close to PLN 800 million. And again, this is the second biggest contributing segment to EBITDA. Number three, spot on the podium every year, this change to a certain extent and the renewables keeps alternating for the conventional generation segment. This year, the conventional generation segment generated better results versus the renewables. I will elaborate on the next slide. Let me just add here that all the EBITDA are positive. So this is also a very good result in the context of the past years when not all segments generating positive EBITDA results. Moving on to the next slide, describing the individual segments. I mentioned the key segment distribution, an increase in the comparable period by more than PLN 700 million. 2 key factors. One can say one as far as the generated margin here, higher value of regulatory asset base. This is a result of the investments that we made in the past year. And the second factor is the weighted average cost of capital, but close to 0.4 percentage point went up year-over-year. This is the key factor behind the increase of the EBITDA in the distribution segment. And the second factor, which is more variable over time is the settlement of the regulatory account. This year, we have a positive settlement of the regulatory account. Last year, regulatory account was negative. This year is positive. Next year is going to be negative again. This is a matter of fact the result of settlement of the volumes of the difference between what was agreed upon in the tariff and what was actually performed in the end last 2 time frame, 2 years later. The actual performance volume is accounted for in the segment with a 2-year lag delay. Regarding the Renewables segment, the key factor unfortunately declined by PLN 71 million year-over-year. And the key factor behind it was the decline of the prices on the market. This is a direct impact upon the EBITDA of this segment. Regarding the Generation segment, good results here, good earnings year-over-year. First of all, the volume went up. However, one thing is the sales volume that Piotr mentioned the production volume and sales volume. First of all, the sales volume is important here. In the current year, the margin due to an increase of sales volume went up by PLN 300 million. So we managed to generate good earnings, good results. It is generated in all 3 areas. It is a result of an increased futures sales increase on the balancing increased sales on the balancing market and increased sales on the spot market. All those factors contribute to the fact that year-over-year, we have a higher EBITDA by PLN 300 million. Regarding the second important component of this growth, more than PLN 100 million was generated by the system services ancillary services increase of revenue from the capacity market. This is first of all, an inflation-based increase where this revenue is -- increased by this rate and as I said there is a lag and the conversion [indiscernible] contribution of high inflation rates from previous years in the balancing market a number of times. Last year in June, a new balancing market was launched. Of course, in Q3, it became highly normalized, but the first quarter generated a strong growth year-over-year. Moving on to the Heat segment. Here, the result, one may say is worse year-over-year. However, if we stripped out the one-off event that in the core operation, the result is slightly better year-over-year, especially in the heating part results are better. Of course, here, the fact behind margin generated increase over transmission rate tariff. So the results are better but on the electricity sales results are better. But the main factor the year-over-year result was weaker is the effect of the deconsolidation of TAMEH Czech subsidiary last year in the recalculation of the deconsolidation, the company generated last year additional extra results in the region of PLN 64 million. It was a one-off event that couldn't have been repeated this year. So it was a determining factor for the results, earnings of the segment in the first 3 quarters. Regarding the supply segment have an improvement year-over-year, more than PLN 100 million. The EBITDA went up. And here, one may say that 2 or 3 key factors behind it. after the negative one I already mentioned, it's negative. It's a one-off event that was positive in 2024, the positive tax interpretation, VAT tax interpretation but we have 2 factors, much higher margin on the sales of electricity to the business customers and the MSCs and a bit higher margin in the G tariff. Here, one could think why only such a difference, although the fact on the first bit, but we described the comparable EBITDA, we're indicating PLN 250 million. And let us not forget that -- other factors were negative -- the negative impact here. First of all, the negative impact came from the profile issuance, the consumer issuance, payments for the distribution in this segment. So these 2 factors have a negative impact. That's why it's not factors do not translate this one-off not translate on the increase of EBITDA that is due -- stems from the sale of electricity to individual customers. If we can move on now to the issues related to debt. For some time now, we've been showing a full bridge of the gross economic debt as well as the net debt. And look, starting from the gross economic debt, it went down by more than PLN 2 billion year-over-year. Of course, the key aspect is the operating results. As before, we are much better year-over-year before the impact on the operating cash flow. And generally, it led to a decline of debt. What we also like to draw attention to is, of course, in the [indiscernible] last year, improved balance of capital. And if we look at the individual items that probably are interesting throughout this bid is a slight decline in the provision for carbon credits. This is due to slightly lower prices, average prices, including the average purchasing price of CO2 allowances. But what we have been showing for 2 quarters now -- previous quarters is the matter of including the national recovery plan funds. And here, we want to be [indiscernible] we are showing the full inclusion -- in the first -- in total, the spreads [indiscernible] the distribution segment, out of which [indiscernible] included in the prepayments and accruals according to IFRS 20. So in total, you can see [indiscernible] in the interest rates, [indiscernible] portion [indiscernible] the subsidy based on [indiscernible] prepayment and the accruals item. Another thing [ that is relating to the ] previous quarters is the declining level of the bond, [ ordinated ] bonds. Of course, debt with higher interest rate due to its nature. And we are gradually exiting [indiscernible] in December last year, we exited and we explained that [indiscernible] our intention to repay the significant portion of the debt in December of this year and March next year. So this item will be going down. [indiscernible] to our growth in renewables and the distributor segment. [indiscernible] is stable [indiscernible] September 30. That's all regarding the financials. Let me hand over the floor to Michal, who will speak about the investment portion.

Ladies and gentlemen, the total CapEx of TAURON Group [indiscernible] of PLN 3.7 billion stable level flat versus last year. Our largest segment remains distribution line of -- close to 70% of this year's CapEx with 46% was allocated to the construction of the new grid connection for sources and new consumers and about 37% for refurbishment and replacement of grid assets. Apart from that, we are continuing the replacement of meters with smart meters. Now in our grid, we have installed 2.4 million of meters. So we are complying with the regulatory regulation. Targets at the current level. It's also worth to mention the dispatch we continue the integration of TETRA, which was especially important in the case of failure, disasters and problems and with also enables emergency communications price situation. The second largest segment were renewables. Regarding the CapEx, year-over-year, we've observed a significant decline. The decline is partly due to our investment cycles. I will speak about it to a larger extent elaborate on it on the next slide, we have several investment projects that are close to completion. Therefore, the outlays not fullt reflect the tangible progress on these investment projects. We can expect that those investment projects in Q4 will accelerate. We are also facing the commissioning of further investment projects, launching [indiscernible] projects, especially the battery energy storage systems in case of getting funds from the national government [indiscernible] renewables. Speaking of [indiscernible] we are talking about bringing our assets to make it usable to extend its life cycle in line with the strategy of our second most effective -- most efficient ingredient 460-megawatt unit also with a strong heating components to a much better economics than the 200-megawatt unit. This year, we are dealing with the final major overhaul, the life cycle of this unit operation strategy we plan at [indiscernible] power plant will be operating until 2030. [indiscernible] recent major overhaul was required to enable it to operate over a time frame. [indiscernible] we are continuing the repair program for above the 910-megawatt units. The availability rate this year was unsatisfactory for this units. So now we are performing prepare actions that were defined at the time when we're finalizing the talk -- the final adjustments to make the unit to operate at a higher level rate and in a more predictable manner generate electricity. Regarding the [indiscernible] segment this year, we are completing 2 major investment projects that expired [indiscernible] already commissioned. However, the outage related to the completion of [indiscernible] yet visible here on the slide. This is due to the process of [indiscernible] contractors. We also launched a major product called [indiscernible] but next year [indiscernible] accelerate the majority of our expenses for a transitional [indiscernible] segment will be [indiscernible] next year, the majority of taking decisions on the transitional are related to next year and the [indiscernible] would be the majority of [ CapEx ]. Supply segment and [indiscernible] investments, we allocated [ PLN 100 million ], maintaining [indiscernible] about PLN 50 million, expansion of [indiscernible] part of the program subsidized from partly from the National Recovery Plan and the operational program, Digital Poland PLN 36 million. And finally, implementation of the central information system market on the energy market and PLN 20 million within the first 3 quarters, the higher spending plan next year. Moving on to the investments in the renewables. We are about to finish complete [indiscernible] wind farms here. We are at the stage of final acceptances. So we are planning to complete both of these investments by the end of this year. The wind farm [indiscernible] is moving faster than we originally [indiscernible] schedule. The first turbine [indiscernible] installed. Further turbines are being delivered. And in the coming quarters -- terminals will be installed. [indiscernible] PVs who also close to completion, [indiscernible] the end of the year. [indiscernible] They are basically already in the construction side, we had time of test by security and [indiscernible] We are planning to launch them to commission [indiscernible] product in the coming months. So we are facing a number of investments. This is regarding reproduction of the better energy storage systems. That's all regarding investment projects. So let's move on to the Q&A session.

Thank you very much for the presentation. Let's move on to the Q&A session. [Operator Instructions] And the first question, why did you make a decision in the dominating part to use the Chinese solutions for smart electricity meters [indiscernible] from the operating or maintenance point of view?

Ladies and gentlemen, letme remind you that in the distribution segment, we are dealing basically majority of technologies and resolutions coming from the domestic entities. Using is implemented locally [indiscernible] by far by the Polish companies. The meters that we are buying are certified meters. We buy them under the public procurement law procedure. And we also tested by us regarding the stability of our operation. And in terms of complying with our cybersecurity standards. Today, in reality, we are mainly Chinese solutions because of price competitiveness. However, as part of the entire CapEx that we have, we have a relatively small portion, share of local is very significant. And the security, we have certified solutions that we [indiscernible] that we are fully certified.

Another question, are there any premises for TAURON to pay out dividend next year?

Let me take over this question. Of course, it keeps coming up again and again during our earning conference calls. And I will not change our reference too much because last time, we said that we intend to take to -- dividend after we have -- the full financial year. So have a full view of the full financial year. And first of all, we are looking at the subsequent years as well. And based on that data, we will take a decision as far as the payout of dividend is concerned. Reemphasize here that we would like once we start paying out the dividend, we want this to be a continuous process of the one-offs. So definitely, this projection of further subsequent major importance bearing on the decision to pay out the dividend. Thank you very much.

Next following questions are similar to the first one. What's the risk of a decline of [indiscernible] WACC weighted average cost grew 8.59% also on target revenue can drop or should we add the 35% of CapEx component [indiscernible] regulatory asset base this year? [indiscernible] regarding the decrease of [indiscernible] process of [ improving tariffs ] [indiscernible] by how much [indiscernible] can go up in 2026?

Let me start, I'll ask Krzysztof to supplement my answer as far as the nontariff revenue and the financial perspective. So regarding our knowledge today. We know that we are in the tariff process expected results will come in the middle of December in parallel [indiscernible] the portfolio came out [indiscernible] the Minister of Energy [indiscernible] next quarter of next year. As of today, it's difficult for us to comment [indiscernible] the result of [indiscernible] We are happy to see [ distribution companies ] [indiscernible] key trade organization of the sectors [indiscernible] as well. So we see there a good opportunity to discuss the mechanisms. A number of questions that came up during our earnings calls and during direct conversations for the financing [indiscernible] for investors each time, they ask about the weighted average cost of capital. It's a good [indiscernible] to discuss it, not on how much the WACC will be in the given tariff period [indiscernible] long term. We have examples of Western countries in Spain, for example [indiscernible] time frame, we know that [indiscernible] now investment risk and at the same time translating to the decline. Regarding the potential expectations of financing institutions that of course is a discussion of the long-term model for remuneration of distributable assets could be definitely worthwhile. And I think for all the participants of the market, it will be beneficial. However, the level themselves, the figure themselves, as of today, we know where [indiscernible] first quarter. Therefore, we actively through TAURON distribution. The subsidiary will definitely be [indiscernible] regulatory dialogue. But as of today, it is difficult to comment on specific levels as we understand that [indiscernible] combined interest of the [indiscernible] I remind you that the distribution investments are key for [indiscernible] and consumption in the capacity of the production capacity and distribution backbone [indiscernible] pick up other systems [indiscernible] this dilution segment will allow us to support the tradition and implement our strategy. Krzysztof, would like to add?

I'd like to refer also [indiscernible] parts of the questions that were asked here because there was a question about 35 [indiscernible] CapEx. Of course, this is, of course, connected to the entire tariff related discussion. However, in our opinion 35% of CapEx added to regulatory asset base as of the end of the year is justified. And so far, there were no discussions [indiscernible] tariff related [indiscernible] good, but this is a recurring component. So I understand [indiscernible] power positions or revenues from the [ past of energy ], [indiscernible] Regarding the [indiscernible] tariff is very important. And EBITDA stemming from [indiscernible] very important for the group [indiscernible]. As I said, the model we still cash flow in the distribution earnings [indiscernible] base on the [indiscernible] magic that EBITDA of [ 3.54% ] is based upon the group's EBITDA, enables implementation [indiscernible] distribution for the group -- the whole group. Based on the debt capacities higher EBITDA and distribution, we can implement more [indiscernible] discussion also has an impact on the distribution, but on the debt capacity of entire group, that's all I think we can say about the distribution.

Next question, what is the risk of putting up provision in Q4 in the trading line of business?

[indiscernible] related to [ right of the charge of plans, ] [indiscernible] In this context, there's an indication from the energy regulatory office about the audits being [indiscernible] utilities related to the amount of charge or a write-off to the fund at the end of '22 and for 2023, we can't stay much above level of risk. Only after the audit and the final conclusions, we'll be able to evaluate there's any discrepancy between our approach to calculation of the write-off versus the allowance versus what the President of Energy regulatory office position is. So [indiscernible], we will take a decision where this provision should be set up.

Thank you. [indiscernible] prices when 2026 can be lower than the once observed now on the spot market?

The current hard coal prices became equal to the ARA parts versus Polish prices, the Polish index. We suppose that this level of prices will not be lower but will be in a similar level as far as what we are observing today and we are forcing for next year.

Next question. What was the result in Q3 of 2025 on the [indiscernible] of electricity and on the balancing market in the Generation segment?

Total result on the [indiscernible] market and energy -- electricity buybacks in the context of capacity offers about PLN 150 million in Q3. With the expected negative impact the settlement of [indiscernible] in 2026 [indiscernible] We already know detailed figures of PLN 170 million in '26 alone. I'm not talking about year-over-year comparison -- we have positive minus PLN 170 million coming next year.

The next question, why is the renewables such a weak result of renewables in Q3?

Let me put it this way. That the key factor, as I mentioned in [indiscernible] lower prices year-over-year. However, as [indiscernible] about 2 other factors that -- volume also is lower, why the volume is lower, one can start thinking about it. But unfortunately, [indiscernible] conditions were not favorable [indiscernible] capacities and still the volume of, let's say, generated from when it's lower year-over-year. Of course, we [indiscernible] the other hydroelectric power plants. So unfortunately, the volume [indiscernible] factor. And finally, [indiscernible] important, we have major decline on the [ green certificate markets ], not only some units of ours are losing those entitlements due to the 15-year time frame having lapsed on the. And secondly, the price market are [indiscernible] in the price of the market. Second factor of the volume and the first factor of a decline in price and the decreasing volume of green certificates.

Thank you. The next question [indiscernible] Isn't the company concerned due to the very low CapEx [indiscernible] significantly lower versus regulatory [indiscernible] decrease the WACC of TAURON '26 as it happened in 2025.

I'm a little surprised by the way this question is formulated like an increase of 80% year-over-year distribution. And calling it to very low [indiscernible] in fact, we're informing before between 15% and 25% increase of CapEx globally in distribution [indiscernible] over the implementation market [indiscernible] and provide proper supply [indiscernible] a number of permits for the implementation of investment [indiscernible] plan on track, we don't perceive this CapEx has been the lowest increase, but it's in line with what we assumed. The strategy, of course, there was no split here per year, but this is [indiscernible] part of our assumptions, let me say. But last year, this year, we are a bit above the plan because we have certain flexibility of spending year-over-year. Wherefore definitely, we do not consider the interest of close to [ 18% ] at the first 3 quarters is a very small CapEx. And here, we don't expect this to be any individual specifically penalized due to the CapEx level.

Thank you. Next question, what capacities in the better energy storage systems do you expect to arrive at the end of 2026 and 2027?

We don't publish detailed figure -- detailed focus, we can say, we won projects, but we won the -- market option [indiscernible] capacity level. The production must start before 2027, a large portion of the products we're accelerating [indiscernible] a portfolio of products, but -- submitted for the national recovery plan funds for also national environment protection are waiting for the decision. So I will not give you which exact figure basis [indiscernible] major acceleration we won at the end of 2027 to be talking about the potential hundreds megawatt, tens of megawatts. But in 2026, it's going to be still a year where we will not be able to reach those levels.

Other question over in the capacity market auction for 2030, will you take part of the gas-fired projects? If so, which ones? We have [indiscernible] market auctions in 2030. I have another question about the [indiscernible] of readiness of those projects.

We are now at the point where [indiscernible] projects can take part in the capital market auction [indiscernible] payment is -- will decide in the coming days. [indiscernible] option for take part as far as detaols of the auction strategy [indiscernible] taking part in the [indiscernible] technology picking, so open cycle gas turbine. Regarding the tenders, we were on the question about the tenders, the tenders have not been announced yet. However, they will be announced in the coming months.

Thank you very much. What are TAURON's plan in the context of December auction? I think [indiscernible] Let's move on to the next [indiscernible] question. [indiscernible] upcoming customer market auction [indiscernible] projects and better energy sources systems products are dependent on acquiring support.

Regarding the gas projects, we discussed already as far as the [indiscernible] are concerned, we don't [indiscernible] for the possibility [indiscernible]. We are now dealing with the adjustment factors [indiscernible] facilities, we make the level of support for megawatt is relatively low [indiscernible]. Therefore, we don't see any connection to the market auction, but let me be frank [indiscernible] but it's very important in particular subsidy program only by National Environment Protection Fund, which haven't made an impact upon economics [indiscernible] better energy storage systems. But supposed to yes, but not necessarily the capacity market auction. Regarding better energy store systems, we have supplemented the question [ regarding the risk of ] setting up a provision in the [ G-Group. ] In the trading segment is difficult to evaluate, to assess. We filed the tariff application, get any feedback, yes, any response by office energy regulator is working. Over time, we don't have any feedback neither positive nor negative. We are patiently waiting for first assessment of the parameters of our regulated revenue what we propose. We'll see what happens.

[indiscernible] shares in one of offshore wind farm projects. Are you considering such an option?

I think that regarding our [indiscernible] we are a minority interest holder in the [indiscernible] The main -- I think [indiscernible] shareholder. At this stage, I will not be giving any detailed comments. We are at the stage of holding discussion [indiscernible] project, but held jointly with our partner and we'll be informing current report in the regulatory filing if the decision is made regarding this project.

Another question, what is currently the level of outlays on the picking gas-fired units per megawatt?

The topic is depending on the technology and details about [indiscernible] PLN 2 million per megawatts -- PLN 3 million per megawatt. These are roughly the amount we are talking about type of technology. Depending upon the detailed solutions, they may vary slightly.

Thank you very much. That was the last question. So that's all for today. Thank you very much for all the questions, for the answers for the presentation. We encourage you to follow our activities on going basis. We wish you a good a nice day and see you at the next conference call. Thank you very much. Thank you. See you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]