This process, particularly important in the implementation of strategic goals, identifies potential deviations from the TAURON Group’s planned result and increases the probability of achieving them. Controlling the level of risk makes it possible to neutralise the impact on strategic goals.

The risk management system comprises all elements of the TAURON Group’s value chain and all employees participate in this process.

Risk management should ensure stable value creation through effective control of risk-taking, enhancing the transparency of risk-taking, independent risk assessment and increasing business concentration on optimisation of the risk to reward trade-off.

The process of risk-taking in the TAURON Group is centralised. In the risk management process the Risk Committee plays a special role as a team of experts that constantly and continuously initiates, analyses, monitors, controls, supports and supervises the performance of the risk management system.


  1. Risk of failure to allocate CO2 emission allowances – associated with the establishment of MSR in the market for emission trading, introducing an instrument to maintain high prices by shrinking the pool of allowances. The higher costs of CO2 emission allowances may have an adverse effect on the the TAURON Group’s operations by raising costs and slashing margins.
  2. The risk of failure to allocate free CO2 emission allowances – associated with the failure to allocate free emission allowances in the plan for 2019 and higher prices for allowances available on the market, triggering the necessity to incur additional costs to perform regulatory obligations.
  3. Risk of fund raising and financial services – associated with the lack of possibilities to raise funding for operational and investment needs or high costs of acquisition of such financing, arising from banks tightening their lending policy, unfavourable market conditions, unstable macroeconomic situation, which may have an adverse material effect on the TAURON Group’s operations, its financial situation or results due to the lack of resources for projects included in the Corporate Strategy and in investment plans, and for operations.
  4. Market risk – associated with the unfavourable price swings in the energy market and related markets as well as other markets, where transactions are performed by the TAURON Group’s operating areas, exerting an adverse impact on the TAURON Group’s financial result.
  5. Concession risk – associated with the withdrawal, failure to extend the validity, or limiting the scope of any of the concessions held, causing an inability to conduct operations as planned, resulting in a loss of revenues and, consequently, softer financial results.
  6. Risk of changes in the rules of Balancing Market functioning – associated with a possibility of changes in the Balancing Market functioning and, consequently, the development of negative prices on this market and finally, on the spot market, which may consequently have an adverse impact on the TAURON Group’s financial results.
  7. Risk of change in the tariff development method for distribution – associated with the change in tariff development for distribution, planned as of 2018, through introduction of qualitative regulations, which may consequently contribute to lower revenues and financial results.
  8. Risk of unstable legal system and European Union energy sector regulations, including environmental protection – related to unfavourable legal changes, modifications in the Polish and the European Union regulations as well as legislative environment uncertainty. The risk factors may have a significant adverse impact on the TAURON Group’s operations and its financial situation by raising its operating expenses, necessary to change the strategy of the Company or TAURON Group companies, permanent exclusion of specific technologies arising from the requirement to implement EU regulations, limiting the Company’s generation capacity and undermining its bargaining position.
  9. Risk of loss of Tax Group status – associated with a possibility to lose this status due to a failure to comply with the statutory requirements (e.g. Insufficient profitability of the TAURON Group, ownership changes infringing the required levels in the capital structure of its member companies), challenging the settlements between the tax group and other affiliated entities, unsettled tax liabilities of the tax group member companies. The materialisation of this risk may result in a loss of tax optimisation, higher fiscal year costs and a requirement to prepare additional documentation of transfer prices.
  10. Risk of resource base identification – associated with poor identification of the perspective resource base arising from a lack of economic, technical and organisational capacity of the Company. Risk materialisation poses a threat to performing tasks and production plans, causing an adverse impact on the TAURON Group’s financial results.
  1. Commercial risk – associated with the volatility of prices for electricity, property rights, CO2 emission allowances and significant and/or unexpected changes in prices for coal and other fuels, as well as volatility in sales and generation volumes. The volatility referred to above, including adverse changes in the medium-term, may significantly affect the TAURON Group’s financial results through higher costs, thinner margins and suppressed revenues, as well as the fulfilment of legal requirements related to maintaining the relevant fuel reserves or imposing a fine in case of failure to fulfil those requirements. The Company manages commercial risk based on the TAURON Group’s risk management policy in its commercial that specifies its rules and principles of commercial risk management in the TAURON Group. This document implements market practices and solutions used in commercial risk management in trading electricity and related products (CO2 emission allowances, property rights, fuels), including their adjustment to the TAURON Group, considering the specific nature of the energy sector.
  2. Risk connected with the obligation to redeem CO2 allowances – connected with emitting CO2 into the atmosphere as well as the need to redeem a relevant number of CO2 The risk factors may have an adverse impact on the TAURON Group’s operations, its financial standing and the results of its activities, through the fines imposed on each unit of unredeemed allowance, or cutting the planned electricity sales profitability and raising the costs associated with the failure to issue free allowances and their incorrect redemption.
  3. Risk of failure to maintain availability of generation units – arises from the inadequate adjustment of units and distribution of loads in the scheduling process of units, emergency conditions of generation equipment, unplanned unit shutdowns, changes (enforced) in operating plans by the TSO, changes in fuel prices other than adopted in the assumptions, failures of the transmission system, control systems and ICT systems. The risk factors may have a material unfavourable effect on the TAURON Group’s operations, through the necessity to select a more expensive generation unit or change the optimum production schedule, resulting in a higher variable cost of electricity generation.
  4. Asset failure risk – associated with significant and/or permanent failures of, and damage to, equipment used by TAURON Group companies. Risk factors may have a material unfavourable effect on the TAURON Group’s operations, its financial situation or results through a loss of income arising from interruptions and shutdowns, the necessity to incur additional costs of repairing the grid infrastructure and non-grid infrastructure, the requirement to pay fines.
  5. Risk of fixed asset management – associated with the lack of possibility to use fixed assets due to ineffective management leading to their poor technical condition, inadequate costs of fixed assets insurance resulting from underestimation or overestimation, as well as the costs of holding redundant assets. Risk factors many have an adverse impact on the TAURON Group’s operations, its financial situation or results through the failure to use the assets in an optimum manner, faster wear and tear arising from inadequate maintenance, the need to incur costs of remedying failures arising from incorrect asset management.
  6. Weather risk in the Heat Area – related to fluctuations of air temperatures that have a significant impact on the demand for electricity and heat in the longer run, causing a significant increase or decrease in demand, respectively, which may result in a failure to achieve the production plan in the relevant period or limitation of the possibility to satisfy demand due to hydraulic constraints of the connection network, fixtures and the increased failure rate of sales.
  7. Compliance risk – associated with the failure to comply with the legal regulations, erroneous interpretation of new provisions and regulations, requirements imposed by ERO/UOKiK/KNF, the requirements of the Act on personal data protection as well as risk associated with the failure to observe procedures associated with the external control conducted in the TAURON Group, which may result in imposing such sanctions by authorised entities.
  8. Risk of lack of coverage of operating costs in the period subject to the tariff – associated with the lack of possibility to cover the Company’s overall operating costs in the tariff for electricity, in particular, operating costs included in the tariff for a given year negatively affecting the TAURON Group’s financial results.
  9. Risk of sales of distribution services – associated with lower revenues for the provision of distribution services to individual groups of consumers in relation to the level included in the operating plan, arising, in particular, from the change in consumer demand for electricity or the change of capacity they order.
  10. Environmental risk, including the risk associated with atmospheric conditions – consists in a possibility of incurring losses resulting from non-compliance with legal regulations (including those arising from the method of implementation of European law in national law, administrative decisions), and including the possibility of environmental damage or serious industrial accident or failure. The risk factors may have a material adverse effect on the TAURON Group’s operations, its financial situation or results through the requirement to incur significant costs of compliance, pay damages, or the potential threat to the implementation of production tasks.
  11. Risk of natural hazards or unfavourable geological and mining conditions – connected with threats to production tasks, hazards to safety of maintenance of the mining plant or safety of the staff due to natural risk factors in the development of mining activities, difficulties connected with the roof and floor conditions hampering the mining process, as well as natural hazards occurring in mines (water and fire conditions, rock bumps).
  12. Risk of economic slowdown – associated with the decline in the TAURON Group’s revenues as a result of economic slowdown translating into reduced electricity demand, in particular, in the business segment, and generally lower energy market prices.
  1. Risk of destruction of key machinery and equipment – associated with a possibility of permanent destruction of machinery or equipment resulting in long-term decommissioning of a power unit, which may lead to a significant loss of financial revenues and additional costs associated with the purchase of new elements or entire machines.
  2. Risk of cyber-attack – refers to an attack against the IT network controlling the performance of power units or the transmission grid, causing a shutdown of power units and, in extreme cases, destruction of key elements of electricity infrastructure, which may result in the lack of possibility of their performance over a longer period of time, leading to a deterioration of financial results through lower revenues and the necessity to incur additional costs to recover their efficiency.