Impact on the economy and the market

PSE’s priority is to ensure the current and long-term security of electricity supply in Poland. The company’s tasks include maintenance development of the transmission network, management of the Polish Power System, including network balancing, as well as cooperation with other TSOs.

Satisfying energy needs throughout the country and ensuring security of electricity supply significantly contributes to Poland’s economic growth, which is reflected in increased income and life qualify of Poles. Such impact of PSE on economic growth is possible owing to the company’s cooperation with numerous enterprises.

As a contributor of taxes and other levies, we have a positive impact on the local, regional and national budgets, enabling many significant projects to be financed.

Impact on the economy and the market

Our impact on employment and economic development of Poland

PSE’s priority is to ensure the current and long-term security of electricity supply in Poland. The company’s tasks include maintenance development of the transmission network, management of the Polish Power System, including network balancing, as well as cooperation with other TSOs.

Satisfying energy needs throughout the country and ensuring security of electricity supply significantly contributes to Poland’s economic growth, which is reflected in increased income and life qualify of Poles. Such impact of PSE on economic growth is possible owing to the company’s cooperation with numerous enterprises.

As a contributor of taxes and other levies, we have a positive impact on the local, regional and national budgets, enabling many significant projects to be financed.

We have a positive impact on all branches of the Polish economy: the energy sector, trade, construction, the professional and business services sector, agriculture, hotel industry, and food service. We generate this impact through all elements of our value creation model, i.e.:

Management of the Polish Power System operation
Contractors for new build, upgrade and repair projects performing work on grid assets;
Management of human resource and active cooperation with the company's environment.

The effects of our activities include:

Added value generated in the economy

Employees hired and new jobs created

Wages paid

Thousands of kilometres of power network in three dimensions

In order to demonstrate the extensive impact of our activities on the economy and society, we used three areas of key importance for the economic growth: added value, jobs and wages.

For each of the impact measures mentioned, three dimensions can be identified, in which we support the development of the Polish economy and contribute to the development of the wellbeing of Poles: direct, indirect and induced¹:

Direct dimension. It results from the activities of our company – such as the number of employees hired at PSE.
Indirect dimension. The results of our expenditure on ensuring the secure, dependable and cost-effective operation of the Polish Power System are the created added value and jobs as well as a positive impact on wages not only for the personnel of our direct contractors and suppliers but also of their partner enterprises representing many industries.
Induced dimension. As a result of the activities we undertake, incomes of our employees and personnel employed by contractors, suppliers and subcontractors are growing. Consequently, demand and consumption in the market increase, which leads to a growth of production and services provided in many sectors of the economy.

[1] PSE’s whole input in annual terms was estimated by means of the Wassily Leontief model, also known as the inter-branch flows model, or the Input-Output model. The method focuses on studying the interdependencies between branches of the economy and enterprises. The model was based on the most recent inter-branch flow tables in current basic prices for domestic production in 2010, published by the Central Statistical Office in 2014

By adding the calculation results for each of the three dimensions, the total effects generated by PSE are obtained.

Impact of PSE on the Polish economy

4,36 mld zł
added value

2 320
workplaces

206,5 mln zł
salary value

1,86 mld zł
added value

9 652
workplaces

370 mln zł
salary value

512 mln zł
added value

5 536
workplaces

95 mln zł
salary value

Fig. 1. Inter-branch flow model visualisation. Source: Deloitte own study.

Added value

PSE’s added value is the value generated as a result of production and service activities of enterprises. This economic value represents the difference between global production and intermediate consumption.

Added value = global production – indirect consumption

Global production includes net sales of products, margin on goods purchased for resale, change in products, and the manufacturing cost of products for internal purposes.

Indirect consumption includes the value of goods and services used as inputs in the production process², including net consumption of materials (including fuels), raw materials (including packaging), energy, industrial gases, third-party services, financial intermediary services, business travel expenses, and other expenses.

The sum of gross added value created by all national institutional units, increased by taxes on products and decreased by subsidies to products, equals the Gross Domestic Product.

GDP = added value + taxes on products – subsidies to products.

[2] Excluding fixed assets.

PLN 6,73 bn total added value generated in the Polish economy in 2018 by the activities of PSE

The direct added value created by PSE in the power sector (electricity production and transmission) was PLN 4,36 bn.This means almost nine times the planned expenditure on the expansion of the electric vehicle charging infrastructure³.
In the industries in which we purchase equipment, materials and services, and in related industries, we contributed to the creation of a total added value of was PLN 1,86 bn⁴.
We significantly contributed to increasing demand in the economy owing to wages paid to our employees, and employees of our suppliers and sub-suppliers across the chain of supply. The wages enabled us to create an induced added value in 2018 in the amount of PLN 512 m.

[3] The Ministry of Energy estimated the cost of building a network of electric vehicle charging stations at PLN 500 m.
[4] In calculating the indirect effect, funds were excluded, remitted by PSE to the Settlement Body in respect of the RES charge and stranded costs, which are financial transfers not recognised as indirect consumption.

Source: Deloitte estimates

Jobs

Owing to cooperation with other industries and our purchases, and through the sale of our services and synergies between different industries, we have a significant influence on the retention and creation of new jobs. The jobs that we influence are not only jobs at our branches, but also in many other sectors of the economy⁵.

17 508 jobs – the total number of jobs maintained in the Polish economy in 2018 owing to PSE’s activities

In 2018, the average number of persons employed at PSE was 2 320 employees.
By awarding contracts for the implementation of new build, upgrade and repair projects, and cooperation with many suppliers and sub-suppliers, and in sectors related to them, we support 9 652 jobs.
As a result of increase in population income, consumer demand grows, as consequently does employment. In an induced manner, we provided 5 536 in different branches of the economy.

[5] In this report, we are using data on the number of people in the labour force, i.e. persons performing work that brings them earnings or income. People in labour force include: 1) persons hired under an employment relationship (contract of employment, appointment, nomination, election or service relationship); 2) employers and self-employed persons, namely: owners, co-owners and lessees of individual farms (including assisting family members) and owners and co-owners (including assisting family members; excluding partners or shareholders who do not work in the partnership or company), entities conducting a business activity other than individual farming, as well as other self-employed persons, e.g. members of the professions; 3) work-from-home workers; 4) agents; 5) members of an agricultural cooperative (farming production cooperatives and other cooperatives dealing with agricultural production and cooperative machinery rings); 6) clergy performing ministry services.

7.55

MULTIPLIER EFFECT

One job in our company creates more than 6 additional jobs across the economy.

Source: Deloitte estimates

Wages

Wages are a major measure of the affluence of households, and simultaneously a guarantee of satisfying the living needs of the household members. Through the employment of our own employees and an indirect impact on contractors, suppliers and subcontractors, who provide employment and pay wages to thousands of people, we positively impact the generation of additional income in many branches of the national economy.

PLN 672 m – total value of wages created in the Polish economy in 2018 owing to the activities of PSE

The total amount of wages in our company in 2018 amounted to more than PLN 206,5 m.
Owing to purchases from our suppliers and links in the economy between different branches, suppliers and sub-suppliers could pay wages to their employees in the amount of more than PLN 370 m.
Wages paid directly at our company and indirectly in the branches in which we purchase materials and services, positively contributed to increasing household consumption, which created new jobs and wages generated in an induced manner, the value of which amounted to PLN 95 m in 2018.

3.25

m PLN

Every zloty spent at our company on wages generates more than 2 zlotys of additional wages in the whole economy.

Source: Deloitte estimates

Our support for the general government

We are running a transmission infrastructure investment programme which is the biggest in our history. We have a significant contribution in taxes and other charges, which represent the general government income. Numerous public investment, possible owing to income from taxes and other charges, make it possible, among other things, to increase transport availability, environmental protection and welfare improvement.

PLN 1,17 bn – total amount of taxes, charges and social security contributions paid by PSE to the state budget, local government budgets and the Social Insurance Fund in 2018.

Source: Deloitte estimates

In 2018, we injected more than PLN 890 million into the central budget in respect of taxes, charges and social security contributions that we have paid.

890

m PLN

This amount corresponds to the value of almost all application for subsidies, loans for thermal upgrading of single-family houses and replacement of heating stoves for more environmentally-friendly heat sources.

According to data published annually by the Ministry of Finance, we belong to the largest individual payers of the corporate income tax (CIT) in Poland. Since 2014, we have been among the 25 top CIT taxpayers in terms of tax due, and in 2018 we ranked 24th among the 2673 top income taxpayers, with CIT due of PLN 143.6 m. In 2017, our CIT due amounted to PLN 149.8 m and we were ranked 17th in terms of the amount paid to the government budget (out of 2499 entities ranked by the Ministry of Finance).

*In the case of PIT and CIT, only the tax components that finally feed the central budget are included. A part of the taxes is received by local and regional governments.

The funds with which PSE supported voivodeships in Poland amounted to PLN 21,74 m. At voivodeship level, the Mazowieckie voivodeship received the highest amounts.

PLN 3,79 m was injected into poviat budgets. The largest tax beneficiaries among all poviats were the Piaseczno, Warsaw and Ełk poviats.

The total amount with which we supported Polish communes was PLN 250 m.