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Management Report
Our Performance in 2025
Energy

Energy

We are the largest distributor of natural gas and one of the leading distributors of electricity in Poland, while also ranking among the country’s key producers of electricity (12% market share) and heat. Our energy generation assets are located in three countries: Poland, the Czech Republic and Lithuania, with renewable energy accounting for a significant share of total output.

The Energy segment sits at the core of the ORLEN Group’s business model. It uses feedstocks supplied by other segments, and its products, including electricity, heat and gas, are supplied to the Group’s own operating assets as well as to third-party customers. The key subsidiaries in the Energy segment include Polska Spółka Gazownictwa Sp. z o.o., Energa- Operator S.A., ORLEN Termika S.A. and ORLEN Energia.

ORLEN Group business model by segment

Financial results

Financial highlights of the Energy segment

[PLN million]	2025	2024	change
Segment revenue, including:	47,392	49,214	(1,822)
Revenue from external customers	27,786	26,962	824
Inter-segment revenue	19,606	22,252	(2,646)
Segment costs	(39,374)	(42,057)	2,683
Other operating income	683	54	629
Net other operating income/(expenses)	(1,927)	(811)	(1,116)
(Impairment loss)/ reversal of impairment loss on trade and other receivables	65	(40)	105
LIFO-based EBITDA excluding impairment losses	12,567	10,896	1,671
LIFO-based EBITDA	11,230	10,353	877
EBITDA	11,230	10,353	877
Operating profit (EBIT)	6,839	6,360	479
Capex	10,688	9,575	1,113

LIFO-based EBITDA by business line [PLN million]

Distribution networks (energy, gas)

PLN 7.6 billion [up PLN 1.5 billion]

(+) higher margins on electricity and gas distribution
(+) increased electricity and gas distribution volumes

Conventional power generation

PLN 4.2 billion [up PLN 0.2 billion]

(+) higher electricity and heat output and sales
(-) lower wholesale margins in electricity and heat generation and distribution business
(-) higher CO2 emission costs

Renewables

PLN 0.8 billion

(+) renewable electricity generation up 18%

Electricity and useful heat volumes sold to customers outside ORLEN Group

[PLN million]	2025	2024
Electricity [TWh]	28.5	28.6
sold on the retail market	16.9	16.4
sold on the wholesale market	11.6	12.2
Heat [PJ]	46.8	46.0

Operations

Installed capacity of power generating units by type of fuel

Renewable energy sources (sun, wind, water)		CHP plants (excluding CCGT plants)				Heat plants			CCGT plants	Commercial power plant	Other assets
Renewable energy sources (sun, wind, water)		gas	coal	biofuels	other fossil fuels	gas	coal	other fossil fuels	gas	coal	Other assets
Installed electrical capacity [MWe]	1,597	171	1,174	69	649	-	-	-	1,845	690	163
Installed thermal capacity [MWt]	-	255	4,195	272	3,922	1,261	1,741	655	1,450	220	-

As at the end of 2025, we operated energy assets with the installed capacity of 6.4 GWe, with renewable energy assets accounting for 27% and gas-fired assets for 32% of the total. Our thermal capacity stood at 14.0 GWt.

In 2025, our net electricity production reached 18.4 TWh, including 2.9 TWh from renewable sources, while total heat production was 89.6 PJ.

Sales to third-party customers totalled 28.6 TWh of electricity and 46.8 PJ of heat.

Electricity and useful heat production volumes

	2025	2024
Electricity [TWh]	18.4	16.8
Renewable energy sources	2.9	2.4
Gas-fired generating units	9.6	9.3
Multi-fuel generating units (mainly fuel oil)	1.5	1.3
Coal-fired generating units	4.3	3.7
Other	0.1	0.1
Heat [PJ]	89.6	86.7

Distribution networks (natural gas, electricity)

The leading ORLEN Group companies within this business line are Polska Spółka Gazownictwa Sp. z o.o. (PSG), whose assets are located across Poland, and Energa Operator S.A., managing infrastructure in northern and central parts of the country.

Natural gas and electricity distribution is a regulated activity in Poland, subject to tariffs approved by the President of the Energy Regulatory Office (URE). Approved tariffs ensure recovery of investment expenditure (incurred on upgrades, infrastructure replacement and renewable energy integration), as well as fixed costs (such as costs of network maintenance, dispatch and metering), and regulatory system charges. The fixed tariff components provide operators with financial stability even when consumption volumes change, while the variable components reflect system load and the cost of transmitting electricity and gas in individual periods.

At the end of 2025, our gas distribution network spanned 215.2 thousand kilometres. Being the owner of the major part of the gas distribution network and gas service lines located in Poland, PSG enjoys a dominant market share. As at the end of 2025, distribution services were provided in 1,734 municipalities, or 70% of all municipalities in Poland. During the year, we delivered 140.1 TWh of gaseous fuels to approximately 7.7 million customers.

In 2025, PSG, ORLEN S.A. and OGP GAZ-SYSTEM S.A. launched a three-party cooperation project. As part of this initiative, they began testing network components and end-user appliances using the research, testing and experimental facility in Odolanów, with a view to verifying the safety and performance of gas infrastructure operating with natural gas and hydrogen blends.

During 2025, the Oil and Gas Institute – National Research Institute, acting as the implementing body under the FEnIKS programme, selected 20 PSG investment projects for funding, and grant agreements were signed for 18 of them. The planned cost of all 20 investment projects totals PLN 2.26 billion, VAT-exclusive, and the amount of funding is PLN 1.25 billion. The total length of gas distribution pipelines to be upgraded or constructed as part of the projects is approximately 689 km.

In September 2025, the first biomethane production plant was connected to the PSG gas network, and a further 10 connection agreements for such plants were signed. At present, 19 agreements are in place, with a total connection capacity of 10,088 m3/h.

The capital expenditure we incurred on the gas distribution network in 2025 totalled PLN 2.6 billion and included spending on network expansion, upgrades and acquisition, as well as gas meters and telemetry systems. PSG entered into nearly 41 thousand new service-line contracts, providing for the construction of nearly 47 thousand service lines. By the end of 2025, nearly 90 thousand grid connection permits were issued. During the year, PSG began distributing gas to 97.6 thousand new customers, with an estimated volume of 78.3 mcm, while 53,655 service contracts were terminated, with an estimated annual volume of approximately 14.8 million mcm.

Conventional power generation

The segment comprises power generation assets that produce electricity and heat primarily from biomass and fossil fuels, such as natural gas and coal. These comprise modern combined-cycle gas turbine (CCGT) units in Płock, Stalowa Wola, Warsaw, and Włocławek, as well as CHP plants, supplying electricity and heat mainly to industrial facilities. Our portfolio also includes the Ostrołęka commercial power plant, which supplies electricity to the national power system.

In 2025, we continued a number of major projects, including the construction of CCGT plants: Grudziądz #1 with a capacity of 583 MW, and Ostrołęka with a net capacity of 745 MW. Both projects were awarded capacity market support for 17 years starting from 2026. At the end of the year, each of them reached a stage enabling the start of initial commissioning activities. Completion of the projects is scheduled for the fourth quarter of 2026 and the first quarter of 2027, respectively. In addition, work was ongoing on the construction of the Grudziądz #2 and Gdańsk CCGT units, each with a capacity of approximately 560 MW. They are in an early development phase: engineering, construction and long-term maintenance contracts have been signed, and preparatory work has begun, including site development and securing access to the necessary utilities. Completion of both plants is planned for 2029.

At the Litvínov CHP plant, we continued a project to phase out coal-fired generation by replacing old units with two modern gas-fired boilers with a total installed thermal capacity of 280.2 MWt. The system will be designed to operate under variable demand conditions, with project completion scheduled for the end of 2028. As part of our asset decarbonisation programme, we also completed in 2025 the conversion of Boiler No. 3 at the Ostrołęka power plant to enable 50% biomass co-firing. This made the unit eligible to participate in capacity market auctions for 2027–2031. The conversion was necessary to comply with regulations allowing only units with CO2 emissions below 550 t/MWh to participate in the capacity market.

Capacity market

In the main capacity market auction for 2030, held in 2025, we secured capacity obligations totalling 846 MW. Seven-year capacity agreements were awarded to our three modernised generating units with a combined capacity of 22,867 MW: the Elbląg CHP plant (Energa Kogeneracja), and the Straszyn and Strzegomino hydropower plants (Energa Wytwarzanie). In addition, in the supplementary auction for 2029, our combined-cycle gas turbine plants, CCGT Gdańsk and CCGT Grudziądz II, were awarded 17-year capacity agreements for 525 MW each. In total, the ORLEN Group secured agreements for 1,239 MW at a price of PLN 534.09 kW/year. Both projects, each with a planned capacity of approximately 560 MW, remain in an early development phase. Engineering, construction and long-term maintenance contracts have been signed, and preparatory work has begun, including site development and securing access to the necessary utilities. Completion of both plants is planned for 2029.

Revenue from capacity contracts [PLN million]

	2026	2027	2028	2029	2030
Total	1,358	1,053	868	1,548	1,635
Non-indexed	768	398	213	307	383
Indexed*	590	655	655	1,241	1,252

*Revenue indexed to inflation

We own heat generation and distribution assets located in Upper Silesia, the Warsaw metropolitan area and in a number of towns, including Przemyśl, Elbląg, Kalisz and Ostrołęka. Our key assets are Poland’s largest municipal CHP plants at Siekierki and Żerań. The leading ORLEN Group companies within this business line are ORLEN Termika S.A. and Energa Group companies.

Heat generation and distribution is a regulated activity in Poland, conducted based on tariffs approved by the President of the Energy Regulatory Office (URE). Approved tariffs ensure recovery of justified operating costs, with heat prices and tariff rates calculated on the basis of planned revenues from heat generation, including revenues from cogeneration units determined using the simplified method, the reference index and average heat sales prices. As a result, the tariffs reflect the actual costs of fuel, CO₂, operation, maintenance and depreciation, while allowing for a reasonable return on capital.

We are pursuing a broad modernisation and transformation programme in our heat generation and distribution business, including a phase-out of coal by 2035 and the development of modern gas, renewable and heat storage technologies. As part of this programme, in 2025 we commissioned a flue gas condensation system at the Siekierki CHP plant to increase recovery of waste heat and a gas- and oil-fired boiler house with a capacity of approximately 220 MWt at the Kawęczyn heating plant, obtained an environmental decision for a 6x38 MWt gas-fired boiler plant, and commissioned a gas engine room at the Pruszków CHP plant with total electrical capacity of 12 MWe and thermal capacity of approximately 12 MWt.

We also continued preparations for key projects to be implemented in the coming years, including:

initiation of stage two of the contractor selection process for a new Class 500 MWe CCGT unit at the Siekierki CHP plant. The unit will be a key source of heat and electricity for the region, improving system efficiency and enabling a significant reduction in CO2 emissions. Signing of the construction contract is scheduled for March 2027;
handover of the construction site to the contractor and commencement of earthworks for the installation of a heat accumulator at the Żerań CHP plant. Commissioning is planned for the third quarter of 2027;
demolition work at the future site of the flue gas condensation systems and heat pumps for the CCGT unit and gas-fired boiler house at the Żerań CHP plant. The new source will use waste energy resources and, by reducing heat generation from existing fossil-fuel-based assets, will help cut CO2 and other emissions;
commencement of the construction of a 3x14.9 MWt biomass-fired boiler house at the Pruszków CHP plant, with commissioning scheduled for November 2027.

New energy

As at the end of 2025, our renewable energy portfolio comprised over 650 MW of installed capacity in 19 wind farms and nearly 740 MWp in solar assets, complemented by several dozen solar photovoltaic micro-installations at service stations. We also own and operate hydropower plants, including the 162 MW Włocławek run-of-river hydropower plant, the largest facility of its kind in Poland, and the Żydowo pumped storage power plant, which serves as an energy storage facility. Additionally, electricity is generated at 45 small hydropower plants, primarily located in northern Poland, with a total installed capacity of approximately 40 MW.

Together with a partner, we are currently constructing the first wind farm off the Polish coast and conducting preparatory work for the development of further areas under licences in the Baltic Sea.

Baltic Power, a joint venture of the ORLEN Group (51%) and Northland Power (49%), is Poland’s most advanced offshore wind project and the only one with offshore construction already under way. It has a planned capacity of approximately 1.2 GW and is scheduled to begin generating electricity in 2026. At the start of 2025, the offshore installation campaign commenced, covering the installation of monopile foundations, wind turbines and offshore substations to transmit the generated electricity to the shore. As at the end of December 2025, the project was 70% complete. In April 2025, the President of the Energy Regulatory Office made a commitment to grant a generation licence to Baltic Power.

Baltic East, our offshore wind project with a planned installed capacity of up to 900 MW, participated in the offshore wind auction held on 17 December 2025 and was awarded support in the form of a 25- year two-way contract for difference, providing a predictable revenue stream and stable investment conditions. In 2025, the project was in the permitting and financing phase.

In 2025, ORLEN Neptun completed construction of the offshore wind farm installation terminal in Świnoujście, which will serve as key infrastructure for the delivery of offshore wind projects in the Baltic Sea.

We are actively developing our renewable energy portfolio by investing in new energy sources, expanding existing assets, and pursuing acquisitions. Renewable projects we completed in 2025 included:

the Sompolno hybrid project – the first licenced project of this kind in Poland, combining a wind farm, a solar PV system and an energy storage facility, with 27 MW of wind capacity, 10 MWp of solar capacity, and a 3 MW energy storage unit ready for construction;
the Przykona solar PV farm – at the time it received its generation licence, it was the largest solar PV project in Poland, with a capacity of 200 MWp; it was acquired from EDP Renewables in 2024 and expanded in 2025 by a further 40 MWp;
PV Mitra, with a capacity of 65.6 MWp – a brownfield solar PV project developed at the former Adamów lignite open-pit mine, one of the largest projects of this type.

To support the balancing of renewable generation, we take part in the National Fund for Environmental Protection and Water Management’s programme Electricity Storage Facilities and Related Infrastructure to Improve the Stability of the Polish Power System. As part of the project, we secured non-repayable funding for up to 45% of total investment costs for energy storage projects with a combined capacity of 121 MW and storage volume of 476 MWh, to be co-located with renewable energy sources.

In the second half of 2025, construction began on an energy storage facility with a capacity of 2 MW and storage volume of 4 MWh at the Włocławek CCGT plant. In 2026, it will be integrated with the solar PV system already operating on the site, significantly improving its efficiency and profitability.

Energy

ORLEN Group business model by segment

Financial results

Financial highlights of the Energy segment

LIFO-based EBITDA by business line [PLN million]

Distribution networks (energy, gas)

Conventional power generation

Renewables

Electricity and useful heat volumes sold to customers outside ORLEN Group

Operations

Installed capacity of power generating units by type of fuel

Electricity and useful heat production volumes

Distribution networks (natural gas, electricity)

Conventional power generation

Capacity market

Revenue from capacity contracts [PLN million]

New energy

Low-carbon automotive-grade hydrogen

Renewable and low-carbon hydrogen

Management Report