Good morning. Good afternoon, ladies and gentlemen. Welcome to the conference, earnings conference. We'll be presenting the financial results of Tauron Group for the first half of this year. We have with us Grzegorz Lot, the President of the Management Board of Tauron Polska Energia, Krzysztof Surma, the Vice President of the Management Board for Finance, Paweł Jabłoński, the Executive Director for Portfolio Management, and Mateusz Lewandowski, the Acting Director, Executive Director for Investments. My name is Urszula Podraza. I'm responsible for the operations of the press office of Tauron Polska Energia. Let's start with a presentation of the priorities of the management board. Mr. President, please. Good afternoon, ladies and gentlemen, both present offline and online. Six months ago, we had the first meeting with you. We promised that it would be our good practice. We are in the full team here.
We have a bit of a vacation time now, therefore, our colleagues are traveling. However, we are confirming also that we have excellent directors and lady directors that are with us. So we have the directors, the Mrs. Director as well. For communications, we have the entire team. We are at your service during the conference and also after the conference, and of course, just as you all have already experienced, twenty-four hours a day, seven days a week. Ladies and gentlemen, six months ago, we presented in front of you our directions of our operations. I'm referring to what we've managed to achieve, what we continue doing, and how much determined we are to have the vision that we outlined for you during the first conference, to implement it.
Let me start with what is most important, what is the core of our company, the six million customers connected to the grid, distribution grid, who are buying electricity from us, and our will is to have this energy to be green and best it would be produced using our assets. Customer in the center, a few other things, but the organization is changing in this direction. Individual lines of business, starting from the distribution, customer service, supply, heat, are converting to become more customer-oriented. The organization built in such a way, the KPIs are set in such a way, so as to see, first of all, the customer in front of us. All we do is customer. The distribution model that we are building for some time now, has a customer as its focus.
So our paradigm for the distribution line of business, it's a very competitive line of business. Ladies and gentlemen, the customer who comes today to Europe has a choice between Poland and other countries. If he comes to Poland, he can choose our competitors or Tauron distribution. We, with our grid connection conditions, with our approach to the customer, flexibility of the grid and security, safety, and the distribution rates, we either attract or repel this customer, this investor. And in the long term, we would like to place, to set ourselves very ambitious KPIs, not only in categories based on number of connections, but the sales of distribution services and obtaining, acquiring new customers.
Because the more investments, the more customers on our territory and, Tauron's historical area, we're operating nationwide, but the area where we, our core business is located, it will be growing, will be expanding. This is good for the local communities, local government. This is also good for the inhabitants of this region, and this is the main element, the strong cooperation between the utility, electric utility, distribution company, the supply company, and the local institutions, the population, and the local business. In order for all this to happen, I'm looking all the time at the customer. We are not talking about the strong distribution, efficient and safe, but also green energy. We have had tens or hundreds of meetings with various investors, customers, who speak unequivocally. "To invest here, I need to have grid.
I also to have, must have green energy." The ESG requirements, the competitive market requirements, which we are operating on, are clear. The price and, and also green energy, these are the main directions of our operations. Here, also, not to keep you any longer, because we got your feedback that we should be a bit briefer in the communications, and give some opportunity for bilateral conversations. We promised on the twenty-second of June, we put forward a new offering, Tauron New Energy, for our customers. Up to now, thirty-four thousand households took advantage of our offering. Nine years of a price guarantee of a totally green energy, energy coming from our wind and PV sources, as well as hydroelectric.
Thirty-four thousand times the average volume of two point two MW per hour, MW hour per hour, that's almost seven gigawatt hours of guaranteed electricity we will supply over the coming years. This shows our, demonstrates our business model, which indicates that based on our customers, cooperation with our customers, we are building our assets and the energy we are producing using our assets, we are offering to our customers in order to build their comfort, trust, confidence, ecology, as well as competitive advantage. At the same time, in line with the same model, three and a half thousand business customers took advantage of this offering. This offering is timed for five years. This is the point of view we are showing.
It's almost 70000 GW of energy, electricity, contracted with a guaranteed price, and it's electricity coming from our sources. This demonstrates the potential for our growth, our investment capabilities, opportunities in these areas.... Today is 28 TWh of sales. That's the first thing. I was talking to you about the spinning off of coal assets. I know that some questions come up during the bilateral meetings, ladies and gentlemen, how determined we are to offer green energy. We are also working on spinning off the coal assets. The product is still live, underway. We are keep talking to the Ministry of State Assets. Our works are being continued as one of the highest priorities in our, at our company.
But I'll also like to say that after the six months of our work and managing this company, I know that irrespective of the decision that will be taken, either according to one model or the other model, the company will continue to operate, and with determination over timeframes which we define within the European Union, will bring about the full independence on, on CO2, quote-unquote, and will guarantee for customers cheap and green energy. So there'll be many questions, so I will not continue this topic. Decarbonization of the heat segment, very key aspect again. Our colleagues from the heat line of business will present in two or three weeks the full strategy for decarbonization. Today, unequivocally, there's not a single one good technology that could bring about a certain decarbonization.
Therefore, we are developing hybrid solutions, both electrode stoves and the energy storage facilities, and the gas engines, and the biomass-based solution. This is a hybrid solution, depending upon the specifics of a given area. However, in the plans that we are talking about, we have a full decarbonization envisaged of this line of business, and the goal is to have an efficient energy company that will be providing green energy and energy at yeah, socially acceptable prices. Because this element, the price of heat, is a very socially sensitive element. It's not the point to build or invest, but to build in such a way and invest in such a way to transform this heat segment in such a way so that our customers are able to consume this heat.
The expansion of renewable assets from the beginning we started meeting you. We knew that 0.7 of capacity installed. At the end of this year, we have practically one gig in projects underway. Once we start discussing, and Mateusz will talk to you about which projects and will be connected, will be electrified already this year. We have a pipeline of projects for the subsequent years, and with a like a waterfall force, we are moving in this direction. We are developing the renewable energy segment. I talked to a number of partners about the cooperation. We have also ideas how to build it from from bottom up, so this will be the details we'll be sharing with you. Energy storage facilities, we are at the stage of the so-called permitting certification.
We'll be entering the capacity market as of, at the end of this year. We'll be submitting such applications. It's several hundred MWs that we want to submit, but we are thinking about this initiative in the categories of such a business. We see the price differences during the twenty-four-hour timeframe. They are getting bigger and bigger, and we are offering a large business potential. This is the direction we are going in. Regarding the distribution, the projects are going in line with the plan, are on track. PLN 2.9 billion last year, we had. Let me look at Krzysztof. PLN 2.7 billion, today we are already topping PLN 3 billion, and this is the direction we are moving in.
Distribution requires a lot of CapEx, but also we're looking according to such a model, which distribution is not only reactive actions, but also proactive, to build such areas as we expand in such areas where we'd like to proactively invest in the grid. So, jointly with the local governments, cities, the local community, to invite, attract investors here to develop the economic power of this region. Financial stability, Krzysztof will share the details of that, but however, the covenant is at the level of 2.3, so it's a comfortable level. We'll talk about the write-downs and everything that happened, why it happened, but the company's stable in the business sense. Respect for the shareholders and our attitudes, I don't have to repeat it.
We are, because we are here also, I had a number of meetings between the earnings conferences with you. Each time when any investor, in a way that is in line with the regulations and principles, ask us for a meeting, for an interview, we are ready. There's been several meetings, at least several, that took place. You're, I'm looking at Paweł, you're confirming that we are always ready?... to meet, and we cooperated. And ESG, that we are keep emphasizing, we are operating according to the values, according to the rules. All the processes and transition changes that we are implementing must have in the DNA, the ESG changes. We are working very intensely on the strategy, and that strategy we're working on now.
We are at the stage of a first strategy that we did at the group-wide level, also preparing the operational strategies for each business line that we have in our group. I think as of the end of this year, we'll be presenting the group-wide strategy, as well as the operational strategies. We are moving bottom up and then top down, and we'll combine these two approaches. We'll be showing you, we'll demonstrate to you how we want to proceed and work on the in the subsequent years. We also introduce a new business model for the entire group. This is the operational model or business model based on the business units. We divided it all into business units, so creating value, creating products, starting with commercial generation through renewable distribution heat. As part of those business units, we have subsidiaries consolidated.
We are looking from a business point of view at the group through these business units. That's where we are creating value. Of course, formal management according to the Code of Commercial Companies, but the main management body are the so-called business review meetings that define and verify, and of course, adjust activities taken within each business unit. By the end of this year, we'll also update the group's code that demonstrates not only from a business point of view, but also how formally this should work, how the decisions are taken. One of the elements, the introduction of the so-called EDM to management. So we're inviting heads, bosses of individual business units to manage the group.
So, part of the EDMs will be. The EDM will be representative of other all business units with respect to unbundling principles and to take the strategy decisions from the group point of view. This all will lead to the situation where the competitive advantage that we have to build and maintain is realistic. Thank you. Good. Please, next slide. Ladies and gentlemen, these six months, 80-90% or even more of our energy was spent on the business area, creating value, the customer infrastructure, organization, but also the time during which we were performing audits. We are verifying everything, how the group is operating, what can be improved. This time of audits, the first stage, was quite strongly condensed during the March, July timeframe this year.
The main areas we are verifying, well, it's not everything, but the main areas that we focused upon were the sponsorship deals, the CSR contracts, communications, all the court and administrative proceedings, cybersecurity, excuse me, and the issues related to the human resources management. So the recruitment, the compensation, bonuses, and so on. Please excuse me. Okay. During that time, we completed 16 audits, very specific, detailed audits. What's most important is the fact that we took the decision, those audits are performed in-house, so using the internal audit team that is reporting to me partly, but first of all, is reporting to the audit committee and the supervisory board. So the structure is in line with the best practices regarding internal audit.
The main areas of those audit, as I mentioned, the sponsorship agreements, CSR, external and internal foundations, the grid assets, selected areas, so the so-called spotlight was placed on the selected elements, cybersecurity, how we are prepared, what can be improved in this respect, promotions, compensation, bonuses, renewables, investment projects, how this process was carried out. A lot of things were happening. The purchasing process, as well as the asset sale. These are the main topics. The effect of these activities include three cases reported to the Prosecutor's Office, sponsorship and CSR agreements. This is the PLN 8.5 million . This is the amount that was reported to the Prosecutor's Office. Prosecutor's Office has accepted it, and of course, partly accepted, partly not.
The donations made, this is PLN 4.51 million, that was also reported to the Prosecutor's Office, and the issues related to the grid assets is more than PLN 1 million. These are the three main areas that we reported to the Prosecutor's Office, where the outcome also of the audits that we completed, there are several other activities that will be now carried out. I don't want to talk about it up front. I will show you later on the effects, the outcome of the several activities regarding the forensic investigative auditing. Now, we selected external companies. There are three companies that are supporting our TPE headquarters head office, but we will undergo the same process, repeated at the business units and other subsidiaries. These are areas starting with deepening the sponsorship deals, sponsorship issues.
We have several projects that, in our opinion, shouldn't be implemented. There are several investment projects related to the purchasing, and I will be talking about it once we have launched this process, and I will be talking to you about earnings conference calls, and if you have questions, I will answer as well. But for me, and for the entire management board, and I can say for the entire management, we have a clear message here, that the focus of organization is on the customer and the growth, the expansion. These are the natural things for us. Let me put it this way, that the audit for us is a natural element. We are improving the organization, enhancing it, and what we are doing will be also continued for the next several years, even during the time when we will no longer be members of the management board.
The subsequent management board should continue that, because in the world as it is today, only continuous improvement enables successful competing and to compete successfully for customers and to maintain the competitive edge. So much for me, as far as introduction. And now, Krzysztof, welcome, ladies and gentlemen. I will speak about the financial results of the group over the last six months. I'll start with the operating data, because first, we determine the financial result. If you look at our key segment in the distribution line of business, we had a slight increase over volume of electricity distributed. This is, of course, in line with what we can see in the macroeconomic areas of economic growth and the overall increase of consumption of electricity in Poland.
Regarding the renewables, we also had a slight increase versus the first half of 2023. However, here there was a certain allocation of sources. We produced a bit less electricity using the hydroelectric power plants. The hydrological conditions were weaker during the first six months of this year, but we produced a little bit more electricity using the wind farm, mainly thanks to the newly deployed wind farms. Regarding our conventional energy, electricity generation, this is our weakest result. Another six months where we recorded a decline of production by 17% this time. Our 12 MW units are the units where they're closing the system, basically, and the first ones to be shut down by the operators. That's why the production using these generating units is dropping as compared to the first six months of 2023 by as much as 17%.
The next segment where we also observed a decline is the heat segment. Here, it just happens that the volume of heat also declined as compared to the first half of last year, but it is mainly caused by the outdoor temperature. In the first half of twenty twenty-four, the outdoor temperature was significantly higher as compared to the first half of twenty twenty-three. Regarding the supply segment to the final customers, retail supply, also, we observed a decline versus last year. The reasons for are several. We are dealing with some large customers leaving us, that also led to a large volumetric decline. But also, we are dealing with a regular trend of production increases by our customers, both prosumers in the household segment, but as well as in the small and medium enterprises segment.
There is more and more installations, PV installations, that are satisfying, meeting some of the demand of those customers. That's why the trend of downward trend of decreasing volumes year-over-year is also visible. If you look at the financial results, which I also mentioned, are determined by the operating data, we have a major significant decline of revenue, 35%. This is some factors I've already mentioned, so the decline of supplies sales to the customers and the decline of production in the generation segment were the reason. But also, we were dealing with a significant decline of electricity prices on the market, and the volumes times the price led to the situation where we are dealing with a 35% decline of revenue year over year.
Regarding EBITDA, also, we observed an almost 30% decline, but on the subsequent slides, I will be explaining to you that we as a matter of fact, talking about the significant decline at the reported EBITDA level. If you look at the comparable EBITDA, then the decline, of course, is there, but is no longer as material regarding year over year. If we look at the net profit, here, this net profit is. The loss, as a matter of fact, at the net profit level, is caused by two major material events. First of all, a large impairment charge, a large write down in the conventional electricity, both in the generations with heat segments. As I mentioned at the very beginning, the coal-fired units, generation units, are demonstrating an ever lower profitability.
Based on the new price projections recently that we adopted, and the impairment test related to the carrying value led to the 1.6 billion PLN write-down impairment charge in this segment. The second reason for this net loss was the issue of write-down of the asset due to the deferred tax. Since we wrote down a lot of significant portion of generation assets, so we will not be able to recover the losses from the previous years. So part of the tax was also had to be written off. Regarding the capital expenditures, they are flat practically year-over-year. However, I'd like to draw attention to the fact, and my colleagues will, Mateusz, will probably be expanding, elaborating on that on the further slide.
But I'd like to indicate here that 75% of spending was allocated to the distribution line of business, another 12% was allocated in the renewables segments. Means that almost 90% of our capital spending is carried out in the two segments of our company, namely the distribution segment and the renewable segment. Regarding the net debt to EBITDA ratio, as the CEO mentioned, it's stable year-over-year. I will be elaborating on it when we're talking about the debt and financing, but this ratio stays at a stable and safe from a covenant point of view level. Let me hand over the floor to Paweł Jabłoński, who will speak about the trends on the market, and then I will continue talking about the results at the EBITDA, comparable EBITDA level and the individual segments. Good afternoon.
Let me give you a brief out information on the market. Exactly the same way as it was presented during the previous earnings conference calls. We are presenting the prices of the key instrument that have an impact upon the results of Tauron Group. It's also a certain backdrop for what will be presented for later on the presentation of the results of individual segments. It's clear that these prices, to a large extent, determine the margins that we are achieving, earning individual lines of business of our group. It's important to indicate that the horizon, the timeframe, that we are showing these four graphs, I will cover them in more detail in a second. This timeframe is not accidental.
It indicates how we are looking at the market, based on what time horizon, timeframe we are undertaking hedging activities, so as to preemptively take up certain actions and hedge the commercial, the trading position of our group. It's also worth mentioning that our hedging policy is a preemptive policy to a large extent. Its purpose is, of course, to support the strategy that the CEO described in the beginning, in particular, the element related to the financial stability. So the goal is to build the profitability of, trading units of our group, but what's important, while protecting the risk, hedging the risk related thereto. As a group, Tauron Group, we have a low risk appetite related to our presence on the market. So to a large extent, preemptively, we are analyzing the market and take actions way ahead of time.
So we can see here the three-year timeframes on these graphs. It's also worth mentioning the, due to the fact that the group has been changing recently and will be changing even faster, so we are placing our bets on the renewables, and we are changing the offering for the customer. The president was talking about the nine-year offering for the households also requires a change in the hedging policy, and this is being actively undertaken by our group now. Moving smoothly over these four graphs, of course, the most important one, the key one, is the price of electricity. On the graph, in the upper left corner, we can see the futures prices, and in the blue color, we can see the spot market prices.
You can clearly see that we are continuing the downward trend, a very strong downward trend, following the crisis that took place in 2022. The entire 2023 were meant the decline by half, so from the 4,000 per MW hour to 500. The spot market for the first half of the year was at the level of 170 PLN, so more than 30% lower than a year ago and more than 50% versus the futures market. There are several reasons for that. The most important ones being the fact, the changes on the cost factor, so the price of fuels, the price of hard coal, and the price of carbon credits. I will expand on that in a moment. Definitely, the economic situation impacts that, but also the change of the structure of generation in Poland.
We've seen major changes over the last two, three years. Of course, material increase over production by the renewables, the increase of the production by the photovoltaic farms, more than 35% on PVs. On wind farms, 25% year-over-year, talking about the first half of this year versus the first half of last year. Regarding the electricity imports, which also has a major impact on the prices, this is similar, flat versus last year. We are observing a slight decline, but it continues to be at the 2 TWh level. This all means that the units that are closing the system, the hard coal-fired units, are being pushed out. That's why we are observing the declines of the production as President Surma mentioned in the first part of the presentation.
Regarding the coal prices, we are showing here two graphs, one global one, the ARA futures contracts for the delivery of coal, and the Polish index, PSCMI 1, which is, has a bit of a structure. It namely demonstrates what is the price of coal that was delivered to the coal-fired unit. So this is, in fact, ex-post index, and you can see a certain shift between both graphs. However, in both cases, we are observing here the declines. In this year, regarding first half of this year, in terms of hard coal in the Polish market, this has declined by about 30% from the 31-32 per gigajoule level, down to about 22 PLN per gigajoule. ARA prices also, we have declines a bit slower because ARA responds faster than our, index.
The first half of this year versus the first half of last year, it's a decline in the region of about 20%. Regarding the carbon credit, the CO2 emission allowances, the left graph at the bottom, we can also see here a downward trend with a correction in the second quarter. Of course, this also determines the decline of prices on the Polish market. Although we can observe very high volatility of this index, this year, practically 30 PLN spread between minimum and maximum, between high and low. This is quite a material volatility versus last year. Of course, there are several reasons here. Definitely, the demand side, so the lower production using the conventional units, but also the supply issues, so the increased volume on the primary market due to the repower program in place.
And the final graph in the right-hand bottom corner. The output, the outcome, kind of the result and graph from the three previously discussed, so CDS, so clean dark spreads, so the difference between the revenue and cost of energy and the variable costs. Here, based on the spot market prices, two graphs. Why two graphs? Because we are presenting two efficiencies. The first 35% is of a 200-MW units, and the other one for the 1,000-MW units, so better efficiency rate, 45%. The less efficient units, this index is at very low level, so which indicates that there's no possibility to place them on the electricity market. Regarding the better units, we can see, it's closer to zero. On the futures market, it looks a bit better.
It enables us to place those units on the futures market. However, here, the comfort of this hedging is much lower, and this profitability, despite the fact that as part of our preemptive actions, we have, positions hedged and we take actions to have the best hedging to protect this value in the conventional line of business, still, this element has a negative impact upon our units. Thank you very much. Thank you, Paweł. Let me go back to the EBITDA issue, which I already indicated at the very beginning. We were trying to show to you a comparable EBITDA.
We adjusted EBITDA by stripping out in the first half of last year and the first half of this year, but stripped out the one-off events, and having adjusted, we stripped out the one-off events. This EBITDA, comparable EBITDA is slightly lower, and as a matter of fact, it reached in the first half of this year around PLN 3.5 billion, so less than 5% lower than we reported in the first half of last year. The main events that had an impact upon it, you probably have already seen it, and you, both in the first half or the first quarter of 2023 and the first quarter of 2024, these are the revaluation effects in the distribution segment. There's a key factor, but there's a difference between the two individual years.
We also had the write down or charge to the difference, price difference payout. We had damages paid out based on the settlement agreement regarding the Jaworzno 910-MW unit in Jaworzno. We had also another event related to the positive tax interpretation regarding the bonus of 185 PLN received by the customers, namely that the VAT tax that's accrued can be deducted. Which means that the provision that we set up last year, we were able to release part of it in the first quarter of this year with respect to the VAT tax. This means that this EBITDA is slightly lower, but not as material lower, that you would have an impression of when you looked at the reported value.
Moving on to the individual segments results, and it's worth emphasizing again that the key segment for Tauron is distribution segment. Again, more than 50% contribution to EBITDA coming from this segment. As I mentioned, if it weren't for the events related to the revelation of a balancing difference, this contribution to EBITDA would have been even higher. It's worth noting here the good results, good earnings of the supply segment first half of the year. I will elaborate on the second half of the year when I discuss the results of this segment. At the same time, I'd like to emphasize the weaker results of the generation segment. We can see that this segment in this first six months of this year had the lowest contribution to EBITDA.
I'm not talking about the EBIT, but I already mentioned, and the write-down impairment charge, but at the EBITDA, we only have PLN 156 million coming from this segment, which indicates an ever-worsening situation, deterioration of the conventional energy segment and the coal-fired units. Comparing to the other two segments, the renewables segment and the heat segment, one can say that both these segments have installed capacity several times lower than the generation segment. However, the EBITDA is significantly higher, which just demonstrate the situation related to the potential spinning off of those assets or the economic operation, cost-efficient operation of those units in the future will be of key importance for the entire group. Moving on to the next topic, namely the individual segments. Let's start, of course, with the key segment for our group, namely the distribution segment.
As I said, EBITDA, reported EBITDA year-over-year, significantly lower. However, we have this effect that was already presented in the first quarter of this year, so the issue of revaluation. Let us remember, the very revaluation, the customers. Just a few more words on this topic. I think it's a topic that's difficult to grasp, but the customers, not all customers are. The readings are made on an ongoing basis, especially in the G Tariff and the small households. At the end of the year, at the end of each reporting period, there is a revaluation, and this revaluation of electricity consumed by the customers, as a matter of fact, reduces the balancing difference. But we, in the financial statement, we are talking about the difference, period-over-period, and individual periods, the price is, there is different of electricity.
This electricity was much more expensive in 2023. This year the price is much lower. Therefore, a comparison of two balances effectively reduces this revaluation, this adjustment, and the grid losses. However, effectively, due to the fact that the price this year is much lower, the balance versus balance comparison means that we have a negative result. Of course, this result is not directly cash result; it's a booking; it's an accounting effect. As we declared during the previous earnings conference call, we are working on a model where, to a lesser and lesser degree, would have a lesser and lesser impact upon the results of the distribution line of business period over period.
The first element of the change could be a stronger feed, feeding to the model with the readings from the remote readout meters, because today we have around one million two hundred and fifty thousand, or so, a significant portion, more than 20% of the customers have such meters. If we manage to feed that data from those meters, it will mean that these effects will be smaller in the subsequent periods. The second effect will be the lower volatility on the market. As Paweł mentioned, the price was dropping from a very high level in 2022, through a relatively high level of 2023, and now, lower and lower level in 2024.
We have stabilization of the price on the market, and it seems that if the stability in the subsequent years continues, so the impact on the result of the segment will be getting lower. Regarding the other factor we have in the distribution segment, the positive impact of the regulatory account. Again, we are talking about the balance year-over-year, because the regulatory account still in 2024 is being accounted for for the distribution gives a negative result for distribution segment. Next year, it should be reversed, this trend, but year-over-year, this is a positive effect. This year, there's difference, so the charge due to the regulatory balance is lower.
Regarding the margin on the distribution service, here, the main business element is, it's higher year-over-year, first of all, due to the value of the regulated asset base and the higher WACC that was accepted for this year. Let's remember, in 2023, we were dealing with about 18.5%. Now we have 10, about 10.5%, and we will be observing what will be happening in the subsequent year. The other results, as a matter of fact, we have additional revenue due to the resolving of the power collisions and additional grid connections. Regarding the quality parameters that are already displayed on the screen, basically, the group, as of now, fulfills the majority of quality parameters.
We are on the border regarding the time to install new grid connections, but jointly with Tauron Dystrybucja subsidiary, we are discussing this, and we are doing our best that the parameters set by the President of the Energy Regulatory Office are not exceeded, and in the subsequent periods, we'll be working on optimizing this area so that the time it takes to connect the customer to the grid is as short as possible. Regarding the interruption durations, we have a safe level versus the targets set by the President of the Energy Regulatory Office. Because of that, we are not expecting any risks regarding the lowering of our tariff in the subsequent years. Moving on to the next segment, the renewables, the energy sources, we have a significant increase of EBITDA year-over-year, the key element being the price effect.
Here, one could start thinking about it, why, since the prices are dropping year-over-year, we have a positive impact, but let us remember that last year we were dealing with the freezing of the price, and the renewable sources had a predefined, upfront, predefined price. Therefore, the abolition of this freezing means that we have a positive price effect year-over-year, because the margin from electricity generation is purely market-based. Regarding the volume, as I mentioned, a slight increase year-over-year, a transfer between the hydroelectric power plants and the wind farms, and the negative impact on was affected, the signals affected negatively by the carbon credit prices, property rates prices. In addition, it was additional negative impact came from the fact that some of our wind farms lost the right to receive green certificates. You know it very well.
After fifteen years from the starting operating a wind farm, the wind farm under the old regime was losing these privileges. So in this first six months of this year, one wind farm lost it totally, and the other one, another one lost some of it. Moving on to the next slide, we have the generation segment that we already described a bit today. Paweł also showed what the prices were like and the CDSs. Unfortunately, the declining profitability of these power plants means that year-over-year, we have a very material decline of the margin. If we were to answer why the comparable EBITDA year-over-year was lower, one can say that was the segment that was the main reason behind the lower and comparable EBITDA after stripping out the one-off events. So the main reason being the much lower profitability and the lower CDS on the coal-fired units.
The positive impact came here in this segment, came from the heat tariff and the reduction, slight reduction, maybe not slight, but a decline of the fuel price. We are talking about, first of all, coal. This had a positive impact upon the heat segment, heat that is being generated by, partly by these units. Additionally, this year, we didn't have this one-off effect related to the settlement agreement related to the construction of a 910 MW unit in Jaworzno. That's why this EBITDA in this segment is significantly, materially lower, year-over-year. Moving on to the heat segment. In the heat segment, similar as in case of electricity, we are dealing with a negative, comparison year-over-year, the same reasons behind it.
So the profitability of sales generated by the coal-fired unit is much lower, but we have a clear positive effect of a positive tariff on heat tariffs, and additionally, supported by the operation of the biomass-fired units and the lower cost of purchasing coal. If you looked at the comparable EBITDA year-over-year, it's almost flat because we stripped out the TAMEH result, then this EBITDA year-over-year would have been almost flat. Let us remember, the much weaker result of TAMEH is what we communicated already in our current report. We did the filings, one of the subsidiaries of TAMEH Holding. TAMEH Holding has two subsidiaries, TAMEH Poland and TAMEH Czech Republic. TAMEH Czech announced its bankruptcy, declared its bankruptcy. That's why this year we have no financial result coming from them in this area.
That's why a much lower impact upon the heat segment that TAMEH was assigned to. The supply segment, as I mentioned, good results, good earnings in this year. We had a full coverage of, first of all, G tariff. All the costs were covered, so that's why the margin in this segment was positive. We were also dealing with things that had a negative impact on the segment. Unfortunately, what I already mentioned, the loss of volume and customers, a positive one-off effect, was a tax interpretation that I already also mentioned. What we would like to highlight, talking about this segment is, let us remember, we published it in our current report. Let us remember, starting from July first, the tariff was changed. The tariff will not cover the costs in the second half of twenty twenty-four.
Therefore, one should assume that this result cannot be easily multiplied. You cannot easily multiply the first half of the year times two and have earnings of supply segment in the second half of the year. The other piece of information that we also provided in the current report, assuming there'll be no changes, the tariff was set for eighteen months. Therefore, the eighteen-month tariff will fully cover, or should cover those costs that would not be covered in the second half of twenty twenty-four. Therefore, they should the return on the G tariff should be visible in twenty twenty-five. That's why am I talking about it?
Because this is, as we are talking about the outlook for this year, so this outlook, because of the fact that this tariff was changed starting from July first, then this outlook for this segment also changes at this point in time. And as a matter of fact, one more piece of information, very brief, about the financing and debt. As the CEO mentioned at the very beginning, we have a stable level of financing, a stable level of financial stability of the entire group. The first thing you can see here that the net debt dropped by around 2 billion PLN year-over-year. This is a positive effect. However, I will have to add here that this year, also the regulation changed regarding the timing of redeeming the CO2 emission allowances. The CO2 emission allowances last year had to be redeemed by April latest for the previous year.
This year, we can redeem those carbon credits until September. Of course, due to the value of money over time, we are taking advantage of this option, and these emission allowances, to a large extent, were purchased after June thirtieth, which of course had an impact upon the level of net debt. The second piece of information in the context of, to emphasize the stability regarding of the group regarding the financing availability, at the end of June, we had all close to PLN 6.5 billion of available financing in the group. For a number of years, has been conducting a safe, secure financial policy, ensuring its financing at least twelve months ahead of the needs for such financing.
This financing, this number gives us an assurance that the group has a guaranteed financing for at least twelve months forward. Regarding the net debt to EBITDA ratio, as I mentioned at the beginning, it's at a stable level, around 2.2. Of course, this is significantly lower, below the boundary level that is outlined in some financing covenants, which is 3.5. That's all from me. Let me hand over floor to Mateusz, who will present the CapEx in our group over the last six months. Ladies and gentlemen, regarding the CapEx activities, in the first half of 2024, we spent PLN 1.865 billion PLN. It's an amount that's similar to what we reported in the same period of last year. However, the restructure, that I said, of the capital spending were certain differences.
In the current year, as it was mentioned, 75% of CapEx was allocated to our distribution line of business, which means PLN 1.4 billion spent on installing new grid connections, refurbishment, and replacements of the grid assets. It was also worth mentioning this amount, about PLN 180 million higher as compared to the same period of last year. Now, the second key segment regarding our CapEx is the renewable segment. The investment in this segment, first half of this year, came in at PLN 232 million, and we are related, first of all, to the projects that are underway now. These are eight renewables projects that I will elaborate on more in a moment.
However, what's important, this amount is related to the work progress, for these investment projects, the acceptance of individual milestones, so between periods, these amounts might fluctuate a bit. Generation, 40 million PLN of CapEx, these are exclusively practically refurbishment, upgrade CapEx are related to, our generation assets and the overhaul schedules of such units, which are related to the life cycle of individual units, of individual assets. The heat segment, 53 million PLN of CapEx in first half of 2024, allocated, first of all, to the new district heating connections, new consumers, and maintaining and upgrading both the district heating and the generation assets, and the implementation of projects in the gas units in Katowice.
And the other operations, segment in this year, first of all, the IT investments in our customer service, about PLN 200 million, and the operation of our lighting business, which is roughly PLN 30 million in CapEx. Please, next slide, please. Yes, on this slide, we can see our renewables projects, which are currently underway. As I mentioned, these are 8 projects with a total capacity of 364 MWs. I think, a general message would be that all these projects are being implemented without any material schedule overruns and moving on to project by project. The most advanced one, Mierzyn, to start with, it is a project that is practically, we can say, at the stage of commissioning. It generates electricity. We are at the home stretch regarding the formal aspect, to be able to say that the project has been completed.
Warblewo Gamów, let me speak about these projects jointly, because we are at a similar work progress level. As a matter of fact, we are conducting the acceptance activities from our contractors works, and up to now, no major surprises, no major comments, so I can say that the deadline indicated here is not under threat. Two projects at a bit of an earlier stage of implementation. Nowa Brzeźnica, first of all, 19.6 MW. We just completed the GPO, the main energizing the main power supply point, and we are about to deliver the wind turbines to this site. We did an initial route review, everything is prepared, and we are inviting the contractor to start the installations. Here, it is a relatively early stage. We are preparing the foundations for mounting the, for installing the wind turbines.
Up to now, it's all according to the going according to schedule, right on track. So we cannot, we don't have any indications by this end of 2025 completion date is under any risk. And the PV farms, PV projects, the Pruszków photovoltaic farm, a very advanced, highly advanced project, the PV farm is already generating electricity. The acceptance work is underway, and the final aspects of calibration related to this farm, at the end of this month, we should have it as part of our assets. Bałków, an early stage of implementation project. What's important, this is our own development, in-house development project. We are at the stage of preparing the engineering documentation. The key components have been ordered, we are waiting for the deliveries. We are preparing the construction site. Similar situation regarding the Postomino project.
These are projects where decisions were taken at the similar time, so the work progress on these projects is very similar. It's worth mentioning regarding the Postomino project, this is our cable pooling project. This is connected to our wind farm in Marszewo. So the first configuration of this type that we are implementing at our, in our group up to now.
Thank you very much, gentlemen. Now, the time has come for the Q&A session. Let's start with the questions from the audience present here, and those of you who are watching us online, please ask questions using the form available on the website. Good afternoon, Portal High Voltage PL. I'll ask several questions in one go. The first one is regarding the spin-off of the coal assets.
Based on the statement made by the Minister Jaworowski, it seems that it's not gonna happen very fast. So the question is, what's the strategy of the group versus this, respect to these assets? Are you planning to put forward some of all of the coal units for, submit them for the additional auctions between 2026 and 2028? With the assumption that already is also clear, there will be no auction for three years, but there will be one-year auctions. And if this decision has not been taken, and when will this decision be taken? The second question is related to the decline of the sales. Can you show, as PGE does it, in what segments the sales decline? One, PGE is 1 TWh in the A segment, group A, which is very interested, interesting, what's the situation in your case? That's all for now. Thank you.
Let me start with first question. First thing is that, as a group, we have two options. We can spin all those assets, we don't have to spin them off. We can spin off some of them, regardless, the company will survive on the market. The second thing is that, we'll be fully determined to implement the program of becoming more and more green. That's one thing. Whether the assets will be spun off now or in a year time or in two years' time, we'll not answer because, it's clear that it's a decision-making process. To a large extent, is beyond our company's scope. Our message is that for us, the spinning of hard coal assets for us is a highly preferable solution because it gives us a lot of investment options, and this is the main element.
However, if the spinning off of coal assets doesn't materialize, so we will still be implementing it, but based on various models. It doesn't have to be based on the balance sheet. So therefore, we are preparing for each of those scenarios. Which scenario will be the ultimate one, we'll see in the coming months. Based on that, we will present our strategy. Regarding the capacity market, that's true. For a long time, we were fighting, but in the business sense, we were fighting for the freer capacity market because this would have been an optimum solution from the point of view of investing overhauls that we have to carry out. It would be a solution, ideal solution for us, as we communicated before, and I did it.
I can say that the capacity market ends in 2025, and starting from 2026, there are only two units on the capacity market regime. I'm talking about the 200-MW units, the others will not be there anymore, and without the support with today's prices of electricity and what Krzysztof mentioned, they will not be cost efficient, will not prove themselves economically. The existence of 200-MW units is dependent upon the support mechanism. Where are we- where do we stand? At the moment, we are counting, we're calculating the spending, the CapEx required for overhauls. That will be quite depending on how much money we'll have to spend next year for the operation of such a unit in 2026. Based on that, we'll be taking the decision.
So, theoretically or practically, we are talking about something like that. We have ten units that we can place on the capacity market. However, each of those units will have a different pricing, so there'll be different strategy. But these are details that I'll have to leave within our organization, because it's an element of our strategy. We are preparing for that, very much detailed levels, really, not only to the trading, but also the technology, but among the technical solution, those units, each of those units requires different level of CapEx for upgrades, refurbishments, and overhauls in twenty twenty-five for them to be able to operate in the subsequent years. Director, have I answered your question? Regarding the second question, we displayed this information. If you could again display slide number seventeen, and that's where we are showing. Sixteen, yes, sixteen.
And here, we are clearly showing that the loss of volume took place in all customer groups, but that's true. The larger decline we reported, we observed in Group A. So I think, without disclosing the name, in the previous year, a customer for our supply subsidiary was one of the distribution companies. This year, it was no longer our customer, so this had the largest impact on the loss of volume in Group A. In the G and C group especially, we have an increased number of customer generation, and therefore, the volume is declining year over year. Even the same number of customer consumes low volume of electricity because they self-generate by using their own generation solutions.
We mentioned about the distribution companies due to the fact that the operator is organized tender for so-called losses, and so that's why you can withdraw. But the customers are highly specific and maybe individual discussions in the offline, we can discuss the details. But of course, if you want to know more about it, of course, we'll be able, we can answer it here. Good afternoon. My name is Mariusz Marszałkowski, BiznesAlert.pl. I have two questions. The first question regarding, the president already mentioned it a bit, but I'd like to get more details on it, because there is a program to refurbish the 200-MW units. A lot was talked about it over the last few years. What is the prospect of refurbishing these units to bring them to the condition, to a more flexible ability to operate?
The second question regarding the CapEx issue, the pumped storage, Rożnów two hydroelectric power plant. There is plans to expand this power plant last year mentioned. Is this still being implemented? And according to what schedule has there been a decision, CapEx decision made? Thank you. I will continue this spin-off or the units. Well, you rightly mentioned that a lot was being talked about it, and I will draw the curtain on this topic. There was time to prepare the mega units to make them flexible. Today, we have September, the Capacity Market expires next year, and the prospect for further operation of two hundred MW units is highly restricted. And who will spend hundreds of millions or billions of PLN for this type of investment project without a guaranteed return on this investment?
This is the decision that would have to be taken. Looking at our units, they can operate until 2028, 2030, so we are able to invest in those entities. They can survive until that time. We can present such an offering, we can function until 2028. These are relatively rational capital outlays, but following 2028, for various reasons, those outlays will have to be much higher, but easily until 2030, they, these units can be operated. But to invest as management board, for us to invest in those units, we would have to know that there is a prospect of getting a return, a payback on this business. This is the question. Now, in a situation where we have contracts or auctions, one-year contracts, so we're looking at such units as with a one-year prospect, one-year outlook.
So we're to submit an offer, a bid on the Capacity Market. So, I will see that there's a probability of winning this auction. If we win, we will prepare it and we'll be operating. And there is also a chance that in a subsequent year, entire year, we'll be submitting that bid. So those units that will be used in the first year, we'll strip out those units that require more spending in 2025 and less efficient. Those units that will not be used under the Capacity Market will have to be shut down to place, and we will have to develop other solutions of co- for commercializing the so-called sites. This is one of our strategic elements, and a place where the, an excellent infrastructure. So the post-coal development is under special care in our stra- actions.
Those units that will win the first capacity market auctions have a chance to take part in the subsequent, so, and so on and so on. We have a three-year time frame, three-year outlook, so to move, to look beyond that, it's difficult for me to speak of any details. We look at it from a commercial point of view, but once there is a demand for such services on the market, we are able to submit such a bid, of course, on the economic terms. Regarding the pumped storage project, power plant project, let me confirm that the project is being continued. Let's start with the fundamental issues. We believe that such a project is needed in the national power system.
Secondly, we believe that we own one of the best sites in Poland regarding terms of building such assets. Currently, the projects are at the planning stage, so working on developing the optimum variant version for implementing this project, this new project, to bring it to the stage where it's be ready for construction. As far as the investment decision, it's difficult to say today when this decision will be taken. The process of preparing this investment project, it takes some time, because definitely it'll be dependent upon the level of CapEx for this type of project, available support mechanism, and as of the moment of taking this decision, and the system services and the interest of various partners in this type of investment projects. Please speak to the microphone.
The situation is as follows: It's a very costly, difficult investment project. It could be an excellent investment project. On one hand, we have a large energy storage facility that will be operating in several years' time. The situation is such that today, the situation is that we as a sector, but not only company, but in the current circumstances, specific circumstances, we are talking about the coal sector, about the growth of expansion of renewables. We're talking about the energy storage facilities. We're talking about the peakers of gas engines that have to ensure the capacity availability rate. There's so much, so many uncertainties, so many unknowns, but taking a decision here now, with an option of commercialization in more than a dozen years, is very dangerous.
So when the decision were taken a few years back in, on investing in large coal-fired units, we can see today, looking back, if someone had known once the decision would come like we have it today, so would the decision be have been taken to build such large coal-fired units? Maybe a different mix could have been chosen. But easy to look at it in hindsight, but we are not doing that, but we need to draw conclusions from what has happened, and we are preparing this project. It seems very interesting, but this project, Rożnów, will be competing against the energy storage facilities that are being implemented now.
So we have to take into account what the demand and supply of a large-scale energy storage facilities will be, and whether there's a room for such a large energy storage facility, and whether there's a chance to get profitability out of this project. But let me put it this way, that, under the model that we are developing, such a project, needs partnership. There must be a number of parties involved, interested and engaged, in order to have, potential benefits and the major risks that are involved here could be spread over a number of entities. Paweł Puchalski, Santander. I'd like to continue the topic of, 200 MW units. You mentioned that you are at the end of a curve. Is my understanding correct?
The capacity market that is to provide the support still is kind of like a solution for everything, but we in fact don't know what values we are talking for everything. Is it so that the amounts that were supposed to come to Tauron would be unsatisfactory, or will Tauron proceed to shut down those 200 MWs at the end of a curve, a life cycle, and will be pushed out? Well, let me put it this way. It's difficult to maintain the units that are not generating a positive result, even at the zero plus level. So we are preparing ourselves. So the messages that we are providing to you and to the shareholders, we are also conducting these communications with our people, the social board, the people, the workforce. We say unequivocally, the coal-fired units, that the capacity market for them is expiring.
Those units that will not be profitable will have to be shut down, and instead of them, we'll have to find a different solution, different model, business model. We are looking for it. As a matter of fact, each case, each site is being analyzed on individual basis. That's where we want to position a new business. But the truth is that there's a Capacity Market auction. We submit ten units as we have today, and six out of them, just to have more, just on purpose, I'm giving this example where I know there's no specific numbers behind it. But let's assume six of them will be under the capacity, will be operating for another year. The other units will have to be shut down as of the end of twenty-five. Instead of that, we have to find some new business.
But as of now, in our considerations, we are not accepting such a model that the units will not have the capacity, not be under the Capacity Market, will not be operating, will be maintained just to keep the fleet, to maintain the fleet clear. In line with the same topic, one of the pains up to now in the first half of this year, in the conventional generation for Tauron, is the expensive hard coal that was purchased before and is still being burned. I'd like to find out at the current volumes of hard coal consumption by those units, until what time you will have enough of expensive coal?
Or to rephrase it, when the results of the segment will improve for this very simple reason, that the expensive hard coal will be burned, and the new one will be, that was purchased at lower prices, will be used. Let me answer the question. Regarding the expensive hard coal, these were the contracts concluded for twenty twenty-four, in particular, and now we are bringing down our inventories, and we are replenishing it with the new contracts that replace the expensive hard coal with cheap hard coal. So next year probably will be not too much excessive volume that was bought at a higher price. On average, we'll have a fuel price at the market level. Let me add to what Paweł mentioned.
Let us remember, because it's also the accounting method is very important, because in the financial statements, you will practically see the hard coal is valued at an average price. So it's not first in, first out, it's gradually the cheaper coal bought ongoing basis will be gradually reducing the price, and thus will lead to an improvement of the earnings. Partly, it's already can be seen if we talk about the heat segment and the generation segment, partly this cheaper fuel is already there. But so far, it hasn't pushed out fully the more expensive fuel that was purchased. Paweł mentioned the positive messages that gradually we are reducing the high hard coal inventory levels, and in subsequent year, it will be better seen, the cheaper purchase of fuel.
Based on what I've heard in here, the second half of this year, still you will be burning the expensive coal from last year's purchases, correct? Partly, as I said, it's not so- Okay. And another question, you mentioned about your large potential pipeline in the energy storage projects. Can it be implemented only if you obtain significant or some auction-based support, or are you also considering the construction of such projects even without the auction-based support? The capacity market is only... has a certain percentage share in this business. However, we are irrespective of capacity market for energy storage facilities, we are preparing the entire investment pipeline as a business that is strongly interconnected with the expansion of the renewables.
I have a question from you: whether the storage facilities, the large-scale storage facilities in a reasonable amount, plus the distributed dispersed storage facilities, we are working on that. We have six million customers. As a project, we are also strongly engaged in, plus heat. That's for us an excellent energy storage that we can take advantage of. This is the model that we are building, and based on that, we'll be doing our CapEx projects. Irrespective of our capacity market, the energy storage facilities that you mentioned is an important, strong element of our strategy. To add to what the CEO mentioned, let us remember the big projects that NFOŚ, the Environmental Protection Fund, launched. They also launched a large energy storage facility program.
It's at its initial stage, but also, we are hoping that if the energy storage facility will not join Capacity Market, some of them do not, are not applicable to the Capacity Market. Some of them can use these aids, funds or available, so from a business point of view, we can benefit, but also looking at other available funds in the market, so apart from Capacity Market, we see a program that will provide subsidies under the National Fund for Environmental Protection. Let me just add with the model that I keep describing, we have to provide to the customer, to the business customer and the household, 100% of green energy. Green energy understood as a low-carbon. Of course, it could be nuclear or the other elements, that are considered as low-carbon or zero-carbon.
This will be possible once we have an excellent management system. Paweł is responsible for creating such a model, management model, which will on one hand, will combine generation production on one hand, and the customer and the storage, energy storage facilities. So storage facilities, production, generation, and the DSR. These are components that are required to make sure that we can meet the demand for electricity at reasonable prices, and meet the demand using the low emission, zero emission, zero carbon electricity. Another question, offshore. Along with PGE, you are a co-owner of one of the licenses. Are you taking part in any conceptual works? When this license of yours, yours and PGE, could be participate in the auction, or you're not dealing with it for now, and this is up to PGE?
We are a minority shareholder of that project, so our role is more passive. But we are very open, however, that once offshore comes online to be a counterparty in PPL, it'll happen sometime in the future. But to answer your question, yes or no, yes, we are more passive. We are focusing on other areas more. Thank you very much. Good afternoon, Robert Maj, PKO BP Securities. I have a question regarding the gas projects, because recently, speculation surfaced that PSE, the TSO, might encourage companies to build their gas-fired project, gas-fired units. So if it were to happen out of your portfolio of a current 100 MWs, any, can anyone be converted into gas? Łagisza, once there was a concept to convert it, if not, any other projects could be in line with that strategy.
Large-scale gas-fired units, we are looking at it, but it's a very difficult project. This is not the construction of such a large-scale gas-fired unit. It's a very difficult project, but what you are saying, the so-called peakers or gas projects, gas units that could satisfy the demand for at least during peak time, talking about a few percent during the in a year of electricity demand. We are interested in that. We can create such an offering. We are conducting analysis, we are looking at our site, where we have such sites, where we have access to gas. This access is commonly available in Poland today, so once such demand comes up, surfaces for such a service, we will be able to invest in such a project. I don't know if I answered your question. Well, yes.
I'm returning to the question. There was a project to convert Łagisza to gas. A large unit is not probably an option. Well, let me just mention that was not a project to convert a coal-fired unit to a gas-fired unit. It was a project where it was supposed to, a new co-generation unit was supposed to be built. And of course, we are analyzing that. We haven't struck down this location yet, this site. We are preparing the analysis for the heat market, because this unit was supposed to be basically, mainly a unit for the needs of the heat market in the Silesia and Zagłębie metropolitan area. But we are analyzing it now, and we are looking at what capacity would be optimal based on the current situation on the heat market.
The Łagisza unit is definitely being taken into account. However, we haven't made a final decision about its size. Regarding the contention, the dispute with TAMEH, could you give us some update on what's the situation as of today? Generally, the dispute with TAMEH or dispute with Mittal regarding TAMEH, in fact, but we are still at the stage of conducting a dialogue. We don't want to get into too much details of the dialogue, but of course, we'll set ourselves a certain deadline. If nothing happens by the deadline, then it's possible that we will file a lawsuit or suit to the arbitration. We'll take this case to the arbitration court for the British court to determine who's right regarding those shares. Of course, we are not excluding an out of court and amicable solution regarding this aspect.
Last question about the ČEZ assets. Are you looking at this process of selling these assets? Are you actively taking part in this process? We know the process is underway. We were looking into it. It's not so that it's an easy project. It's a process underway. We are analyzing it, but we haven't taken any decisions as of now. We are waiting for the move, the next move of the selling party. Thank you very much. Good afternoon, Piotr Apanowicz, ISBnews . The president already partly answered my question, let me make it more detailed. As I understand, as of today, you allow for possibility where the spinning of the coal assets will not materialize at all. So when do you expect the final decision on that issue, or when the ultimate model will be developed? Will be finalized.
Six months ago, I was here, I told you that I hope I wanted it to happen by the end of this year, so I can confirm it's recorded, and that was my message. Whether it's gonna be successful, I don't know. It's not all up to me. The majority of it is out of... It's not up to me. However, regarding the portion related to the company's strategy, let me emphasize, we are submitting such an offering, such a proposal. We are prepared for both organizationally as well as conceptually, and this is one of our strategic directions, our initiatives. Nevertheless, we are prepared, and we are preparing the entire strategy also for the scenario when the spinning of all the coal assets will not materialize, and we take onto ourselves the entire transition, that transformation. So each of those paths has its advantages.
Advantages for organization over spinning off the assets, the main benefits for us would be to launch much larger CapEx capability, and it's a renovation of the transition, but we are not also disregarding the option of taking on this transition ourselves. So in our mainstream, we have a transition over twenty MWs, preparing them for the capacity market, taking part in the capacity market. Once the twenty-MW units are not operating, will be shut down, they will not be covered by the capacity regime. So developing such a business idea instead in both sides to generate business, generate revenue, so we are optimistic about this options. Also, we are obligated to give jobs for our people.
That's also one of the strategic elements, strategic elements that our declaration, our statement that mentions that with the business, we want to have a business case, safety for people, security for people, so jobs for the people and the development for the regions. There's a number of elements I don't want to repeat, but that's what the ESG is all about. That the sustainable strategy, sustainable development consists in the fact that all these elements are taken into account. So as I said, irrespective whether there will be the spin-off or there will be no spin-off, we will continue implementing our strategy, transition strategy, under a different, under the various models.
The same way we will be implementing the CapEx plan, maybe it will not all be done on the balance sheet, maybe using other models, but our in-house resources, analytical resources, financial resources, have to invent it. Krzysztof is already working on it. We will not be telling you the details of it, about all the models, but that's we are working upon in order to be prepared for to be able to operate in twenty twenty-five. A technical question, have I answered your question? Yes, it is possible. With all due respect, but I can... I'm not able to tell you everything. Thank you, Bartłomiej Sawicki, Parkiet Daily. I have several questions. I'd like to ask regarding continuing the Łagisza topic. I understand that the product is under review, but will not be submitted for this year's capacity market. We're talking about the gas-fired unit, yes.
Yes, I confirm it's being analyzed, this project. I mentioned before, those large-scale gas-fired projects are difficult today, due to the fact that the gas is not a preferred source of, according to the European Union, a number of things must happen. We think this is under the strategic option, we are analyzing it. We know how we could take advantage of it, but also have other alternatives, such as regarding what to do in, at that site. So this year we will not submit such a declaration. Thank you. Let me just add, let me just say that this unit is a heat generation unit. It's very important. It's a unit that is to provide the maximum cogeneration, and we are considering this unit. It's not a typical condensation-based unit, for the capacity market. Regarding Skawina, you mentioned that the process is underway.
Am I correct in understanding? Does it mean that you're interested in taking over the gas-fired project that ČEZ communicated some time ago? Well, too much has been said. This is a long and complicated process. We are considering, we are open to various types of investment projects, but they have to have a very good economic justification, a good business case. I know, talking about the Skawina, what we are talking about the sales process of the ČEZ assets in Poland, if so, but I don't know. Yes, but at the same time, ČEZ communicated that they would like to build a gas-fired unit there, probably, as I understand. So sale of coal and gas project together. Today, the CEO mentioned that we are operating on the Upper Silesia market. In the Upper Silesia, ČEZ has its assets in Chorzów.
Probably, this asset potentially could be the subject of our interest. I'm not saying we are in part of any process, but it could be potentially, we could be potentially interested in that due to its location. But Skawina is outside of our heat market, and definitely we will not take part in such a process of entire assets, ČEZ assets. We are not participating, so, we are not interested in Skawina itself as such. Okay, so I have impression that, Mr. Surma contradicted what, the CEO mentioned. Are you interested or not interested? Depending on what? Surma said that Skawina- We are not interested in Skawina. I confirm what Surma, Mr. Surma mentioned.
But if you're asking whether we are considering certain things, well, I said that yes, we are not limiting myself, not defining specific detail, but the Upper Silesia and Zagłębie area where we are conducting our business operations, and if there was an opportunity and interesting proposals in the area of our operations, of our heat operations, we are open for the discussion. So I can give you a more precise answer. Okay, now it's clear. I think we are coherent now, yes? Consistent? In the context of the capacity market, in the list of legislative works of the government, we are talking, we are reading about the one-year contracts. The CEO mentioned that the three-year contracts would be best on the capacity market regime.
If the assumption goes through for another three years of Capacity Markets, but based on one-year contracts, would it be profitable for you in case of your 10 units that could stop operating soon? This profitability, of course, could be very profitable if we get as much money from the Capacity Market as is required to maintain this asset. So this is the determining factor. Again, there will be some demand for a service, because I assume there are 41 200-MW units in Poland. I can be wrong, but not much. If there are 41, the question whether all 41 will apply for this Capacity Market, where they will all pass through first initial period.
I think that if 41 companies place all of their units on the market, and they will be placed for this one-year contract, and those units they don't win the capacity market auctions, so in majority of cases, they will be shut down. Because probability of doing business in the subsequent two years, including the necessary required CapEx on refurbishments and overhauls, will be very difficult. Looking at what we have today, I can say on behalf of my company, of our company, the fact that we will prepare all our 200 MWs units in order to apply for the capacity market, and we will place those elements on the capacity market. We make bids, and we will see which ones will be, will pass this verification and which fail to pass verification, and then we'll take decision. Again, I understand.
I have a question regarding the spinning off of all the coal assets. Are you planning, as your competitor, a selection of a partner that could prepare a model to spin off coal assets as PGE selected PwC? Are you planning to find a partner, or are you planning on using your own analyst team? Up to now, we've been focusing on our own resources, in-house resources. I mentioned about audits and developing all the models. All the models, all the analysis that we are doing, we are doing internal, in-house. We are using external companies when we do a due diligence of acquisition projects. Up to now, regarding the spin-offs and the models, we are working in-house. Once a certain solution is selected, that will be accepted by all the parties, and when the right time comes for that.
I don't want to say when will this happen. I assume that there will be a need for an external company to do appropriate valuation, appraisal, confirmations, and so on. One last question from me. Yesterday, again, your market competitor shared such a reflection, that such a photovoltaics in the case of current balancing market from the middle of June is less and less profitable due to the negative prices, and they are planning very selective, let me quote it, "approach to the photovoltaics business," and if an expansion or growth, this will be large farms or hybrid ones or cable pooling, but such farms that there is some land available, and we are building it, we are not planning it anymore, so do you see the need for a change of your optics or your view over growth over PV?
I must compliment competition. It's a very reasonable what the CEO said, I guess. This has been an element from the very beginning. As long as we've been present in this market, as long as we've been analyzing projects, we know for now that PV, photovoltaics, in itself, in and of itself, is a very difficult business. So investing in photovoltaics requires a very good model that involves the allocation of this electricity energy to the customers or storage thereof. Photovoltaics today, at this current price, and the shutdown and CapEx, as of today, is a difficult business. So today, we have an oversupply of photovoltaics offerings on the market. For investing in this technology must be very reasonable.
As we also communicated, before, PV by itself, no, but PV with a wind profile, in combination with wind profile, with energy storage facilities, with allocation of electricity to customers, with heat, is a good complement, a good element of the strategy. One have to think in a comprehensive manner approach this technology. Mariusz, one more question to get more details. Two years ago, you signed as Tauron, a contract or letter of intent with KGHM regarding the development of, SMR technology. Also, it was mentioned that, the installation of construction will take place on both sides. I understand post two hundred MW units, that would be the size. During that time, certain change just took place, regarding this vision.
Regarding vision itself, are you still thinking about the concept of this SMR, as I said, in the future and over time, fifteen-year timeframe, or is it a topic that's been put on the shelf? We have a very serious approach to this topic. We are interested in such a technology and such a solution. Looking at this energy mix that we have now, looking at the potential that we have in the area that we are operating in, SMR would be a very nice complementing. I think we have an interesting site where we could place it. We are waiting for the technology. So if an offer comes through, definitely we'll be talking about it. However, irrespective of that, we are giving it subjecting to a very intense analysis.
But we don't want to declare that we'll build five, 10, eight, 15 SMRs, because there is no technology-ready technology yet. But if something like that comes up, that in part of the energy mix that is to be built, so that the customer base could be fed with green energy, this is a very interesting solution. The same way we look at the large-scale nuclear project that might be built, we're looking at the possibility of contracting electricity from these units, this could also be a very interesting option. I have two brief questions. The first one, are you able to disclose the number of hours that coal-fired units were operating for the first six months of the year? How many hours they were operational? Let me put it this way. I don't know the answer to. You, I do not know.
We'll send you an answer. Second question: assuming that they will not be covered by the Capacity Market, is there a chance for them to be maintained as a peaking unit that will be earning on the, during the peak hours? How much those peaks will have to be? I don't have any excels in front of me to answer your question, but the two hundred MWs, they were never designed as a peaking power plants. So let's, let's not have any illusions here, that the power plants that were built in the '70s, one can today, in a very flexible manner, to make such changes at the, for little money, to make them operate as peaking plants. This is not this type of technology.
They can operate in a stable manner, they could be switched on and off, but I have a seven-minute start-up, and then after two hours, I shut down such a unit, and I start it up in another four hours. That's not the type of technology that can be applied, it can be used here. So I don't see any potential that those units, those power plants, to have mega units that will not be covered by the capacity, but can be used as such a backup peaking power plant. Of course, this is a technology that can guarantee security of supply. However, this is not a technology that could be required using the system as a equalizer of the peakers. When something happens, it stop, the wind stop blowing.
I need a fast response on large scale, there is locations to add quickly more capacity. How many of those units are generating heat? Have you taken any actions to inform the local government, those units could be shut down after twenty-five years? Each local government we are working with, and those units that have heat-generating units, we are conducting dialogue with. For instance, we have the city of Jaworzno, that is buying electricity or heat from us. We have a district heating, a joint entity. So looking at the fact that those units will be shut down after some time, we are preparing the entire plan of shutting down the coal-fired units and guaranteeing that the heat will be provided, ecological heat at a good price.
So the entire project, the strategy for the heating segment, takes into account the fact that we are obligated to deliver heat. So no agreements, no contracts have been terminated for the supplier. They were terminated, but we are, that's according to the law, but we are in a dialogue with the local government and the mayors, president of the cities, that we are giving a full declaration that we'll ensure the heat supply. These are legal and technical nuances. However, what we are doing will not lead, cause a situation where the local government or the city will not have heat supply. This was our commitment, irrespective of what the transition of a large utility-scale power industry will be conducted, no customer will suffer for that reason, and the heat will be, and the electricity supply will be guaranteed.
Let me ask whether we can say something about the CapEx for the second half of the year. Can we expect that it will also be similar to last year's? I think we can expect that it'll be even, a bit higher. This is first of all, due to the specifics of our project. Yes, projects, which are numerous projects we are implementing. We are at the stage of acceptances, so the CapEx, which will so far be, was based on, advanced payments. It will be included in the financial statement, so I can expect the CapEx will be a bit higher even.
If no more questions from the audience, so the time has come for the second round. Questions are asked online.
Could you give us information about the plans on the decarbonizing, the heat segment in the Tauron Group, what fuels and energy sources will be preferred in the—I already mentioned it earlier, let me repeat. There are no—there's no one excellent technology, but to make sure that the heat segment will turn green, will be cheap and cost effective, cost efficient, and so on. Our goal of our company, but the entire segment is cost effective, so that we can connect further customers. We're changing the entire modern paradigm of the heat, district heating. It's not only just heat generation, heat production, also the second dimensions of the energy storage facility. It's a combination of generating renewables capacity, including the photovoltaics, that could very well cooperate with heat, and for instance, be a very good supplier of electricity regarding the hot water.
Regarding the energy mix, definitely gas, definitely power to heat. So we're talking the heat pumps, we are talking about the electrode boilers, we are talking biomass. These are the things that we are developing at each unit. So we are developing, building a unit today, we are saying this is a biomass. We are building or designing next to the term, heat or energy storage facility, but also thinking about the small gas-fired units that can on one hand, meet the demand at a certain point in time, but can also be used potentially in, if there is a market opportunity for that. So the type of system is being built, so depending upon the geography, what's the characteristics of a given heat market, that's how the given energy mix is being developed.
Let me just add, in case of investment projects have to be based on gas, we are also intensely analyzing the option of using decarbonized gas in a certain time frame, and for each option, we are approaching it in a based on various variants. We don't have one select variant for each location. We are also testing the market, analyzing the regulatory environment. We are preparing ourselves for taking optimum decisions. Okay. Next question: Does the company, there's a possibility for the lack of a full spin-off of the coal assets? Is there an option of gradual shutting down of the coal units as part of Tauron Group? I will be the single point of contact regarding the spin-off. We are taking into account all alternatives. We are saying that if there's a full spin-off, it will be excellent.
We'll be growing, we'll be investing in the distribution grid, in the heat, in turning heat into green energy, and the customer, and the energy storage facilities, and renewables, and so on. These are large actions at a quick pace. And if it don't have a spin-off, we'll take onto ourselves the large commitment to implement the energy transition. So we'll be operating on the commercial market, we'll be competing for the capital market, we'll be... If it's not possible, we'll be developing new business, but we guarantee for our people that we'll have for them jobs. Whether it's a job when organizing in the organization of the transition or preparation of the land, maybe in the new construction projects, definitely the sites that are equipped with excellent infrastructure located in the centers of the town and the world, let's put it this way.
We want to take advantage of them and build new business there. We are also allowing for the possibility of a partial spin-off. Various scenarios could be developed here, but I won't do this here. We are considering taking observation on each scenario and answering the question very precisely, yes. Since we're talking about spinning all the coal assets, when are you going to then the strategy on the spin-off of the coal assets, how do you evaluate the scenario, B scenario, taking materializing? What if there's no scenario B, what's the option of doing the spin-off of the coal assets under a different strategy? As says whether it's NABE or not no NABE, National Energy Security Agency, it's fifty-fifty question. I'm just joking. It's difficult to answer this question precisely because there is no method to calculate that probability.
We are focusing on our company, on what's best for the customers, shareholders, work, employees. This is our domain, and I put it this way, that we are prepared for any scenario that materializes. Therefore, it's not a determining factor for the company to grow, to expand, to develop the competitive advantage and generate value for the customers and shareholders. This is the message that I am convinced about, and that's it. Whether, whether the National Energy Security Agency or this agency does not materialize, in what form, that's a totally different thing. I can only speak about what Tauron can do, and as I just said to you before, there are three options, strategic options. Each of them is possible, which will, one will be selected, we still do not know, but developing strategy, developing long-term business plans, we are taking into account each of those options.
But let me emphasize once again that none of them blocks in any way for us the strategic objective, which is to bring about, to achieve the climate neutrality in 2050, and to guarantee an excellent grid in case, in terms of, balancing price, efficiency, quality. It's not the point to have something very expensive, but something super efficient and very safe, of green energy that will be accepted on accepted price levels by the customers. Another question? Thank you. What is the current cost of building one MW of the onshore farm following the RTB stage? I think I will not surprise you here answering, it depends. It depends upon the quality of the specific level project.
I think this starting with benefits of terrain, where the farms to position it, plus the transportation and the type of turbines that are to be included in the project, that all has an impact upon the productivity out of the one MW of that farm, and determines the price. Were to give you a specific range, so based on a bit on market analysis that we have exposed to and the offerings that, be frank, come to our desks, I would indicate between eight and 12 million PLN per MW. But noting that a lower range of it is not so commonly made. The question from Mr. Wilk
Will the last estimation be repeated by the distribution result in the second half of the year, especially in Q4 2023, was markedly lower than the first half of that year, last year? First of all, we are not publishing forecast, therefore, I will not answer very precisely this question. Definitely not in respect to specific quarters, let me put it this way, but this year I would expect more a stable result for the first half and the second half of this year. So the relation between the two halves of the year should be more in line, both halves. At what stage are you preparing the ESG report? Have you completed the era analysis? Of course, we are working very intensely on the sustainable development report.
It will be done for the year 2024 first time, so the works are highly advanced. We have completed the first analysis, ESG analysis. We are looking at a number of risks, but we've already identified. Now we are selecting the key ones for the report, and those works are at a highly advanced level. So in the near future, we'll be selecting first with our auditor, but we'll be looking at the things that we are preparing will allow us to design the correct report at the end of the year. We are here using an external expert's assistance. It's a new, large topic, a new one, so we need an external resource. We have in-house team that's been built, dedicated for ESG, and it's a long-term story. However, we needed, in this case, some support, and we are using some support.
Katarzyna Wirtualna Polska is asking about two issues. The CEO mentioned the audit and the cases reported to the prosecutor's office. Sponsorship and CSR were for the amount of PLN 8.5 million. What are these reported cases reported to the applicable to? And the second question: What about the further cooperation between Tauron and Polish Olympic Committee? The cases reported to prosecutor's office were PLN 8.5 million. Based on our analysis that are indicating that the projects that this money was spent on is not should part of the given field, and one can, and they should be carried out. At this stage, I will leave it because this is the cases are already reported to the office.
I don't want to give you the details, but we have the grounds for reporting to the prosecutor's office, and the confirmation being that at least some of those indications, the prosecutor's office, already in its message, has, have, they have accepted it. We have such information that they accepted it, so there's one thing regarding the Polish Olympic Committee. On Tuesday, we passed a resolution of the management board that says as follows: We'll terminate, that we are terminating the agreement with the Polish Olympic Committee. As I mentioned before, we are, our actions are based on the rules and the values. The brand of a company is a key element of developing our competitive advantage and building trust among customers, and what is happening now doesn't give us comfort, doesn't give us a guarantee.
On the contrary, it works the other way, and the brand of our company can suffer because of that. So that's why we took this decision. We didn't see any option or any wish to introduce any improvements in this relationship. So definitely, this is not, this is clearly not the implementation of the goals that we assumed in our, as part of our sponsorship projects. Let me say that we are not leaving sport, withdrawing from sports at all, and the sport that gives positive energy, a sport generates joy, value, it's fair, it's honest, it's... and it works in line with the Olympic values and Olympic principles. When we sign an agreement with the Polish Olympic Committee for the subsequent year- Not, excuse me, not, please cut it out. Agreement with the Polish Volleyball League. The project is for four years.
As part of the project, we are operating in the men's volleyball. But what I'm super proud of is that energy is a woman. We are a title sponsor of the women's league, and we are very proud of that and, very excellent distinction for the company. That's what we are building our future on, not only based on this project, but also on many others that we'll be communicating one at a time when we are presenting our strategy, because the sponsorship strategy, marketing strategy, was also an important part of the business strategy. Thank you.
Taking into account the negative electricity prices, are you planning to change the outlook for, if it's the volume generated by the PV photovoltaic segment?
Thank you for the question. To a large extent, this answer was already given earlier by President Lot. PV is a high risk, elevated risk source, so we can see that the change of the conditions regarding the balancing had an impact upon the deepening of the price values in the daily. So but our goal is to build the, to grow the green energy for we. So PV as a standalone product, is very high risk of such a product. We combine it with energy storage facility, and along with the wind profile to the customer, that generates value for the organization, also allows for obtaining a good price for the final consumer.
And the final question, out of the ones that we received so far, so beyond the in-house development, does Tauron take part in the acquisition project in the renewables segment? If so, what are the effects?
Let me answer the question and split this answer into two technologies, because we have a different approach to PV, and our approach to wind farms is different. Let's start with the fact that we have a long, large pipeline of development projects. At this point in time, it is more than one gigawatt of project that could achieve ready-to-build day status soon, and we have an extensive pipeline of projects as part of the acquisition processes. We are looking seriously at each project, but it comes to our desk. In the PV segment, we are here much more selective due to the issue that I call is the moderately beneficial production portfolio, which has an impact upon the lower sales prices. And here, if possible, we try to... We have to optimize the CapEx here.
The answer to such an approach is mainly in-house development and the cable pooling solution. But of course, we are not saying no to the acquisitions. We are looking at each attractive project. In the wind segment, basic market situation is a bit different due to the constraints for the siting of such projects. Also, the ability thereof is much lower. As a consequence, we are more strongly involved in the acquisition processes. The questions about the effects of such activities, the acquisition projects, by definition, are highly competitive. It seems to me that we are an investor that knows very well what we want. We have a strong exposure, both with acquisition projects, a large portion of our portfolio comes from acquisition projects. So we approach this process very consciously, assessing the effectiveness of our processes.
I would say it's not deviating from the market average for the competitive acquisition processes. When you make a decision about the acquisition process, the first thing is that the electricity generated by the given asset must be possible to allocate to the final consumer. This is the process, not just to build, but also to manage this electricity in appropriate way. And the business, of course, because this is the prospect. Let's just spell it out very precisely. We don't want to depreciate the PV photovoltaics. Photovoltaics is an excellent technology, a very good one. However, looking at the development of the photovoltaics and the assets that we have, and for any company, the competition also mentioned that. We have to talk about the balanced elements.
Moving too much into PV generates a profile that is very disadvantageous, and means that the cost of profiling the appropriate products for the customer is very expensive. Therefore, the sense of building photovoltaics is strongly interconnected, intertwined with building, developing wind-based power. We have an oversupply of the solar projects today, but the number of wind projects is not sufficient. It seems that after the declaration that we've heard earlier, there will be a shortening, there will be a stronger realization of investment opportunities in the wind power. There will be more projects, the wind projects will be developed, and the energy storage will be developed. So then, then there'll be more space for P- for photovoltaics as well. But this, we have a model at the back of our head, mind, and we are committing to it. But what will really happen, we'll see. That's ahead of us.
So step by step, it's important that as part of a transition, that is very dynamic, very rapid, carries a lot of technological uncertainty, a lot of regulatory-related uncertainties. Those steps must be taken in a very stable manner. You don't do big leaps, but you have this more approach of a sustainable development that we are preferring. Ladies and gentlemen, thank you very much for your questions, both offline and online. This was a big intellectual challenge for us. Thank you very much. Since it's always a great challenge and a great pleasure, great honor to be here, we're also declaring that, for the next meeting, we'll be coming as well with more information. We'll bring more information, also show you what is the progress of our strategy implementation.
Maybe we'll show you the results of our activities regarding our development or acquisition processes, and we'll show you what are the results for Q3 and Q4. Let me hand over to Ola for-
Thank you. Thank you very much.
Thank you, ladies and gentlemen. Thank you for today, and see you-