Good morning, ladies and gentlemen, on this beautiful summer day. The earnings conference is for the analysts, media, and analysts with respect to the TAURON Group's H1 2023 financial results. The host of today's meeting is Mr. President, Krzysztof Surma, responsible for the finance, CFO. My name is Łukasz Zimnoch. I'm the press spokesman of TPA. The presentation will be conducted in Polish, along with the simultaneous interpreting into English. Outside of the broadcast, you can also listen in to today's meeting via the teleconference mode. I'd like to invite you already now to ask questions using the form available on the broadcast website. Let me just note that this is the only option that you have to ask a question, is to send a question via using the form that's available on the broadcast website. Mr. President, the floor is yours.
Good morning, ladies and gentlemen. I'd like to present the earnings, the financial results of the group, overall results, and then broken down by individual segments. With respect to the financial data alone, the results of the first half of this year have been very good. The company generated more than PLN 4 billion of EBITDA in the first half of this year. The net profit came in at close to PLN 2 billion. Thanks to these good financial results, the net debt to EBITDA ratio came down to 2.04. Operating data, they are under the big impact of the overall economic situation in Poland. Therefore, the operating data are at a weaker level year-over-year. I will elaborate on that in more detail further on in the presentation. However, it's worth noting here that we experienced a 5% decline in the distribution line of business.
Also, a 5% drop in the generation of business from renewables. Here, the main factor being the production using the biomass-fired units. As far as other units are concerned, the operating data were better year-over-year. With respect to the production of electricity by hard coal-fired units, here, very significant change year-over-year. I will elaborate on that, when I be describing the situation on the market. In terms of heat generation, here, the situation pretty much flat year-over-year. Here, if we're talking about the retail electricity supply, it is slightly lower year-over-year. If we look at the data for Q2 alone, they are similar to the data for the entire first half. The EBITDA in Q2 went up by more than PLN 2 billion.
In terms of net profit, it came in at around PLN 840 million, and the net debt to EBITDA ratio, as I mentioned before, stood at 2.04. In terms of the operating data, again, the trend was declining, a downward trend in Q2. A particularly significant change we can observe with respect to the production by hard coal-fired units here, quarter over quarter or, I mean, I mean, Q2 2023 versus Q2 2022, were declined by as much as 41%. As I mentioned, I will elaborate on that in detail when I describe the situation, macroeconomic situation on the market. In terms of the key highlights, key events that we observed recently, let me present those highlights that we didn't discuss during the previous earnings conference. Here, we began the construction of another wind farm, 30 MW capacity.
Additionally, we signed a letter of intent with the ORLEN Group. The letter intent is related to the confirmation of the further works on the potential divestment of a combined heat and power plant in Stalowa Wola. This letter of intent was signed before with PGNiG, but due to the major equity ownership changes in the ORLEN Group, we confirmed our intention with a new owner of the PGNiG Group. And the novelty in this letter of intent is the possibility of a potential swap of these assets with assets, heat assets of PGNiG TERMIKA here in Silesia area, in return for the assets of our CHP in Stalowa Wola. In addition, we obtained the decision, a permit for the erection and use of artificial island structures, as a matter of fact, an offshore farm, wind farm.
The permit was granted to PGE Baltica 4, where we have... It's our joint venture, specifically related to this license, and TAURON shares 45% in this venture. And finally, I left out the key information for our group. As a matter of fact, on July fifteenth, we received the key terms, transaction terms of the acquisition by the State reasury of the assets related to the N-A-B, NABE, the coal assets, coal units, and on the, excuse me, on the eighth, on the tenth of August, we obtained all the corporate approvals for these terms of, of the transaction that we signed with the State Treasury. The key terms, according to which potentially these assets will be sold, will be done, divested. Those terms were then reflected in the SPA agreement, purchase agreement. Here we are at the final stage of negotiating those terms.
The group is also working on the fulfillment of all the suspensive conditions related to the NABE program. One of the preconditions was recapitalization of TAURON, the conversion of some of a portion of the debt. The group has already met this condition. We also applied for appropriate consents to KOWR with respect to this transaction. So one can say that on the side of TAURON Group, the majority of the issues that were supposed to be finalized to prepare for the NABE transaction have been fulfilled. However, the key issue here is the decision of our parliament regarding the providing of financial guarantees. First of all, financial institutions, and this, as a matter of fact, will be the moment when NABE, National Agency for Energy Security, will be able to come to being.
With respect to the CapEx, here we have a major acceleration year-over-year. We are implementing fully, fully the strategy announced last year. The CapEx went up year-over-year by 26%. However, here, the most important two lines of business that we indicated in our strategy, namely the distribution and the renewables. In these two lines of business, these are the pillars of the future of TAURON Group. As a matter of fact, the capital spending in these two segments went up significantly in terms of the renewables. CapEx, here we have a more than triple increase year-over-year. Historically, our group has never spent that much on renewables. In addition, the capital spending in the distribution line of business came in at more than PLN 1.2 billion, which is almost 40% more year-over-year.
Here, the key portion of the capital spending was the new connections, new consumers connections to the grid, and also the refurbishment of the lines, and partly also the installation of the smart meters. Now, what I already mentioned before, the macroeconomic situation in Poland and its impact upon the operating results of our group. As I mentioned, the financial results are good. However, the operating results are weaker year-over-year, and this is the result of the macroeconomic situation now in Poland. We are dealing with a decline with a contract economic construction over the last two quarters, the declining PMI index, which also indicates further deterioration of the economic situation activity in Poland. What's key for our group, in the first six months of this year, we are dealing with a 5% decline of electricity consumption.
This decline of electricity consumption is calculated nationwide. However, it's has a direct translating to results of our distribution line of business and the amount of electricity distributed. This other indicator of production of electricity in Poland automatically leads to the translating to the decline in our TAURON generation line of business. The decline of production year-over-year is 10%. One can divide this decline in two parts. One part stems from what I already mentioned, the decline of the consumption of electricity in Poland, this is the 5%, whereas the other 5% is the reversal of the situation in terms of imports and exports of electricity. From exporter Poland turns to an importer of electricity, and the 5% decline of electricity production is due to the electricity imports into Poland.
As I mentioned, our units, especially the 200-megawatt units, are the units that close out the system and are most sensitive to the declines in the electricity consumption in Poland. And therefore, due to the cost, the operating expenses, we are the first to be shut down if there is a decline of electricity consumption. That's why we have such a significant drop of electricity production year-over-year, 41%, as I mentioned, despite the fact that our Nowe Jaworzno, New Jaworzno, is operating in a stable manner, and its production year-over-year is better. However, in terms of 200-megawatt units, they were not utilized frequently by the system. That's why the production decline is so substantial. Let us move on now to the segment-by-segment data and in individual categories.
Here we are dealing with a strong upward trend regarding the revenue. But let's remember that the first half of 2022 was not really affected by the war effect yet. Therefore, the price of electricity, in particular, changed quite significantly after the outbreak of the war, and therefore, especially the first quarter of 2022 did not include the high electricity prices. That's why such a strong increase of revenue year-over-year was a result of an increase in electricity prices, and to a certain degree, the increase of revenue due to the distribution services. In terms of EBITDA alone, as I mentioned, EBITDA is very important in terms of growth. We have an 80%+ growth year-over-year in nominal terms, regard EBITDA in year-over-year.
However, if we adjust this EBITDA and strip out the one-off events or non-typical events, then this growth is a bit lower, slightly more than 20%. It is worth mentioning the one-off events. They will also be mentioned when we discuss the results of individual segments. In 2022, the key one-off event was the provision for onerous contracts, and here, at the end of the first half of 2022, we set up such a provision. It was the result of a very significant increase of hard coal prices, which didn't have an impact yet upon the electricity prices, whereas the contracts on electricity were, had been concluded way before, whereas the coal contracts were renegotiated. The second one-off was the settlement of excess of, like, CO2 emission allowances.
These two one-off events resulted in more than PLN 500 million lower EBITDA last year. If we looked at the one-off events this year, here, the key issue is the upward adjustment of the grid losses. As a matter of fact, the price effect of this balance, that I already mentioned when I discussed the Q1 earnings, and the additional key factor in this quarter is the settlement agreement concluded with RAFAKO and its impact upon EBITDA for the first half of this year. Additionally, we are dealing with a regulatory account here. This decline of consumption means that we have a decline of the volume, decline of EBITDA, and this regulatory account, as a matter of fact, it'll be adjusted, as a matter of fact, over the next two years. Therefore, we recognize it as, or not so much as a one-off event.
It'll always be there. There will be deviations from the volume, but due to its magnitude, we treat this now as a one-off. An additional small factor, the provisions for onerous contracts, as a matter of fact, the PLN 60+ million, is the dissolution, dissolving of the provision, release of a provision that we set up at the end of 2022. If we now move on to the data for Q2 alone, here, we have a much higher increase of EBITDA, comparable EBITDA. Here, the factors are exactly the same as I described on the previous slide. If you look at revenue alone, this revenue, the growth rate of revenue, is not so strong. We are talking about the 20% growth rate. Let us remember that we are just entering more into the quarters that already reflected the effect of outbreak of the war.
So the growth rate quarter-over-quarter, year-over-year, will be getting lower and lower. Additionally, a positive impact from the company's point of view, the matter of, revenue forward distribution service had a favorable impact. One should also note a good result at the net profit level. Let us remember that, in this quarter, we did not announce any impairment charges. We didn't set up any significant provisions. Of course, there was a provision, for the wages, but apart from it, we didn't set up any other provisions. Therefore, the operating results, the financial results at the EBITDA level, had a strong impact upon the net profit in this quarter.
If we look at the results of individual segments, invariably, the key segment is the distribution line of business, its results, whereas the results of all the segments are good. Therefore, the contribution of the distribution line of business, slightly more than 50%, versus 70% that we observed in the previous periods from this line of business as far as contribution to the full results of the group. One should also note that the results are good both on the EBITDA as well as on the EBIT level. Similar situation we have. We look at the Q2 results. Looking at the Q2 alone results, here, also, the results are good. As I mentioned, distribution continues to be the key line of business, with slightly more than 50% contribution.
Also worth noting the good quarterly results of the supply segment. I will elaborate a bit later on in the presentation. Let's move on to the comparison of the results year-over-year. You can clearly see that practically all of the segments generated good financial results, good earnings, except for renewables. Here, we have a slight decline year-over-year, but here, it's worth to remember the price caps that were introduced under the law at the end of last year. And this is the main determining factor of a slightly weaker result of the renewables segment year-over-year. If we look here, the biggest jump, of course in the generation line of business.
However, let us remember that in generation last year, as I mentioned at the beginning, we set up this provision for the onerous contracts, and this provision, as a matter of fact, consumed the entire result of the generation line of business last year. That's why it was such a surge of earnings in this segment. The results for Q2 alone practically confirm the same thing. All of the segments had a positive impact, except for the renewables, the distribution, the same. And let me repeat that the generation line of business, where we set up a provision for the onerous contract, that's why such a substantial change year-over-year, substantial difference year-over-year.
In Q2, the issue of settlement agreement with RAFAKO, so we had two big one-off events, 2021 and 2023, that led to the such a big surge, change of the results year-over-year. If we move on to the distribution segment now, we have both positive and negative factors, events that have an impact upon the results. Let me start with the upward adjustment of cost of the grid losses, and let me put it this way. The first effect, namely the price effect, I mentioned already in Q1, this is the effect. It's a one of, during a significant change of the prices. So this year, this effect is very, very visible. So that's why we're exposing so much and showing that they're a one-off event. But of course, this event is a recurring event.
Every year, it will be recurring, and it may reverse in the subsequent years if the price trends are maintained on the market, as we can observe them now. The second effect of this upward adjustment is the volumetric effect, and here it'll be fluctuating over the year. Therefore, on purpose, we are showing the price and the volumetric effect to show, to demonstrate that one part of this upward adjustment will be fixed over the year, course of the year, whereas the other portion will be fluctuating over the course of the year. And the total effect, the price and the volumetric one, gave more than PLN 460 million of a positive impact upon the distributions results in the first half of this year.
The second effect, one may say, of regulatory account, a negative one, which I already mentioned when I described the one of factors, we are dealing with very untypically strong decline over demand, and in total, it has an impact upon the decline of sales volume. This is this bar, and we are dealing with the issue of regulatory account that dates back to two years ago. These two factors are combined with one another. The volume issue has an once sometimes negative, and when the negative effect on the regulatory account. This regulatory account, this PLN 120 million, is a positive impact of the volume, which occurred two years ago.
Now, it has a—it's, it's a charge to the results of the distribution, and the decline of the volume, PLN 127 million, which will impact upon the results of the distribution. Now, in the two-year time, we'll have a positive impact upon because the negative difference is posted on the regulatory account. These are non-typical events, but they will be adjusting, especially the one related to the volume, will be adjusting the results of distribution line of business in the subsequent years. And the positive impact on the distribution segment is the result of increase of distribution services charge, which is indicated here as a margin on the distribution service. In terms of Q2 alone in the distribution segment, here, some events are similar.
As I mentioned before, the volumetric impact of upward adjustment is even greater in Q2, while the regulatory account, in terms of the reversal of this positive volume from two years back, contributed PLN 64 million to the charge, to the results of company's results, whereas the decline of the volume and distribution gives an PLN 85 million charge to the result. As I mentioned, this PLN 85 million over the next two years will then have a positive impact upon the distribution segments. Also worth mentioning here in a few words, the margin and the on the distribution service, and this item also includes the balancing difference. And here, this balancing difference, especially in Q2, was on a statistically low level.
As compared to previous years, it's very low, which may mean that in the subsequent quarters, part of this difference also will be reversed, non-statistically, and so the part of the result might be, might deteriorate in a significant way if this balancing difference returns to its statistically recorded levels. In terms of the key quality parameters, here, they have changed a bit if you compare the position year-over-year, whereas the key for piece of position is such that all of them are fulfilled, are met, all the conditions, and we are not foreseeing any big risk of a negative impact upon the tariff in the subsequent years... In the renewables segment, a simpler segment to discuss. The key impact upon the results comes from the price decline. As I mentioned, it's partly related to the price caps that were introduced last year.
In addition, we had a positive impact upon the results coming from the increase of the volume. First of all, the volume of electricity generated by the hydropower plants. The negative impact came from the green certificates, generally slightly lower production, slightly worsened wind conditions, and the lower production from the power plants that are covered by the green certificates. Additionally, the prices declining year-over-year, and the positive impact came also from the end of a court litigation, which was adjudicated in favor of TAURON Green Energy Subsidiary. It had a positive impact on the renewables segment's results. Q2 alone, here, the results are also the result of those price caps, so the decline of the revenue, the decline of the prices.
At the same time, we have a slightly higher production volume from the renewable sources, practically neutral, flat results in terms of, certificates. The price of the certificates throughout the quarter went up a bit, while the volume declined a bit, so the result is neutral. And that's all practically regarding the renewables segment. Let's move on to the generation segment now. In the generation segment, as I mentioned, a lot of one-off events, provision for onerous contracts, you already mentioned, the issue of excess of, CO2 emission analysis and the settlement agreement with RAFAKO is all included in the one-off events. If we stripped out all the one-off events, then as a matter of fact, the EBITDA result year-over-year would be higher by PLN 160 million.
And what's worth noting here, I think that in the segment itself, it's worth to note the declining profitability rate of, heat segment, especially Q1 and the first half of this year, because of the fact that the tariff, the heat tariff, did not fully cover the increase of, fuel prices. First of all, the increasing cost of CO2 emission allowances. However, in terms of the units, as I mentioned, the decline of the volume already discussed. However, it's also worth to mention the buybacks. So in last year, 2022, the potential buybacks led to large losses in the generation segment. This year, buybacks generated profits when the units were shut down or were buying back electricity on the market.
Then, the main result was achieved in this segment because the margins, the CDSs themselves, were declining this year, were much lower than last year. Regarding Q2 alone in the generation segment, here, you can see even better this one-off effect of provision, the RAFAKO issue. All the other factors are the same. Here, additional impact on the production came from the increased production from the photovoltaic installations. So we are dealing with a rising number of installations year-over-year. In addition, this part of the year is characterized by this high production, so additionally, it pushes out our 200-megawatt units from the merit order, which, as I said, are the incremental units. So the more renewable productions you have, less often you operate the 200-megawatt units of our generation segment in operation.
If we move on to the supply segment, here, we are dealing with several factors. Let me start with the ones that are less, the minor ones, that had an impact upon the results of segment. Positive impact came from the assets located abroad, in the, to the south, as a matter of fact, the Czech subsidiary, the positive impact of PLN 22 million in terms of a year-over-year earnings. Good results in this line of business. Negative impact came from a slightly larger write-down related to the receivables, related to overdue or lack of a payment by some of the customers, a normal increase in the accounts receivable. These are the two minor factors that had an impact, whereas the key factor on the core business, the substantial, significant increase year-over-year. What were the reasons?
The key issue, let's remember that last year, the costs under the G tariff were not fully covered. This year, G tariff covers all the costs, so we have a full coverage of the cost. The costs are fully passed on, according to the law. In terms of the other issues, also, partly, the company is having gains on the open position. Electricity price on the market was declining this year. It had an impact upon the positive impact upon this line of business. In addition, one should also remember that here we had an even hedging of profiles over the course of a year, might have a non-uniform impact upon the results of a segment over the course of a year. That's why those results don't have to be uniform individual quarters. In terms of Q2 alone, it's situation is similar.
Here, also, you can see clearly the positive impact. As I mentioned, those factors that have a positive impact upon the results of a supply segment are similar, and here, of course, we are observing very carefully what will be happening in the subsequent months of the year, and in particular, in the context of a declining volume, we will see what happens. As I mentioned, individual quarters don't have to have this uniform distribution of earnings. And finally, the debt and financing issue, as I mentioned at the very beginning, because of the good financial results, we have a major increase of EBITDA, and so, substantial decline of a net debt to EBITDA ratio. It went down to 2.04, much lower than last year, when it came in at 2.9, and situation was similar at the end of the year.
Therefore, we have a significant decline. As I mentioned, it is practically fully generated by the much better operating data. I'm talking about the financial data and EBITDA. In terms of the maturities, the maturities, one may say, this and next year, they are quite moderate, in the region of PLN 1 billion. The key issue now for TAURON Group for its debt level and obtaining of financing is the NABE, National Agency for Energy Security, and the potential sale of the assets will have a major impact upon the level of net debt to EBITDA ratio and the debt level in the subsequent year. That's all regarding the presentation. Let's move on to the Q&A session.
Ladies and gentlemen, traditionally, let me repeat and remind you that the questions can be asked only via the form on the TAURON website. We have quite a number of questions, and each time I will read a question, and then the President will provide an answer. The first question from Mr. Chojnacki, BNP, "Does TAURON plan to take part in this year's renewables auctions? If so, with what projects? Wind, PV or other. If it's not planning to take part, then why?"
Well, we are in the process of performing market evaluations, analysis, whether take part in the renewables auctions. You know, that in the previous years, we were not taking part in those auctions due to the price levels. We are conducting analysis of the market, what risks we are facing here on the market, especially on the photovoltaics market. We'll be potentially evaluating the participation. As of now, there's no final decision yet. The analysis is underway.
Next question, Wim Belsky, BP, "What would be the indicative or approximate net debt, including the coal assets of TAURON Group as of Q2 2023? How is TAURON prepared for the operation under the potential failure of the project, of another project?"
Well, regarding the Q2 ratio level, let us remember that, the debt ratio, let us remember that the spending over the years and then the settlement, the full settlement, accounting for the investment, these are two different things. As we provided information in our regulatory filing, the impact, the influx of funds should not take place, not long, not later than within 90 days from the transfer moment.
As a matter of fact, therefore, even if, as of the end of the quarter, you would spin off the funds, the influx of the funds would be coming in the subsequent months, so the ratio would be exactly the same as we reported. Potential impact upon the leverage ratio, just to trying to think about the sense of this question, will depend upon the level of debt of TAURON Generation as of the spinning off moment. We, in the message that we published, we demonstrated what was the level of debt as of September thirtieth.
Let us remember that we are dealing with valuation based on the lock-box method, which means that to a large degree, all the movements that are taking place during the periods from the valuation date until the transaction date, are then the revenue or the cost of the buyer. Therefore, indicatively, I indicated in which direction the debt ratio could go towards what direction it should take, what should be the trend, because the funds that we receive automatically will reduce the amount of debt, and the same time, depending upon the EBITDA level, will be also accordingly adjusting downwards of a leverage ratio. Another question, "Last week, PGE Management Board at the strategic conference indicated that they expect the increase of WACC in the distribution segment above, to above 10% of the current 8.5%.
It seems surprising in the context of a decline of interest rates on the market over the last year and the justification of energy office for the tariff for 2023. The regulator indicated that its intention is to average WACC for the 2023-2028 time frame. Does TAURON also expect such a strong growth in the distribution tariff in 2024? Well, first of all, in terms of the estimates, usually they come during our full year results earnings conference. So at this point in time, we are not showing any estimates for 2024. The talks with the regulator are underway. As a matter of fact, until they have been completed, we will not be publishing any estimates or expectations regarding the tariff for the next year.
Next question: TAURON announced this day that it's planning to launch in 2024 a new portfolio of investments in renewables with a capacity of more than 300 megawatts. How many projects that come from in-house development? How many from the acquisition of projects? What is the magnitude of purchase acquisitions? How much in PV and in wind? Please specify the names of specific projects.
I think this topic will definitely not be presented in such detail, such as giving the names of projects. But since some time, we've set up a special subsidiary, TAURON Zielona Energia, Green Energy, TAURON Green Energy. One of its goals is to develop its own products.
So there's a chance that next year we'll be able to boast our own development project, not only the projects that we buy under the ready for construction projects from the market. Therefore, here, the chance that some of those products will come from our in-house development, I cannot give you now the answer what portion of the 300 MW will be announced, will be under this formula or what portion will come under another formula. However, here, of course, we are working very intensely to have those projects also coming from our own backyard. So implemented on the territory of our distribution line of business and developed and prepared by our subsidiary, dedicated for this purpose.
A hypothetical spinning off of distribution assets out of the company would be possible, taking on the investment plans in the renewables and heat lines of business. I already discussed this topic during the conference. Generally, the distribution line of business is a key segment in terms of TAURON Polska Energia. During each conference, we are emphasizing the bid from this area, from this line of business, 50%-70%. Based on that, it's a key asset in all the financing agreements anyhow. So any spinning off of this asset would require an approval of all the financial institutions or contributors, a violation, a breach of the financing agreements for the group. Even in addition, re-investment rating is granted to the group. Investment grade rating, assigned to the group is based on these assets.
So as of now, it seems it's not possible that the group could survive in such a configuration if we were to spin off the distribution assets and could easily finance its operations on the market. Another question: Why the return on RAB in distribution is highest versus ENEA and PGE? What is the reason for that? It's difficult to specify so directly, especially with the results. As far as I know, the results of PGE have not been announced yet. The results of ENEA are just estimates. So it's very difficult to answer what is w ithout getting into the details, what is the difference between the individual areas?
One can say that the distribution line of business of TAURON Group is the high density area, both in terms of the population as well as the industrial density, which gives certain competitive advantages in the context of CapEx versus OpEx. But it's difficult for me to answer directly why the return on the regulatory asset base is better in our case, especially if you don't have the data to make a full comparison. So I cannot give you an answer to this question.
Clear, and next question. The cash generated by the hard coal-fired power plants since Q4 2022, until the segment is consolidated, will be transferred to NABE in the first quarter of 2024, in case the process has been finalized.
Well, as I said, this is in line with the lockbox method. The cash generated in the TAURON generation line of business will be adjusting the balance of debt. So the higher the amount of cash generated in that line of business, then the potentially, the lower the potential, potentially lower debt. According to the offer that received for the NABE assets, the entire debt of TAURON generation, without will be paid back from the funds received by NABE from the banks. Answering directly, the cash generated will be adjusting the debt balance.
Next questions are coming from Mr. Bartłomiej Sawicki, as part of the next stage of the NABE transaction, the preliminary agreement is forcing to be concluded, and then the pledge agreement of asset sale, the sale. When can we expect those steps?
So in terms of, as I mentioned during the presentation, in terms of preparing our group for the transaction, we practically are ready or at the home stretch, one can say, in our process. SPA documentation, the key terms of which were included in the term sheet, is practically ready in terms of the suspensive conditions that were indicated there to be fulfilled by TAURON Group. But I mentioned during the presentation, those conditions have been, to a large degree, basically implemented or completed. We are just waiting for the clearance from KOWR and some minor things that need to be completed, but I would say are more in the technical operational nature, not so much material. So we are ready.
Not so much substantive, but the key, especially for the transfer of assets agreement, is the obtaining the approval for the guarantees for financial institutions and for us as the loan providers for NABE. And this part is outside the company, so it's difficult to speak about the legislative process. Of course, we are keeping our fingers crossed. As I mentioned, we are fully supporting the NABE project and the spinning off of the assets, which will enable us to complete the transition as a whole group.
Next question is related to the coal. Are you receiving the full volume of hard coal ordered earlier? Is there space at storage facilities of TAURON to store it? What are the inventory levels of TAURON compared to 2022, 2021, 2020? Are you importing coal?
I think I will combine those two questions related to the coal. If so, where do you import it, in what quantity, and what will be the answer to yesterday's letter of trade unions for at TAURON Mining? Let me answer as follows. Let's start from the beginning. In terms of inventory levels, we are implementing the contractual issue in two areas. First of all, we can use this coal for to burn it in our power plants. Secondly, we can store it at the storage facilities at the power plants. Taking into account the first part, the method of burning coal, as I mentioned, we showed the difference in the production output of electricity from by the hard coal, coal-fired units, and it declined 40% quarter-over-year, year-over-year.
So you can clearly see that the level of burning, despite the fact that, let us remember, that we have Orno unit, was just starting. It was not fully operational at that time. But in spite of that, the production is significantly lower, so the burning is much lower this year. So, if you look at the storage facilities at the power plants, as you can see in the report, they are practically full, fully replenished, so the possibility of a significant increase of receiving coal are limited now. However, we are doing our best to burn a little more of that hard coal.
It's also known we are dealing with the approaching autumn and winter conditions, and this burning, the level of burning, will be significantly higher due to the fact that PV, photovoltaic installation, will be producing accordingly less electricity, so the consumption of coal by our units that are closing out the system will be higher, so it will accelerate the burning process. The contracts are for one-year contracts, so no monthly volumes are determined in those contracts. For receiving, we can see a certain delay if you look if we assume the linear consumption of coal on the contract. We can see a certain delay set in the implementation performance of those contracts, but this is due to the system demand, the decline of consumption in Poland, which is consumption imports of electricity into Poland.
Here, as I mentioned, the units that are closing out the system have this feature that they are not able to burn this coal in a linear fashion during the course of a year. In case of import contracts, some of the contracts were all performed with the aftermath of a shortage of coal last year. At that time, we did not have coal available from the domestic sources. However, now, we are not considering at all any further, any new contracts for importing of coal. We'll be focusing definitely only on the domestic sources due to the fact that the coal is available, generally available in Poland.
Time for another question. The cash generated by the hard coal-fired-... Power plant starting from Q4 2022 until the consolidation of a segment will be transferred to NABE in Q1 2024, in case the process has been final.
I think I answered this question already. Let me confirm the cash adjusts the debt balance. So anything that's happening, positive, both positive, negative in this area, based on today's transaction terms, will have an impact, a direct impact upon the result of a transaction for the buyer.
The result in the supply segment for Q2 2023 be repeated in Q3 and Q4 2023.
I already answered partly this question during my presentation. I said that, core in the quarters are not fully representative, are not fully uniform, so I will not confirm the fact that the result in the subsequent quarters could be so good.
Will the renewables segment in 2024 also be limited based by price caps and at what level?
Well, I think it's not to the question to our company. This is a question probably to legislator, and we don't have any knowledge regarding this topic.
What are the costs now of onshore wind farms per megawatt hour? What is the cost of the ready-made wind farms?
It's a matter of timing and the acquisition. TAURON recently is usually based on the project that it had purchased before, ready to build projects. Recently, we haven't made any acquisition of ready-made wind farms, so I don't want to say exactly what is now the estimate. The cost of acquiring such a farm. The conditions keep changing, the electricity prices keep changing.
Last year, we had very high electricity prices, so the renewable sources potentially could generate very good financial results. When the price caps were introduced for renewables, for renewable sources, as we know, this factor of high electricity prices and then highly limited price level from renewables had a dramatic, dramatic impact upon the way you calculate the possibility rate, and at the end of the day, the cost of acquiring those wind farms. So I cannot tell you today without any detailed analysis, what will happen to the price caps next year, and what will be the cost of purchasing ready-made wind farms.
A question regarding the actions of the parliament. When do we expect that the parliament will approve formally the NABE project?
And here, as I mentioned before, generally, this part is outside or beyond the control, the jurisdiction of our company. From our side, we are doing our best to be ready at any time for the NABE deal. However, here we have to follow the parliamentary process, and that's where the answer lies when this may happen. We do hope that it happens as soon as possible.
Next question: When does TAURON plan to publish the update of a strategy? I understand the example of PGE excludes the date before the elections. Let me remind you that TAURON published the update of strategy in June last year. So the question, why should there be an update? The update was published last year, so we are not even thinking about an update as of now. Is the company expecting the increase of WACC for 2024 in distribution taking account the higher average par interest rates for the treasury bonds over the last twelve months?
This answer was already asked before, partly. Of course, we are involved in discussions with the regulator. It seems that as of now, the issue of such a simple passing on of interest rates is not taking place. You already have seen a substantial increase of the rate for the distribution last year, for this year, and it didn't quite... wasn't fully correlated with increase of interest rates. So I think it's a broader discussion here of equalizing or averaging the WACC over a longer timeframe. I think we'll be able to say something more after further talks with the regulator. First of all, in terms of our distribution line of business, as annually, we do it together with a full year earnings conference.
And now, ladies and gentlemen, the last question: When TAURON wants to depart from hard coal?
Here, the full decarbonization issue was indicated in our strategy. Of course, it's a matter of a NABE issue. We are supporting this process. We hope that the hard coal-fired units will be spun off as soon as possible in the context of entire NABE deal, in terms of the heat line of business, because after those units of TAURON, the generation will still have some hard coal left in the heat line of business. We are conducting analytical work regarding the Katowice unit as well as the other units, potentially. And here, the decarbonization efforts will continue. I can't give you an exact date of departure from coal, but the issue of decarbonization was indicated it's in line, generally, with the expiration of all the coal mines in Poland.
Last refresh. No more questions. Ladies and gentlemen, thank you very much for the meeting. I'd like to invite you already today for the next meeting, directly after the Q3 report is published. We'll provide you with information about the date of the conference in a traditional manner. Thank you very much. Have a nice day. Thank you very much. Bye.