Energy management

The implementation of international standard of energy utility management in accordance with the ISO 50001 standard began with the adoption of the KGHM Polska Miedź S.A. Energy Policy by the President of the Management Board on 28 November 2016. Currently the second edition of the policy, approved on 28 February 2019, is in effect.

The ambition of KGHM Polska Miedź S.A. is to continually grow the share of renewable energy, including its own energy sources. Currently KGHM Polska Miedź S.A. has two Gas-Steam Combined Cycle Units located in Polkowice and in Głogów with the capacity of 39.55 MWe each and a Surface-based Central Air Conditioning Station located next to shaft R-XI in Grodowiec and at the GG-1 shaft in Kwielice. They are equipped with natural gas powered engines with the total capacity of 8.8 MWe. The Company is in the process of advancing further investments to increase electricity generation, with nitrogen-rich natural gas used as fuel. By 2030, two more Stations will be built with the total capacity of 17.6 MWe.

8.8

MWe

the total capacity of the natural gas powered engines

17.6

MWe

capacity of gas-fired power units to be built by 2030

Small Modular Reactors (SMR)

One of the important projects which will bring the Company closer to achieving energy independence is the implementation of small nuclear power reactor technology (SMR – Small Modular Reactor). KGHM plans to build a small modular light water nuclear unit with a capacity of up to 500 MW by 2030. In 2021, KGHM Polska Miedź S.A. established a Nuclear Energy Department and in February 2022 a contract was signed with NuScale Power, LLC (“NuScale”) to commence work on implementing the SMR technology in Poland. NuScale’ s design of the reactor is based on the well-known concept of small high-pressure light water reactors, whereas its modular, integrated form enables the structure to be simplified and construction costs reduced. At present, NuScale’s technology is undergoing formal assessment for compliance with the Polish nuclear safety and radiological protection requirements by the President of the National Atomic Energy Agency as part of the so-called General Opinion procedure. The General Opinion procedure was initiated by the Company in July 2022 and the outcome will be known in the second half of 2023. Another important step in the implementation of the SMR project by KGHM was the receipt of the so-called principal decision by the Company on 12 July 2023. The principal decision is the first administrative decision in the system of permits and authorisations for an investment project involving construction of a nuclear power plant in Poland that an investor can apply for. The principal decision issued by the Minister of Climate and the Environment is an expression of the state’s political acceptance of the Company’s investment project and allows the Company to apply for further permits and authorisations for the project.

Low-loss wires

“Development of high-conductivity and high-strength load-bearing cores for low-loss overhead power cables based on Cu-Ag alloys”. This project was completed in 2023 with considerable success. Together with KGHM Polska Miedź S.A., a scientific consortium led by AGH University of Science and Technology in Krakow was involved in the project. The project involved the design and manufacture of a high-strength, high-conductivity core of CuAg5 alloy wires (copper and silver are manufactured by KGHM Polska Miedź S.A.), a prototype cable called 41-CuAg/250-AL1, which contains an outer braid of aluminium wires in addition to the core, and is a substitute for conventional cables in terms of design and performance. A prototype of the CuAg5 alloy cable, manufactured by the consortium under industrial conditions, was subjected to utility verification tests in the final phase of the project in order to assess its mechanical and electrical properties and transport parameters. The cable was tested and monitored for one year under natural operating conditions on a selected section of the 110 kV overhead AC line (Polkowice – Rudna line, S-414) owned by TAURON Dystrybucja S.A.

The design of the new cable under operating conditions was successfully completed. Relevant calculations of transmission losses of the prototype conductor in comparison with the conventional AFL-6 240mm2 type cable (based on the data from the tests of the new cable) showed the possibility of reducing energy transmission losses by more than 20%, which, taking into account the costs of energy generation, distribution and the final price for the consumer, results in significant savings.

What the project offers:

Very high commercialisation potential; the electricity grids in Poland consist of 13.5 thousand kms of 220, 400 and 700kV EHV and HV lines (transmission); 32 thousand kms of 110kV high voltage lines (distribution); 3-phase double track lines with a total length of 300 thousand kms. A large part of the current transmission and distribution system consists of worn-out conventional lines, and the demand for electricity is constantly increasing. The value of annual transmission losses in Poland is PLN 2 billion. The new cable can reduce these losses by more than 20%. Not only does the conductor have an excellent ability to carry an electrical charge, but the central conductor/conductors are used for current transmission in an Ag band structure. Such a cable is not subject to creep over time and its design enables very fast installation on and removal from overhead power lines.

Own RES assets

The Company is also developing its own renewable energy sources. Currently, photovoltaic power plant projects are being carried out in the areas owned by KGHM, i.e. at the Głogów Copper Smelter and Refinery and at the Cedynia Copper Wire Rod Plant, next to the Tailings Plant and in the Obora Sandpit area. Other projects are also being prepared on KGHM’s own land. The Company is also active on the M&A market and is engaged in several due diligence and valuation processes for RES assets that are available for purchase. KGHM has also taken steps leading to the implementation of an ambitious project of construction of offshore wind farms.

The Energy Policy contains the most important principles of energy management in KGHM Polska Miedź S.A. By observing these principles, the Company’s management undertakes to:

ensure resources necessary to achieve the planned energy objectives and outcomes;
operate in accordance with the law and other energy requirements relating to energy use;
create desirable attitudes, build awareness and continually improve the skills of the Company’s employees and partners performing tasks for KGHM Polska Miedź S.A.;
prevent waste in the area of energy consumption;
cooperate with partners and suppliers in the procurement of material goods and services having regard to energy efficiency as an important selection criterion.

The principles adopted in the Energy Policy of KGHM Polska Miedź S.A. are complied with by all employees of the Company, as well as other persons and entities performing tasks needed for its operation.

As a result of the Energy Policy, the Company pursues activities designed to manage the energy used by KGHM rationally and in compliance with the law, including:

specification of procedures for the investment and procurement process,
energy overhauls in KGHM Divisions and the Head Office, performed in accordance with the approved methodology,
actions to achieve the approved energy objectives,
implementation of the regulations: Legal and other requirements in the field of power generation and evaluation of their conformity for the purposes of the Energy Management System at KGHM Polska Miedź S.A.

GRI

302-1

Energy consumption in the years 2021-2022 in KGHM Polska Miedź S.A. [GJ]
Total energy consumption by KGHM Polska Miedź S.A. in the years 2021-2022

Export to Excel

	2022	2021
+ Consumed non-renewable fuel	5,440,058	7,811,422
+ Consumed renewable fuel	0	0
+ Electricity, heating, cooling and steam purchased for consumption	11,225,471	10,403,786
+ Electricity produced in-house, heating, cooling and steam that are not consumed	2,888,368	3,883,984
– Sales of electricity, heating, cooling and steam	1,709,688	2,952,244
Total energy consumption within the organisation	17,844,209	19,146,948

Export to Excel

	2022	2021
Electricity consumption [kWh]	3,063,596,728	3,014,585,000
Consumption of thermal, cooling energy and steam [GJ]	3,084,890	3,435,264

In 2017, the Parent Entity and Energetyka Sp. z o.o. implemented an Energy Management System (EMS), in conformity with PN-EN ISO 50001:2012. The re-certification audit conducted in KGHM Polska Miedź S.A. and in Energetyka Sp. z o.o. in September 2020 confirmed that KGHM had adapted its Energy Management System to comply with the requirements of the new edition of the standard: PN-EN ISO 50001:2018. The second Supervision Audit in KGHM Polska Miedź S.A. and in Energetyka Sp. z o.o. conducted in June 2022 confirmed that the system is undergoing continual improvement, as are the energy results. Based on the findings of the UDT CERT Certification Unit’s auditor team, it was concluded that the Energy Management System in KGHM Polska Miedź S.A. and in Energetyka Sp. z o.o. is fit to achieve the planned objectives, and its certificate has been renewed.

As a result of the EMS implementation, the costs of energy audits are avoided, which must be performed pursuant to the Energy Efficiency Act if no certified Energy Management System is in place. Another result of the EMS operation is the possibility to implement a comprehensive improvement of the energy management process and improve KGHM’s energy result, which in 2021 generated energy savings of 10 GWh.

The EMS also reduces the costs of purchase and consumption of power utilities, including the cost of CO₂ emission allowances, as a result of lower greenhouse gas emissions. We intend to raise the skills of our human resources, achieve further savings in future years and, most importantly, improve occupational safety for all of KGHM Polska Miedź S.A.’s employees through the implementation of standards and improvement of procedures.

Environmental and carbon footprint of products

Copper, silver and gold are the foundation of the energy transition process. It is therefore crucial for sustainable development to find environmentally friendly ways of producing these essential metals. To meet these expectations, a decision was made in 2021 for the Institute of Mineral Raw Materials and Energy Management of the Polish Academy of Sciences to carry out an analysis of the environmental and carbon footprint of the main products manufactured at KGHM Polska Miedź S.A.

The analyses confirm that KGHM’s smelters (the Legnica Copper Smelter and Refinery, the Głogów Copper Smelter and Refinery and the Cedynia Copper Wire Rod Plant) produce metals in a responsible manner and in accordance with the highest standards.

A life cycle analysis was performed in accordance with ISO 14040, ISO 14044, ISO 14067 standards; additionally, environmental product declarations (type II – so-called self-declarations) were prepared for selected products in accordance with PN-EN ISO 14021 standard, which were then independently verified.

Environmental and carbon footprint of products

Carbon footprint of KGHM Polska Miedź S.A. products