The economic security of power plants

SGH Warsaw School of Economics Al. Niepodległości 164, 02-554 Warsaw, Poland

^* Corresponding author: dniedz@sgh.waw.pl

Abstract

Currently, power plants in Poland have to work in a very uncomfortable situation. Unstable market conditions and frequent changes in the law may have serious adverse consequences for their economic security. Power plants play a very important role in the economy. The effectiveness of their performance affects the activity of all other businesses. Therefore, it is very important to provide a definition of economic security for the power plants’ sector and the factors determining its level. Maintaining economic security will allow energy generation companies to grow in a sustainable way as well as limit operational risk. A precise definition can also be used to create analytical tools for economic security measurement and monitoring. Proper usage of such tools can help energy generation companies sustain their economic security and properly plan their capital expenditures. The article focuses on the definition of economic security in the “micro” context of a separate business unit (enterprise). We also present an analytical model that measures economic security of a company engaged in the production of energy - a company of strategic importance for the national economy. The model uses macroeconomic variables, variables describing prices of raw material and legal / political stability in the country, as well as selected financial indicators. The appliance of conclusions resulting from the model’s implementation will help provide economic security for companies generating energy.