Grid Segment Overview










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Natural gas grid distribution volume to end customers









General Legal and Regulatory Conditions in the Grid Segment

On 1 January 2018, a new five-year regulatory period began for natural gas. The benchmarking and cost review to determine the basis for the third regulatory period for gas had already taken place in the 2016/2017 fiscal year. With 100% efficiency, Netz OÖ ranks top of the Austrian comparison of gas grid operators. One decisive issue in the past 2017/2018 fiscal year was preparations for the next regulatory period for electricity starting on 1 January 2019 with a detailed costing procedure and electricity distribution grid operator benchmark.

The grid utilisation fees for end customers in the natural gas sector were significantly reduced due to the general regulatory conditions laid down for the third regulatory period, between -5,2% at grid level 3 and -26.5% at grid level 2. In contrast to this, the grid fees in the electricity sector were increased significantly on 1 January 2018, between +25% at grid level 3 and +7% at grid level 7. The reason for this does not lie with Netz OÖ, but, according to E-Control Austria, can be attributed to the massive increase in charges for system-stabilising measures in the supra-regional transport grid, which are required to compensate for what can at times be highly fluctuating generation from wind and solar energy. The cost base of Netz OÖ itself remained stable compared to the previous year.

The general regulatory conditions for the 2018/2019 fiscal year can be judged in principle to be constant. The current regulatory period for electricity expires at the end of 2018. The Austrian Federal Economic Chamber and the Federal Chamber of Labour objected to the general economic conditions stipulated by the regulatory authority as of 1 January 2018. The decision on these objections is still pending, however, the complaints are affecting discussions on the details of electricity regulation in the following period from 2019 onwards. The goal remains to keep the general economic conditions for grid operations stable.

Business Development in the Grid Segment

The Grid Segment generated sales revenues of EUR 370.2 million in the reporting period. This represents an increase of 1.7% over the previous year's sales of EUR 363.9 million. Lower distribution volumes in the natural gas grid and the regulatory adjustment of grid utilisation fees for natural gas were more than offset by the regulatory increase in grid utilisation fees for electricity and minor volume increases in the electricity grid.

EBIT in the Grid Segment amounted to EUR 57.7 million in the 2017/2018 fiscal year and was thus significantly lower than the unusually high result in the previous year (EUR 99.8 million). In addition to the absence of an appreciation of EUR 16.5 million from the previous year due to impairment testing of the grid facilities, volume declines as well as regulatory tariff reductions in the natural gas grid had a significant impact on the Segment's earnings. The declines were only partially offset by volume and tariff increases in the electricity grid. The deviating development compared to sales revenues results mainly from high upstream grid costs affecting net income.

Electricity and Natural Gas Grid as the Backbone of the Upper Austrian Supply Infrastructure

Electricity Grid Distribution Volume to End Customers


Electricity Grid Distribution Volume to End Customers (bar chart)

In the 2017/2018 fiscal year, 8,297 GWh of electricity was distributed to end customers from the electricity grid. This represents an increase of 87 GWh (1.1%) compared with the previous year. The increase in volume is mainly attributable to favourable economic development. As of 30 September 2018, Netz OÖ supplied approx. 502,000 active customer installations.

In the year under review, the storms “Herwart” in October 2017 and “Fabienne” in September 2018 posed challenges in grid operation with a noticeable influence on the availability parameters of the electricity grid. For details on the availability of the electricity grid in the reporting period, see the Non-Financial Report.

In the 2017/2018 fiscal year, the activities of the Grid Segment focused on the consistent implementation of the “Electricity Grid Master Plan Upper Austria 2026 (Stromnetz-Masterplan Oberösterreich 2026)“. In addition to regular grid upgrade and expansion campaigns, these included in particular the completion of the “Jochenstein grid support” and “Feldkirchen transformer station” projects as well as the start of construction on the “Almtal und Kremstal power supply” (construction work has been interrupted since August 2018 as explained in the Energy Policy Environment) and “General renovation of Ranna-Partenstein” projects. Approval procedures for the high-voltage line project “Power Supply Pramtal South” are on-going. A route finding procedure is in progress for the “Electricity supply Mühlviertel – sub-area Rohrbach – Bad Leonfelden/Langbruck” project.

In the year under review, the programme to replace overhead medium-voltage lines that are particularly susceptible to disruption with underground cable proceeded according to plan. In the tenth year of this priority programme, a further 20 kilometres of overhead power lines were replaced by underground cables.

Due to the ongoing integration of local electricity generation facilities, ensuring voltage quality for grid customers on the low-voltage grid remains a challenge. The installed capacity from photovoltaics is already around 205 MW (previous year: 161 MW) with around 18,600 connected systems (previous year: 16,600 systems). Lessons learned from research and development projects are being successfully adopted for efficient grid integration.

Natural Gas Grid Distribution Volume to End Customers


Natural Gas Grid Distribution Volume to End Customers (bar chart)

In the 2017/2018 fiscal year, distribution volumes to end customers from the natural gas grid amounted to 18,397 GWh (previous year: 20,463 GWh) and were thus down by 10.1% compared with the previous year's value. In the high-pressure area, natural gas volumes fell year-on-year, primarily due to lower proprietary electricity generation by industrial operations and power plants. The reason for the decline in the household and commercial sectors was the shorter heating period in the reporting period.

In the past fiscal year, natural gas grid customers in Altheim, Redlham, Klaus a.d. Pyhrnbahn, Arbing, Kremsmünster and Nettingsdorf were connected to the natural gas grid or saw their connections extended. Preparatory work for the construction of the new Frankenmarkt local gas supply system was completed.

In the 2017/2018 fiscal year, a further eight gas pressure regulating stations were adapted and their efficiency increased, allowing to boost pressure on the Upper Austrian high-pressure grid to meet additional capacity requirements . The multi-year project was thus brought to a successful conclusion. In addition, sections of two high-pressure natural gas pipelines with a total length of 31 km were examined during the reporting period using intelligent pigging; various repairs were carried out on high-pressure pipelines and two high-pressure pipelines being relocated. Continuation of the cyclic fault location measurements and the expansion of the local anti-corrosion systems proceeded according to plan.