Reliability in supply and waste management services
In fiscal year 2021/2022, the turbulences on the energy markets and the continuing COVID-19 pandemic once again presented Energie AG with enormous challenges in warranting the uninterrupted operation of critical infrastructure (power plants, electricity and gas grids, telecommunication, water supply and waste management). In combination with a solid foundation built on the highest technical and organisational standards, the efficient work of the additionally established taskforce warranted a high level of supply security and supply quality. Energie AG Group faced particular challenges in this context as a result of the looming shortages in Europe’s supply with natural gas caused by the war between Russia and Ukraine. Energie AG therefore afforded special attention to the development of strategic concepts aimed at securing Upper Austria’s energy supply in the medium and long term. These efforts included an anticipatory procurement of the necessary gas quotas on the energy markets, the replenishment of the Group’s own gas storage facilities, and increased focus on renewable energies.
Netz OÖ GmbH secures the energy supply in Upper Austria with a modern and reliable electricity and gas grid and is Austria’s pioneer in the by now completed roll-out of smart meter technology, making it the backbone of the supply infrastructure in Upper Austria.
In addition to a high-performance grid infrastructure, the security of supply also depends on a secure and flexible energy output. The combined cycle gas-turbine power plant in Timelkam (CCGT power plant Timelkam) plays an important role in congestion management here, and in grid reserve management for transmission system operators. Energie AG’s own gas storage rights (or gas storage contracts) and subsidiaries support the high degree of flexibility. The gas storage capacities also serve the purpose of meeting the provisioning obligations pursuant to Article 6 (1) lit. c of the Gas-SOS-Regulation 2017/1938 in conjunction with § 121 para 5 GWG. Under these statutory provisions, Vertrieb GmbH as the supplier of protected customers is obliged to evidence the corresponding volumes in storage.
The development and application of new technologies and intelligent system solutions for the integration of volatile decentralised electricity generation systems (PV, wind) and flexible consumer systems (battery storage, e-mobility, heat storage) is of particular importance as well. Together with partners from science and business, the project Underground Sun Storage 2030 examines the role of hydrogen in extending the production of electricity from renewable sources from the summer into the winter months. Netz OÖ GmbH actively supports national research projects (e.g. Industry4Redispatch, System management 2.0). The participating experts are developing solutions that can accommodate the increasing requirements for system management, data exchange processes and active participation of additional market players in the electricity market.
The Waste Management Segment guarantees solutions for hazardous and non-hazardous waste and recycling materials to the highest technological and ecological standards and, due to the two waste incineration plants in Wels and Lenzing, makes a significant contribution to waste management in Austria.
The Energie AG Group has succeeded in establishing itself as a reliable drinking water, waste water management, space heating and hot water supply company in the Czech Republic Segment. The Group intends to deepen its partnerships with municipalities while simultaneously boosting efficiency and competitiveness by making targeted investments in its own water, waste water and heating infrastructure as well as making constant upgrades to the Group’s equipment and vehicle fleet.
Energie AG installs and operates a modern telecommunication infrastructure in Upper Austria and has been investing in the extension of future-proof fibre-optic technologies for around two decades. The Company’s goal is to advance the digitalisation and increase the attractiveness of Upper Austria for businesses and residents alike. The majority of public buildings in Upper Austria as well as many companies are already connected to the Group’s fibre-optic network. In the business with residential and small customer accounts, the past fiscal year witnessed a reorientation of the strategy for the FTTH development that aimed at combining and optimising the broadband activities in Upper Austria, more information can be found in the chapter headed Business model.
Digitalisation will offer Energie AG numerous future opportunities. The development of digital platforms will allow customers to benefit from new solutions. True to the motto of “secure digital services”, Energie AG is actively shaping Upper Austria’s digital future in collaboration with its customers and partners. Therefore key topics and objectives, and a corresponding roadmap have been developed and consistently implemented.
Energy transition and circular economy
The Paris Climate Agreement requires CO2 emissions to come down to almost zero (net value) by the year 2050. Austria has set itself the target of becoming climate neutral by 2040. Successfully mastering the necessary transformation process in the energy system requires the political actions to focus on measures that are aimed at countering climate change as well as those that prioritise the competitiveness of the economy and security of supply.
On EU level there are currently discussions about the wording of many of the existing directives, with the objective of achieving the higher CO2 reduction target of at least -55% over the period between 1990 and 2030 agreed as part of the Green Deal. Responding to the impact of Russia’s invasion of Ukraine on the global energy market and resulting turbulences, the European Commission moved to present the REPowerEU plan. The plan provides for a diversification of energy sources and acceleration of the transformation processes along with higher targets for the expansion of renewable energy and energy savings. The European Commission approved the financial assistance mechanisms of Austria’s Renewable Energy Expansion Act, with the relevant provisions entering force on 1 January 2022. The decarbonisation of space heating is implemented by virtue of a law on heat from renewable energies, which postulates an end to fossil energy sources by no later than 2040. An amendment of the Environmental Compatibility Assessment Act (UVP-G) was the subject of consultations until September 2022. Among other issues, it is concerned with the identification of certain zones that are necessary for a rapid implementation of the energy revolution. These projects related to the energy transformation are of a particularly high interest in the public eye.
Further information on the fundamental political and regulatory framework can be found in the Group Management Report, Energy and climate policy environment and Statutory and regulatory framework in the Grid Segment.
The national energy and climate targets for 2030 as well as the decarbonisation path to be pursued up to 2040 are a very challenging step towards the future energy supply in Austria. By using biomass, geothermal energy and industrial waste heat, the Energie AG Group has for many years pursued a consistent decarbonisation strategy in the area of heat supply and thus plays a pioneering role as a sustainable utility in its market sectors. From the perspective of Energie AG, it is relevant to take a holistic, integrated look at the entire energy system, taking into account the electricity and heat and mobility sectors (“sector coupling”), as well as a regulatory framework for the ramping up of green gases and hydrogen.
In the area of electricity procurement, Energie AG has used its own 43 hydropower plants and corresponding rights to procure electricity generated from renewable energy sources. Fiscal year 2021/2022 witnessed Energie AG assuming the operational management of three hydropower plants owned by Wels Strom GmbH: Traunleiten, Breitenbach and the run-of-river power plant in Traunleiten. Energie AG Group also operates 84 PV plants (previous year: 75) and holds interests in four wind farms with 13 wind power facilities across Austria.
Energie AG supports the government’s programme for 2020-2024 by making sustainable strategic decisions. This includes the planning and implementation of a number of power plant projects in the areas of hydroelectric power, photovoltaic and wind power. This is part of Energie AG’s contribution to the climate and energy policy of the Austrian Federal Government, which is pursuing the goal of covering 100% of Austria’s total electricity demand from renewable energies – on balance over a year - by the year 2030.
As a pioneer in the area of sustainable energy supply and partner for the energy transition in Upper Austria, the Energie AG Group endorses the energy and climate goals and supports them with concrete measures and projects: Environment. Most Energie AG Group projects pursue the objective of advancing the use of renewable energy and improving energy efficiency on the one hand, while on the other hand reducing the consumption of resources and production of waste both within the Group as well as at the customer.
In the interest of a sustainable waste management and circular economy, the operations of the Waste Management Segment are optimised by maximising the utilisation of synergy effects, additional resource conservation, and more efficient recycling processes, e.g. by further increasing the utilisation of waste heat (Wels waste incineration plant) as district heat for the town of Wels.
Additional electricity generation from renewables until 2030
The strategic goal of Energie AG Group is to provide 630 GWh of additional electricity from renewable energies produced by new and revitalised energy generation plants by the year 2030. This will deliver savings of around 200,000 tonnes of CO2 (reference value = ENTSO-E Mix 2020).
The expansion of electricity generation from renewable energies will make a significant contribution to the reduction and prevention of greenhouse gas emissions. 2,442 GWh of electricity from renewable sources were generated and 784,000 tonnes of CO2 saved in the fiscal year 2021/2022.
Energie AG will also be continuing to promote the sustainable use of waste, geothermal energy, industrial waste heat and renewable gases in heat production in the coming years – adding yet another element to the efforts to achieve a future characterised by renewables.
In addition to these measures, what is also required to fundamentally transform the energy system is that the grid infrastructure is expanded quickly at all voltage levels, that additional storage capacity is created and that the gas/hydrogen grid is coupled with this sector and correspondingly integrated.
The progressing expansion of electricity generation from renewable energies gives rise to additional challenges in safeguarding the security of supply. Particularly important is the continued safeguarding of the supply during times of low water levels, diminished solar power or phases of weak wind activity. To some extent, this can be achieved by a changed scheduling of production volumes with the help of new pumped-storage power plants. Additional power plants that can provide a high output over a longer period of time will however also be required. At the moment, this is mainly achieved with the help of gas power plants. In the long term, there are plans to operate these power plants with renewable gas and green hydrogen in particular. This is part of the EU’s energy strategy as well as national energy strategies, e.g. in Germany and Austria. Energie AG Group is investigating and monitoring the technological possibilities, including by means of participation in research projects. The further implementation does however require framework conditions that support a functioning business model.
Focus on the customer
Energie AG Group stands for high-quality, reliable products and services, which it continuously and consistently adapts to the needs and preferences of existing and potential customers. The strategic orientation of all organisational units of the Group is guided by the benefit offered to the customer. New innovative solutions aim at generating additional value for consumers, e.g. by creating special incentives for the purchase of environmentally friendly products or by digitally supporting their decision-making processes.
In its business environment, Energie AG stands for sustainable and fair solutions, which it can guarantee on the basis of permanent process optimisation efforts. Despite wholesale prices increasing since 2017, existing residential and commercial customers alike were guaranteed stable prices for standard electricity products until 1 January 2023 (with the exception of residential/commercial electricity float prices). The stable prices are made possible by an expedient procurement strategy: for risk diversification and optimisation reasons, the procurement for these customers takes places on a very long-term “rolling” basis, which means equally distributed over various points in time, with the result of an average price and a smoothing out of peak price points.
Starting in the autumn months of 2021, the prices for new customers were successively adjusted to match the higher procurements costs and changed market price levels. This is because even though Energie AG’s customers in Austria receive electricity from 100% renewable energies, they are nevertheless affected by the enormous price hike and price fluctuations on the European electricity market.
As a result of the price guarantee, customer offers for standard gas products have also remained unchanged for many years, which was also made possible by the rolling procurement strategy described above. An adjustment to the new framework conditions for new customers was implemented in fiscal year 2021/2022. In the autumn of 2020, the prices for internet services were guaranteed for the first time. The price guarantee assumed until 1 January 2023 ensured that Energie AG Group once again positioned itself as a reliable and fair partner in the past fiscal year.
Once the price guarantee assumed in the household and commercial sector expires, higher procurement costs will necessitate a price increase for the gas and electricity supply to existing customers.
Customers ascribe responsibility to Energie AG Group in particular in the area of security and regionality. In both areas, Energie AG Group aspires to meet these expectations by developing and investing in renewable energies and the establishment of a sustainable circular economy. Turning to social responsibility, Energie AG contributes to the common good by providing ongoing support in the areas of health, education, sport, arts and culture as well as charitable and not-for-profit activities, also see the section headed Social Affairs and the section headed Employees. Energie AG Group clearly showcased its solidarity by actively supporting customers affected by energy poverty, e.g. by means of goodwill offers.
Safeguarding the legitimate interests of its customers is a top priority for Energie AG. This not only applies with respect to an ethically exemplary treatment of customers in accordance with the Group’s Code of Conduct titled “This is how we think, this is how we act”, but also when it comes to the handling of personal data. Internal controls have been implemented to assure the Group’s compliance with the relevant regulations. An awareness campaign started in the autumn of 2019 has focused on raising employees’ awareness for the prudent handling of personal data and potential risks (cyber crime etc.). The campaign aims at increasing the awareness for information security among employees. A dedicated topic (e.g. data protection, phishing, social engineering) is presented in each quarter using a range of materials such as banners, flyers and e-learning sessions.
As the energy supplier for Upper Austria, the Energie AG Group has positioned itself as a strong regional partner for its customers and an important economic factor for the state. A high degree of regional value creation is achieved by the generation of energy in our home state, extensive investments in infrastructure projects across the state (expansion of electricity generation systems, fibre-optic network etc.) and the associated creation of jobs.
Digitalisation provides an important impetus for the region. The Energie AG Group advances the development of pioneering technologies and uses them to increase the quality of its customers’ lives in their direct environment – e.g. by providing the means for a more efficient use of energy and extending the coverage of the fibre-optic network in Upper Austria.
Similar to Austria, the water and heat markets in the Czech Republic are distinguished by a very regional structure. All services provided by Energie AG in the Czech Republic are rendered by seven regional and local water utility companies, five heat utility companies and one mixed water and heat utility company.
Energie AG’s financial goal is to achieve attractive returns, to sustainably secure the value of the Energie AG Group and to continue to be a reliable and interesting business partner for owners and investors in the future. Financial stability is supported by the balanced Group portfolio of liberalised and regulated business models. A further basis for success is the efficient management of risks and opportunities. It empowers the Group management to identify challenges at an early stage and to take effective measures in good time.
The Group responds quickly to dynamic changes to the statutory framework, as well as market-based challenges stemming from changes in customer needs or competitors from outside the industry.
Without motivated and committed employees, strategic goals are unachievable. The employees working at Energie AG are the Group’s most important resource. Energie AG prevails in the competition for talent by implementing a strategically coordinated recruiting process and succession management. The Group has also taken measures to further improve its reputation as a preferred employer.
The Group’s successful apprenticeship programme trains the specialists needed by the Group’s business sectors and includes measures in the area of diversity that send an important socio-political signal.