Energy Segment

Economic environment for the energy sector ¹⁾

Price development on international energy markets

Sources: EEX, ICE

The forward market prices for electricity for delivery in the front year 2023 in Austria showed a strong upward trend in the reporting period and rose from around EUR 89.7/MWh to EUR 193.1/MWh as of 31 March 2022. At EUR 127.3/MWh, the average price was around one-and-a-half times higher than the previous year's value. The main influencing factors here were the substantially higher prices for coal and gas. On the spot market, electricity prices also more than tripled in the first half of the 2021/2022 fiscal year compared with the same period of the previous year. The average European Power Exchange (EPEX) spot price base for delivery in Austria was around EUR 211.7/MWh with a highly volatile development which correlates strongly with gas prices.

In the first half of the 2021/2022 fiscal year, the Trading Hub Europe (THE) gas price for the front year 2023 developed from EUR 31.7/MWh at the beginning of October 2021 to EUR 89.0/MWh at the end of March 2022, almost tripling in the process. Up to the end of December 2021, discussions relating to dropping the commissioning of the Nord Stream 2 pipeline, comparatively low gas storage levels, and only short-term capacity bookings for individual pipelines from Russia forced prices up, briefly exceeding the EUR 60.0/MWh mark for the THE front year product. In February, the Russian-Ukrainian war then brought about an entirely new price level with an increase to almost EUR 90.0/MWh.

Prices for CO₂ emissions allowances also initially increased during the reporting period, rising from EUR 62.5/t to peak at EUR 97.0/t in early February 2022. Following the outbreak of the Russian-Ukrainian war and the associated fears relating to European economic development, CO₂ prices had again fallen to EUR 76.5/t by the end of the reporting period.

The oil price for a delivery in May 2022 rose from USD 75.9/barrel (bl) of Brent crude oil at the beginning of the reporting period to USD 107.9/bl at the end of March 2022. Following moderate price developments up to the end of December 2021, uncertainties surrounding a possible Russian-Ukrainian war and, ultimately, the start of the war triggered a significant increase in prices with peaks of almost USD 128.0/bl at times.

Business development in the Energy Segment

Sales in the Energy Segment amounted to EUR 1,709.6 million in the first half of 2021/2022. The notable increase compared to the same period of the previous year (EUR 796.9 million) is attributable to the significant increase in wholesale prices for electricity and gas, which lead to higher sales revenues in the sale of electricity and gas as well as in the management of power plants and electricity procurement rights.

In the first half of the 2021/2022 fiscal year, the EBIT of the Energy Segment amounted to EUR 46.9 million and was 7.3% below the level of the previous year (EUR 50.6 million). The decline was mainly caused by below-average electricity generation from hydropower plants due to low river water levels, increased procurement prices for electricity and gas and the management of gas reservoirs. The increased use of the CCGT power plant in Timelkam on the electricity market, on the other hand, had a positive effect on the operating result. In addition, income of EUR 43.5 million was generated from the measurement and realisation of energy derivatives without hedging relationships.

The previous year's EBIT included impairments in the amount of EUR 1.3 million for the Timelkam CCGT power plant and a provision in the amount of EUR 6.7 million related to the 7Fields gas reservoir.

Below-average production from hydroelectric power and use of the Timelkam CCGT power plant on the free electricity market

Total electricity procurement in the Energy Segment in the first six months of 2021/2022 totalled 7,949 GWh and was therefore 22.2% lower than the previous year's value (10,215 GWh). The decline was mainly caused by lower volumes of electricity procured from third parties. In contrast, proprietary electricity procurement increased from 1,363 GWh in the previous year to 1,718 GWh in the reporting period – a rise of 26.0%. This development was mainly due to the significant increase in electricity generated by thermal power plants in the reporting period.

Electricity production from thermal capacities in the Energy Segment was 695 GWh in the first half of 2021/2022, which was more than double the previous year's value of 306 GWh. The main reason for this was the use of the Timelkam CCGT power plant on the free electricity market as of January 2022, whereas the power plant had exclusively been used in congestion management for grid support in the comparable period of the previous year.

Electricity production from hydroelectric power in proprietary power plants and from procurement rights in the reporting period was below the values of the previous year. The root cause for this was that river water levels were 6.0% below the long-term average and 5.0% below the previous year's levels. The months of October and November 2021 and March 2022 were significantly below expectations due to the unusual drought. The hydro coefficient in the reporting period was 0.94 (previous year: 0.99).

The electricity procurement structure in the Energy Segment was as follows in the reporting period:

Electricity procurement structure without electricity trading

1st HY 2021/2022; previous year's figures in brackets

Ennskraftwerke AG, in which Energie AG holds a participating interest of 50%, also reported electricity production below the long-term average in the first half of 2021/2022, with a hydro coefficient of 0.94 (previous year: 1.00). Energie AG holds electricity procurement rights to the hydropower plants of Ennskraftwerke AG and Verbund Hydro Power GmbH with a total annual standard production capacity of about 1,410 GWh.

As planned, in the scope of reorganising cooperation with the Wels-based eww ag, Energie AG took over the operational management of the new Traunleiten hydropower plant starting on 1 January 2022.

Energie AG's wind power portfolio in Austria comprises investments in four wind parks with a pro rata overall performance of some 15 MW. Generation from wind power in the reporting period was 23 GWh (previous year: 19 GWh).

Energie AG operates photovoltaic plants and PV contracting plants in Austria and Italy itself or via subsidiaries with a total capacity of 18 MW_p. In the first six months of 2021/2022, 5 GWh of electricity (previous year: 3 GWh) was fed into the public grid. In the first quarter, among other things, work on expanding the solar campus in Eberstalzell was completed, while the power generation plants with an output of 3.3 MW_p that were constructed additionally were successfully commissioned.

The distribution of district heating from the power plant locations in Riedersbach and Timelkam fell from 188 GWh in the comparable period of the previous year to 181 GWh in the reporting period, which is equivalent to 3.4%.

Cogeneration-Kraftwerke Management Oberösterreich GmbH (CMOÖ GmbH) in Laakirchen supplies a key account customer with electricity and process heat through a CCGT power plant, as well as several adjacent companies with district heating. The volume of process heat and district heating generated in the first six months of 2021/2022 was 373 GWh, which is 3.3% up on the previous year's figure of 361 GWh.

Dynamic environment and on-going development of the sales organisation

In the course of the tightening of the energy markets in the first half of 2021/2022, intensive monitoring of the Russian-Ukrainian war and its impact on the supply situation and sales in Austria in particular is material to Energie AG Oberösterreich Vertrieb GmbH’s (Vertrieb GmbH’s) procurement and sales.

In the competitive environment, there were price increases and numerous customer contract terminations by other market entities; this, in turn, generated a massive demand for new customer contracts in Energie AG's Sales unit. Vertrieb GmbH responded to this development by introducing three price adjustments for new customers while existing customers in the household and commercial sector benefited from the procurement strategy with a price guarantee for standard electricity and gas products (with the exception of float prices) and fibre-optic internet. Due to the significant increase in prices and the high volatility on the electricity and gas market, the product “Electricity Business Secure” was developed as a risk-minimising product for business customers.

The number of heating degree days in Upper Austria in the reporting period was slightly below that of the comparable period in the previous year (-1.9%), and on a par with the average for the last five years (+0.3%).

Since the outbreak of the COVID-19 pandemic, monitoring of risks from receivables has been an even greater part of Energie AG's sales activities than usual. Due to the good economic situation in the autumn of 2021, no significant effects were felt in the first half of 2021/2022; monitoring of risks from receivables is continuing on an on-going basis.

Constant forward-looking development of the organisation, especially in dynamic times, appears material: The retirement of ENAMO as an entity and brand following the renaming of “ENAMO Ökostrom GmbH” to “Energie AG Oberösterreich Öko GmbH”completed the last of the four milestones for achieving the target structure in the Sales unit.

Electricity sales volume

in GWh

Following in-depth strategic analysis, the decision was also taken to discontinue electricity and natural gas sales activities in Germany and to implement this decision as of 31 December 2021.

Electricity

At 3,486 GWh, Energie AG's consolidated electricity sales volume in the first half of the 2021/2022 fiscal year was 164 GWh below the previous year's figure of 3,650 GWh.

Sales volumes to business and industrial customers were down on the previous year, especially at Energie AG Oberösterreich Businesskunden GmbH, where volumes fell due to customer switching and the discontinuation of business in Germany. The volumes in the residential, commercial and municipal customer sector were above the previous year's value. This was due to customer growth, caused in part by other energy suppliers terminating agreements.

Gas

Gas sales volume

in GWh

At 3,795 GWh, Energie AG's gas sales volume in the first half of the 2021/2022 fiscal year was 252 GWh, or 6.2%, below the previous year's figure of 4,047 GWh.

There were massive price fluctuations in the business and industrial customer areas. The decline in volumes caused by customer losses in this sector was partially offset by higher sales volumes to existing customers. Volumes delivered to residential, commercial and municipal customers were slightly higher than in the previous year, due to customer growth; again, this was triggered by other energy suppliers terminating contracts.

Heat

Heat sales volume Austria

in GWh

The heat sales volume in Austria amounted to 764 GWh in the first half of 2021/2022 and was therefore unchanged compared to the previous year's level.

In addition to the district heating sales volume and the heat sales volume supplied to customers by CMOÖ GmbH, the heat sales also include volumes from energy contracting.

Telecommunications

By the end of the first half of the 2021/2022 fiscal year, more than 15,000 customers were already actively using Energie AG's products (previous year: 11,000). Despite the challenging competitive environment, Energie AG was also able to convince more customers in the business customer sector of its product benefits.

Photovoltaics

In the first six months of 2021/2022, 58 photovoltaic contracting customer plants (previous year: 50) with an output of 9.6 MW_p (previous year: 8.4 MW_p) were in operation.

Electromobility

The focus of electromobility activities is currently on charging solutions and the targeted establishment of public charging stations. Energie AG currently operates 141 publicly accessible charging stations (previous year: 103) and manages a total of over 502 charging points (previous year: 298).