The IMF and the domestic economic institutes, IHS and WIFO, are forecasting a moderate but stable growth path for the second half of the current fiscal year. In Austria, economic growth forecast for the entire calendar year 2024 is between +0.2% and +0.5%. The inflation rate is likely to continue to decline, stabilising at between +3.9% and +3.5%. At +0.7%, GDP growth in the Euro zone is expected to be slightly above domestic economic growth, as is growth in the Czech Republic at +0.8%.
Numerous energy policy measures in Austria were at various stages of the consultation or legislation process at the end of the reporting period. Resolutions on the Electricity Industry Act and the Renewable Gas Act, for example, are expected in the second half of the 2023/2024 fiscal year. The steps for implementing the Council of Ministers' proposal from January 2023, which provides for a government bill for the Renewable Energy Expansion Acceleration Act, are also the subject of political debate. Furthermore, publication of the integrated Austrian Grid Infrastructure Plan is expected in the second half of the current fiscal year. At EU level, the intent is for regulations on the design of the EU electricity market to be formally adopted and for a trilateral agreement to be reached on the Nature Restoration Law prior to the EU elections in June 2024.
Due to imponderable geopolitical influences, such as the Russian war of aggression in Ukraine or the crisis in the Middle East that has been ongoing since the beginning of the fiscal year, the energy industry framework conditions remain highly challenging for Energie AG and the entire industry. Following the significant drops in the prices of electricity, gas and CO2 in the reporting period, prices are expected to move laterally within a high bandwidth in the second half of the 2023/2024 fiscal year.
Price adjustments by Vertrieb GmbH for products in the households and commercial customer area are regularly evaluated on the basis of the pertinent legal situation ("relevant circumstances" for electricity and provisions in the general terms and conditions based on the Austrian Gas Price Index in the gas sector pursuant to § 80 para 2a of the Electricity Industry and Organisation Act (ElWOG)). As a result, the development of wholesale prices, which have been falling for several months, is constantly being evaluated in the focus of sales activities with a view to potential price reductions for end customers. In April 2024 existing gas customers received an offer to switch to a cheaper product with effect as of 1 April 2024. In the Business and Industrial Customer unit, there is a noticeable increase in demand for direct electricity supply contracts (known as power purchase agreements) between electricity producers and electricity customers. Tailor-made solutions are being developed for customers here.
In the business unit Generation, the focus in the second half of the 2023/2024 fiscal year is on expanding electricity generated from wind power in Upper Austria and on the Ebensee pumped-storage power plant project. A fivefold increase in wind power generation by 2030 is planned in the Kobernaußerwald area. The existing wind farm in Munderfing is being expanded with a view to extensions including project areas in the communities of Schalchen, Maria Schmolln, Lengau and St. Johann am Walde. The construction of nineteen new wind turbines is under evaluation. At the Ebensee pumped-storage power plant, the focus in the second half of the 2023/2024 fiscal year will be on the construction of the access tunnel and cavern as well as the construction of the dam at the upstream reservoir.
The general regulatory framework for the Grid Segment for the fiscal year can continue to be assessed as stable. The statutory environment for the fourth regulatory period for gas and the fifth regulatory period for electricity has been laid down. Due to the need for major investments in the electricity grid, investment forecasts will be taken into account in future tariffs. The design and expansion of renewable forms of energy remain challenging for the Grid Segment. In addition to this, the ongoing development of IT systems and certifications will be focal points of work in the second half of the 2023/2024 fiscal year.
In terms of the availability of waste volumes for incineration, generally stable framework conditions are anticipated in the Waste Management Segment for the second half of the 2023/2024 fiscal year. Prices for waste wood as a recycling material are expected to fall in the second half of the 2023/2024 fiscal year. Cost increases are likely to be less dynamic than in the first half of the 2023/2024 fiscal year due to the forecast flattening of the inflation trend. The first e-trucks are expected for delivery to the Redlham location in the second half of the 2023/2024 fiscal year. Beyond this, further PV systems will be installed at the Redlham and Timelkam locations while conversion of the Hörsching location is scheduled for completion.
The implementation of decarbonisation and energy efficiency projects for the heat and water supply and waste water management will push forward in the Czech Republic Segment. A positive development in services provided to municipalities and cities is expected in the second half of 2023/2024. The entities will push forward with further projects in the field of technical information systems and smart meters in order to offer customers new and more efficient services.
In the Telekom business area, the focus in the second half of the 2023/2024 fiscal year will be on evaluating the changed market conditions due to the partial suspension of new subsidies for expanding the FTTH network in Upper Austria and the resulting strategic reorientation of the BBOÖ GmbH FTTH joint venture.
In view of the tense geopolitical and energy industry situation, and numerous challenges in terms of energy policy, Energie AG will continue to focus on supplying its customers in a reliable manner, and on ensuring the Group's financial stability in the second half of the 2023/2024 fiscal year. Beyond this, numerous campaigns and projects will be pushed forward in the second half of the 2023/2024 fiscal year with a view to actively shaping a sustainable energy future.
Despite the moderate forecast on economic development and market uncertainties, and assuming a largely stable development of the business environment, Energie AG expects its operating result for the 2023/2024 fiscal year to be above the previous year's level thanks to its diverse and robust business portfolio.
Linz, 29 May 2024
The Management Board of Energie AG Oberösterreich
Dr. Leonhard Schitter
CEO
Dr. Andreas Kolar
CFO