Consolidated Financial Statements of the Stadtwerke Leipzig Group ...

1.3 Main legal and economic factors
Energy policy – focusing on climate change:
With the European Council’s agreement on a
revision of emissions trading for the next trading
period and the adoption of the Renewable
Energy Directive, European regulators have laid
the foundations for the development of energy
policy over the coming years. The principle of
the full auctioning of CO 2 certificates in the
power generation sector means that efforts to reduce
emissions will largely depend on the power
utilities. The Directive on the Promotion of the
Use of Energy from Renewable Sources has set
the target that one fifth of the EU’s energy needs
should be met by renewable energies by 2020.
Against this background, the Federal Republic
of Germany has an obligation to increase the
percentage of the overall demand for energy that
is covered by renewable energies to at least 18%
by 2020.
At the national level, too, discussions in 2009
after the national elections were characterised by
different ideas on energy issues in Germany. This
was one reason why there were failed attempts to
pass bills to introduce a national law on carbon
capture storage and an energy efficiency bill.
However, there was agreement on reforming the
redistribution mechanism under the EEG (German
Renewable Energies Act). With effect from
January 2010, the previous system of purchasing
rigid monthly bands was replaced by the direct
marketing of power from renewable sources
(“EEG-Strom”) on the exchange. If the proceeds
are too low to fund the promotion of renewable
energies, the power suppliers will collect an EEG
levy from customers that is fixed centrally and
nationwide.
1.4 General economic climate and industry-specific conditions
General economic climate
German economy marked by the financial and
economic crisis: The impact of the financial and
economic crisis was a dominant theme throughout
2009. The government was unable to prevent
negative trends in many industries despite
comprehensive support measures. Declining
sales figures put considerable pressure on many
companies to cut costs and in some cases led to
corporate insolvencies.
Natural gas and power consumption in Germany
fell markedly in the first nine months of
2009, despite cooler weather in the first quarter.
Demand for both electricity and gas was 5%
down on the same period of the previous year.
The main reason for the decline in electricity and
natural gas consumption was the fall in industrial
production. Stadtwerke Leipzig GmbH, while
only marginally affected by this development in
Leipzig, recorded a drop in its nationwide energy
sales due to the overall economic development.
Economic prospects remain uncertain: It is still
impossible to predict exactly how the economy
will develop in 2010 and the following years. Initial
indicators, including those from abroad, suggest
a slight recovery, or at least a stabilisation of
the economic situation. The fact that consumer
06 | Annual Financial Statements of Stadtwerke Leipzig GmbH