Annual Report 1999739KB - Essent

essent1999With the preparations for the establishment ofEssent Energy Systems, the intention is to set upan innovative and management organisationincorporating the total concepts for energy systems(including co-generation).In order to achieve growth in the long term, it isvital that Essent has a presence on the internationalmarket. The restructuring of the Dutchenergy market is almost complete and in the longrun therefore offers too few prospects for the sustainedexpansion of the company. For the Germanmarket, an office of Essent Energie GmbH wasopened in Düsseldorf. The German market hasbeen completely free since 1998 – including forconsumers – resulting in major price wars andfierce competition. An additional factor is thatrates for resupplying energy are relatively highand are not subject to the judgment of an independentsupervisory authority as in the Netherlands.Despite the short time that Essent EnergieGmbH has been active in Germany, it alreadyranks sixth among German electricity suppliers,both in terms of turnover and output.The consumer market Essent serves over2.3 million electricity customers and 1.7 milliongas customers. Under the Electricity Act, this marketwill also be deregulated in 2007. Currentlycaptive customers will then be free to choosetheir supplier. Essent is expressly allowing for thepossibility that this process will be fast-trackedand completed far earlier.The supply company and the network company,converted from five regional energy distributioncompanies in the northern Essent area in 1998,were further developed in 1999. The supply companyfor captive customers now operates underthe name Essent Energie Noord NV. The impendingfree market accelerated the pace of change.More than ever before, consumers’ needs dictatedthe setup of the organisation. A call centre was setup to promote the efficient handling of consumercontracts. E-commerce is another policy spearhead,both for ‘2002 customers’ and the consumermarket.A new product, Domestiq, was introduced.Domestiq is a multi-faceted security and alarmsystem which can be tailor-made to customerrequirements.In the south of the Netherlands, the consumermarket was served by PNEM Energieverkoop,MEGA Limburg and Nutsbedrijf Heerlen, whichsince the merger jointly form Essent Zuid NV.The transition from 1999 to 2000 was tense for allparts of the company due to potential millenniumproblems. However, following intensivepreparations and precautionary measures, theturn of the millennium passed without incident.Infrastructures Four network companieswere set up in 1999 for the total infrastructure inaccordance with the new Electricity Act:NV EDON Netwerk and NV FRIGEM Netwerk inthe north, and MEGA Limburg Netwerk BV andPNEM Netwerk BV in the south. Under the namesEssent Netwerk Noord and Essent Netwerk Zuidthese companies manage the networks for thetransmission of electricity, gas and heat. A widerangingefficiency operation, Transformatie 2000,was launched in the north during 1999, with aview to increasing the market focus of operationsand achieving considerable cost savings.Sustainable energy In 1999, the Ministryof public housing, town and country planning,and the environment published its implementationmemorandum on climate control which setout intended CO 2 reductions in the Netherlands,and served as a strong stimulus to sustainableenergy applications. The Energy Report presentedby the Ministry of Economic Affairs in November1999 indicates that a market for sustainableenergy has emerged. This will certainly be thecase if consumers can buy ‘Green Electricity’ from2001 from the supplier of their choice, as envisagedby the Ministry. The intended market forcesare to be stimulated by exempting end users fromenvironmental tax. Essent sees sufficient potentialin this market, partly on the basis of theintention to combine free enterprise with asocially responsible attitude. Green Electricitywas a popular product and the number of customersgrew significantly. In addition, the tradein CO 2 certificates became an interesting optionfor the company.20annual report