Annual report 2008/09 - Axpo Group

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Annual Report Axpo Holding AG 14 – 15 Editorial / 2–3 Interview with the CEO / 4–6 Strategy / 8–10 Markets and perspectives / 12–18 Success factors / 22–29 Corporate governance / 32–47 Annual report / 50–65 With its demand for a strategy for large-scale power plants, the Council of States is increasing pressure on the electricity industry, requiring it to agree on two sites for the replacement of the existing nuclear power plants. Negotiations with the EU on a bilateral electricity agreement should ensure security of supply for Switzerland and investment protection for Swiss companies. of those behind the referendum initiative have largely been taken into account, the fi sheries association has withdrawn the initiative. A new strategy for large power plants and nuclear energy delays In August 2009, the Federal Council announced that the draft bill for a revision of the CO2 law had been passed. Among other things, this makes provision for the reduction of domestic CO2 emissions by 20% until 2020, the use of part of the CO2 tax to fi nance building measures, and stricter thresholds for new vehicles. For the time being, compensation for gas-fi red combined cycle power plants is still regulated in a Federal Council decision that will remain valid until the end of 2010. It is a subject of political debate whether fossil-fuel power plants should be used as an interim solution for domestic electricity production until replacement nuclear power plants are commissioned. If the Council of States has anything to say about this issue, the matter will be resolved as part of a new strategy for large-scale power plants. On the one hand, the Council of States wants to close the remaining gap in the Federal Council’s four-pillar strategy, and on the other hand, this would increase the pres - sure on the electricity industry to agree on two sites for the replacement of existing nuclear power plants. However, delays are emerging in the general licence approval procedure. As far back as January 2009, Federal Councillor Leuenberger stated that the processing of three applications for general licences will place an excessive drain on the resources of the authorities involved. The time schedule might have to be extended until the results of a possible referendum are available, but no binding statements on this can be made as yet. In contrast, the implementation of the repository plan for deep geological repositories is proceeding as scheduled. Following the Fede - ral Council’s identifi cation of possible sites at the end of 2008, both the Swiss Federal Nuclear Safety Inspectorate ENSI and the Commission for Nuclear Waste Disposal KNE stated their position on this issue last year. Their reports on possible sites will be published at the beginning of 2010. Diffi cult negotiations between Switzerland and the EU The third round of negotiations between Switzerland and the EU on a bilateral electricity agreement took place during the past fi nancial year. However, the starting position changed after the EU approved the third energy package in June 2009. The EU is now demanding that Switzerland continue the negotiations on the basis of the new legislation and adopt Community law if a conclusion is reached. This would, of course, require the reformulation of the Swiss negotiation mandate. The protection of the long-term agreements plays a key role in the negotiations, as security of supply for Switzerland and the safeguarding of corporate investments must continue to be guaranteed.
Energy market The global economic crisis during the 2008/09 fi nancial year signifi cantly changed the global and European energy markets. These changes concerned energy prices and the demand for electricity and primary energy as well as investments in the energy sector. Collapse of primary energy and electricity prices During the fi rst six months of the 2008/09 fi nancial year, prices for crude oil, coal and gas at times plunged by around 50%. The price for CO2 emission rights in the European emissions trading system also contracted. Prices only began to stabilize in 2009, albeit at a lower level than before the fi nancial crisis, when the fi rst indications that the economic crisis might be waning appeared in the middle of the year. Electricity prices did not fall further, and crude oil became more expensive again. However, there has been no indication of any increases in demand and prices on the electricity market to date. Stable demand for electricity in Switzerland Gas prices decoupled from oil and fell substantially, resulting, among other things, in a reduction in electricity generation costs in gas- and coal-fi red power plants, which in turn meant that prices on the electricity markets dropped. The main contributor to the lower electricity prices was shrinking demand. In France, Germany and Italy, demand shrank by 1.4%, 2.3% and 5.4% respectively in the fi rst quarter of the year under review (International Energy Agency IEA, 2009). This contraction in demand is mainly due to falling demand from industry, especially the steel sector. In Switzerland, however, electricity demand remained stable, with end consumption largely on a par with the previous year. A small dip was observed in spring, but this was only partially due to economic effects. The weather also had an impact. The deciding factor for the stability of domestic demand was the steadily growing demand from private households and the service sector. Negative effects on investments According to IEA studies, the economic crisis had a threefold negative effect on investment in the energy sector: fi rstly, lending policy was stricter, secondly, project profi tability dropped in view of lower energy prices, and thirdly, de- Electricity price trends EUR/MWh 0 25 50 75 100 0 50 100 150 200 1.7.2008 1.10.2008 1.1.2009 1.4.2009 EEX spot price Crude oil, gas and coal price trends in CHF 1.7.2008 1.10.2008 API No.2 coal price for 2010 delivery (USD/tonne) Front-month Brent crude oil price (USD/barrel) TTF gas price, 2010 delivery (EUR/MWh) Read more about the demand for electricity at www.iea.org 1.1.2009 1.4.2009 1.7.2009 1.7.2009
Page 1 and 2: Energy is the future Annual Report
Page 3 and 4: Key fi gures Finances 2008/09 in CH
Page 5 and 6: Table of contents Energy is the fut
Page 7 and 8: Milestones in infrastructure expans
Page 9 and 10: effi ciently. Competitors can be co
Page 11 and 12: “Energy is dreaming.” Flavia Ma
Page 13 and 14: As a company owned by the cantons o
Page 15 and 16: “Energy is there to make our live
Page 17: Energy policy Uncertain trends in f
Page 21 and 22: Electricity prospects In the fi nan
Page 23 and 24: Bettina Baer, 19, plays in the wome
Page 25 and 26: Renewable energies How we are inves
Page 27: Illustration: Geopower Basel AG Lim
Page 30 and 31: Annual Report Axpo Holding AG 22 -
Page 34 and 35: «Energie ist die Sonne.» “Energ
Page 38 and 39: PRO: ARGUMENTS IN FAVOUR The protec
Page 40 and 41: Axpo is dedicated to climate protec
Page 43 and 44: CONTRA: ARGUMENTS AGAINST Warnings
Page 45 and 46: Group structure and shareholders Gr
Page 47 and 48: Dr. Wulf Glatz, 35, won the 2009 Sw
Page 49 and 50: vis-à-vis third parties and deals
Page 51 and 52: ility, the strategic energy busines
Page 53 and 54: Axpo also has several tools on hand
Page 55 and 56: Corporate bodies and Group function
Page 57 and 58: Peter Reinhard Member of the Board
Page 59 and 60: Executive Board Heinz Karrer Chief
Page 61 and 62: Mobility What will get us moving in
Page 63: Public transport consolidates its p
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Annual Report Axpo Holding AG 52 -
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“Energy is, when I’m healthy.
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PRO: ARGUMENTS IN FAVOUR If we are
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Electricity from nuclear energy is
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CONTRA: ARGUMENTS AGAINST Nuclear e
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Balance Sheet 30.9.2009 (condensed)
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Minergie A registered quality label
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Conventional power plants • 1 KKB
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Publishing details Published by Axp
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Annual report 2008/09 - Axpo Group

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