Outlook for the 2016/17 financial year
The steadily increasing expansion of renewable generation has been accompanied by major challenges for the energy wholesale markets. Low prices have created a situation where thermal power plants can no longer operate economically. At the same time, balancing energy and capacity for the management of shortages are needed to stabilise the electricity networks. EVN has, for many years, made its thermal power plants available to support network stability. The relevant agreements have already been concluded for the winter half-years in 2016/17 and 2017/18 and for summer 2017.
EVN again plans to make substantial investments in its infrastructure during the 2016/17 financial year. The electricity networks in Lower Austria will be upgraded to accommodate the increasing feed-in from volatile renewable energy. Activities in South Eastern Europe will continue to focus on the further reduction of network losses, whereby EVN is concentrating on modern networks that meet Western European standards and on remote-read meters.
The expansion of renewable generation in Lower Austria represents another focal point of investments. New projects will be realised, above all in the area of wind energy, to meet the target for an increase to over 300 MW in the next two years. In the natural heating plants, network coverage will be extended and existing equipment will be modernised. In addition, EVN’s pipeline networks for drinking water supplies in Lower Austria will be expanded to also maintain supply standards in low precipitation regions and during dry periods. Natural filter plants, which reduce the hardness of the water by natural means with membrane technology, will be used to further improve the already high quality of water supplies.
The international project business in the Environmental Services Segment will increase its focus on the acquisition of new projects during the coming months. Special interest will be placed on new markets with an appropriate potential, in keeping with the avoidance of or protection against political risks.
EVN’s integrated business model has proven to be successful in this challenging business environment for many years. The company’s broad positioning along the energy value chain and its additional diversification through the environmental services business support stable earnings.
Against this background and under the assumption of average conditions in the energy business environment, the Group net result for 2016 /17, which is derived from the operating business, is expected to remain largely stable. Effects from the proceedings involving the Duisburg-Walsum power plant must be evaluated separately. Other factors that could influence this net result include the regulatory background, developments in the proceedings in Bulgaria and the progress on activities in Moscow.
Maria Enzersdorf, 17 November 2016