austrian power grid ag
ANNUAL REPORT 2015 WE KEEP IT GOING
AUSTRIAN POWER GRID AG
THREE-YEAR COMPARISON THREE-YEAR COMPARISON
€M, %
Revenue
2013
2014
2015
573.7
541.4
730.8
Earnings before interest and taxes (EBIT)
68.7
56.4
83.3
Result from ordinary activities
50.3
28.5
55.4
Net income
37.7
20.3
41.6
Total assets
1,463.1
1,560.7
1,584.5
Fixed assets
1,187.1
1,248.4
1,285.8
102.1
134.1
108.2
67.1
71.4
73.7
313.0
324.6
368.0
Return on sales (ROS)
12.0 %
10.4 %
11.4 %
Return on equity (ROE)
16.1 %
8.1 %
15.4 %
4.8 %
3.9 %
5.3 %
24.0 %
23.1 %
25.4 %
n.a.1)
10.5
6.7
Capital expenditure on tangible fixed assets Depreciation of fixed assets Equity
Return on investment (ROI)
Equity as percentage of assets Fictitious debt repayment period Net cash flow from operating activities2)
97.9
42.3
69.3
220.1 %
229.1 %
197.3 %
Number of employees
462
456
463
(of which apprentices)
25
25
24
43,137
43,957
46,164
Net gearing2)
TRANSPORT VOLUME (GWH) 1)
In 2013, the fictitious debt repayment period pursuant to Section 24 of the Company Reorganisation Act (Unternehmensreorganisationsgesetz, URG) represents a separate line item. The
2)
The key figures were revised in 2013, and prior year's figures have been adjusted.
reason lies in the change in accounting treatment of the regulatory tariff provisions recognised in 2012.
AUSTRIAN POWER GRID AG
ANNUAL REPORT 2015
ANNUAL REPORT 2015 WE KEEP IT GOING
AUSTRIAN POWER GRID AG
CONTENTS CONTENTS
INTRODUCTION Governing bodies of the Company Foreword by the Executive Board We keep it going
03 05 06
MANAGEMENT REPORT About us Annual Report at a glance Energy market developments Grid operational developments Legal developments Regulatory developments Economic developments International activities Asset management Corporate social responsibility Research and innovation Financial performance indicators Cash flow statement Risk and opportunity management Outlook Report on branch offices Events after the balance sheet date
16 16 17 17 18 19 19 21 24 27 31 32 34 37 39 39 39
FINANCIAL STATEMENTS Balance sheet Income statement Statement of changes in fixed assets Maturity schedule Statement of changes in untaxed reserves
40 42 44 46 48
NOTES TO THE FINANCIAL STATEMENTS AND DETAILS Details on equity investments Notes to the financial statements Glossary Auditor's Report Report of the Supervisory Board
49 50 62 64 66
ANNUAL REPORT 2015
GOVERNING BODIES OF THE COMPANY GOVERNING BODIES OF THE COMPANY
SUPERVISORY BOARD
EMPLOYEE REPRESENTATIVES
WORKING AND AUDIT COMMITTEE
Dr. Peter Kollmann Chairman
Ing. Wolfgang Liebscher Chairman of the Central Works Council, 2nd Vice Chairman
Dr. Peter Kollmann Chairman
Ing. Mag. Peter Koren 1st Vice Chairman
Andreas Gross Central Works Council
Dr. Johann Sereinig Mag. Dr. Erich Entstrasser Dr. Christof Germann
Karl-Heinz Stieger Central Works Council Konrad Gerl Central Works Council
Mag. Leopold Rohrer Mag. Dr. Georg W. Westphal Mag. Andreas Wollein
EXECUTIVE BOARD Dr. Ulrike Baumgartner-Gabitzer DI Mag. (FH) Gerhard Christiner Mag. Thomas Karall
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Ing. Mag. Peter Koren 1st Vice Chairman Ing. Wolfgang Liebscher 2nd Vice Chairman
FOREWORD BY THE MANAGING BOARD
The United Nations‘ 21st climate conference of last December (2015 Paris Climate Conference – COP21) was highly anticipated by much of the general public as well as in the electricity industry. The political situation in Europe and around the world had many players doubting whether all participating UN member states would give climate protection a high priority on their political agendas. The media response was correspondingly positive as the climate change conference at least produced a crystal clear commitment to the so-called “two degrees Celsius goal”. Even though first concrete implementation strategies and catalogues of measures have to follow at the national level in the coming months and years, one thing is clear: All areas of the economy will also have to step up their efforts in the future to reduce their CO2 emissions. The electricity industry worldwide will play an important role in this – and not only in the realisation of its own savings targets. In fact, it will have to create the technologies and applications that enable the diversification of electrical applications. Because electricity obtained from renewables and CO2-free resources, such as wind power and solar energy, will become the key form of energy of a climate-friendly supply of energy. APG, as a Company, has a special responsibility with its power grid in the heart of all these developments. Keenly aware of our role, we have also made every effort to prepare our hardware for the rising demands in the 2015 financial year just ended. That means: We have made progress with important line construction projects – the positive notice from the court of first instance with respect to the Salzburg line project or the successful completion of the approval process for the Germany line are only two examples. We also further developed our software. We understand this to include all measures that a power grid operator can take to make its systems and plants even more flexible and efficient with quicker reaction times. A core area of focus for the financial year just ended was the topic of balancing energy and therefore the general question: How can a power grid best deal with strong fluctuations in electricity production – in particular without forfeiting the level of security of supply and at the lowest possible additional cost? The operational balance for 2015 is completely positive in light of the challenges overcome. However, the recognition that APG is on the right path with the strategic focus on the further development of its assets and systems in the direction of a renewable power plant park was also central. Europe‘s electricity future is renewable.
Dr. Ulrike Baumgartner-Gabitzer e.h. Chairwoman of the Executive Board
Mag. Thomas Karall e.h. Chief Financial Officer
APG Executive Board
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DI Mag. (FH) Gerhard Christiner e.h. Chief Technology Officer
STRENGTHEN REGIONAL INITIATIVES APG as a partner of SV Haiming SV Haiming, which was established in the mid-1950s, is a football club with a very long tradition. One of SV Haiming‘s strengths has always been its active and very successful youth work – and that is still true today. Nine youth teams currently play in Haiming in all age groups from “under 7” to “under 14”. The SV Haiming team always produces talented players that hold their own in the upper leagues. More important than the sporting successes, however, is the shared team experience that the club offers to its young members. The trainers are not just trainers: they are important role models for the adolescents that accompany them in their development. We support this work out of conviction.
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WE KEEP IT GOING
No reversal in the turnaround The expansion of electricity generation from renewable sources of energy continues unabated. The basic resolutions of the Paris Climate Conference this past December left no doubt that the UN community of states intends to adhere to its climate protection goals – in particular Europe. The electricity industry must also continue contributing to reaching the two degree goal (keeping global warming below two degrees Celsius), which has been recognised to be indispensable. Despite the market distortions brought about by the German energy turnaround, i.e. the expansion of German wind power and photovoltaics not coordinated at the European level, the German federal government continues to rely on massive subsidies for renewable electricity plants. Austria also intends to further invest in alternative electricity generation. European electricity generation is supposed to become CO2-free in the first half of the current century. In the unanimous opinion of all energy economy experts, the often-described bottleneck in this development is the expansion of the requisite grid infrastructure. Herculean task – grid expansion The European electricity generation structure has undergone massive changes in the past ten years. Electricity is generated in sharply rising volumes from wind farms in Northern Europe and photovoltaic systems in Southern Europe that are not tied to consumption. If Europe continues to rely on wind and solar energy, the concentration of production sites will also continue. The electricity transit routes are changing appreciably with this trend. The European power grid operators have been trying to react to these changes and expand their grids to meet the new requirements for years. The financial challenge: ENTSO-E, the association of European network operators, puts the value of investments in the European electricity grid needed at around €150bn in the next ten years alone. The APG Network Development Plan provides in the next decade for around €140m annually for the expansion of the domestic electricity grid.
for years. Add to this citizen participation processes that major infrastructure projects will be subjected to in the future. The expansion of the electricity grid can hardly keep up with the pace of expansion in the area of wind power and photovoltaics. The political challenges: The distortions on the European electricity market that were triggered as a result of Germany‘s leading role in the expansion of renewable energy have led to diverging energy policy trends in the EU member states. Some obstacles still have to be overcome along the way to the common EU electricity market. European domestic electricity market – the advances, the setbacks The deregulation of the European electricity industry has brought major advances in the past two decades, but also some setbacks. The EU member states have committed to a long-term restructuring of their electricity supply in favour of renewable sources of energy. Even if the individual counties differ significantly with respect to the speed of developments, the basic goal is clear. The resolutions of the Paris Climate Conference have emphatically underscored the political commitment. Key harmonisation goals were achieved on the way to the common domestic electricity market. The European network operators have made an important contribution to this. Through intensive dialogue and coordination processes, they arrived at a consensus on common standards for grid operation and for common market rules. The CACM code (Capacity Allocation and Congestion Management Code), which governs transport capacity allocations and congestion management measures all over Europe, took effect in August.
The legal challenges: Complex approval regimes and long review processes delay important grid expansion projects
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ANNUAL REPORT 2015
New initiatives to improve international coordination in the area of grid security were taken up. In connection with regional grid security cooperations, IT tools are being developed for exchange and for improved common use of grid data, which should increase grid security across Europe. There were also selected developments and individual events in 2015 that give rise to concern. The European regulatory agency ACER recommended breaking up the common electricity price zone between Germany and Austria in September of the past year. According to the ACER opinion, the explanation for this was that technical problems in Poland and the Czech Republic could be mitigated. APG is of the opinion that such a step would not eliminate these grid operating problems. In addition, such a step would destroy the so far only existing and functioning electricity price zone in Europe – that would be a setback for the European internal electricity market. Europe – on track to generating electricity? A common internal electricity market is and remains one of the central goals of the European Union. The advances that were achieved in recent years are impressive. In particular the standardisation of the body of European rules and standards has brought significant improvements for security of supply in Europe. The market distortions that have arisen as a result of unilateral energy policy decisions created tension and differences of opinion between nations. Based on the differing national generation structures, the EU member states have also overcome various challenges in the transformation of their electricity supply systems.
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In order to keep Europe on the path of electricity, the renationalisation tendencies in the energy economy must continue to be prevented as much as possible. Electricity as the sustainable resource – power grid operators as the motor of sustainable development In light of global warming and climate change, governments around the world are seeking ways to generate sustainable and climate-friendly economic growth. If we assume that economic growth necessarily means rising energy consumption, the transition to renewable and CO2-neutral forms of energy must make a contribution to reducing the emission of pollutants that are harmful to the climate. Electricity as a form of energy – obtained from natural resources such as wind power and photovoltaics – will continue to increase in significance in the future. The largest potential for CO2 savings has been identified in the area of transportation. Therefore, many experts place great hope in the further development of energy mobility. With their infrastructure, power grid operators are creating the prerequisites for the diversification of electricity applications in all areas. In the future, high-performance electricity grids must be in a position to absorb massive and suddenly available volumes of electricity from natural sources of energy and distribute them to consumers. The grid infrastructure must become more intelligent in order to be able to react flexibly to the constantly changing demands on the part of consumers and producers. In conjunction with highly competitive and efficient storage technologies, investments in the electricity grids are sustainable investments in the future.
ASSUME RESPONSIBILITY FOR THE ENVIRONMENT APG is a partner in the endeavour to protect the saker falcon The saker falcon is a bird of the open plains that was thought to have died out in Austria in the 1970s. A species protection project was able to reestablish the large falcon in the plains of eastern Lower Austria and Burgenland. Together with BirdLife Österrreich and accompanied scientifically by the University of Veterinary Medicine, Vienna, nesting aids were installed on APG electricity towers for saker falcons starting in 2010 – meanwhile with remarkable success. In just a few years, the number of breeding pairs has multiplied, which has led to a welcome increase in the size of the saker falcon population. APG also supports BirdLife Österreich in a long-term partnership with respect to other bird protection projects – out of responsibility for the living environment of people and animals.
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The APG grid – the strategic timetable In light of the given political climate protection goals, APG is working on multiple levels to further development of the domestic grid infrastructure. The Company is making a significant contribution to the sustainable restructuring of the energy supply system in favour of renewable energy. Increase in the system performance The Austrian power grid must become more efficient. Therefore, APG is pursuing an ambitious modernisation and expansion programme. In the coming ten years, hundreds of millions of euros are to be invested in improving APG‘s hardware. The Company is pursuing a grid concept that not only provides for new construction and the modernisation of existing plants, but also the streamlining of infrastructure wherever possible.
Grid investments as the foundation for sustainable economic growth Austria‘s electricity supply infrastructure will continue to become more important in the future. A secure and affordable supply of electricity is and remains one of the central location factors for Austria as a place of business. Investments in the domestic power grid trigger direct stimuli for the domestic economy. Up to 80 percent of APG‘s investments flow to domestic companies. In addition, investments in the domestic power grid open up opportunities for sustainable and climate-friendly economic growth. An efficient and flexible power grid forms the basis for the development and use of new technologies not only in the supply of energy, but also in the area of Industry 4.0.
Flexibility of the systems Renewable energy places new demands on system flexibility. As a result of the further development of the system software, the APG grid can now react to strong fluctuations in the production of electricity from wind power and photovoltaic systems, thereby optimally utilising the renewable sources of energy. Improvement in system efficiency APG constantly improves the operational efficiency of its plants. Technological innovations will make it possible to better utilise existing line capacities in the future without impacting the high level of security of supply in Austria.
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APG
Power grid
IT grid 13
SUPPORT VOLUNTARY COMMITMENT APG as a partner of the Salzburg Mountain Rescue Service Since May 2011, APG has been one of the main sponsors of the special area of youth work of the Salzburg Mountain Rescue Service. Over 1,900 mountain rescuers alone in the Federal State of Salzburg perform thousands of hours of service every year in order to rescue people from dangerous situations – on a voluntary basis, without any compensation and in their free time. Without the commitment of these many volunteers, Alpine safety would be inconceivable. In order to safeguard the valuable work of the Salzburg Mountain Rescue Service also for the future, the responsible individuals are working intensively to recruit and train young people – the mountain rescuers of tomorrow. The educational work performed at schools to raise the awareness of young people of the dangers associated with the Alpine region is also extremely important. We support this commitment out of conviction.
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MANAGEMENT REPORT MANAGEMENT REPORT
ABOUT US Austrian Power Grid AG (APG), as a control area manager, operates the Austrian transmission grid, which is part of the trans-European transmission grid of the Regional Group Continental Europe (RGCE) of the European Network of Transmission System Operators for Electricity (ENTSO-E). With a route length of approximately 3,400 kilometres, around 7,000 kilometres of connected lines and 63 substations and switching systems, APG’s grid is the backbone of Austria’s power supply. It ensures the transregional exchange of electricity both inside and outside of Austria between energy providers and consumers, thereby guaranteeing a stable supply to the distribution grids. ANNUAL REPORT AT A GLANCE The first sections of this Annual Report present the main developments that had a substantial impact on APG’s activities in 2015: → Energy market developments → Grid operational developments → Legal developments → Regulatory developments → Economic trends The influential factors range from a declining electricity price trend, a greater need for congestion management to ensure reliable grid operation, the settlement of important legal proceedings and the completion of the 2015 tariff review to the demand for a coordinated capacity allocation between Austria and Germany. Key economic trends are also presented.
The subsequent sections present the main strategies and measures intended to counteract the constantly changing trends and operating environment: → International activities → Asset management → Corporate social responsibility → Research and innovation As a result of the dynamic changes and grid operational developments in connection with the energy turnaround, the demands on the transmission grid are rising; therefore, asset management is a key component of APG in order to ensure the security of supply and of the system both today and in the future. This takes place in particular under the aspect of ensuring adequate profitability for the owners of APG. APG not only meets all these challenges proactively and diligently, it also takes into account a sustainable position, both economically and ecologically as well as socially. APG was also active in the area of research and innovation in 2015. Finally, the financial performance indicators and risk and opportunity management are presented and an outlook for 2016 is provided. For further details, please refer to the notes to the financial statements. The APG Annual Report 2015 can be downloaded online at http://www.apg.at/de/ueber-uns/daten.
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ENERGY MARKET DEVELOPMENTS 1)
Declining electricity price trend The declining price trend on the electricity futures markets also continued in 2015. On the European electricity exchange EEX in Leipzig, the average trading price of the front year base product for 2016 was €30.97/MWh, whereby the prices at the end of the year fell clearly short of the €30 level. The closing price (on 28 December 2015) was €28.08/MWh. The Austrian spot market EXAA showed no conspicuous irregularities this year. In addition to the main driver of the existing excess capacities, on top of the further expansion of renewable energy, the global price decline in the fossil primary energy sector can also be seen as a driver of this price decline. As a result of the further excessive use of new conveyor systems for oil and gas in the USA and the simultaneous insufficient reduction of crude oil production volumes on the part of the OPEC countries, a price decline below the $30 level for a barrel of Brent crude oil was realised. A similar price decline was also observed on the markets for natural gas and coal. On the CO2 market, the upward trend of 2014 continued, as a result of which prices of around €8.5/t CO2 were realised at the end of the year. GRID OPERATIONAL DEVELOPMENTS Greater need for congestion management and strategic grid reserve APG is responsible for the secure operation of the Austrian transmission grid. In 2015, a total of 46,164 GWh was transported from the 220/380 kV grid. In order to fulfil this legal mandate, APG implemented numerous measures in coordinated grid operations. Massive congestion management measures at power plants (redispatch) were often required to overcome bottlenecks in Austria in 2015 in order to ensure grid security at APG and in the European transmission grid. In 2015, these congestion management measures had a total volume of around 2,200 GWh (in comparison, the annual consumption of Graz is around 1,200 GWh) and a total expense of €201.1m. 1) Source: http://www.eex.com/de/marktdaten
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The reason for the congestion in the APG grid was high north-south and west-east electricity flows, related in part to necessary shutdown of power lines. The aforementioned wide-ranging electricity flows arise in conjunction with wind and photovoltaic generation in Germany and/or Northern Europe and were exacerbated during the summer months as a result of the low hydropower generation in Central and Southeastern Europe. Power plants in the APG control area also had to be utilised frequently to manage congestion outside of Austria – primarily in Poland and Germany. The short-term availability of selected power plants for redispatch was also contractually secured (grid reserve) for the summer of 2015 and for 2016–2017. This was – and remains – the only way to cope with bottlenecks on the basis of short-term forecasts, thereby ensuring secure grid operations. Optimising the procurement of balancing energy reserves In 2014, APG procured balancing energy reserves in the amount of €203.2m. As a result of savings through international cooperations, the total cost for 2015 amounted to €145.3m and can be broken down as follows: primary balancing (€12.6m), secondary balancing (€104.8m), outage reserve (€4.6m), tertiary balancing (€17.8m) and unwanted exchange (€5.5m). As a result of the change in pre-qualification requirements implemented in 2014 to increase the integration of the supplier pool and demand side management as well as a result of adaptions with respect to the rules governing calls for bids, three new suppliers were attracted for the secondary balancing reserves market in 2015, whereby the total number increased to nine. For 2016, an additional supplier will begin the pre-qualification process for the secondary balancing reserves market. Due to the introduction of an electronic mechanism for balancing energy requests and the associated decrease in the minimum bid size, seven new suppliers were attracted for the tertiary balancing reserves market for 2015 for a total of 14 suppliers at the end of the year. Central responsibility for system loss procurement As the central purchaser, APG procures the necessary grid loss energy for a majority of the grid operators in Austria.
AUSTRIAN POWER GRID AG
MANAGEMENT REPORT
Thus, the Company acts as a wholesale buyer on the European electricity market and conducts market-based purchasing activities to cover grid losses. APG uses daily spot trades to compensate daily remaining shortfalls on the electricity markets. The participating grid operators are supplied daily with the necessary energy volumes to cover their grid losses. In 2015, APG was responsible for procuring approximately 3.15 TWh (2014: 3.22 TWh) or around 90% of the total volume of grid loss energy in Austria (3.22 TWh). Green electricity clearing APG began with the marketing of volumes from the forecast discrepancies of green electricity on EPEX Spot's intraday market in April 2015. The foreseeable balancing energy volume is determined based on current wind feed-in forecasts (continuous for the “intraday segment”) compared to the previous day’s forecast. These volumes are marketed as best as possible in an additional step on the EPEX Spot intraday market. This results in a reduction in balancing errors for the ecobalance group as well as for the entire control area. As a result of the generally better prices on the exchange, this represents costsavings for the OeMAG balancing group and an increase in control quality for APG. LEGAL DEVELOPMENTS Abolishment of the tariff regulations The System Charges Order (SystemnutzungsentgelteVerordnung, SNE-VO) formerly the System Usage Rates Directive (Systemnutzungstarife-Verordnung, SNT-VO), provides the basis for grid billing. It is issued annually by the regulatory commission of E-Control (ECA) erlassen. The Austrian Constitutional Court (VfGH) cancelled the SNT-VO in its entirety for the years years 2009, 2010 and 2011. APG is affected by the cancellation of all pending court proceedings with respect to system usage rates for pumped storage power plants, grid loss fees and fees for system services. The comprehensive solution sought within the industry was realised in 2015 in coordination with the ECA. The relevant proceedings were settled when the final notice of the
decision on costs was provided and the redemption amounts were approved. Change in the general grid conditions With a notice dated 27 November 2015, the regulatory agency E-Control approved the changes in the General Grid Conditions (Allgemeinen Netzbedingungen, ANB) for the access to APG’s transmission grid in accordance with Section 41 of the Austrian Electricity Industry and Organisation Act 2010 (Elektrizitätswirtschafts- und Organisationsgesetz, ElWOG). It was necessary to adapt and update the ANB (most recent version dated 12 February 2010) as a result of legal changes at the national and collective-bargaining level, in particular as a result of the ElWOG 2010 and the amendment of the ElWOG in 2013 as well as the certification of APG as an independent network operator (ITO). In accordance with Section 18 ElWOG 2010, the revised ANB take effect on 1 April 2016 and are published online at www.apg.at/de/market/electricity market/legal, where they can be downloaded. Complaints against the ACER opinion ACER, the Agency for the Cooperation of Energy Regulators, issued an “opinion” on 23 September 2015 as requested by the Polish Regulator. In this opinion, ACER declared that the allocation rules for the CEE area (Central and Eastern Europe), which provide for a common bidding zone between Austria and Germany, are incompatible with Art. 16 para. 1 of Regulation (EC) 714/2009. As a consequence, ACER “invited” the network operators (Transmission System Operators, TSOs) and national regulatory agencies of the CEE region to provide an implementation calendar for the coordinated allocation of capacity between Austria and Germany within four months. APG filed an appeal against the ACER opinion with the ACER Board of Appeal on 23 November 2015. Among other things, the formal grounds include the violation of procedural rights (APG was denied a right to be heard), the de facto effect of the opinion on parallel processes (in particular the decision regarding the Capacity Calculation Region), including the associated legitimate interest to take legal action and the
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transgression of competences with respect to the issuing of opinions under the ACER Regulation. The appeal was dismissed by the Chairman of the ACER Board of Appeal in a decision handed down on 16 December 2015. The dismissal of the appeal was summarised with the legal nature of the opinion, the European Court of Justice case law regarding preparatory documents of agencies and the lack of legal consequences in the event of noncompliance with the opinion. In particular, it was argued that the disputed opinion is “non-binding”, i.e. no legal consequences are associated with non-compliance. For this reason, the review of the opinion does not fall under the responsibility of the Board of Appeal, which is only tasked with coming to an agreement on the admissibility of appeals against decisions as defined under Art. 19 of Regulation (EC) 713/2009. The relevant EU law (Regulation (EC) 713/2009) specifies that in the event of non-compliance with an ACER opinion, the matter is to be referred to the European Commission, which then initiates treaty violation proceedings against the Republic of Austria if need be. As a private company, APG would not be directly impacted by or involved in such proceedings. Since it is strictly a matter of administrative procedure at the level of a European agency, there is no value in dispute within the meaning of national law, nor is any loss apparent on the part of APG.
REGULATORY DEVELOPMENTS APGֹ’s control system is a mix of the cost-plus and revenue cap models. Based on the most recently available annual financial statements and the investment planning, reasonable costs are established as part of the annual cost finding process. Furthermore, differences between the budgeted and actual revenues are rolled up based on statutory provisions. Tariff review 2015 The tariff basis for APG’s gross and net tariffs increases, among other things, as a result of the international activities and the grid expansion by 0.8% to €154.1m. The overall tariff basis (including level 3, the loss fees and system service) increased by 1.4% to €330.9m. With respect to the relevant grid fees for system services for grid feeders, there is an increase by 2.0%, whereas the grid loss fee is rising by 28.2%. The reason for this is the regulatory account (in particular with proceedings related to SNT/SNE orders). ECONOMIC DEVELOPMENTS Development of earnings in 2015 APG's operating profits amount to €80.2m – this result was characterised in particular by the drivers social capital, the SNT-VO/SNE-VO settlements and capital expenditures and/or the regulatory asset base (RAB). Social capital
Compared to the previous year, the line item “Termination benefits and old age pensions” in the income statement changed from €–20.9m to €2.4m. This difference can be explained primarily by high actuarial losses in 2014 due to the decrease in the discount rate from 3.50% to 2.00%. Furthermore, there were actuarial gains in 2015 in particular due to a remeasurement of provisions for supplementary health insurance (increase in the discount rate from 2.00 % to 2.25% and effects from other adjustments).
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SNT-VO/SNE-VO settlements
As a consequence of legal settlements, the provisions recognised in prior years were largely utilised or reversed. This led to a positive contribution to earnings in 2015. RAB/Capital expenditures
An adequate capital return was recorded as a result of APG's capital expenditures, which represent the basis for the standard capital cost reimbursements. Financial implications of congestion management The grid operational developments described above and the resulting necessary congestion management measures also have financial implications for APG. → Internal congestion management for APG: This represents congestion management expenses for APG's own use. These expenses result in direct costs for APG that are reimbursed under the agreed tariff scheme.
Investment in European Power Exchange (EPEX) EPEX SPOT SE is a European company based in Paris with branch offices in Leipzig, Bern and Vienna, that among other things operates on the electricity spot markets for Germany, France, Austria and Switzerland (day ahead and intraday). EPEX SPOT SE is a project partner of European initiative Market Coupling, also known as Multi-Regional Coupling. H.G.R.T. Ou Holding des Gestionnaires de Réseau de Transport d'Electricité (HGRT) includes the shares of network operators and holds 49% of EPEX SPOT. Since October 2015, APG holds an equity interest of 5% in HGRT and indirectly 2.5 % in EPEX SPOT. APG's equity investment is an important milestone in the further integration of Austria in the electricity trading area of Central and Western Europe. It will strengthen the collaboration between the transmission grid operators and EPEX in this region and is consequently an important step in the further development of the European electricity market.
→ External congestion management for third parties: This represents congestion management measures based on requests by other TSOs. These expenses are correspondingly passed on to the respective TSOs. Based on the collectively agreed refund methodology (in the case of internal congestion management) and existing European contractual structures (in the case of external congestion management), there were negative effects to be recorded on the working capital in 2015.
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INTERNATIONAL ACTIVITIES As a result of the multitude of international projects due to 2) network codes (NC) and directives as well as new EU guidelines, the market trend and system integration are currently playing an important role at APG. Relevant topics include cross-control-area cooperations for the procurement of balancing reserves and for the management of the intraday market, the increase and improvement of transparency, market-coupling initiatives and international, strategically important cooperations and equity investments. ENTSO-E network codes/directives as the starting point for increasing internationalisation NC/directives define and harmonise numerous rules for the power grid, among other things in the areas of grid operations, grid access, congestion management and balancing energy. They are the most important components of the future legal framework for the European electricity market. APG was heavily involved in the development of important NC/directives. In addition to the Chairman for Operational Security and Balancing Codes, APG also appointed the chairman of the ENTSO-E working groups for all operating codes and the future Operation Handbook. The Capacity Allocation and Congestion Management Guideline (CACM) took effect in August 2015. This guideline deals in particular with the integration, coordination and harmonisation of the congestion management regime – on the one hand for the simplification of electricity trading within the uniform electricity market and on the other hand for the optimised utilisation of existing line capacities in the transmission grid. Four other NC/directives, among other things regarding the grid access of generation plants and consumers, also successfully made it through comitology – the European legislative process – and will take effect in 2016. In order for all of APG's resulting responsibilities to be able to be correspondingly identified and prepared, extensive implementation projects were already initiated internally that also include the periodic coordination of cross-cutting issues related to various codes and directives.
Opening of the balancing energy market Due to specifications of the Electricity Balancing Guideline currently being approved, APG is working on inter-control area cooperations for the purpose of opening up the balancing energy market and utilising synergy effects when balancing energy is requested. Primary balancing
In April 2015, the cooperation with Swissgrid in the area of primary balancing in place since 2013 was expanded to the German, Dutch and Danish network operators. An average of 26 MW per week has been reserved from the APG control area for other control areas. The total costs for primary balancing were decreased by around 5% year-on-year thanks to international cooperations. Secondary balancing
The existing international cooperations for the optimisation of the secondary balancing activation and the further development of these netting cooperations are being actively pursued. In 2016, the borders with Switzerland, the Czech Republic and Croatia are to be integrated. In the medium term, netting cooperations are also planned with Italy and Hungary. The secondary balancing cooperation between the control blocks from Austria and Germany on the basis of a TSO-TSO model, with a common allocation and activation function (common merit orders) is currently at the beginning of the implementation phase. Additional savings should be realised on the secondary balancing reserve market as a result of the intended price convergence between the two control reserve markets. The first part of the implementation phase includes the common mutual activation of secondary balancing reserves and should be placed into operation in the third quarter of 2016. Tertiary balancing
In the area of tertiary balancing, cooperations are currently being prepared on two levels. On the one hand, a timely implementable pragmatic solution is being advanced with the German transmission grid operator, whereby both existing market structures and products are to be retained as much as possible. On the other hand, we are working on a long-term, harmonised target model for the balancing
2) Once they take effect, network codes and directives become a component of European Regulation (EC) 714/2009 and thus directly applicable federal law. Network codes may not include any instructions to be finalised after they take effect, whereas directives also provide for such instructions that are only completed within defined periods after the directives take effect and thus become finally legally binding.
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reserve market as part of the international project “EXPLORE”, which also includes the Dutch and Belgian network operators. In addition to tertiary balancing, this should also include secondary balancing. Implementation of the intraday market The intraday market serves to balance the short-term supply and demand of electricity and is therefore constantly increasing in importance under the current market conditions. In 2015, two initiatives to improve the intraday market design were successfully implemented. In July 2015, the lead times for exchange-based intraday trading were reduced. In addition, exchange trading with 15-minute products has been possible since the beginning of October 2015 both within Austria as well as cross-border with Germany. Furthermore, APG is participating in the pilot project for the implementation of the European target model for intraday called “Cross Border Intraday (XBID)”. The goal of this project, in which 15 network operators and 5 electricity exchanges in Northwestern Europe as well as in Switzerland and Austria are currently participating, is to develop a central intraday platform that should ensure the consolidation of liquidity from the coupled markets. The plan is to place this project into operation in the third quarter of 2017. From the perspective of APG, the border between Germany and Austria should already be integrated by then. Afterwards, the goal will be to implement integration at the border between Switzerland and Austria. APG is not only complying with future legal and regulatory requirements through its active participation in the XBID project, it is also paving the way for Austrian market participants to be able to benefit from the liquidity of the largest and most important intraday markets in Europe from the beginning. Establishment of a European central allocation office Regional initiatives (regional markets) were established in 2006 as an interim step with the goal of completing the EU internal market. Multiple neighbouring countries and their regulatory agencies are working together on this with the EU
Commission, with enterprises and other interest groups in order to eliminate any possible hurdles in the electricity sector. Based on EU Regulation 714/2009, Austria is a member of the two regions, Central Eastern Europe (CEE) and Central Southern Europe (CSE), and was also added as an official member of the Central Western Europe (CWE) market region in 2011 by the responsible ministers. APG is involved as an observer in Southeastern Europe (SEE). In 2015, another important milestone in the direction of a harmonised European internal energy market was achieved with the merger of the capacity allocation offices CAO and CASC.EU with the Joint Allocation Office (JAO). The JAO has auctioned the cross-border capacities of 20 transmission grid operators since 1 September 2015 and fulfils important tasks with respect to European market coupling for them. As a result of the merger of the capacity offices, in particular synergy effects are to be utilised and auctioned in order to be able to effect a sustainable and long-term simplification and increase in efficiency. Activities for regional collaboration on the part of the TSOs The year 2015 was particularly eventful with respect to the regional collaboration of TSOs and some of the milestones reached are determining the path for the further development of APG. TSO Security Cooperation (TSC)
TSC has been one of the two most important European “Regional Security Coordination Initiatives” (RSCIs) since 2008. TSC aims to permanently ensure security in the high voltage grids in Central Europe by means of cooperation on the part of 13 European transmission grid operators. In 2015, APG's Chief Technology Officer was elected Chairman of the TSC Shareholders and Cooperation Board for the period from 2016 to 2017. Therefore, APG bears direct responsibility for the good coordination of the TSO collaboration and in the future can be more actively involved in the further development of European system operation and the electricity market.
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RCSI project of ENTSO-E
The framework for the future operational TSO coordination is determined by the operational network codes, and the specific implementation of these new instructions has been directed by ENTSO-E since mid-2015 in the pan-European project “TSO Coordination Strategy Implementation with RSCIs”.
as the generation of new data whose provision is legally required. No major difficulties were experienced from the perspective of APG while placing the platform into operation; however, work continues on the improvement of the established reporting process as well as on the further increase in data quality. Publication requirement: REMIT
In 2015, APG was entrusted with the management of this project and can therefore also make a coordinating and supporting contribution towards regional development of European TSOs at an operational level. An important milestone has already been reached in that the European TSOs signed a mutual “Multilateral Agreement” (MLA) on 10 December 2015. With this MLA, the TSOs undertook the coordinated implementation of the following joint key services in the operational grid planning: → Joint grid model → Grid security analysis → Capacity calculation → Availability planning → Load coverage forecast Increase and improvement in transparency As a result of the international instructions and to further improve the provision of information to all market participants, APG is working intensively on the implementation of increased requirements for transparency. Publication requirement: EMFIP
The new pan-European transparency platform “Electricity Market Fundamental Information Platform” (EMFIP) was put into operation by ENTSO-E on 5 January 2015 as a consequence of Commission Regulation (EU) No. 543/2013 regarding the submission and publication of data in electricity markets. The fundamental data to be reported includes the following areas: load, transmission and interconnecting lines, generation and balancing reserves. Work was carried out within APG to satisfy the various requirements from both an IT as well as an organisational perspective as part of the “EMFIP/REMIT publication obligation” project. This included both the forwarding of previously existing data to the transparency platform as well
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Regulation (EU) 1227/2011 “Regulation on Wholesale Energy Market Integrity and Transparency” (REMIT) obligates all market participants to publish insider information in addition to the prohibition of insider trading and market manipulation. With the commencement of the monitoring of the European energy markets on 7 October 2015, all organised marketplaces within the EU are obligated to report their transaction data to the Agency for the Cooperation of Energy Regulators (ACER). APG was not classified as an organised market, whereby the transaction data of the system loss procurement is not to be submitted to ACER until phase 2 starting 7 April 2016, in addition to other fundamental data. Work is currently being conducted on the final registration and the organisational measures in order to be able to finally transmit the data to ACER. In Austria, in contrast to most other European countries, a delayed requirement to report to E-Control has been anchored in law since 1 May 2015 with the Energy Wholesale Data Ordinance (Energiegroßhandelsdatenverordnung, EGHD-VO). The implementation of these reporting requirements was completed on time, despite the tight schedule. The process for publishing insider information was completely redesigned at APG as the result of an internal project. In addition, a REMIT guideline was specifically put into effect and the employees were trained in sensitive areas.
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ASSET MANAGEMENT The demands on transmission grid and system services are rising as a result of the dynamic changes in connection with the energy turnaround and in the deregulated electricity market. The enormous expansion of renewable sources of energy and the utilisation of power plants based on market prices are leading increasingly to high grid loads and costintensive bottlenecks. Shorter and shorter lead times and faster market processes are being demanded from the market players on the electricity exchanges in order to be able to market short-term fluctuations in generation (e.g. sharply rising intraday electricity trading). Grid expansions are urgently needed in the transmission grid in order to ensure system security and the security of supply in the future. Energy turnaround and energy storage The expansion of renewable energy and market activities in recent years have led to increasingly higher loads in the APG grid. The volatility associated with the generation of renewables can be balanced out, and excess electricity can be stored and utilised to meet high demand using pumped storage power plants. In addition, APG is responsible for precisely maintaining the grid frequency of 50 Hz through its balancing energy activities and by requesting balancing energy. Accomplishing this requires a high-performance 380 kV Grid in Austria. Wind power plants with a capacity of 40 GW and photovoltaic plants (PV plants) with 40 GW feed-in capacity are meanwhile connected to the grid in Germany. This corresponds to around 45% of the entire installed capacity. Wind power and photovoltaic plants with a total capacity of around 2.4 GW were also expanded in Austria in the years 2011 to 2015. This corresponds to around 10% of the entire installed capacity. The expansion of renewable energy and market activities in recent years have led to increasingly higher loads in the APG grid. Sustainable, optimised grid concept APG prepares and publishes a Network Development Plan (current version: NDP 2015) that includes annual input from market participants and distribution network operators and
which is based on the long-term strategic APG Master Plan 2030. This plan presents in detail the required grid expansions for the next 10 years and their necessity. The Network Development Plan must be prepared in accordance with Section 37 ElWOG 2010 and based on detailed grid analyses as well as grid access projects requested at APG. The NDP 2015 covers 41 projects in the planning period from 2016 to 2025 and was approved by the Austrian regulatory authority E-Control Austria in an official notice. The expansion provided for in the NDP 2015 can be broken down as follows: → 370 kilometres of new transmission lines and around 440 kilometres of upgrades to existing power lines as well as → Construction and expansion of substations with around 160 new switching fields and around 40 new transformers The core of the APG target grid is the creation of the 380 kV ring in Austria as well as high-performance connections with western Austria and the neighbouring states. The 380 kV ring will connect all major load centres (the large cities and metropolitan areas) with the major generation units (renewables and conventional power plants). In order to create a high-performance grid infrastructure with minimal impact on nature and the environment, APG is orienting itself on the “NOVA Principle” (grid optimisation and reinforcement before expansion). According to this principle, the opportunities of grid optimisation and reinforcement must first be utilised, e.g. upgrades of existing power lines, new routes for power lines. Overall investment volumes According to the NDP 2015, the total investment volume for master plan projects planned by APG, including substations and plant investments, amounts to around €2.4bn for the next ten years. Since studies conducted at the Graz University of Technology and the Austrian Institute for Industrial Research (IWI) show that APG’s projects will add up to 70% in value for the Austrian economy, the implementation of APG’s projects will not only function as a significant economic stimulus, but also permanently safeguard Austria as a business location. According to these studies, around 13,000 jobs will be created in Austria for every billion euros invested in the APG grid. You can find an excerpt of the current APG projects below.
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Salzburg line project (St. Peter – Tauern)
A significant step towards ensuring the long-term system security and security of supply is the closing of gaps in the 380 kV ring between St. Peter and Tauern network nodes. The newly constructed section of the Salzburg line between the Salzburg substation and the Tauern network node is 113 kilometres long. With the new Wagenham/Upper Austria and Pongau/Salzburg substations, a significant improvement is being made to the local security of supply by means of additional grid support for the 110 kV distribution networks. The state of Salzburg completed the environmental impact assessment proceedings for the Salzburg line after a total of 38 months – compared to the 9 month period specified under the law – with a notice dated 14 December 2015 and issued a positive notice. For APG, this is a significant milestone in this important project. The project is currently being assessed at the courts of second instance and construction is not expected to begin until the end of 2017 at the earliest due to the complexity of this major line construction project, numerous limitations on the construction period and the stages of appeal throughout the approval process. German line project
The new 380 kV line as a replacement for the two existing 220 kV power lines should facilitate flexible market-oriented interaction on the part of generators (e.g. the wind power plants in Northern Europe) with the Austrian pumped storage power plants and customers. Further increases in the capacities exchanged between Austria and Germany are possible in the common market area with the 380 kV German line. This will also increase system security and security of supply. The EIA approval process commenced in February 2015, and regulatory body in the state of Upper Austria issued a positive EIA notice for the German line on 2 December 2015. Weinviertel line reconstruction for grid integration wind power
Plans are available to further expand wind farms by around 1.5 GW for Lower Austria, Burgenland and the metropolitan area of Vienna. Since the local feed-in capacities of the wind farms exceed local consumption in some cases many times
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over, the wind power capacity must be fed into APG’s 380 kV grid and transported to the consumer centres and/or the pumped storage power plants. In order to facilitate the integration of wind power with the grid, extensive expansion must be carried out at substations and the line capacity must be increased in the Weinviertel. An expansion of wind power from currently 600 MW (end of 2015) to 1,200 MW can be expected in the Weinviertel in the coming years. Due to the grid situation as well as for reasons related to age and condition, it is necessary to increase the transmission capacity with the 380 kV reconstruction of the Weinviertel line and the construction of a new 110 kV grid support in the northern Weinviertel (Zaya substation). The grid expansion in the Weinviertel is planned in two stages and will lead to a sustainable and optimised grid concept. The submission documents for the environmental impact assessment to begin in the summer of 2016 are currently being prepared. 380 kV ring and grid expansion in western Austria
The core of the APG master plan is the closing of the 380 kV ring in southern Austria (in the Lienz–Obersielach section). In addition, the so-called “Inntal axis” in western Austria between the two substations West Tirol and Zell/Ziller is to be efficiently connected to the 380 kV ring in the future. A 380 kV upgrade to the existing route is intended for the two 220 kV lines Lienz–Obersielach and West Tirol–Zell/Ziller. The “innovation section” was placed into operation for this in a section of the 380 kV Kronstorf–Dürnrohr line near Ruprechtsdorf in November 2015. In addition to thicker and specially-coated lines to reduce sound emission, insulated crossarms were also successfully utilised. APG will gather operating experience with the innovation section in the coming months. With these line construction technologies, an upgrade was carried out on the 220 kV Lienz-Obersielach and Westtirol-Zell/Ziller lines to the existing route for 380 kV operation following regulatory approval. This corresponds to the NOVA principle with an optimised utilisation of existing routes. Reconstruction of the 220 kV St. Peter-Ernsthofen line
The existing 220 kV St. Peter-Hausruck-Ernsthofen line (as part of the so-called 220 kV Danube line) was put into
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operation back in 1941. A general overhaul is needed due to its age and condition. Due to the feed-in from the Danube power plant Aschach and the 220 kV grid support for Netz OÖ as well as a part of the Austrian east-west transmission grid, the 220 kV line is very important for grid operations. The foreseeable energy market developments are leading to increasing utilisation of the capacity of the 220 kV Danube line. Therefore, an overall reconstruction with modern highperformance lines on the existing route was incorporated into the NDP 2014. The project planning provides for the reconstruction from 2016 to 2019 after the approval process under special administrative laws is completed.
Other projects and operating investments Furthermore, APG plans extensive capital expenditures in existing and new substations as well as operating investments in accordance with the NDP. Numerous substation projects serve to reinforce the connection of 110 kV distribution networks and to optimise the grid segment concepts as well as to integrate renewable sources of energy with the grid. Thus, the majority of the highly competitive renewables (in particular wind farms) feed into APG's 380 kV grid level. Considerations regarding necessary improvements for existing plants (e.g. with respect to short-circuit resistance) lead in particular with respect to older plants to extensive upgrades, general overhauls, or increasingly to reconstruction in the sense of a technical economic optimisation. In addition to investments to enhance or improve performance in connection with grid expansion projects, operating investments and grid improvements in existing plants will require rising investment volumes in the coming years.
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CORPORATE SOCIAL RESPONSIBILITY
Co-determination
APG is responsible for the safe supply of electricity to all of Austria, both today and in future. In its mission statement, APG expresses its commitment to the principles of sustainable trade. The classic three pillars of sustainability (economy, ecology and social aspects) form the framework for all of APG’s initiatives. The foundation is a corporate policy that respects economic requirements as well as ecological limits and strives for social equilibrium.
The faithful and constructive collaboration in the past with all governing bodies of the workforce was also continued in financial year 2015. In order to reach the greatest possible acceptance of entrepreneurial decisions, these governing bodies are integrated more extensively than required under laws governing co-determination. The employees also regularly receive information regarding the development of the Company. Apprentice programme
Analogous to 2014, an integrated Annual Report is being prepared for calendar year 2015 that includes the topic of sustainability. Owing to its integration into the annual report, the topic of sustainability is more widely distributed than before and underscores the importance that APG attaches to this topic. As a wholly owned subsidiary of VERBUND, APG also makes a contribution to the VERBUND sustainability report. This meets the requirements of the Global Reporting Initiative (GRI 4).
APG continues to rely on the apprentice programme started years ago in order to be able to continue the healthy business development. This measure focuses on the goal of being able to satisfy the specific demands for skilled workers, who must possess both extensive electro-technical as well as metal-fitting skills. In order to satisfy the need for new apprentices all over Austria, APG's training opportunities were presented in collaboration with schools in the regional environment as well as by participating in regional job fairs. Evaluation of stress in the workplace
Focus on Human Resources APG's business success is largely based on the commitment, qualification and creativity of its employees. They form the basis for the Company's positive further development. For this reason, APG places special value on the preservation and further development of individual employees' qualifications in order to cope with the increasing demands on the Company. Work-life balance
An increase in family-friendliness entails far-reaching benefits that cannot be ignored in the competition for the best talent. As a responsible employer, it is important for APG to take into consideration the various stages in life and the resulting differing needs of the employees. In financial year 2015, APG successfully applied for the issue of a basic "Career and Family Audit" certificate after completing a structured internal project. The active participation of the employees in shaping a goal agreement, for whose implementation APG committed to a period of three years, formed the basis of this success.
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In the previous year, the evaluation of physical strain in the workplace stipulated under the Austrian Employee Protection Act (ArbeitnehmerInnenschutzgesetz, ASchG) was carried out at APG. This survey scrutinises, identifies and assesses job-related psychological stress and its development based on various factors of influence of the work situation. Of 502 possible individuals, 302 participated in the survey. This corresponds to a feedback rate of 59% and represents a very good value for such surveys, enabling a reliable interpretation of the overall results. The overall assessment of the evaluation shows a tendency towards the centre: The results in the five areas tested (environmental conditions, responsibilities and processes, job requirements, social environment, perspectives and participation) lie in the centre compared to Austria as a whole (i.e. they are to be regarded as neither particularly critical, nor particularly uncritical).
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At subsequent workshops, the employees had the opportunity to define measures for what they considered to be the greatest stress factors. Periodic evaluation and further development of the derived measures is planned. Focus on occupational safety
Safety is of primary importance in all of APG’s activities and at all of its construction sites. Accordingly, safety and health plans are drawn up for all projects, instructions from external entities carried out to the letter in all areas and the working premises are regularly inspected by the construction site coordinator. Documentation of these tasks is reproduced in APG’s document management system. The high level of safety and health of our employees as well as the entities engaged is ensured by way of intensive training sessions, seminars and an active exchange of experience. The close collaboration with the labour inspectorates and the social insurance for occupational risks (AUVA) is also an important part of these measures. In 2015, the number of reportable accidents increased slightly year-on-year. With a total of eight reportable workplace and commuting accidents, APG recorded one reportable accident more in the reporting period than in 2014. The number of sick days due to workplace accidents rose sharply compared to the previous year; the severity of the accidents also increased. Four of the eight reportable accidents – two of which were commuting accidents – were to be regarded as minor, three as moderate, and one as severe. In order to improve the accident trend of 2015, the job instructions will once again place a special emphasis on the risk of falling as part of the 2016 safety priority programme. When instructing agency staff and external personnel, greater emphasis is to be placed on the potential dangers. In order to further reduce the severity of accidents, APG’s health and fitness programme should also play a supporting role. In an overall comparison with other grid operators in Austria, the number of accidents at APG in 2015 can be described as average. The average severity of accidents in the accident statistics of Austria’s energy sector serves as a reference.
One of the key areas of focus for safety technology in 2015 was the adaptation of operating guidelines to the new European standard “Operation of Electrical Installations” (EN 50110-2014). The changes in this standard also relate to the responsibility structure and have an impact on the work processes. The standard is to be implemented by February 2016. With the adaptation of the guidelines, all requisite preparations were made internally at APG. Integrated Management System (IMS) All of APG’s sites and lines are certified under ISO 14001 (international environmental management system), ISO 9001 (international quality management system), OHSAS 18001 (safety and health management system) and ISO 27001 (information security management). The annual external appraisal of the integrated management system contributes to the continuous process of improvement in all areas and provides valuable tips for optimising the processes. Certified management systems also increase the legal security in the Company. The synergies in the IMS were optimally utilised in 2015 as well through the shared audit of all of the norms and standards used at APG. A team of auditors from Lloyd’s Register Quality Assurance (LRQA) and Certification & Information Security Services GmbH jointly audited APG’s management system for compliance with standard requirements. As part of the recertification audit in 2015, it was determined that APG maintains a well-established and stable integrated management system. Tasks and responsibilities are regulated, and processes and procedures are well documented. Continuous improvement was demonstrated, among other things, through the implementation of measures from previous audits, the grid analysis team’s activities and the IMS programme. Therefore, the recertification was once again granted for the environment, quality, security and health management. The certificate for information security management was renewed as scheduled.
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Sustainable line management As a sustainably operating entity, APG seeks to also measure up to the importance of environmental protection in all areas of line maintenance. Building on its corporate concept, APG has developed a comprehensive approach for sustainable line management.
axes and reviewing possibilities for the joint use of these spaces, structures and line routes in order to minimise the impact on the general public and the environment.
The philosophy
→ sections in the area of already developed landscapes, → sections with the bundling of facilities accomplished by entraining existing lines on the newly constructed 380 kV line to a new route while simultaneously dismantling the lines on the existing route, as well as → sections with the bundling of infrastructure accomplished by using existing routes for the planned newly constructed 380 kV line and entraining or cabling of existing lines.
The philosophy of sustainable line management is based on the following guiding principles: → Ensuring occupational safety is the top priority → Maintenance in consideration of nature (precautionary principle) → Maintenance measures based on the natural potential of the site and its surroundings → Intensive communication with land owners and authorities → Fostering the regional creation of value Sustainable line management using the example of the Salzburg line
We can point to the 380 kV Salzburg line project as a concrete example: While APG submitted 128 kilometres of power lines with 449 pylon sites for the environmental impact assessment, 193 kilometres of power lines and 678 pylons will be simultaneously dismantled when the project is implemented. Thus, this power line project saves the population of Salzburg a total of 65 kilometres of line and 229 pylons. No developable land and no potentially developable land is affected by the construction of the 380 kV line for a distance of 70 meters to the left and right of the newly designed line axis. Therefore, no space is lost for residential construction. In contrast, this can be seen alongside the release of 38.2 hectares of developable land for residential use and 20 hectares for potential residential use as a result of the disassembly of the 220 kV line at a distance of 70 meters. In addition to avoiding areas protected under environmental laws and avoiding residential areas as well as the shortest possible connections between constraint points when selecting route areas and alternative routes, APG’s planning principles also include identifying existing infrastructure
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For example, the Salzburg line route submitted for EIA includes:
Protection of domestic wildlife As part of the protection of domestic wildlife, the following projects are to be noted in particular: Protection of domestic endangered species: saker falcon
A cooperative project to protect the saker falcon began in 2010 with the partner BirdLife and the Research Institute of Wildlife Ecology (FIWI). Based on past experience, the overriding credo was to offer the saker falcon (estimated breeding population in Austria: 30–35 pairs) safe breeding grounds within the APG infrastructure for the long term. For this reason, nesting platforms and boxes were developed together out of aluminium. The nesting aids are directly accepted by common kestrel and the Eurasian hobby, but in particular by the saker falcon. The build-up of a saker falcon population along APG’s routes will take time. After the first five years, it can already be concluded that the nesting aids have made an important contribution to securing the population of saker falcons, and the successes of the past few years allow us to look confidently to the future. Protection of domestic endangered species: ground squirrel
The European ground squirrel is a large, ground-dwelling rodent approximately 20 centimetres long that today can only be found in a few parts of Europe. According to the European Habitats Directive, it is listed as an endangered
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species. The ground squirrel has found a new habitat in the Bisamberg substation. Thus, construction work must be carried out in the substation in order to ensure the security of supply and a species-appropriate solution found together with the Austrian League for Nature Conservation and the University of Vienna. The ground squirrels were carefully relocated to an alternate enclosure of approximately 0.12 hectares in size. The animals will be kept and fed in an enclosure during the renovation and released once the construction work is completed. For the animals' safety, the enclosure was surrounded by a protective structure, thereby preventing the intrusion of martins and birds of prey.
Promotion of domestic flora: tree of heaven
As an invasive, rapidly growing tree species with significant potential for expansion and the displacement of native plants, the tree of heaven has become an ever-greater problem in the past century. In the area of line maintenance, these negative characteristics can make it very difficult for APG to keep branches clear of its power lines. However, mechanical control measures (e.g. girdling) have so far shown little success and the use of herbicide is not a viable and desirable control strategy in many areas (water protection zones, national parks, etc.). In order to solve this problem, various infrastructure agencies and forestry stakeholders (the State of Styria, Österreichische Bundesforste (“Austrian Federal Forests”), Austrian Federal Railways (ÖBB), Via Donau, Wiener Linien (“Vienna Lines”), Forstbetrieb Esterházy (Esterhazy forestry operation)) are working together with APG in support of a project for the biological control of the tree of heaven.
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RESEARCH AND INNOVATION In 2015, work was carried out on 24 research projects; 11 projects were successfully completed. A special area of research focus is the development of energy market scenarios. For example, APG participated in projects such as “e-Highway 2050” and “Merit Order der Energiespeicherung 2030”, which gained further insight on the use of new technological applications and their effectiveness in an international context on the grid infrastructure and the market. In the environmental area, the long-term LIFE NATURE project “Cross-border Protection of the Great Bustard in Austria” was successfully completed. Another area of focus lies in grid monitoring and system management. Among other things, APG participated in the EU UMBRELLA project. The goal of this project is the development of a toolbox for the early identification of critical grid conditions and their control by means of various countermeasures. Probabilistic approaches are chosen in order to take into account forecasting imprecision, e.g. of wind generation.
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In another EU project, “eBADGE”, processes and lT tools are developed that enable the integration of Virtual Power Plants (both at the transmission grid level as well as the distribution grid level) in the balancing energy market. Competition can be increased through additional participants in the balancing energy market and the establishment of a cross-border balancing energy market. This would significantly lower the costs for the procurement of balancing energy. The KIRAS Blackout Prevention and Intervention project (BlackÖ.2) was also completed after developing specific solutions for blackout prevention and intervention. Expenditures for research and development in 2015 amounted to around €0.6m. APG will also actively participate in research projects in the future in order to be able to ensure a permanently ensure the efficiency of the transmission grid.
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FINANCIAL PERFORMANCE INDICATORS
Personnel expenses decreased year-on-year by €21.4m to €49.2m. This decrease can be primarily attributed to changes related to social capital.
Results of operations €K
2014
2015
541,445.3
730,775.4
Earnings before interest and taxes (EBIT)
56,449.6
83,324.0
Result from ordinary activities
28,468.0
55,409.5
Net income
20,320.4
41,626.7
301.0
21,692.3
1,053,282.1
1,061,268.0
Return on equity (ROE)
8.1 %
15.4 %
Return on investment (ROI)
3.9 %
5.3 %
Return on capital employed (ROCE)
4.0 %
5.9 %
10.4 %
11.4 %
Revenue
Net retained profits Average capital employed
Return on sales (ROS)
Earnings before interest and taxes (EBIT) stood at €83.3m, rising year-on-year by €26.9m. The result from ordinary activities increased by €26.9m and amounts to €55.4m, primarily as a result of the aforementioned changes in social capital. Net income for the financial year amounted to €41.6m and was thus €21.3m higher than in the previous year. Net retained profits amounted to €21.7m, which was appropriated for the distribution of dividends in 2016.
APG’s revenue increased year-on-year by €189.3m to €730.8m. This increase can be mainly attributed to higher revenue from the recharging of congestion management expenses. Expenses for the purchase of electricity increased year-onyear by €185.5m to €489.5m. This increase can be explained essentially with increased expenses for congestion management.
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Net assets €K
2014
2015
1,248,387.3
1,285,795.7
Current assets
293,169.7
280,955.0
Net working capital
176,468.2
99,525.0
Net debt
827,149.5
795,097.0
Equity
324,614.1
368,015.2
Current liabilities
321,390.5
347,286.0
Current assets
144,922.3
247,761.0
23.1 %
25.4 %
Fixed assets
Equity as percentage of assets
Fixed assets show a net increase of €37.4m to €1,285.8m since investments in tangible and intangible assets and other long-term equity investments in the amount of €117.1m clearly exceeded depreciation and amortisation and construction grants.
Current liabilities rose by €25.9m to €347.3m. The key effects were the changes in asset items and provisions set aside for legal settlements in connection with the SNT-VO/SNE-VO and with respect to auctions. In addition, there was an increase in current Group liabilities essentially due to the negative impact of congestion management on working capital.
Financial position €K
2014
2015
Net cash flow from operating activities
42,272.9
69,259.3
Net cash flow from investing activities
- 135,386.1
- 124,442.9
Net cash flow from financing activities Financial result Net gearing
Asset items related to the SNT-VO decreased by €50.0m to €26.0m, while asset items intended to cover the underfunding with respect to grid losses and secondary balancing decreased by €28.1m to €89.2m. Receivables from affiliates decreased by €4.9m, while receivables from other long-term investees and investors decreased by €6.6m. Deposits at banks fell by €4.5m. Outstanding trade receivables rose by €82.0m to €139.7m. This can be attributed to increased revenue from congestion management. Liabilities to affiliated companies increased by €51.1m from €644.0m to €695.2m; in total, liabilities increased by €61.7m from €781.8m to €843.5m.
33
Fictitious debt repayment period
97,317.9
50,724.2
- 24,354.8
- 24,753.3
229.1 %
197.3 %
10.5 years
6.7 years
The reduction in net gearing from 229.1% to 197.3 % can be primarily attributed to a decrease in provisions (SNTVO/SNE-VO). Cash flows for the financial year are presented in a separate list. The fictitious debt repayment period amounted to 6.7 years in 2015.
AUSTRIAN POWER GRID AG
MANAGEMENT REPORT
CASH FLOW STATEMENT €K
NOTE
2014
2015
20,320.4
41,626.7
Amortisation of intangible assets and depreciation of fixed assets
75,045.1
76,828.8
Result from disposal of fixed assets
- 1,798.3
- 145.6
Change in long-term provisions and deferred tax liabilities
16,076.8
- 5,508.7
Net income
Change in long-term liabilities
- 15,437.0
- 16,487.9
Change in long-term other receivables and assets and deferred tax assets
- 4,243.3
116,399.3
Income from the reversal of building-cost contributions and investment grants
- 5,325.4
- 5,947.4
Other non-cash expenses
- 1,495.7
- 754.1
Change in inventories Change in trade receivables and other receivables1) Change in trade payables and other liabilities2) Change in current provisions and current tax liabilities NET CASH FLOW FROM OPERATING ACTIVITIES
(1)
Investments in intangible and tangible fixed assets Disposals of intangible and tangible fixed assets Investments in long-term financial assets Disposals of long-term financial assets NET CASH FLOW FROM INVESTING ACTIVITIES
(2)
Building-cost contributions and grants received
39.3
170.0
- 27,867.6
- 106,060.9
16,704.3
31,289.5
- 29,745.8
- 62,150.5
42,272.9
69,259.3
- 138,034.2
- 122,455.0
2,496.6
2,151.4
- 2.5
- 4,954.4
154.0
815.2
- 135,386.1
- 124,442.9
28,048.0
7,429.3
Proceeds/disbursements from increases/decreases in Group financing
129,097.2
- 20,902.8
Proceeds/disbursements from increases/decreases in Group clearing balances
- 49,452.8
64,498.8
Dividends paid
- 10,374.5
- 301.0
97,317.9
50,724.2
Change in cash and cash equivalents
4,204.7
- 4,459.4
Cash and cash equivalents as at 1/1
11,393.3
15,598.0
CASH AND CASH EQUIVALENTS AS AT 31/12
15,598.0
11,138.6
NET CASH FLOW FROM FINANCING ACTIVITIES
1)
including prepaid expenses
2)
including deferred income
(3)
34
ANNUAL REPORT 2015
MANAGEMENT REPORT
[1] Regarding net cash flow from operating activities Net cash flow from operating activities is calculated using an indirect method and increased year-on-year by €27.0m to €69.3m. Long-term provisions for personnel expenses decreased by €5.5m in 2015 due to the higher interest rate for social capital. Long-term other liabilities decreased by €18.6m primarily as a result of the reclassification of the tariff provisions for auctions. As a result of the decrease in interest for longterm liabilities by 0.75% to 2.5% the long-term presentation for the liability for investment reserves rose by €3.2m. In long-term other receivables, the regulatory asset in accordance with Section 50(5) ElWOG with respect to the provision of the disputed system services from the years 2009–2011 (SNT-VO) and 2012 (SNE-VO) was decreased by €49.4m from a total of €75.4m due to the legal settlements. The long-term portion of the regulatory asset decreased by €58.0m from €75.4m as a result of the approval on the part of E-Control and specification of the reimbursement in the 2015 notice. For 2015, long-term regulatory assets were recognised in the amount of €15.8m. The change in trade receivables and other receivables in the amount of €106.1m can be attributed to the increase in trade receivables by €82.0m to €139.7m and results from outstanding receivables from congestion management. Receivables from affiliated companies decreased by €6.3m, while receivables from other long-term investees and investors decreased by €6.6m.
35
The current regulatory assets from 2013 in the amount of €44.3m were utilised in their entirety. The tariff provisions from 2014 in the amount of €73.0m are current as confirmed in the 2015 notice. Furthermore, €8.6m of the other receivable from the SNT-VO and SNE-VO is also current. Current liabilities increased by €31.3m, €24.1m of which related to the change in current regulatory liabilities. Trade payables decreased by €4.6m. Liabilities from affiliated companies increased by €11.4m. Current provisions decreased by €62.2m in 2015. The provision for the cancellation of the disputed system services from the years 2009–2011 (SNT-VO) and 2012 (SNE-VO) was reduced by €79.6m to €0.8m based on the instructions on the part of E-Control in accordance with the legally valid cost notice. €61.6m was allocated for tariff provisions for 2015. The carrying amount of €45.9m as at 31 December 2014 was reclassified to current other liabilities based on the notice from E-Control Austria in financial year 2015.
AUSTRIAN POWER GRID AG
MANAGEMENT REPORT
[2] Regarding net cash flow from investing activities The outflow of funds from investing activities for intangible assets and tangible fixed assets amounted to €122.5m. The primary capital expenditures related to the Kaprun grid zone, the fourth 380/110 kV transformer in both Bisamberg and Kainachtal, the grid support Zeltweg substation and the optimisation programme for the transformers (among others, in Southwest Vienna, Lienz, St. Peter) as well as the renewal of the control systems in the Zeltweg substation.
[3] Regarding net cash flow from financing activities €7.4m in building-cost contributions and investment grants were received and related in particular to the Bisamberg, Schwarzenbach and Zeltweg substations.
The investments in long-term financial assets related to the investment in H.G.R.T. Ou Holding des Gestionnaires de Réseau de Transport d'Electricité.
Net retained profits in 2014 amounted to €0.3m and were distributed in full to the owners in 2015. In financial year 2015, net retained profits amounted to €21.7m, which was appropriated for distribution in 2016.
In 2015, €20.9m in long-term borrowings was repaid. The current funding requirements, primarily due to the increase in congestion management measures, were satisfied by means of current Group financing.
Taking into account the disposal of intangible assets and tangible fixed assets, investing activities required €124.4m in cash funds.
36
ANNUAL REPORT 2015
MANAGEMENT REPORT
RISK AND OPPORTUNITY MANAGEMENT The European transmission grid operators have made every effort in the past two years to bring the national markets closer together. Contrary to these efforts, the European Agency for the Cooperation of Energy Regulators (ACER) published an opinion on the issue of the common market area between Austria and Germany on 23 September 2015 in which it recommended breaking up the common market area. APG sees this recommendation as a strategic risk, because only a Europe-wide functioning electricity market represents the basis of security of supply. Therefore, APG advocates waiting for the results of comprehensive analyses and working out appropriate measures for the relief of the European grid situation as a whole based on these analyses. Risks and opportunities are part of any business venture. The early identification and professional evaluation of these risks and opportunities are therefore integral components of planning, management and all decision-making processes. Risk is understood to be a potential negative deviation from planned corporate goals. In the evaluation and management of risk, we also take the associated opportunities into consideration. APG’s risk and opportunity management is guided by the Committee of Sponsoring Organizations of the Treadway Commission – Enterprise Risk Management (COSO-ERM) framework. The COSO-ERM framework consists of the components internal environment, objective setting, risk management process, monitoring activities (internal control system), information, communication and monitoring. APG’s risk management process comprises the following individual steps: identification, analysis, measurement, management (implementation of measures), and reporting. Updating and/or remeasurement and reporting to the Executive Board are carried out on a quarterly basis. The internal control system (ICS) of relevant business processes is examined with respect to risk by the Internal Auditing department. The Internal Auditing department
37
informs the Executive Board on an ongoing basis and the Supervisory Board (Audit Committee) annually of the status of the ICS in order to facilitate an assessment of its effectiveness and efficiency. APG focuses particularly on major risks such as outages in the transmission grid and the communication and control systems, delays in the 380 kV grid expansion, and environmental catastrophes that result in destruction of parts of the system. Financial and operational risks, compliance and legal risks, regulatory risks and risks in the area of energy procurement and the market are subject to monitoring and measurement. The following actions were taken to minimise these risks: System and operational risks → Pressing ahead with 380 kV grid expansion → Practising the disaster recovery plan, ongoing training of employees for outage and crisis situations, and measures to protect properties → TSC-TSO Security Cooperation Project risks → Creation of a network development plan for a period of ten years → Implementation of project controlling → Operation of anti-claim management
AUSTRIAN POWER GRID AG
MANAGEMENT REPORT
Financial risks → Securing the financial resources for the implementation of investment projects → Liquidity and cash management planning → Price risk: the rates are set in the respectively applicable SNE-VO based on the annual cost review by the regulator → Currency risk: no exposure due to uniform currency → Default risk: default risk should be limited as much as possible by means of credit checks and a standardised dunning process. Allowances are recognised for defaulted payments. Risks from hedging transactions → Electricity forwards of up to two years into the future are purchased in order to procure grid losses. There is no price risk due to the procurement process coordinated with the regulatory agency (ECA). APG takes advantage of the “own-use” rule.
Compliance risks → Monitoring of legal developments → Implementation of a code of conduct, clear rules, process descriptions and compliance management system → Conducting employee training in particular with respect to anti-corruption and Independent Transmission Operator (ITO) Legal risks → Cooperation with national and international interest groups, associations and authorities → Legal consulting from external experts → Maintaining a database for contracts and official notifications with an automatic reporting system Personnel risks → Training of executives and employees → Ensuring succession planning and employee development → Fostering programmes that promote health and safety
Market risk → Introduction of strict risk management in energy procurement → Assessment of creditworthiness, awarding of credit limits, and supervision of compliance → Development of suppliers and increase in provider diversity Regulatory risks → Cost management to ensure cost acceptance → Hiring of independent experts for audit certificates → Cooperation with national and international interest groups, associations and authorities
38
ANNUAL REPORT 2015
MANAGEMENT REPORT
OUTLOOK The energy market trend, in particular the further geographic shifts in generation and the rising feed-in volatility will also present great challenges for APG in the coming years. Another driver of these future trends is the increasing internationalisation of the European electricity market. Accompanied by this complex and dynamic environment, the next year will be dominated by the following tasks, among other things: → In light of the current energy market situation, it is urgently necessary to implement the APG grid expansion programme on a timely and efficient basis. These investments are a key factor for ensuring the permanent security of supply of Austria as a place to live and conduct business and to be able to grow the domestic economy. → Due to the high trans-regional load flows in the European transmission grid and the sharply declining availability of thermal power plants, strategic interventions in the Austrian power plant facilities will be necessary for the purpose of secure grid operations. In order for this to be possible, the general conditions for a strategic grid reserve must be brought about in order to permanently ensure secure grid operations. → APG will further expand and intensify international cooperation in order to further consolidate increases in efficiency and savings for the Austrian electricity consumers in the future. → APG's business activities will need to continue to be considered from the perspective of generating a sustainable result under the regulatory return parameters.
39
After the financial years strained in the past in particular by legal proceedings (from SNT-VO/SNE-VO), the emerging revenue and earnings situation for 2016 appears to be stable. REPORT ON BRANCH OFFICES There were no branch offices in financial year 2015. EVENTS AFTER THE BALANCE SHEET DATE There have been no events since the balance sheet date that require disclosure in the management report. Vienna, 29 January 2016 The Executive Board Dr. Ulrike Baumgartner-Gabitzer Mag. Thomas Karall DI Mag. (FH) Gerhard Christiner
AUSTRIAN POWER GRID AG
FINANCIAL STATEMENTS FINANCIAL STATEMENTS
BALANCE SHEET AS AT 31/12/2015 ASSETS
NOTE
2014 IN €K
2015 IN €
A. FIXED ASSETS I.
Intangible fixed assets
(1)
6,664.0
7,400,736
II.
Tangible fixed assets
(2)
1,230,437.0
1,262,690,629
III. Long-term financial assets
(3)
11,286.3
15,704,300
1,248,387.3
1,285,795,665
B. CURRENT ASSETS I.
Inventories 1.
II.
(4)
Consumables and operating supplies
Receivables and other assets 1.
Trade receivables
2.
Receivables from affiliated companies
3.
Receivables from other long-term investees and investors
4.
Other receivables and assets
504,664 504,664
57,672.5
139,687,597
(5)
III. Cash-in-hand and bank balances
7,050.7
2,151,034
18,230.1
11,620,421
193,943.8
115,852,670
276,897.0
269,311,722
15,598.0
11,138,592
15,598.0
11,138,592
(6)
C. PREPAID EXPENSES 1.
674.7 674.7
Deferred tax assets
40
19,108.5
17,758,065
19,108.5
17,758,065
1,560,665.5
1,584,508,709
ANNUAL REPORT 2015
FINANCIAL STATEMENTS
EQUITY AND LIABILITIES
NOTE
2014 IN €K
2015 IN €
A. EQUITY I.
Subscribed capital
(7)
70,000.0
70,000,000
II.
Capital reserves
(8)
15,383.5
15,383,543
(9)
238,929.5
260,939,294
(10)
301.0
21,692,338
324,614.1
368,015,174
48,322.5
46,258,813
III. Revenue reserves IV. Net retained profits
B. UNTAXED RESERVES 1.
Valuation reserve due to impairment losses
2.
Other untaxed reserves
(11)
C. PROVISIONS
289.8
277,993
48,612.3
46,536,805
(12)
1.
Provisions for termination benefits
23,164.1
22,744,028
2.
Provisions for pensions and similar obligations
80,108.5
73,905,430
3.
Other provisions
D. LIABILITIES 1.
Payments received on account of orders
2.
Trade payables
3.
Liabilities to affiliated companies
4.
Liabilities to other long-term investees and investors
5.
Other liabilities
189,871.1
119,437,495
293,143.8
216,086,953
(13) 340.0
290,000
14,496.0
8,866,862
644,027.0
695,158,634
153.9
2,990,984
122,764.1
136,188,410
781,781.0
843,494,891
96,670,831
of which taxes €8,451,143.21 (previous year: €3,584.2k) of which relating to social security and similar obligations €843,405.06 (previous year: €832.2k)
E. DEFERRED INCOME
(14)
1.
Contributions to building costs
95,238.3
2.
Other
17,276.0
13,704,055
112,514.3
110,374,886
1,560,665.5
1,584,508,709
41
AUSTRIAN POWER GRID AG
FINANCIAL STATEMENTS
INCOME STATEMENT FOR FINANCIAL YEAR 2015
1. Revenue
NOTE
2014 IN €K
2015 IN €
(15)
541,445.3
730,775,423
10,328.0
13,056,640
1,822.6
240,547
2. Other own work capitalised 3. Other operating income a.
Income from disposal and reversal of write-downs of fixed assets with the exception of long-term financial assets
b.
Income from reversal of provisions
b.
Miscellaneous
(16)
4. GROSS PROFIT (SUBTOTAL FROM LINES 1 TO 3) 5. Expenditures for electricity and other purchased services and production services 6. Personnel expenses a.
Wages
b.
Salaries
c.
Expenses for termination benefits and payments to employee pension funds
d.
Cost of old age pensions
e.
Expenses for social security as required by law as well as income-based charges and mandatory contributions
f.
Other social expenses
(18)
8. Other operating expenses
(19)
Taxes not included under line 19
b.
Miscellaneous
32,849 11,137,377
10,982.0
11,410,772
562,755.3
755,242,836
- 303,939.7
- 489,459,428
(17)
7. Depreciation and amortisation
a.
44.0 9,115.5
9. OPERATING PROFITS (SUBTOTAL FROM LINES 4 TO 8)
42
- 352.0
- 331,287
- 39,934.9
- 41,443,567
- 2,929.1
- 288,947
- 18,012.0
2,699,858
- 8,777.0
- 9,204,247
- 528.4
- 595,097
- 70,533.4
- 49,163,287
- 75,045.1
- 76,828,787
- 248.9
- 249,490
- 60,165.4
- 59,379,008
- 60,414.3
- 59,628,498
52,822.8
80,162,835
ANNUAL REPORT 2015
FINANCIAL STATEMENTS
10. Income from long-term equity investments
622.4
2,185,393
of which from affiliates €1,758,022.51 (previous year: €301.0k) 11. Income from other securities and long-term loans 12. Other interest and similar income
553.3
0
2,427.6
696,944
of which from affiliates €54,358.01 (previous year: €20.4k) 13. Income from the disposal of long-term financial assets 14. Interest and similar expenses
23.5
278,761
- 27,981.7
- 27,914,409
- 24,354.8
- 24,753,311
28,468.0
55,409,524
- 8,147.6
- 13,782,871
20,320.4
41,626,653
of which from affiliates €24,251,012.21 (Previous year: €21,190.8k) 15. FINANCIAL RESULT (SUBTOTAL FROM LINES 10 TO 14)
(20)
16. RESULT FROM ORDINARY ACTIVITIES 17. Taxes on income
(21)
18. NET INCOME FOR THE FINANCIAL YEAR 19. Reversal of untaxed reserves 20. Allocation to revenue reserves 21. NET RETAINED PROFITS
43
1,700.4
2,075,462
- 21,719.7
- 22,009,777
301.0
21,692,338
AUSTRIAN POWER GRID AG
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN FIXED ASSETS
€K
BALANCE 1/1/2015
ADDITIONS
DISPOSALS
34,255.1
3,903.9
33.2
34,255.1
3,903.9
33.2
I. INTANGIBLE FIXED ASSETS 1. Concessions, industrial property rights, electricity purchase rights, usage fees and similar rights and benefits as well as licences derived therefrom
II. TANGIBLE FIXED ASSETS 1. Land, land rights and buildings, including buildings on third-party land a. With residential buildings b. With plant facilities and other structures c. Undeveloped land
265.0
0.0
0.0
255,517.1
2,074.0
871.5
1,797.3
19.0
0.0
4,453.2
272.4
1.0
3. Electrical installations
1,139,635.2
31,841.5
5,420.2
4. Power lines
1,239,477.6
5,367.0
301.1
34,193.7
3,205.4
598.3
124,290.4
65,420.7
246.4
2,799,629.4
108,199.9
7,438.4
2,833,884.5
112,103.8
7,471.6
2. Machinery
5. Other equipment, operating and office equipment 6. Assets under construction, projects and prepayments
TANGIBLE AND INTANGIBLE FIXED ASSETS III. LONG-TERM FINANCIAL ASSETS 1. Shares in affiliated companies
127.2
0.0
0.0
1,859.7
4,954.4
258.8
15,110.3
0.0
452.8
24.0
0.0
9.6
17,121.3
4,954.4
721.2
2,851,005.8
117,058.2
8,192.8
2. Other long-term equity investments 3. Long-term securities 4. Other loans
FIXED ASSETS
The value of properties as at
31/12/2015
€27,962.5k
31/12/2014
€27,943.5k
44
ANNUAL REPORT 2015
FINANCIAL STATEMENTS
RECLASSIFICATIONS
BALANCE 31/12/2015
CUMULATIVE DEPRECIATION, AMORTISATION AND WRITE-DOWNS
RESIDUAL CARRYING AMOUNT 31/12/2015
RESIDUAL CARRYING AMOUNT 31/12/2014
IMPAIRMENT LOSSES 2015
DEPRECIATION AND AMORTISATION IN FINANCIAL YEAR 2015
0.2
38,125.9
30,725.2
7,400.7
6,664.0
0.0
3,146.3
0.2
38,125.9
30,725.2
7,400.7
6,664.0
0.0
3,146.3
0.0
265.0
265.0
0.0
0.0
0.0
0.0
2,587.7
259,307.2
143,708.5
115,598.7
117,765.2
0.0
5,995.4
0.0
1,816.2
0.0
1,816.2
1,797.3
0.0
0.0
4.5
4,729.1
1,623.1
3,106.0
3,047.0
0.0
216.9
22,229.2
1,188,285.6
840,040.6
348,245.0
333,459.7
24.4
38,454.6
737.8
1,245,281.3
625,662.8
619,618.5
638,997.0
0.0
25,188.2 3,802.9
2.0
36,802.8
26,400.1
10,402.7
11,080.5
0.0
- 25,561.2
163,903.5
0.0
163,903.5
124,290.4
0.0
0.0
- 0.2
2,900,390.8
1,637,700.2
1,262,690.6
1,230,437.0
24.4
73,658.0
0.0
2,938,516.7
1,668,425.3
1,270,091.4
1,237,101.0
24.4
76,804.3
0.0
127.2
0.0
127.2
127.2
0.0
0.0
0.0
6,555.3
0.0
6,555.3
1,859.7
0.0
0.0
0.0
14,657.5
5,650.2
9,007.4
9,275.3
0.0
0.0
0.0
14.4
0.0
14.4
24.0
0.0
0.0
0.0
21,354.5
5,650.2
15,704.3
11,286.3
0.0
0.0
0.0
2,959,871.2
1,674,075.5
1,285,795.7
1,248,387.3
24.4
76,804.3
45
AUSTRIAN POWER GRID AG
FINANCIAL STATEMENTS
MATURITY SCHEDULE REMAINING TERM AS AT 31/12/2015
€K
UP TO 1 YEAR
MORE THAN 1 YEAR
MORE THAN 5 YEARS
14.4
0.0
0.0
14.4
0.0
0.0
LOANS 1. Other loans
RECEIVABLES AND OTHER ASSETS 1. Trade receivables
139,687.6
0.0
0.0
2,151.0
0.0
0.0
3. Receivables from other long-term investees and investors
11,620.4
0.0
0.0
4. Other receivables and assets
82,644.6
33,208.1
0.0
236,103.6
33,208.1
0.0
2. Receivables from affiliated companies
LIABILITIES 1. Payments received on account of orders 2. Trade payables 3. Liabilities to affiliated companies 4. Liabilities to other long-term investees and investors 5. Other liabilities
46
290.0
0.0
0.0
8,105.3
749.9
11.7
116,360.0
333,611.1
245,187.5
2,991.0
0.0
0.0
94,495.3
4,913.6
36,779.5
222,241.7
339,274.6
281,978.7
ANNUAL REPORT 2015
FINANCIAL STATEMENTS
REMAINING TERM AS AT 31/12/2014
TOTAL
UP TO 1 YEAR
MORE THAN 1 YEAR
MORE THAN 5 YEARS
TOTAL
14.4
9.6
14.4
0.0
24.0
14.4
9.6
14.4
0.0
24.0
139,687.6
57,672.5
0.0
0.0
57,672.5
2,151.0
7,050.7
0.0
0.0
7,050.7
11,620.4
18,230.1
0.0
0.0
18,230.1
115,852.7
45,686.9
135,724.9
12,532.0
193,943.8
269,311.7
128,640.1
135,724.9
12,532.0
276,897.0
290.0
340.0
0.0
0.0
340.0
8,866.9
12,697.0
1,663.4
135.6
14,496.0
695,158.6
44,325.6
333,611.1
266,090.3
644,027.0
2,991.0
153.9
0.0
0.0
153.9
136,188.4
65,620.6
23,554.4
33,589.2
122,764.1
843,494.9
123,137.1
358,828.9
299,815.0
781,781.0
47
AUSTRIAN POWER GRID AG
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN UNTAXED RESERVES €K
BALANCE 1/1/2015
ADDITION/ RECLASSIFICATION
REVERSAL/ DISPOSAL
BALANCE 31/12/2015
VALUATION RESERVE DUE TO IMPAIRMENT LOSSES 1. ACCELERATED DEPRECIATION IN ACC. WITH SECTION 7A OF THE AUSTRIAN INCOME TAX ACT (ESTG) 1988 a.
Structures
6,228.0
0.0
12.8
6,215.2
b.
Machinery
485.8
0.0
0.0
485.8
c.
Electrical installations
19,564.4
37.7
1,531.7
18,070.4
d.
Power lines
16,254.7
- 10.4
2.5
16,241.8
e.
Operating and office equipment
481.5
0.0
38.9
442.6
f.
Assets under construction
298.2
- 45.6
0.0
252.6
43,312.6
- 18.3
1,585.9
41,708.4
2. ACCELERATED DEPRECIATION IN ACC. WITH SECTIONS 8 AND 122 ESTG 1972 a.
Power lines
1,556.8
0.0
449.2
1,107.5
1,556.8
0.0
449.2
1,107.5
1,391.2
0.0
3.8
1,387.4
13.7
40.3
4.4
49.5
1,980.8
15.8
54.7
1,941.8
2.5
0.0
0.0
2.5
65.0
0.0
3.3
61.6
3,453.1
56.0
66.3
3,442.9
48,322.5
37.7
2,101.4
46,258.8
3. TRANSFER OF HIDDEN RESERVES IN ACCORDANCE WITH SECTION 12 ESTG a.
Land, land rights and buildings, including buildings on third-party land
b.
Electrical installations
c.
Power lines
d.
Operating and office equipment
e.
Remote telecommunication system
OTHER UNTAXED RESERVES 1. INVESTMENT-RELATED EXEMPTION IN ACCORDANCE WITH SECTION 10 ESTG 1996
20.9
0.0
0.2
20.7
1997
130.8
0.0
4.0
126.8
1998
61.6
0.0
3.1
58.5
1999
37.6
0.0
0.3
37.3
2000
38.8
0.0
4.1
34.7
289.8
0.0
11.8
278.0
48,612.3
37.7
2,113.2
46,536.8
UNTAXED RESERVES
48
ANNUAL REPORT 2015
DETAILS ON EQUITY INVESTMENTS IN ACCORDANCE WITH SECTION 238 LINE 2 UGB DETAILS ON EQUITY INVESTMENTS IN ACCORDANCE WITH SECTION 238 LINE 2 UGB
€K
REGIST– ERED OFFICE
SHARE OF CAPITAL IN % AS AT 31/12/2015
MOST RECENT ANNUAL FINANCIAL STATEMENTS
(+) (–)
NET INCOME/LOSS FOR THE FINANCIAL YEAR
EQUITY1)
Klagenfurt
100.00
2015
+
1,758.0
583.1
Vienna
24.40
2014
+
413.9
5,459.5
AFFILIATED COMPANIES CONSOLIDATED VERBUND Umwelttechnik GmbH (VUM) OTHER LONG-TERM EQUITY INVESTMENTS OeMAG Abwicklungsstelle für Ökostrom AG 1)
Equity as defined under Section 224 (3) letter A of the Austrian Commercial Code (UGB)
49
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
I. ACCOUNTING POLICIES
pension funds defined under Section 203(3) of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB) as well as with respect to the capitalisation of borrowing costs in accordance with Section 203(4) UGB. The transmission systems contributed by VERBUND AG in 1999 were recognised including capitalised borrowing costs up to and including 1989 (see [2] II. Tangible fixed assets for details).
Preliminary remarks Rounding differences may occur when adding rounded amounts and percentages due to the use of automated calculation systems. Fixed assets As a rule, depreciable fixed assets are measured at cost less depreciation and amortisation. The catalogue of uniform depreciation rates applied by Austrian Power Grid AG (APG) essentially comprises the following rates of depreciation: DEPRECI– ATION RATE IN %
USEFUL LIFE IN YEARS
Rights to telecommunications facilities
10
10
Rights to software products
25
4
5
20
2 and 3
33.3 and 50
3
33.3
INTANGIBLE FIXED ASSETS
Other rights BUILDINGS Residential and office buildings Plant buildings TECHNICAL EQUIPMENT AND MACHINERY Machinery
4 and 5
20 and 25
Electrical installations
5
20
Power lines
2
50
10- 25
4- 10
OFFICE AND PLANT EQUIPMENT
Tangible and intangible assets used for more than six months during the financial year are depreciated at the full annual rate; those used for less than six months are depreciated at one-half the annual rate. Purchased intangible assets are measured at cost and – if amortisable – amortised based on the typical useful life. In addition to direct costs, an appropriate amount of material and indirect labour costs are capitalised in the production cost of internally generated assets. APG has chosen not to apply the optional method of measurement with respect to the inclusion of social security expenses, termination benefits and contributions to the employee
Low-value assets are fully written off in the year of acquisition in accordance with Section 226(3) UGB. Financial assets are recognised at cost or the lower fair value; long-term securities are measured at cost or the most recent carrying amount in the event of temporary impairment. Loans bearing interest are recognised at nominal value. Receivables with a remaining term of more than one year are reported as loans under long-term financial assets. Current assets Inventories of consumables and operating supplies are measured at cost in accordance with the strict lower of cost or market value principle. A permanent inventory is kept of stored supplies and spare parts measured based on the moving average price method. Inventory risks arising from the storage period and reduced utility are taken into account through appropriate write-downs in value. Receivables and other assets are measured at nominal value, unless a lower amount is to be recognised in the event of identifiable specific risks. Deferred income If tax relief is expected in subsequent years, the option to recognise deferred tax assets is applied, whereby the 1) deferred taxes attributable to the group members based on tax allocation are presented under the current result on their balance sheet. These deferred items result from differences between cumulative results under commercial law for items with expenses that will only be offsettable for tax purposes in future periods.
1)
See taxes on income
50
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
Deferred income includes building cost contributions and investment grants which are depreciated based on the useful life of tangible assets. Provisions Provisions reflect all identifiable risks attributable to a past financial year and include all amounts necessary based on prudent business judgement. Provisions for termination benefits are allocated in the full actuarial amount based on the projected unit credit method typical of international accounting standards. With respect to termination benefit obligations, service cost is allocated over the entire length of service, but at most over the period in which the employee maximises their termination benefit entitlement or reaches the age of 62. Employees whose contracts began after 31 December 2002 are not entitled to a direct claim against their employer for a statutory termination benefits. For these employment contracts, the employer pays 1.53% of the salary monthly into an employee pension fund in which the premiums are deposited in an account of the employee. The provisions for termination benefits reflect regulations that go beyond the statutory claims specified under the collective agreement for energy providers. APG is obligated based on labour-management agreements and contracts to pay pension benefits to employees when they retire if certain requirements are met. Dedicated pension fund assets of APK Pensionskasse AG are available to cover some of these defined benefit obligations. The provisions determined in accordance with the projected unit credit method typical of international accounting standards are presented net of pensions plan assets. The employer is obligated to provide additional funding to the extent that these defined benefit obligations are to be fulfilled by APK Pensionskasse AG. Pension fund contributions are made to APK Pensionskasse AG for defined contribution plans; however, there is no obligation to provide additional funding. Provisions for current pensions, entitlements to pensions and similar obligations are determined based on the projected unit credit method. Interest expense has been shown under financial results since 2012 in accordance with international standards.
51
“AVÖ 2008-P – Actuarial Assumptions for Pension Insurance – Pagler & Pagler” were applied as a calculatory basis. Calculations as at 31 December 2015 and 31 December 2014 are based on the following assumptions: 2014
2015
Pensions and similar obligations
2.00%
2% bzw. 2.25%
Termination benefits
2.00%
2.00%
Increases in pension
2.25%
2.25%
Increases in salary
2.25%
2.25%
Contribution payments for obligations similar to pensions – old contracts
6.50%
6.50%
Contribution payments for obligations similar to pensions – new contracts
4.00%
4.00%
INTEREST RATE
TREND
Turnover
0.00- 4.00%
0.00- 4.00%
Retirement age for women
56.5- 65 y.
56.5-65 y.
Retirement age for men
61.5- 65 y.
61.5-65 y.
2.00%
2.00%
Expected long-term return on fund assets
The interest rate applied for the expected return on plan assets was the same as the one used to calculate the associated provisions. Liabilities Liabilities are recognised at their settlement amount based on the principle of prudence. Taxes on income VERBUND AG has decided to participate in the tax authorities’ horizontal monitoring project. Thus, VERBUND AG, including all subsidiaries, is in permanent dialogue with the tax authorities for timely coordination on tax issues. The goal of horizontal monitoring is to increase legal security and thereby reduce tax risk. Austrian Power Grid AG is not a taxable entity in terms of corporate income tax due to its inclusion as a member of the corporate group of the parent entity VERBUND AG (Group and Tax Allocation Agreement dated 21 September 2005).
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS
The members of the group are charged attributable amounts for corporate income tax incurred by them in the form of positive tax allocations amounting to 25% of their attributable positive income; if a loss is generated, they are credited 25% of their attributable negative income in the form of negative tax allocations. The offsetting of allocated tax amounts shifts the tax expense within the group parent’s income statement. The tax offsets with the group members are only adjusted to reflect subsequent differences if they are material.
As a general rule, if the presentation was changed in comparison to the previous year, the amounts reported for the previous year were adjusted in accordance with Section 223(2) UGB. Notes regarding assets A. Fixed assets
For more details, see the separate Statement of changes in fixed assets. [1] I. Intangible fixed assets
Regulatory assets and liabilities If grid tariffs are set by a regulator on the basis of estimates of costs and/or revenues and lower or higher costs and/or revenues in previous periods are taken into account when determining future tariffs, the grid operator is entitled to charge the grid users higher tariffs as compensation for higher costs and/or lower revenues in future years. The grid operator is also obligated to refund the grid users for lower costs and/or higher revenues by charging lower tariffs. Such entitlements and obligations are referred to as regulatory assets and liabilities. APG is subject to such a regulated tariff structure by Energie-Control Austria. The special provisions governing the accounting treatment set forth in the Austrian Electricity Industry and Organisation Act (Elektrizitätswirtschafts- und organisationsgesetz, ElWOG) are applied. II. NOTES TO THE BALANCE SHEET AND INCOME STATEMENT General information Individual line items are consolidated in the balance sheet and income statement in the interest of clarity. These line items are explained separately in the notes to the financial statements. In accordance with Section 223(7) UGB, items in the balance sheet and income statement that did not show an amount in either the financial year or the previous year are not stated. In accordance with Section 223(4) UGB, the descriptions of the items were shortened or expanded to reflect their actual contents if it was deemed to increase the clarity and understanding of the annual financial statements.
The residual carrying amount of the rights to use plants acquired from affiliated companies amounts to €474.6k (previous year: €567.5k). [2] II. Tangible fixed assets
The capitalised borrowing costs related to the financing of tangible fixed assets in the years up to and including 1989 for the transmission systems contributed by VERBUND AG in 1999 amounted to €7,232.1k (previous year: €7,779.5k). [3] III. Long-term financial assets
Disclosures required under Section 238 no. 2 UGB are presented in a separate schedule entitled “Disclosures regarding other long-term equity investments in accordance with Section 238 no. 2 UGB”. The development and structure of other long-term equity investments and long-term securities can be found in the separate appendix entitled “Statement of changes in fixed assets”. Long-term securities
These primarily consist of shares in Austrian investment funds and loans. The reversals of write-downs omitted in accordance with Section 208(3) UGB amount to €3,378.8k (previous year: €3,133.2k), since the increase in value is not expected to be permanent.
52
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
Notes regarding equity and liabilities
B. Current assets [4] I. Inventories €K
Consumables and operating supplies
2014
2015
674.7
504.7
For more details, see the separate Maturity schedule. 2014
2015
Regulatory assets
192,731.5
115,199.6
Security deposits
184.6
275.0
Personnel accounting
150.4
139.3
0.0
49.7
7.2
26.5
OTHER RECEIVABLES AND ASSETS
Relating to social security Local tax offices Investment grants Other
The subscribed capital equals €70,000.0k and is divided into 70,000,000 registered no-par value shares. [8] II. Capital reserves
[5] II. Receivables and other assets
€K
A. Equity [7] I. Subscribed capital
54.1
0.0
816.1
162.6
193,943.8
115,852.7
Regulatory assets include revenue shortfalls and exceptional additional costs in accordance with Section 50 ElWOG as well as additional costs in accordance with Section 59(8) ElWOG that will be taken into account in future tariffs. Other receivables include €115,362.1k (previous year: €193,547.6k) in income that will not be realised until after the balance sheet date in accordance with Section 225(3) UGB.
Capital reserves comprise €7,000.0k in restricted capital reserves (previous year: €7,000.0k) and €8,383.5k in unallocated capital reserves (previous year: €8,383.5k). The restricted capital reserves correspond to 10% of subscribed capital. [9] III. Revenue reserves
Revenue reserves comprise €184,282.0k (previous year: €162,272.3k) and €76,657.3k (previous year: €76,657.3k) in distributable investment-related reserves. [10] IV. Net retained profits
Changes in net retained profits are shown below: €K
As at 31/12/2014 Distribution of dividends Net income for the financial year before changes in reserves Change in revenue reserves Change in untaxed reserves AS AT 31/12/2015
301.0 - 301.0 41,626.7 - 22,009.8 2,075.5 21,692.3
[6] C. Prepaid expenses €K
Deferred tax assets
2014
2015
19,108.5
17,758.1
19,108.5
17,758.1
Deferred tax assets are the result of differences between the cumulative financial and taxable results with respect to line items that can only be used to offset future taxable income. The calculation was based on a tax rate of 25%.
53
[11] B. Untaxed reserves
For more details, see the separate Statement of changes in untaxed reserves.
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS
[12] C. Provisions 1. Provisions for termination benefits €K
3. Other provisions €K 2014
2015
Premium reserve based on actuarial calculations
23,164.1
22,744.0
Taxed portion of provisions
23,164.1
22,744.0
2. Provisions for pensions and similar obligations
€K
2014
Grid billing
Pension provisions
80,108.5
73,905.4
Of which obligations similar to pensions
32,250.5
28,864.9
61,622.9 22,376.7
147,069.6
83,999.6
Premiums
3,280.1
3,454.7
Unused holidays
3,257.0
3,291.6
Holiday bonus
1,690.8
1,608.0
OTHER PERSONNEL-RELATED PROVISIONS
Time credits 2015
45,918.5 101,151.2
Funeral benefit
Provisions for pensions changed as follows:
2015
OTHER PROVISIONS RELATED TO THE ELECTRICITY/GRID BUSINESS Regulatory reserves
In accordance with Section 14 of the Austrian Income Tax Act (Einkommensteuergesetz, EStG), the provision was transferred in 2002 tax-exempt to a reserve qualifying as taxed (Section 124b no. 68 EStG).
2014
Early pensions, voluntary termination benefits and partial retirement Other DELIVERIES AND SERVICES NOT YET BILLED
0.0
922.2
352.7
362.8
46.5
0.0
449.9
642.2
9,076.9
10,281.7
33,724.5
25,156.3
189,871.1
119,437.5
Regulatory provisions relate to additional revenue that will be taken into account in future tariffs. Additional revenue received is reclassified as a regulatory other liability when it is identified in an official notice. The provision for grid billing results from unbilled services for grid billing in the amount of €21,535.2k and the impending obligation to repay revenue received in the amount of €841.5k due to the cancellation of the SNT-VO for 2009 to 2011 and the provisions for the impending cancellation of the SNE-VO for 2012. This provision was decreased by €79,033.0k as a result of legal settlements with the litigating parties.
54
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
[13] D. Liabilities
[14] E. Deferred income
For more details, see the separate Maturity schedule.
€K
Liabilities to affiliated companies Of which financial liabilities Of which trade payables
Regulatory liabilities From taxes Relating to social security Personnel accounting Other
95,238.3
96,670.8
14,112.8
13,431.5
122.8
9.0
Prepayments for grid use
817.5
0.0
Prepayments for auctions
2,222.9
0.0
0.0
263.6
112,514.3
110,374.9
2014
2015
644,027.0
695,158.6
Investment grants
620,849.7
599,923.5
23,177.3
95,235.1
Advance lease payment for fixed telecom assets of affiliated companies
2. Other liabilities €K
2015
Building cost contributions (financial contributions)
1. Liabilities to affiliated companies €K
2014
OTHER
Other 2014
2015
118,030.8
126,708.8
3,584.2
8,451.1
832.2
843.4
3.0
1.3
313.9
183.9
122,764.1
136,188.4
Regulatory liabilities include additional revenue received in 2014 that was identified in 2015 in an official notice from Energie-Control Austria. Other liabilities include €128,766.6k (previous year: €120,217.8k), that will be realised after the balance sheet date in accordance with Section 225(6) UGB.
55
Building cost contributions relate to third-party contributions associated with the use of individual facilities. Deferred income includes €7,333.8k (previous year: €7,589.9k) related to affiliated companies.
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS
Notes to the income statement [15] 1. Revenue €K
2014
2015
385,346.9
366,442.2
Industrial customers
14,865.7
17,275.9
Other customers
53,498.5
68,346.0
453,711.1
452,064.1
Energy providers
1,573.5
195,956.8
Other customers
15,478.8
4,622.9
17,052.3
200,579.7
Energy providers
0.0
21.5
Other customers
1,243.7
0.0
1,243.7
21.5
472,007.1
652,665.3
378.2
- 1,951.9
REVENUE FROM GRID TARIFF SETTLEMENT Austria
EU
Other countries
Energy providers
USER AND MANAGEMENT FEES Austria
Energy providers1) Industrial customers Other customers
EU
45.3
46.1
386.1
55.0
809.5
- 1,850.8
Energy providers1)
- 4,073.7
- 4,605.6
Other customers2)
67,678.0
80,876.1
63,604.3
76,270.5
64,413.8
74,419.7
5,024.4
3,690.4
541,445.3
730,775.4
OTHER REVENUE
1)
Negative revenue in the EU arises as a result of auction revenue forwarded to the merchant line.
2)
Other customers in the EU only include the Joint Auction Office (JAO) in Germany and Luxembourg, which carry out the auction of marginal capacities for APG.
56
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
[16] 3. Other operating income €K
a) Income from the disposal of fixed assets with the exception of long-term financial assets b) Income from the reversal of provisions c) Miscellaneous
2014
2015
1,822.6
240.5
44.0
32.8
9,115.5
11,137.4
10,982.0
11,410.8
Miscellaneous other operating income mainly comprises income from the reversal of building cost contributions in the amount of €6,822.6k (previous year: €5,385.8k).
[17] 6. Personnel expenses €K
a) Wages b) Salaries
2014
2015
352.0
331.3
39,934.9
41,443.6
40,286.9
41,774.9
c) Expenses for termination benefits and payments to employee pension funds Termination benefits
1,779.4
874.5
Change in the provision for termination benefits
895.8
- 876.4
Premium payments to employee pension fund
253.9
290.8
Expenses (income) from absorption (transfer) Group
0.0
0.0
2,929.1
288.9
4,910.4
4,043.4
12,047.7
- 7,744.5
0.0
- 337.5
d) Cost of old age pensions Early retirement benefits, pension payments and similar obligations Change in the provisions for pensions and similar obligations Expenses (income) from absorption (transfer) Group Change in provisions for early retirement and partial retirement
- 315.4
- 46.7
Pension fund contributions (including additional funding obligations)
1,369.2
1,385.4
18,012.0
- 2,699.9
8,777.0
9,204.2
e) Expenses for social security contributions as required by law as well as income-based charges and mandatory contributions f)
Other social expenses
528.4
595.1
70,533.4
49,163.3
Pension fund contributions include payments for defined contribution plans and defined benefit plans. Any obligation to provide additional funding to APK Pensionskasse AG relates exclusively to defined benefit commitments.
57
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS
[18] 7. Depreciation and amortisation €K
2014
2015
74,955.2
76,606.6
a) Amortisation of intangible fixed assets and depreciation of tangible fixed assets Depreciation and amortisation in the financial year Impairment losses Immediate write-offs of low-value assets in accordance with Section 13 EStG
0.0
24.4
89.9
197.7
75,045.1
76,828.8
[19] 8. Other operating expenses €K
2014
2015
248.9
249.5
248.9
249.5
Regulatory costs
12,951.5
12,945.2
Third-party deliveries and services for repair and maintenance
a) Taxes not included in taxes on income b) Miscellaneous
17,927.7
12,920.4
Telecommunications services and data services
7,956.0
8,173.6
Allocations to other regulatory provisions
1,438.3
4,664.8
IT support, electronic data processing
2,677.4
4,245.9
Operating costs for buildings, rent and leasing
2,237.4
2,859.7
Consumables for offices, operations and maintenance
2,311.2
2,007.3
Temporary staff and personnel secondment
2,515.3
1,865.8
Travel expenses
1,627.8
1,527.3
Legal, audit and consulting expenses
2,567.5
1,484.5
Insurance
1,364.7
1,402.2
Advanced training and further education (incl. apprentice training)
1,078.8
879.5
92.4
67.2
Miscellaneous administrative expenses Write-downs of and valuation allowances on receivables Other expenses
58
22.2
63.1
3,397.2
4,272.5
60,165.4
59,379.0
60,414.3
59,628.5
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
[20] 15. Financial result €K
2014
2015
20.4
54.4
21,190.8
24,251.0
2014
2015
Income tax for the current period
11,317.7
12,432.4
Deferred tax assets
- 3,170.1
1,350.5
8,147.6
13,782.9
OTHER INTEREST AND SIMILAR INCOME From affiliated companies INTEREST AND SIMILAR EXPENSES From affiliated companies
[21] 17. Taxes on income €K
FROM THE GROUP PARENT
In 2015, €2,075.5k in untaxed reserves were reversed (previous year: €1,700.4k), thereby increasing taxes on income by €518.9k. The result from ordinary activities was reduced by €13,782.9k in taxes on income (previous year: €8,147.6k). III. OTHER DISCLOSURES 1. Total amount of other financial commitments €K
TOTAL COMMITMENT
2016
2016- 2020
MAIN ITEMS Rent and lease agreements
1)
10,482.9
53,457.5
Other (insurance, compensations, fees for usage and operational management)
1)
3,751.6
18,473.8
Purchase commitment Purchase commitment for lost energy Purchase commitment for balancing energy
81,718.5
93,692.2
91,579.2
131,586.0
5,721.2 1)
Of which to affiliated companies 1)
93,692.2 131,586.0
The total commitment cannot be determined because the contractual periods are indefinite.
59
5,721.2
5,721.2
43,778.0
93,356.6
AUSTRIAN POWER GRID AG
NOTES TO THE FINANCIAL STATEMENTS
APG is obligated to provide additional funding to land owners for a limited period of up to ten years after a power line is placed into operation if a portion of the developable land is rededicated. As a transmission system operator, APG is obligated under the Austrian Electricity Industry and Organisation Act (ElWOG) of 2010 to ensure the balance between generation and consumption for the purpose of operating a secure system as well as to maintain frequency and voltage. In order to fulfil these duties, Austrian Power Grid AG also purchases grid services in the form of balancing and lost energy from VERBUND AG, VERBUND Hydro Power GmbH, VERBUND Solutions GmbH and VERBUND Trading GmbH. A contract has been entered into with VERBUND Services GmbH for the billing of services in the areas of IT and telecommunications as well as administrative services.
layoffs. To qualify, an employee must have worked for VERBUND for at least 20 years and be at least 45 years of age. No other off-balance-sheet transactions as defined under Section 237 no. 8a UGB were entered into by APG. 2. Number of personnel AVERAGE
Salaried employees Apprentices
APG is obligated based on labour-management agreements and contracts to pay pension benefits to employees when they retire if certain requirements are met. The employer is obligated to provide additional funding to the extent that these pension obligations are to be fulfilled by APK Pensionskasse AG. Due to the trend on the financial markets, APK Pensionskasse AG reported an anticipated obligation to provide additional funding in the amount of €410.5k (Previous year: €0.0k ). At the balance sheet date, 16 employees had a letter of loyalty granting them a higher degree of protection against
2015
431
439
25
24
456
463
3. Expenses for termination benefits and pensions €K
Members of the Managing Board Managerial employees
A contract has been entered into with VERBUND Finanzierungsservice GmbH for the settlement of services relating to the processing of payment transactions and cash management. In financial year 2015, all agreements entered into with members of the Supervisory Board or any entities closely associated with individual members of the Supervisory Board were formed at arm’s length as defined under Section 237 no. 8a UGB. Services were rendered for various companies of the VERBUND consolidated group; these contracts were approved by E-Control Austria.
2014
Employees
2014
2015
129.7
43.8
1,129.2
98.8
19,682.2
- 2,553.5
20,941.1
- 2,410.9
4. Governing bodies of the Company
The details regarding the Company’s governing bodies (members of the Executive Board and Supervisory Board) are provided before the management report. The Executive Board comprised three members throughout financial year 2015. No loans or advances were paid to members of the Executive Board. €
2014
2015
Remuneration of three members of the Executive Board Fixed remuneration
939,609
961,828
Variable remuneration1)
172,757
293,017
1,112,365.5
1,254,845.0
TOTAL 1
Variable remuneration for the respective financial year is paid starting in June of the following year in 14 equal payments because whether or not goals have been achieved can only be determined during the first quarter of the following year. Consequently, the variable components shown are the proportionate variable components paid to the members of the Executive Board in 2015 in respect of financial years 2013 and 2014. Variable remuneration for 2015 will be paid starting in June 2016.
60
ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
Remuneration for members of the Supervisory Board in the financial year amounted to €51,700 (previous year: €57,325). 5. Intra-Group relationships
The parent company of APG obligated to prepare consolidated financial statements is VERBUND AG, Am Hof 6a, 1010 Vienna. As a result of the inclusion in the consolidated financial statements of the parent company, APG is exempt from the requirement to prepare consolidated financial statements. Austrian Power Grid AG is a member of the parent company’s corporate group (as defined under Section 9(8) of the Corporate Income Tax Act (Körperschaftsteuergesetz, KStG)). Due to APG’s inclusion in the consolidated financial statements of VERBUND AG, Vienna, as well as the corresponding disclosure of expenses for the auditor in the aforementioned consolidated financial statements, this information is omitted in these annual financial statements.
the Austrian Federal Law Gazette (Bundesgesetzblatt, BGBl) II 134/2012 on 19 April 2012 by the Austrian Federal Minister of Economy, Family and Youth. In accordance with Section 27(2) no. 3 ElWOG, the compliance officer began his activities on 1 March 2012. Business transactions as defined under Section 8(3) ElWOG will be carried out in particular with the following companies: → Electricity deliveries
VERBUND Hydro Power GmbH, VERBUND Thermal Power GmbH & Co KG, Ennskraftwerke Aktiengesellschaft, VERBUND Trading GmbH → Grid services
VERBUND Hydro Power GmbH, VERBUND Thermal Power GmbH & Co KG, VERBUND Solutions GmbH, Ennskraftwerke Aktiengesellschaft, ÖsterreichischBayerische Kraftwerke AG, Donaukraftwerk Jochenstein AG, KNG-Kärnten Netz GmbH, Energienetze Steiermark GmbH, VERBUND AG → Telecommunications
The consolidated financial statements are filed with the commercial register of the Vienna Commercial Court.
VERBUND Services GmbH → Managerial services
VERBUND Services GmbH, VERBUND AG, VERBUND Umwelttechnik GmbH
6. Influence of the 3rd EU Internal Energy Market Package in Austria
VERBUND has decided to implement the ITO (Independent Transmission Operator) as defined under the 3rd EU Internal Energy Market Package and the ElWOG 2010, which entailed stricter unbundling rules, thereby remaining the owner of APG.
→ Financing
VERBUND Finanzierungsservice GmbH, VERBUND AG → Engineering
PÖYRY Energy GmbH APG received ITO certification in a notice issued by E-Control Austria (ECA) dated 12 March 2012. The official designation as an independent transmission operator was announced in
→ Personnel secondments
VERBUND Services GmbH
Vienna, 29 January 2016 The Executive Board
Dr. Ulrike Baumgartner-Gabitzer
DI Mag. (FH) Gerhard Christiner
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Mag. Thomas Karall
AUSTRIAN POWER GRID AG
GLOSSARY GLOSSARY
EBIT
Earnings before interest (including personnel-related interest) and taxes.
Equity as a percentage of assets
Equity and investment grants plus untaxed reserves adjusted for deferred taxes, in relation to total capital.
Fictitious debt repayment period
CALCULATION
Operating profits +
Financial result
-
Interest expense
=
EBIT
CALCULATION
Equity ÷
Total capital adjusted for closed items
=
EQUITY AS A PERCENTAGE OF ASSETS
CALCULATION
Ratio of debt to the surplus funds from ordinary activities.
Gearing1)
Net indebtedness in relation to equity plus untaxed reserves adjusted for deferred taxes and investment grants.
Net cash flow1)
Balance of cash inflows and outflows, usually broken down into net cash flow from operating activities, investing activities and financing activities.
Net current assets
Current assets (including current loans and current prepaid expenses) less short-term liabilities (including current deferred income).
1)
Provisions +
Liabilities
-
Other securities and shares classified as current securities
÷
Surplus funds from current activities
=
FICTITIOUS DEBT REPAYMENT PERIOD
CALCULATION
Net debt ÷
Equity
=
GEARING
CALCULATION
Net cash flow from operating activities +
Net cash flow from investing activities
+
Net cash flow from financing activities
=
NET CASH FLOW
CALCULATION
Net current assets from operating activities +
Net current assets from financing activities
=
NET CURRENT ASSETS (WORKING CAPITAL)
The key figures were revised in 2013.
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ANNUAL REPORT 2015
GLOSSARY
Net debt1)
CALCULATION
Interest-bearing debt less cash and cash equivalents (including securities and shares classified as current securities) adjusted for closed assets and closed liabilities.
ROE
Interest-bearing liabilities
-
Net balance with closed items
=
GROSS DEBT
-
Financial assets
=
NET DEBT
CALCULATION
Return On Equity: Result from ordinary activities in relation to equity plus untaxed reserves adjusted for deferred taxes and investment grants at the beginning of the financial year. ROI
Result from ordinary activities ÷
Equity as at 1 Jan
=
ROE
CALCULATION
Return On Investment: Result before interest expense (including personnel-related interest) and taxes in relation to total capital at the beginning of the financial year. ROCE
EBIT ÷
Total capital as at 1 Jan adjusted for closed items
=
ROI
CALCULATION
Return On Capital Employed: Result before interest expense (including personnel-related interest) less attributable taxes in relation to average capital employed. ROS
EBIT – taxes attributable to EBIT ÷
Average capital employed
=
ROCE
CALCULATION
Return On Sales: Result before interest expense (including personnel-related interest) and taxes in relation to sales (revenue).
1)
Interest-bearing provisions +
The key figures were revised in 2013.
63
EBIT ÷
Revenue
=
ROS
AUSTRIAN POWER GRID AG
AUDITOR’S REPORT*) AUDITOR’S REPORT*)
Report on the Financial Statement We have audited the accompanying financial statements, including the accounting system, of Austrian Power Grid AG, Vienna, for the fiscal year from January 1, 2015 to December 31, 2015. These financial statements comprise the balance sheet as of December 31, 2015, the income statement for the fiscal year ended December 31, 2015, and the notes. Management’s Responsibility for the Financial Statements and for the Accounting System The Company’s management is responsible for the accounting system and for the preparation and fair presentation of these financial statements in accordance with Austrian Generally Accepted Accounting Principles. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility and Description of Type and Scope of the Statutory Audit Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financial statements comply with legal requirements and give a true and fair view of the financial position of the Company as of December 31, 2015 and of its financial performance for the fiscal year from January 1, 2015 to December 31, 2015 in accordance with Austrian Generally Accepted Accounting Principles.
*) This report is a translation of the original report in German, which is solely valid. Publication of the financial statements together with our auditor's opinion may only be made if the financial statements and the management report are identical with the audited version attached to this report. Section 281 paragraph 2 UGB (Austrian Commercial Code) applies.
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ANNUAL REPORT 2015
AUDITOR’S REPORT*)
Comments on the Management Report Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclosures are not misleading with respect to the Company’s position. The auditor’s report also has to contain a statement as to whether the management report is consistent with the financial statements. In our opinion, the management report is consistent with the financial statements. Vienna, January 29, 2016
Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H.
Mag. Christoph Harreither mp Wirtschaftsprüfer / Certified Auditor Mag. Elfriede Baumann mp Wirtschaftsprüferin / Certified Auditor
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AUSTRIAN POWER GRID AG
REPORT OF THE SUPERVISORY BOARD REPORT OF THE SUPERVISORY BOARD
During the reporting period, the Supervisory Board discharged its duties and exercised its powers under the law and the Articles of Association in four ordinary plenary meetings, four ordinary Working/Audit Committee meetings and an Annual General Meeting. Due to the nature of APG’s activities, a voluntary Audit Committee was set up as defined under the Austrian Stock Corporation Act (Aktiengesetz, AktG). The Working Committee also acts as an Audit and Emergency Committee. The General and Remuneration Committee also convened twice. The Nominating Committee met once. The managing directors of the Executive Board were reviewed by the Supervisory Board on an ongoing basis based on oral and written reports on the course of business and the position of the Company. These reviews did not lead to any objections. The accounting system and financial statements were audited by Ernst & Young GmbH, Vienna. The auditor has prepared a written report on the results in which it was determined that the Executive Board provided all requested information, that the accounting and financial statements comply with the legal requirements and give a true and fair view of the Company's financial position and financial performance, and that the management report is consistent with the financial statements.
and the meetings of the Working and Audit Committee as well as in the meetings of the Executive Board. The Supervisory Board would also like to thank the Executive Board and all of the Company’s employees for mastering the difficult challenges with which they have been presented. Vienna, March 2016 On behalf of the Supervisory Board Dr. Peter F. Kollmann (Chairman)
The Supervisory Board reviewed these annual financial statements prepared in accordance with the Austrian Commercial Code (Unternehmensgesetzbuch, UGB), for which the auditor issued an unqualified auditor’s report, as well as the Executive Board’s management report. The Executive Board’s management report was approved and acknowledged. The annual financial statements were approved by the Supervisory Board, whereby they are approved in accordance with Section 96(4) AktG. The Chairman of the Supervisory Board is in regular contact with the Executive Board. In particular, they regularly discuss the business performance and new European developments. The Executive Board normally met every 14 days. The Chairman of the Supervisory Board and the Executive Board confirm that discussions were held in an open manner, both in the meetings of the Supervisory Board
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ANNUAL REPORT 2015
IMPRINT IMPRINT
Publisher: Austrian Power Grid AG Wagramer Straße 19, A-1220 Vienna Contact: www.apg.at E-mail:
[email protected] Concept and Design: This Annual Report was produced in-house with FIRE.sys. Photos: Page 4, 5, 6, 7, 14 and 15: Karl Michalski Photography Page 10 and 11: Franz-Josef Kovacs Translated by: ASI GmbH – Austria Sprachendienst International Printed by: Rema-Print-Littera Druck- und Verlagsgmbh Barring typesetting and printing errors. Vienna, March 2016
