At the annual press conference of Stadtwerke Gießen AG (SWG) on 1 September 2009, Supervisory Board Chairman Dr. Volker Kölb, CEO Manfred Siekmann and company spokeswoman Ina Weller drew a cautiously positive balance sheet for the 2008 financial year.
Manfred Siekmann: "Certainly, with an annual loss of EUR 0.4 million for the SWG Group, one cannot speak of a satisfactory result. But this result is characterised by extraordinarily high provisions for the so-called additional revenue absorption, which our network subsidiary Mittelhessen Netz GmbH (MIT.N) had to form on the basis of the IDW (Institut der Wirtschaftsprüfer in Deutschland e.V.) requirements. Just as the 2007 annual result was very strongly distorted upwards by special effects, the 2008 annual result has been significantly shifted downwards by this effect."
Manfred Siekmann was quite satisfied with the actual course of business in the 2008 financial year. In addition, the company had set an important course for the future in 2008 with the SWG 2015 strategy project.
Annual result 2008
The annual loss for 2008 totalled EUR 0.8 million for the AG and EUR 0.4 million for the SWG Group. By way of comparison, in 2007 the AG and the Group each reported a net profit for the year of EUR 4.8 million (mainly influenced by an income tax refund for previous years).
Additional revenue absorption
The reason for the necessary provisions at MIT.N lies in a ruling by the Federal Court of Justice (BGH) on 14 August 2008. In the so-called "Vattenfall decision", the BGH ruled that the grid fees collected during the transition phase from negotiated grid access to approval should not remain with the grid operators. With the provisions totalling EUR 6.4 million, MIT.N reported a net loss for the year of EUR 6.5 million. In the course of loss equalisation, this also affects the result of Stadtwerke Gießen AG.
Milestones 2008
SWG 2015 strategy project
In 2008, SWG launched a large-scale strategy project to prepare the company strategically for the coming challenges (e.g. falling grid utilisation fees and increasing competitive pressure on the electricity and gas markets) on the one hand and to be able to recognise and seize opportunities on the other: SWG 2015.
As part of this project, energy services for the customer groups of industry and commerce, housing and building cooperatives, local authorities, residential, retirement and nursing homes and hospitals were identified as a new profitable business area. In 2008, SWG developed the energy service package under the name "En5" until it was ready for the market. The first customers have already been acquired (including Caritas Verband Gießen e.V., Gemeinde Heuchelheim, Poppe GmbH & Co. KG and Evangelisches Krankenhaus Mittelhessen gemeinnützige GmbH).
TREA (Thermal Residue Treatment and Energy Utilisation Plant)
In general, SWG is pursuing the goal of further expanding its own generation and becoming less dependent on fossil fuels. The TREA is an important step in this direction. Construction of the TREA began in February 2008 and it has been in trial operation since April 2009. The plant is due to start regular operation in the second half of 2009 and will supply heat for around 6,000 households.
3rd woodchip heating plant
In May 2008, SWG commissioned its third woodchip heating plant. The plant on the site of the municipal cleaning and waste disposal centre in Schlachthofstrasse generates 5,500 MWh of heat per year. This corresponds to the heating requirements of around 240 single-family homes.
Energiezentrale Universitätsklinikum Gießen GmbH
The company, in which Stadtwerke Gießen AG and Rhönklinikum AG, Bad Neustadt an der Saale, each hold a 50% stake, was founded on 29 December 2008. The aim of the company is to build and operate a so-called high-efficiency power plant. This globally unique power plant is an ideal combination of three different types of power plant: a high-temperature fuel cell, a combined heat and power plant (CHP) with a natural gas engine and an absorption chiller. The special feature is an intelligent control system that ensures that all three components always work in the optimum mix. This is how the extremely high efficiency of almost 98% is achieved (for comparison: a normal CHP plant achieves 88-90%). The control system is being developed at SWG as part of a degree dissertation at Giessen-Friedberg University of Applied Sciences.
Successful sales in 2008
Electricity sales to private and business customers rose by 5.4 % in 2008. In addition, so many new customers were acquired that electricity sales are expected to exceed 1,000 GWh (= 1 TWh) for the first time in 2010.
In 2008, SWG began acquiring private and business customers outside the MIT.N grid area in the gas sector. Customers have already been acquired here as well.
SWG has been offering its customers a whole range of energy-saving services under the brand name enerGIeßen since 2007. Customers made active use of these offers in 2008: Over 2,200 services were used (e.g. energy performance certificate, thermography, blower door test, e-check, planning, construction & optimisation of heating systems).
Outlook
A look into the future reveals many challenges, but also opportunities for SWG. Like all energy supply companies, Stadtwerke Gießen must expect grid utilisation fees to fall further in future. Competition, particularly on the natural gas market, is also likely to intensify further. The company believes it is well equipped to meet these challenges thanks to the SWG 2015 strategy project. "We are convinced that we are on the right track. On the one hand, we have successfully opened up new business areas with En5, for example, which can offset the unavoidable losses from other areas. On the other hand, customer development in recent years shows that we have been able to hold our own well on the market with our products and services," says CEO Manfred Siekmann.
Siekmann also sees an opportunity in entering into strategically sensible co-operations with other suppliers as part of SWG 2015. The aim here is to optimally complement one's own portfolio with the strengths of the other partner. Initial talks have been held with eight companies and a further joint meeting is due to take place soon.
Stadtwerke Gießen's technical expertise in the field of heat and cooling generation and heat and cooling distribution, particularly in the generation of heat from wood, is also increasingly valued by partners from the region. SWG sees great marketing potential here for the future.
The future of local transport in Giessen remains a challenge. Manfred Siekmann comments: "We will do everything we can to ensure that we can continue to provide local transport services for Giessen and the surrounding area in the future. Because our concept is the best for the region. We will continue to fight for this in court."