The progress of the energy transition, increasing digitalisation and a change in consumer needs - Stadtwerke Gießen is resolutely pursuing its path from a pure energy supplier to a service provider for energy and quality of life in the region. At the annual press conference on 21 June, those responsible looked back on a challenging year and presented prospects for the future.
Stadtwerke Gießen (SWG) is heading into the future with new solutions and a willingness to innovate. Against the backdrop of the energy transition, digitalisation and changing consumer behaviour, SWG, like all energy companies, has to face major challenges. With the willingness to break new ground and invest in modern technologies, the course has been set for the future. At the annual press conference on 21 June in the main building of Stadtwerke Gießen, the Chairwoman of the Supervisory Board, Astrid Eibelshäuser, and the two members of the Management Board, Matthias Funk and Jens Schmidt, presented how SWG, as a company with regional roots, is also committed to society in Gießen and the region.
Despite the huge upheavals on the energy market, the company once again presented positive figures for the 2017 financial year. As already forecast in the previous year, the annual net profit fell compared to 2016. In the end, however, there was once again a significant plus of around 3 million euros. As in the previous year, Stadtwerke Gießen is distributing €2.5 million of this to the city of Gießen - the owner of SWG.
Decline in electricity and gas sales
One of the main reasons for the lower result is a decline in electricity and gas sales.
Compared to the previous year, electricity sales fell to 1,453 gigawatt hours (GWh), while gross sales revenue fell by just under 11 per cent to 284 million euros. However, at almost 70 per cent, the electricity sector still accounts for the lion's share of Group sales.
There was also a decline in sales in the natural gas sector in 2017. Sales fell by 4.6 per cent to 1,035 GWh with turnover of 58 million euros.
By contrast, sales in the heating segment remained largely constant. At 453 GWh, sales volumes fell by just 0.6 per cent. Turnover in this division remained almost constant at 37 million euros.
Strategic orientation
By consistently realising its strategic goals, SWG has already initiated the change required by the changes in the energy market in recent years. The Group's management team carries out regular reviews to ensure that the strategic objectives can be adapted to changes in the environment. "We already carried out a strategy inventory in the second half of 2016, as part of which we critically scrutinised the basis of the corporate strategy. This year, we will revise the SWG 2020 strategy and transfer it into the SWG 2025 strategy with newly formulated objectives," explained Jens Schmidt, Chief Commercial Officer of SWG. Matthias Funk, Chief Technical Officer of SWG, added: "The optimisation of technical and economic processes will be the focus of the coming years. And digitalisation will also continue to occupy us - not least due to the Act on the Digitalisation of the Energy Transition and the Metering Point Operation Act."
Improving quality of life
As a company with strong regional roots, social commitment is also a key element of the corporate strategy. Jens Schmidt explains: "With numerous sponsorship activities in the region, we make an important contribution to the development of society and the city." For example, SWG is realigning its commitment to sport with its new sponsorship concept "Spiel Dein Spiel" (Play Your Game), which was launched last year. Instead of mainly supporting top-class sport in Giessen and the surrounding communities as before, SWG now wants to focus on supporting the important work of young talent in clubs and organisations. "With 'Spiel Dein Spiel', we are focussing much more strongly on young people in popular sports, because this is precisely where financial support is needed," explained Jens Schmidt at the balance sheet press conference. "Spiel dein Spiel" - the name of SWG's new sponsorship programme - aptly summarises the new concept. The idea behind it: To support children in getting active through play and to enable young people to develop their sporting skills. SWG is not focussing on one type of sport or on clubs. The company would also like to support schools or private initiatives that give children the chance to take part in organised sport.
Sports expansion at the swimming pool
With a special concept behind a still relatively unusual project, SWG also expanded the sports facilities at the swimming pool in Ringallee last year. The Swedish sports concept Actic Fitness has already convinced Stadtwerke Gießen, 21 other swimming pool operators in Germany and thousands of members across Europe. What makes Actic Fitness so special is the high quality of its equipment and training support. For strength training on machines, high-quality equipment of the latest generation from the USA is used, which is of course regularly replaced with the latest equipment. Those who train with free weights move top Swedish products, which are also used by weightlifters at the Olympic Games or World Championships. In the cardio area, there are cycling, rowing and cross-country skiing ergometers, spinning bikes, crossers and treadmills from various well-known manufacturers. The operators of Activ Fitness also attach particular importance to the quality of the trainers.
State-of-the-art technology
SWG's network control system is also fit for the future. With a new central network control centre, SWG is investing in greater security for the approximately 100,000 customers it supplies with natural gas, water, district heating and electricity. After all, two things are needed to guarantee a secure supply: well-developed networks and the ability to monitor and control these very lines and the systems integrated into them. It was precisely for this purpose that SWG set up and commissioned a new central network control centre last year.
Behind the control centre, which is equipped with state-of-the-art technology, lies a completely new organisation. Previously, SWG had a control centre for the district heating network and a second one for the electricity, natural gas and water networks. "In the past, this was certainly justified. But the new energy world requires more flexibility from all players on the market," says Jens Schmidt, explaining the decision.
In fact, monitoring a district heating network is different from monitoring an electricity, gas or water network. In the district heating sector, the main task is to keep an eye on the many different generation plants and coordinate them with each other. In the other three sectors, the main task is to maintain reliable transport. Nevertheless, these various tasks can be handled very well in a central network control centre. In fact, even better. This is because the new organisation makes it possible to staff the network control centre with the same personnel around the clock. "We assume that we will have to intervene much more frequently in the future, especially with electricity, which will require more efficient deployment of personnel. This will be triggered by the energy transition and climate change. Because more and more electricity from renewable energy sources is being fed into the German electricity grid, the specialists in the control centres have to react ever more quickly in order to compensate for the associated fluctuations," explained Matthias Funk at the annual press conference. In addition, the apparent increase in extreme weather conditions is exacerbating the situation in a grid control centre.
SWG is taking another step forward in terms of security by introducing an information security management system (ISMS). SWG has set up its own ISMS to protect its critical infrastructure. It was ISO-certified in December 2017. "With the new system, we are ensuring that we are optimally equipped against hacker attacks and cybercrime. Especially in the area of grid control, this is a key point for a secure energy supply," said Matthias Funk, Chief Technical Officer of SWG, at the press conference on the financial statements.
Conversion under own management
SWG is also going its own way when it comes to switching from L-gas to H-gas. The largest infrastructure project in the history of SWG's network subsidiary Mittelhessen Netz (MIT.N) is currently gathering pace. The mammoth project, which affects millions of heating systems across Germany, was triggered by the Netherlands' announcement that it will stop producing natural gas by 2030.
The resulting supply gap can easily be covered with natural gas from other sources. However, this so-called H-gas has a higher calorific value, which requires the heating systems to be technically adapted. This is why MIT.N and SWG are currently working on preparing everything so that the necessary changeover can take place smoothly next year and the year after. MIT.N and SWG are the only companies in Germany to be going their own way with the natural gas changeover. Unlike all their competitors, they are working together with regional companies instead of exclusively using the special teams organised and deployed by the industry. "That makes more work and of course raises the odd problem. But all in all, it's better for us," explains Matthias Funk. By organising the technical project management themselves, those responsible are always up to date. This is actually a must, but not the case for many other companies that only rely on external service providers.
"The project of the century is making good progress. Collaboration with the companies involved has become established and so far the experts have largely encountered understanding customers who support them in their work," Matthias Funk reported on the positive progress of the project so far.
SWG focusses on alternative mobility
SWG also has its sights firmly set on the future when it comes to mobility. They are focussing on a demand-oriented mix of drive concepts. In addition to diesel engines, the SWG subsidiary "MIT.BUS" is focussing on natural gas to expand its vehicle fleet and has already purchased four articulated buses that run on natural gas in 2017. The plan is to expand the fleet by an average of four more natural gas-powered buses every year until 2030.
Electromobility will also play an increasingly important role in the future. For example, SWG is planning to realise "charging lanterns" in the Giessen city area. In this project, street lamps are to be converted into charging stations for electric vehicles. Matthias Funk explained at the BPK: "Together with the local authorities, we have to check where it makes sense to place charging points. The relevant lampposts will then be converted to enable electric vehicles to be charged." As more and more people are also travelling electrically, expanding the charging infrastructure is a necessary step.
From energy supplier to service provider
The commitment to an electromobile future is just one example of how SWG is moving towards becoming a service-oriented provider. "In the medium and long term, one of the aims is to promote modern services relating to energy, leisure and mobility. Innovative ideas and digitalisation play a decisive role here," emphasised Jens Schmidt, Commercial Director of SWG. Another example of the company's new understanding of its role as a service provider: With the RasenRobo, SWG successfully launched its activities in a new business segment at the start of 2018 following a successful test phase. Fourteen of the robotic mowers have already been installed - 32 further firm commitments are waiting to be realised. "We see potential for the robotic lawn mower, particularly for larger public lawns, for example in schools, kindergartens and parks," said Matthias Funk, highlighting the prospects for the new product. In addition to investing in new business areas, SWG is continuing to invest in its core business areas of electricity, natural gas, water and heating. "Our solid foundation gives us the necessary strength to initiate change. Maintaining and expanding our core business is just as much a part of our strategy as breaking new ground," emphasised Jens Schmidt. With the commissioning of the second thermal residue treatment and energy utilisation plant (TREA 2), SWG is continuing to focus on the expansion of climate-friendly electricity generation in its own plants in the core business areas of electricity and heat. SWG started trial operation of the plant this month. It is scheduled to be transferred to regular operation by December 2018. When completed, TREA 2 will cover the heating requirements of up to 4,200 single-family homes and the electricity requirements of around 13,500 average households and reduce CO2 emissions by around 28,000 tonnes per year compared to conventional energy generation. What's more, the fuel - processed waste - comes from the region. "The entire plant is extremely variable. We can use it to react flexibly to the respective electricity demand or the current market situation and thus generate electrical energy particularly economically," says Matthias Funk, summarising another key advantage. Flexibility and cost-effectiveness - two characteristics that will be decisive factors not only for the success of TREA II, but also for the Group as a whole.