Stadtwerke Gießen presents pleasing business figures for the 2020 pandemic year. At the annual press conference on 13 July, the Chairwoman of the Supervisory Board and the two members of the Management Board presented the company's results and a number of important projects from the past year.
Stadtwerke Gießen (SWG) has weathered the first nine months of the crisis very well. In the past financial year, the coronavirus proved to be a key challenge for SWG, but by no means the only one. The industry is still undergoing massive upheaval. In addition to day-to-day business and the pandemic, two major issues are dominating our work: the energy transition, which requires new, innovative solutions every year, and the increasingly rapid pace of digitalisation. Digitalisation is finding its way into society everywhere. However, due to its exposed position as an operator of critical infrastructure, SWG has to take a particularly meticulous approach and consider even the smallest details before introducing a new system. After all, the security of the energy supply always comes first.
"In view of this complex situation, the performance of Stadtwerke Gießen cannot be rated highly enough," says Astrid Eibelshäuser, Chairwoman of the SWG Supervisory Board.
Improved earnings after taxes
Despite this challenging overall situation, SWG was able to generate a profit of around 10.5 million euros in the 2020 financial year, exceeding the previous year's earnings after taxes by around 1.5 million euros. This is shown in the balance sheet presented by Astrid Eibelshäuser and the two SWG board members Matthias Funk and Jens Schmidt at a press conference. The main reasons for this success are the ongoing construction boom and the fact that SWG has been able to reap the rewards of its "consolidate and optimise" strategy. In addition, the company is now benefiting from the prudent provisions made in previous years. This puts SWG in a position to cushion coronavirus-related burdens in 2020 and also led to a reduction in tax payments. This has a significant impact on the actual profit.
"Of course we are satisfied with the result," summarises Jens Schmidt, Commercial Director of SWG. And Matthias Funk, Technical Director of SWG, adds: "We would like to take this opportunity to thank all our employees for their exceptional work. A result like this can only be achieved with a competent and committed team."
As in previous years, 2.5 million euros will be distributed to the city of Giessen. SWG will use most of the proceeds from 2020 to drive forward the energy transition and digital transformation and to prepare for the uncertainties caused by the pandemic. However, in order to remain successful, SWG must also invest in its infrastructure - especially in its electricity, gas, heating and water grids. The business model is based on these facilities and pipelines. In addition, local public transport and the swimming pools also require financial resources.
A total of 8.2 million euros has been set aside as a reserve. "We don't want to use up this cushion. But it allows us to approach the numerous tasks ahead with much greater peace of mind," explains Jens Schmidt. Because the fact is: even after 15 months of the pandemic, its overall economic consequences cannot yet be estimated. For this reason, it is only possible to predict that SWG will most likely lose further income. However, the amount is still completely open.
Despite these uncertainties, Astrid Eibelshäuser is not worried about SWG. "The company is obviously well positioned for the future," she summarises in conclusion. An important key figure underpins this thesis: SWG has an equity ratio of 38.5 per cent for 2020. A sure sign of a rock-solid company.
Much progress made during the crisis
In order to make the gas grids fit for the future, the outstanding project in 2020 was the switch from L-gas to H-gas. With around 21,000 customers, around 24,800 gas appliances had to be converted to the new natural gas quality. Unlike the vast majority of network operators, the municipal utility subsidiary Mittelhessen Netz GmbH (MIT.N) tackled the matter itself. Instead of engaging supra-regional service providers, the experts at MIT.N worked together with local specialised companies. "It is one of our principles to keep the added value in the region whenever possible," says Matthias Funk, explaining the decision. It couldn't have been better. In fact, both changeover dates - on 3 March and 15 April 2020 - went off without any significant problems. And this despite the fact that essential work for the adaptation of well over 19,000 gas appliances took place during the first lockdown. "The whole team worked brilliantly - from the project manager in Lahnstrasse to the fitters in the customers' basements," says Jens Schmidt, praising everyone involved.
Keyword Corona: As a company that maintains critical infrastructure, SWG is optimally prepared for crisis situations. It is therefore not surprising that everything ran like clockwork in terms of organisation. The crisis management team met regularly to make the necessary decisions. As was to be expected, there were some restrictions due to the pandemic. SWG had to temporarily close its contact points in the SWG customer centre on Marktplatz and in Lahnstraße as well as the swimming pools. With falling case numbers, the Ringallee outdoor pool was at least able to welcome guests in time for the summer holidays. "Digitalisation helped us a lot here," recalls Matthias Funk. In order to fulfil the official requirements and to be able to monitor visitor numbers at all times, SWG introduced an online ticket without further ado. "Anyone who wanted to spend a few pleasant hours in the outdoor pool could book their ticket for a free time slot online," says Matthias Funk, explaining the concept.
However, these and some other very positive developments at SWG should not obscure the fact that the coronavirus has also left its mark economically. The pools are a particularly good example of this. Due to the delayed opening and official requirements, visitor numbers fell to a third of the previous year's level. This inevitably has a negative impact on revenue. This is offset by significantly higher costs. For example, for the purchase of the online booking tool, but also for more staff in the outdoor pool. This was necessary to ensure that everyone adheres to the hygiene concept.
Local transport during the pandemic
Local transport was also affected by the pandemic. And in this sector, too, SWG suffered a sharp drop in sales. In March and April, those responsible reduced the number of journeys - initially the timetable for weekends applied throughout, later the holiday timetable also applied during school term time. The booster buses for students remained in the depot at all times. "In this way, we reacted to the massive drop in demand, but ensured that there were always enough buses on the road at all times," summarises Jens Schmidt.
This is precisely where the Vectura Analytics software - a programme developed by SWG together with the consulting firm Brodtmann Consulting - proved its worth. The intelligent tool makes it possible to forecast the capacity utilisation of the various buses on the different routes very accurately. SWG has also been making the data available to its passengers since May of this year: A matrix shows intuitively which line is carrying many or rather fewer people at which time. "This kind of information is particularly valuable when it comes to keeping your distance," emphasises Jens Schmidt. He adds: "But our passengers also benefit from this new service in normal everyday life without the risk of infection."
The SWG local transport subsidiary also has positive news to report: At the end of 2020, MIT.BUS replaced the first six natural gas articulated trains with the latest generation models. Of course, these vehicles - like the rest of the fleet - run almostCO2-neutrally on bio-methane, but also require significantly less fuel than their predecessors. "We are consistently pursuing our strategy and continuing to reduce the energy requirements and therefore the pollutant emissions of our buses," explains Matthias Funk.
The pandemic as a driver
SWG began setting up a LoRaWAN back in mid-2020. The abbreviation stands for Long Range Wide Area Network. This is a wireless network that can be used to exchange data very efficiently. Some schools in Giessen are now using the technology to measure theCO2 content in the air. Sensors collect the relevant information and transmit it to a server at SWG. If a critical value is exceeded, the central computer sends a signal requesting ventilation. This comparatively simple technology can help in the fight against the pandemic in schools. BecauseCO2, just like viruses, enters the room air via human respiration, the carbon dioxide content is an indicator of the potential viral load.
LoRaWAN also offers numerous other potential applications. From car park monitoring and checking the fill levels of waste bins to measuring the moisture in plant pots. Usually, not even a power connection is required. This is because the vast majority of LoRa sensors, which are also comparatively inexpensive, work with batteries. This means they can also be used in remote locations. "Local authorities and companies can benefit from LoRaWAN technology," says Matthias Funk. And announces: "That's why we will continue to expand the network in the coming months and years."
Driving forward the energy transition locally
SWG reached another important milestone in heat generation last year. TREA 2, a highly efficient combined heat and power plant that is probably unique in the world and converts high-calorific waste into heat and electricity, went into regular operation at the end of 2020. Experts from TÜV Hessen certified the safety of the entire system back in September following extensive checks.
In addition to the electricity and heat sectors, transport also plays a key role in the energy transition. Consequently, SWG has also become involved here and developed new products for its E-Revolution brand. The portfolio, consisting of wallboxes, solar systems and electricity storage units, has been supplemented by a practical e-scooter at exclusive conditions since April. "We see great potential for electrically powered two-wheelers, especially in urban transport," says Jens Schmidt, explaining the addition to the range.
The SWG subsidiary smartSTADTwerke made another important contribution to the transport revolution: Since the beginning of 2021, the e-fuelling charging network has made charging e-vehicles convenient. The practical e-fuelling app is the linchpin here. It is used to open the charging stations and as a guide to the nearest charging point. Customers can also view all their bills via the app.
In order to drive forward the energy transition and climate protection, the search for innovations has always been on SWG's agenda. This is why the experts in the various specialist departments work closely with different research institutions - first and foremost with the Technical University of Central Hesse. "This partnership, which has been cultivated for many years, proves to be a win-win situation for both parties time and time again," says Matthias Funk.
Political requirements
As in previous years, SWG also had to deal with various political requirements from the federal government in the past and current financial year. For example, it had to fulfil the requirements of the Grid Expansion Acceleration Act. To enable more volatile energy from wind and solar to be used, distribution grid operators are to make a greater contribution to stabilising the electricity grids in future. This will require new technology and, above all, different processes. SWG and MIT.N have set up the Redispatch 2.0 project to develop all of this. As was the case with the natural gas switchover, the two companies - in contrast to their size - did without external specialists and handled the matter themselves.
Another requirement from Berlin had a much more direct impact on SWG's business: the pricing ofCO2 as part of the Fuel Emissions Trading Act (BEHG). Due to this new surcharge, SWG had no choice but to raise its prices for natural gas and district heating at the turn of the year. The fact that politicians are already using the BEHG to determine how much more expensive fossil fuels will become in the future means that customers can expect further price increases. "We are working hard to counter this development in the best possible way and in the interests of our customers. For example, by noticeably increasing the proportion of renewable fuels in the generation of our already highly efficient district heating," says Jens Schmidt, explaining the situation.
Looking ahead
Stadtwerke Gießen is staying on course - despite all the uncertainties resulting from the pandemic in particular. Against this backdrop in particular, the two Management Board members see the consistent optimisation of processes and structures at SWG as the central task. "We want to further expand our strengths," announces Jens Schmidt. The chances of achieving this goal are good. "Our employees have proven that they adapt quickly to new situations and maximise their performance. I am therefore confident that we will continue to improve bit by bit and do our work even more efficiently." And he is not only referring to internal processes, but also to the numerous generation plants. "We will focus even more strongly than before on innovative solutions. In order to further reduce the use of fossil fuels, noticeably lowerCO2 emissions and thus make a decisive contribution to the local energy transition and climate protection."
As in 2019, it is difficult for the two experienced energy managers to forecast business development at the time of presenting the balance sheet. "At the moment, we don't dare to make any predictions about how the economy will develop and, of course, how our business will perform," Jens Schmidt points out. For this reason, Stadtwerke Giessen will probably continue to play it safe in the coming months. "We have proven in the past that we can react to changes with agility. This ability will help us to survive the crisis and emerge from it stronger."