Climate protection is MVV’s mainstay
Mannheim energy company upheld its sustainable growth course in 2019 – CEO Dr. Müller questions exit terms for hard coal and calls for further expansion in renewable energies
Were the Mannheim-based energy company MVV to have its way, then the new decade that has just started would be the “Green Twenties”. At this year’s Annual General Meeting, company CEO Dr. Georg Müller drew a parallel with the Golden Twenties of the past century: “Those years are known as a golden age for the arts, culture and science. Now, in the 21st century, the twenties are the decade when climate protection will be the key topic on the world stage and when Germany overcomes its final doubts concerning the energy turnaround.” For MVV, climate protection had been “the mainstay of our strategic alignment and the basis for our entrepreneurial responsibility” for many years already, stressed Dr. Müller to the shareholders attending the meeting.
Overall, the past financial year was a good year for MVV. The company met the targets it had set itself and made substantial progress with implementing its strategy. Dr. Müller: “This way, we laid strong foundations for our future growth.”
By consistently implementing its strategy, which is based on sustainability and economic viability, MVV aims to be climate neutral by 2050 at the latest. To achieve this, MVV will reduce emissions from its conventional generation positions to zero by 2050 at the latest, press consistently ahead with expanding renewable energies and gradually make the heating energy supply green. The company is also looking into new technologies to reduce, use or offset its unavoidable residual emissions. It acts as a competent partner to its customers and assists them in implementing their own personal energy turnarounds by offering innovative products and services, for example in the fields of renewable energies and e-mobility. “For us, sustainability means proactively shaping the transformation in the energy industry”, added Dr. Müller.
Clear commitment to coal exit
Turning to current energy policy discussions, MVV’s CEO stressed the crucially important role played by a secure, affordable and climate-friendly energy supply. Precisely because of that, “the country needs to make every conceivable effort here to make sure we set the right course.” He viewed the plans on the part of the Federal Government to allow lignite-fired power plants to operate longer than recommended by the Coal Commission and on the other hand to decommission hard coal-fired power plants at an earlier date as “the wrong approach”. Not only that, according to the draft coal exit legislation lignite-fired power plants will receive compensation for being decommissioned while lower-emission hard coal-fired power plants, particularly in Southern Germany, will go empty-handed.
This imbalance, which goes against the shared objectives of climate protection, is also apparent in the heating energy supply. Most hard coal-fired power plants are operated using highly efficient combined heat and power generation and therefore play a key role in supplying environmentally-friendly district heating in large built-up areas. Dr. Müller spoke out in favour of stable conditions for the coal exit and against disadvantaging precisely those companies that are working to implement the heating energy turnaround. Instead, he called for “relief as we head for green heating energy.”
MVV achieved its first major milestone on its way towards green heating energy in February of this year by connecting its energy from waste plant on Friesenheimer Insel to the district heating grid in Mannheim and the region. This will increase the share of district heating generated from green energies to an annual average of 30 percent. This will be followed in the next stage by linking up the adjacent biomass power plant, most likely in 2024. The group of companies is pressing ahead with decarbonising the district heating supply in Kiel as well. In November last year, the new gas-fired CHP plant of Stadtwerke Kiel launched operations. Carbon dioxide emissions here are around 70 percent lower than at the predecessor plant.
Further expansion in renewable energies
MVV’s CEO called for greater courage and determination in the field of energy policy, also for the further expansion in renewable energies. “If we want to exit from nuclear and coal power – and that is something we want and have to do – then we also have to say how we intend to replace them. Here, renewable energies are the only option.” This requires a well-coordinated approach on all political levels. Dr. Müller called for project-specific rules for the distance between wind turbines and residential areas, financial incentives to encourage local authorities to make sites available, as well as for significantly higher tender volumes and speedier and simpler approval processes.
Consistent dividend, outlook affirmed
For the past 2019 financial year, the Supervisory and Executive Boards are proposing an unchanged dividend of 90 cents per share for approval by the Annual General Meeting. This once again corresponds to a high payout ratio of 61 percent and a dividend yield of 3.4 percent based on the year-end share price on 30 September 2019. “Our share remains a solid investment with a good yield. We will be aiming for that in future as well”, commented Dr. Müller.
For the 2020 financial year, MVV expects to generate slight growth in both sales and operating earnings and is thus upholding the outlook issued in December 2019. The CEO stressed that 2020 would be a special year for the company: “Many of the climate protection-related projects approved and initiated in recent years will become reality in 2020”. This was particularly true of the heating energy generation and renewable energies project development businesses.
Ongoing high pace of investment
MVV will be investing a total of three billion euros in the future energy system in the years ahead, of which it invested Euro 310 million in the 2019 financial year alone. “We will be maintaining our high pace of investment”, stressed Dr. Müller. The company would be focusing its investments in future as well on the three pillars of expanding renewable energies, boosting energy efficiency and offering innovative products and services to its retail, business and industrial customers.