13. March 2015| MVV Energie

MVV Energie aims to link renewable and conventional energies

Mannheim energy company to invest up to Euro 500 million in future energy system in current financial year - Mild weather leaves its mark - Positive outlook

The Mannheim-based energy company MVV Energie will continue investing heavily in the energy system of the future in the years ahead as well. Having invested Euro 321 million in the past 2013/14 financial year in expanding renewable energies, enhancing energy efficiency and modernising and maintaining its existing grids and plants, the Group plans to channel up to Euro 500 million into its growth and existing businesses in the current financial year. This was announced by Dr. Georg Müller, CEO of MVV Energie, at the company'’s Annual General Meeting at Congress Center Rosengarten in Mannheim on Friday. "The key focus for us is on sustainably linking renewable and conventional energies along the energy industry value chain. This way, we aim to set course for the energy system of the future in a way that is socially and ecologically responsible, but also successful in economic terms."

The energy industry was continuing to undergo structural change. Dr. Müller emphasised to shareholders that the energy supply would have to become more renewable, flexible and efficient, but also remain reliable and affordable. Politicians had the task of creating a framework for a new market system "in which renewable, but volatile, energy forms and conventional, yet reliable, energies could be operated in a way that makes both macroeconomic and microeconomic sense".

The Mannheim-based energy company sees reliability and plannability as the basic requirements for this transformation. These conditions may be met by consistently enhancing the existing energy-only market, which deliberately allows for price peaks due to competitive factors, or by introducing a decentralised performance market. Commented Dr. Müller: "What ultimately counts is that we have an energy market design that offers system security and avoids permanent interventions in market processes".

MVV Energie is also in favour of further expanding combined heat and power (CHP) generation and suitably amending the German Combined Heat and Power Generation Act (KWKG). According to MVV’s CEO, CHP is making "an indispensable contribution towards the heating energy turnaround as a crucial component of the energy turnaround". In conjunction with environmentally-friendly district heating, combined electricity and heat generation significantly eased the strain on the heating energy sector, particularly in towns and metropolitan areas. Compared with all other supply systems, it remained the most economically efficient, most ecological and, for consumers, the most cost-effective solution.

At the same time, CHP perfectly complements renewable energies in the electricity business. Remarked Dr. Müller: "Heating energy is generally needed most when the sun and wind are in short supply, i.e. in winter." Combined heat and power generation had to be able to perform this systemic function on an economically viable basis in future as well. Only this way would it be possible to actually achieve the target set in law of generating 25 percent of Germany's electricity from CHP by 2020.

Enough renewable electricity to supply all household customers
MVV Energie already generates 28 percent of its electricity using CHP. In the past financial year, the Group raised its renewable energies generation capacities by 9 percent to 344 megawatts. At the same time, it increased the volume of electricity generated at these renewables plants by 16 percent to 872 million kilowatt hours. That corresponds to the average annual consumption of around 250,000 three-person households. Comments Dr. Müller: "MVV Energie already generates more electricity from renewable energies than is consumed by all our household customers in Mannheim, Kiel and Offenbach."

This is also impacting positively in terms of climate protection. By generating electricity at its renewable energies plants, MVV Energie avoided total emissions of 685,000 tonnes of climate-harmful carbon dioxide in the past financial year, 22 percent more than one year earlier.

Satisfactory earnings
In the past 2013/14 financial year (1 October 2013 - 30 September 2014), the Mannheim energy company generated what its CEO described as satisfactory earnings and met its own annual forecast despite persistently difficult conditions on the energy markets and the unusually mild winter. At Euro 3.8 billion, the Mannheim-based Group’s sales almost matched the previous year’s record figure, in which MVV Energie slightly topped the 4 billion mark for the first time in its history. Operating earnings amounted to Euro 173 million.

Commented Dr. Müller: "The ongoing fall in the electricity generation margin has left its mark throughout the energy industry, and thus at our company as well." At the same time, earnings also include increasing revenues and earnings contributions from growth investments in renewable energies and energy efficiency. "However, these are not yet - and I mean not yet - sufficient to compensate for the reductions in the conventional business."

Now that mild temperatures this winter as well have led to lower turnover with heating energy and gas in particular, the target of concluding this year with higher earnings once again has become "more ambitious. We are making every effort to meet our earnings forecast of Euro 180 million to Euro 195 million."

Consistent dividend
The Supervisory and Executive Boards are proposing an unchanged dividend of 90 cents per share for the past 2013/14 financial year for approval by the Annual General Meeting. The distribution total thus once again stands at Euro 59.3 million.

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