Market environment and success factors – Energy segment
Generation business unit
EVN generates energy from thermal sources, hydroelectric power and wind. Through its own power generating facilities and purchasing rights from hydroelectric plants, EVN has a total generating capacity of 1,829 MW. EVN operates three thermal power stations in Dürnrohr, Theiß and Korneuburg, five storage and 63 run-of-river hydroelectric plants as well as 63 wind power facilities in seven wind parks. The company also sources its own electricity from the Danube power stations of Melk, Greifenstein and Freudenau. In addition, EVN has a one-third stake in the hydro power plant of Nussdorf. EVN is currently implementing several power plant projects and expanding its power generation from renewable energy sources in order to exploit favourable market opportunities in the future.
Networks business unit
This business unit encompasses the operation of electricity and gas networks as well as networks for EVN’s cable TV and telecommunications businesses. EVN possesses a power grid for electricity transmission and distribution with a total length of around 50,180 km of high-voltage, medium- and low-voltage lines. EVN’s gas transport and distribution pipeline network has an overall length exceeding 13,250 km.
Supply business unit
The sourcing of electricity and gas, the trading and the sale of electricity and gas takes place within EnergieAllianz, a joint subsidiary of EVN, BEWAG, BEGAS and Wien Energie. All EVN Group gas sourcing and trading is carried out via
EconGas, the joint natural gas wholesaling company of the EnergieAllianz partners operating in gas business as well as Linz AG, EGBV Beteiligung GmbH and OMV. The spinning off of these activities along the value chain to joint companies in cooperation with other partners has created competitive entities which make economies of scale possible.
The heat generated by EVN and distributed to 39,000 private and commercial customers is also encompassed in the Supply business unit. The production of this heat is carried out in own district heating, local heating and cogeneration plants, the bleeding of waste heat from EVN Group’s thermal power stations, and biomass. EVN is the largest supplier of heat from biomass in Austria, operating 44 biomass facilities. In the second quarter of the 2007/08 financial year, EVN acquired a 49% shareholding in the company set up by the City of Sankt Pölten to manage its district heating operations. In the third quarter 2007/08, the heating operations of the EVN Group were spun off retroactively to October 1, 2007 and integrated into the newly-established company EVN Wärme GmbH.
South East Europe business unit
This business unit primarily encompasses the Bulgarian electricity network operator EVN EP AD, electricity distributor EVN EC AD and the Macedonian national electricity distribution company EVN Macedonia AD. Disproportionately high economic growth is expected in South East Europe compared to the rest of the continent, accompanied by a continual increase in energy demand. The Bulgarian electricity market was liberalised in July 2007, nevertheless a competitive business environment has not yet emerged. The Macedonian electricity sector is largely regulated by the government. In both countries, a significant increase in prices is expected on a medium-term basis, due to the growing gap between current production capabilities and electricity demand.