Essent 2011: more efficient and more innovative
The Essent organisation has changed significantly between 2009 and 2011. Here’s an overview in facts and figures.
Highlights 2011
Erwin van Laethem was appointed as Chief Executive Officer as of 1 January 2012, Peter Terium was appointed new CEO of RWE AG as of 1 July 2012.
Essent is fully integrated with RWE.
Strong performance in the retail- and business-to-business segment due to repositioning of the Essent brand (‘Essent Levert’), innovative product development, increased customer satisfaction and improved client processes and efficiency.
Customers benefit from smart energy services to a lower energy bill and initiatives to increase sustainability of energy supply. Essent is focusing on smart energy leadership in the Netherlands.
Aim for energy efficiency is supported by a EUR 820 mln investment in new power plants: in the first two months of 2012 two highly efficient (58.5%) gas fired units (total 1.7 GW) were connected to the grid.
The focus on innovation in sustainable energy concepts is visible in won tender for E-mobility infrastructure (charging stations) in Amsterdam and the signing of E-mobility contract with automobile supplier Renault. Multiple initiatives were started regarding the bio-based economy, emphasizing Essent’s leading position on biomass.
Strive for internal efficiency improvement is visible in cost saving programmes which have reduced costs with 18%. Synergies driven by the take-over of RWE are being delivered above initial plan.
Operating Result decreased from EUR 391 mln to EUR 245 mln. The figures can not be compared due to multiple one off effects, amongst others the reallocation of Essent Trading contracts across RWE Group and incidental effects. These effects were partially offset by the results of cost saving programmes.
Deteriorating market circumstances triggered a limited impairment of the asset portfolio (EUR 270 mln).
2011 in overview
The Essent organisation has changed significantly between 2009 and 2011. During 2010, the integration of the mid stream gas business to RWE Supply and Trading was completed. In the second half of 2011, Essent concluded the remaining part of the Essent acquisition by RWE; the acquisition of Energy Resources Holding (ERH). ERH owns a 30% share of EPZ, which operates the Borssele nuclear power plant, a hard coal power plant and a number of small wind turbines. Following successful integration with RWE, realisation of synergies is well on track with EUR 109 mln structural savings. This will add up to a total of EUR 135 mln yearly savings in 2014.
Cost saving programmes in our asset park
On top of the synergy savings, additional cost saving programmes were launched to compensate for lower spreads for gas and hard coal (the difference between purchase costs of fuel & carbon emission rights and the revenues of the generated electricity). Costs have been reduced by 18%. Long-term low spreads put pressure on the earnings capacity of our asset park and triggered impairment of the less efficient part of the asset park.
Essent is still the largest sustainable energy producer in the Netherlands
RWE is confident in the opportunities in the Dutch and Belgian markets by continuing the investment programme in new highly efficient and sustainable assets (EUR 820 mln). In 2011, Essent maintained its position as largest sustainable energy producer in the Netherlands and within the RWE group. The realization of the most flexible and efficient gas-fired power plants in the Netherlands proceeded according to plan. Claus C (1,304 MW, Maasbracht) and Moerdijk 2 (426 MW, Moerdijk) became commercially operational early 2012.
Production assets in the Netherlands are highly flexible
Essent/RWE continues to execute its strategy towards the energy transition. The current Essent/RWE production assets in the Netherlands are highly flexible and provide a good mix of gas, biomass and hard coal fired power plants as well as wind turbines. To further increase the value, additional effort is put on maximising commercial availability and increased cooperation with other RWE entities. Cooperation with RWE has already resulted in lower maintenance costs for the production fleet.
Market leader Essent is promoting biomass even further
Essent has been the Dutch market leader in using biomass (wood pellets) in its core business of power production for almost 20 years. Essent has now accepted the challenge to promote biomass even further. Together with partners from the agri/food-, chemical-, paper- and energy sector Essent will work to establish commercial attractiveness and sustainability of the biomass value chain in support of a bio-based economy.
Read more about Essent’s vision on the bio-based economy
Extended tests with bio coal
In 2012, Essent wants to start with an extended test of the next generation of renewable biomass, so-called bio coal. Bio coal is woody biomass which, after a pre-treatment by heating, can be co-fired in power stations. This biomass has a much higher energy value than wood pellets. As a result, the current yield per ton is much higher, and even comparable to the high energy value of coal.
Ten major wind turbines to be built in the Netherlands
New developments have also been made in the field of wind energy. Two new 6 MW wind turbines will be placed in the North (near Eemshaven). It is also expected that an investment will be made for the yet to be build wind farm Noordoostpolder, where Essent/RWE Innogy wants to build eight 7.5 MW wind turbines.
Financial results*
Revenue is 11% lower than prior year because 2010 revenues were exceptionally high driven by cold weather conditions. The operating result of 2011 (EUR 245 mln) is considerably lower than 2010 due to multiple one off effects, amongst others the reallocation of Essent Trading contracts across RWE Group and incidental effects. Lower earnings of the power production (due to lower spreads) were compensated by efficiency improvement programmes. Customer numbers increased due to winning tenders in Belgium and successful marketing campaigns, retention measures and the launch of new products and services in the Netherlands.
| Highlights | FY 2011 | FY 2010 | Difference '11-'10 |
|---|---|---|---|
| Financials (in € mln) | |||
| External revenue | 5,818 | 6,510 | -11% |
| Electricity | 2,141 | 2,195 | -2% |
| Gas | 3,460 | 4,108 | -16% |
| Other | 217 | 207 | 5% |
| EBITDA | 462 | 660 | -30% |
| Operating result | 245 | 391 | -37% |
| Capital expenditure | 1,402 | 1,147 | 22% |
| Retail customers (in '000) | |||
| Electricity NL & B | 2,346 | 2,329 | +17 |
| Gas NL & B | 2,024 | 2,015 | +8 |
| FTEs (own staff) | 3,794 | 3,899 | -105 |
*This press release has not been part of the external auditor's audit. The figures are derived from data contained in the Annual Report 2011 of RWE AG and where applicable prepared in accordance with the accounting policies of RWE AG.
Commercial developments
Competition on the Dutch and Belgian energy market has further increased in 2011, both in the consumer segment and in the (mid size) business segments. Essent successfully increased the number of customers through a combination of offering energy saving services & products, winning tenders, increasing retention efforts and the effects of large scale marketing campaigns such as Smart Thermostat (‘Slimme Thermostaat’), Home insulation campaign (‘Spouwmuur isolatie’), E-Thermostat (E-Thermostaat) and the ConsumptionManager (‘VerbruiksManager’) App. With these campaigns/products, Essent is supporting the customer in enhancing insight in energy consumption and lowering the total energy bill. Essent also further expanded its strategy to manage gas shipping to end-customers.
Health, Safety and Environment (HSE) & Corporate Responsibility
The structural attention for a safe and healthy working environment is clearly bearing fruit. Strict safety procedures within Essent, also with contractors, have led to an exceptionally good internal safety score with a LTIF (Lost Time Injury Frequency) score of only 0.64 per million worked hours. An excellent achievement given the two major construction projects Essent performed in 2011 (Claus C, Maasbracht and Moerdijk 2, Moerdijk).
Energy supply: affordable, reliable, sustainable
As a major Dutch energy company, we take responsibility for an affordable and reliable energy supply, which at the same time is developing into a sustainable energy supply. We translate this responsibility into our core business by enhancing the efficiency of our power stations, by replacing fossil fuels with bio fuels when possible, and by investing in sustainable wind energy. We also stimulate our customers to lower their energy consumption; always the most sustainable option. For their remaining energy needs, we provide green electricity and green gas, preferably produced by Essent in The Netherlands.
Global ISO 26000 standard for Corporate Social Responsibility
This vision of a sustainable energy supply is well embedded in our operations. This is emphasised by the fact that in 2011 Essent became one of the first Dutch companies to operate in accordance with the global ISO 26000 standard for Corporate Social Responsibility. To make sure that our customers are more aware of environmental issues and that they act accordingly, Essent intensified its cooperation with the HIER Climate Campaign in 2011; together we ensure that customers choose green electricity and green gas more frequently than in the past.
New business developments
Under the name ‘My E’ (‘Mijn E’), Essent is also developing new and innovative ‘smart energy’ products to help its customers become energy efficient in and around the home. The first ‘My E’ product is the E-Thermostat which gives customers the opportunity to control their heating remotely via smartphone app or PC. Essent is the first energy company launching a product like this on the market. Next to this Essent introduced the unique free ‘Verbruiksmanager app’ (Usage Manager app) for her customers, giving them insight in their energy usage and control over their bill. Over 70,000 customers have downloaded the app so far.
‘Powermatching’ pilot for decentralised energy production
A good example of longer term innovation is the Essent pilot in Hoogkerk. With the increase of decentralised energy production, it becomes even more important to match timing of production and usage of power (‘Powermatching’) without concessions to comfort at home. In Hoogkerk we work together with partners such as KEMA, TNO and Enexis on a real live, large scale pilot unique in the Netherlands.
Essent is investing in electric transportation
Essent is preparing for future emission restrictions and scarcity of fossil fuels (oil) by investing in electric transportation. The focus is on offering a full charging infrastructure, including charging stations, green power and necessary services such as invoicing and usage of third-party loading infrastructure. The cooperation with RWE Effizienz strengthened our leading position. The won tender for the loading infrastructure in Amsterdam and the cooperation with Renault on the sale of electric cars are some of our successes.
Annual results 2011 RWE Group (mother company of Essent)
Published: 06 March 2012