Consolidated management report

12. OUTLOOK

The state-of-the-art cogeneration power station Simmering 1/2 will be available to the production division in the coming financial year. This represents a further increase in the proportion of environmentally friendly and highly efficient cogeneration plants in Wien Energie’s power station park and increases the security of supply enjoyed by Vienna even further. Fernwärme Wien can not only draw on the additional capacity provided by this plant to provide district heating, but can also tap into that generated by the waste incineration plant in Pfaffenau with its new heat recovery system which was commissioned in mid September 2008.

Both the electricity and the gas networks require constant investments in order to safeguard the existing high degree of reliability. The extent to which this is and will remain challenging in the present and the future regulatory environments can be demonstrated by considering the recent development of grid tariffs in the electrical power sector: In comparison to the situation at the beginning of the deregulation process in 1999, grid tariffs will be over 40% lower at the end of the 2009 regulatory period. Further cuts would have a massive impact on security and quality of supply given that it would no longer be commercially viable to invest. Wien Energie will continue to forge ahead with the expansion of the district heating network in response to the positive development of customer demand and urban development projects in Vienna.

In the area of sales, competition is expected to intensify even more in the coming years. The commercial success of Wien Energie will therefore be largely dependent on the extent to which the Group is successful in pushing ahead with customer loyalty and advisory programmes, offering good value for money, and tailoring pricing models in the context of its existing partnerships. For the district heating division, the aims are to continue with the excellent progress made with regard to sales in previous years and to actively promote its new business area – district cooling.

As the 2007/2008 financial year demonstrated time and again, the development of Wien Energie, in terms of both turnover and earnings, is heavily dependent on weather conditions and the price developments of purchased primary energy sources and electrical power. It is to be assumed that energy markets will continue to experience periods of volatility in future. The 2008/2009 financial year will see steady turnover and earnings position development provided that the operating environment remains stable. The level of investment will be higher than in the 2007/2008 period. The main focuses of investment activity will be the ongoing expansion of electricity, gas and heating infrastructure, in the area of network operations, as well as further optimisations measures in the area of power generation.