Annual report 2009: Eneco invests in future of sustainable energy supply


  • Energy revenues increase by 5% to € 4.9 billion (€ 5.2 billion including other revenues)
  • Net profit decreases to € 177 million as result of rate regulation, recession and non-recurring expenses
  • Unbundling costs negatively impact result
  • Orders placed for construction of EnecoGen gas plant in Europoort area and gas storage facility in Epe (Germany)
  • Permits /concessions obtained for offshore wind farms in the Netherlands, Belgium and United Kingdom
  • Acquisition parts of Econcern positively contributes to operating result
  • 30% increase in number of customers using Ecostroom; Eneco’s brand of green electricity

Jeroen de Haas, chairman of the Board of Management: “In 2009, Eneco again invested in its sustainable future. The expansion of our company with future-oriented sustainable activities now leads to costs, but increases the future profit earning capacity. The general recession and non-recurring costs related to the legally required unbundling lowered the profit in 2009. The strategic acquisition of parts of Econcern already positively contributed to the operating profit during the first year. This year we will separate the energy company that will continue under the name Eneco, from the network group consisting of Stedin and Joulz. Each of these companies faces the future from a healthy financial basis. In view of the extensive impact of the prospective unbundling, we do not make a statement regarding our expectations for the results in 2010. Eneco has a promising portfolio, a loyal customer base and a good basis for realising its sustainability ambitions.”

In 2009, Eneco Holding N.V. realised a net profit of € 177 million, which is a decrease of € 95 million compared with 2008 (€ 272 million). This result is achieved in a year in which the consequences of the financial crisis and the economic decline are apparent. In addition, the unbundling casts a shadow in the form of already incurred and still to be incurred unbundling costs.

The acquisition in 2009 of the Econcern entities Ecostream, Evelop and Ecofys significantly strengthens the development of our sustainable energy portfolio. Ecostream and Evelop will be integrated while Ecofys will continue to be positioned as an independent consultancy agency. Energy company Eneco focuses on increasing the sustainability of its energy supply. The central component will be cooperation under the motto Sustainable, Decentralised, Together. The total customer base decreased slightly (-0.7%). In a period of one year, the number of customers that purchase Ecostroom, Eneco’s brand of green electricity, increased from 508,000 to 662,000 (+30%).

2009 was the second year in a row that Greenpeace elected Eneco to be the cleanest electricity producer of the Netherlands.Financial result Eneco Holding N.V.In 2009, the energy revenues increased by € 248 million (+5%) to € 4.9 billion. The total revenues, including other operating revenues, increased by € 302 million (+6%) to € 5.2 billion. The gas sales were higher than in the previous year while the prices were lower. The increase can for a large part be explained by the supply to the Pergen and Intergen gas plants on the basis of gas supply contracts that became effective in 2009. The deteriorated economic conditions resulted in lower electricity sales, mainly in the business and agricultural sectors.The operating result decreased by € 136 million to € 268 million in 2009 (2008: € 404 million). There are several specific reasons for this decrease in the operating result. Stedin again had to apply lower regulated transmission rates, which had a negative impact on the 2009 operating result in the amount of € 60 million.

During the course of 2009, a number of cross border leases were terminated early, which had a negative impact of € 10 million. The provision for doubtful debtors increased by approximately € 12 million in 2009 compared with 2008. This is in line with the changes in the economic and financial climate. In connection with the legally required unbundling, a provision of € 15 million was made for the separation of information systems. In addition, other costs to the amounting to € 11 million were incurred in 2009, in relation to the unbundling. The higher investments in 2009 resulted in an increase of the depreciation costs to € 296 million (2008: € 291 million).

The share of profits of associates increased in 2009 by € 28 million to € 31 million. This increase relates to our participation in Kema that realised non-recurring income in 2009 resulting from the disposal of a business unit.

On balance, the financial income and expenses increase in 2009 by € 15 million to a negative € 76 million (2008: negative € 61 million). This reflects the higher balance sheet total and the relating required increase of the financing volume.

The decrease in corporate income tax (€ 40 million in 2009 as opposed to € 75 million in 2008) is the consequence of the lower result from normal business operations and accelerated depreciations for tax purposes.

Energy company Eneco
Despite the negative market conditions, energy company Eneco was able to reasonably maintain its operating result in 2009 (€ 153 million in 2009 as opposed to € 173 million in 2008).

In 2009, energy company Eneco made investments in the amount of € 282 million, of which a little under € 150 million in the new EnecoGen gas plant and the Gasspeicher gas storage facility in Epe (Germany). These projects serve to expand the capacity for flexible electricity production to balance the growing wind portfolio and also to extend the gas side of the shipping portfolio. € 105 million was invested in wind energy, bio-fermentation and heat generation.

Eneco Retail maintained its market share and was able to retain customers with new sustainable propositions such as Eneco Windstroom (electricity generated from Dutch wind energy) and Eneco Biogas. The number of customers using Ecostroom (Eneco’s brand of green electricity) increased by 30 percent.

Sustainable energy
The production and supply company is making step-by-step progress with its sustainability strategy. Eneco’s aim is to ultimately offer a 100% sustainable energy supply generated by its own or contracted production facilities.

The wind portfolio in particular will expand significantly over the next years. Eneco has obtained permits / exclusive concessions for the development of offshore wind farms off the Belgian, Dutch and British coasts. A number of small-scale onshore wind farms became operational. Especially in Belgium, Eneco is very successful in the area of solar energy applications and purchase contracts. In the first half of 2009, 2.5 MegaWatt worth of solar panels were installed in this country. In addition, two large-scale solar panel projects were completed for major industrial Belgian customers.

Progress is also made in the area of biomass and biofermentation. A biogas installation for cosmetics producer L’Oréal in the Belgian Libramont became operational. In addition, two agricultural biogas projects in Belgium became operational and another two are currently under construction. Eneco’s first biofermentation installation in the Netherlands will be built at an agricultural location in the municipality of Putten. In 2009, the total available sustainable electricity production capacity from wind and solar energy and biomass increased to 805 MegaWatt, which equals the consumption of approximately 600,000 households.

Gas as a transition fuel
In 2009, a start was made with the construction of the EnecoGen gas plant in the harbour area of Rotterdam. This project, which is a cooperation between Eneco and the Danish energy company DONG, is now well underway. Eneco’s share in the investment amounts to € 350 million. Eneco will purchase half of the electricity production of this plant, which is sufficient for approximately 1 million households. The construction of the gas storage facility in Epe, just across the German border, has begun. This installation involves an investment of € 135 million. This project strengthens Eneco’s position on the gas market.

Acquisition sustainable businesses
The acquisition of several parts of Econcern in 2009, involved an investment of € 31 million. Evelop (wind energy) and Ecostream (solar energy) will be integrated into the energy company. The internationally operating consultancy agency Ecofys will remain positioned at a distance. This acquisition entailed a transfer of 402 FTEs to energy company Eneco.

Network manager Stedin is responsible for carrying out the legal management tasks relating to gas and electricity networks. Stedin will also develop new infrastructures for steam, CO2 and biogas. In 2009, much effort was spent on increasing Stedin’s independence.

In 2009, Stedin’s operating result decreased to € 184 million (2008: € 268 million). The lower regulated rates lowered the result by € 60 million. In addition, some cross border leases were terminated early in 2009, which had a negative effect of € 10 million.

In 2009, Stedin invested € 260 million in its networks, which is € 43 million more than in 2008.

The average interruption time in Stedin’s electricity network amounted to 28.1 minutes per connection. This is slightly higher than the national average in 2009, which amounted to 26.5 minutes.

The administrative processes, which were carried out by Eneco Netherlands, have been transferred to Stedin on 1 January 2010. It concerns the call centre, the switch desk, invoicing, fraud control and the metering company. This involves a total of 600 FTEs, which means that the number of employees at Stedin doubles.One of Stedin’s strategic objectives is to facilitate the transmission of energy-related substances, such as steam and CO2, through pipeline infrastructures. In 2009, Stedin concluded a contract with the Port of Rotterdam Authority for the joint development of such pipeline infrastructures in the industrial area of Rotterdam.

Joulz offers its customers comprehensive solutions in the areas of consultancy and the engineering, construction, management and maintenance of energy infrastructures. In addition to the work that Joulz carries out for network manager Stedin, the company also seeks to win contracts on the open market. The installation and maintenance of public lighting and parking installations for a large number of municipalities is the responsibility of the business unit CityTec.Joulz was responsible for the installation of a heavy-duty cable connection between the location where a new part of the Intergen electricity plant is being constructed and the high-voltage grid at a distance of 12 kilometres. In addition, it was awarded a ten-year contract for the operation and maintenance of and the correction of faults in the grid connection of the Princess Amalia Wind Farm at a distance of 23 kilometres off the coast of IJmuiden. For Stedin, Joulz will carry out projects related to the energy infrastructure for Maasvlakte 2.

Just as in 2009, the preparations for the unbundling will again require a lot of attention in 2010. At 1 January 2011 at the latest, the Eneco group will have to be divided into the energy company and the network group.

Given the extensive impact of this unbundling and the uncertain economic conditions, no statement can be provided regarding our expectations for the results in 2010.