Market Central Europe South

One of the outstanding events of the year for Market Central Europe South was the acquisition of Romanian energy services provider EHOL Distribution. By taking over this company on 1 July 2009, Alpiq advanced to become one of Romania's top three providers to end customers, thereby further enhancing its position in the South-East European electricity market. EHOL Distribution serves large industrial customers and distributors. Energy Holding, a sales company acquired in July, was successfully integrated.

Strong position in Romania

Since September 2009, Alpiq has successfully established itself as one of the largest sales companies in Europe by gaining new customers. Due to its balanced customer portfolio covering small, medium-sized and large customers, there were no serious payment defaults in 2009 despite the sustained economic crisis.

Last year, the State Electricity Regulatory Commission in Bosnia-Herzegovina granted Alpiq a licence for international energy trading, as a result of which Alpiq is now the country's largest electricity exporter. In Bulgaria, Alpiq managed to acquire its first end customer through its Bulgarian sales subsidiary. Alpiq expanded its trading business by founding Alpiq Albania and renewed the trading licence for Kosovo until 2011.

Lower demand for electricity in heavy industry

As a result of the crisis, electricity consumption dropped by up to 10 %. At the same time, liquidity and the number of business partners declined sharply. Due to high availability of water, electricity prices fell in the first six months of 2009 despite a short-term gas crisis, but stabilised slightly in the dry third quarter.

One of the main causes of the massive decline in electricity consumption was the drastic cutback in production by heavy industry exporters, especially in Romania, Bulgaria, Macedonia, Serbia and Montenegro. But on a more positive note, several countries in the region consistently built up their market mechanisms, clearing the way for competition in energy procurement, sales and transmission. At the same time, market liberalisation was constrained by the protectionist measures imposed by some governments and state-run energy utilities.

Carving out new markets in South Eastern Europe

In 2010, Alpiq plans to capitalise on new business opportunities and enter new markets in South Eastern Europe and neighbouring regions. Focus will be placed on expanding sales business and wholesale trading activities since South Eastern Europe offers huge market potential due to the current liberalisation and growth of its electricity markets, coupled with increasing liquidity. However, this is dependent on an economic recovery and renewed industrial production in the region.