Market Switzerland

Thanks to Alpiq's balanced Swiss portfolio, the economic situation had less of an impact on Market Switzerland's sales of electricity than the average seen in the industry. This portfolio allows Alpiq to make an important contribution to energy security in Switzerland, with most of the electricity being sold to customers indirectly through its Swiss shareholders, joint ventures, subsidiaries and associates.

Partial liberalisation so far with little impact

The first phase of electricity market liberalisation, from 2009 to 2013, has so far brought about virtually no change in the price environment prevailing in the Swiss marketplace. For the time being, only large customers with an annual consumption volume of 100MWh or more are free to choose their electricity supplier. Because of the high price volatility, large consumers are seeking long-term purchase contracts with reliable partners. While price remains an important criterion, it has lost some of its significance.

After reviewing its commercial positioning in Switzerland, Alpiq decided to bring its sales activities in Olten and Lausanne under one roof. These activities centre on energy business with shareholder-customers and strategically important resellers. This restructuring led to a new organisational structure specifically tailored to the new challenges.

In Switzerland, Alpiq is actively involved in the procurement of energy from waste incineration plants (WIP). In 2009, it signed energy purchase agreements with three WIPs, and agreements with other WIPs are under negotiation. Alpiq also demonstrated its innovative approach by supplying the Cartaseta paper factory with industrial steam from the Gösgen nuclear power station via a brand-new pipeline. This will reduce annual CO2 emissions by more than 8,000 tonnes by doing away with the need for around 2,500 tonnes of heavy oil per year.

Società Elettrica Sopracenerina

Overall, 2009 was a positive year for Società Elettrica Sopracenerina SA (SES) in Locarno, which supplies electricity to much of the northern Ticino region. The challenging capital expenditure plan was adhered to, and costs as well as profit were on target. Due to higher household consumption in the cold months of January and February, electricity sales were slightly above target.

The liberalised market is presenting major challenges to SES. The new cantonal law on electricity came into force on 1 January 2010, which means that SES needs to negotiate new licensing agreements with the local authorities by the end of 2013. SES has also renegotiated its electricity delivery agreement with Azienda Elettrica Ticinese (AET), since the current agreement expired at the end of 2009. Although selling prices still remain below the market price, the marked rise in purchase prices has forced SES to pass some of this increase on to end customers.

SES met its capital expenditure targets and those for the implementation of new tariff structures, while keeping the financial consequences of the new price structure firmly under control. Good progress was achieved in the collaboration with Aziende Industriali di Lugano on a joint service centre, and the unit went into operation on 1 January 2010.

Alpiq Versorgungs AG

In the wake of the merger between Atel and EOS to form Alpiq, Atel Versorgungs AG (AVAG) changed its name and has been operating as Alpiq Versorgungs AG (AVAG) since 3 August 2009. The administrative changes required by the Electricity Supply Act for the partially liberated market were implemented without any notable incidents.

Sales in 2009 were higher than a year earlier, since grid losses on the energy side are now charged to income too. Energy sales to end customers nearly matched the prior-year level. One of the highlights of the year was the commissioning of the Kappel substation and the Rankwaage substation in Olten. 2009 also saw the decision to dispose of the Niederamt district heating network.

AVAG devoted its efforts to building up the energy efficiency platform for the canton of Solothurn's building programme "Jetzt energetisch modernisieren" ("Put your energy into modernising now"). One important goal for the near future is to bring geographically dispersed operating facilities under one roof, in a new operations building shared with our cooperation partner, Städtische Betriebe Olten.

AEK Energie AG

AEK Energie AG can look back on a successful year of operation in 2009, in which it substantially grew its energy consulting services for private and business customers through additional offerings, while signing long-term energy delivery contracts with numerous SME customers.

AEK exceeded the targets set for pellet sales and played a key role in launching the pellet industry organisation "propellets.ch", which aims to ensure that the Swiss pellet market grows at an even stronger rate than to date. In the contracting business, which primarily specialises in district heating networks and pellet systems, AEK recorded a successful year. AEK's electrical installation business also enjoyed a high volume of incoming orders throughout the year.