Strong performance in challenging conditions and improved resilience – people make the difference 

Johannes Teyssen and Antje Kanngiesser.

Dear reader,

Did 2022 mark a turning point in the European energy industry? It’s still too early to say for sure. However, it was certainly a watershed year – for society, for our company and for our employees.

When the Corona pandemic subsided, we believed we were on the way to a “new normal”. However, on 24 February 2022, our image of a peaceful Europe was shattered. The belligerent attack on Ukraine had been preceded in 2021 by manipulations of the European gas supply and soaring energy prices caused severe liquidity problems for energy companies.

The rapid rise in gas prices in summer 2021 sent alarm bells ringing for our company. The twin setbacks of the French nuclear power plant outages and Russia’s targeted curtailment of gas supplies at the end of December 2021 caused electricity and gas prices to surge to historically high levels and led to unprecedented volatility. Throughout the company, we switched to crisis mode. Our key people gathered around the table several times a day to ensure a targeted information flow, direct communication, quick and courageous decision-making, and speedy implementation. Our employees, our management, our Board and our shareholders worked together hand-in-hand with heart and humour. We are one Alpiq!

Since then, we have strengthened our company by taking a broad variety of measures in financing and risk management. These measures released funds of up to CHF 6 billion. We appreciated the foresight of the Swiss Federal Council and Parliament in introducing an emergency rescue package to meet the potential liquidity needs of the major power generators in 2022. The very existence of this package sent a strong and calming signal to investors and trading counterparties alike. We will continue to make every effort not to make use of it, but we will pay our fair share of the regulated costs for this governmental support.

Good results, strong balance sheet and improved resilience

Our balance sheet is strong and shows a low financial net debt. We succeeded in replacing matured bonds and short-term liabilities with new bonds at reasonable costs. Relying on our own capabilities, we closed the strenuous year with access to unused liquidity and financing of around CHF 2 billion.

Our operating performance is strong. Alpiq employees across all divisions and business lines delivered an outstanding performance, resulting in an adjusted EBITDA of CHF 473 million, which is an increase of CHF 161 million against the previous year. This is an operating result we can build on.

Our reported IFRS earnings are still significantly influenced by extraordinary effects. Our investors understand that IFRS calls for regular evaluations of all financial hedges even if deliveries and their underlying profitability is secured by the supporting generation fleet. Thus, our 2022 report continues to include the impact of last year’s sudden price hikes, which led to a temporary shift in results. At the end of the past financial year, the negative net effect on the IFRS result is CHF -250 million. As soon as the quantities hedged at lower prices are actually delivered, this effect will dissipate, which is why we refer to a temporary shift in results. In addition, the performance of the decommissioning and waste disposal fund (STENFO) was exceptionally negative due to the weak financial markets in 2022. This had a negative impact on our underlying IFRS EBIT of CHF -276 million. We would like to remind investors that the accumulated earnings of the STENFO funds are still above the minimal required target rate. Despite these two substantial extraordinary effects, we managed to post a positive IFRS result for the past year of CHF 111 million.

Absolute focus on security of supply

While the first half of 2022 was primarily about securing liquidity for our electricity production, our focus in the summer was on supporting our customers and the Federal Government, because the liquidity crisis had turned into an energy crisis. In markets that were no longer liquid, large amounts of energy had to be secured. We worked tirelessly for months on end to achieve this goal. At Alpiq, we focus on the outcome!

We decided to offer the Federal Government as much energy as we could make available for the tendered winter reserve, priced on a cost and risk basis in order to keep costs low for our fellow citizens. This decision was rewarded by the Federal Council and the public at large. All our tenders were accepted, and we are contributing 218 GWh – more than half of the contracted hydropower reserve of Switzerland. In this way, we were able to make a significant contribution to ensuring the security of Switzerland’s electricity supply while limiting the economic costs to society.

The energy crisis has led to a lot of activity and debate in Europe as well as in Switzerland. The current market design of the European energy market is under question and lively discussions are taking place about the introduction of new regulations at a national and European level. Some measures can be implemented quickly. However, stable long-term framework conditions are a prerequisite for large-scale investments in system-relevant infrastructure.

Alpiq lives up to its purpose – and delivers

At Alpiq, we share the common purpose that with our sustainable energy business we contribute to a better climate and an improved security of supply. In 2022, the latter was physically at stake for the first time in decades. It was extremely important that our nuclear and hydro facilities in Switzerland delivered very high availabilities and offered the necessary flexibility and power throughout the past year. Thanks to a joint effort, we were able to maximise the production from our assets in Switzerland, which allowed us to compensate almost fully for the record low access to the contracted French nuclear deliveries due to the extended outages in France.

We already have a powerful fleet of highly flexible hydro power assets in Switzerland to integrate all energy sources into the energy system. We commissioned the latest and most powerful of these in mid-2022: our 900 MW pump-storage powerplant Nant de Drance in the Valais. This highly flexible, efficient and powerful installation enables us to make a significant contribution to the security of supply and the grid stability. After 14 years of construction and a total spend of CHF 2.3 billion, we celebrated the official inauguration in September 2022. Another important piece of the mosaic is the Grande Dixence power plant complex. Thanks to the special effort and an excellent workforce, the replacement of the Péroua – Condémines penstock that feeds the Fionnay/Nendaz plant was finished seven months ahead of schedule. As a result, we were already able to ensure the availability of an additional 450 MW of installed hydro power capacity this winter.

As a company, we embrace our purpose by driving the rapid expansion of renewable energy sources. We are already well equipped to achieve this thanks to our highly flexible and efficient power plants. To rise to the challenges of the new energy world, however, we need to increase renewable power generation from photovoltaics, wind and hydro. Additional storage capacities and strong efforts to save energy play a key role in enabling a sustainable energy supply.

We make our contribution to climate protection and the security of supply

At the same time, we must invest in a world of renewable energies to ensure the long-term security of supply. And we will invest. Together with our partners, we have drawn up robust expansion projects worth CHF 1 billion in Switzerland alone in the areas of hydropower, alpine photovoltaics, and wind energy. Policymakers, recognising the urgency of the situation, are paving the way for investment in the future. We are confident that by working together in a spirit of partnership we will find responsible and effective solutions. It is incumbent on all stakeholders to work together. A secure, affordable, and reliable energy supply forms the backbone of a functioning economy.

While the market environment remains volatile and uncertain this year, Alpiq has strengthened its resilience significantly. The crisis has taught us something important: people make the difference. It is the attitude and values of our employees, as well as their expertise, that create corporate value. We will only be able to face the ever faster pace of change and the ever greater impact on our company with resilience. And this is where every employee counts. We learn and grow together, and we share the steering wheel. As a company, we follow a clear course: to make our contribution to climate protection and the security of supply. And each individual stays on that course. To provide a comprehensive overview on our practice, we currently undertake a review of our Sustainability Report which will be published in June 2023.

We expect a good operating performance in 2023. However, sharply fluctuating valuations of remaining hedges and the performance of STENFO may also have a significant impact on this year’s underlying result. Despite our strong operational results and in view of the continuing high market volatility, the Board of Directors of Alpiq will submit a proposal to the annual General Meeting that no dividend will be distributed for the 2022 financial year. 

Johannes Teyssen

Chairman of the Board of Directors

Antje Kanngiesser


22 February 2023