4.7 Provisions
|
CHF million |
Onerous contracts |
Decommis- sioning own power plants |
Other |
Total |
|
Non-current provisions at 1 January 2023 |
14 |
49 |
23 |
86 |
|
Current provisions at 1 January 2023 |
8 |
|
9 |
17 |
|
Provisions at 1 January 2023 |
22 |
49 |
32 |
103 |
|
Increase |
2 |
5 |
62 |
69 |
|
Unwinding of discount |
|
2 |
|
2 |
|
Utilised |
– 4 |
|
– 12 |
– 16 |
|
Unused amounts reversed |
– 18 |
|
– 7 |
– 25 |
|
Revalued |
|
9 |
|
9 |
|
Currency translation differences |
– 1 |
– 1 |
– 1 |
– 3 |
|
Provisions at 31 December 2023 |
1 |
64 |
74 |
139 |
|
Non-current provisions at 31 December 2023 |
|
64 |
45 |
109 |
|
Current provisions at 31 December 2023 |
1 |
|
29 |
30 |
Onerous contracts
These provisions comprise the present value of the onerous contracts in place at the reporting date.
The amount of the provisions for onerous contracts depends on various assumptions, relating in particular to the development of wholesale prices on European forward markets and forecasts of medium-term and long-term energy prices. These assumptions associated with uncertainties are made at the reporting date, some of which can result in significant adjustments in subsequent periods.
Decommissioning provision
The provision for decommissioning the Group’s own power plant portfolio covers the estimated costs of decommissioning and restoration obligations associated with the Group’s existing power plants.
Other provisions
Other provisions include obligations arising from the human resources area, existing and pending obligations from litigation and other operating risks deemed probable.
In December 2023, a provision of EUR 21 million (CHF 19.4 million) was recognized in other operating expenses in connection with legal proceedings against the sold Kraftanlagen Group. More information can be found in Note 5.1.
Alpiq reached an agreement with a contracting party to settle a dispute over the termination of a long-term energy sales contract that Alpiq considered to be null and void. This agreement led to the recognition of a provision of CHF 34 million.
Provisions for pending obligations from litigation are based on information available in each case and estimates made by management as to the outcome of the litigation. Depending on the actual outcome, the effective cash outflow may differ significantly from the provisions.
Accounting policies
Provisions cover all present legal or constructive obligations arising from past transactions or events that are likely to be incurred, but are uncertain as to timing and/or amount. The amount is determined at the reporting date and corresponds to the best possible estimate of the expected cash outflow, discounted to the reporting date.