Governance

Security of supply

Why is this important?

Alpiq’s portfolio of flexible large hydro assets and nuclear power plants in Switzerland and our gas assets internationally are part of our DNA. The contribution to security of supply is clearly pronounced directly in our company purpose.

Reliable power generation when needed by its customers, including transmission system operators, has a direct impact on the economic results of the company. It is therefore of the utmost self-interest for the company to maintain and continuously upgrade its assets not only to comply with the latest environmental legislation, but also to make use of the best available technology to increase the fuel efficiency and flexibility, and to prevent any operational failures that could significantly affect both the economic position of Alpiq and consequently negatively impact the security of supply.

What are we doing?

The main KPI that helps to monitor the security of supply is the in-market availability, which is a percentage of the time when the asset is available when needed and shows how reliable the asset is. Alpiq has a long track record of this KPI for each asset and type of production technologies. The availability KPI is, as a weighted average per installed capacity, reported to all internal stakeholders, and is closely monitored and assessed as one of the key drivers of business results. The focus and ambition to keep asset availability high is firmly embedded in the company culture and the commitment goes beyond any written regulation.

Any outage events (both planned and unplanned) are duly reported to both internal and external stakeholders (e.g. REMIT reporting, Regulation on Wholesale Energy Market Integrity and Transparency). At all assets there are internal processes in place and competent technical staff that deal with such situations to mitigate the damage and remedy the problem.

How do we track the effectiveness of our approach?

The level of security of supply and grid safety level is typically set by requirements of the TSO and/or local regulation for grid support service (GSS). Where technically possible, Alpiq has certified products for GSS at each flexible asset (typically hydro and/or gas). To be allowed to participate on the GSS market, the technical ability of each individual asset is regularly tested by the TSO according to its local requirements for each GSS product.

Milestones in 2022

Short-term outages are quite usual during the asset lifetime. Through risk-based maintenance management and in close cooperation with original equipment manufacturer (OEM) power train suppliers the company makes every effort to avoid both short-term, but mainly long-term outages. From that perspective, 2022 was a successful year without any major incidents and the operational performance of all key Alpiq assets had a positive impact on the material topic security of supply.

An example of a positive impact of Alpiq to the security of supply was the put back in operation of Spanish CCGT Plana del Vent (GE 9FB technology) in January 2022 after almost 2 years’ outage. Nevertheless, the length and severeness of this outage shows the impacts on security of supply can be significant and may long lasting.

In the current difficult market situation Alpiq has decided to help the security of supply in Switzerland (and Europe via interconnected grids) and participated in the tender for the Swiss winter reserve ordered by federal governmental ordinance on the establishment of a hydropower reserve (WResV). The tender was organized in October 2022 by the Federal Electricity Commission (ElCom) together with the operationally responsible Swissgrid for the upcoming 2022/23 winter. In order to help share the responsibility for ensuring the security of supply Alpiq has managed to shift already sold hydro production to free-up capacity for the Swiss winter reserve between December 2022 and 15 May 2023.

Alpiq and its hydro assets are an important pillar of Switzerland’s winter reserve and can help bridge any electricity shortage in the upcoming months should this become necessary towards the end of the winter. Alpiq was successful in the tender with all its bids and we contributed 218 GWh – more than half of the contracted hydropower reserve of 400 GWh. As Alpiq’s intention was not to maximize the profit, it responsibly calculated the fair prices covering all related costs and risks. This sent out a very positive signal that Alpiq is a company committed to ensuring the security of supply and takes both entrepreneurial and social responsibility. Alpiq’s goal is to maintain this proactive approach and participate in any similar future tenders should it help to ensure the security of supply in Switzerland and/or in Europe.

Numbers 

- 17,450 – total production in 2022 (GWh) 

- 218 – hydropower capacity awarded to Alpiq in tender for Swiss winter reserve (GWh) 

- 2,000,000 – households supplied by recommissioned Plana del Vent plant in Spain

Frameworks/guidelines 

- Federal Electricity Commission (ElCom) 

- European Transmission System Operators ENTSO-E

GRIs 

GRI 3-3: Management of material topics

Sustainable Development Goals 

- SDG 7

Thermal power plants: Important contributors to security of supply

Thermal power plants, which comprise gas-fired and nuclear power plants, convert fuels into heat, mechanical or electrical energy. Thanks to their high degree of flexibility, gas-fired power plants in particular are ideally suited for the balancing of load fluctuations in the electricity grid. They thus play an important role in ensuring security of supply.

Alpiq owns and operates thermal power plants in Switzerland, Italy, Hungary and Spain, and has shareholdings in nuclear power plants in Switzerland. The generation of energy in harmony with the environment is our top priority. This includes sustainable resource management and the low-emission generation of electricity. Already during the constructing of our thermal power plants, environmental protection and clean air are addressed as key factors. The plants are equipped with certified environmental technology and secure monitoring. We regularly take measures to reduce emissions.

Gas-fired combined cycle power plants (CCGTs)

Thanks to their high electrical efficiency and their flexibility, gas-fired combined cycle power plants are among the most efficient conventional power plants. We have shareholdings of up to 100% in gas-fired power plants in Hungary, Italy and Spain. These plants fulfil in addition to the production of electricity numerous requirements such as the ability to additionally supply district heating or quick-start capability. Annual inspections guarantee occupational safety and compliance with environmental management standards.

Our Alpiq Group strategy is to further improve the efficiency of our gas-fired power plants. We want to be the best owner of these power plants by deriving the maximum from the existing facilities while minimizing emissions, e.g. of CO2 and nitrogen oxide, by converting existing sites to the next generation of technology.

In 2022, the exceptional geopolitical situation experienced in Europe led to an increased demand for electricity from gas-fired power plants in the countries where Alpiq is present. This meant that Alpiq produced more electricity with its CCGTs during the reporting year, resulting in a higher share in Alpiq’s power portfolio and higher absolute CO2 emissions. However, it is pleasing to note that due to the higher dispatch (running the machines on average at higher capacity) the CO2 emissions intensity (g CO2 per KWh) of Alpiq’s CCGTs decreased.

For detailed information about the emissions from our gas-fired power plants and their intensity, see section Facts & figures (‘Emissions’).

Nuclear power plants

Nuclear energy has historically played a significant role in ensuring Switzerland’s security of supply and remains an important pillar in Alpiq’s production portfolio for climate-friendly electricity. Nuclear power plants generate vast amounts of base-load electricity around the clock. They are particularly important for Switzerland in the winter, when domestic hydropower plants do not generate sufficient electricity and the European countries have an increased demand for electricity.

In Switzerland, Alpiq has a share of 40% shares in Kernkraftwerk Gösgen-Däniken AG (KKG), of 27.4% in Kernkraftwerk Leibstadt AG (KKL) and of 33% in Kernkraftwerk-Beteiligungsgesellschaft AG (KBG). Alpiq holds the executive management mandate for KKG and KBG. As a shareholder in KKG and KKL, Alpiq pays the plants’ annual costs in proportion to its share; this includes the costs of financing decommissioning and waste disposal activities.

KKG and KKL are partner power plants. This means that the shareholders take over the entire power production and reimburse the resulting annual costs in return. KBG has energy purchasing rights in the EDF French nuclear fleet. The French energy group EDF is the sole owner of its nuclear power plants and is thus solely responsible for the operation and safety of the facilities.

Alpiq has no fully consolidated shareholdings in nuclear power plants and GRI prescribes no specific standards in relation to nuclear power plants. However, Alpiq is fully aware of its responsibility and obligation towards the environment and society, therefore we present comprehensive data regarding the impact of nuclear energy on sustainability in section 8.3 of the General Disclosures (‘Nuclear energy’).