Verbund in Brief

Verbund is Austria’s leading electricity company and one of Europe’s largest producers of hydropower. For more than six decades, it has been by far the largest producer and transporter of electric energy in Austria, covering some 40% of Austria’s electricity demand from its own power plants.

Verbund is not only one of Europe’s most profitable energy providers, it is also one of the most eco-friendly. About 90% of the annual production comes from renewable hydropower. In 2009, we expanded our power plant park by 13 run-of-river power plants on the Bavarian part of the Inn River and now have 123 hydropower plants, three available thermal power plants, three wind farms and two photovoltaic power plants.

Since the start of energy deregulation, the Verbund Group has followed a consistent course of internationalisation; about one-half of its revenues is generated outside Austria, primarily in Germany and France.

We are active in trading and production in some 20 countries and continue to reinforce our status as an international hydropower company. Apart from our home market of Austria, we are focused on Germany and our participating interests in France, Italy and Turkey. Our market position is boosted by subsidiaries in Croatia, Greece, Macedonia, Romania, Bulgaria, Serbia, Slovakia, Slovenia, the Czech Republic and Hungary. We were the first foreign investor charged with building a hydropower plant in Albania.

On the European wholesale market, we trade at energy exchanges and bilaterally with more than 150 partners. We are in business at electricity or certificate exchanges in Vienna, Leipzig, Paris, Amsterdam, Rome and Ljubljana. We also supply to industrial companies and distributors in Europe.

Economy

The year 2009 was positive for Verbund, despite the continued economic crisis.

In a difficult environment, we continued to press ahead with our growth projects in Austria and abroad and further expanded our position in key strategic markets.

Verbund had its second best results ever in fiscal 2009, just behind the record figures of 2008. Sales declined from € 3,744.7 million to € 3,483.1 million (–7.0%), the operating result fell by 8.5% from € 1,138.6 million to € 1,042.3 million and consolidated net profit dropped by 6.2% to € 644.4 million.

Environment

Since the launch of a Group-wide environmental management programme, our power plants and grid locations are being successively audited or certified under EMAS and ISO 14001. Since the end of 2009, more than 80% of all hydropower plants of Verbund in Austria have had an environmental system regularly subject to review. Verbund’s thermal power plants in operation have also been externally audited for many years; the respective preparations are underway for the headquarters in Vienna. The integrated management system of the independent Verbund grid subsidiary was once again successfully certified at all locations including the lines in the areas of environment, quality, safety, health and information security.

Verbund’s electricity is also certified: Verbund’s customers receive energy that originates 100% from hydropower plants. This is inspected by TÜV Süddeutschland.

Social

Careful selection, fair pay, providing encouragement and challenging our employees are top priorities for our corporate success. We carefully recruit our future employees and offer fair market salaries using a performance-based salary model. Comprehensive training and education helps our employees develop continually. We offer a comprehensive health programme to keep employees healthy longer in the work process, and in 2009 we were awarded the “Work and Family Audit” basic certificate. We train a large number of apprentices – in 2009 we had 142 – and we awarded a womens scholarship at the Technical University of Vienna for the first time in 2009.

For more than 50 years, we have supported aid organisation SOS Children’s Villages and for two decades, we have helped sponsor a school in Vienna for children with physical disabilities. In 2009, two major initiatives for disadvantaged persons were launched: “Verbund Stromhilfefonds der Caritas” assists households in Austria that need assistance with energy-saving measures and energy bills. With “Verbund Empowerment Fund der Diakonie”, we assist people with disabilities that are heavily dependent on electrical devices to communicate in their surroundings.

Generation

Verbund is by far Austria’s largest electricity producer, covering about 40% of Austria’s electricity consumption in 2009.

91% of our electricity production in 2009 came from our hydropower plants, which are the Group’s foundation for sustainable energy generation. We are continually renewing and expanding our power plants with state-of-the-art technologies and in close cooperation with ecology experts. Verbund’s household customers receive electricity that is 100% derived from Verbund’s own hydropower production. Business and industrial customers can choose between 100% hydropower – for a surcharge – or the European UCTE mix, which consists of different energy sources. For 2009, the UCTE mix, according to preliminary information, was as follows: 13% hydropower, 7% other renewable energies, 51% fossil fuels, 29% nuclear energy.

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KEY FIGURES – POWER PLANTS
	Number	EPL	RAV	2006	2007	2008	2009
		MW	GWh	GWh	GWh	GWh	GWh
* Three wind farms in Lower Austria (Bruck an der Leitha, Hollern, Petronell-Carnuntum) with a total of 49 MW and two photovoltaic power plants in Spain with a total of 3 MW.
Hydropower	103	6,297	23,695	20,836	21,406	22,221	23,858
Hydropower procurement rights	20	590	3,030	3,017	2,915	3,087	3,241
Wind/Photovoltaics	5*	52*		–	–	–	106
Thermal power	8	1,520		4,233	3,986	3,352	2,351
Thermal power procurement rights	1	165		–	–	–	363
Total	137	8,624	26,725	28,086	28,307	28,660	29,918

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GROUP PROCUREMENT	GWh	GWh	%
	2008	2009	Change
* incl. procurement rights
Hydropower*	25,308	27,099	+7.1 %
Wind/Photovoltaics	–	106	–
Thermal power*	3,352	2,714	–19.0 %
Own generation	28,660	29,918	+4.4 %
Purchased electricity	27,397	21,371	–22.0 %
Group procurement	56,057	51,289	–8.5 %
Forward contracts	36,468	60,673	+66.4 %

Hydropower

Verbund’s 123 hydropower plants generated 27,099 GWh in 2009. Our 21 pumped storage hydro power plants are a particular asset. These flexible plants make energy rapidly available at peak times, ensuring stable grid operations despite heavy increases in the volatility of wind energy.

A number of projects focus on expanding domestic power plant capacity, including pumped storage hydro power plants that make a significant contribution to safeguarding the power supply. The Limberg II power plant is under construction, the Reisseck II pumped storage hydro power plant project obtained EIA (Environmental Impact Assessment) approval in 2009 and EIA documents were submitted for the Inn cross-border/joint venture power plant. On 31 July 2009, the Salzach power plant Werfen/Pfarrwerfen, a joint facility of Verbund and Salzburg AG that delivers power to 22,000 households, was opened.

Some of our existing power plants were expanded and revitalised in 2009. Examples include the expansion to the Hieflau power plant and the revitalisation of the Pernegg power plant.

New renewable energies

In addition to two photovoltaic facilities in Spain since January 2009 we have operated three wind farms in the Lower Austrian municipality of Bruck an der Leitha. In May 2009, we started a wind power project in Bulgaria and in Rumania we took initial steps to launch a wind power project as well. In 2009, we generated a total of 106 GWh from wind power and photovoltaics.

As part of our energy partnerships with the Almenland and Bruck/Leitha regions, we support sustainable, eco-friendly regional development and are committed to state-of-the-art technology in order to produce wind energy most efficiently.

Thermal power

In the field of thermal power, Verbund has eight power plants – three of which are operational, five of which are currently offline or leased out. In 2009, thermal power generation including drawing rights was 2,714 GWh.

We focus on those three locations that offer the best conditions for electricity production and district heating. District heating is decoupled at the district heating plants at Mellach and Neudorf-Werndorf 2. The amount of district heating delivered is about 800 GWh annually.

Going forward, for our new plants in Austria, we will use natural gas, which emits lower CO₂ emissions than coal. The gas and steam combination power plant in Mellach will deliver electricity and district heating from the end of 2011.

Grid

VERBUND Austrian Power Grid AG, the independent grid subsidiary of Verbund, is in charge of planning, operations, maintenance and expansion of the some 3,500 km line route length. It is operated as a high and extra high voltage grid at 110 kV, 220 kV and 380 kV. Guaranteeing continuous supply is at the heart of all activities, which makes the three largest projects of the company particularly important: the commissioning of the new main control centre “Power Grid Control” in October 2009, the Styria line that went into operation in June 2009 and the Salzburg line that has been underway since mid-2009.

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GRID DATA
Voltage	Overhead cable		Substations/ Grid switching stations
	Line route length in km	System length in km
380 kV	1,104	2,218
220 kV	1,661	3,313
110 kV	706	1,232
Total	3,471	6,763	57

Trading and sales

Apart from energy production and transmission, trading and sales are key areas of the company’s success.

The core competence of the Verbund Group’s international electricity trading company includes marketing Verbund’s own production, trading electricity on European electricity exchanges and on the bilateral trading market as well as direct supply to distributors or public utilities in Austria and other countries. Apart from the core electricity business, Verbund is also active in primary energy trading and in the field of environmental products with CO₂ and “green” certificates. Verbund is thus one of Europe’s key traders on the electricity market.

In Austria we supply some 225,000 household, commercial and agricultural customers with electricity derived from 100% hydropower. The business and industrial customers of the electricity subsidiaries can choose between 100% renewable energy sources – for a surcharge – or energy from undetermined sources (UCTE mix – see table “Generation” above).

The customer base increased to more than 280 business and industrial customers with a total supply volume of about 6 TWh in 2009; in the industrial customer segment, demand for electricity from renewable sources – a premium product – is continually on the rise.

International participating interests

In 2009, Verbund reinforced its foreign activities as well. The portfolio of participating interests continues to develop in a positive way:

In Italy, Sorgenia – which has grown to become the fifth largest energy provider and largest private energy supplier in Italy with partner CIR Compagnie Industriali Riunite S.p.A. – celebrated its ten-year anniversary. In the coming years, Sorgenia plans to invest in an increased share of renewable energy sources.

In France, POWEO is a competitor on the end customer market and invested in gas, wind and photovoltaic plants; in September 2009 the first gas powered plant and another wind farm went into operations. The Verbund share was increased to some 46% in 2009.

The EnerjiSA joint venture with Turkish partner Sabanci Holding intends to build 5,000 MW of new power plant capacity by 2015 – a significant part thereof from hydropower and wind power, thereby gaining an electricity market share of 10%. Başkent EDAŞ, the energy supplier in the Ankara region with three million customers that was acquired in early 2009, is to be developed to become one of the leading distribution grid companies in Turkey by 2012.

In Albania, following brief but intensive preparations, we are about to build a hydraulic power plant in the northern part of the country, scheduled to supply energy in 2012.

Verbund’s memberships

Verbund’s memberships in sustainability organisations include:

• respACT austrian business council for sustainable development
• AGAW Arbeitsgemeinschaft Alpine Wasserkraft e.V.
• IG Windkraft
• International Hydropower Association
• Kleinwasserkraft Österreich
• ÖK-IAD Österreichisches Komitee Donauforschung
• Photovoltaic Austria Federal Association
• WEC World Energy Council (Austrian National Committee)