The European energy market is undergoing a fundamental change that features historically low energy prices, falling demand, significant overcapacities in energy production as well as massive subsidies and prioritisation of new renewable energies. The regulatory environment as well as the trend to promote energy efficiency and decentralised energy management are accelerating this change, putting under pressure the profitability of large power plants. Under the strategic realignment approved by the Board of Directors, Alpiq faces this new reality and addresses these challenges.
Expanding range of services Against the backdrop of the European-wide move towards market liberalisation and the strong trend towards an end-user market, Alpiq intends to expand decentralised energy management, energy efficiency and the end-user business. Plans include, amongst others, decentralised power plant management as well as energy management in buildings, industrial plants or micro grids. Alpiq will move into the retail business selectively, together with partners in Switzerland and other European countries. Together with its existing installation business, Alpiq can offer full-service solutions for the client needs of tomorrow.
The power plant and portfolio management will also be adjusted to the new overall framework conditions. The priority here will continue to be the management of the flexible power plant park. In addition, Alpiq plans to strategically expand its core competencies in industrial and plant engineering. This business area also increasingly includes the decommissioning of plants.
"Alpiq will reposition itself strategically. Expanding the range of services that are based on our strengths and our broad know-how will play a key role in continuing to be successful in the market," says Hans Schweickardt, Chairman of the Board of Directors.
Focus on renewable and flexible energy sources In line with the Swiss energy strategy 2050, hydro power continues to have a high priority. Switzerland is predestined for this clean and flexible source of energy. The country already covers more than half of its electricity needs with hydro power. Economically viable framework conditions are needed in order for this typically Swiss source of energy to generate sustainable value. Alpiq will devote all its forces to this, in particular through political dialogue at the national and cantonal level.
In addition, Alpiq plans to invest in and manage new renewable energies together with partners at selected locations in Europe.
Thermal power stations remain important Alpiq will not build any new nuclear power plants with the technology used in Switzerland today and will continue focusing on safe and efficient operation. For future planning and investment security, Alpiq is looking to open a political dialogue to find acceptable and economically viable solutions for the life span of nuclear power plants.
Alpiq will continue to operate fossil fuel power plants in selected European locations and, in line with the Swiss energy strategy 2050, will evaluate potential projects in Switzerland.
Cutting costs, adjusting structures and increasing profitability As part of the restructuring measures that the Group has already announced and implemented, internal structures and processes will be simplified and streamlined to reduce the organisation's complexity, which had grown historically. The goal is to reduce sustainably annual costs by CHF 100 million. With the repositioning, the company plans an additional EBITDA contribution over the mid-term. Together with the cost cutting Alpiq will improve its profitability sustainably over the medium term.
"Alpiq is facing the new reality and is seizing the opportunities offered by the change in the energy markets. The emphasis in this renewed focus on the future energy market is on client proximity and innovative solutions. Alpiq has a strong position in hydro power and possesses some important elements for the energy future. We see ourselves as a competent partner of the energy policy, and we are doing everything we can to implement a sustainable energy strategy," says Jasmin Staiblin, CEO of Alpiq.