2009 annual report
TABLE of content executive report
Foreword* The Elia share Key events 2009* Prospects and challenges*
02 04 10 12
economic report
Grid operation Security of supply Infrastructure Grid Maintenance Market operation
17 18 21 25 27
environmental report
Environnemental objectives and indicators
39
social report
Staff policy Employee safety and welfare Branding campaign Sponsoring
49 54 57 58
corporate governance statement
Corporate governance statement* Significant events in 2009* Code of conduct* Remuneration of the board of directors and management committee Description of the risks and uncertainties facing the company* Stakeholder relations
62 66 68 69 71 74
financial report*
Consolidated financial statements IFRS Notes to the consolidated financial statements Joint auditors’ report on the consolidated financial statements Regulatory framework and tariffs Information about the parent company (*) T hese chapters form the annual report cf. Article 119 of the Belgian company code
80 84 122 124 126
Key figures consolidated ifrs results (in million €, results per share in €)
2009
2008
2007
2006
2005
Revenue
771.3
757.3
731.7
711.5
714.2
EBITDA
327.9
334.1
308.5
292.5
295.9
Profit after tax
84.0
103.1
77.6
75.9
76.5
Earnings per share (€)
1.74
2.14
1.62
1.58
1.60
Dividend per share (€)
1.38
1.37
1.30
1.28
1.27
Number of employees (31/12)
1,205
1,231
1,232
1,227
1,221
Length of the grid in km (31/12)
8,379
8,412
8,406
8,367
8,344
(1)
(1) EBITDA = operating income - cost of goods and services - personnel costs - provisions- write-downs.
profile
values
Elia is Belgium’s electricity transmission system operator (TSO) under licences awarded to it by the country’s federal government (for the 380 to 150 kV network) and those of its three regions (for the 70 to 30 kV grid).
“We are a team of professionals with the ambition to create shared wins for our customers and the community and to develop the European electricity market in a reliable, sustainable and efficient way.” This is the mission statement defined by Elia in 2008, with the aim of giving everyone in the company a clear view of our objectives and the challenges that we seek to address. By setting out the company’s priorities, it provides a guiding principle for the way we use the resources at our disposal.
Elia comprises two legal entities, Elia System Operator SA and Elia Asset SA, operating as a single economic entity under the generic name Elia. Together with its subsidiary Elia Engineering, it employs around 1,205 people. The company’s number one duty is to ensure the reliable and safe transmission of electricity from production units in Belgium and Europe to grid users (distribution system operators and large industrial consumers). Given the central position of the Belgian grid in the Western European electricity system and the intensification of electricity exchanges on the European grid, Elia takes constant care to ensure safe management of international power flows (imports, exports and transits) on its grid. Elia also ensures that there is a constant balance between production and imports, on the one hand, and consumption and exports, on the other, within its control area. Since electrical energy is difficult to store, it must be generated as and when consumption requires it. To enable it to perform its tasks, Elia must maintain its various facilities, including lines, cables, transformers, low-voltage equipment and systems for transmitting data to the national and regional control centres. It develops and upgrades its grid using the latest tried-and-tested technologies. This approach incorporates a proactive respect for the environment and supports the sustainable development policies in place in Europe and in Belgium at both federal and regional level. It also ensures that the various stakeholders in Elia’s activities are involved in implementing those policies. Its unique and central position on the Belgian electricity market allows Elia to develop innovative services and mechanisms aimed at ensuring the effective operation and development of this market within continental Europe. Elia adheres strictly to statutory rules on corporate governance as well as the provisions of the Belgian Corporate Governance Code for listed companies. Elia has been listed on the regulated market of Euronext Brussels since June 2005.
This mission statement has been translated into a number of values, which Elia considers to be the essential qualities underpinning the way its employees should operate, both within the company and in their dealings with outside players. Those values are: entrepreneurship, integrity, empathy and responsibility.
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
PREFACE
BALANCED AND SUSTAINABLE DEVELOPMENT
To us, being responsible means facing difficult choices head on, finding solutions to the problems we encounter, upholding rigorous professional standards at all times and engaging with stakeholders in an open and transparent way based on information, explanation, dialogue and a willingness to listen.
Geared towards Belgium’s energy needs, our job has important long-term goals, namely to guarantee security and quality of electricity supply, ensure a balance between supply and demand, modernise our infrastructure and prepare today’s grid to meet tomorrow’s climate challenges.
This 2009 annual report provides an overview of our actions to strengthen Belgium’s electricity system within a constantly evolving European market, whether it be enhancing security of supply, improving the competitiveness of Belgian companies or combating climate change. The report showcases some of our achievements in the fields of economic development, environmental preservation and social commitment: and indeed, our ongoing drive to reconcile these three priorities is now our primary contribution to balanced and sustainable development.
An integral part of this task involves supporting the energy transition at national and European level, a transition made inevitable by technological advances, social priorities and environmental concerns. In this respect, a commitment to sustainable development is central to our corporate strategy. This commitment to acting responsibly, which we share with all of our employees and partners, is reflected in a high level of investment and innovation designed to ensure that we provide conditions of optimum safety for our staff and subcontractors and for the people living near our facilities. Naturally, we also strive to minimise the impact of our activities on the natural environment.
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
FOREWORD BY THE CHAIRMAN OF THE BOARD OF DIRECTORS The energy market changed more in 2009 than at any time since electricity market liberalisation. 2
The economic recession triggered by the financial crisis of September 2008 led to a big reduction in electricity consumption in all industrialised countries. Elia displayed its customary flexibility and foresight by immediately adapting its investment plan to the expectations of its customers and to the drop in consumption: after all, why should today’s consumers shoulder investments that will not be needed for some time to come? However, despite the economic situation, Elia has continued to upgrade the grid in readiness for the economic upturn, in order to support Belgium’s industries. The same goes for investments in decentralised generation and renewable energy. For, despite the somewhat disappointing outcome of the Copenhagen Summit, if a major turning point was reached on any issue in 2009 it is surely support for renewable energy. Initiatives were adopted in Wallonia to accommodate onshore wind energy and 2009 also saw the official launch of the project to expand the grid to the Belgian coast, primarily to enable connection of the 2,000 MW of offshore capacity planned by the Belgian government. 2009 will also be remembered for the publication of the 3rd European energy package. With liberalisation still only partially implemented and operating at different speeds in different countries, this is an attempt by the EU to give new impetus to the project.
But what of the electricity market itself? It too changed over the course of the year, with a number of European players consolidating their presence in the Belgian market. Elia, which plays a central role in market operation, has continued to develop tools that help to open up the Belgian market to competition whilst safeguarding security of supply and grid reliability. Significant progress has also been made in the regional market of Central West Europe, with Elia playing a decisive role here too. Let us finish by mentioning some longer-term prospects: “smart grids”, the large-scale integration of wind power, the participation of renewable energy in system services, the enhancement of operational security in a new environment that will see flows being managed in line with consumer requirements among other things, direct current connections… These are all areas of research & development in which Elia is active, at both Belgian and European level. Though a small company, Elia has some major assets in the shape of its skills base and flexibility. These allow it to respond quickly and efficiently to opportunities that arise and to actively foster a European electricity market that benefits consumers and the wider community. No doubt 2010 will bring the company its fair share of new and exciting challenges.
In this area as in many others, Elia already broadly meets the requirements of the new directive, not least thanks to the corporate governance mechanisms introduced when Elia was established as the independent transmission system operator.
RONNIE BELMANS
Chairman of the Board of Directors
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
FOREWORD BY THE CHAIRMAN OF THE MANAGEMENT COMMITTEE The economic and financial crisis affected both Belgian consumers and Elia in 2009. The first quarter saw a record fall in the consumption index for the Elia grid, followed by a slight upturn from October onwards. However, this difficult climate did not stop Elia from pushing forward with its grid operation activities, in what is an increasingly European environment. For example, February 2009 saw the launch of Coreso, the regional technical coordination centre jointly managed by Elia and its French and British counterparts RTE and National Grid. Coreso has demonstrated the value-added of regional monitoring of energy flows across all grids in Central West Europe. The phase shifting transformers that began operating on Belgium’s north border at the start of the year more than proved their worth, most notably on 21 July, when several very-high-voltage connections came down in exceptionally severe weather. This unforeseeable incident demonstrated the ability of Elia personnel, working closely with our subcontractors and in consultation with the authorities and local residents, to react quickly and efficiently to restore power and deploy a backup line until the final repairs are carried out in spring 2010. On another level entirely, the successful completion of a €1 billion bond offering, intended to refinance various loans and develop the Belgian transmission system, confirmed market confidence in the company.
very high security of supply, with average reliability of over 99.999%; meeting our targets on safety at work, with results that make us one the safest of industrial companies; and the implementation of maintenance and investment programmes. These results have been achieved whilst improving productivity in order to meet savings targets that will impact favourably on tariffs and to secure the tariff incentive for the benefit of shareholders, as stipulated in the multi-year tariff regulations. 2009 also provided further evidence of our commitment to the reliable, sustainable and efficient development of the European electricity market, including: the official launch of the Stevin project, which will expand the Belgian grid to the coast to enable the connection of 2,000 MW of offshore wind capacity being built with the support of the Belgian government; the development of new market mechanisms, in particular for the intraday market; the first auctions of annual and monthly capacity via CASC, the joint service company of system operators in the Central West Europe (CWE) region; the final phase of implementation of pentalateral market coupling in the CWE region; and further research into new interconnections, among other things, in partnership with our British and German colleagues. In view of these achievements, we are confident in our ability to meet these and other challenges in 2010.
These various actions attest to the motivation of Elia staff and their ability to think ahead, as well as their commitment to serving our customers and the community. These essential qualities underpin the excellent results achieved by the company in areas that really matter to it. These include:
DANIEL DOBBENI
Chief Executive Officer
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ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
THE ELIA SHARE SHAREHOLDER INFORMATION
THE SHARE IN 2009
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2009 was an unusual year on the stock exchange in more than one respect. During the first quarter of 2009, the financial crisis that had started in 2008 weighed heavily on the economy, causing the markets to continue plummeting until 9 March. The first positive economic news signalled an upturn in the markets which continued over the summer and, to a lesser extent, in the last quarter. Elia, whose activities are regulated, has been operating since 1 January 2008 under a system of four-year fixed tariffs. It consequently weathered the financial and economic storm of 2008 and early 2009 very well, thereby confirming its ‘safe investment’ status.
The Elia share followed an upward trend in 2009, with just one dip to €24 at the start of March following the collapse in market valuations. The price soon recovered to €28, and then stabilised until the dividend payout. Following the dividend payout on 27 May, the share remained stable over the summer before rising to €28. The share’s liquidity fell by around 33% (from 16,682 shares per day to 10,717 shares per day on average), primarily because Elia’s regulated activities offer a high level of visibility and around 25% of the freely tradable shares are owned by ARCO Group.
Bel20 Elia Price (€)
Volume (number of shares)
28
250 000
27
187 500
26
125 000
25
62 500
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
The Elia share finished 2008 at a price of €24.56. The closing price at the end of 2009 was €27.30, a rise of 11.16%. Factoring in the dividend of €1.37, the share went up by 16.73% over the year.
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The lowest price in 2009 was €24, recorded on 12 March. The highest price, €28, was recorded several times in September and October. Over the year as a whole, therefore, the Elia share underperformed the Bel20, which rose by 31.6% in 2009. However, it should be noted that the Bel20 slumped by 53.6% in 2008.
Bel20 Elia 140
130
120
110
100
90
80
70
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
Compared with the other listed European transmission system operators, Elia’s results in 2009 were better than those of Red Electrica in Spain (+7.8%) and National Grid in the UK (-0.7%). Only the Italian TSO Terna performed better (+28.5%). The electricity sector as a whole only rose by 4.5% in 2009. 6
With 48,270,255 shares outstanding, the company’s market capitalisation stood at €1,317,777,962 at the end of December. In 2009, 2,743,488 Elia shares were traded on Euronext Brussels, equating to 14.51% of the freely tradable shares. The table hereafter gives an overview of monthly statistics for the Elia share on Euronext Brussels in 2009.
Elia Terna Red Electricia Dow Jones Utility index National Grid 130 125 120 115 110 105 100 95 90 85 80 75 70
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
minimum
Freefloat turnover rate
Market capitalisation (million €)
24.47
1.06 %
1,262
27.50
25.94
0.94 %
1,298
24.75
27.00
24.00
3.37 %
1,190
10,868
27.73
27.80
24.50
1.15 %
1,333
May
9,768
26.26
27.96
25.51
1.03 %
1,263
June
14,733
26.00
26.75
25.81
1.71 %
1,250
July
7,475
26.39
26.54
25.50
0.91 %
1,269
August
5,158
26.45
25.50
26.01
0.57 %
1,272
September
7,288
27.62
28.00
26.31
0.85 %
1,320
October
8,147
27.46
28.00
27.00
0.95 %
1,314
November
6,809
27.34
27.55
27.11
0.76 %
1,318
December
1,0 421
27.30
27.54
27.19
1.21 %
1,318
2009
10,717
27.30
28.00
24.00
14.51 %
1,318
Volume (daily average)
Closing price
maximum
January
9.567
26.24
26.25
February
8,869
27.00
March
28,922
April
Month
ELIA SHARE PRICE AND VOLUME APPOINTMENT OF 2 LIQUIDITY PROVIDES FOR THE ELIA SHARE
In late 2009, Elia entered into a “liquidity provider” contract with KBC Securities and Bank Degroof, both officially recognised by NYSE Euronext. The aim of the agreement is to boost the liquidity of the Elia share. These two financial institutions have been continually present in the order book for the Elia share since 1 December and are involved in both sale and purchase.
SUSTAINABLE AND SOCIALLY RESPONSIBLE COMPANY The Elia share was included in the Ethibel Excellence Investment Register. Ethibel promotes socially responsible investing (SRI) in Belgium and Europe. It administers two quality labels, registered in 15 EU countries: Ethibel Pioneer and Ethibel Excellence. These labels offer investors a guarantee that the companies they are investing in are sustainable and play a pioneering role, or a leading role within their sector, in all fields of corporate social responsibility (CSR).
THE ELIA SHARE AND ITS CODES
Audits are performed by ratings agency VIGEO, which screens every company in four specific areas:
Share index
• internal social policy
On 31 December 2009, Elia’s share was included in the Bel Mid index. Elia’s weight on that date was 4.62%, ranking it 7th in the index.
• environmental policy
Stock exchange
Elia share on the stock exchange
Elia strips on the stock exchange
Euronext Brussels
Euronext Brussels
Index
BEL MID
Ticker
ELI
ELIS
ISIN
BE 0003822393
BE 0005597688
Code Bloomberg
ELI BB
ELIS BB
Code Reuters
ELI BR
ELIS BR
• external social policy • economic policy.
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TRANSPARENCY REGULATIONS AND DISCLOSURE OF INTERESTS Under the Belgian Transparency Act, stakes of at least 5% (or a multiple of 5%) of total share capital must be disclosed to the Belgian Banking, Finance and Insurance Commission (CBFA) and to the company itself. No disclosures were received in October 2009.
DIVIDEND On 25 February 2010, Elia’s Board of Directors decided to propose the following dividend payments for shareholders at the general meeting of 11 May 2010: In accordance with the dividend policy and subject to approval by the annual general meeting, a normal dividend of €66.6 million or €1.38 per share (gross) will be proposed. This gives a net result of €1.035 per share without VVPR strip or €1.173 per share with VVPR strip. The following paying agents will pay out dividends to shareholders : Fortis Bank, ING Belgium, KBC-Bank/CBC Banque and Dexia Bank. Dividend payouts for shares held in a stock account will be settled automatically by the bank or stockbroker. Elia will pay out dividends on registered shares directly to shareholders.
DIVIDEND POLICY Elia is obliged by its articles of association to pay out at least 85% of profit gained, after retaining 5% for the legal reserve. This represents a payout ratio of 81% of recorded profit. Following the introduction of multi-year tariffs, part of the net profit derived from offsetting decommissioning gains in the tariffs must be reserved under equity. As a result, the overall payout ratio will fall, but this situation will considerably enhance Elia’s (self-)financing capacity.
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
SHAREHOLDER STRUCTURE On 31 December 2009, the shareholder structure of Elia System Operator SA was as follows:
FREE FLOAT* 40.10 %
PUBLI-T 33.01 %
ELECTRABEL 24.35 %
PUBLIPART 2.54 %
ELIA SYSTEM OPERATOR ELIA ASSET 99.99 % ECONOMIC UNIT
CASC-CWE 14.28 %
HGRT 24.50 %
CORESO 33.33 %
BELPEX 60.00 %
ELIA RE** 100.00 %
ELIA ENGINEERING** 100.00 %
* Arco Group has announced on 21 October 2008 that it has 10.37% of the Elia shares in its possession. ** Elia System Operator has 1 share of Elia Re and 1 share of Elia Engineering in its possession.
FINANCIAL CALENDAR 26 February 2010 (8:00 a.m.)
Publication of annual figures for 2009
Early April 2010
Publication of 2009 annual report in pdf
11 May 2010
General meeting of shareholders
14 May 2010
Interim statement for Q1 2010
26 May 2010
Payment of 2009 dividend (coupon No. 5)
27 August 2010 (8:00 a.m.)
Publication of half-yearly figures for 2010
12 November 2010
Interim statement for Q3 2010
INVESTORS For any questions regarding the Elia share, please contact: Elia Investor Relations Department Boulevard de l’Empereur 20 B-1000 Brussels Belgium Tel. : +32 2 546 72 39 Fax : +32 2 546 71 80 Email : bert.maes@elia.be Information about the group (press releases, annual reports, share prices, disclosures, etc.) can be found on the Elia website www.elia.be in three languages (French, Dutch and English). Elia’s financial newsletter Investor News provides investors with up-to-date information about the company.
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ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
KEY EVENTS 2009 25 JANUARY: ANNULMENT OF TIHANGE-AVERNAS CONNECTION PERMIT
The Council of State annuls the permit for the twin 150 kV connection between Tihange and Avernas, issued by the Walloon Region in July 2001, on the grounds that the authorities should have included the infrastructure in the Sector Plan in advance. The connection, which secures the electricity supply to Walloon and Flemish Brabant and powers the high-speed train link between Brussels and Liège, was commissioned in autumn 2003. Elia is now working with the Region to resolve the situation.
28 MARCH: MASS SWITCH-OFF (AND ON!) PASSES OFF SMOOTHY
The World Wildlife Fund organises Earth Hour, a global initiative to raise awareness about greenhouse gases and energy savings, in which all European consumers are asked to switch off the lights between 8:30 and 9:30 p.m. Elia and other European TSOs monitor the event extremely closely to ensure that instantaneous balance between power production and consumption is maintained at the two critical moments, thereby contributing to the success of the initiative.
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7 APRIL: €1 BILLION EUROBOND ISSUED
16 FEBRUARY : FEBRUARY: LAUNCH OF CORESO
Coreso, a regional technical coordination centre shared by several transmission system operators, helps to enhance the security of Europe’s electricity supply. It is opened on 18 February in the presence of the Belgian Energy Minister Paul Magnette and Fabrizio Barbaso, Deputy Director-General of DG Energy & Transport at the European Commission.
Elia successfully issues a €500 million 4-year tranche and a €500 million 7-year tranche. Less than an hour after the order book opened, offers already exceed €5.3 billion. The proceeds are intended to refinance various loans due in 2009 and to further develop the Belgian transmission system.
ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
22 APRIL: THIRD PACKAGE OF EUROPEAN DIRECTIVES APPROVED
13 AND 14 OCTOBER: HARMONISED AUCTION RULES APPLIED FOR THE FIRST TIME
The European Parliament approves the agreement on the third package of measures to promote the development of a single electricity and gas market in Europe, as part of efforts to combat greenhouse gas emissions.
Following their approval by regulators, the harmonised auction rules drawn up by system operators in the five countries of the CWE region are applied for the first time by their joint auction office CASC-CWE. From 1 November, CASC-CWE will perform all auction-related activities for the five countries. This marks a major new step towards the creation of a regional electricity market in Central West Europe.
20 NOVEMBER: STEVIN PROJECT OFFICIALLY LAUNCHED 16 JULY: CREG APPROVES CONNECTION CONTRACT
The connection contract, together with the access contract and access responsible party contract already approved by the regulator, sets out the rights and responsibilities of the producer/consumer and Elia regarding connection to the transmission system.
Elia is extending its 380 kV grid from Zomergem to the coast at Zeebrugge in order to bring the wind energy produced offshore to centres of consumption in Belgium, expand the interconnections with neighbouring countries, particularly the United Kingdom, and improve energy supply to western Flanders and the port of Zeebrugge. The project is in line with European, Belgian and Flemish energy and environment policy. The procedure to incorporate the connection into a regional land-use plan (GRUP) is launched on 20 November, following the completion of an environmental impact report plan (“MER plan”).
6 SEPTEMBER: BACKUP LINE COMMISSIONED AT LINT
A powerful tornado hits the area around Lint, near Antwerp, on 21 July, bringing down two pylons on the 380 kV MercatorMassenhoven line. Luckily nobody is injured in the incident. As a result, this important link in the very-high-voltage grid is out of action for over nine months. To restore security of supply in the affected area, Elia builds a backup line which it commissions on 6 September. Work to repair the damaged line will continue until the second quarter of 2010.
14 DECEMBER: CONTRACT IN THE PERSIAN GULF
Elia lands a new consultancy contract for the Gulf Cooperation Council Interconnection Authority (GCCIA), in consortium with the French transmission system operator RTE and the engineering firm Tractebel Engineering. The contract is to provide grid engineering, operation and maintenance services to support the GCCIA in its role as operator of the interconnected grid for the Gulf states.
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ELIA 2009 ANNUAL REPORT — EXECUTIVE REPORT
PROSPECTS AND CHALLENGES
IMPLEMENTATION OF THE NEW EUROPEAN DIRECTIVE 12
Elia is a European leader when it comes to the components of the ‘third package’ of EU directives aimed at developing a single electricity and gas market, which are due to be transposed into Belgian law by March 2011. In this connection, GDF SUEZ has informed Elia of its intention to dispose of some or all of its Elia shares, in a manner yet to be determined, in close coordination with Elia and in the interests of the company and its shareholders. This disposal is in line with the provisions on ownership unbundling contained in the new Electricity Directive.
CONTINUED SUPPORT FOR RENEWABLE ENERGY Policies aimed at achieving sustainable and environmentally friendly economic development rely heavily on improved control of consumption and massive integration of renewable energy sources into Europe’s energy mix. Electricity is thus set to develop as an energy vector in the 21st century, all the more so as it can be generated from renewable sources. To achieve this, transmission and distribution grids will need to be enhanced, in terms of both transmission capacity and functionality. Consequently, everyone now agrees that grids are key to the success of energy and environmental policies. Elia is
playing a proactive role in this area and grid projects will receive special attention in 2010. Examples include the Stevin project to connect future offshore wind farms, collaborating with a range of stakeholders to connect onshore wind farms (particularly in Wallonia) and combined heat and power plants (in Flanders and Brussels), and contributing to the development of the future North Sea grid.
MAINTAINING GRID SECURITY The intensification of exchanges on the European transmission system and the growth in the proportion of energy generated from variable renewable sources are prompting a rethink of the way in which transmission grids are operated, to ensure that security of supply is maintained and potentially enhanced. Elia is also leading the way in this area, for example by coordinating its use of phase shifting transformers on Belgium’s borders with neighbouring TSOs and through Coreso, the European regional coordination centre set up with Elia’s French and British counterparts. In 2010, particular attention will be focused on maintaining security in the context of the regional integration of electricity markets.
LAUNCH OF PENTALATERAL COUPLING IN CENTRAL WEST EUROPE Coupling of the Belgian, Dutch, French, German and Luxembourg day-ahead markets is due to be launched in spring 2010. This is the first major step in the creation of an integrated European market. Following a trial period, the coupling will be improved by introducing a method for calculating transmission capacity based on anticipating energy flows on the five countries’ grids. Discussions are also under way within the European TSOs’ association ENTSO-E to extend this coupling to other regions such as the Nordic countries and the United Kingdom.
STAKE IN THE GERMAN GRID 50HERTZ TRANSMISSION In early March, Elia and its financial partner IFM acquired the German grid 50Hertz Transmission. The move is in line with Elia’s commitment to create added value for its shareholders, play a bigger role in developing the Central West European electricity market through the large-scale integration of renewable energy production units, improve operational excellence and consolidate Elia’s role in the future integration of Europe’s transmission systems.
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14
Elia has shown hown flexibility and foresight foresig ght in dealing with the substantial reduction in electricity consumption caused by the recession. However, despite the economic situation, it has continued to upgrade the grid in readiness for the economic upturn, in order to support Belgium’s industries. Investment in decentralised generation and renewable energy has been a key focus.
ECONOMIC REPORT
15
HANS VANDENBROUCKE, CUSTOMERS & MARKET
16
Hans Vandenbroucke has worked in the Customers & Market Department since 2007. Having trained as a sales engineer, he has found the perfect setting in which to indulge his taste for innovation, interest in energy markets and ability to work in both a Belgian and European context.
“As Market Development Manager, my job is to work with my colleagues from the Market Mechanisms team to develop products that will improve the way the Belgian electricity market operates, and thereby create opportunities that benefit our customers. The electricity market has been a cross-border market for many years now, so our work also has a European dimension. What does that mean in practice? We design products in Belgium – for example, services that are vital to the smooth operation of the electricity system – which Elia then contracts out to third parties. These products are regularly adapted, for instance to take account of the growing proportion of electricity generated from renewable energy sources such as wind.” It goes without saying that Hans’s work is not confined to Belgium, since the single electricity market involves the integration of national markets. “That integration means increasing interconnection capacity with other countries and making available commercial products that are harmonised at a European regional level. For example, crossborder transmission capacity must be made available to the market in an optimal fashion. One way of achieving this is via auctions covering various timeframes: annual, monthly, day-ahead and intraday. The creation of CASC-CWE, which organises harmonised auctions for transmission capacity between five countries (Germany, France and the Benelux), is an example of this progressive integration. CASC-CWE is the grid-operation counterpart to the regional technical coordination centre Coreso. The steady increase in the proportion of renewable energy within the generation facilities of EU Member States will also require greater integration of control areas, which are currently contained within national borders.” Hans is also interested in the contractual aspect of this trend: “A market committee within ENTSO-E coordinates the various initiatives designed to deliver the integrated European market that Europe wants. It develops joint proposals representing the transmission system operators and looks for synergies and economies of scale. ENTSO-E is the umbrella organisation within which the different synchronous areas, Western Continental Europe, Scandinavia and the United Kingdom, consult one another with a view to developing a raft of shared tools.” Thanks to Elia’s relations with the regulators, both regional (VREG, CWApE, Brugel) and federal (CREG), Hans and his colleagues keep in regular contact with their specialists. “We help keep them abreast of all aspects of the electricity market so that they can do the best job possible and make the right decisions in an ever-changing Belgian and European context.”
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
GRID OPERATION
Grid operation is central to Elia’s mission, and takes place across different timeframes, ranging from year- and day-ahead through to real-time operation, 24 hours a day, seven days a week. The national control centre maintains instantaneous balance between production and consumption and manages energy flows on the Belgian interconnected grid, in close collaboration with the transmission system operators from neighbouring countries. The regional control centres (in Merksem, Namur and Brussels) focus particularly on the quality of supply for industrial customers connected to the transmission system and for distribution system operators. They work in close partnership with the operational teams responsible for maintenance services. This operational mission increasingly re quires spe cialised skills, and now entails working in a European setting, since the Belgian grid is a subset of the West European grid and is synchronously interconnected with grids from Portugal to Ukraine. Following liberalisation of the internal electricity market, exchanges within this extended grid have continued to intensify, partly owing to the price differentials in the different national markets. The growing share of energy generated from renewable sources such as large offshore wind farms will increase the variability of energy flows within grids. The progressive introduction of intraday adjustment mechanisms will make it possible to meet the needs of these players more effectively by allowing them to align their production with their customers’ consumption throughout the day. This will result in greater variability of energy flows, which will require operational measures to be implemented in order to maintain a reliable and continuous supply.
To this end, Elia has put in place control instruments known as phase shifting transformers, which act like mixer taps and allow electricity flows to be distributed between a greater number of connections on the Central West European grid. These transformers, which are the largest in Europe, have been in service since the start of 2009 and are operated in close collaboration with the transmission system operators in neighbouring countries. Elia, together with its French and British counterparts RTE and National Grid, demonstrated its commitment to strengthening this European regional vision of grid operation by helping to establish Coreso, which began operating in February 2009. In its capacity as a regional technical coordination centre, Coreso assesses the risks of incidents on the Central West European grid over weekly and daily periods and in near real time. It warns the system operators concerned, including Elia, and proposes preventive measures in which phase shifting transformers play a vital role. For example, during the Lint incident on 21 July 2009, when the Belgian grid lost several 380 kV connections, phase shifting transformers enabled the operational security of the Belgian electricity system to be maintained between the moments the connections went down and the backup line was commissioned.
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ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
SECURITY OF SUPPLY
In 2009, security of supply remained at a very high level. The average number of interruptions on the Elia grid per consumer (Average Interruption Frequency) was 0.09, equivalent to one interruption per customer every 11 years. The average duration of interruptions was 17 minutes and 12 seconds. Spread across all customers, the average duration of interruptions was 1 minute and 34 seconds per customer (Average Interruption Time), equivalent to an average reliability of more than 99.999%. Belgium is definitely one of the best countries in Europe in terms of quality of electricity supply.
CONSUMPTION PER MONTH 9 000 GWh / month 8 000 7 000 6 000
DECEMBER
NOVEMBER
OCTOBER
SEPTEMBER
AUGUST
JULY
1 000
JUNE
2 000
MAY
3 000
APRIL
4 000
Electricity consumption as recorded on Elia’s transmission system is a good indicator of Belgium’s economic activity. It has therefore been scrutinised very closely month by month, not just by Elia but also by outside observers.
MARCH
5 000
FEBRUARY
CONSUMPTION
JANUARY
18
(November 2009 was the warmest November since weather records began in Belgium). In December, however, the figures were up again compared with 2008 (+4,2%), mainly due to the prolonged wintry spell. In 2009 as a whole, consumption was down by 14,2% for industrial customers connected directly to the Elia grid, and by 3,4% for industrial, business and residential customers and distribution system operators.
CONSUMPTION
The consumption 1 indicator for the Elia control area fell by 8%, from 88.3 TWh 2 in 2008 to 81.8 TWh in 2009. This was mainly due to the recession, whose effects began to be felt from the last quarter of 2008. The monthly values recorded in 2009 were down year on year compared with 2008, up to and including September. The slight upturn in consumption in October did not continue in November, owing to the extremely mild weather conditions
(1) The Elia consumption indicator covers the majority of electricity consumption in Belgium. It includes all production connected to the Elia grid plus the net import-export balance. The share of consumption supplied directly by production units connected to the distribution grids is not included in the indicator. (2) It should be noted that the metering equations have been redefined to better reflect consumption on the Elia grid; the 2008 figure shown here has been adjusted to enable comparison with 2009 and therefore does not correspond to the figure published in the 2008 annual report.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
1000
500
0
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
-500
-1000
19 CONSUMPTION PEAKS
In 2009, the maximum consumption on the Elia grid was 13,530 MW, recorded on 8 January 2009 between 18:00 and 18:15. This is lower than the all-time record observed on 17 December 2007 (14,040 MW) but is nonetheless slightly higher than the maximum value recorded in 2008 (13,479 MW on 9 January 2008). Conversely, the lowest consumption point (5,901 MW) was recorded on 26 July 2009 (between 6:00 and 6:15). It is even lower than the minimum value in December 2008 (6,141 MW), which was recorded on Christmas morning.
IMPORTS AND EXPORTS PER MONTH IN 2009
Imports from the Netherlands Imports from France Imports from Luxembourg Exports to the Netherlands Exports to France Exports to Luxembourg NET BALANCE
(GWh)
IMPORTS AND EXPORTS In 2009, the Belgian control area was a net exporter (1.83 TWh), whereas 2008 saw a net import of 10.57 TWh.
FR
Physical exchanges of electricity with neighbouring countries via the Elia grid totalled 20.8 TWh in 2009, down from 23.7 TWh in 2008.
NL
These differences are the result of a heavy increase in exports to France, while imports from the Netherlands and France fell significantly.
LUX
Change
Change
2009
2008
2007
09-08
09-07
import
1,832
7,386
8,332
-75 %
-78 %
export
6,642
2,034
2,322
+227 %
+186 %
import
5,787
8,119
5,266
-29 %
+9,9
export
3,769
3,005
5,084
+25 %
-25 %
import
1,868
1,629
2,084
+15 %
-11 %
export
910
1,518
1,631
-40 %
-45 %
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
NET OFFTAKE FROM THE GRID Net offtake is a measure of the volumes of energy taken from the Elia grid. In the case of local production, some or all of the power generated is consumed directly on the site of the industrial customer or distribution system operator. Compared with 2008, local production was up by 10%, reflecting the growing importance of cogeneration and wind in Belgium’s energy mix. Since energy generated and consumed locally is not taken from the Elia grid, it is not counted as part of the net offtake, although it is included in the domestic consumption indicator. In 2009, net offtakes were down 6% compared with 2008, from 78.3923 TWh in 2007 to 73.6423 TWh in 2009. BALANCING PRODUCTION AND CONSUMPTION MEETS THE NEEDS OF THE BELGIAN MARKET
Balancing production and consumption is primarily the responsibility of market players, more particularly access responsible parties (ARPs). ARPs are expected to ensure the best possible balance between the injection and offtake of their consumer customers. Each ARP must inform Elia, one day ahead, of all the energy exchanges that it will carry out, on a quarter-hourly basis for each point on the grid. This applies to injections and offtakes, exchanges between ARPs, imports and exports. 20
The volumes of energy activated by Elia to ensure the balance of the control area were 707 GWh in 2009, compared to 582 GWh the year before.
(3) Includes energy off-taken by pumping units as of 2009.
CORESO, HELPING TO SAFEGUARD SECURITY OF SUPPLY IN BELGIUM AND EUROPE
Coreso is a regional technical coordination centre shared by several TSOs (Elia, RTE & National Grid) which began operating in Brussels on 16 February 2009. Since its creation, Coreso has been supplying the control centres of the participating TSOs with forecasts about the security of the North West European grid, by performing security analyses, simulating various scenarios and proposing sets of coordinated remedial actions that TSOs can take to control the security of the electricity system in this zone. Coreso’s operational team works in shifts around the clock. It comprises 12 individuals of several nationalities, speaking Dutch, English, French and German. On 1 April 2009, the TSOs of the CWE region (Central West Europe, comprising Belgium, France, Germany, Luxembourg and the Netherlands) appointed Coreso as a service provider for the experimentation with regional market coupling. It started to deliver two-day-ahead forecasts and technical data on that date. At the end of June, Coreso launched its around-the-clock operations, providing security analyses updated every 15 minutes based on data provided by the TSOs (topology, power flows, voltage, generation and load, and technical characteristics of their network) in the zone concerned. On 15 May 2009, the British TSO National Grid joined Coreso. The participation of National Grid allows flows on the existing DC cable IFA linking France and Great Britain to be taken into account. This collaboration paves the way for the development of future projects to build offshore wind farms and new DC cables linking Great Britain to Central West Europe.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
INFRASTRUCTURE
LENGTH OF THE HIGH-VOLTAGE GRID Voltage (kV)
Underground cables (km) 01.01.10
01.01.09
Overhead lines (km) 01.01.10
01.01.09
Total (km) 01.01.10
01.01.09
380
—
—
891
891
891
891
220
—
—
297
297
297
297
150
415
413
2,008
2,011
2,423
2,424
70
282
282
2,388
2,412
2,670
2,694
36
1,928
1,932
8
8
1,936
1,940
30
140
140
22
26
162
166
2,765
2,767
5,614
5,645
8,379
8,412
Total
For the overhead lines, the figures shown are geographical lengths. For the underground cables, the figures shown are electrical lengths. The figures do not include networks not owned by Elia.
INVESTMENTS Investments in the transmission system are driven by various factors: the need to meet the requirements of industrial customers and distribution system operators, to cope with changing demand in terms of both the location and volume of energy taken
from the grid, to replace facilities at the end of their service life or bring them into line with environmental requirements, and to contribute to the opening-up of the market. CONNECTIONS REQUESTED BY INDUSTRIAL CUSTOMERS Slykens: Biostoom and Biofuel
Elia connected two 18.5 MW cogeneration units to its 36 kV network at the Oostende-Slijkens substation for Ostend-based company Electrawinds. Zwijndrecht : Lanxess Rubber
Lanxess Rubber has established a cogeneration unit at its site in Zwijndrecht (on the left bank of the Scheldt in Antwerp). The unit comprises a 40 MW gas turbine and a 15.5 MW steam turbine. The gas turbine was connected to the Zwijndrecht 36 kV high-voltage substation, and the steam turbine to the 36 kV Kallo substation via Lanxess’s internal network.
21
22
OVERHEAD AND UNDERGROUND CONNECTIONS
HIGH-VOLTAGE SUBSTATIONS
Beringen – Mol
Zandvliet
Following the closure of the old coal-fired power stations at Mol and in preparation for connection of the “T-Power” power plant at Tessenderlo Chemie to the Beringen 150 kV high-voltage substation, Elia increased the transmission capacity of the Beringen-Mol 150 kV high-voltage line by means of energy-efficient conductors. This new technology allows greater energy flows to be transited through conductors of the same diameter and weight, which means that existing pylons can be used.
A second 380/150 kV transformer was commissioned in 2009 at the Zandvliet high-voltage substation, to help ensure security of supply for major industrial customers in the northern zone of the port of Antwerp, including BASF.
Schaerbeek – Centenaire
A 36 kV underground cable was commissioned in north-east Brussels between Elia’s Schaerbeek and Centenaire substations. This means that supply to the Centenaire substation can be strengthened locally, from the 150 kV injection substation at Schaerbeek. The Centenaire substation supplies the Heysel site and Brussels Expo exhibition centre, among other places. Switch to 75 °C on overhead lines
A number of line-related projects were carried out in 2009. These included switching the operating temperature of conductors to 75 °C on the Auvelais-Gerpinnes-Hanzinelle-NeuvilleCouvin line, and retrofitting on the Eupen-Les Plénesses line.
Avelgem
A second 380/150 kV transformer was installed at the Avelgem high-voltage substation, strengthening injection into the 150 kV network and safeguarding the independence of the transmission system in the face of changes to production facilities. Lillo
Part of the 150 kV infrastructure at the Lillo substation was replaced by a compact insulated substation. The purpose of this was twofold: to enable the connection of a 380 kV transformer, and to free up enough space to build a 380 kV substation as part of the Brabo project. Brabo is intended to enhance the transmission capacity of the 380 kV network to deal with the increase in international flows, connect additional production units and strengthen security of supply in the port of Antwerp. Heliport
The development of consumption in the centre of Brussels required a 150 kV – 11 kV supply point to the distribution system to be installed on a site owned by Elia. The architecture of the resulting building, which is located in the urban heart of the capital, around Rogier and Tour & Taxis, was adapted to meet the requirements of the local authorities.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
Wiertz
DECENTRALISED PRODUCTION UNITS
The upgrading of this electrical substation, which supplies the European quarter in Brussels, was completed by the commissioning of a 150/11 kV transformer.
In Wallonia, the study into the potential for accommodating wind power production, conducted by Elia in 2008 in partnership with the ICEDD and APERe, was extended to cover the whole of Wallonia. Based on the findings of the ICEDD study, Elia worked out the existing and future accommodation capacity of the local transmission system. It found that many places could accommodate wind turbines without requiring any major alteration to the existing grid. Aggregating the results for the whole of Wallonia puts the accommodation capacity of the existing local transmission system at between 2,500 and 3,000 MVA. A map was produced showing the substations on the Elia grid with the greatest connection potential.
Neuville
Work was carried out at Neuville to completely overhaul the 70 kV substation and install transformer tanks. Dampremy
The 150 kV Dampremy substation was replaced with an insulated substation in order to improve security of supply for industrial customers in the region and to strengthen the 150 kV line between the 220 kV Monceau injection point and the 380 kV Gouy injection point. Gouy et Monceau
Several bays at these two substations were adapted to enhance security of supply, mainly by increasing the maximum permissible short-circuit power. Fosse-La-Ville
The substation was adapted to enable the connection of windpower production units at medium voltage. EQUIPMENT Transformation upgrades
A second 150/70 kV transformer was commissioned at the Mechelen substation to strengthen the 70 kV network. A second 150/12 kV transformer was commissioned at the Ham substation to ease pressure on the Ghent 36 kV network and strengthen the 12 kV network. The transformer is supplied from the 150 kV Ringvaart substation via the second 3-phase transmission line fitted on the existing line between Ringvaart and Ham. Retrofi tting of 36 kV network and medium-voltage substations
A number of cublicles the Elia 36 kV network and the mediumvoltage networks managed by the distribution system operators (DSOs) were retrofitted in consultation with the DSOs. In 2009, work on the following high-voltage substations was completed: Flora 36 kV, Ham 36 kV, Noordschote 15 kV, Sijsele 12 kV, Merksem 15 kV, Burcht 15 kV, Herentals 15 kV.
STEVIN : EXTENSION OF THE 380 KV GRID TO THE COAST
The expansion of the 380 kV grid between Zomergem and Zeebrugge is in line with Europe’s energy/climate policy, which has three major objectives for 2020: to reduce Europe’s energy consumption by 20%, cut CO2 emissions by 20% and generate 20% of its energy consumption from renewable sources. For Belgium, this means that 13% of its power must be generated from renewable energy sources. One such source is offshore wind power generated in the North Sea; in 2004, the Belgian government earmarked an area off the coast for the installation of at least 2,000 MW of capacity. In order to transport the electricity produced offshore to consumption centres in Belgium, transmission capacity between the coast and the grid needs to be upgraded. This upgrading will also create the conditions needed for an interconnector with the United Kingdom via a subsea connection and, in the medium term, with an offshore transmission system linking up the various wind farms. Thanks to the installation of a 380 kV substation in Zeebrugge, this connection will contribute to security of supply in western Flanders as well as the economic development of the port of Zeebrugge and surrounding area. The route of the high-voltage overhead connection is designed to connect the future high-voltage substations at Zomergem and Zeebrugge. The first phase of the procedure was launched in November 2009 when the Flemish authorities published the public consultation notice. On this occasion, Elia organised public information sessions and published a new information section on its website. The connection is due to be commissioned in 2015 (late 2013 at the earliest), subject to the necessary permits being obtained.
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ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
AC Grid
UK
AD/DC connection
Diagram of the direct-current connection between Belgium and the UK
AC Filter
connection bay
DC Filter DC land cable AD/DC convertor
DC submarine cable Joint
BEL GIU
M
INTERNATIONAL PROJECTS INTERCONNECTION WITH THE NETHERLANDS
24
During installation of the phase shifting transformers, the protection systems on the 380 kV connection between Zandvliet and Borssele in the Netherlands were adapted to enable the connection to be used as an international interconnector during expansion of a 380 kV high-voltage substation at Borssele. INTERCONNECTION WITH GERMANY
A feasibility study confirmed the utility of a direct interconnection between Belgium and Germany. Such a connection would improve the security of supply of Belgium and Germany, as well as enhancing market integration through greater convergence of electricity prices and increasing the transmission of renewable energy across Europe. Elia and Amprion (the relevant German transmission system operator) have embarked on a detailed study to analyse, among other things, the exact route of the connection and the technologies that could be used.
INTERCONNECTION WITH THE UNITED KINGDOM: NEMO PROJECT
The UK grid has a 2,000 MW connection with France, which will be supplemented in 2011 by a 1,000 MW connection with the Netherlands. Despite this upgrade, transmission capacity between the UK and Central West Europe will remain well below the minimum threshold set by the European Commission. It is against this backdrop that Elia and National Grid are looking into creating a connection between their respective grids in order to increase market liquidity and bolster security of supply in both Britain and Belgium. The feasibility of the Nemo project was confirmed in late 2008 and the first part of the phase leading to the creation of the connection has been launched. Its aim is to define more precisely the technical aspects of the connection and to initiate licensing procedures. The procurement phase is due to start in 2012, and the connection should be live by 2016 at the earliest.
INTERCONNECTION WITH FRANCE
As well as installation of a second 3-phase transmission line on the existing 220 kV connection between Aubange and Moulaine, which is under way, Elia and RTE are looking at whether or not it is necessary to upgrade transmission capacity between France and Belgium. INTERCONNECTION WITH THE GRAND DUCHY OF LUXEMBOURG
Feasibility studies for the creation of a direct 220 kV interconnection between Elia’s grid and that of the Luxembourg system operator Creos are ongoing. A number of variations are being examined, based on different market development scenarios for the coming years.
The Nemo connection will have two main components, one offshore part under the sea, the other onshore. The offshore part should be around 150 km in length, the onshore part no more than a few kilometres, extending to connection substations either side of the Channel. The connection will have a capacity of between 700 and 1,300 MW, depending on the findings of the ongoing study. The direct-current connection comprises two separate cables (one with negative voltage, the other with positive voltage), operated as a single whole. Each end is connected to a high-voltage substation that acts as a converter station, at which the direct current (DC) is converted into alternating current (AC) and connected to the 380 kV grid. The actual conversion is done by power electronic semiconductor components.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
GRID MAINTENANCE
PREVENTIVE GRID MAINTENANCE Thanks to the expertise of the teams in the field responsible for preventive and corrective maintenance of the transmission system and to the investments in equipment replacement over recent decades, security of supply has been at a very high level of performance for a number of years. This outcome is the result of proactive incident risk management including a preventive maintenance programme and replacement policies covering the technologies and components that make up the transmission system. On the one hand, maintenance and replacement policies are driven by experience feedback. During the past year, 456 incidents were subject to a specific analysis, even though most of them did not lead to any interruption of supply for customers. On the other hand, greater standardisation and harmonisation of infrastructure components, operational databases and working procedures help to both maintain quality and increase productivity. For the lines, cables and pylons part, preventive maintenance encompasses multiple forms of inspection, such as infrared or camera inspection of all 20,000 or so pylons, which are inspected several times a year. With regard to high-voltage substations, preventive maintenance is scheduled on around 10,000 infrastructure sub-units across the country. In 2009, close on 19,400 operations were carried out by teams in the field, covering preventive maintenance (14,200), inspections (4,400) and legal checks (800). When it comes to replacement investments, a synergy is sought between investments in upgrades, replacements and personal safety. In 2009, some â‚Ź49.3 million was invested in upgrading end-of-life equipment. Many projects were carried out, including the replacement, at all voltage levels, of circuit breakers, isolators, bus bars and line sets, voltage and current transformers, lightning arresters, meter boxes, protection relays and remote monitoring systems.
Maintenance and replacement activities mobilise around 600 Elia staff, of whom two-thirds work in the field and onethird provide technical and administrative support.
INCIDENT RESPONSE Grid Services specialists are also responsible for post-incident repair interventions, 24 hours a day. Their ability to intervene rapidly at the scene of an incident, seven days a week, to carry out repairs, contributes directly to security of supply on the grid. Other interventions are necessary to secure facilities or ensure the safety of individuals.
25
LINT: DEPLOYMENT OF BACKUP LINE
A powerful tornado that hit the area around Lint, near Antwerp, on 21 July, seriously damaged two pylons on the 380 kV Mercator-Massenhoven line, bringing down the neighbouring 70 kV and 150 kV lines. 26
While the 150 and 70 kV lines were soon restored (within 10 minutes to one hour, depending on the municipality), the 380 kV connection will remain out of service until the second quarter of 2010. To maintain security of supply, Elia deployed and commissioned a backup line. Under the management of Elia Engineering and Grid Services, assisted by their subcontractors, in particular Fabricom, Van Bruwaene BVBA and Maclot GC, the backup line was commissioned on 6 September. Before this could happen, a route had to be identified, local residents and landowners contacted, the necessary licences and permits obtained, protection gantries installed, greenery cut back and earthworking undertaken before deploying the 12 pylons for the backup line, hauling the conductors onto the 12 pylons and joining the backup conductors onto either side of the damaged connection. Special safety measures were also put in place in the vicinity of the temporary line. For example, all the pylons were earthed and equipped with non-climbable fencing to prevent them being accessed. In addition, ground teams patrol twice a week to check the entire structure.
HEINSCH SUBSTATION: COLLECTIVE EFFORT TO REPAIR EQUIPMENT
On 29 April 2009, while painting work was under way on 220 kV equipment at the Heinsch substation, an operation error by an Elia subcontractor on the arm of an aerial device caused tensile stress to build up in some equipment, which snapped at the base. The two poles of a circuit breaker and the transformer bushings were damaged, but fortunately no people or other equipment were harmed. Grid Services teams took immediate action to learn lessons from the incident and analyse procedures to ensure that they were appropriate for the risks associated with handling an aerial device in proximity to our facilities, in particular checking the competence of third parties involved, the additional safety measures in place, and so on. The review was extended to all activities where Elia personnel face similar risks, including for example the introduction of movement reliability criteria in elevator hire contracts. Alongside this, the teams worked hard to repair the damage. This took several weeks and involved a number of phases, starting with the dismantling of the defective components and the procurement of lightning arresters and a circuit breaker from strategic stock. Following major delays in the delivery of new transformer bushings, the teams decided to replace the Heinsch transformer with an identical model from the transformer store in Rimières. The equipment was finally recommissioned at the end of June.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
MARKET OPERATION
THE BELGIAN MARKET SUPPORT FOR OFFSHORE WIND FARMS
All market players that have an access responsible party (ARP) contract with Elia are required to balance their production with their customers’ consumption as best they can in order to help ensure security of supply within the Belgian electricity system. Any differences within a quarter-hour period are absorbed by Elia, subject to an imbalance charge. To support the development of wind power production, the federal authorities passed a royal decree on 31 March 2009 which allows operators to deviate from production forecasts by up to 30% without being liable for the adjustment cost. The new mechanism took effect on 1 June 2009 for all North Sea wind farms. INTRADAY PRODUCTION
Since 2009, Elia has offered a mechanism allowing producers to modify the production plan they submitted the previous day. The previous mechanism offered no guarantee that the requested changes would be made; such a guarantee is necessary in order to benefit from the Belpex intraday market and the crossborder market. The first production modifications were successfully exchanged and processed on Monday, 19 October 2009, between Elia and SPE. Alongside this, Elia has made available a tool allowing producers to view the regions of Belgium within which their production can be modified without compromising the operational security of the transmission system.
CONNECTION CONTRACT
On 16 July 2009, CREG approved the connection contract proposed by Elia. The contract specifies which grid user connection equipment is liable to affect the Elia grid and consequently other consumers and producers. It determines rights of ownership and use and sets out the management tasks to be performed by Elia on the connection equipment. It also contains provisions on works, measurement and metering data, quality of supply and the functioning of protection systems. As part of the process, grid users were consulted to ensure that their opinions were incorporated in the proposal. The connection contract is one of a trio of documents, together with the access contract and access responsible party contract. Each point of access to the grid is governed by one of these three contracts. FEDERAL CONTRIBUTION
A change to the federal contribution came into effect on 1 July 2009 following an amendment to the royal decree. Levied on end customers through electricity transmission tariffs, the federal contribution finances a number of public service obligations and the costs associated with regulation and supervision of the electricity market. This includes the funding of CREG, social tariffs, social support, the decommissioning of nuclear power stations, Kyoto policy, and so on. In practice, as of 1 July 2009 Elia collects the federal contribution from customers connected to its grid as well as from distribution suppliers and customers, via the distribution system operators. It passes on the money raised in this way to CREG.
27
EUROPEAN INTEGRATION 28
The system operators in Belgium, France, Germany, Luxembourg and the Netherlands have been working together for some years on an action plan aimed at developing an integrated electricity market in Central West Europe (CWE). Some important steps towards this goal were taken in 2009. HARMONISED AUCTION RULES
The transmission system operators in the CWE region drew up harmonised rules for auctions of annual, monthly and daily transmission capacity on their shared borders. These were approved by the relevant regulators with effect from 1 November 2009. The auctions are organised by the joint auction office CASC-CWE, a subsidiary of the TSOs with headquarters in Luxembourg. This means that auctions for annual and monthly transmission capacity on Belgium’s borders are subcontracted to CASCCWE. Daily capacity is allocated by Belpex, in the framework of trilateral market coupling with France and the Netherlands. In the event of technical problems with the coupling of these three markets, daily capacity will be allocated by means of an explicit auction organised by CASC-CWE.
COMMON CAPACITY CALCULATION
Since 18 May 2009, transmission system operators in the CWE region have been coordinating their calculations of monthly import and export capacities. At the start of the month, the TSOs exchange information that is useful for calculating crossborder transmission capacity, such as any connections decommissioned for maintenance and any large production units shut down. The results of these calculations are then exchanged and discussed by experts to ensure reliable and safe operation of the CWE grid. DAY-AHEAD MARKET COUPLING
Trilateral coupling based on existing capacity calculations (more specifically the Available Transfer Capacity (ATC) model) will be extended to Germany and Luxembourg in spring 2010. Meanwhile, the exchanges and transmission system operators are continuing their efforts to move towards coupling based on ‘flow-based’ capacity calculations (i.e. based on a simulation of energy flows using a shared model of the CWE grid). The Cosmos algorithm, developed by Belpex in collaboration with Elia specialists in electricity systems and specialists in operational research (KUL, MIT, N-Side, UCL), was selected as the basis for CWE coupling. This success confirms the expertise that Belgium has built up in this rapidly evolving field. Cosmos has since become the joint property of Epex, APXEndex and Belpex. In addition to this initial expansion, on 15 October 2009 12 transmission system operators from the CWE and Scandinavia regions announced plans to introduce a single price coupling mechanism in order to create a single market. This mechanism is the most efficient, objective, non-discriminatory and transparent means of allocating cross-border transmission capacity.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
INTRADAY
On 27 May, Elia and its Dutch counterpart TenneT launched the allocation of intraday capacity on their shared border. This gives market players greater flexibility in their ability to adjust their production/consumption balance, especially in the case of unexpected events. The same sort of mechanism was introduced in 2008 on the border with France. A similar approach is being examined for the borders between the five CWE countries. OPTIMATE
On 27 and 28 October 2009, Elia headquarters hosted the kick-off meeting for the European research project OPTIMATE, which is being conducted by a consortium of five transmission system operators, among them Elia, and seven universities and research centres, including KU Leuven. The aim is to develop a simulation platform that models interactions between TSOs and electricity market players, from D-1 to real time. Among other things, it will make it possible to study the impact on different market designs of the massive integration of intermittent energy sources dispersed in several regional markets.
BELPEX AND MARKET COUPLING Trilateral market coupling between the Belgian, French and Dutch power exchanges (Belpex, Powernext and APX respectively) and the three countries’ transmission system operators (Elia, RTE and TenneT) celebrated its third birthday on 21 November 2009. Such coupling enables efficient and coordinated day-ahead energy pricing on the three markets concerned and optimises the use of transmission infrastructure for cross-border exchanges between these countries. Market coupling links the purchase orders with the highest price and the sales orders with the lowest price on the three exchanges, regardless of the country where they were submitted,
but taking into account the daily capacity available on the interconnections. This means that a demand is met by the cheapest supply bid, irrespective of the country from which the bid originates. Whether demand in one country can be fulfilled with an offer from another country depends on the daily capacity available at the interconnections. If the capacity is sufficient, the price is the same on Belpex, APX and Epex Spot (France). If the capacity is insufficient, price differences are nevertheless limited by saturating the capacities to their limit. In the first three years of trilateral coupling, prices on the three power exchanges – Epex, Belpex and APX – converged 63% of the time on average, but only 57% in 2009. Among other things, this reduction is the result of falling demand in Belgium, which has restored the heavy export profile that the country had lost in recent years. Publication of the market results for the three exchanges is subject to a joint closure time set at 11:00 a.m. CET and takes place within quarter of an hour on average. Despite this tight timeframe, market coupling has operated flawlessly for the past 30 months. BELPEX, THE BELGIAN POWER EXCHANGE
Belpex allows producers, suppliers, large industrial consumers and traders the chance to optimise their portfolio in the short term at a transparent and internationally competitive market price. Elia holds a 60% stake in Belpex. The remaining 40% is divided up equally between TenneT, RTE, APX and Powernext. At the end of 2009, a total of 34 market players – producers, suppliers, traders and banks – were registered and active on Belpex. Thanks to the success of trilateral market coupling, Belpex achieved positive financial results in its first year of operation. This situation continued in 2009, meaning that the company can offer new products to its Belgian and European customers.
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Stable volumes
Despite the financial and economic crisis that held sway in 2009, causing a sharp drop in power consumption, the market share of the Belpex day-ahead market in relation to Belgian load remained stable at 12.4% (compared with 12.65% in 2008). The volume exchanged was down slightly, from a daily average of 30,372 MWh in 2008 to 27,782 MWh in 2009. The highest volume was 51,504.7 MWh, recorded on 6 September 2009; this is equivalent to 23% of average consumption on the Elia grid. The European electricity market saw its liquidity fall in the second quarter of 2008, as a result of the general economic climate and more specifically the problems in the banking sector. This trend continued until the end of the first quarter of 2009, with a similar effect on Belpex Spot market volumes.
The second new product is the continuous day-ahead market (CoDAM), which offers the possibility of trading standardised products such as baseloads, peakloads, off-peak loads and weekend contracts. CoDAM is open for trading during weekday working hours and offers all available products up to two days prior to delivery. In 2009, the volume traded on these two markets totalled 193.6 GWh, compared with 94 GWh in 2008. In all, 5,514 contracts were signed on the two markets in 2009, compared with 1,819 in 2008. Belpex is working in close collaboration with European partners to bring about implicit allocation of cross-border intraday transmission capacity. This method of allocation would be a useful addition to existing products until the moment immediately preceding physical delivery, especially for production units that rely on intermittent, renewable energy sources.
Converging prices
The average price was €39.4 per MWh, slightly higher than the Dutch average and lower than the French average, which stood at €39.2 and €43 respectively. The Belgian and French prices were equal 70.5% of the time, while the Belgian and Dutch exchanges converged for 85.2% of the time. Market coupling generated an average volume of 11,216 MWh for export and 2,740 MWh for import each day. 30
Continuous markets
From 13 March 2008, Belpex added two new products to the existing day-ahead market. The first new product is the continuous intraday market (CIM), which offers market players an IT platform on which to trade any unanticipated changes in their electricity portfolio (breakdown of a production unit, change in wind forecasts, unexpected shutdown of a major industrial customer, etc.) up to five minutes prior to delivery. CIM therefore enables optimum management of risks for new players and producers using intermittent energy sources such as wind and photovoltaic. The intraday market made major progress in 2009, with the introduction of auctions for intraday capacity at the border between the Netherlands and Belgium as well as a growing number of players in the European market.
GREEN CERTIFICATES EXCHANGE (GCE) 1
Belpex launched a green certificates exchange in Flanders in March 2009 and another in Wallonia in May 2009. The exchange enhances transparency on the certificate market and facilitates contacts between buyers and sellers. It offers standardised products, in terms of both green certificates (GCs) and combined heat and power certificates (CHPCs). The fact that the regional regulators VREG and CWAPE are involved in the project is a guarantee of delivery and reliable operation. 18 participants are active in the GCE market, which saw a total of 13,873 certificates exchanged in 2009: 2,023 Flemish green certificates, 7,273 combined heat and power certificates in Flanders and 5,050 green certificates in Wallonia. The average price on the three markets was €108.3/GC, €39.2/CHPC and €85.3/GC respectively. There was heavy pressure on certificate prices in 2009 due to the fall in demand for electricity, which resulted in a comparable drop in demand for green certificates. Improvements to the platform, and the installation of an automated interface with the regulators VREG and CWAPE, will support the future development of the GCE market in 2010.
(1) Green Certificates Exchange
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
PREVENTIVE MANAGEMENT OF CRITICAL GRID SITUATIONS
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MANAGING THE BALANCE BETWEEN PRODUCTION AND CONSUMPTION
The Belgian grid is part of the continental European electricity system, an interconnected network of 24 countries between which power circulates freely, from Portugal to Poland and as far east as Bulgaria. This grid forms the backbone of our power supply system as it enables supplies to be obtained from across Europe, whether to benefit from more advantageous wholesale prices or to cope with the breakdown of a large production unit. The European grid is like a big, wide-meshed web into which electricity is injected by various types of generation facilities (conventional power stations, wind turbines, cogeneration facilities, etc.) and which supplies electricity to a variety of users (large industries, small and medium-sized enterprises, institutions such as hospitals, and homes). As electricity cannot be stored in any great quantity (except by means of hydraulic pumping units), production must be tailored to consumption at all times. Transmission system operators such as Elia maintain this balance, each in their respective control area and in compliance with common rules drawn up at European level.
To this end, the turbines of some production units are equipped to automatically adjust their production within 30 seconds, based on deviations from a grid frequency of 50 Hz. Thanks to the interconnected European grid, all of these production units will react in a decentralised but coordinated way to immediately offset the loss of 3,000 MW (3 million kW), that is, 1% of the load (i.e. 1% of the average consumption on the grid). This security mechanism is sufficient to offset two serious, simultaneous incidents, namely the loss of two 1,500 MW production units. The system operators will then use other means of production to restore the automatic intervention capability as quickly as possible, until the situation is back to normal. Despite these resources, Elia must be prepared for any eventuality, even the most critical, the blackout, i.e. a complete interruption of power supply.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
BLACK START: PROGRESSIVE RECONSTRUCTION OF THE GRID
EARTH HOUR: RAISING AWARENESS TO ENABLE BETTER MANAGEMENT
In the event of an interruption in power supply across a wide geographical area, the system operator will use production units enabling the electricity system to be progressively reconstructed in its control area, so that the electricity supply can be gradually restored to all consumers affected. These production units, which are specially equipped to enable them to start up autonomously, are known as ‘black start’ units. Elia has contracts for black start services with Belgium-based producers and checks regularly that these units can start up as required. In 2009, Elia performed detailed tests at two black start units.
On Saturday, 28 March 2009, the WWF asked all Europe’s citizens to switch out their lights between 8:30 and 9:30 p.m., in a bid to raise awareness about greenhouse gas reductions and energy savings. Elia backed the initiative, but urged residential consumers to stagger their timing. If people across Europe were to switch off their lights and, more importantly, switch them on again all at the same time, this would have resulted in a major imbalance between production and consumption, and therefore posed a serious risk to security of power supply.
CRISIS SIMULATION: TESTING IN ORDER TO IMPROVE PROCEDURES
Elia’s crisis teams were on standby nonetheless, but thanks to the information campaign the event passed off without any negative impact on the grid.
In the event of a crisis, the level of preparation of the teams mobilised to restore normality is key. From day one, Elia has had an emergency plan setting out the roles and responsibilities of the various players in the event of a major problem in the electricity transmission system. These procedures are regularly tested in simulation exercises. This year’s exercise, in March 2009, was done in close collaboration with the French transmission system operator RTE.
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A realistic crisis scenario affecting France and Belgium – an unexpected period of very cold weather in early March, an accumulation of unavailable production units, an absence of wind and therefore of wind power, major problems in France from Thursday evening with repercussions in Belgium on Friday morning, forcing Elia to perform emergency load-shedding – enabled the focus to be placed on coordination between cross-border players. The lessons learnt from the exercise resulted in improvements to the two emergency plans.
CONTINUAL DRIVE TO IMPROVE TOOLS
In addition to the specific actions undertaken during the year, some more general improvements were made to the crisis management tools. These included: • a radical overhaul of the emergency plan; • the commissioning of an IT tool to enable internal operational communication in the event of a crisis; • the training of crisis teams; • the revision of crisis procedures with fellow transmission system operators from continental Europe; • participation in a crisis exercise, organised by the Interior Ministry’s crisis centre, as part of the plan for dealing with nuclear and radiological emergencies on Belgian territory.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
PROACTIVE TECHNOLOGY WATCH The long service life and high cost of transmission infrastructure mean that the right choices need to be made in every investment project. To this end, Elia pursues a policy of active technology watch, mostly in collaboration with other European transmission system operators. The areas studied include: direct-current energy transmission technology (which is being used more and more, for both onshore and submarine interconnections), multinodal HVDC technology for the development of a European direct-current transmission system (for the large-scale transmission of wind energy generated in northern Europe and solar power generated in southern Europe and subSaharan Africa), the concepts of offshore platforms and grids in the North Sea (linking up the major wind farms), and the deployment of high-performance conductors and pylons with insulating arms (which lengthen pylon lifetime and increase the transmission capacity of existing circuits). The following are also being monitored closely: technological developments enabling the integration of new decentralised generation sources and, in particular, the impact of the largescale introduction of such generation sources on the operation of protection & control systems and the use of short-circuit current limiters. Elia’s technology watch also focuses on many other areas including: the use of composite materials as an alternative to concrete for 70 kV supports, the use of modern techniques for assessing the condition of conductors (corrosion detectors, etc.) and managing vegetation (hyper-spectral imaging), the development of automatic equipment monitoring systems, and the automation of incident analysis using digital recordings of disruption from the grid. In addition, technology watch entails closely monitoring developments in the IT and telecommunication technologies underpinning smart grids. These grids of the future also aim to better integrate local production through cogeneration and renewable energy, thereby balancing production and consumption at a lower cost, even down to residential customer level (e.g. electricity generated using photovoltaic cells).
PREPARING THE FUTURE : RESEARCH AND DEVELOPMENT Today’s grids are the result of an age in which the development of transmission infrastructure was mainly guided by the location of large centralised production units, which were themselves established based on the location of the main centres of consumption. Since then, decentralised generation, which is based on small units, has steadily developed. This development has gone hand in hand with that of renewable energy sources, inspired by climate policies developed at European level and translated into national and regional policies. In terms of transmission systems, this means the rapid integration of large offshore or onshore wind farms located where the wind conditions are most favourable. The integration of micro production sites, prompted by the arrival of photovoltaic power, for example, and the important role that demand management will play in future (in response to price signals, in particular), requires both transmission and distribution system operators to adapt their grids to enable twoway management. Elia has entered into various R&D initiatives at European, Belgian and regional level, in order to acquire the experience it needs to give full and active support to these policies. EUROPEAN ELECTRICITY GRID INITIATIVE
Backed by the European Commission’s DG Research and DG TREN, this R&D programme will address four fundamental areas with a view to accommodating the energy mix that Member States plan to achieve by 2020: technical challenges, market-related issues including the integration of intermittent energy sources and active demand management, the problems associated with pan-European data exchange, and regulation. Seven transmission system operators (Elia, RTE (France), Red Electrica (Spain), Tennet (the Netherlands) and the German TSOs Amprion, Transpower and 50Hertz Transmission) and seven distribution system operators will collaborate on the research programme, under the supervision of European regulators and various member countries, including Belgium.
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TWENTIES
OPTIMATE
Supported by the European Commission, this collaboration project brings together 26 partners: system operators, producers, distributors, manufacturers and universities in Europe. It includes several demonstrations of innovative techniques promoting the large-scale integration of renewable energy sources into high-voltage grids, electricity storage, demand management and the provision of ancillary services by renewable units.
Launched in late 2009, Optimate brings together five transmission system operators and seven European research centres and universities. It aims to compare different market designs with a view to the massive integration of intermittent energy sources dispersed in several regional markets. A simulation platform modelling the interactions between transmission system operators and electricity market players from day-ahead up to and including real time is one of the expected outcomes. Elia will focus particularly on the optimisation of intraday mechanisms.
Elia is focusing in particular on aspects related to the flexibility of high-voltage grids, optimising exchange capacity, mainly by means of control instruments such as phase shifting transformers, optimising the real-time use of connections on the basis of meteorological data, and grid stability. A number of Belgian universities are participating in the project, namely KU Leuven, the ULB and the University of Liège. Coreso, the regional technical coordination centre bringing together Elia, RTE and National Grid, is also involved in the project.
COLLABORATION WITH UNIVERSITIES: BE-PRONE
Elia works with a number of universities to foster collaboration on research topics relating to operation of the grid and the electricity market. For example, it participates in the Belgian inter-university platform Be-Prone, which aims to support and promote scientific research into power grids through studies and R&D programmes. 7MW-WEC-BY-11
Gearbox
Electric control system
Brake 34
Rotor hub and control
Generator Wind orientation control Rotor blade
Tower
EWIS
Established by a group of transmission system operators, among them Elia, and financed by the European Commission, the European Wind Integration Study aims to propose, by 2015, practical solutions enabling the intermittent energy produced by large wind farms to be integrated into the European energy system and in particular very-high-voltage grids. EWIS consists of a number of working groups covering both technical and regulatory/legal issues. The European Wind Energy Association (EWEA), which represents wind energy producers, has a seat on the project’s Consultation Board. The final report setting out realistic pathways for promoting the large-scale success of wind power is due to be published in spring 2010.
This European project aims to promote the emergence of large wind energy production units and the development of a wind forecasting model. Elia’s research focuses on using a wind farm as an adjustment tool. Trials carried out in late November 2009 on a pilot farm showed that four of the five wind turbines in service remained connected to the grid. The production and absorption of reactive power (which was expected to be 6 MVAr per 6 MW turbine) was also verified. A system of computerised communication and direct control from the Elia control system to the wind farm management system, in order to control the active and reactive power in emergencies, is currently being implemented. In this context, Elia could provide a monitoring and control service to wind farm operators and other small producers, thereby avoiding the need for a roundthe-clock dispatching centre for each operator. SMARTLIFE
Elia is involved in the work of the Smartlife working group, which brings together Europe’s main TSOs, DSOs and research centres to identify future needs in relation to grid infrastructure management: the development of ageing models, evaluation of residual life, risk analysis and replacement strategies with a view to preparing the transition to the grids of the future.
ELIA 2009 ANNUAL REPORT — ECONOMIC REPORT
AMPACIMON
In partnership with the University of Liège, a tool is being developed and tested which aims to optimise use of the transmission capacity of overhead lines in real time, based on measurements of vibrations on the line’s conductors.
DECENTRALISED GENERATION
Elia monitored the work of the integrated European project EUDEEP, which drew to a close in 2009. EU-DEEP examined the most appropriate technical, economic and regulatory means to promote the development of decentralised generation in the current transmission and distribution systems. EUROPEAN DIRECT-CURRENT GRID
As part of its technology watch, Elia is keeping a very close eye on European initiatives to develop a DC grid enabling the connection and large-scale transmission of wind energy production sources in northern Europe and solar energy production sources in southern Europe and sub-Saharan Africa. In this connection, it is paying particularly close attention to developments in multinodal HVDC technology and the Desertec project. SMART GRIDS
Anticipating future developments liable to radically alter operational grid management helps to maintain a high quality of supply in the long term. One of the major challenges in this connection is the arrival of grids that enable interaction between consumers and their suppliers on the one hand and system operators on the other. Known as ‘smart grids’, these grids of the future are intended to combine flexibility with strength.
Elia has long-standing expertise in this area, since its grid is already very ‘smart’ in the sense outlined above. Measuring, metering and grid protection systems have been designed in response to various needs: the bidirectional nature of energy flows, congestion management in contractual collaboration with production units, centrally controlled adjustment mechanisms, the exchange of electronic data with other European TSOs, and so on. At the same time, Elia works continuously to improve these systems, for example by implementing a new energy management system. Elia is also involved in the Smartgrids technology platform, which aims to identify R&D requirements in the context of the European Union’s 7th R&D Framework Programme. Last but not least, an ad hoc group bringing together representatives of Elia’s various activities was set up in 2009 to identify the transmission system needs, stakeholders and challenges associated with implementing smart grids within distribution systems.
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Just like any other responsible company, Elia mainstreams environmental concerns into its actions and projects on a dayto-day basis. This is especially important given the duty of the transmission system operator to set a good example.
ENVIRONMENTAL REPORT 37
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MICHEL NEDERLANDT, ENGINEERING Three years ago, Michel Nederlandt, then Environment and Property Manager, was appointed to oversee the construction of a building to house the Transmission division and departments as well as two control centres for the Elia grid: the national centre and the regional centre for central Belgium. The site chosen was on Avenue de Vilvorde, alongside the Brussels Canal, which was already home to several other Elia departments.
“Architecturally, the new building had to fit in with what was there already,” Michel explains. “But at the same time Elia wanted the new structure to be compatible with the principles of sustainable development.” Having found an architect capable of doing justice to such a project, Michel set to work. “We had to reconcile the needs of the future occupants with the requirements of a low-energy building,” he explains. “We applied all the principles of ecoconstruction and rational use of energy, from using free cooling instead of traditional air conditioning through to eco-friendly materials, wood from sustainably managed forests and the green roof. The window glass has a higher solar factor to reduce heat dissipation, the air extracted from the offices is reused to reheat incoming air, gas and electricity consumption is minimal – lights are triggered automatically by movement sensors, for example – and the amount of mains water needed is small, with rainwater being used in the toilets. The target is zero greenhouse gas emissions.” The project has been so successful that it won the “exemplary building” label, awarded in 2008 by the Brussels Institute for Management of the Environment (IBGE/BIM) and the Energy Minister Evelyne Huytebroeck. In November 2009, the building welcomed its first occupants, including staff from the national control centre. Is Michel Nederlandt pleased with the outcome? “It wasn’t always easy to comply with the specifications and to source materials that were both eco-friendly and sufficiently strong - the glues being one example. That caused some hold-ups. But we achieved our objective and initial feedback from the new occupants is positive. All we need now is a heat wave to test the free cooling concept and the last doubts will be gone. So ask me again next summer!”
ELIA 2009 ANNUAL REPORT — ENVIRONMENTAL REPORT
ENVIRONNEMENTAL OBJECTIVES AND INDICATORS
Like other companies, Elia has environmental obligations to meet in connection with its activities. For a transmission system operator, these obligations relate in particular to the decontamination of polluted soil, waste disposal, installing transformer tanks to prevent oil discharge, and compliance with noise regulations and legislation on greenhouse gas emissions and asbestos. As transmission system operator and a regulated company, Elia also has a duty to set an example in terms of the rational use of energy and nature conservation and protection. It must also ensure that its facilities and investment projects are accepted by the community, in terms of their human and environmental impact as well as their cost-effectiveness (i.e. the cost to the community at large). It is with this in mind that Elia has undertaken various initiatives such as planting native species in the corridors beneath overhead lines, environmental offsetting measures, and energy audits at high-voltage substations and administrative sites. The main environmental indicators of relevance to Elia’s activities, and their development over time, are detailed hereafter.
ENERGY ENERGY CONSUMPTION OF BUILDINGS Energy audit of high-voltage substations
In a high-voltage substation, the medium-voltage equipment (36 kV and 17.5 kV cells) and the distribution-related equipment are located inside a building. The lighting and electrical heating of these buildings are powered directly from the Elia grid. A detailed energy audit was therefore carried out independently by the Flemish Institute for Technological Research (VITO) at 11 representative substations. This involved monitoring the power consumption and temperature for two months over the winter. The resulting audit report will be used to define the energy-saving measures to be implemented, while regular monitoring will determine the effectiveness of these measures before they are rolled out to all high-voltage substations. Energy audit at Elia headquarters
Another energy audit was performed on all technical installations at Elia headquarters, with the aim of assessing gas and electricity consumption over the years. Gas consumption, particularly for heating, was found to be lower than the reference standard for that type of building. As for electricity, the main uses are for air conditioning, IT equipment, ventilation and lighting. The consultancy firm produced an ambitious energy-saving plan for each installation and function concerned, including an estimate of the saving, the cost of implementation and the payback period. Based on these figures, some 22 measures were defined, some of which were implemented in 2009. When fully implemented, the annual saving will be in the order of 310,000 kWh of gas and 180,000 kWh of electricity, i.e. a reduction of 37 and 11% respectively.
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ELIA 2009 ANNUAL REPORT — ENVIRONMENTAL REPORT
ECODYNAMIC ENTERPRISE
ENVIRONMENTAL OFFSETTING
In September, Elia submitted an application to the Brussels Institute for Management of the Environment (IBGE/BIM) to obtain the “Ecodynamic Enterprise” label for its headquarters in Brussels. The label is an official recognition of good environmental practice by public and private companies based in Brussels. Its aim is to encourage companies to act voluntarily to improve their environmental performance and to put in place an environmental management plan over time. The application includes an analysis, an environmental programme setting out the objectives derived from the analysis, and the way there are applied to the activities concerned. The label is awarded by an independent jury and is valid for three years. Elia obtained 2 stars on a scale of 3.
Planting of trees and hedges
Elia demonstrated its commitment to nature and the environment by organising a recreational day during which staff and their families were invited to plant hedges around the perimeter of a piece of land owned by Elia but not currently in use. The hedges consisted of native shrub species, interplanted with trees. An orchard of around 30 trees was also planted on the same plot, and a flower meadow will be sown in the orchard next spring. These various elements will make a major contribution to the ecological enhancement of the site. The project was undertaken in partnership with Les Bocages, a nature and landscape conservation organisation.
BIODIVERSITY IMPACT Presence in protected areas
Within Natura 2000 areas, Elia devotes considerable attention to the flora and fauna in the corridors under its overhead lines. These cover a total length of 323 km. Environmental assessment projects 40
In addition, five projects were launched in 2009: • In Flanders, an evaluation document has to be compiled to determine whether a project requires an environmental study (project MER). Such a document was produced for two new substations in Flanders; • A preliminary study will be carried out to examine whether a proposed underground connection would have a significant impact on the environment; • An environmental procedure (plan-MER) is under way for a new overhead connection (see Stevin, page 23); the resulting report deals with the environmental impact in the context of a modification of the regional plan by means of a regional land-use plan (GRUP); • An exemption from the mandatory MER procedure is due to be drafted and awarded for an existing overhead line. Such an exemption can be obtained by demonstrating that the project has no significant impact on the environment.
Green management of corridors
Elia joined forces with the owners and managers of woodland crossed by the 70 kV Nassogne-Tenneville overhead line to launch a pilot project aimed at managing these corridors in an environmentally friendly way through targeted replanting to avoid felling and pruning of trees. Bogs and meadows are being created where possible, with varieties that enhance the natural quality of the woodland without growing to heights that would cause problems for the conductors. Meanwhile, a proposal for a project to develop five additional corridors on the same principles has been submitted to the European Commission under the following call for projects: “LIFE+ Biodiversity: Demonstration and/or innovative project contributing to the objectives of the Commission Communication COM (2006) 216 final: “Halting the loss of Biodiversity by 2010 – and beyond”. The aim of this project is to develop 150 km of green corridors under high-voltage lines in order to eliminate pruning and felling, conserve and restore biodiversity and cut maintenance costs. If it gets the go-ahead, much of the cost will be subsidised by the European Commission and the Walloon Region.
Planting at high-voltage substations
Elia also strives for environmentally friendly solutions in its management of high-voltage substations. For example, it plans to plant new hedges around strategically important substations, using native varieties of densely-branching thorn shrubs to discourage intruders. This type of thick hedge also makes an ideal habitat for small birds. 5 km have been planted in 2009. Elia-owned land outside substation enclosures also poses a major risk in terms of fly-tipping and neglect, which can prompt complaints from local residents. With this in mind, Elia converted a patch of land around its high-voltage substation in the Eikenmolen district of Merelbeke into a nature area, which is now home to some rare amphibians. To prevent weed infestation, Elia created two ponds and converted the low-lying part of the site into natural grassy area that requires virtually no upkeep. Near to the Thuilies substation, a grassy area outside the substation boundaries was converted into a low-maintenance meadow. This provides a home to insects and small animals and plants which would have little chance of surviving on the surrounding farmland. Nest boxes
For a number of years now, Elia has been putting up nest boxes for kestrels on its high-voltage pylons in the places requested by nature conservation groups. These groups then monitor the birds that use them. Kestrel boxes are also erected in places where residents report excessive numbers of starlings on pylons, in an attempt to disperse these birds.
In addition, Elia installed a nest box for peregrine falcons at the request of the Royal Belgian Institute of Natural Sciences, which was aware of a pair of the birds near the 380 kV highvoltage line in HĂŠrinnes. The box was not used this year, but Elia hopes for better luck in 2010. A further five nest boxes were fitted in a quiet spot under a ledge at the Schelle high-voltage substation. These are intended for a rare variety of swift, which has been spotted in the area by a local nature conservation group.
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ELIA 2009 ANNUAL REPORT — ENVIRONMENTAL REPORT
EMISSIONS AND WASTE GREENHOUSE GASES SF6
SF6 gas has been used in electrical equipment for over 30 years, mainly as an electrical insulator in high-voltage devices. The advantage of gas insulated switchgear (GIS) is that it is more compact than traditional outdoor switchgear, which uses air as an insulator. To date, there is no alternative to SF6 in high- and very-high-voltage equipment. SF6 is also used in circuit breakers.
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Since SF6 is one of the main greenhouse gases, the European Commission has heavily regulated its use, which is now only authorised in high-voltage substations. Consequently, Elia has developed specific maintenance and investment policies aimed at limiting the risk of SF6 loss. In this connection, manufacturers must guarantee a very stringent maximum percentage of loss throughout the lifetime of the equipment. With medium-voltage equipment, Elia uses vacuum circuit-breaking chambers as an alternative to SF6. Wherever possible, Elia only buys vacuum equipment. The volume of SF6 gas installed in the Elia grid (36 kV to 380 kV inclusive) is 49.5 tonnes, of which 62% is found in GIS. The maintenance policy aims to keep operations involving compartments containing SF6 gas to an absolute minimum. The consumption of SF6 gas (as a replacement and as a top-up in the event of a leak) is tracked closely using a system that monitors each bottle of SF6. There are currently 323 bottles of SF6, i.e. 4.5 tonnes, in circulation. Maintenance of the equipment concerned is carried out by specially trained teams, in accordance with European legislation. EU Regulation 305/2008 on minimum requirements and the conditions for mutual recognition for the certification of personnel recovering certain fluorinated greenhouse gases from high-voltage switchgear was transposed into Flemish law by the Decree of 4 September 2009 on the certification of technicians tasked with recovering fluorinated greenhouse gases from high-voltage equipment. The decree was passed at the initiative of the Flemish Environment, Nature and Energy Department, in close collaboration with Synergrid, the Federation of Electricity and Gas Operators in Belgium, and with Elia. HAZARDOUS WASTE Elimination of PCBs
Since the end of 2005, none of Elia’s equipment has contained more than 500 ppm of PCB (polychlorobiphenyl). However, transformers with concentrations below 500 ppm are still in operation and Elia has voluntarily undertaken to decontaminate this equipment or replace it before the end of its service life, even though it is not legally obliged to do so. The funds needed to complete this project have been earmarked. Ten transformers, representing 250 tonnes of mineral oil, were decontaminated by an accredited firm in 2009.
Batteries
The installation of batteries, which is very common in highvoltage substations, requires a permit. Environmental legislation in this area is aimed principally at preventing possible leaks from such batteries. Elia favours a switch to dry batteries, which carry no risk of leakage. Wet batteries now account for just one in seven of all batteries installed in the grid. Accidental soil pollution
Elia manages over 12,000 plots of ground, spread right across the country. To preserve this land from waste dumping (flytipping) and protect the surrounding environment (soil, ground and surface water, etc.) in the event of accidental pollution, all contamination is cleared as quickly and efficiently as possible following notification. Our internal maintenance teams have the necessary equipment (absorbent matting, etc.) and can call in a specialist firm seven days a week in the case of more serious pollution. There were around 25 interventions of various kinds in 2009, from clearing up fly-tipped waste to removing oil that had polluted surface water following an incident during alteration work on a transformer. In the latter case, the relevant authorities were informed of the removal. COMPLIANCE Paint debris
During work to strip pylons on a 70 kV line prior to painting, traces of lead-based paint were ingested by cows, despite the precautions taken to avoid dispersal of the paint residue (covering the pylons in tarpaulins). Cows and cattle are highly susceptible to lead poisoning, which may be fatal depending on the quantity ingested. The relevant procedures for this type of work were adapted (landowners to be informed, animals kept away from the area, etc.) in order to avoid a repeat incident.
ELIA 2009 ANNUAL REPORT — ENVIRONMENTAL REPORT
Noise
Transformers at high-voltage substations generate noise, the level of which must comply with legally-defined values, according to the area’s designated land use as stipulated in the landuse plans. Whenever changes are made to its facilities, Elia ensures that the prevailing values are not exceeded and makes any necessary adaptations. Elia also follows up on all noise-related complaints. These are mostly to do with noise generated at high-voltage substations and noise from electrical conductors. In 2009, two complaints relating to high-voltage substations (Houffalize, Stembert) were recorded. In the first case, the limit values were not being exceeded. The second case is still being examined. Soil pollution
At the time of Elia’s incorporation, soil studies were carried out at over 200 sites in Flanders, in accordance with Flemish soil legislation. These studies showed that our transformers, though potentially responsible for local oil pollution, posed little or no risk to the environment. At sites where significant soil pollution was observed, this pollution was historic and was the result not of electricity transmission activities but rather of earlier or nearby industrial activities (gas plants, blast furnaces, chemicals, etc.). Work is under way or completed at all sites requiring decontamination. The Brussels-Capital Region introduced soil legislation in 2004. A new ordinance was published in 2009 but will only come into force in 2010. The Walloon Region soil decree entered into force in April 2009. Elia anticipated the application of this new legislation by carrying out analyses at sites housing high-voltage substations that it owns. As a result, it decided to ringfence the future costs of potential decontamination projects. In-depth studies will be carried out to determine the decontamination obligations that Elia is likely to incur.
In Wallonia, all existing transformers must be fitted with a tank by 2015 at the latest. Since this legal framework takes into account various criteria (presence of drinking water catchment areas, transformer characteristics, etc.), a major investment programme was set up in 2004 to fit the relevant transformers (540 voltage transformers and 800 backup or earthing transformers) with impermeable tanks. In 2009, tanks were installed in around 35 high-voltage substations at a cost of some €2 million. Noise mitigation
The problem of noise at high-voltage substations is mainly linked to the extremely low frequency (50 Hz) tonal noise generated by voltage transformers. While new transformers emit low levels of noise, old models still present in the grid may cause noise nuisance. To eliminate this nuisance for local residents, Elia invested €852,000 in noise mitigation in 2009. Asbestos removal
Like many old buildings, some high-voltage substations contain asbestos, mainly in the form of asbestos-concrete sheets used to seal cable raceways and medium-voltage cells. A total of €152,000 was spent on removing and replacing asbestoscontaining materials in 2009.
OPERATING COSTS TREATMENT OF HAZARDOUS WASTE
Aside from PCB-contaminated mineral oil, batteries and asbestos, hazardous waste is confined to empty oil drums and paint pots, aerosol cans and fluorescent tubes. A total of 32,200 kg of waste was collected by accredited companies. TRAINING
ENVIRONMENTAL SPENDING INVESTMENTS Transformer tanks
Because transformers contain large quantities of mineral oil, new equipment is systematically installed in a watertight tank with an oil-water separator to prevent environmental pollution in the event of a leak. In the past, transformers were not fitted with these oil collection systems. In Flanders, in the wake of the Vlarem legislation, all existing transformers must be fitted with a tank in the event of any upgrading, modification, replacement or movement of the transformer. In other cases, untanked transformers may be kept until the end of their service life.
Environment Service specialists receive regular training on changes in environmental legislation (particularly following the major amendments to soil legislation in the Brussels-Capital Region and Wallonia), pruning regulations, compliance with the rules on safe distances from high-voltage facilities, and so on. They also organise internal training for colleagues from the operational services on environmental aspects of their day-today jobs, such as handling used oil, eliminating SF6 losses and preventing soil pollution.
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ELECTRIC AND MAGNETIC FIELDS 44
The magnetic field produced by the electricity system has a very low frequency (50 Hz), much lower than that used by mobile telephones for example, and its intensity declines rapidly the further you move from the source. There are concerns among the public about the possible effect of magnetic fields on human health. International scientific studies carried out over the past three decades have not established a correlation between 50 Hz magnetic fields and health problems. For some years, Elia has been actively contributing to the advancement of scientific knowledge on this subject. In 2009, it renewed its cooperation agreement, including full guarantees of scientific independence, with various research centres and universities forming part of the Belgian BioElectroMagnetic Group (BBEMG). The BBEMG studies the effects of electric and magnetic fields generated by the transmission and use of electrical energy at work and in our day-to-day lives. On 13 May 2009, the BBEMG held a seminar at the Musée de la Médecine, Hôpital Erasme, in Brussels, for anybody interested in the issue of electric and magnetic fields and their potential effects on health. The seminar addressed the various aspects of the issue and gave an update on the work undertaken by the BBEMG in the past four years. It attracted a large turnout. 2009 also saw Elia renew a research contract with the Electric Power Research Institute (EPRI). Under the contract, Elia has access to the findings of high-level international research conducted in this field.
To ensure transparency, Elia regularly performs magnetic-field measurements in the field at the request of local residents. In the absence of specific Belgian legislation in this area, Elia applies the European recommendations issued by the International Commission on Non-Ionizing Radiation Protection (ICNIRP) and the Council of the European Union. When planning new investments, magnetic fields are simulated at the study phase, so that the project or the layout of the facilities can be adapted if necessary.
SUPPORT FOR ENVIRONMENTAL POLICIES DECENTRALISED GENERATION
Elia is helping to meet European, Belgian and regional targets on the integration of renewable energy sources by ensuring harmonious grid development. For example, Elia has undertaken, in collaboration with the relevant distribution system operators and regional bodies, to anticipate the development of these technologies and to propose connection projects for decentralised production units as part of regional sustainable development initiatives. In Flanders, most of the decentralised production units involve cogeneration for horticultural purposes. A number of geographical areas have been identified for the connection of cogeneration and renewable energy facilities, most notably at Merksplas, Lier and Rijkevorsel. Plans to connect an area in the far north of the Campine region (Hoogstraten - Meer) are currently being examined.
ELIA 2009 ANNUAL REPORT — ENVIRONMENTAL REPORT
In Wallonia, the study into the accommodation potential for wind energy production, carried out in 2008 by Elia in partnership with the ICEDD and APERe, found that there is great scope for accommodating renewable decentralised generation (mainly onshore wind farms) in the region spanning the south of the province of Liège and the north of the province of Luxembourg. The study, which was subsequently extended to include the whole of Wallonia, highlighted the potential of the Elia grid to accommodate wind production units – with a total capacity of between 2,000 and 3,000 MW – without requiring any significant strengthening of grid infrastructure. On this basis, Elia has entered into a constructive dialogue with the relevant regional authorities with a view to devising an optimum grid development scenario. In Flanders, Elia has also embarked on similar grid development studies, in collaboration with the relevant authorities, with a view to accommodating wind power projects.
RATIONAL USE OF ENERGY (RUE) AND RENEWABLE ENERGIES PROMOTING RUE AMONG OUR CUSTOMERS
As part of its public service obligations in Flanders, each year Elia implements an action plan aimed at encouraging Rational Use of Energy (RUE) among its industrial customers. In this connection, Elia provides its customers with the resources required to make recurrent savings of 1.5% on their primary energy consumption for each MWh supplied, for facilities connected at between 36 kV and 70 kV. Elia reached its 2009 target – a saving of 27.2 GWh of electrical energy – by subsidising energy-saving measures implemented by its industrial customers. Results to the end of December 2009 already showed a saving of 171.9 GWh, well above the initial target. In 2009, 30 schemes were introduced and 23 customers undertook to invest in energy-saving schemes. Since 2003, thanks to Elia’s work with its industrial customers, a combined total of 421.4 GWh had been saved by the end of December 2009 – equivalent to some 137,000 tons of CO2.
SUPPORT FOR RENEWABLE ENERGIES: INTEGRATION OF OFFSHORE WIND FARMS
2009 saw Elia continue its efforts to integrate wind energy production units in the North Sea, representing a production capacity of around 2,000 MW by 2015. To this end, Elia launched the Stevin project, which aims to upgrade the 380 kV grid as far as the coastal region. Elia supports the implementation of offshore wind farm projects by helping to finance submarine connection cables, applying special measures to deal with the production fluctuations associated with such units and purchasing the green certificates awarded to them. SUPPORT FOR RENEWABLE ENERGIES: GREEN CERTIFICATES
Federal and regional legislators have developed market mechanisms aimed at encouraging investment in facilities for generating electricity from renewable energies. These include the ‘green certificates’ awarded to producers by the regulator, attesting to the green credentials of their electricity. Suppliers produce the certificates annually in proportion to their sales, with the proportion being set by law. As transmission system operator, Elia is required by law to purchase the certificates offered to it at a minimum price. Elia returns these certificates to the market via Belpex. The balance between the price at which Elia purchases the certificates and the price at which they are sold on Belpex is covered by the transmission tariffs.
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Elia’s core mission as transmission system operator – safeguarding Belgium’s security of supply – requires it to be acutely aware of its role within society and its public service remit, with respect to both the economy and the community at large.
SOCIAL REPORT 47
SAREH SHAHRAKI, CORPORATE AFFAIRS
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The Enterprise Portfolio Management Unit was set up just over two years ago. The objective was twofold: to develop internal consultancy within the company and, above all, to offer an attractive career path to promising young graduates by allowing them to get involved in multi-departmental projects within the company for two years before focusing on a specific area of activity.
The gamble has paid off: the young people taking part in the scheme appreciate the pathway on offer and the first intake have gone on to develop their careers within particular departments. Sareh Shahraki is a 28-year-old civil engineer, and is currently doing a Master’s course in Management at the Solvay Brussels School of Economics and Management. She joined the Enterprise Portfolio Management team in January 2009. “I had already had my first job at that point, working for nearly two-and-a-half years in the field of engineering, focusing on civil engineering within the nuclear sector. The work was interesting in itself but offered little scope for expanding my skill set. I felt like I was committed to a single course for the next 10 years.” Sareh learned about the Enterprise Portfolio Management scheme through a friend who had applied for a job with Elia. “What interested me straight away was the multidisciplinary approach – a bit like at university. My future manager described the variety of tasks I might be involved in, telling me straight off that some tasks were more ‘administrative’ in nature and others more ‘technical’. Besides this, there were also research, implementation and support projects. But the multifaceted aspect appealed to me. It’s the perfect opportunity to get to know a company quickly, before focusing on a more specific pathway. It has more than lived up to my expectations. All the projects I’ve been involved in have been extremely interesting.” One such project was the inventory of distribution generation in neighbouring countries compiled for Customers & Market: “I learnt a lot about tariffs, relations with distributors and the regulatory system. I did a lot of Internet research and met transmission system operators from other countries. I hope that the Decentralised Generation Working Group found the report we produced for them useful.” Another project was a skills catalogue for the Transmission division: “I took over the project when it was already under way. The job involved producing a consolidated description of each of the specific competencies identified, and describing the appropriate training. I liaised with a huge number of people and learned a lot about the work done by our colleagues at Transmission.” A third was the “Performance” project, which aims to improve the monitoring of staff performance: “It’s a big project with major implications for Elia over the coming years. I was lucky enough, with my boss, to be allowed to give a presentation to the Management Committee and to demonstrate the tool to the CEO. Quite an experience!” Aside from the guidance and support she receives from her management and the business colleagues she works with, what Sareh most appreciates is the atmosphere within the Enterprise Portfolio Management team: “We’re all young, we share the same offices, and we exchange a lot of thoughts and ideas. We have totally different jobs but we keep each other informed through team meetings. It’s a young, dynamic team, and I’ve made some really good friends.”
ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
STAFF POLICY
In carrying out its activities, Elia relies on the professionalism and expertise of some 1,200 staff, almost 40% of whom have joined the company since it was founded in 2001. The company faces a variety of challenges, in a constantly and rapidly evolving energy environment. These include the need to: • identify and attract young people, often in technical disciplines, and train them in the specific skills needed in its activities – both traditional activities, such as high-voltage technology, and new ones, e.g. all the disciplines related to market operation and regulation; • ensure career development opportunities for staff within the company and continue to enhance their skills in areas of activity that are changing year by year; • anticipate the company’s HR needs in a context of ongoing change, and expand its skills base to meet the challenges of tomorrow’s world; • integrate newcomers with older, more experienced staff who possess valuable knowledge and experience; • put in place performance management mechanisms designed to motivate and develop staff according to their own personal aspirations and the specific needs of the company. Against this backdrop, Elia has introduced policies on staff recruitment and retention, skills management, training, mobility and motivation.
These policies are rooted in the values of the company’s mission statement, which Elia believes are an essential foundation underpinning the way its employees should operate, both within the company and in their dealings with outside players. Those values are: • Entrepreneurial: actively seek opportunities and show the courage, along with others, to take the plunge with regard to improvements, overhauls or chances to help Elia to develop and serve our customers better; • Caring: be open and attentive to the feelings and opinions of others and demonstrate your desire to understand them while maintaining your own authenticity; • Ethical: be open, loyal and honest with others, respecting them personally and their professional ethics. Make commitments and keep to your word; • Responsible: be aware of the importance of your work and therefore bring it to a successful conclusion using the appropriate resources, while at the same time respecting others and organisational constraints and accepting the consequences of your actions.
STAFF FIGURES Composition of the Elia Group, 31 December 2009 Men Management
Women
Total
FTE
7
0
7
7
290
66
356
345.9
Employees
698
144
842
779.28
Total
995
210
1,205
1,132.18
Supervisory staff
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ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
RECRUITMENT Elia largely continued with its hiring programme in 2009, in spite of the economic and financial crisis. It took on 77 new employees to meet the HR needs resulting from retirements and the creation of new positions associated with the liberalisation and internationalisation of the electricity market and Elia’s activities. Around 40% of Elia’s staff joined the company after its incorporation in June 2001. The proportion of employees with more than 10 years of seniority has fallen progressively from 68% in 2002 to 55.68 % in 2009. Women make up 17.43% of staff.
PARTNERSHIPS WITH SCHOOLS AND UNIVERSITIES Elia’s areas of activity, especially those relating to highvoltage technology, are not necessarily well catered for in school and university curricula. For this reason, Elia has developed a partnership policy with educational establishments to offer significant added value to universities and technical schools and enable students to gain practical experience of the various disciplines associated with operating a transmission system. This is a very valuable learning experience for students and is an opportunity for Elia to attract young people to the company.
TOP EMPLOYER 2010 In 2009, for the third year in a row, Elia took part in the Top Employer survey organised by the independent experts at CRF and once again won the coveted title of Top Employer for 2010. Five criteria are considered in the selection process: primary working conditions, training opportunities, internal promotion opportunities, secondary working conditions and corporate culture. 50
The title, which was awarded to 34 Belgian companies, is a further boost to Elia’s profile as a leading employer in the labour market. ELIA CHALLENGE
JOB FAIRS As in previous years, job fairs were a particularly useful aid to Elia’s recruitment activities in 2009. Aside from the Career Launch job fair held nationwide in the autumn, Elia also attended the leading job events organised by universities and colleges. Attending these events allows Elia’s recruitment specialists to meet talented young people, who are then invited to take part in the first phase of the recruitment procedure held on a Saturday in February and March. The initiative has gone down very well with students.
Each year, students from a number of technical schools have the chance to complete an end-of-school project on a subject relating to high-voltage, with assistance from Elia specialists. The programme includes a visit to a high-voltage substation and completion of a project on technologies used in highvoltage systems and Elia’s activities. The schools receive assistance from Elia in the form of financial support. The projects are then presented in front of members of Elia’s management. For the 2009-2010 academic year, Elia adapted the concept and enhanced the support that students receive: the latter is now provided by junior engineers and deputy managers at Grid Services.
TECHNICAL EDUCATION TROPHY
Following the success of the first Technical Education Trophy, Elia organised a second in academic year 2008-2009. The Technical Education Trophy is a competition aimed at students in their final year of technical secondary education, studying electricity, electrical engineering and electronics. The process begins with a written questionnaire sent to all schools, designed to select the 10 best classes in each language community. The 10 winning classes from each community then go head-to-head in a final at the Elia Training Centre, comprising 10 practical and theory tests. The participating schools found the contest exciting and unusual, and the educational aspect is highly appreciated by teachers. First prizes went to Don Bosco Tournai for the French Community and V.T.I. Zandhoven for the Flemish Community. The two winning teams were rewarded with a trip to the Science Museum in London. BELGIAN BEST ENGINEERING COMPETITION
The Belgian Best Engineering Competition is a contest organised by the Board of European Students in Technology. In the final, teams of four engineering students from six Belgian universities pitted their wits against one another in a series of exciting and challenging tests. Elia, which sponsored the competition, supplied a case study for the contestants to work on: how to install a connection between the UK and Belgium, taking into account the main factors involved, namely location, grid development, operation, environment and financing.
The winners of the contest (teams from ULB and UCL) secured their places in the European version of the competition, EBEC. During an event organised by BEST Leuven in the autumn, Elia also had the chance to showcase its activities to students from French and Dutch, as well as Belgian, universities. 51
INTERNSHIPS Elia operates an internship policy for final-year secondary school, college and university students. Internships allow students to get to know the company and its activities. By talking to Elia staff and experiencing the working environment, they may discover a real passion for our line of work. Internships are also an ideal springboard to subsequent employment with Elia.
COMPANY VISITS Elia organises guided visits for interested groups, featuring a presentation of the company followed by a visit to a control centre and a high-voltage substation. These visits allow people to find out about the transmission system operator’s activities. They usually take place at Elia’s premises in the Brussels port area, which is also home to the Elia Training Centre.
ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
SKILLS MANAGEMENT Elia operates its skills management policy on the basis of a skills catalogue which includes five generic skills, defined for all Elia staff in line with the company’s values. For managerial staff, a further three or four specific skills have been defined for each job family. Eventually, the individual skills needed for each specific job will be added to the catalogue. For employees hired after 2002, the skills are supplemented with a description of the tasks specific to each job category. These skills are analysed at various stages of an employee’s career: in the appraisal conducted when an employee is hired or changes job, in the development interviews for both managerial staff (the Midyear Review held each summer) and employees (during the annual Jobdate), as well as in the training provided to develop specific skills, etc. Both the managerial staff and employees hired under the new staff rules are subject to a Performance Management process, including an interview at the start of the year to set the objectives and activities to be achieved, an appraisal interview at the end of the year, and a development interview. For employees hired under the old staff rules, there is currently only a development interview. 52
2009 saw various divisions and departments, including Transmission and Grid Development, make progress in the definition and management of technical skills.
TRAINING:
Elia offers its employees a wide variety of training. Detailed in a mini-catalogue, the courses on offer include training on behavioural skills, such as assertive communication, and training related to Elia’s activities, including the Campus Elia training course, the Elia Business Game with its individual versions for specific target groups (middle management, foremen at Grid Services, etc.), the “Elia’s Activities” training course and language classes. The mini-catalogue is adapted or extended in response to changing needs. The IT department also offers specific training on IT and associated tools. In addition, training pathways have been established for certain target groups including junior managers, middle managers, assistants to senior managers and newcomers to particular departments. In addition to the mini-catalogue, Elia allows staff to take part in external training programmes (at the Vlerick Leuven Gent Management School, for example), subject to certain conditions (completion of an application form, compliance with entry criteria, etc.). On top of the above, Elia does its best to meet individual training requests wherever possible. Training in fi gures:
Average training time per employee in 2009: 40.57 hours Learning coverage (at least one day of training) in 2009: 72.48%
ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
TECHNICAL SKILLS Alongside behavioural skills, another major focus of Elia’s investment in training is technical skills. Reflecting the strategic importance of their expertise and know-how for the company, special attention was paid in 2009 to producing the catalogue of technical skills for Transmission staff, i.e. the teams responsible for the safe operational management of the grid, from producing forecasts for different time horizons (year, month, day-ahead) through to real-time, round-the-clock management of the grid. The catalogue contains some 20 technical skills considered necessary to successfully execute Transmission tasks. Each skill is defined and described based on a number of levels, reflecting the different stages of its development over the course of a career.
EDISON SUBSTATION: NEW ISOLATOR
In October 2009, the Edison training substation was fitted with a new 150 kV three-pole isolator. It is a low-maintenance model selected by Elia under a framework contract with the supplier. Its installation in the Edison high-voltage substation is a pilot, which may result in the same type of device being selected for use in investment projects. Each day, a computer in the relay room puts the isolator through a number of systematic operations, thereby enabling the wearing process to be evaluated more quickly. Already used for training and visits, the Edison substation now therefore has a third function as a test bed.
The level of each skill required in every job performed by managerial staff was defined. Interviews with staff were used to map available skills and the skills needed in the medium term. Steps were then taken to match the two (objectification of individual and overall development needs, provision of the necessary training, etc.), by means of appropriate training programmes. This approach allows the company to preserve and develop the professional expertise it requires in a constantly changing environment.
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SF6 CERTIFICATION
In the wake of the European Union Regulation (305/2008) on minimum requirements and the conditions for mutual recognition for the certification of personnel recovering certain fluorinated greenhouse gases from high-voltage switchgear, Flemish legislation was amended by the Decree of 4 September 2009 on the certification of technicians tasked with recovering certain fluorinated greenhouse gases from high-voltage switchgear. Wallonia and the Brussels-Capital Region are also required to transpose this new directive. Elia is directly affected by this matter, since a number of its personnel carry out recovery of SF6 gas from high-voltage equipment. It therefore monitored the issue very closely, in a proactive manner, at various levels, helping to draw up the decree, resolving theoretical questions and training the staff concerned for the exam they are required to sit with an independent certification body. The Training Centre has been equipped with gas treatment apparatus to enable it to dispense the training. This equipment will also be used subsequently for the practical part of the exam, since Elia will be making the Training Centre facilities available to the independent examination centre.
KNOWLEDGE TRANSFER
Since November 2008, expertise and knowledge management for the various technical disciplines, together with the technical Training Centre, have been centralised at Elia Engineering. This results in more efficient management of the various fields of strategic knowledge that the company must safeguard and maintain in order to develop its professional expertise in an ever-changing environment.
ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
EMPLOYEE SAFETY AND WELFARE
The safety and welfare of its employees and the personnel of companies with which it works are a priority for Elia. Safety results over recent years show Elia to be among the safest industrial companies, not only in Belgium but also Europe-wide. 54
The approach adopted to systematically improve both the intrinsic safety of our facilities and operational safety in the exercise of our activities, based on a dynamic risk management system, is bearing fruit and must therefore be continued. Moreover, these results fully justify Elia’s belief that “Any accident is one accident too many”, since aiming to prevent even the smallest of accidents is the best way to avoid serious occupational accidents. A minor oversight or an innocent fall can have unfortunate consequences, as was regrettably demonstrated in 2009 when a series of seemingly minor slips and falls resulted in a high number of days off work for the individuals concerned, compared with the previous year’s results. To support this ongoing effort, targeted campaigns have been run for a number of years aimed at reinforcing the safety mindset of all staff and ensuring that safety becomes second nature. The ultimate goal is to increase awareness about safety at all levels of the company. As part of this drive, Elia launched its 2009 campaign, which will continue in 2010, based around the four key moments in relation to safety and the quality of work preparation and execution: STOP – THINK – ACT – REVIEW . This work ethos is perfectly in keeping with Elia’s values.
SAFETY AND WELFARE OF SUBCONTRACTOR PERSONNEL The recommendations arising from the “Safety Contractors” project began to be introduced in 2009, with a view to encouraging a safety mindset among subcontractors and rewarding good safety results. The model being implemented was developed by Elia and means that a series of objective safety and quality parameters, as well as results on the ground, are taken into account when selecting contractors and assigning jobs. Existing and potential contractors are audited, transparently and in a spirit of dialogue, and assessed on-site. A safety charter setting out the attitude Elia expects of its contractors has been compiled, to which contractors will be expected to sign up.
WIDER COMMITMENT TO SAFETY
MEASURES IN RESPONSE TO A/H1N1
It is not just Elia employees and those of its subcontractors who are required to heed the potential risks of high-voltage infrastructure: the same goes for anybody venturing near our facilities. At the request of various fire brigades, Elia organised sessions dealing with the specific risks and the safety measures to be taken during emergency interventions in the vicinity of our facilities. This subject was also on the agenda at the symposium of the Flemish firefighters and paramedics association (Vlaamse Vereniging Brandweer Verpleegkundigen).
Without wishing to overplay the A/H1N1 flu pandemic, yet aware of the importance of its own activities to the community at large, Elia was keen to identify the potential risks associated with this threat and take all necessary measures to address it.
In addition, various sessions were held around the country for design and execution safety coordinators (at mobile and temporary construction sites), in partnership with the gas transmission system operator. The federal cable and pipeline contact point (www.klim-cicc.be) was showcased at these events.
Accordingly, a working group was set up at the start of August to monitor the development of the situation and propose a set of measures. These were defined at two levels: • A series of preventive measures including, principally, the recommendation of specific hygiene rules within the company, the provision of means of disinfection and more frequent cleaning; • Organisational measures including an inventory of priority jobs and development of the necessary plans to ensure continuity in jobs of vital importance to the company. The prevention measures paid off since monthly absenteeism rates were down on those recorded in 2008, when circumstances were normal.
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FREQUENCY RATE AND SEVERITY RATE FREQUENCY RATE
SEVERITY RATE
2005
2006
2007
2008
2009
2005
2006
2007
2008
2009
10.0
8.0
2.7
5.1
2.8
0.11
0.18
0.03
0.10
0.14
Headquarters
1.4
2.6
0.0
2.7
0.0
0.00
0.05
0.00
0.03
0.00
Service Area North
8.7
14.6
2.8
5.8
5.8
0.08
0.26
0.02
0.12
0.02
Service Area South
30.9
17.5
11.3
14.2
8.7
0.31
0.53
0.15
0.35
0.71
6.8
3.3
0.0
0.0
0.0
0.13
0.01
0.00
0.00
0.00
56 Elia
Engineering
ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
BRANDING CAMPAIGN
Given the many challenges it faces at both Belgian and European level, it is vital that Elia conveys a positive image to its various stakeholders.
An additional component was launched in 2009 in the form of an Internet campaign, aimed primarily at young people and designed to complement traditional media outreach.
Within the labour market, Elia must come across as a dynamic employer offering good future prospects if it is to attract the new staff it needs to maintain the efficiency and quality of its service.
The initiative took place in two waves, one in March and the other in December. The metaphor of the giant plug as a symbol of electricity transmission on the high-voltage grid was used again.
The success of our transmission grid improvement and expansion projects depends on winning the trust of local residents and public authorities. That trust is key to identifying the most appropriate solutions in a spirit of constructive dialogue. As a listed company, investor confidence is vital if Elia is to have the capital it needs to safeguard the sustainable development of its activities. As for the public, they need to be provided with clear and easy-to-understand information about Elia’s role as transmission system operator, at federal level and within Belgium’s three regions. To this end, in 2009 Elia continued the public relations campaign it launched in 2008, targeting the general public in the daily press and on mainstream radio stations. However, it narrowed its focus to the main daily newspapers and primetime weekday slots, in a bid to concentrate on the working population.
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ELIA 2009 ANNUAL REPORT — SOCIAL REPORT
SPONSORING
THE ELIA FUND: WONDER AND DISCOVERY FOR ALL 58
Working together with specialists from the King Baudouin Foundation – an ideal partner for such a project – Elia came up with a framework for the Elia Fund in 2001. The King Baudouin Foundation is also responsible for managing the fund in complete independence and transparency. The Elia Fund is aimed at less able people in the broad sense of the term (people with a mental, physical or sensory disability, older people, families with young children, and so on) and supports projects that offer these individuals transparent and non-discriminatory access to tourist, cultural and sporting facilities, in the same way as everybody else. The Fund, which has an annual budget of around €250,000, is not intended as a substitute for state provision, but rather seeks to go beyond the basic obligations discharged by the state. In 2007, the Fund’s purpose was modified slightly, to place an emphasis on wonder and discovery. In 2009, the jury of independent experts selected 22 projects which, as in 2008, focus heavily on the integration of disabled people in as broad a context as possible.
2009 PROJECTS
Accueil en intégration Administration communale de Leglise Mobiel en sportief met de fiets De kangoeroe – Thuisbegeleidingsdienst Extra Olympiades Asbl badje Groene halte + TreinTramBus PAD (“Persoonlijke Assistentie bij Dingen die je wil doen”) Ithaca 100 % eigen stijl VFG-Oost-Vlaanderen 100 % eigen stijl VFG-Jong-Oost-Vlaanderen Van buiten naar binnen – creatief-agogisch snoezelen Vereniging Personen met een Handicap vzw Musicalité et surdité : Si Tom Sawyer m’était conté, avec les doigts. Passe-Muraille Aangepast skien voor personen in revalidatie Anvasport vzw Spélé-handi Les petits pas Kiten voor specials Recreas watersportclub Vas-y au Bois de tes rêves ! Un pas lunaire vers une autonomie tangible Cap Patrimoine asbl
Zitten en toch bewegen met beachvolleybal Beach Projects Vlaamse Ardennen Zin in bos Vereniging voor Bos in Vlaanderen Kajak en triatlon voor personen met een beperking Avalympics À portée de main à l’heure d’aujourd’hui Couleur Café asbl « Doeda » of nieuwe ontdekkingen doen e-prikkeling De regenboog vzw Animations sensorielles nature Centre régional d’initiation à l’environnement de la Forêt d’Anlier asbl Liefde op het eerste gezicht (een deconstructie van Orphus en Euridike) Tartaar vzw
TÉLÉVIE A few years ago, a group of Elia operational staff launched an initiative to raise money for cancer research as part of the Télévie appeal, which Elia then decided to support. This resulted in a charity event at Corbais, the location of an Elia high-voltage pylon used for training power-line installers (the pylon is not connected to conductors). The challenge is for people to overcome their fears and climb the high-voltage pylon, with each ascent raising money for the good cause. Naturally the safety of participants is key, so the event is carefully supervised by both Elia professionals and a group of volunteer para-commandos from the Mons area.
BELGIAN BUSINESS AWARDS FOR THE ENVIRONMENT The Belgian Business Awards for the Environment were established by the Belgian Business Society, in collaboration with the Federation of Enterprises in Belgium. Supported by Elia for the first time in 2009, the awards are a perfect platform for showcasing economic development that is both sustainable and environmentally friendly, in keeping with our mission statement. Daniel Dobbeni had the honour of presenting the winners with their awards at a ceremony attended by Prince Philippe.
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As transmission ransmission system operator, Elia is duty-bound ound to be transparent, neutral neutra al and non-discriminatory towards d allll stakeholders k h ld involved its activities. Corporate governance rules are strictly enforced.
CORPORATE GOVERNANCE STATEMENT 61
ELIA 2009 annual report — Corporate governance statement
CORPORATE GOVERNANCE STATEMENT
Elia System Operator has adopted the Belgian Corporate Governance Code as its reference code.
Board of Directors
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CHAIRMAN
DIRECTORS
Ronnie Belmans Appointed as Chairman for three years on 24 June 2008, Electrabel
Jacqueline Boucher Electrabel
Jean-Marie Laurent Josi Independent
Clement De Meersman Independent
Ingrid Lieten Independent
Johan De Roo Publi-T
Walter Peeraer (until 12 May 2009) Electrabel
Jacques de Smet Independent
Sophie Dutordoir (from 12 May 2009) Electrabel
Claude Grégoire Publi-T
Luc Van Nevel Independent
Vice-Chairmen
Francis Vermeiren Appointed as Vice-Chairman for three years on 24 June 2008, Publi-T Thierry Willemarck Appointed as Vice-Chairman for three years on 24 June 2008, Independent
CORPORATE GOVERNANCE COMMITTEE • Thierry Willemarck (Chairman) • Luc Van Nevel • Ingrid Lieten
AUDIT COMMITTEE • Clement De Meersman (Chairman) • Claude Grégoire • Jacques de Smet
REMUNERATION COMMITTEE • Jean-Marie Laurent Josi (Chairman) • Sophie Dutordoir (from 25 June 2009) • Jacques de Smet
AUDITORS • Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises, represented by Alexis Palm • Ernst & Young Réviseurs d’Entreprises, represented by Jacques Vandernoot
MANAGEMENT COMMITTEE • Chairman and Chief Executive Officer - Daniel Dobbeni • Vice-Chairman and Chief Corporate Officer - Jacques Vandermeiren • Chief Officer Grid Services - Hubert Lemmens • Chief Financial Officer - Jan Gesquière • Chief Executive Officer Elia Engineering - Markus Berger • Chief Officer Transmission - Roel Goethals • Chief Officer Customers & Market - Frank Vandenberghe SECRETARY-GENERAL
• Pierre Bernard
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
BOARD OF DIRECTORS The Boards of Directors of Elia System Operator and Elia Asset each have 12 members. The same members sit on both Boards. These members do not have a management function within either Elia System Operator or Elia Asset. Half of the members are independent directors, appointed by the general meeting and having received a positive unanimous opinion by CREG on their independence. In accordance with provisions stipulated by legislation and the articles of association, the Boards of Directors of Elia System Operator and Elia Asset are supported by three committees: a Corporate Governance Committee, an Audit Committee and a Remuneration Committee. The Boards of Directors monitor the efficiency of these support committees. In addition, two temporary ad-hoc committees were set up by the Board of Directors in 2009 to support Elia’s management in various matters. The Management Committee was set up on 29 July 2003, under Article 524a of the Belgian Company Code and the law of 29 April 1999 on the organisation of the electricity market. The chairmanship and vice-chairmanships of the Boards of Directors of Elia System Operator and Elia Asset were renewed indefinitely by the Boards of Elia System Operator and Elia Asset at their meeting on 24 June 2008. 64
APPOINTMENT OF DIRECTORS The general meeting of 10 May 2005 appointed six non-independent directors and six independent directors. The general meeting of 9 May 2006 appointed Ingrid Lieten as an independent director to replace the outgoing Hilde Laga. The general meeting of 8 May 2007 appointed Jacqueline Boucher as a director to replace the outgoing Willy Bosmans. Sophie Dutordoir was appointed as a director by the ordinary general meeting of 12 May 2010 to replace the outgoing Walter Peeraer. All these directorships will expire at the end of the 2011 general meeting. This six-year period diverges from the period of four years recommended by the Belgian Corporate Governance Code, a fact justified by the technical, financial and legal specificities and complexities associated with the tasks of the transmission system operator. It should be remembered that specific corporate governance rules exist regarding the appointment of the independent and non-independent members of the Boards of Directors of Elia System Operator and Elia Asset and their committees, as well as the tasks of the latter. The appointment procedures are laid down in the law of 29 April 1999 on the organisation of the electricity market. In practice, non-independent directors are appointed after having been nominated by shareholders. Independent directors are appointed in accordance with a procedure established by the law of 29 April 1999 on the organisation of the electricity market and the company’s articles of association. The Corporate Governance Committee presents a list of candidates; for each candidate, the Committee takes into account an up-to-date CV and a signed formal declaration outlining the criteria for independence as stipulated by legislation applying to Elia and the articles of association. The general meeting then appoints the independent directors. These appointments are submitted to CREG for its opinion concerning the independence of each independent director. A similar procedure applies if a director is co-opted onto the Board of Directors. One of the Corporate Governance Committee’s tasks is therefore to act as a nomination committee for independent directors. Ingrid Lieten tendered her resignation to the Board of Directors on 15 July 2009. The resignation will take effect once a replacement has been found.
ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
APPOINTMENT OF COMMITTEE MEMBERS The chairmanships, vice-chairmanships and memberships of the various committees supporting the Board of Directors were renewed indefinitely by the Board of Directors at its meeting on 24 June 2008.
AUDITORS The general meeting of 13 May 2008 appointed Ernst & Young Réviseurs d’Entreprises and Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises as auditors, represented by Jacques Vandernoot and Alexis Palm respectively.
The Board of Directors meeting of 25 June 2009 appointed Sophie Dutordoir to replace Walter Peeraer on the Remuneration Committee.
Remuneration for each auditor was fixed at €111,250 for each financial year for Elia System Operator, Elia Asset and Elia Engineering, to be indexed annually. The auditors were appointed for a period of three years. Their mandate is therefore due to expire at the end of the ordinary general meeting for the year ending 31 December 2010.
TEMPORARY AD-HOC COMMITTEES
Additional remuneration of €152,991.45 was requested by the auditors for duties relating to the IFRS accounts, tax advice and other special tasks.
Pursuant to Article 522 of the Company Code, the Board of Directors set up a number of temporary ad-hoc committees in 2009 to assist Elia’s management in specific matters. AD-HOC COMMITTEE
An ad-hoc committee was set up to assist the Management Committee and Board of Directors, where necessary, in examining a number of projects of international significance. The members of this committee are Sophie Dutordoir, JeanMarie Laurent Josi, Luc Van Nevel, Jacques de Smet and Claude Grégoire. The committee met twice. AD-HOC COMMITTEE ON THE STRUCTURE OF THE ELIA GROUP
The committee met once and comprises Sophie Dutordoir, Jacques de Smet, Jean-Marie Laurent Josi, Luc Van Nevel and Claude Gregoire. This committee examines, as and when necessary, the various potential structures of the Elia Group, most notably in connection with any international investments that the Group may acquire.
BOARD OF DIRECTORS’ ACTIVITY REPORT Under the law of 29 April 1999, the Board of Directors: • defines the company’s general policy; • exercises the powers attributed to it by the Belgian Company Code or in accordance with that Code, with the exception of powers attributed or delegated to the Management Committee; • exercises general control over the Management Committee in accordance with statutory restrictions regarding access to commercial and other confidential information relating to grid users and the processing thereof; • exercises the powers attributed to it by the articles of association. The Board of Directors met five times in 2009. The following members were absent on one or more occasions: • Jacqueline Boucher (25 June 2009 and 26 November 2009) • Sophie Dutordoir (27 August 2009) • Thierry Willemarck (19 February 2009 and 27 August 2009) • Johan de Roo (14 February 2009 and 24 June 2009) • Ingrid Lieten (27 August 2009 and 26 November 2009) • Jean-Marie Laurent Josi (27 August 2009) Members who are unable to attend usually have a representative. Under the provisions of the articles of association, an absent director may authorise another member to represent him or her by giving prior written permission. No member may represent more than two directors.
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
SIGNIFICANT EVENTS IN 2009
NEW SHAREHOLDER FOR CORESO SA 66
The UK transmission system operator National Grid joined the Belgian and French TSOs Elia and RTE as a new shareholder in Coreso SA, the first technical coordination centre shared by several TSOs. The three TSOs – Elia, RTE and National Grid – now hold a third of the capital each. Coreso was established on 19 December 2008 and began operating on 16 February 2009. It is based in Brussels. Since the launch of its operational activities on 16 February, Coreso has been providing national control centres with integrated forecasting services in relation to security on the NorthWest European grid. The participation of National Grid will allow Coreso to develop operational exchanges between the UK and mainland Europe. It will take into account the flows on the existing DC cable IFA (linking France and Great Britain) and their influence on the grids on both sides of the Channel. This latest step will strengthen the operational safety of the power systems and the fluidity of electricity exchanges between the UK and mainland Europe. In July 2009, Coreso expanded its round-the-clock service, supplying TSOs with security and grid-monitoring analyses every 15 minutes, 24 hours a day, seven days a week.
CAPITAL INCREASE The extraordinary general meeting of Elia System Operator on 14 October 2009 approved a dual capital increase reserved for personnel comprising a first capital increase in 2009 (“2009 capital increase”) of no more than €4,400,000, and a second capital increase in 2010 (“2010 capital increase”) of no more than €600,000, by issuing new category B shares, eliminating the preference right of existing shareholders in favour of personnel of the company or its subsidiaries, where appropriate below par of existing shares in the same category. The extraordinary general meeting resolved to set the issue price for the 2009 and 2010 capital increases at a price equal to the average of the closing prices on the 30 calendar days preceding 30 October 2009 and 6 January 2010 respectively, less 16.66%. The 2009 capital increase was carried out and subscribed up to €4,397,711.50, with 193,306 shares issued. The share capital of Elia System Operator was increased from €1,201,294,911.24 to €1,205,692,622.74 and the number of shares representing the share capital was raised to 48,270,255. Consequently, Articles 4.1 and 4.2 of the articles of association were amended with respect to the share capital and number of shares.
ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
AMENDMENTS TO THE ARTICLES OF ASSOCIATION The articles of association of Elia System Operator were amended on 21 December 2009 in order to adjust the capital pursuant to the 2009 capital increase, as described above. They were also amended on 14 October 2009 to take account of various legislative changes.
ACQUISITION BY THE COMPANY OF ITS OWN SHARES The Board of Directors’ authorisation to acquire own shares in the event of serious and imminent harm, as provided for in Article 38 of the articles of association, was renewed for a period of three years following the date of publication of the extraordinary general meeting of 14 October 2009.
BOND OFFERING On 7 April 2009, Elia successfully issued a €1 billion dualtranche bond offering (Eurobond), consisting of a €500 million four-year tranche and a €500 million seven-year tranche. The bonds are listed on the Luxembourg Stock Exchange. Elia’s A- stable rating was confirmed by Standard & Poor’s on 25 March 2009.
REMUNERATION COMMITTEE In addition to its usual support role to the Board of Directors and in accordance with the law of 29 April 1999, the Remuneration Committee is required to make recommendations to the Board of Directors with regard to remuneration policy and remuneration of the Management Committee. The Remuneration Committee met on four occasions and each meeting was attended by all members. The company evaluates its management staff on a yearly basis in accordance with its performance management policy. This policy also applies to members of the Management Committee. Accordingly, the Remuneration Committee evaluates the members of the Management Committee on the basis of a series of collective and individual targets, of a qualitative and quantitative nature. As noted elsewhere, remuneration policy for the variable portion of the Management Committee’s remuneration was adapted to take account of the implementation of multi-year tariffs. Consequently, since 2008 the salary scheme for members of the Management Committee has included, among other things, an annual bonus and a long-term incentive (linked to achievement of the Y factor). The annual bonus has two parts:
the attainment of quantitative collective targets and individual performance. The collective targets proposed by the Management Committee for 2009 include, in addition to the quantitative targets already applied in 2008, a new component relating to refinancing of the company. The criteria governing the attainment of these targets are stricter than those applied in 2008. The Committee also examined progress on the Management Committee’s targets in relation to certain business projects and organisation of the 2009-2010 capital increase reserved for personnel.
AUDIT COMMITTEE In addition to its usual support role to the Board of Directors and in accordance with the law of 29 April 1999, the Audit Committee examines the accounts, ensures that the budget is controlled, monitors audit activities, evaluates the reliability of financial information, assesses internal control and checks the efficiency of internal risk management systems. The Audit Committee may investigate any matter that falls within its remit. It is given the resources it needs to perform this task, has access to all information (with the exception of commercial data concerning grid users) and can call on internal and external experts for advice. The Audit Committee met on four occasions in 2009 and each meeting was attended by all three directors of the Committee, with the exception of the meetings on 19 February and 26 November, which Claude Grégoire was unable to attend. The Committee examined the annual accounts for 2008, drawn up in accordance with both Belgian GAAP and IFRS. It then analysed the quarterly results to 31 March 2009, the halfyearly results to 30 June 2009 and the figures for the first three quarters to 30 September 2009, drawn up in accordance with Belgian GAAP and IFRS. The Committee took note of the audits and recommendations made. The further expansion of risk management within the company was also explained and approved by the Committee. An action plan was drawn up for each of the audits and recommendations in order to improve the quality and application of procedures and the associated communication. The Committee examined the follow-up to action plans resulting from this audit and earlier audits from multiple perspectives (timetable, results, risk) on the basis, among other things, of an activity report from the Internal Audit Department. The Committee concluded that these action plans had been carried out properly and within the agreed timeframes. The 2010 audit plan was submitted to and approved by the Committee.
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE COMMITTEE In addition to its usual support role to the Board of Directors and in accordance with the law of 29 April 1999, the Corporate Governance Committee puts forward candidates to be appointed as independent directors, gives prior approval for the appointment of members of the Management Committee, and, at the request of any independent director, the Chairman of the Management Committee or CREG, examines all cases of conflicts of interests between the transmission system operator and a dominant shareholder or company associated with a dominant shareholder in order to report to the Board of Directors. This latter task aims to strengthen the directors’ independence above and beyond the procedure stipulated under Article 524 of the Belgian Company Code, which the company also applies. The Committee is also expected to give an opinion in cases of incompatibility on the part of members of the management and personnel, to enforce the provisions contained under Articles 9 and 9b of the law of 29 April 1999 on the organisation of the electricity market, evaluate how effectively they have been applied in terms of fulfilling the objectives of operating the transmission system in an independent and impartial manner and report annually on this matter to CREG. 68
The Committee met twice in 2009. All members attended all the meetings, with the exception of Ingrid Lieten, who was absent from the meeting on 26 November. As far as confidentiality rules permit, the Committee is kept regularly informed by the Management Committee on issues of major importance such as the purchase of ancillary services and the content of the infrastructure project portfolio, in order to ensure the opening of the electricity market. In addition to these ongoing issues, specific matters are dealt with at particular meetings, as priorities dictate.
EVALUATION In 2007, the Board of Directors of Elia System Operator organised a formal procedure to evaluate its operation in accordance with the provisions (Article 4.1.1 et seq.) of the corporate governance code for listed companies in Belgium (the Belgian Corporate Governance Code). In line with the rules of corporate governance, such a process will be organised every two to three years. The next evaluation will take place in 2010.
MANAGEMENT COMMITTEE Under the law of 29 April 1999, the transmission system operator’s Management Committee is responsible for transmission system operation and the day-to-day management of the transmission system operator, as well as for exercising the other powers delegated to it by the Board of Directors and the powers assigned to it by the articles of association. The Management Committee usually meets formally at least once a month. Members also attend informal weekly meetings. The Management Committee met 11 times in 2009. Members who are unable to attend usually have a representative. In accordance with the Committee’s internal rules of procedure, an absent director may authorise another member to represent him or her by giving prior written permission. No member may represent more than two directors. Each quarter, the Management Committee reports to the Board of Directors on the company’s financial situation (in particular on the balance between the budget and the results stated). It also reports on transmission system operation at each Board meeting. As regards transmission system operation, the Committee updated the Board on developments in legislation and case law affecting Elia, important decisions by regulators and authorities, grid management, the situation at subsidiaries, significant events for the company, the bond offering (Eurobond), the founding of Coreso and the expansion of its shareholder structure, and the development of international projects.
CODE OF CONDUCT Elia has a code of conduct which all persons most likely to have access to privileged information within the Group (i.e. insiders) must comply with. The code of conduct lays down a series of regulations for stock exchange transactions by insiders, in accordance with the provisions of Directive 2003/6/EC on insider trading and market manipulation and the law of 2 August 2002 on monitoring of the financial sector and other financial services. The Board of Directors approved the code of conduct on 22 December 2005. The Secretary-general ensures that the code of conduct is applied correctly and updated.
ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
REMUNERATION OF THE BOARD OF DIRECTORS AND MANAGEMENT COMMITTEE
POLICY ON DIRECTORS’ REMUNERATION AND THE SETTING OF DIRECTORS’ REMUNERATION DIRECTORS’ FEES The remuneration policy for directors was agreed upon at the general meeting of shareholders, based on a proposal by the Board of Directors, after a draft remuneration policy was drawn up by the Remuneration Committee. Total remuneration paid to the 12 Elia directors in 2009 was €494,472 (€247,236 for Elia System Operator and €247,236 for Elia Asset), including indexing. The table below lists the individual gross sums paid to each director: Ronnie Belmans
€43,548
Jacqueline Boucher
€29,032
Clement De Meersman
€36,928
Johan De Roo
€29,032
Claude Grégoire
€50,864
Ingrid Lieten
€18,000
Jean-Marie Laurent Josi
€50,864
Walter Peeraer/Sophie Dutordoir
€50,864
Luc Van Nevel
€49,936
Francis Vermeiren
€34,838
Jacques de Smet
€58,760
Thierry Willemarck
€41,806
These figures were calculated on the basis of five Board meetings in 2009. The Audit and Remuneration Committees met four times. The Corporate Governance Committee met twice. The number of temporary ad-hoc committee meetings is detailed below. The figures are gross sums, from which social security contributions and other withholding taxes are subsequently deducted. Directors’ remuneration consists of a basic remuneration of €25,000 per year (€12,500 for Elia System Operator and €12,500 for Elia Asset) plus an additional €800 (€400 for Elia System Operator and €400 for Elia Asset) for each meeting after the 8th Board meeting during the year, including meetings with regulators. These two remunerations are increased by 50% for the Chairman and 20% for each Vice-Chairman of the Board of Directors. An additional fixed remuneration of €6,000 per year per committee (€3,000 for Elia System Operator and €3,000 for Elia Asset) is awarded to directors who sit on a support committee, with an additional remuneration of €800 (€400 for Elia System Operator and €400 for Elia Asset) for each additional committee meeting (i.e. each meeting after the three covered by the basic remuneration), including meetings with regulators. This remuneration covers all costs and is included in the company’s operating costs. It is indexed annually in accordance with the consumer price index. All remunerations are paid on a pro rata basis during the director’s term of office. Directors receive an advance on their annual remuneration at the end of the first, second and third quarters. The advance is calculated on the basis of the basic indexed fee and on a pro rata basis in relation to the duration of the directorship during the quarter in question. A detailed account is prepared during the month of December for the financial year. This account takes into consideration any additional remuneration on top of the basic remuneration. Directors do not receive any other benefits in kind, stock options, special loans or advances.
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
POLICY ON REMUNERATION AND THE SETTING OF REMUNERATION OF THE MANAGEMENT COMMITTEE
CONTRIBUTIONS TO THE CORPORATE PENSION SCHEME
Since 2007, all pension plans for Management Committee members have been ‘defined contribution’. In 2009, Elia System Operator paid a total of €94,449.56 in corporate pension contributions for the Chairman of the Management Committee. Contributions totalling €284,610.18 (€148,449.90 for Elia System Operator and €136,160.28 for Elia Asset) were paid for the other members of the Management Committee. OTHER BENEFITS
REMUNERATION The Remuneration Committee evaluates the members of the Management Committee once a year. The change in the basic remuneration is linked to the position of each member of the Management Committee with respect to a benchmark salary in the general marketplace and the assessment of his/her individual performance. Since 2004, the Hay methodology has been used to weight each management position and ensure that remuneration is in line with the going market rate.
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In addition, the Remuneration Committee evaluates the members of the Management Committee at the end of each year, based on a number of qualitative and quantitative targets. Since 2008, the variable portion of the remuneration has comprised two components. The first is based on the attainment of a number of targets set by the Remuneration Committee at the start of the year, with a maximum of 25% of variable remuneration for the individual targets and 75% for the attainment of six collective targets. The second is based on multiannual criteria covering a period of four years. In 2009, no variable remuneration was awarded in connection with the second component. BASIC AND VARIABLE REMUNERATION
It should be noted that all members of Elia’s Management Committee have employee status. In 2009, gross remuneration for the Chairman of the Management Committee, which is paid by Elia System Operator, totalled €538,260.95, of which 35.22% was variable remuneration. Remuneration paid by Elia to the other members of the Management Committee in 2009 totalled €1,717,525.11 (€895,284.64 for Elia System Operator and €822,240.46 for Elia Asset), of which 27.57% was variable remuneration. A total of €2,255,785.57 was therefore paid to members of the Management Committee in 2009.
Other benefits awarded to members of the Management Committee, such as guaranteed income in the event of longterm illness or an accident, healthcare and hospitalisation insurance, invalidity insurance, life insurance, tariff benefits, other allowances, assistance with public transport costs, provision of a company car and other small benefits are in line with the regulations applying to all company managers. The cost of other benefits in 2009 is estimated at €32,465.84 for the Chairman of the Management Committee and €225,693.10 (€104,957.26 for Elia System Operator and €120,735.84 for Elia Asset) for the other members of the Management Committee. There was no Elia stock option plan for the Management Committee in 2009.
SHARES HELD BY MEMBERS OF THE MANAGEMENT COMMITTEE The Chairman of the Management Committee of Elia System Operator holds 6,998 shares in Elia System Operator; the other members of the Management Committee hold a total of 16,991 shares. Elia has yet to implement a long-term share allotment policy.
ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
PROVISIONS OF MANAGEMENT COMMITTEE EMPLOYMENT CONTRACTS The terms of the employment contracts for members of the Management Committee, including the Chairman, do not contain any specific provisions as regards notice of dismissal.
DESCRIPTION OF THE RISKS AND UNCERTAINTIES FACING THE COMPANY In 2009, at the request of the Audit Committee, the Internal Audit & Enterprise Risk Management department put in place a pragmatic and coordinated approach to identify, assess and manage the risks facing Elia. This Elia Risk Management (ERM) approach also aims to develop the corporate culture in relation to risk management. 1. REGULATORY AND INCOME RISKS International
Although Elia proactively anticipates European legislation, new directives and regulations being prepared at EU level or awaiting transposition into Belgian law may entail uncertainties. Elia is a European leader when it comes to the components of the European Commission’s ‘third package’ of directives aimed at developing a single electricity and gas market, particularly as regards the independence and impartiality of management. Nonetheless, the transposition into Belgian law of the provisions of the third package, which must take place before March 2011, creates some uncertainty as to the framework in which Elia will operate in the medium term. Elia is also one of the founder members of the European Network of Transmission System Operators for Electricity (ENTSO-E), which was set up in December 2008 and brings together 42 transmission system operators from 34 countries, including the EU countries. Amongst other things, ENTSO-E will perform the role of the European Network of Transmission System Operators provided for in the third package. Daniel Dobbeni is serving a two-year term as president of the association.
National
The Belgian legal framework was established when the first European directive on the internal electricity market was transposed by the Electricity Act of 29 April 1999. The company’s net profit is largely determined by the legally prescribed fair remuneration. As of 1 January 2008, the regulation mechanism applying to Elia contains an ‘incentive’ component and involves a multi-year tariff. Elia’s result will therefore be influenced annually, either positively or negatively, by its ability to achieve and/or exceed the efficiency improvement factor, by changes to Belgian linear bonds (OLOs), and by the analysis of the regulator regarding any cross-subsidising between controllable and non-controllable costs. On the other hand, Elia’s turnover also depends on the energy transported on the grid, and is therefore directly impacted by the level of business activity of its customers. The decline in residential consumption prompted by the slowdown in economic activity in 2009 has resulted in an income deficit compared with the budget approved by the regulator. Under prevailing legislation, this deficit and the extra cost resulting from the need for additional financing must be offset when the transmission tariffs for the next regulatory period are set. The impact on the electricity consumption of Elia’s various customer segments, and the uncertainty regarding an upturn in business among industrial customers, continue to pose a risk to Elia’s income in the short term. Regional
The regulatory framework entails risks at regional level. For instance, contradictions between the various regulations, including the grid codes, can hinder the exercise of the company’s activities. The further development of and changes to these regulations may also impact the company’s liability in the event of a power outage on the grid or – in the context of state reform – the division of powers between federal and regional authorities, including the power to approve the transmission tariffs.
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
2. OPERATIONAL RISKS
IT risk
Security of supply
Failures in the IT network and IT systems used to manage the electricity system may harm the latter’s performance. Elia takes appropriate measures to back up the IT network and associated systems as far as technical and financial considerations allow. It has drawn up and regularly tests recovery plans for the most critical IT systems. However, component failures in the IT network and IT systems are impossible to rule out. Where systems do fail, Elia will strive to minimise the impact on customers.
In the criteria for operational and investment planning, Elia factors in an adequate level of reserve capacity for active and reactive energy and always seeks out the most efficient and costeffective way of contracting the availability of such reserves. Nationally and within a European framework, Elia analyses how the growing proportion of intermittent renewable energy production units can be integrated at a lower cost.
Environmental risk
The Europe-wide growth in the number of cogeneration and renewable energy units connected in distribution systems and the future connection of large offshore wind farms create new challenges for operational grid management and necessitate the development of grid infrastructure. The developments required for existing and future connections, changing trends in offtake and the enhancement of interconnection capacity are dependent on securing permits and approvals from local, regional, national and international authorities. The need to obtain such approvals and permits within certain timeframes represents a risk to the timely implementation of these projects. Moreover, these approvals and permits can be contested in courts with the relevant jurisdiction. This may affect the continued operation of the infrastructure in question. 72
Power outages
With an average interruption time (AIT) of well under 0.001%, Elia’s high-voltage grid is one of the most reliable in Europe. Nonetheless, as in any other electricity system, incidents may occur on the grid which interrupt the smooth operation of one or more infrastructure components. In most cases, these incidents have no impact on consumers’ power supply because the grid’s meshed structure means that consumers can be reached via a number of different connections. However, in extreme cases an incident in the electricity system may lead to a local or widespread outage (known as a blackout). Such outages may be caused by natural phenomena, unforeseen incidents or operational problems, either in Belgium or abroad. Elia regularly holds crisis management drills so that it is ready to deal with the most unexpected and extreme situations. The general terms and conditions of its standard contracts limit the company’s liability to a reasonable level while its insurance policy is designed to offset the financial repercussions of these risks.
Elia’s results may be affected by outgoings needed to keep up with environmental legislation, including costs associated with implementing preventive or corrective measures or settling third-party claims. The company’s environmental policy is developed and monitored in such a way as to manage these risks. Where Elia is in any way liable for decontamination, the appropriate provisions are set aside. Elia has already done this for Flanders and the Brussels-Capital Region. In the Brussels-Capital Region, a new ordinance on soil pollution enters into force on 1 January 2010, while new soil legislation in Wallonia took effect on 18 May 2009. These amendments to legislation in conjunction with additional studies carried out by Elia meant that Elia had to set aside additional provisions. Risks of legal disputes
Although the company operates in such a way as to minimise the risk of legal disputes, it may nonetheless become involved in such disputes. Where necessary, the appropriate provisions are laid aside for this. Safety and welfare
Elia operates facilities that may cause harm to the natural or human environment or for which accidents or external attacks may have serious repercussions. Persons working in or near electricity transmission facilities may be exposed, in the event of an accident, error or negligence, to the risk of electrocution. The safety and welfare of individuals (both Elia personnel and third parties) is a daily priority for Elia’s management, supervisory staff and personnel, and considerable resources are invested to safeguard it. Each year, an action plan is approved and implemented based on developments in safety figures. Risks associated with ineffi cient internal control mechanisms
Internal processes can all impact the company’s results in some way. The multi-year tariff mechanism increases the need for year-on-year increases in the company’s overall efficiency. To this end, the efficiency of internal processes is monitored regularly, using performance indicators and/or audits, to ensure they are kept under proper control. This is overseen by the Audit Committee, which controls and monitors the work of the Internal Audit & Enterprise Risk Management Department.
ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
3. FINANCIAL RISKS
4. NEW BUSINESS DEVELOPMENTS
Interest risk
Elia strives to anticipate new opportunities relating to its core businesses, both inside and outside the Belgian regulated framework. The launch of international projects abroad may create risks associated with foreign regulations or uncertainties regarding the business plans to be drawn up.
A change in interest rates can impact on financial charges passed on in a subsequent regulatory tariff period (or in the same period in the event of an exceptional change in charges). To minimise this risk, Elia’s Board of Directors has approved a financing policy that strives to achieve an optimal ratio of fixed and variable interest rates. In addition, appropriate financial instruments are used where necessary to further offset potential risks. A financing policy that seeks to bring the term of loans more into line with the lifetime of assets helps to ensure a successful financial policy. However, Elia System Operator SA cannot guarantee total protection in the event of significant fluctuations in interest rates. Credit, market, capital-structure and liquidity risk
In the course of its normal business activities, Elia incurs credit, market, capital-structure and liquidity risks. The Group aims to identify each and every risk and to come up with strategies to control their economic impact on the Group’s results. The regulatory framework in which Elia operates limits their effects on profit or loss considerably (see the chapter on Regulatory framework and tariffs). The results of increased interest rates, credit risk, etc. can be settled in the transmission tariffs. Some of the strategies used to manage these risks involve derivative financial instruments. These are instruments that derive their value from one or more underlying assets, reference prices or indices. Derivative instruments create rights and obligations that transfer financial risks, in whole or in part, between the contractually bound parties. In 2009, the Group made use of interest rate swaps. Tax audit risks
Although tax rules are applied with accuracy and precision, it may be that the company’s own interpretation differs from that of the relevant authorities during an audit. More information on the difference of opinion with the tax authorities regarding the recognition of operational surpluses can be found on page 17 of the financial report.
5. CONTEXTUAL FACTORS Macroeconomic risks
The effects of the economic and financial crisis in 2009 represent an income risk and a financial risk for Elia (see sections 1 and 3). Elia strives to achieve optimum control of the operational risks linked to the fact that the Belgian grid is increasingly open to electricity flows generated and consumed in EU Member States, to the growth in renewable energy production and to changes among Belgian electricity market players. HR risk
Elia pursues an active image and recruitment policy in order to maintain an appropriate level of expertise and know-how in a tight labour market. This is an ongoing challenge, bearing in mind the highly specialised nature of the business. Image risk
Generally speaking, circumstances may arise that have a negative impact on the company’s image. Elia has an internal control mechanism to guarantee the confidentiality of data. Despite this, external parties may pass on information in their possession that could have an impact on the company’s share price. Miscellaneous
Elia realises that there might be other risks of which the company is not yet aware. Some risks may seem limited today but become greater in the future. The subdivisions used give no indication of the potential consequences of the listed risks.
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ELIA 2009 ANNUAL REPORT — CORPORATE GOVERNANCE STATEMENT
STAKEHOLDER RELATIONS
STAKEHOLDER RELATIONS 74
Elia seeks to engage in open and transparent dialogue with its various stakeholders. This commitment applies to its customers, suppliers, shareholders, potential investors, authorities and the community at large, as well as to Group staff members.
Furthermore, safety and the environment are at the core of Elia policy, including its procurement policy. Elia’s preference therefore goes to suppliers that pursue a vigorous safety and environment policy. Certification (VCA, BeSaCC, ISO9001, ISO14000, etc.) is thus an important criterion when choosing suppliers. RELATIONS WITH INVESTORS
RELATIONS WITH SUPPLIERS
Elia aims to build up a long-term, mutually beneficial relationship with its suppliers. Its procurement policy is therefore based on the following principles: • An objective selection procedure; • Continuous quality assessment and improvement; • A constant search for new partners and innovative solutions; • A preference for suppliers that support our goal of operating, maintaining and developing a safe and reliable electricity system; • A preference for suppliers that provide the best possible service to both external and internal customers; • A preference for suppliers that use their knowledge and experience to reduce our costs by minimising the total cost of ownership; • A preference for contracts and framework agreements in which the purchase of goods is linked to provision of the corresponding services; • A preference for results-based commitments (or service level agreements) rather than means-based commitments.
The task of the Investor Relations Department is to ensure transparent communication with current and potential investors. By engaging in transparent dialogue with investors and financial analysts, Elia seeks to achieve a fair value for its share. Various roadshows were organised in 2009 aimed at institutional investors in Europe’s major financial centres. Elia also took part in the Belgian Excellence Investment Seminar co-organised by NYSE and KBC Securities in New York. In between roadshows, investors and analysts had a chance to talk to the CEO and CFO, either in person or by videoconference. In addition, Elia attended many national and international investment conferences. Elia is also committed to private investors and takes part in the annual events organised by the Vlaamse Federatie van Beleggingsclubs en Beleggers (VFB) in Antwerp. Elia’s financial newsletter Investor News provides investors with up-to-date information about the company on a regular basis.
RELATIONS WITH EMPLOYEES Industrial relations
Industrial relations at Elia in 2009 were dominated by a series of agreements concluded at gas and electricity sector level and within the Elia Group. Sectoral agreements
Two collective labour agreements for the gas and electricity sector (Joint Committee 326) were signed on 14 May 2009. They apply to Elia (Elia System Operator and Elia Asset). In addition, a sectoral agreement was signed on 30 June 2009 within Joint Committee 218, which covers Elia Engineering. This was transposed to company level via a company agreement on 23 October 2009. Group-level agreements
A series of company agreements were signed, including: • a collective labour agreement on stand-by and duty overtime for employees on Elia’s new pay conditions; • t ransposition of collective agreement 90 (bonus linked to achievement of a set of collective results) at Elia and Elia Engineering. The social dialogue bodies were also informed in detail about the financial and economic situation of Elia System Operator, Elia Asset and Elia Engineering via a joint works council. Elia’s three committees for prevention and protection at work and that of Elia Engineering met regularly, either separately or together. Among the items discussed were alterations to the procedure for adapted work and the procedure for harassment, violence and unwanted sexual conduct in the workplace. A joint working group on psychosocial stress was set up at the initiative of the Elia and Elia Engineering committees in order to produce an action plan to combat psychosocial stress and, more especially, psychosocial stress at work.
A number of specific issues were also addressed with the social partners in Elia’s three trade union delegations and that of Elia Engineering. INTERNAL RELATIONS WITHIN THE COMPANY
Alongside industrial relations within official staff representative bodies, Elia offers many opportunities for employees to meet, exchange information and engage in dialogue. These are organised at both company level – for example, the meetings on the ground between the CEO and all managerial and supervisory staff in 2009, which will continue in 2010 with meetings involving all employees – and within specific divisions (decentralised information sessions at Transmission, Grid Services, Engineering, etc.). Departmental and team meetings are also held. In addition, there are various communication channels providing regular information to Group staff (website, e-newsletters, company magazine, etc.). Elia also supports staff who take part in sports contests (20 km race through Brussels, amateur versions of the Tour of Flanders and the Liège-Bastogne-Liège, etc.) and other types of event (managers’ meeting, “Plant a tree” day, etc.).
75
RELATIONS WITH CUSTOMERS The sales department and account manager teams are the bedrock of Elia’s customer relations. 76
RELATIONS WITH THE AUTHORITIES, RESIDENTS AND THE GENERAL PUBLIC
A series of “product sheets” have been produced, setting out the range of products and services Elia offers to its various types of customer, as well as the associated legal framework – an important factor for a regulated company. Regularly supplemented and updated, these sheets are also available on the Elia website.
Whether in connection with its investment, maintenance or emergency intervention projects, Elia takes care to inform the relevant administrative bodies and authorities and the residents living near to its facilities about what it is doing and how this may affect their daily lives, especially during works carried out by subcontractors or maintenance teams.
Customers benefit from a monthly e-newsletter and detailed and transparent information published on the Elia website. They can also access relevant applications and information via the extranet in an efficient, user-friendly and secure way.
Information meetings with the public and authorities, a hotline to regional technical secretariats in Brussels, Merksem and Namur and round-the-clock website access at www.elia.be are just a few of the ways Elia caters to individuals and public authorities requiring information.
Each year, Elia organises a special day for all of its customers. The 2009 programme proved very popular, not least due to the contributions of producer customers like Jaap-Jan Ferweda, CEO of Windvision, who highlighted the innovative aspects of his company’s wind farm, most notably its contribution to the provision of system services. The CEOs of three large offshore wind farms, Frank Coenen from Belwind, Filip Martens from C-Power and Rik Van de Walle from Aspiravi, discussed the future of offshore wind energy and the importance of such investments for energy and climate policy.
The regional technical secretariats field around 50,000 questions each year.
“Plant a tree” – November 2009
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2009 results in detail.
REPORT FINANCIAL 79
ELIA 2009 ANNUAL REPORT — FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS IFRS 1. CONSOLIDATED INCOME STATEMENT (31 DECEMBER 2009 – 31 DECEMBER 2008)
(in million €)
31 December 2009
31 December 2008
733.7
724.4
1.3
(5.6)
(6.8)
(17.6)
Gross profit
728.1
717.6
1.5
Other income
37.6
32.9
14.3
Continuing operations
Notes (3.1)
Revenue Cost of sales
80
Change (%)
(3.2.1)
Services and other goods
(3.2.1)
(303.5)
(281.9)
7.7
Personnel expenses
(3.2.2)
(124.4)
(118.8)
4.7
Depreciation, amortisation, impairment and changes in provisions
(3.2.3)
(102.1)
(96.2)
6.1
Other expenses
(3.2.4)
(9.9)
(15.7)
(36.9)
225.8
237.9
(5.1)
(3.3)
(120.5)
(109.3)
10.2
Results from operating activities Net finance costs Finance costs Finance income Share of profit of equity accounted investees (net income tax)
54.2 13.3
(1.0)
2.0
(150.0)
104.3
130.6
(20.1)
(20.0)
(27.2)
(26.5)
84.3
103.4
(18.5)
(3.5)
84.3
103.4
(18.5)
84.0
103.1
(18.5)
Profit from continuing operations Profit for the period
8.3 (117.6)
(3.4)
Profit before income tax Income tax expense
12.8 (133.2)
Profit attributable to Owners of the Company Non-controlling interest
0.3
0.3
0.0
84.3
103.4
(18.5)
Notes
31 December 2009
31 December 2008
Change (%)
Basic earnings per share
(3.6)
1.7
2.1
(19.5)
Diluted earnings per share
(3.6)
1.7
2.1
(19.5)
Profit for the period
Earnings per share (€)
ELIA annuAl Report 2009 — financial Report
2. C onsolidated statement of comprehensive income
31 December 2009
31 December 2008
Change between 2008 and 2009 (%)
84.3
103.4
(18.5)
(4.15+5.2)
(2.6)
(19.7)
86.8)
(4.12+4.15)
(3.4)
(12.0)
(71.7)
Other comprehensive income for the period, net of income tax
(6.0)
(31.7)
(81.1)
Total comprehensive income for the period
78.3
71.7
9.2
Profit attributable to Owners of the Company
(in million â‚Ź)
Notes
Profit for the period
Other comprehensive income Effective portion of changes in fair value of cash flow hedges, net of tax Defined benefit plan actuarial gains and losses, net of tax
78.0
71.4
9.2
Profit attributable to Non-controlling interest
0.3
0.3
0.0
Total comprehensive income for the period
78.3
71.7
9.2
81
ELIA annuAl Report 2009 — financial Report
3. C onsolidated statement of financial position (31 December 2009 – 31 December 2008)
Notes
31 December 2009 3,976.6
3,938.1
Property, plant and equipment
(4.1)
2,089.6
2,060.4
Intangible assets
(4.2)
1,730.1
1,727.0
Trade and other receivables
(4.3)
105.8
98.7
Investments in equity accounted investees
(4.4)
9.4
10.1
Assets (in million €)
Non-current assets
Other investments (including derivatives) Deferred tax assets
31 December 2008
(4.5)
16.7
17.7
(4.15)
25.0
24.2
Current assets
443.4
290.0
Inventories
(4.6)
13.7
13.7
Trade and other receivables
(4.7)
218.1
246.9
0.7
2.1
Cash and cash equivalents
(4.8)
174.6
27.3
Other assets
(4.9)
Income tax receivable
Total assets
Equity and liabilities (in million €)
Notes
36.3
0.0
4,420.0
4,228.1
31 December 2009
31 December 2008
1,367.1
1,349.7
1,365.4
1,348.1
1,207.3
1,202.1
8.5
8.5
82 Equity Equity attributable to equity holders of the Company
(4.10)
Share capital Share premium Reserves
36.0
21.0
Hedging reserve
(18.7)
(16.0)
Retained earnings
132.2
132.5
Non-controlling interest
1.7
1.6
Non-controlling interest
1.7
1.6
Non-current liabilities
2,804.7
1,774.8
Loans and borrowings
(4.11)
2,618.9
1,593.5
Employee benefits
(4.12)
142.9
142.7
(5.1)
28.2
24.3
Provisions
(4.13)
4.8
4.7
Deferred tax liabilities
(4.15)
6.8
6.5
Other liabilities
(4.15)
3.1
3.1
248.2
1,103.6
0.1
804.3
Derivatives
Current liabilities Loans and borrowings
(4.11)
Provisions
(4.13)
13.9
10.3
Trade and other payables
(4.14)
233.9
281.7
Income tax payables
(4.15)
0.2
0.2
0.0
7.1
4,420.0
4,228.1
Other liabilities Total equity and liabilities
ELIA annuAl Report 2009 — financial Report
4. C onsolidated statement of cash flows as at 31 December 2009 and 31 December 2008
Notes
31 December 2009
31 December 2008
(3.5)
84.3
103.4
Net finance costs
(3.3)
124.1
114.7
Income tax expense
(3.4)
17.3
20.2
1.0
(2.0)
97.7
95.4
Cash flows from operating activities (in million €)
Profit for the period Adjustments for:
Share of profit of investments accounted investees, net of tax Depreciation of property, plant and equipment and amortisation of intangible assets
(4.1 – 4.2)
Loss on disposal/sale of property, plant and equipment
(4.1 – 4.2)
3.5
3.6
Impairment losses of current assets
(3.2.3)
0.7
0.1
Change in provisions
(3.2.3)
(1.3)
(18.8)
(5.2)
(2.4)
1.1
Change in fair value of derivatives
2.6
7.0
Change in fair value of financial assets through income
Change in deferred taxes
(4.15)
0.5
(0.4)
Change in non-cash items
0.9
0.1
328.9
324.4
Change in inventories
Cash flow from operating activities (4.6)
(0.7)
(0.6)
Change in trade and other receivables
(4.7)
(14.9)
(80.7)
Other Current assets
(4.9)
Change in trade and other payables Change in other current liabilities
0.5
(4.14)
(47.8)
76.9
(4.3)
(7.1)
(27.3)
(70.5)
(31.2)
Changes in working capital Interest paid
(3.3)
(102.0)
(116.7)
Income tax paid
(3.4)
(15.9)
(118.6)
140.5
57.9
Notes
31 December 2009
31 December 2008
(4.1 – 4.2)
(133.7)
(170.5)
(4.4)
0.0
0.0
Investments recognised at cost
0.0
(0.5)
Proceeds from sales of investments
0.2
0.0
6.1
2.5
(127.4)
(168.5)
Net cash from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets Investments in equity accounted investees
Interest received
(3.3)
Net cash used in investing activities Cash flow from financing activities Proceeds from issue share capital
(5.1)
4.4
0.4
Expenses related to issue share capital
(4.10)
(0.1)
0.0
Dividends paid (-)
(4.10)
(66.0)
(62.5)
Repayment of borrowings (-)
(4.11)
(927.9)
0.0
Proceeds from withdrawal borrowings (+)
(4.11)
1 123.8
166.5
Net cash flow from (used in) financing activities
134.2
104.4
Net increase (decrease) in cash and cash equivalents
147.3
(6.2)
Cash & Cash equivalents at 1 January
(4.8)
27.3
33.5
Cash & Cash equivalents at 31 Dec
(4.8)
174.6
27.3
83
ELIA annuAl Report 2009 — financial Report
Notes to the consolidated financial statements
84
1
Reporting entity
85
2
Significant accounting policies for financial reporting under ifrs
85
3
Items in the income statement
93
3.1
Revenue
93
3.2
Operating expenses
94
3.2.1
Cost of materials, services and other goods
94
3.2.2
Personnel expenses
94
3.2.3
Depreciation, amortisation, impairment and changes in provisions
95 95
3.2.4
Other expenses
3.3
Finance income and expenses
95
3.4
Income taxes
96
3.5
Profit
97
3.6
Basic earnings per share
98
4
Items in the statement of financial position
98
4.1
Property, plant and equipment
98
4.2
Intangible assets
100
4.3
Trade and other receivables
101
4.4
Equity accounted investees
101
4.5
Other financial assets
102
4.6
Inventories
102
4.7
Trade and other receivables
102 103
4.8
Cash and cash equivalents
4.9
Other assets
103
4.10
Shareholders’ equity
104
4.11
Interest bearing loans and borrowings
106
4.12
Employee benefits
108
4.13
Provisions
111
4.14
Trade and other payables
112
4.15
Deferred tax assets and liabilities
112 114
5
Miscellaneous
5.1
Share-based payments
114
5.2
Financial risk and derivative management
114
5.3
Operating lease contracts
118
5.4
Investments and other liabilities
118
5.5
Contingent liabilities and uncertainties
118
5.6
Disclosure about related parties
119
5.7
Business combinations
120
5.8
Group entities
120
5.9
Events after closure of the annual accounts
121
5.10
Non-audit tasks carried out by the joint auditors
121
ELIA annuAl Report 2009 — financial Report
1. Reporting entity Established in Belgium, Elia System Operator SA has its registered office at Boulevard de l’Empereur 20, B 1000 Brussels. The Group’s consolidated financial statements for the 2009 financial year include Elia System Operator SA and four subsidiaries, i.e. Elia Asset SA, Elia Engineering SA, Belpex SA and Elia Re SA, and also the associated companies HGRT S.A.S. and Coreso SA (see Note 5.8). HGRT S.A.S. and Coreso SA are included in the consolidated statements on the basis of the equity method. The stake in CASC-CWE SA, a company established in 2008, is recognised at cost price in the item ‘Other investments’.
Elia is the Belgian transmission system operator, transmitting electricity from producers to distribution system operators and major industrial users, and importing and exporting electrical power from and to Belgium’s neighbouring countries. These activities are regulated by the Commission for Electricity and Gas Regulation (CREG). Please refer to the ‘Regulatory framework and tariffs’ chapter for more details.
2. s ignificant accounting policies for financial reporting under IFRS
IFRIC 18, Transfers of Assets from Customers: This interpretation explains the requirements for agreements in which an entity receives a tangible fixed asset from the customer that the entity subsequently has to use to connect the customer to a network or to give the customer access to the provision of goods or services (such as the supply of electricity, gas or water). The amount received is booked in revenues, whereas it was previously recognised as a negative item among the booked property, plant and equipment. This interpretation was prospectively applied as from 1 July 2009.
(a) Statement of compliance
IAS 1 (revised in 2007): Presentation of Financial Statements (effective 1 January 2009). Under the revised standard, all income and expenses, regardless of whether they are recognised in the result or in shareholders’ equity, are presented in an overview of the overall result for the period. This overview of the overall result for the period can be integrated into the income statement, but the Group decided to present it separately from the income statement.
The consolidated financial statements for the year ending 31 December 2009 presented in this annual report were prepared under the supervision of the board of directors and established by the board of directors on 25 February 2010 subject to the shareholders’ approval of the statutory non-consolidated financial statements at the annual general meeting due to take place on 11 May 2010. In accordance with Belgian legislation, the consolidated financial statements will also be presented to Group shareholders at the annual general meeting. The consolidated financial statements are not subject to change unless they are modified following a decision taken by the shareholders concerning the statutory non-consolidated financial statements that has an impact on the consolidated financial statements. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the interpretations of IFRS that are established by the International Accounting Standards Board (IASB) as adopted for use in the European Union. The Group has applied all new and revised standards and interpretations published by IASB and applicable to the Group’s activities which are in force for financial years starting on 1 January 2009. The Group has applied the following interpretations and amendments: IAS 23 (Amendment) Borrowing Costs: Under the amendment, borrowing costs that are the direct result of the acquisition, construction or production of an eligible asset must be capitalised as part of the cost price of that asset. An eligible asset is any asset that can only be used or sold after a significant period. Said amendment was prospectively applied to assets that are capitalised on or after 1 January 2009. Previously, the Group immediately booked all borrowing costs as costs.
Amendment to IFRS 7 Financial Instruments: Disclosures – Improving Disclosures about Financial Instruments (applicable to financial years as from 1 January 2009). None of the above amendments to the policies for financial reporting has a significant impact on the consolidated financial statements, and their effects are discussed in more detail in the notes, apart from the adoption of IFRIC 18 (more information is included in the explanatory notes). The following amended and new standards are effective but are not applicable to the Group: IFRS 1 First-time Adoption of International Financial Reporting Standards (revised in 2008) (applicable to financial years as from 1 January 2009). IFRS 8 Operating Segments (applicable to financial years as from 1 January 2009). Improvements to IFRS (2007-2008) (applicable to financial years as from 1 January 2009). Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements (applicable to financial years as from 1 January 2009).
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ELIA annuAl Report 2009 — financial Report
Amendment to IFRS 2 Share-based payment - Vesting Conditions and Cancellations (amendments applicable to financial years as from 1 January 2009). Amendment to IAS 32 Financial Instruments: Presentation, and IAS 1 Presentation of Financial Statements – Puttable Financial Instruments and Obligations Arising on Liquidation (applicable to financial years as from 1 January 2009). IFRIC 13 Loyalty Programmes (applicable to financial years as from 1 July 2008). IFRIC 15 Agreements for the Construction of Real Estate (applicable to financial years as from 1 January 2009). IFRIC 16 Hedges of a Net Investment in a Foreign Operation (applicable to financial years as from 1 October 2008). Amendment to IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: Recognition and Measurement (applicable to financial years ended on or after 30 June 2009). The standards and interpretations listed hereafter are published on the date of approval of these consolidated financial statements but are not yet effective, and the Group did not opt for early adoption. The Group does not expect any major impact on its financial statements in the period of their initial application:
86
IFRS 3 Business Combinations (applicable to business combinations taken over on or after the start of the first financial year as from 1 July 2009). Said standard replaces the version of IFRS 3 Business Combinations published in 2004. IFRS 9 Financial Instruments (applicable to financial years as from 1 January 2013). Improvements to IFRS (2008-2009) (applicable to financial years as from 1 January 2010). Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards – Additional Exemptions (applicable to financial years as from 1 January 2010). Amendment to IFRS 2 Share-based Payment (amendments applicable to financial years as from 1 January 2010). Amendment to IAS 24 Related Party Disclosures (applicable to financial years as from 1 January 2011). Said standard replaces the version of IAS 24 Related Party Disclosures published in 2003.
IFRIC 17 Distributions of Non-cash Assets to Owners (applicable to financial years as from 1 July 2009). IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (applicable to financial years as from 1 July 2010). Amendment to IFRIC 14 IAS 19 –The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction – Prepayments of a Minimum Funding Requirement (applicable to financial years as from 1 January 2011). (b) Basis of preparation
The financial statements are presented in million euro (the functional currency of the Group), rounded off to the nearest hundred thousand, unless stated otherwise. The financial statements have been prepared on a historical-cost basis, except for the derivative financial instruments, which are estimated at fair value. Non-current assets and assets groups held for sale are valued at the lowest of carrying amount and fair value less cost to sell, and employee benefits are valued at actuarial value. The preparation of financial statements in accordance with IFRS requires management to make judgements, estimates and assumptions that could affect the reported amounts of assets and liabilities and revenue and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements regarding the carrying amounts of assets and liabilities. Actual results could differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision only affects this period, or in the period in which the estimate is revised and future periods, if the revision affects both current and future periods. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes:
Note 3.2.3 – Depreciations, impairment and amortisations, changes in provisions
Amendment to IAS 27 Consolidated and Separate Financial Statements (amendments applicable to financial years as from 1 July 2009). Said standard is an amendment to IAS 27 Consolidated and Separate Financial Statements (revised in 2003).
Note 3.4- Income taxes
Amendment to IAS 32 Financial Instruments: Presentation – Classification of Rights Issues (applicable to financial years as from 1 February 2010).
Note 4.12 – Employee benefits
Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items (applicable to financial years as from 1 July 2009).
Note 4.2 – Intangible assets Note 4.5 – Other financial assets Note 4.6 – Inventories Note 4.13 – Provisions Note 5.2 – Financial risk and derivative management The accounting policies set out hereafter have been applied consistently to all the periods presented in this financial report and have been applied by all Group entities.
ELIA annuAl Report 2009 — financial Report
(c) Basis of consolidation
(e) Derivative financial instruments
1. Subsidiaries
The Group sometimes uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operating, financing and investment activities. In accordance with its treasury policy the Group neither holds nor issues derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as instruments held for trading purposes.
A subsidiary is an entity that is controlled by the company. Control means that the company has the power to, directly or indirectly, govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. 2. Associated companies
Associated companies are those companies in which the company has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group’s share of the total recognised profits and losses of associated companies on the basis of the equity method, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of the losses exceeds its interest in an associated company, the Group’s carrying amount is reduced to nil and further losses are not recognised except to the extent that the Group has incurred legal or constructive obligations or has made payments on behalf of an associated company. 3. Elimination of intra-Group transactions
Intra-Group balances and any unrealised gains or losses or revenue and expenses arising from intra-Group transactions are eliminated when preparing the consolidated financial statements. Unrealised gains from transactions with associated companies are eliminated to the extent of the Group’s interest in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence for impairment. (D) Foreign currencies
Transactions in foreign currencies are converted into euro at the foreign exchange rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies on the balance sheet date are converted into euro at the foreign exchange rate prevailing on that date. Foreign exchange differences arising on conversion are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies that are valued in terms of historical cost are converted at the exchange rate prevailing on the date of the transaction.
Derivative financial instruments are recognised initially at fair value. Any gain or loss resulting from changes in the fair value is immediately booked in the income statement. Where, however, derivative financial instruments qualify for hedge accounting, reflection of any resultant gain or loss depends on the nature of the item being hedged (see accounting policy F). The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap on the balance sheet date, taking into account the current interest rates and the current creditworthiness of the swap counterparties and the Group. The fair value of forward exchange contracts is their quoted market price on the balance sheet date, i.e. the present value of the quoted forward price. (f) Derivatives used as hedging instruments 1. Cash-flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised directly in equity to the extent that the hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, the hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised in equity remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognised in equity is transferred, where justified, to the carrying amount of the asset. In other cases the amount recognised in equity is transferred to profit or loss in the same period that the hedged item affects profit or loss. When a derivative or hedge relationship terminates, cumulative gains or losses still remain in equity provided that the hedged transaction is still expected to occur. If the hedged transaction is no longer expected to take place, the cumulative unrealised gain or loss is removed from equity and is immediately recognised in profit or loss. 2. Hedging of monetary assets and liabilities
Hedge accounting is not applied to derivative instruments that economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair value of such derivatives are recognised in profit or loss of foreign currency gains and losses.
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ELIA annuAl Report 2009 — financial Report
(G) Property, plant and equipment 1. Owned assets
Items of property, plant and equipment are stated at cost price (including the directly allocated costs such as finance costs) less accumulated depreciation and impairment losses (see accounting policy M). The cost price of self-produced assets comprises the cost of materials, of direct labour and, where relevant, of the initial estimate of the costs of dismantling and removing the assets and restoring the site where the assets were located. If parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. 2. Leased assets
3. Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost price of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied in the item will flow to the Group and the cost price of the item can be assessed reliably. All other costs are recognised in profit or loss as and when they are incurred. 4. Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of each component of an item of property, plant and equipment. Land is not depreciated. The applied depreciation percentages are as follows:
Administrative buildings
2.00%
Industrial buildings
3.00%
Overhead lines
2.00%
Underground cables
2.00%
Substations (facilities & machines) Remote control
5. Derecognition
An asset is no longer recognised on the balance sheet when the asset is subject to disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from the derecognition of the asset on the balance sheet (which is determined as the difference between the net disposal proceeds and the carrying amount of the asset) are included in profit or loss during the year in which the asset was derecognised from the balance sheet. (H) Intangible assets
Leases under the terms of which the Group assumes virtually all the risks and rewards of ownership are classified as finance leases. Fixed assets used via a finance lease are stated at an amount equal to the lower of fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation (see hereafter) and impairment losses (see accounting policy M). Lease payments are accounted for as described in accounting policy U.
88
Depreciation methods, remaining useful lives and residual values of the property, plant and equipment are reassessed annually and are prospectively adjusted as the occasion arises.
3.00%
1. Business combinations and goodwill
Goodwill is determined as the excess of the cost of an acquisition over the Group’s interest in the net fair value of the identifiable assets and (contingent) liabilities of the acquired subsidiary or associate at the date of acquisition. All business combinations are accounted for by applying the purchase method. Goodwill represents amounts arising on the acquisition of subsidiaries and associated companies. In the case of acquisitions that have occurred since 1 January 2004, goodwill represents the difference between the cost of the acquisition and the net fair value of the acquired identifiable assets, liabilities and contingent liabilities of the acquiree. In the case of acquisitions that occurred before the above date (i.e. Elia Asset SA), goodwill is included on the basis of the assumed cost price, which is equal to the value allocated under the previously applied Be GAAP 1. The classification and accounting treatment of business combinations that occurred before 1 January 2004 was not reconsidered when preparing the Group’s opening IFRS balance sheet at 1 January 2004. Goodwill is stated at cost price less accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but tested annually for impairment (see accounting policy M). In the case of associated companies, the carrying amount of goodwill is included in the carrying amount of the investment in the associated company. Negative goodwill arising on an acquisition is recognised directly in profit or loss.
10.00%
Dispatching
10.00%
Other property plant and equipment
20.00%
Vehicles
20.00%
Tools and office furniture
10.00%
Hardware
33.00%
(1) Be GAAP : Belgian GAAP (generally accepted accounting principles)
ELIA annuAl Report 2009 — financial Report
2. Software
(I) Investments
Software licences acquired by the Group are stated at cost price less accumulated amortisation (see hereafter) and impairment losses (see accounting policy M).
Each type of investment is recognised on the date of the transaction.
Expenditure for research activities undertaken with the prospect of developing software within the Group is recognised in profit or loss as expenditure as incurred. Expenditure for the development phase of software developed within the Group is capitalised if: • the costs of development can be measured reliably; • the software is technically and commercially feasible and future economic benefits are likely; • the Group plans - and has sufficient resources - to complete development; • the Group plans to use the software. The capitalised expenditure includes cost of material, direct labour costs and overhead costs that are directly attributable to preparing the software for its use. Other costs are recognised in profit or loss as incurred. 3. Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as expenditure as incurred. 4. Amortisation
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful life of intangible assets, unless the useful life is indefinite. Goodwill and intangible assets are tested systematically for impairment on each balance sheet date. Software is amortised from the date it is available for use. The estimated useful lives are as follows: Licences
5 years
Internally developed software
5 years
Depreciation methods, remaining useful lives, and residual values of intangible assets are reassessed annually and are prospectively adjusted as the occasion arises.
1. Investments in equity securities
Investments in equity securities are undertakings in which the Group does not have significant influence or control. This is the case in undertakings where the Group owns less than 20% of the voting rights. Such investments are designated as availablefor-sale financial assets and are measured at fair value. Any resulting changes in fair value, except those related to impairment losses and foreign exchange gains and losses, are recognised directly in profit or loss. On disposal of an investment, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. 2. Investments in debt instruments
Investments in debt securities classified as held for trading purposes or as being available-for-sale are carried at fair value, with any resulting gain or loss respectively recognised in profit or loss or directly in equity. Fair value of these investments is determined as the quoted bid price at the balance sheet date. Impairment charges and foreign exchange gains and losses are recognised in profit or loss. Investments in debt securities classified as held to maturity are measured at amortised cost. 3. Other investments
Other investments held by the Group are classified as available-for-sale and are measured at fair value, with any resulting gain or loss recognised directly in equity. Impairment charges are recognised in profit or loss (see accounting policy M). (J) Trade and other receivables 1. Construction work in progress
Construction work in progress is stated at cost price plus profit based on progress made to date, less a provision for foreseeable losses and less progress billing. The cost price comprises all expenditure directly related to specific projects, plus an allocation of fixed and variable overheads incurred during the Group’s contract activities based on normal operating capacity. 2. Lease receivables
Receivables from financial lease contracts are stated at an amount equal to the present value of the future net lease payments at the inception of the contract. The values of the receivables are reduced during the course of the lease contract by the amount of the lease payments associated with the reimbursement of the principal amount. 3. Trade and other receivables
Trade receivables and other receivables are measured at nominal value, less the appropriate provisions for amounts regarded as unrecoverable.
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ELIA annuAl Report 2009 — financial Report
(k) Inventories
1. Calculation of recoverable amount
Inventories (spare parts) are stated at the lower of cost price and net realisable value. Net realisable value is the estimated selling price less the estimated costs of completion and selling expenses. The cost of inventories is based on the weightedaverage-cost-price method. The cost includes the expenditure incurred in acquiring the inventories, and the direct costs of bringing them to their location and making them operational.
The recoverable amount of intangible assets and property, plant and equipment is determined as the higher of their fair value less costs to sell or value in use. In assessing value in use, the expected future cash flows are discounted to their present value using a pre-tax discount rate that reflects both the current market assessment of the time value of money and the risks specific to the asset.
Write-offs of inventories at net realisable value are recognised in the period in which the write-off occurred.
The Group’s assets do not generate cash flow that is independent from other assets and the recoverable amount is therefore determined for the cash-generating unit (i.e. the entire highvoltage network) to which the asset belongs. This is also the level at which the Group administers its goodwill and receives the economic advantages of acquired goodwill.
(l) Cash and cash equivalents
Cash and cash equivalents comprise cash balances, bank balances and deposits that can be withdrawn on demand. Overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. (M) Impairment
The carrying amount of the Group’s assets, excluding inventories (see accounting policy k) and deferred taxes (see accounting policy v), are reviewed on each asset’s balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated (see accounting policy M1). 90
The recoverable amount of goodwill and intangible assets with an indefinite useful life and intangible assets that are not yet available for use is estimated on each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Recognised impairment losses relating to cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. After recognition of impairment losses, the depreciation costs for the asset will be adjusted for future periods in order to post the revised carrying amount of the asset throughout its remaining useful life.
2. Reversals of impairment
An impairment loss in respect of goodwill is not reversed. Impairment loss on other assets is reversed if there have been changes in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (n) Share capital 1. Transaction costs
Transaction costs in respect of the issuing of capital are deducted from the capital received. 2. Dividends
Dividends are recognised as a liability in the period in which they are declared. (o) Interest bearing loans
Interest bearing loans are recognised initially at fair value less related transaction costs. Subsequent to initial recognition, interest-bearing loans are stated at amortised cost price with any difference between cost price and redemption value being recognised in profit or loss over the period of the loans on an effective interest basis.
ELIA annuAl Report 2009 — financial Report
(p) Employee benefits
(q) Provisions
1. Defined contribution plans
A provision is recognised in the balance sheet when the Group has a current legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits – of which a reliable estimate can be made – will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, of the risks specific to the liability.
Obligations related to contributions to defined-contribution pension plans are recognised as an expense in profit or loss as incurred. 2. Defined benefit plans
For defined benefit plans, the pension expenses are assessed on an annual basis by accredited actuaries separately for each plan by using the projected unit credit method. The estimated future benefit that employees have earned in return for their service in the current and prior periods is discounted to determine its present value, and the fair value of any plan assets is deducted. The discount rate is the interest rate as at the balance sheet date on high-quality bonds which have maturity dates that approximate to the terms of the Group’s obligations. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised as an expense in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits are vested immediately, the expense is recognised immediately in profit or loss. All actuarial gains and losses as at 1 January 2004, the date of transition to IFRS, were recognised in the opening reserves. Actuarial gains and losses are immediately recognised as liabilities and do not affect the income statement, but are immediately recognised in equity. The amount charged in profit or loss consists of current service cost, interest costs, the expected return on any plan assets and the past service cost.
If the Group expects to recover some or all of the provisions from a third party, the compensation is only included as a separate asset if it is virtually certain that said compensation will be awarded. The cost connected to a provision is included in profit or loss net of any compensation. The total estimated cost of dismantling and disposal of an asset are, if applicable, recognised as property, plant and equipment and depreciated over the asset’s entire useful life. The total estimated cost of dismantling and of disposal of the asset, is posted as provisions for the discounted current value. If the amount is discounted, the increase of the provision due to expiring of time is classified as finance expenses. (r) Trade and other payables
Trade and other payables are stated at amortised cost price. (s) Capital subsidies
Where the calculation results in a benefit to the Group, the recognised asset is limited to the balance of past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.
Capital subsidies are related to property, plant and equipment and are presented under other liabilities. The subsidies are only recognised in the balance sheet when there is a reasonable assurance that the amounts will be received and are expensed on a systematic basis over the expected useful life of the underlying asset.
3. Other long-term employee benefits
(t) Revenue
The Group’s net obligation in respect of long-term service benefits, other than pension plans, is assessed on an annual basis by accredited actuaries. The net obligation is calculated by using the projected unit credit method and is the amount of future benefit that employees have earned in return for their service in the current and previous periods. The obligation is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield as at the balance sheet date on high-quality bonds having maturity dates that approximate to the terms of the Group’s obligations.
Revenue is recognised when it is probable that the company will enjoy the economic benefits associated with the transaction and the income can be measured reliably and recovery of the compensation due is likely.
4. Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised as for the amount expected to be paid out under a short-term cash bonus or profit sharing plans if the Group has a legal or constructive obligation to pay this amount as a result of the past service provided by the employee and the obligation can be estimated reliably.
1. Goods sold and services rendered
Revenue from services and the sale of goods is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. 2. Construction work in progress
As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in profit or loss in proportion to the stage of completion of the contract. An expected loss on a contract is immediately recognised in profit or loss. 3. Transfers of assets from customers
The revenue from customers (financial contribution) for the Construction of connections to the high-voltage grid is recognised in profit or loss on the basis of the stage reached in recovery of the underlying property, plant and equipment.
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ELIA annuAl Report 2009 — financial Report
(u) Expenses
(v) Income taxes
1. Operating lease payments
Income taxes comprise current and deferred tax. Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised directly in equity.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received to conclude the leasing agreement are recognised in profit or loss as an integral part of the total lease expenses. 2. Finance lease payments
Payments made under finance lease payments are apportioned between the financing charges and the reduction of the outstanding liability. The financing charges are allocated to each period of the total lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability. 3. Finance income and expenses
92
Finance expenses comprise interest payable on borrowings, calculated using the effective interest rate method, foreign exchange losses, gains on currency hedging instruments offsetting currency losses, results on interest rate hedging instruments, losses on hedging instruments that are not part of a hedge accounting relationship, losses on financial assets classified as for trading purposes and impairment losses on available-for-sale financial assets as well as any losses from hedge ineffectiveness. All interest and other costs incurred in connection with borrowings or financial transactions are expensed as incurred as part of finance expenses. Net finance expenses comprise interest on loans, calculated using the effective interest rate method and foreign exchange gains and losses. Interest income is recognised in profit or loss as it accrues using the effective interest rate method. The interest expense component of the finance lease payments is recognised in profit or loss using the effective interest rate method.
Current tax is the expected tax payable on taxable income of the year, using tax rates enacted or substantially enacted on the balance sheet date, and any adjustments to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investment in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising from initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend. (w) Segment reporting
A segment is a clearly distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment) and which is subject to risks and rewards that are different from those of other segments. The company does not use segment reporting since the Group is a company that generates revenue from one activity, i.e. its role as the federal electricity transmission system operator in Belgium. Furthermore, the Group only operates in one geographical area (Belgium) where there are no differences between the Regions as regards risks and returns.
ELIA annuAl Report 2009 — financial Report
3. Items in the income statement 3.1. Revenue
(in million €) 2009
2008
32.8
32.7
509.9
510.9
22.8
20.9
108.0
113.4
International revenue
28.7
28.3
Energy sales
37.6
32.9
739.8
739.1
31.5
18.2
771.3
757.3
Detail revenue (in million €)
Grid connection revenue Grid use revenue Revenues from the reversal of surpluses from previous years (decision by the regulator) Ancillary services revenue
Other revenue Deviations from approved budget (settlement mechanism) Total revenue
Grid connection revenue remained stable compared to 2008. Grid use revenue was in line with the same period last year, in spite of an 8% reduction in electricity offtake from the Elia grid as a result of the economic crisis, since this decrease was largely offset by the introduction last year of revenue from offtake tariffs for hydraulic energy storage units (pumped-storage power stations) during pump operations. Ancillary services revenue decreased as a result of the reduction in offtake from the Elia grid. (in million €)
2009
2008
Explicit auctioning
22.3
19.2
6.2
7.7
Implicit auctioning (trilateral market coupling) ETSO
0.1
1.2
Sale of auxiliary energy
0.1
0.2
28.7
28.3
Total international revenue
Details of the ETSO mechanism 2 which has an impact on both ‘International revenue’ and ‘Services and other goods’, are given in the table hereafter:
International revenue remained more or less unchanged from 2008. Thanks to market coupling of the Belgian, French and Dutch electricity markets, wholesale prices in these three countries remained highly convergent.
Sales ETSO (recognised as revenue)
2009
2008
0,1
1,2
Costs ETSO (recognised as expense)
(1,5)
(1,9)
Net profit/loss ETSO (+ revenue/- expense)
(1,4)
(0,7)
Other operating revenue increased by 14.3% to €37.6 million, mainly due to application of IFRIC 18 3 for the first time (up €2.7 million), whereby all customer contributions to grid connections must be booked as revenue in IFRS and are no longer deducted from investments as previously, as a result of a rise in the compensation received from insurance companies (up €1.7 million) and more passed-on costs as part of the CWE (Central West Europe) project and other assignments (up €0.9 million). The section “Deviations from approved budget for non-controllable items” refers to the tariff deficit for 2009 that can be recovered in the next tariff period 2012-2015. The tariff deficit of €31.5 million is mainly the result of lower-than-budgeted tariff revenue (€14.8 million) and international revenue (€18 million), greater-than-expected offsetting of the surplus value in the decommissioning of fixed assets (€1.2 million) and lower-than-budgeted operating expenses (€2.9 million), including extra savings amounting to €8.3 million as a result of lower-than-expected inflation (-1.4% compared with budgeted inflation of 1.8%). 2009
2008
Own production
13.2
16.2
Optimal use of assets
10.0
9.8
3.2
3.2
(4.4)
(5.6)
(in million €)
Services and technical expertise Changes in current assets related to application of IAS 19 Transfers of assets from customers
2.7
Belpex activities
4.2
Other Total other revenue
3.4
8.7
5.9
37.6
32.9
(2) ETSO mechanism: the European Transmission System Operators (ETSO) – which on 1 July 2009 was integrated into ENTSO-E (European Transmission System Operators for Electricity), to which Elia belongs – established a compensation mechanism (‘Inter-TSO Compensation’ (ITC)), meaning that all participants receive compensation for any losses caused by uncontrolled (loop) flows in their grid. (3) IFRIC 18: Transfers of Assets from Customers
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ELIA annuAl Report 2009 — financial Report
Details of the settlement mechanism are given in the table hereafter: 2009
2008
Surplus revenue from grid access
(14.8)
1.4
Surplus in international revenue
(17.3)
(23.8)
Surplus in other revenue
(0.7)
2.4
Total difference at the end of the financial year
(32.8)
(20.0)
Amount saved on budget for purchase of ancillary services
(14.1)
6.4
Amount saved on budget for sundry operating charges
25.3
1.9
Amount saved on budget for financial expenses
(8.3)
2.3
Total difference in operating charges
2.9
10.6
Difference surplus value and others
(2.2)
0.4
Total adjustment of regulated profit
0.6
(6.3)
Sources (in million €)
1. Source of differences in the financial year
Total difference revenue
94
In addition, a mechanism was adopted to allocate costs accurately and ensure that Belgian tariffs would not be adversely affected in the event of the launch of non-Belgian regulated activities. 3.2. Operating expenses 3.2.1. Cost of materials, services and other goods
(1.6)
(5.9)
(31.5)
(15.3)
Allocation of 50% of the bonus to Elia
0.0
(2.9)
Total impact of the CREG decision
0.0
(2.9)
(31.5)
(18.2)
Total of differences in results
In light of these assessments, an agreement was concluded by Elia and CREG with regard to the subsequent development of the Group’s new activities and how the Group could be remunerated for them in the future. Its purpose was to ensure that Elia continues to strive to further develop its activities profitably, thereby both contributing to a reduction in the tariffs for users and providing additional income for Elia.
2. CREG decision
(in million €)
2009
2008
Purchase of ancillary services
155.6
135.0
5.6
6.8
Services and other goods (excl. purchase of ancillary services)
147.9
146.9
Total
309.1
288.7
Raw materials, consumables and goods for resale
The rise in the cost of purchasing ancillary services is mainly due to the relatively high prices of electricity and to a lesser extent an increase in the quantities of energy used under the respective contracts. The other items (‘Services and other goods’ and ‘Raw materials’) are more or less unchanged from last financial year. 3.2.2. Personnel expenses
TOTAL OF DIFFERENCES IN RESULTS
2009
2008
Wages
79,3
77,9
Social security contributions
22,9
22,8
Contribution to defined benefit plans and other liabilities
19,2
15,2
Other personnel liabilities
(1,5)
(0,5)
0,9
0,1
(in million €)
Pursuant to the Royal Decree of 8 June 2007 4, during 2009 CREG assessed the amounts booked in 2008 with regard to the settlement mechanism and confirmed that the sum of €15.7 million can be regarded as a ‘regulatory receivable’. The sum of €15.7 million is broken down as follows:
Share-based payment with reduction
(in € million)
Other personnel cost
Balance (see above table)
18.2
Correction regarding to previous financial year (already recognised as a regulatory receivable in the past)
(2.9)
Amendment new activities (included in the 2009 accounts) Total
0.4 15.7
(4) Royal Decree of 8 June 2007 regarding the rules on determining and assessing the total income and the reasonable profit margin, the general tariff structure, the balance between costs and revenue and the basic principles and procedures with regard to tariffs, reporting and cost control by the national transmission system operator.
Total
3,5
3,3
124,3
118,8
Personnel expenses are up 4.6% - mainly due to a rise in wages. More information about the defined benefit pension plan and other personnel liabilities can be found in Note 4.12, and Note 5.1 provides more details about the item ‘Share-based payment with reduction’.
ELIA annuAl Report 2009 — financial Report
3.3. Finance income and expenses
3.2.3. Depreciation, amortisation, impairment and changes in provisions
Recognised in profit and loss
2009
2008
91.7
91.0
6.1
4.5
97.8
95.5
Impairment of inventories and trade receivables
0.7
0.4
Total of impairment
0.7
0.4
(in million €)
(in million €) Finance income
Depreciation of property, plant and equipment Depreciation of intangible assets Total of depreciation
Provisions for litigation
0.1
(0.6)
Environmental provisions
3.5
0.9
Total of provisions
3.6
0.3
102.1
96.2
Total
Depreciations in property, plant and equipment assets increased by €2.3 million, mainly due to a rise in depreciations in intangible assets. A brief content-based description of the property, plant and equipment, intangible assets and amounts written off is provided in Notes 4.1 and 4.2. The inventory consists of consumables and strategic items required for repairing high-voltage substations, cables and lines. The turnover of these strategic items is very low, and the amount written off for these materials is €0.7 million. No amounts were written off for trade debtors.
3.2.4. Other expenses 2009
2008
Taxes other than income tax
6.4
12.6
Net loss on disposal/sale of property, plant and equipment
3.3
3.1
Net loss on trade debtors
0.2
Total
9.9
(in million €)
2008
12.8
8.3
Interest income on investment trust, bank deposits, cash and cash equivalents
3.0
2.5
Net change in fair value of investment trust
0.7
0.9
Other financial income
9.1
4.9
Finance expenses
133.2
117.6
Interest expense
116.3
120.9
11.2
(3.7)
5.7
0.4
(120.4)
(109.3)
Interest expense on derivatives Other financial costs Net finance expense
Finance income increased by €4.5 million due to both the recognition of €6.6 million in moratorium interest on a €93.8 million tax assessment (paid, but contested) relating to the tax file (see Note 3.4) and the moratorium interest collected from the repayment of tax on high-voltage pylons (see Note 3.2.3). The interest expenses amounted to €120.4 million and mainly included interest expenses on loans and the interest income or expense resulting from the associated interest rate swaps. The €11.1 million increase is primarily due to rising net financial debt and to the interest expense arising from the pre-financing operation for the issue of the Eurobond. See Note 4.11 for more details. Recognised directly in equity
A detailed description of provisions is provided in Note 4.13.
2009
2009
2008
Net changes in fair value of interest rate swaps
(3.9)
(29.8)
Finance income/expenses directly recognised in equity
(3.9)
(29.8)
(3.9)
(29.8)
(in million €)
Recognised in:
15.7
The 36.9% decrease is mainly due to a decrease in the item “Taxes other than income tax”, and specifically taxes on highvoltage pylons, which were unjustifiably charged to Elia and recovered by the Group from the municipal authorities in a court case.
Hedging reserve
The hedging reserve is discussed in detail in Note 5.2.
95
ELIA annuAl Report 2009 — financial Report
3.4. Income taxes Recognised in profit and loss
The consolidated income statement includes the following taxes: 2009
2008
Due income tax expenses
17.5
20.2
Adjustments prior years
(0.1)
0.0
Total income tax expenses
17.4
20.2
Origination and settlement of temporary differences
2.6
7.0
Total deferred tax
2.6
7.0
20.0
27.2
(in million €)
Total income tax recognised in income statement Reconciliation of the effective tax rate
The reconciliation between the theoretical income taxes calculated on the basis of the statutory tax rate and the actual income tax rate as presented in the income statement can be summarised as follows:
96
(in million €)
2009
2008
Profit after tax
85.3
101.4
Share of profit of equity accounted investees
(1.0)
2.0
Profit for the period
84.3
103.4
Income tax expenses
20.0
27.2
104.3
130.6
Profit before tax Income tax using the domestic corporation tax rate
35.4
44.4
Income tax expense fell by 26.5%, due to both an 18.1% decrease in the pre-tax profit (from €128.6 million to €105.3 million) and a further tax optimisation. The lower level of tax has been passed on in full in the form of lower tariffs, to the benefit of all consumers. Elia received a tax assessment in early 2008 in view of taxation of the remaining tariff surpluses as at 31 December 2004. The income taxes paid total €85.3 million, plus an administrative charge of 10%. Having consulted its tax advisor and CREG and given that similar tariff surpluses accounted for by other companies in the sector were not taxed, Elia management decided to file a complaint, but it was rejected by the tax authorities. Elia is now using judicial channels to claim back the full amount, including moratorium interest. In 2009, the tax authorities made a similar decision on the increase of tariff surpluses in 2006. Elia received a tax assessment of €22.7 million, plus a 10% administrative increase, and decided to file a complaint about this in line with the 2004 file. The tariff surpluses that led to the additional assessment will be systematically settled in tariffs over the years to come (refund to consumers), meaning that this is a matter of a timing difference between a surplus generated in the past and a refund in the subsequent years. If Elia’s complaint is rejected, the corporate income tax paid on the remaining surpluses will automatically be offset by ‘recoverable taxes’ on the refund given to consumers in 2005, 2006 and 2007 and subsequent periods. In this way the basic amount of the corporate income tax can be recovered in full. If a balance is still outstanding, it will be settled using the tariff mechanism. Income taxes recognised directly in equity (in million €)
2009
2008
Effect of the foreign tax rate
0.0
(0.1)
Derivatives
1.4
10.2
Expenses not deductible
1.7
1.4
Actuarial gains (losses) on employee benefits
1.8
6.1
Other tax free income mainly related to intercompany dividend
0.6
0.9
Total
3.2
16.3
(0.1)
0.0
0.0
0.0
(18.0)
(19.1)
0.4
(0.3)
20.0
27.2
Adjustments prior years Recognition unrecognised tax losses Use of notional interest Other Total income tax expenses in income statement
* Belgian tax rate in 2008 and 2009 was 33.99%
Deferred income taxes are discussed in Note 4.15 (‘Changes in deferred tax assets and liabilities resulting from movements in temporary differences during the financial year’).
ELIA annuAl Report 2009 — financial Report
3.5. PROFIT
Although Elia draws up its consolidated results according to IFRS standards, 96.9% of profit is determined by the regulatory framework in which Elia operates. Within this framework, tariffs are approved by CREG and are based on Belgian accounting standards. You will find hereafter a detailed description relating to the fair remuneration margin in accordance with the regulatory framework and the association with profit in line with IFRS standards. (in million €)
2009 Actual
2008 Budget
2008 Actual
Average RAB
3,765.0
3,688.0
3,673.0
Equity reference
1,242.0
1,217.0
1,212.0
4.99%
5.08%
5.62%
62.0
61.8
68.1
Average RAB/Mean RAB
35.70%
36.25%
35.93%
Variance equity reference
2.70%
3.25%
2.93%
Compensation variance equity reference
4.64%
4.63%
5.14%
Equity compensation Compensation Equity reference (A)
4.7
5.5
5.5
Accelerated depreciations (C)
S-Factor (B)
(8.2)
(8.2)
(8.2)
Fair remuneration on shareholders’ equity (A+B+C) = (1)
58.6
59.3
65.5
Realised added value
15.4
14.2
15.0
Controllable costs incentive Y
6.3
0.0
4.4
Profit transfer pricing
0.7
0.0
Other elements
0.3
0.0
Bonus
(0.2) 1.9
Total various regulatory elements (2)
22.7
14.2
21.1
Profit after tax (Regulated) (1+2)
81.3
73.5
86.6
Various IFRS adjustments and others Profit attributable to owners of the company
2.7
16.5
84.0
103.1
Consolidated profit (based on IFRS standards) after income tax decreased by 18.5% to €84 million compared to 2008. However, this still represents an improvement on the multiannual budget of €73.5 million approved by the regulator for 2009, mainly thanks to: • offsetting in tariffs of the surplus arising from decommissioning of fixed assets; €14.2 million was earmarked for this in the budget, whereas the amount realised was €15.4 million (i.e. €1.2 million more than expected); • extra savings over and above those imposed by the regulator (€6.3 million extra); • dividends from Belpex and HGRT (two financial shareholdings that are part of the RAB): following the approval of the regulator, 60% of these dividends are paid to Elia (gain of €0.7 million) and 40% are used to reduce future tariffs; • the IFRS adjustments for 2009 and others (gain of €2.7 million): these adjustments relate mainly to the capitalisation of software (€3.1 million), booking in full of revenue from customer contributions (€2.7 million) minus the consolidation of HGRT/Coreso (€1.0 million) and the net effect of deferred tax on all IFRS entries (€2.4 million). A detailed description of the method for calculating fair remuneration is given in the ‘Regulatory framework and tariffs’ chapter.
97
ELIA annuAl Report 2009 — financial Report
3.6. Basic earnings per share
The basic earnings per share are calculated by dividing the net profit of €84.0 million (2008: €103.1 million) from the year which can be paid out to holders of ordinary shares by the weighted average number of ordinary shares during the year (48,082,774). Weighted average number of ordinary shares
2009
2008
48,076,949
48,061,695
(in million €) Issued ordinary shares on 1 January Impact of the shares issued in March 2008 Impact of the shares issued in December 2009 Weighted average number of shares on 31 December
11,535 5,825 48,082,774
48,073,230
Diluted earnings per share
Diluted earnings per share are calculated by dividing the net profit from the year to be paid out to the holders of ordinary shares by the weighted average number of ordinary shares outstanding, corrected for potential dilution. The diluted profit is equal to the ordinary profit per share, since there are no convertible bonds or share options. Share capital and reserves per share
98
Share capital and reserves per share totalled €28.3 per share on 31 December 2009, compared to a value of €28.0 per share at the end of 2008.
4. Items in the statement of financial position 4.1. Property, plant and equipment (in million €)
2009
2008
1,167.2
1,141.1
760.9
762.5
Land on which substations, lines and cables are located
70.9
70.6
Facilities used for network operation
31.4
31.5
Administrative buildings, furnishings and vehicles
59.2
54.7
2,089.6
2,060.4
High-voltage substations and transformers Lines and cables
Total property, plant and equipment
The capital expenditure of €157.3 million in 2009 is mainly related to the construction of high-voltage substations, laying of underground cables and building of overhead lines. The most important projects are discussed in more detail in the activity report. Application of the new IAS 23 Borrowing Costs standard had an impact of €0.1 million on the cost price of the assets. Property, plant and equipment under construction totalled €124.6 million as at 31 December 2009, compared to €149.3 million as at 31 December 2008 and are presented in the table hereafter. In 2009, €142.1 million of property, plant and equipment under construction was commissioned and transferred to assets in use. (in million €)
2009
2008
High-voltage substations and transformers
98.3
107.2
Lines and cables
17.3
30.4
Facilities used for network operation
8.7
7.3
Administrative buildings, furnishings and vehicules
0.3
4.4
124.6
149.3
Total property, plant and equipment under construction
Other liabilities relating to new investments are described in Note 5.4.
ELIA annuAl Report 2009 — financial Report
Changes in the period
(in million â‚Ź)
Land and buildings
Machinery and equipment
Furniture and vehicles
Other tangible assets
Assets under construction
Total
Acquisition value
Balance at 1 January 2008 Acquired by business combinations
121.5
3,737.3
119.0
10.6
160.5
4,148.9
0.0
0.0
0.0
0.0
0.0
0.0
Other acquisition
11.0
23.0
2.9
0.0
124.4
161.3
Disposals
(0.6)
(17.4)
(0.7)
0.0
0.0
(18.7)
0.2
135.6
0.0
0.0
(135.6)
0.2
Balance at 31 December 2008
Transfers from one heading to another
132.1
3,878.5
121.2
10.6
149.3
4,291.7
Balance at 1 January 2009
132.1
3,878.5
121.2
10.6
149.3
4,291.7
0.0
0.0
0.0
0.0
0.0
0.0
Acquired by business combinations Other acquisition Disposals Transfers from one heading to another Balance at 31 December 2009
7.0
50.6
2.6
0.3
67.2
127.7
(0.1)
(33.5)
(0.4)
0.0
0.0
(34.0)
4.1
87.7
0.0
0.3
(95.3)
(3.2)
143.1
3,983.3
123.4
11.2
121.2
4,382.2
(20.0)
(2,016.4)
(110.3)
(9.0)
0.0
(2,155.7)
(1.2)
(86.0)
(3.3)
(0.5)
0.0
(91.0)
Depreciation and impairment
Balance at 1 January 2008 Depreciation of the period Acquisitions from third parties
0.0
0.0
0.0
0.0
0.0
0.0
Written down and disposals
0.5
14.3
0.7
0.0
0.0
15.5
Transfers from one heading to another
0.0
(0.3)
0.3
(0.1)
0.0
(0.1)
Balance at 31 December 2008
(20.7)
(2,088.4)
(112.6)
(9.6)
0.0
(2,231.3)
Balance at 1 January 2009
(20.7)
(2,088.4)
(112.6)
(9.6)
0.0
(2,231.3)
(1.2)
(86.8)
(3.4)
(0.3)
0.0
(91.7)
Depreciation of the period Acquisitions from third parties
0.0
0.0
0.0
0.0
0.0
0.0
Written down and disposals
0.0
30.2
0.4
0.0
0.0
30.5
Transfers from one heading to another Balance at 31 December 2009
0.0
0.2
0.0
(0.2)
0.0
0.0
(21.9)
(2,144.8)
(115.6)
(10.1)
0.0
(2,292.5)
Book value
At 1 January 2008
101.5
1,720.9
8.7
1.6
160.5
1,993.2
At 31 January 2008
111.4
1,790.1
8.6
1.0
149.3
2,060.4
At 1 January 2009
111.4
1,790.1
8.6
1.0
149.3
2,060.4
At 31 January 2009
121.2
1,838.5
7.8
1.1
121.2
2,089.7
99
ELIA annuAl Report 2009 — financial Report
4.2. Intangible fixed assets Goodwill
Software
Total
1,707.8
20.8
1,728.6
Obtained by business combinations
0.0
0.0
0.0
Acquired, others - own construction capitalised
0.0
9.1
9.1
(in million €) Acquisition cost
0,0
Balance at 1 January 2008
Disposals
0.0
(0.3)
(0.3)
Balance at 31 December 2008
1,707.8
29.6
1,737.4
Balance at 1 January 2009
1,707.8
29.6
1,737.4
Obtained by business combinations
0.0
0.0
0.0
Acquired, others - own construction capitalised
0.0
9.2
9.2
Disposals
0.0
0.0
0.0
1,707.8
38.8
1,746.6
Balance at 31 December 2009
Depreciation and amounts written off
Balance at 1 January 2008
0.0
(5.9)
(5.9)
Depreciations
0.0
(4.5)
(4.5)
Balance at 31 December 2008
0.0
(10.4)
(10.4)
Balance at 1 January 2009
0.0
(10.4)
(10.4)
Depreciations
0.0
(6.1)
(6.1)
Balance at 31 December 2009
0.0
(16.5)
(16.5)
100
Book value
At 1 January 2008
1,707.8
14.9
1,722.7
At 31 December 2008
1,707.8
19.2
1,727.0
At 1 January 2009
1,707.8
19.2
1,727.0
At 31 December 2009
1,707.8
22.3
1,730.1
The goodwill, amounting to €1,707.8 million, relates to the following past transactions: (in million €) Acquisition of participations in Elia Asset SA by Elia System Operator SA - 2002 Acquisition of participations in Elia Engineering by Elia Asset SA - 2004 Total
2009
2008
1,700.1
1,700.1
7.7
7.7
1,707.8
1,707.8
‘Intangible assets’ consists of two items: goodwill and software. Software comprises both IT applications developed by the company for operating the grid and software for Elia’s normal business operations. The increase for internally-developed software was €9.2 million in 2009. See Note 3.2.3 for the impact of depreciations in intangible assets on profit or loss.
ELIA annuAl Report 2009 — financial Report
4.3. Trade and other receivables
Impairment test for cash-generating units containing goodwill The goodwill generated by the acquisition of Elia Asset SA by Elia System Operator SA in 2002 and the goodwill generated by the acquisition of Elia Engineering SA in 2004 were classified as one cash-generating unit for the impairment test, since the income and expenses were generated by one activity. The impairment test was conducted by independent experts and was based on the following valuation methods: 1. Discounting of future cash flows. 2. Discounting of future dividends. 3. Comparison between previously mentioned impairment methods and those used by some comparable Western European listed companies, such as Red Electrica España, Enagas, Terna, Fluxys, Snam Rete Gas and National Grid. 4. Market valuation based on Elia’s share price. Future cash flows and dividends were discounted on the basis of financial prospects approved by the management for the period 2008-2011 (new regulation mechanism), accompanied by an extrapolation to 2018 based on assumptions included in the strategic plan for 2007-2015 and applying discount rates of between 3.78 % and 5.41%. The independent analyses did not result in accounting an impairment loss on goodwill in 2009.
(in million €) Tax receivables Other amounts receivable
2009
2008
105.3
98.7
0.4
Total
105.7
98.7
Long-term receivables consist of the basic amount of tax receivable (€93.8 million) and the cumulative moratorium interest (€6.6 million for 2009 and €4.9 million for 2008) that the Group could recover in the future. These amounts only relate to the tax audit of 2004 and since the dispute will first come before the court in 2011, they have been qualified as a long-term receivable. A detailed description can be found in Note 3.4. 4.4. Equity accounted investees Investments in associated companies (in million €)
At 1 January Acquisition of subsidiary Share of (loss)/profit At 31 December
2009
2008
10.1
8.1
0.3
0.0
(1.0)
2.0
9.4
10.1
Summary of financial data on equity accounted investees, not corrected for the group’s ownership percentage: 101
(in million €) Name
Assets
Liabilities
Revenues
Profit/(loss)
% interest held
H.G.R.T. S.A.S.
39.3
23.1
6.6
6.3
24.5%
Total
39.3
23.1
6.6
6.3
45.3
8.3
7.1
1.7
24.5%
2.4
1.3
3.4
0.1
33.3%
47.7
9.6
10.5
1.8
2008
2009 H.G.R.T. S.A.S. Coreso Total
ELIA annuAl Report 2009 — financial Report
4.7. Trade and other receivables
4.5. Other financial assets (in million €)
2009
2008
Immediately claimable deposits
16.7
17.2
0.0
0.5
16.7
17.7
Others Total
This section covers investments classified at fair value for which the changes in fair value are recognised in profit or loss. In 2009, a portion of investments, good for €0.6 million, was sold. The risk profile of these investments is discussed in Note 5.2. As from 2009, the shareholding in Coreso SA, which was included in other financial assets in 2008, is covered by the category ‘Investments in equity accounted investees’ (see Note 4.4).
2009
2008
3.8
1.8
201.7
221.4
VAT, other taxes
6.7
10.3
Other
2.7
7.3
Deferred charges and accrued income
3.2
6.1
218.1
246.9
Projects for third parties Other amounts receivables and advance payments
Total
The decrease in trade and other receivables (€28.8 million) was mainly due to both a drop of 22.1% in trade receivables relating to market coupling with France and the Netherlands and a €3.7 million decrease in recoverable VAT. Trade debtors (in million €)
4.6. Inventories (in million €)
(in million €)
2009
2008
Not past due Past due 0-30 days
Raw materials and consumables Impairment Total
102
24.3
23.6
(10.6)
(9.9)
13.7
13.7
The total value of warehouse articles is in line with the value for last financial year. The warehouse primarily stores replacement and spare parts for maintenance and repair work on Elia’s high-voltage substations, overhead lines and underground cables. In 2009, the inventory increased by €0.7 million compared to the previous year and purchasing for materials/consumables came to €6.3 million, which resulted in a total net impact on the consolidated income statement was €5.6 million (see Note 3.2.1). Impairment recognised in profit or loss totalled €0.7 million for 2009 and is included under the booked impairment of inventories in Note 3.2.3.
(in million €)
Past due 31-60 days Total (excl. impairment) Doubtful amounts Amounts written off Total
2009
2008
172.6
181.9
32.9
35.8
(4.1)
3.0
201.4
220.7
3.7
4.1
(3.4)
(3.4)
201.7
221.4
Trade and other receivables are recorded without taking into account receivables which have been impaired. Receivables impaired are mostly due after more than one year. In 2009 no additional impairment losses were accounted for and the total impairment of trade debtors is €3.4 million.
Bad debtors
Impairment losses
Remaining balance
Balance at 1 January 2008
4.1
(3.4)
0.7
Changes during the year
0.0
0.0
0.0
Balance at 31 December 2008
4.1
(3.4)
0.7
Balance at 1 January 2009 Changes during the year Balance at 31 December 2009
4.1
(3.4)
0.7
(0.4)
0.0
(0.4)
3.7
(3.4)
0.3
ELIA annuAl Report 2009 — financial Report
4.9. Other assets
4.8. Cash and cash equivalents (in million €) Balance at bank
2009
2008
(in million €)
2009
2008
60.6
3.5
Balance settlement mechanism
36.3
(7.1)
Immediately claimable deposits
114.0
23.8
Total other current liabilities
36.3
(7.1)
Total
174.6
27.3
(in million €)
2009
2008
To be refunded to the tariffs of current period
(80.1)
(102.9)
59.7
28.1
Discount future tariffs
(20.4)
(74.8)
Moratorium interest on income tax - period 2008
(11.5)
(4.9)
Amount receivable as a result of the application of IAS 19
68.2
72.6
Balance settlement mechanism*
36.3
(7.1)
The rise in cash is due to the fact that the market coupling activity did not result in a pre-financing situation at the end of the financial year. In addition, at the time of the €1 million Eurobond issue (see Note 4.11) in April 2009, provision was made for financing potential tariff deficits and covering future needs so as to minimise the liquidity risk. Short-term deposits are invested for periods that vary from a few days to a few weeks, depending on the Group’s immediate cash requirements and report interest in accordance with the interest rates for the short-term deposits. The interest rate of interest-bearing investments at the balance sheet date varies from 0.25% to 0.40%. The investments were due to mature in January 2010. Bank-account balances earn interest in line with the variable rates of interest on the basis of daily bank deposit interest. The Group’s interest rate risk and the sensitivity analysis for financial assets and liabilities are discussed in Note 5.2. For the purposes of the consolidated statement of cash flows, ‘cash and cash equivalents’ comprises the real bank balance and immediately claimable deposits (as listed above) minus current-account credits. The Group did not make use of currentaccount credits on 31 December 2009. The amounts listed in the consolidated statement of financial position and the consolidated statement of cash flows match those shown above.
Balance period 2007, 2008,2009 to be recovered through the tariffs - period to be determined
A detailed description of this mechanism can be found in the ‘Regulatory framework and tariffs’ chapter. On 31 December 2009, other assets totalled €36.3 million, whereas at the end of 2008 the negative balance amounted to €7.1 million. This section includes the remaining balance of €20.4 million from the settlement mechanism, which is still being agreed with the regulator, and various entries linked to the regulatory mechanism. The amount listed under ‘Discount future tariffs’ includes €80.1 million to be reimbursed into the tariffs in the 2010-2011 period and €59.7 million that will be passed on in tariffs in the next tariff period (2012-2015). Moratorium interest of €6.6 million, related to the tax file, has been posted under this section in 2009. The sum of €68.2 million that resulted in receivables under the application of IAS 19 is also recognised as other asset. A total of €22.8 million of the remaining balance at the end of 2008 (€102.9 million) has been included in the 2009 income statement as ‘income’ (see ‘revenues from the reversal of surpluses from previous years’ in Note 3.1).
(*) Positive amounts are receivables, whilst negative amounts are debts.
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ELIA annuAl Report 2009 — financial Report
4.10. Shareholders’ equity Consolidated statement of changes in equity
(in million â‚Ź) Balance at 1 January 2008
Share capital
Share premium
Hedging reserve
Retained earnings
Total
Minority interests
Total equity
1,201.7
8.5
3.6
124.8
1,338.7
1.3
1,340.0
103.1
103.1
0.3
103.4
0.0
(19.7)
0.0
(19.7)
(11.9)
(11.9)
0.0
(11.9)
Total comprehensive income for the period
Profit or loss Other comprehensive income Effective portion of changes in fair value of cash flow hedges, net of tax
(19.7)
Defined benefit plan actuarial gains and losses, net of tax Total other comprehensive income
(19.7)
(11.9)
(31.6)
0.0
(31.6)
Total comprehensive income for the period
(19.7)
91.2
71.5
0.3
71.8
Transactions with owners, recorded directly in equity
Contribution by and distribution to owners Shares issued
0.4
Dividends paid
104
Total transactions with owners
(62.5) 0.4
0.4
0.4
(62.5)
(62.5)
(62.5)
(62.1)
Balance at 31 December 2008
1,202.1
8.5
(16.1)
153.5
1,348.1
1.6
1,349.7
(62.1)
Balance at 1 January 2009
1,202.1
8.5
(16.1)
153.5
1,348.1
1.6
1,349.7
84.0
84.0
0.1
84.1
Total comprehensive income for fhe period
Profit or loss Other comprehensive income Effective portion of changes in fair value of cash flow hedges, net of tax
(2.6)
Defined benefit plan actuarial gains and losses, net of tax
(2.6)
(2.6)
(3.4)
(3.4)
(3.4) (6.0)
Total other comprehensive income
(2.6)
(3.4)
(6.0)
Total comprehensive income for the period
(2.6)
80.6
78.0
0.1
78.1
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners Shares issued
5.2
Dividends to equity holders Total transactions with owners Balance at 31 December 2009
(65.9) 5.2 1,207.3
8.5
(18.7)
5.2
5.2
(65.9)
(65.9)
(65.9)
(60.7)
168.2
1,365.4
(60.7) 1.7
1,367.1
ELIA annuAl Report 2009 — financial Report
Share capital and share premium Number of shares
Outstanding on 1 January Issued against cash payment Outstanding on 31 December - paid
Reserves 2009
2008
48,076,949
48,061,695
193,306
15,254
48,270,255
48,076,949
In 2009 the Elia Group gave its personnel the opportunity to subscribe to an Elia System Operator SA capital increase (tax tranche and additional tranche). This was welcomed by the Group’s employees and resulted in a total of €4.4 million being underwritten (see Notes 5.1 and 3.2.2), meaning the number of shares outstanding rose from 48,076,949 to 48,270,255 (shares without nominal value). The capital of Elia System Operator SA increased from €1,202.1 million to €1,207.3 million.
In accordance with Belgian legislation, 5% of the parent company’s statutory net profit must be transferred to a legal reserve each year until the legal reserve represents 10% of the capital. Within the tariff mechanism, Elia must reserve in shareholders’ equity the realised surplus passed on in the tariffs as a result of derecognitions of fixed assets (decrease in Regulated Asset Base). In 2008, this amounted to €15.0 million. The general meeting of 12 May 2009 decided to include that amount in the legal reserve. On 31 December 2009 the Group’s legal reserve was €36.0 million, compared to €21.0 million on 31 December 2008. This reserve can only be paid to shareholders in the event of liquidation. The board of directors can propose the payment of a dividend to shareholders up to a maximum of the available reserves and the profit carried forward from previous financial years for the parent company, including the profit from the financial year closed. Shareholders must approve the dividend payment at the annual general meeting of shareholders.
105
ELIA annuAl Report 2009 — financial Report
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash-flow hedging instruments in respect of hedged transactions that have not yet occurred.
2009
2008
Elia manages its liabilities and general financing strategy through a combination of short- and long-term liabilities or hedges them using interest rate swaps. The Group finances its daily working capital requirement, if necessary, via various confirmed or non-confirmed credit lines and uses commercial paper. Medium-term loans usually have an interest rate that is based on the inter-bank interest rate on the date on which they are taken out increased by a predefined margin.
1.38
1.37
A general overview of loans (long- and short-term borrowings) and interest payable is given hereafter:
Dividend
After the balance sheet date, the board of directors put forward the dividend proposal stated hereafter. (in €) Per ordinary share entitled to dividend
On 12 May 2009, the shareholders approved payment of a gross dividend of €1.37 per share (€1.0275 per share without VVPR strip or €1.1645 per share with VVPR strip after the deduction of 25% Belgian withholding tax), yielding a total gross dividend of €65.9 million.
106
4.11. Interest bearing loans and borrowings
This year, the board of directors’ meeting of 25 February 2010 proposed a gross dividend of €1.38 per share. This dividend is subject to approval by shareholders at the annual general meeting on 11 May 2010 and was not included as a liability in the consolidated financial statements for the Elia Group prepared under IFRS. The total dividend will, on the basis of the number of shares outstanding on 25 February 2010, be €66.6 million. The Group’s profit includes the fair remuneration as described in the ‘Regulatory framework and tariffs’ chapter and remuneration for the amounts that are removed from the Regulated Asset Based for the decommissioning of assets. This resulted in a net profit of €15.4 million for 2009. The regulatory framework specifies that this amount cannot be paid to the shareholders but must be posted to the reserve. The board of directors’ meeting of 25 February 2010 decided to suggest to the annual general meeting that this amount be allocated to the legal reserve. The amount had not yet been posted to the reserve on 31 December 2009.
(in million €) Long term borrowings Accrued interests Subtotal long term borrowings
2009
2008
2,550.5
1,552.9
68.4
40.6
2,618.9
1,593.5
Current portion of long term borrowings
0.0
637.7
Short term borrowings
0.0
161.9
Short term borrowings branch Belpex
0.0
4.5
Accrued interests
0.1
0.2
Subtotal short term borrowings Total
Long term borrowings
(in million €) (Book value) Shareholders' loan tranche A Shareholders' loan tranche B3 Financial institutions Eurobond issues (1) European Investment Bank Total Current portion of long term borrowings Total long term borrowings
0.1
804.3
2,619.0
2,397.8
2009
2008
495.8
495.8
0.0
387.7
0.0
250.0
1,994.7
997.1
60.0
60.0
2,550.5
2,190.6
0.0
(637.7)
2,550.5
1,552.9
(1) Current carrying amount of the Eurobond, consisting of a number of tranches, with a nominal value of €2,000 million.
ELIA annuAl Report 2009 — financial Report
The following table gives an overview of the maturity dates and conditions of the loans:
(in million €)
Interest rate before hedging
Interest rate after hedging
Current proportion of the interest
Maturity
Amount
Shareholders' loan tranche A
2022
495.8
3.37%
5.51%
79.83%
20.17%
Eurobond issues 2004/10 years
2014
498.9
4.75%
4.75%
100.00%
0.00%
Eurobond issues 2004/15 years
2019
498.6
5.25%
5.25%
100.00%
0.00%
Eurobond issues 2009/7 years
2016
498.2
4.50%
4.50%
100.00%
0.00%
Eurobond issues 2009/4 years
2013
499.1
5.63%
5.63%
100.00%
0.00%
European Investment Bank
2016
40.0
4.27%
4.27%
100.00%
0.00%
European Investment Bank
2017
20.0
4.79%
4.79%
100.00%
0.00%
95.43%
4.57%
95.43%
4.57%
Total
2,550.6
Current portion of long term borrowings
Fixed
Variable
0.0
Total long term borrowings
2,550.6
The following table gives an overview of the actual amounts of the loans outstanding at year-end by maturity bucket. The differences in amounts are attributable to the issuing below par of the Eurobond.
(in million €) Shareholders' loan tranche A Eurobond issues
Face value
1 year or less
1-2 years
3-5 years
More than 5 years
495.8
0.0
0.0
0.0
495.8
2,000.0
0.0
0.0
1,000.0
1,000.0
European Investment Bank
40.0
0.0
0.0
0.0
40.0
European Investment Bank
20.0
0.0
0.0
0.0
20.0
2,555.8
0.0
0.0
1,000.0
1,555.8
Total
Short-term loans and credit line facilities (in million €)
Amount Maturity
Available amount
Average basic interest
used
not used
Confirmed credit line
30/10/2010
150.0
Euribor + 0.65%
0.0
150.0
Confirmed credit line
15/01/2010
125.0
Euribor + margin when concluding the deal
0.0
125.0
0,0
275,0
Total
275,0
Amount Available amount
Average basic interest
used
not used
70.0
Market conditions
0.0
70.0
Uncommitted credit line facility
100.0
Euribor + margin when concluding the deal
0.0
100.0
Belgian dematerialised treasury notes
250.0
Euribor + margin when concluding the deal
Total
420.0
(in million €) Uncommitted credit line facility
Maturity
250.0 0.0
420.0
107
ELIA annuAl Report 2009 — financial Report
During 2009, a shareholders’ loan expired in September, as well as a number of short-term loans and the used amounts of the commercial paper programme. Elia decided to refinance these loans by issuing a Eurobond. This transaction was successfully implemented in two tranches (a €500 million four-year tranche and a €500 million sevenyear tranche) in April 2009, following a roadshow that presented Elia’s industrial and regulatory strengths to the leading European financial markets. Investors welcomed this initiative with open arms both during the roadshow and in order-book subscriptions, with a total of over €5.3 billion being offered in less than an hour. The four-year tranche attracted €3 billion of subscriptions, while the seven-year tranche was good for €2.3 billion. Altogether they attracted more than 300 investors from 14 countries across Europe.
108
2. Defined benefit pension plan Active staff hired from 1 January 1993 until 31 December 2001 and all managerial/executive staff hired prior to 1 May 1999 are granted the same guarantees via a defined benefit pension, which is funded by individual and employer contributions as set out in the Belgian law on supplementary pensions. Staff employed prior to 1993 have since been given the option of signing up to the plan, and more than 90% of the active staff members were participating by 1997. The amounts are paid to Elgabel and Pensiobel and to the insurance company Contassur. The three entities work together as the pension fund for the gas and electricity sector. Early retirement:
If certain conditions are met, employees may leave Elia before 60. Other employee benefits:
The considerable interest that investors showed Elia in the credit meant that bookrunners set the price for the four-year tranche at mid-swap + 190 bp (coupon of 4.5%), and at mid-swap + 245 bp (coupon of 5.625%) for the seven-year tranche. The bonds are listed on the Luxembourg stock exchange.
In addition to the pension arrangements described above, employee benefits also include other non-statutory benefits, such as:
The interest bearing loans have been issued in euro to avoid all financial exchange rate risks and totalled €2,550.6 million.
– cover of medical costs and hospitalisation;
4.12. Employee benefits
Other provisions
Elia Group employees are entitled to a number of benefit plans, as described hereafter:
Other benefits consist of a provision for restructuring, which provides for future expenses for career breaks and time credits.
Defined benefit pension plan
Overview of the provisions for employee benefits
1. B y virtue of a collective agreement of 2 May 1952, staff receive specific benefits, called pension supplements, under which, as retired persons, they are entitled (following a full career) to overall funds equal to 75% of their annual income, in line with their statutory pension. The supplements are partially revertible to the widow or widower and, where necessary, can be supplemented by orphan benefit. If the individual dies while at work, the additional survivors’ supplements are paid to the beneficiaries. T he benefits granted are linked to Elia’s operating result. There is neither an external pension fund nor group insurance for these liabilities, which means that no reserves are constituted with third parties.
– a ‘jubilee’ premium paid to staff who have been with the company for 25, 30 and 35 years;
– reductions on gas and electricity bills.
(in million €)
2009
2008
Defined benefit plans
85.9
87.5
Early retirement plan
13.9
12.0
Other employee benefits
41.9
42.0
141.7
141.5
1.2
1.2
142.9
142.7
Subtotal Others (restructuring) Total provisions for employee benefits
ELIA annuAl Report 2009 — financial Report
Change in benefit obligation (in million â‚Ź)
Defined benefit obligation at the beginning of the period
2009
2008
(240.0)
(258.8)
Service Cost
(5.8)
(5.6)
Interest Cost
(11.9)
(12.0)
Contributions from plan participants
(0.6)
(0.5)
Gains (losses) on curtailments or settlements of plans
0.0
0.0
Special termination benefits
5.5
(1.3)
Actuarial gains (losses) on long term benefits
0.9
1.6
(5.5)
9.2
Actuarial gains (losses) Benefits paid Defined benefit obligation at the end of the period
31.5
27.4
(236.9)
(240.0)
98.5
116.9
5.5
6.0
Changes in plan assets
Fair value of plan assets at beginning of the period Expected (not actual) return on plan assets
21.9
29.8
Plan participants contributions
Company contributions
0.6
0.5
Actuarial gains (losses) on long term benefits
0.3
(27.3)
(31.5)
(27.4)
95.2
98.5
Benefits paid Fair value of plan assets at end of period
109 Funded status
Funded status of the plan
(141.7)
(141.5)
Net amount recognised accrued / prepaid
(141.7)
(141.5)
Net amount recognised (accrued)
(142.7)
(142.1)
Net amount recognised (prepaid)
1.0
0.6
Net periodic pension cost
Service Cost
(5.8)
(5.6)
Interest Cost
(11.9)
(12.0)
Plan participants contributions
(0.6)
(0.5)
Expected return on plan assets
5.5
6.0
Amortisation of actuarial net gains (losses)
0.0
0.0
Gains (losses) on changes of plans Special termination benefits Gains (losses) on curtailments or settlements
0.0
0.0
(4.6)
(1.3)
0.0
1.6
(17.5)
(11.8)
(Accrued) prepaid benefit cost
(141.7)
(141.5)
(Accrued) benefit cost
(142.7)
(142.1)
1.0
0.6
Actuarial gains (losses) on long term benefits
Net periodic benefit cost
Prepaid benefit cost
ELIA annuAl Report 2009 — financial Report
Actuarial gains and losses recognised directly in equity (in million €)
Cumulative amount at 1 January Recognised in the period
2008
(25.7)
(7.6)
(5.2)
(18.1)
(30.9)
(25.7)
2009
2008
Inflation rate
2.00%
2.20%
Interest rate (not including inflation)
2.60%
3.00%
Salary increase rate (not including inflation)
2.00%
2.00%
Yield rate on deposits (not including inflation)
4.00%
3.70%
Interest appreciation rate (not including inflation)
3.00%
0.00%
18.0
17.0
1.00%
1.00%
2009
2008
Equity instruments
21.76%
27.91%
Bonds
55.23%
44.53%
7.83%
8.75%
Cumulative amount at 31 December
Actuarial assumptions
Length of future services (years) Rate of increase of health benefits (retirement and current)
Details of plan assets
Property Other (cash included)
110
2009
Total plan assets
Inclusion in future tariffs
Elia has specific obligations as regards employee benefits and similar commitments. In accordance with a study report issued by CREG, it is virtually certain that some of the employee benefits total of €68.2 million will be accepted by CREG as
15.18%
18.81%
100.00%
100.00%
reasonable expenses and will therefore be passed on in future tariffs. Since this amount can be recovered by Elia from third parties, in accordance with IFRS principles (IAS 19), it will be classified as an asset item. The amount is included under other current liabilities (see Note 4.9).
ELIA annuAl Report 2009 — financial Report
4.13. Provisions (in million €)
Environment
Litigation
Total
Balance at 1 January 2008
9.4
5.4
14.8
During financial year: increase in provisions
1.2
0.8
2.0
(0.3)
(0.1)
(0.4)
During financial year: usage provisions During financial year: reversals of provisions
0.0
(1.4)
(1.4)
10.3
4.7
15.0
Long term portion
0.0
4.7
4.7
Short term portion
10.3
0.0
10.3
Balance at 1 January 2009
10.3
4.7
15.0
9.6
0.4
10.0
Balance at 31 December 2008
During financial year: increase in provisions During financial year: usage provisions
(0.2)
0.0
(0.2)
During financial year: reversals of provisions
(5.8)
(0.3)
(6.1)
Balance at 31 December 2009
13.9
4.8
18.7
Long term portion
0.0
4.8
4.8
Short term portion
13.9
0.0
13.9
The change in provisions relating to the environment is due to further soil research and remediation on certain sites in Flanders and to the impact of the announcement of the initial results of the preventive screening of sites in the Brussels Capital Region and the Walloon Region. The booked provisions for the sites in the Flemish Region mainly result from past transfers of business rights. In 2009, was declared as ‘not requiring remediation’ by the Flanders Public Waste Agency (OVAM), thereby leading to the reversal of a provision amounting to €5.4 million). Meanwhile, in 2009 it became clearer that Elia would indeed have to undertake decontamination on two other sites. This resulted in an additional appropriation of €3.8 million (without any disadvantageous acknowledgement). For sites located in the Brussels Capital Region, Elia has already preventively screened 23 sites. Of these, one site was considered to probably present a risk to humans and the environment. For this purpose, a provision of €0.7 million was provided, without any disadvantageous acknowledgement of any obligation or liability.
The ‘soil decree’ was approved by the Walloon Parliament in December 2008 and was published in the Belgian Official Gazette on 18 February 2009. The practical implementation of this new legislation and the interpretation of certain criteria are still causes of doubts. However, Elia has proactively visually screened the sites of high-voltage substations it owns in the Walloon Region. Further analyses were conducted for 56 sites in 2009. For 10 sites Elia, without any acknowledgement of any obligation or liability, provided a total provision of €5 million. Estimates of the amounts were made by an external design office, bearing in mind the BATNEEC 5 principle. The provision for litigation is based on the management’s best estimate of charges that Elia would have to pay as a result of cases in which legal proceedings have been instituted against Elia by a third party or in which Elia is involved in a legal dispute. The expected timing of the related cash outflow depends on the progress and duration of the associated procedures. The changes in provisions are discussed in Note 3.2.3.
(5) Best available techniques not entailing excessive costs
111
ELIA annuAl Report 2009 — financial Report
4.15. Deferred tax assets and liabilities
4.14. Trade and other payables (in million €)
2009
2008
Trade debts
126.3
229.4
5.5
2.4
24.4
23.4
VAT, other taxes Remuneration and social security Dividend
For the following items no deferred income taxes are recognised in the balance sheet: (in € million)
2009
2008
1.3
1.7
Notional interest reduction
111.4
92.1
Levies
55.7
9.0
Not recognised tax asset (-) / liability
111.4
92.1
Other
10.1
7.0
Accruals and deferred income
10.6
8.8
233.9
281.7
Total
The €103.1 million decrease in trade payables is mainly a consequence of the exceptionally open balances linked to the market coupling mechanism in 2008. At the end of 2009, levies are €55.7 million in credit. The increase is due to the introduction of the federal levy in 2009. Elia collects the levy from its customers and pays the collected amount to the regulator. The Group’s foreign currency exchange rate risk and liquidity risk relating to trade and other payables are discussed in Note 5.2.
112
Unrecognised deferred tax assets
The notional interest deduction, if not used, expires after seven years. For these differences no tax assets were recognised because it is unlikely that in the future there will be taxable profit that the Group can use for realising these assets.
ELIA annuAl Report 2009 — financial Report
Recognised deferred tax assets and liabilities Assets
(in million €) Property, plant and equipment
2009
2008
0.5
0.4
Intangible fixed assets
(7.1)
(6.1)
Inventories
(1.0)
(0.9)
8.6
7.9
47.7
46.9
Interest-bearing loans and other noncurrent financial liabilities Employee benefits Government grants, paid in advance Provisions
Liabilities
2009
2008
0.0 0.1
0.3
(23.8)
(24.3)
(6.8)
(6.5)
25.0
24.2
(6.8)
(6.5)
1 January 2008
Recognised in income statement
Recognised in equity
31 December 2008
0.2
0.2
0.4
Intangible fixed assets
(4.3)
(1.8)
(6.1)
Other financial assets
0.0
0.0
0.0
Inventories
(0.9)
0.0
(0.9)
Interest bearing loans and other long term financial liabilities
(2.3)
0.0
10.2
7.9
Employee benefits
46.8
(6.0)
6.1
46.9
Other items Net tax asset (-) / liability
Changes in deferred tax assets and liabilities resulting from movements in temporary differences during the financial year
(in million €) Property, plant and equipment
Provisions
0.3
0.0
0.3
(31.4)
0.6
(30.8)
8.4
(7.0)
16.3
17.7
1 January 2009
Recognised in income statement
Recognised in equity
31 December 2009
0.4
0.1
0.5
Intangible fixed assets
(6.1)
(1.0)
(7.1)
Other financial assets
0.0
0.0
0.0
(0.9)
(0.1)
(1.0)
7.9
(0.6)
1.3
8.6
46.9
(1.0)
1.8
47.7
Other items Total
(in million €) Property, plant and equipment
Inventories and Interest bearing loans and other long term financial liabilities Employee benefits Provisions Other items Total
0.3
(0.2)
0.1
(30.8)
0.2
(30.6)
17.7
(2.6)
Effect of changes in temporary differences during the financial year
Changes in temporary differences during the year are reflected in profit or loss as income tax expense (also see Note 3.4).
3.1
18.2
113
ELIA annuAl Report 2009 — financial Report
5. Miscellaneous 5.1. Share-based payments Discounted share purchase plans
The Group offered its staff discounted share purchase plans in 2009. This was welcomed with open arms by the Group’s employees and resulted in €4.4 million being underwritten. The average price over one month before the decision was taken as a basis for determining the subscription price basis. This came to €27.30 per share. After applying a 16.7% discount, the price amounted to €22.75 (see Notes 4.10 and 3.2.2). 5.2. Financial risk and derivative management Risks
114
(in million €)
2009
2008
Loans and receivables
201.7
221.4
Cash and cash equivalents
174.6
27.3
16.7
17.7
Balance at bank Interest rate swaps used for hedging Assets
0.0
Liabilities
(28.2)
(24.3)
Total
364.8
242.1
Market risk
Market risk is the risk that changes in market prices, raw material prices and salary indexation will affect the Group’s results.
The Group aims to identify each risk and set out strategies to control their economic impact on the Group’s results. In addition to its routine tasks, such as monitoring the risk analysis, defining risk management strategies and reporting to management, the Internal Audit & Risk Management department continues to pay attention to the impact of the financial/economic crisis on Elia and its effects in other sectors, with a view to assessing any risks this unusual situation poses for the Group. The potential impact for each risk factor is described hereafter. The regulatory framework in which Elia operates considerably restricts their effects on profit or loss (see the ‘Regulatory framework and tariffs’ chapter). The results of increased interest rates, credit risk, etc. can be settled in the tariffs, in accordance with the applicable legislation.
The impact in changes in raw material prices on ‘controllable costs’, as defined in the new regulatory mechanism, could have a very restricted effect (see regulatory framework) on the Group’s income statement.
Certain strategies to control these risks make use of derivative financial instruments: instruments whose value is derived from one or more underlying assets, reference prices or indices. The derivative instruments create rights and commitments which transfer all or some of the financial risks to other parties to the contract.
‘Investment risk’ is the name given to the risks faced by the Group as the result of holding major investments that are available for sale as well as investments made under pension plans. As a result of the financial crisis, Elia performed additional monitoring of the situation regarding plan assets in pension funds and it was established that the decrease in these funds, after benchmarking, was lower than the normal market situation. In anticipation of possible consequences, Elia decided to pay a supplement with a view to limiting deficits. Further details of this can be found in the ‘Employee benefits’ section.
Credit risk
Credit risk is the risk that one of the parties to a contract fails to meet its obligations as regards the financial instrument, thereby resulting in a potential loss for the counterparty. The management has put a credit policy in place and the exposure to counterparty credit risk is continually monitored. Consequently for certain contracts appropriate bank guarantees must be requested from the counterparty of the contract. On the balance sheet date there were no significant concentrations of credit risks. The maximum credit risk is the carrying amount of each financial asset, including derivative financial instruments.
The Group has taken a series of precautions to limit the potential impact on the income statement. Currency risk
The Group is not exposed to any significant currency risk, either from transactions or from exchanging foreign currencies into euro, since it has no foreign investments or activities and less than 1% of its costs are expressed in currencies other than the euro. Investment risk
The Group had investments available for sale – these are in line with the investment strategy and have a very low risk profile. This gave rise to a €0.2 million increase in the value of the funds during the financial year.
ELIA annuAl Report 2009 — financial Report
Interest rate risk
As at 31 December 2009, no financial expenses resulting from ineffective cash-flow hedges are included in profit or loss.
Hedging
The objective of the Group’s policy is to ensure that between 40% and 70% of the interest rate risk on loans is based on a fixed interest rate. The Group has undertaken interest rate swaps in euro in order to achieve a good balance within the Group’s policy between the exposure to a fixed interest rate and a variable interest rate. In accordance with the hedge accounting rules of IAS 39, all derivative financial instruments are accepted as cash-flow hedges and valued at fair value. Consequently, the portion of the gain or loss on the derivative financial instrument that can be considered an effective hedge is reflected directly in equity (hedging reserves). Interest rate swaps have an interest rate varying from 4.23% to 4.41%. As at 31 December 2009, the Group held hedging instruments with a contracted reference value of €395.8 million. The net fair value of the swaps as at 31 December 2009 totalled €28.2 million and was entirely composed of liabilities. The amounts are included as derivatives at fair value.
(in million €)
Sensitivity analysis
In its management of the interest rate risk, the Group endeavours to limit the effect of short-term fluctuations on the Group result. Changes in the interest rates will not affect the consolidated result in the short and long term as Elia operates within a regulatory framework where the consequences of fluctuations in financial expenses are recovered in tariffs. Derivative financial instruments
Under IFRS, derivative financial instruments are accounted for at fair value. Fair value
The summary hereafter shows the fair values and carrying amounts of derivative financial instruments. As the loan has a variable interest rate, the carrying amount of the loan is equal to the fair value.
Carrying amount
Fair value
Carrying amount
Fair value
2009
2009
2008
2008
16.7
16.7
17.2
17.2
0
0.0
0.0
0.0
28.2
28.2
24.3
24.3
Assets Sicavs Interest rate swaps:
115
Liabilities Interest rate swaps Loans
395.8
395.8
545.8
545.8
Total
440.7
440.7
570.1
570.1
Fair-value hierarchy
The above fair value of ‘sicavs’ has level 1 type, i.e. valuation is based on the (unadjusted) listed market price on an active market for identical instruments. The above fair value of interest rate swaps has level 2 type, which entails that valuation is based on input from other prices than the stated prices, where these other prices can be observed for assets or liabilities. This category includes instruments valued on the basis of listed market prices on active markets for such instruments; listed prices for identical or similar
instruments on markets that are deemed less than active; or other valuation techniques arising directly or indirectly from observable market data. The table hereafter shows the periods when cash flows relating to derivatives that act as cash flow hedges are expected.
ELIA annuAl Report 2009 — financial Report
(in million â‚Ź) Interest rate swaps
Carrying amount
Expected cash flows
6 mths or less
6-12 mths
1-2 years
2-5 years
> 5 years
(24.3)
(35.8)
(3.3)
(3.3)
(5.2)
(13.1)
(10.9)
(35.8)
(3.3)
(3.3)
(5.2)
(13.1)
(10.9)
Assets Liabilities
(24.3)
Balance at 31 December 2008
(24.3)
(35.8)
(3.3)
(3.3)
(5.2)
(13.1)
(10.9)
Interest rate swaps:
(28.2)
(64.8)
(6.6)
(5.8)
(11.4)
(23.2)
(17.7)
(64.8)
(6.6)
(5.8)
(11.4)
(23.2)
(17.7)
(64.8)
(6.6)
(5.8)
(11.4)
(23.2)
(17.7)
Assets
116
Liabilities
(28.2)
Balance at 31 December 2009
(28.2)
Fair-value hierarchy
Estimate of fair value
The above fair value of interest rate swaps has level 2 type, which entails that valuation is based on input from other prices than the stated prices, where these other prices can be observed for assets or liabilities. This category includes instruments valued on the basis of listed market prices on active markets for such instruments; listed prices for identical or similar instruments on markets that are deemed less than active; or other valuation techniques arising directly or indirectly from observable market data.
Derivatives Brokers’ statements are used for interest rate swaps. The statements are controlled using valuation models or techniques based on discounted cash flows. Interest-bearing loans The fair value is calculated on the basis of the discounted future redemptions and interest payments. Financial lease obligations The fair value is estimated at the present value of future cash flows, discounted against the interest rate for uniform lease contracts. The estimated fair value reflects interest rate changes. Trade and other receivables/trade liabilities and other items payable For receivables and liabilities due within one year the nominal value is deemed to reflect the fair value. All other receivables and liabilities are discounted in order to determine the fair value.
ELIA annuAl Report 2009 — financial Report
Liquidity risk
Liquidity risk is the risk that the Group may not be able to meet its financial obligations. The Group limits this risk by constantly monitoring cash flows and ensuring that there are always sufficient credit line facilities available. In April 2009, the Group issued a €1,000 million Eurobond to reimburse the loans that were to expire in 2009. The amount was determined taking into account any future tariff deficits, the sum of €98 million that was paid as part of the tax assessment and a sum for pre-financing to minimise the liquidity risk. In spite of the financial crisis, the issue was a success – as indicated in Note 4.11. The regulated framework in which Elia operates was very welcomed by investors. For an overview of the credit line facilities available, see Note 4.11.
Non-derivative financial liabilities
Carrying amount
Expected cash flows
6 mths or less
6-12 mths
1-2 years
2-5 years
> 5 years
998.2
(1,399.6)
(50.0)
0.0
(50.0)
(150.1)
(1,149.5)
1,355.4
(1,685.1)
(438.8)
(403.0)
(23.9)
(71.6)
(747.8)
281.7
(281.7)
(281.7)
Interest rate swaps used for hedging
24.3
(35.8)
(3.3)
(3.3)
(5.2)
(13.1)
(10.9)
Of which cash flow hedges
24.3
(35.8)
(3.3)
(3.3)
(5.2)
(13.1)
(10.9)
2,659.6
(3,402.2)
(773.8)
(406.3)
(79.1)
(234.8)
(1,908.2)
1.994.7
(2.601.4)
(100.3)
0.0
(100.6)
(1,249.0)
(1,151.5)
Unsecured financial bank loans and other loans
555.8
(742.2)
(8.0)
(6.7)
(16.0)
(48.0)
(663.5)
Trade and other payables
224.5
(224.5)
(224.5)
Unsecured bond issues Unsecured financial bank loans and other loans Trade and other payables
Derivative financial liabilities
117
Balance at 31 December 2008
Non-derivative financial liabilities
Unsecured bond issues
Derivative financial liabilities
Interest rate swaps used for hedging
28.3
(64.8)
(6.6)
(5.8)
(11.4)
(23.2)
(17.7)
Of which cash flow hedges
28.3
(64.7)
(6.6)
(5.8)
(11.4)
(23.2)
(17.7)
2,803.3
(3,632.9)
(339.4)
(12.5)
(128.0)
(1,320.2)
(1,832.7)
Balance at 31 December 2009
ELIA annuAl Report 2009 — financial Report
Capital structure
Elia constantly monitors its capital structure, which is a combination of debts and equity. Its main objective regarding the capital structure of regulated activities is to achieve the structure imposed by law: one-third equity and two-thirds debt capital. For the other companies the main objective is to maximise shareholder value while at the same time retaining the desired financial flexibility. The company’s dividend policy involves optimising dividend payments while still bearing in mind that there is a requirem ent to reserve a part of the profit resulting from including the surplus, caused by decommissioning property, plant and equipment, in the tariff. Reserving this part of the profit as equity boosts the company’s self-financing capacity considerably, enabling it to finance the investments needed for carrying out its tasks. The Group gives its employees the chance to subscribe to capital increases that are exclusively reserved for them. For more details on the capital increase, see Note 4.10. 5.3. Operating lease contracts Leases as lessee
The Group has operating leases for some office buildings. The leases normally have a term of nine years, with the possibility of renewing the lease thereafter. In addition the Group has contracts for leasing cars, IT equipment and other items with an average lease period of three years. 118
(in million €) Telecom
<1 year
1–5 year
>5 years
9.6
39.9
50.7
Total at 31 December 2008
9.6
39.9
50.7
Telecom
9.8
32.3
51.3
Total at 31 December 2009
9.8
32.3
51.3
The following revenues were included in profit or loss for 2009 in the section ‘Optimal use of assets’ (see Note 3.1): (in million €)
2009
2008
Telecom
10.1
9.8
Total
10.1
9.8
5.4. Investments and other liabilities
As at 31 December 2009, Elia had investment liabilities totalling €87.0 million for the purchase and installation of property, plant and equipment to further extend its grid. 5.5. Contingent liabilities and uncertainties Settlement mechanism
•A calculation of the amount is given in the ‘Regulatory framework and tariffs’ chapter.
<1 year
1–5 years
>5 years
Buildings
3.6
15.3
8.1
Cars, IT equipment and others
4.6
6.1
0.0
Total at 31 December 2008
8.2
21.4
8.1
Buildings
3.7
15.6
8.2
1. a reasonable return on invested capital;
Cars, IT equipment and others
4.9
6.9
0.0
2. all costs that are not unreasonable incurred by Elia.
Total at 31 December 2009
8.6
22.5
8.2
Since the tariffs are based on estimated figures, there is always a difference between the tariffs that are actually charged and the tariffs that should have been charged to cover all reasonable costs of the system operator and to provide shareholders with a reasonable profit margin on their investment.
(in million €)
The following expenses related to leasing buildings and other lease contracts were included in profit or loss for the financial year 2009: (in million €)
2009
2008
Buildings
3.6
3.6
Cars, IT equipment and others
4.1
4.1
Total
7.7
7.7
Leases as lessor
The Group hires out sites and high-voltage pylons to telecommunications operators on the basis of operating leases. The relevant lease contracts have a term of at least nine years. A summary of the future minimum lease payments in respect to the lease contracts is given hereafter:
• Application of IFRS Elia now operates under a ‘cost plus with incentive for greater efficiency’ system in a regulated context which states that Elia tariffs must make it possible to realise total revenue consisting of:
If the applied tariffs result in a surplus or a deficit at the end of the year, this means that the tariffs charged to consumers / the general public could have been respectively lower or higher (and vice versa). Based on IAS 18, Elia is convinced that a surplus or deficit arising from the settlement mechanism must not be classified as revenue or an expense, or as an item under equity. On a cumulative basis, it could be argued that the public has made an advance payment for its future use of the network. As such, the surplus (deficit) is not a commission for a future loss (recovery) of income but instead a passive debt (receivable) to (with regard to) consumers. On the basis of the Electricity Act, Elia believes that the surplus (deficit) does not represent an item of revenue (cost). Consequently, Elia booked this net amount as at 31 December 2009 as an item in other assets, which reflects the reduction in future tariffs that must be approved by the regulator.
ELIA annuAl Report 2009 — financial Report
Following the same logic, Elia also decided to post certain pension expenses as recoverable costs since the federal regulator deemed such expenses to be reasonable charges. Elia is convinced that it can compensate for these expenses in future tariffs and consequently they were booked as an asset. For the purpose of presentation of the consolidated financial statements, both the ‘income to be carried forward’ and the ‘recoverable costs’ arising from the pension obligations are converted to their net values, which means that only a net asset is displayed. At present, there are no definitive IFRS guidelines on the calculation of the settlement mechanism in a regulated context. 5.6. Disclosure about related parties Transactions with directors
Remuneration policy for directors was agreed upon at the general meeting of shareholders. The total remuneration paid to the 12 Elia directors in 2009 was €494,472 (€247,236 for Elia System Operator SA and €247,236 for Elia Asset SA), including indexing. Directors do not receive any other benefits in kind, stock options, special loans or advances. Transactions with members of the management committee
Note that all members of the Elia management committee are employees. The gross remuneration of the chairman of the management committee, which is paid by Elia System Operator SA, was €538,260.95 in 2009, including 35.22% in the form of variable remuneration. The payments that Elia made to the other members of the management committee in 2009 amounted to €1,717,525.11 (€895,284.64 for Elia System Operator SA and €822,240.46 for Elia Asset SA), including 27.57% in the form of variable remuneration. In this way, a total of €2,255,785.57 was paid out to the members of the management committee in 2009. Payment to the non-statutory pension system
Since 2007, all pension plans for managers have been ‘fixedbenefit plans’. In 2009, Elia System Operator SA paid a total of €94,449.56 as non-statutory pension bonuses to the chairman of the management committee. These bonuses amount to €284,610.18 (€148,449.90 for Elia System Operator SA and €136,160.28 for Elia Asset SA) for the other members of the management committee.
Other benefits
The allocation of other benefits to the members of the management committee, such as the guaranteed income in the event of long-term illness or an accident, the medical and hospitalisation insurance, disability and death insurance, the tariff-related benefits, the other bonuses, the contribution to public transport costs, provision of a company car and other minor benefits, is paid on the basis of the rules that apply to members of the company’s managerial staff. For 2009, the cost of other benefits is estimated at €32,465.84 for the chairman of the management committee and at €225,693.10 (€104,957.26 for Elia System Operator SA and €120,735.84 for Elia Asset SA) for the other members of the management committee. No share option plan for the management board was allocated at Elia in 2009. Shares held by members of the management committee
The chairman of the management committee of Elia System Operator SA holds 6,998 shares in Elia System Operator SA, while the other members of the management committee hold a total of 16,991 shares. Elia has yet to introduce a long-term share allotment policy. Provisions of the contracts of employment of the members of the management committee
At the time of coming into force, the provisions in the contracts of employment of the members of the management committee, including the chairman of the management committee, do not include any special conditions regarding resignation. Transactions with associated companies
Transactions between the company and its subsidiaries which are related parties were eliminated during consolidation and therefore are not recognised in this note. In the 2009 and 2008 financial years, there were no transactions between Elia and HGRT. Details of transactions with other related parties are explained hereafter. (in million €)
2009
2008
Sales of goods
1.3
0.0
Purchase of goods
1.4
0.0
Long terms debtors
0.3
0.0
Trade debtors
0.1
0.0
Transactions with joint venture and associated companies
Outstanding balances with joint ventures and associated companies
119
ELIA annuAl Report 2009 — financial Report
5.7. Business combinations
There was no change in the consolidation scope of the Group in 2009. 5.8. Group entities Fully consolidated participations
Elia System Operator SA has direct and indirect control of the subsidiaries listed hereafter: Stake %
Name
Country of establishment
Headquarters
Enterprise number
Average staff
Elia Asset SA
Belgium
Bd de l’Empereur 20 - 1000 Brussels
0475.028.202
750.3
99.99
99.99
Elia Engineering SA
Belgium
Bd de l’Empereur 20 - 1000 Brussels
0471.869.861
146.1
100.00
100.00
Belpex SA
Belgium
Bd de l’Impératrice 66 - 1000 Brussels
0874.978.602
5.3
60.00
60.00
Elia Re SA
Luxembourg
Rue de Merl 65 - 2146 Luxembourg
—
—
100.00
100.00
2009
2008
All the entities keep their accounts in euro and have the same closing date as Elia System Operator SA. Associated companies accounted for using the equity method
120
Name
Country of establishment
H.G.R.T S.A.S. (Holding de Gestionnaires de Réseaux de Transport)
France
Coreso SA
Belgium
Enterprise number
Headquarters
Stake %
Average staff
2009
2008
RCS Nanterre
0
24.50
24.50
808.569.630
10.1
33.3
50.0
438.262.800
1 Terrasse Bellini 92919 La Défense Cedex
Avenue de Cortenbergh 71 1000 Brussels
In 2008, Coreso was recognised at cost price because no economic or accounting transactions had occurred. In 2009, Coreso started operations and 16.7% of the participation was sold to the British power transmission system operator (TSO) National Grid. Other participations
In 2009, the company CASC-CWE, which was founded in 2008, is being included for the first time in the ‘Equity accounted investees’ section (see Note 4.4). Name
Country of establishment
CASC-CWE sa
Luxembourg
Headquarters 2 Rue de Bitbourg - 1273 Luxembourg-Hamm
Enterprise number
B142.282 Luxembourg
Stake % 2009
2008
14.29
14.29
ELIA annuAl Report 2009 — financial Report
5.9. Events after closure of the annual accounts
5.10. Non-audit tasks carried out by the joint auditors
As mentioned in the press release of 12 March 2010, Elia System Operator SA (Elia), the Belgian transmission system operator (TSO), and Industry Funds Management (IFM), one of the largest global infrastructure investment managers, signed an agreement under which they will acquire the German transmission system operator 50Hertz Transmission GmbH from Vattenfall Europe AG. Under the terms of the agreement, IFM will own 40 percent of 50Hertz Transmission, and Elia will own the remaining 60 percent stake.
As well as the standard audit tasks, Elia made use of the services of the joint auditors Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren (represented by Alexis Palm) and Ernst & Young Bedrijfsrevisoren (represented by Jacques Vandernoot) for the following items:
50Hertz Transmission, a company employing around 600 people, ensures operation, maintenance, planning and demandbased development of the transmission grid, just as Elia does. It is responsible for compliant management of the entire electric system in the territories of the German Federal States of Berlin, Brandenburg, Hamburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt and Thuringia. This transaction represents a major step forward in the construction of the European electricity market that Elia has been supporting since its inception as an independent TSO in 2001. It also fits in with its other strategic regional investments, including those in the Central Western Europe (Benelux, France and Germany) to develop a regional market. Thanks to this acquisition, Elia will be better positioned to participate in the growth of a truly reliable and efficient European electricity market in the region that takes into account the integration of a larger part of renewable energy sources among which wind energy, in line with national and European energy policy. The agreed enterprise value is € 810 million and the parties expect to complete the transaction for 50Hertz Transmission in the second quarter of 2010. This acquisition has no impact on the balance sheet and on the income statement on 31 December 2009. Elia will detail the acquisition in the next report in accordance with IFRS standards. The transaction is subject to approval by the relevant authorities. Elia will propose a capital increase at the general meeting to finance the transaction.
• IFRS: extra tasks and advice • Capital increase • Certification of levies • Miscellaneous advice For these services, costs amounting to €75,780 were recognised. Ernst & Young Tax Consultants advised Elia System Operator SA, Elia Asset SA and Elia Engineering and Belpex on various topics, providing for example advice and support with regard to the tax audit and the legal ruling and recurring advice about VAT and corporate income taxes. A total of €50,452 was invoiced for these services. The activities were approved by the Audit Committee.
121
ELIA annuAl Report 2009 â&#x20AC;&#x201D; financial Report
Joint auditorsâ&#x20AC;&#x2122; report on the consolidated financial statements
122
ELIA annuAl Report 2009 â&#x20AC;&#x201D; financial Report
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ELIA annuAl Report 2009 — financial Report
Regulatory framework and tariffs Elia’s transmission tariffs among the lowest in Europe
Elia’s tariffs have fallen considerably in recent years, thanks to the introduction of the cost-plus tariff regulations, its efforts to boost productivity and the impact of using operational surpluses. Elia’s tariffs are among the most competitive of all those charged by Europe’s transmission system operators, as was confirmed once again by the comparative study of 2008 tariffs conducted by ETSO (European Transmission System Operators). The tariffs that have applied since 1 January 2008 will remain unchanged for four years from that date, i.e. until 31 December 2011.
124
Information published by the Belgian regulator indicates what proportion of residential customers’ bills is represented by transmission tariffs. Currently this generally amounts to approximately 4% of the total bill (including taxes and levies). Nonetheless, power transmission has a very minor bearing on final electricity prices and any increase in tariffs per unit transmitted must be assessed primarily in terms of the overall cost-effectiveness for consumers and the Belgian economy. Better market operation, easier access to competitive wholesale electricity prices and improved security of supply, to name but a few, all have a welcome and beneficial impact on the overall electricity bill and on the Belgian economy. Tariff regulations
Most of Elia’s income is generated from the regulated tariffs charged for use of the transmission system (tariff income), which are approved in advance by CREG. A tariff regulation mechanism took effect on 1 January 2008 whereby the approved tariffs apply for a four-year period, barring exceptional circumstances. CREG approved the tariffs for the period 2008-2011 in December 2007. The tariff mechanism is based on accounts stated in accordance with Belgian accounting regulations (Be GAAP). The tariffs are based on budgeted costs, less a number of sources of non-tariff income, and on the estimated volumes of electricity taken from the grid. The costs taken into account include the forecasted value of the authorised fair remuneration, as well as the predicted values of various cost categories, including those over which Elia has direct control (‘controllable costs’) and those over which it has no direct control (‘uncontrollable costs’).
Fair remuneration
The fair remuneration is the return on capital invested in the network. It is based on the average annual value of the regulated asset base (RAB), which is calculated annually, taking into account new investment, depreciations and changes in working capital requirements. In that context, prevailing since 2008, the following formula is used to calculate the fair remuneration, when consolidated capital and reserves make up more than 33% of the average regulated asset base as is the case at present: A: [33% x average RAB x [(OLO n)+(Beta x risk premium)]] plus B: [(S – 33%) x average RAB x (OLO n + 70 base points)] minus C: a djustment of excessive depreciation rates in the past, where -O LO n is the interest rate for Belgian 10-year linear bonds for the year in question; -S = consolidated capital and reserves/RAB, in accordance with Belgian accounting standards (Be GAAP); -B eta will eventually be calculated based on Elia share prices, compared with the Bel20 index, over a seven-year period. In a transitional phase, the tariff regulations stipulate using Electrabel’s beta for the period preceding Elia’s flotation on the stock exchange. The value of beta cannot be lower than 0.3. Part A The rate of remuneration (in %) as set by CREG for year ‘n’ is equal to the sum of the risk-free rate, i.e. the average rate of Belgian ten-year linear bonds and a premium for market risk for shares, weighted using the applicable beta factor. The tariff regulations set the risk premium at 3.5%. For 2009, the applicable beta factor is calculated based on the historic beta factor for Electrabel, compared with the Bel20 index, over a seven-year period. CREG recommends that Elia’s solvency ratio (average capital and reserves/average regulated assets) should be as close to 33% as possible. This ratio (33%) is applied to Elia’s average regulated asset base (RAB) to calculate Elia’s reference capital and reserves. Part B If Elia’s actual capital and reserves are higher than the reference capital and reserves, the surplus amount is balanced out with a reduced rate of remuneration calculated using the following formula: [(OLO n + 70 base points)].
ELIA annuAl Report 2009 — financial Report
Part C CREG also decided that the annual fair remuneration margin should be reduced by €12.4 million (before taxes) up to and including 2012, but with this restriction applying to just the first three quarters of the year, due to overly rapid depreciations before Elia System Operator SA was appointed system operator, which it considers to be excessive. The tariff regulations also provide for the possibility of setting higher remuneration rates for capital that is invested to finance projects of national or European importance. In the absence of a decree implementing this provision of the Electricity Act, this measure was not carried out in 2009. Uncontrollable costs
The costs over which Elia has no direct control (‘uncontrollable costs’) are an integral part of the costs used to determine the tariffs. The tariffs are set based on forecasted values for these costs. The balances of such uncontrollable costs (whether positive or negative), i.e. the difference between the actual and forecasted costs, will be established ex-post and their allocation will be the subject of a royal decree debated in the Belgian Federal Council of Ministers. Controllable costs
The costs over which Elia has direct control (‘controllable costs’) are subject to an incentive regulation mechanism: in other words, they are subject to application of a productivity and efficiency improvement factor. This factor indicates the efforts that Elia must make to control such costs: the authorised costs used to determine the tariffs are established following application of this factor. The productivity improvement required of Elia over the period 2008-2011 is stipulated in the Royal Decree of 18 December 2007. The amount for 2009 was €6 million. The balances of such controllable costs (whether positive or negative), i.e. the difference – established ex-post – between the actual and authorised costs, are in principle either added to or deducted from the fair remuneration.
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ELIA annuAl Report 2009 — financial Report
Information about the parent company Extracts from the statutory annual accounts of Elia System Operator SA, drawn up in accordance with Belgian accounting standards, are given hereafter in abbreviated form. Pursuant to Belgian company legislation, the full financial statements, the annual report and the joint auditors’ report are filed with the National Bank of Belgium.
These documents will also be published on the Elia website www.elia.be and can be obtained on request from Elia System Operator SA, Avenue de l’Empereur 20, 1000 Brussels, Belgium. The joint auditors made an unreserved statement with an explanatory paragraph in the statutory financial statements.
1. Statement of position after distribution of profits
ASSETS (in million €)
126
2009
2008
FIXED ASSETS
3.314,4
3.314,6
Financial fixed asset
3.314,4
3.314,6
Affiliated company
3.306,0
3.306,5
Participating interests
3,306.0
3,306.5
8.4
8.1
Other enterprises linked by participating interests Participating interests CURRENT ASSETS
8.4
8.1
896.6
773.3
Amounts receivable after more than one year
94.2
93.8
Trade debtors
94.2
93.8
Inventories and contracts in progress
4.7
2.6
Contracts in progress
4.7
2.6
Amounts receivable within one year
627.4
632.9
Trade debtors
198.1
208.0
Other amount receivable
429.3
424.9
Investments
103.3
16.0
Other term deposits
103.3
16.0
Cash at bank and in hand
55.9
2.1
Deferred charges and accrued income
11.1
25.9
4,211.0
4,087.9
TOTAL ASSETS
ELIA annuAl Report 2009 — financial Report
EQUITY AND LIABILITIES (in million €)
CAPITAL AND RESERVES
2009
2008
1,298.0
1,276.0
Capital
1,205.7
1,201.3
Issued capital
1,205.7
1,201.3
Share premium account
8.5
8.5
51.4
36.0
Legal reserve
51.4
36.0
Profit carried forward
32.4
30.2
3.5
3.9
Reserves
PROVISIONS, DEFERRED TAXES Provisions for risk and charges
3.5
3.9
Other risk and charges
3.5
3.9
LIABILITIES
2,909.5
2,808.0
Amount payable after one year
2,553.4
1,554.0
Financial debts
2,553.4
1,554.0
Unsubordinated debentures
1,997.6
998.2
60.0
60.0
Credit institutions Other loans
495.8
495.8
Amount payable within one year
266.3
1,138.1
Current portion of amounts payable after more than one year
0.0
637.7
Financial debts
0.0
161.9
Credit institutions
0.0
161.9
Trade debts
117.3
240.9
Suppliers
117.3
240.9
Advances received on contracts in progress
7.1
5.0
Amounts payable regarding taxes, remuneration and social security costs
7.0
5.5
Taxes
0.2
0.0
Remuneration and social security
6.8
5.5
Other amounts payable Accrued charges and deferred income TOTAL EQUITY AND LIABILITIES
134.9
87.1
89.8
115.9
4,211.0
4,087.9
127
ELIA annuAl Report 2009 — financial Report
2. Income statement
(in million €)
2009
2008
Operating income
744,4
728,5
737,0
722,9
Increase (+), decrease (-) in inventories of finished goods, works and contracts in progress
2,1
1,6
Other operating income
5,3
4,0
Operating charges
(578,6)
(579,4)
(549,3)
(551,3)
(29,7)
(28,2)
0,4
0,1
165,8
149,1
Financial income
70,1
71,4
Income from financial fixed assets
55,5
52,7
Income from current assets
14,6
18,7
Financial charges
(135,3)
(118,1)
Interest and other debt charges
(132,4)
(117,4)
(2,9)
(0,7)
100,6
102,4
Turnover
Services and other goods Remuneration, social security costs and pensions Provisions for liabilities and charges OPERATING INCOME
128
Other financial charges PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
Extraordinary income
0,4
2,9
Other extraordinary income
0,4
2,9
Extraordinary income charges
0,0
0,0
Other extraordinary charges
0,0
0,0
101,0
105,3
Income taxes
(16,7)
(19,2)
Income taxes
(16,7)
(19,2)
0,0
0,0
84,3
86,1
PROFIT FOR THE FINANCIAL PERIOD BEFORE TAXATION
Adjustments of income taxes and write-back of provisions PROFIT FOR THE FINANCIAL PERIOD
2˚ 50'
2˚ 40'
2˚ 30' E. Greenwich
BLIGHBANK
3˚ 00'
3˚ 20'
3˚10'
3˚ 40'
3˚ 30'
4˚ 00'
3˚ 50'
4˚ 20'
4˚ 10'
4˚ 30'
4˚ 50'
4˚ 40'
5˚00'
GEERTRUIDENBERG
2
51˚ 30'
THORNTONBANK
KREEKRAK
BORSSELE
ZANDVLIET
Kalmthout
ZANDVLIET POWER
Ravels
51˚20'
NOORDLAND Rijkevorsel
BASF
BEERSE
ZEEBRUGGE
Turnho ut
SOLVAY LILLO
DOEL
MALLE EKEREN
BAYER
3
HERDERSBRUG
BLAUWE TOREN
FINA
KETENISSE
7 e HAVENDOK
t
S -JOB
NOORDERDOKKEN (NMBS)
ESSO
2 SCHELDELAAN
KALLO
SLIJKENS BEVEREN
BRUGGE
EEKLO NOORD
DAMPLEIN ZWIJNDRECHT
51˚10'
AALTER
SADACEM
LANGERBRUGGE
2 NIEUWEVAART
BEERST
Hamme
LOKEREN
RINGVAART
ZELE
l
S -GILLISDENDERMONDE
1
LEEST
Noordschote
lde he
er nd
RUMBEKE S T-BAAFS-VIJVE OOSTROZEBEKE
Welle
IZEGEM IEPER NOORD
PEKKE
HEULE Kortrijk - NMBS WEVELGEM
MOLENBEEK
BRUEGEL
DROGENBOS
Geraardsbergen
nd
Ath (SNCB)
Ronquières
ca ut
Carrière du Milieu
1
CHIEVRES
50˚ 30'
Waret
COGNELEE CHAMPION GOUY
BASCOUP
BAUDOUR
6
Pâturages
150
2
Namur
Sambre
JEMEPPESOLVAY
TERGNEE LA PRAYE FOUR
Grands-Malades
Wierde
DAMPREMY
FARCIENNES MONTIGNIES
MONCEAU
Sart-Bernard (SNCB)
Bois-deVillers
Florée
Lobbes
380+
MASTAING
150 +
THUILLIES
OORDEREN
Gerpinnes
d’Heur
1 : 500 000
SOLVAY
DOEL
e
SNCB
Eau
50˚20'
CENTRALE MARCINELLE
BINCHE
BASF
AUVELAIS
FLEURUS AMERCŒUR
2
SNCB
GOSSELIES
TRIVIERES
PERONNES
Ciply HARMIGNIES
Elouges
An
Marche-les-Dames
S t-Servais
LA CROYERE
V/HAINE
NOORDLAND ZANDVLIET 2 POWER
SEILL
S T-AMAND
COURCELLES
OBOURG
GHLIN
Leuze
12
FELUY
CENTRALE SENEFFE
PETIT MARAIS
ZANDVLIET
Aische-en-Refail Sauvenière
Gembloux
2
CHAMP-DECOURRIERE
Quevaucamps
CHEVALET
2
le
MARCHE-LEZECAUSSINNES PETROCHIM
AIR LIQ. TERTRE
Dy
Glatigny CORBAIS
NIVELLES
Soignies Lens
Thumaide
Harchies
VIEUX GENAPPE
SNCB Baulers
SNCB
ANTOING
Hannut
Ceroux Court-S t-Et.
BAISY-THY
Braine-le-C.
AVELIN
Ottignies (SNCB)
OISQUERCQ
GAURAIN
AVERNAS
Jodoigne
WATERLOO
De
Es
SNCB
BASSE-WAVRE
BRAINE-L’ALLEUD
Meslin
LIGNE
WATTINES
2
MARQUAIN
WARANDE
NMB Landen
ST-GENESIUS-RODE [RHODE-ST-GENÈSE]
CLABECQ
re
50˚40'
THIEULAIN Tournai
TIENEN
S
Enghien (SNCB) [Edingen (NMBS)] Hoves
Blandain
le
T
2 BUIZINGEN
Deux-Acren
Kersbeek
Pellenberg
Heverlee
LABORELEC
MEKINGEN
DOTTIGNIES [DOTTENIJS]
Dij
WOLUWE-S T-L. S -L. WOLUWE
2
Leuven (NMBS)
Gasthuisberg
DHANIS
Kessel-lo
IXELLES ELSENE
FOREST VORST
Herfelingen
Ronse [Renaix]
MOUSCRON [MOESKROEN]
ZAVENTEM
HARENHEIDE
Q. DEMETS K. ZUID/MIDI
RUIEN
MOEN AVELGEM
WILSELE
WIERTZ
HELIPORT
DILBEEK
EIZERINGEN Appelterre
Halen
HOENDERVELD
SCHAARBEEK
NINOVE
OUDENAARDE
ZWEVEGEM
Bas-Warneton [Neerwaasten]
Essene
DIEST
WIJGMAAL
2
GRIMBERGEN 3 KOBBEGEM MACHELEN RELEGEM
S T-Denijs - Boekel
HARELBEKE KUURNE Bekaert 2 K.Oost
2
50˚50'
WORTEGEM
MENEN WEST
Denderleeuw (NMBS)
Zottegem
DESSELGEM
IEPER
VERBRANDE BRUG
AALST
Gavere
er
Dorenberg
WESPELAAR
TERLINDEN
MERCHTEM
AALST NOORD Amylum
MUIZELAAR WESTROZEBEKE
Dem
Aarschot
Sc
DEINZE
De
IJ
TESSENDERL
Muizen
Leie
TIELT
HERCU Dowchemical TI
KRUISBAAN
NMBS
Tisselt
MALDEREN
ESSOCHEM
Nete Langveld Grote
PUTTE
MECHELEN
PITTEM BEVEREN
STADEN zer
MEERHOUT HEIST/BERG
SIDAL Duffel
Willebroek
BUGGENHOUT
FLORA
Geel/Oevel
LINT AMOCO
pe
Baasrode
T
51˚00'
Ru
Bornem
HAM
DRONGEN
Herenthout HEZE
Temse
KENNEDYLAAN
ZOMERGEM
Nijlen
LIER
SCHELLE -DORP
ZEDELGEM KOKSIJDE
Olen
Herentals
MERCATOR
WALGOED
HEIMOLEN
M
MASSENHOVEN
MORTSEL
S t-Niklaas KEERKEN
RODENHUIZE
POEDERLEE 2
PETROL
SIDMAR
6
OELEGEM
2
ZURENBORG WOMMELGEM
2
BURCHT
S T-PAUWELS EEKLO
MERKSEM
36
Thy-le-Château
Warnant
Yvoir (SNCB)
Dor inne
SNCB Cine
Hanzinelle Sommière
LILLO BAYER EKEREN
Dinant
Clermont
150 +
36
7 e HAVENDOK
ACHENE
KETENISSE
Froidchapelle FINA ESSO
9 KALLO
SCHELDELAAN
C. ZWIJNDRECHT
Hastière
Solre-S t-Géry
Botermelk
2
50˚10'
JAMIOLLE
NOORDERDOKKEN (NMBS)
PLATE-TAILLE
Romedenne
NEUVILLE
MERKSEM
2
ZWIJNDRECHT
DAMPLEIN Belliardstr.
BEVEREN
CHOOZ
Oever Tabakvest
2
PETROL
3
50˚00'
MHO
Couvin
Berchem (NMBS)
Chimay
Momignies Fourmies
MORTSEL
Wilrijk
Hoboken
MERCATOR
150+70
HEIMOLEN
VIREUX
OELEGEM
2
S T-PAUWELS
S t-Niklaas
Pondrôme
WOMMELGEM
ZURENBORG
Moonstr.
Meuse
2
BURCHT
Hovenierstr.
WALGOED
REVIN
LIER SCHELLE
Temse
SCHELLE DORP
Aartselaar
Kontich
MAZURES
LINT 7
Monceau-en-Ardenne
WAARLOOS
LONNY m
49˚ 50'
Se
PETROCHIM
BUISSERET
CHAMP-DECOURRIERE
FELUY
70
(15
0)
Chassart
12
Seneffe
LUMES
Gembloux
Sombreffe
2
ois
MARCHE-LEZ-ECAUSSINNES
VESLE
Marbais (SNCB)
Liberchies
CENTRALE SENEFFE Maisières
BAUDOUR
150 + 30 30(150)
AIR LIQUIDE
70(150)
+ 70
(1
150 +70
50 )
BOEL LL
Mons 15
15
0+
70
JEMAPPES
0+
70
ST-AMAND
LA CROYERE
BOEL TCC BOEL HF
VILLE/HAINE
COURCELLES
Keumiée
BOEL FOUR
OBOURG
PETIT MARAIS
16 150 + 70
150
150 + 70
GHLIN
70
49˚ 40'
TERTRE
La Louvière
GOUY
GOSSELIES 70
(15
Heppignies (30) sud
0)
TRIVIERES
0) (15 70
70 (1 50 )
Elouges
Ciply
Pâturages
Anderlues
HARMIGNIES
2
70 + 0
BINCHE
0
0
22
+
15
70
(1
50
)
LA PRAYE FOUR
F. DE FER BLANCHISSERIE Charleroi 70(1
15
49˚30'
TERGNEE
CS MARCINELLE
DAMPREMY CARAL FOC
Estinnes
0
+
70
JEMEPPESOLVAY
bre
Sam
Gilly
CENTRALE MARCINELLE
PERONNES
15
70(150)
AMERCŒUR
Fontaine l’Evêque
50)
FARCIENNES
1 : 1 000 000
Echelle
Schaal
PONT-de-LOUP LA PRAYE
5
0
10
20
30
Marchienne Fosses-la-Ville
MONTIGNIES
MONCEAU
MALFALISE
1 : 500 000 2˚ 40' E. Greenwich
AUVELAIS
50)
FLEURUS
70(150)
150 + 70 70(150)
70+ 30(1
Jumet Piéton (SNCB)
Boussu
70(150)
BASCOUP
2˚ 50'
3˚ 00'
3˚ 10'
3˚ 20'
3˚ 30'
3˚ 40'
3˚ 50'
4˚ 00'
4˚ 10'
4˚ 20'
4˚ 30'
4˚ 40'
4˚ 50'
5˚ 00'
high-voltage networks — Belgium 4˚ 20'
4˚ 30'
4˚ 50'
4˚ 40'
5˚ 10'
5˚00'
5˚ 30'
5˚ 20'
6˚ 10'
6˚ 00'
5˚ 50'
5˚ 40'
6˚ 30'
6˚ 20'
6˚˚ 50'
6˚ 40
7˚ 00' Socolie
CBR
GEERTRUIDENBERG
NAVAGNE 13
51˚ 30'
BERNEAU
LIXHE
Meu se
Visé (SNCB)
EINDHOVEN
FN Vottem
BEERSE
Vottem
Voroux (SNCB)
MALLE
FINA
NISSE
7 e HAVENDOK
Pouplin
150 +70
8 Tilleur
2 LIER
Maaseik
AMOCO
2
TIHANGE
BERINGEN
TESSENDERLO
er
ZONHOVEN
STALEN GENKLANGERLO
Paalsteenstr.
MOLENBEEK
WILSELE
Leuven (NMBS)
Gasthuisberg
Maasmechelen
Lanaken
Bilzen
Alken
Heverlee
prévus
TIENEN
BRUSTEM
Borgloon
2
CHERTAL
Dy
BRESSOUX JUPILLE
CORBAIS
2
le
SERAING
Aische-en-Refail
Ivoz AWIRS
Sauvenière CroixChabot
NIVELLES
Waret
12
E
GOUY
P
AUVELAIS
AMERCŒUR
CENTRALE MARCINELLE
Sambre
JEMEPPESOLVAY
TERGNEE LA PRAYE FOUR
W
P -RECHAIN
ROMSEE Soiron
LA TROQUE
s Ve
dr
Turon
H te SARTE
ile
pp
1 2
e
War
e d’Heur
Eau
1 x 150 + 2 x 70 (3 x 150)
blè
2 x 150 (2 x 380 + 2 x 150)
3 x 70 2 x 150 (4 x 150)
Warnant
Yvoir (SNCB)
1 x 70 (4 x 150) 1 x 220 + 2 x 70 3 x 150 (4 x 150) 3 x 150 + 1 x 70 (4 x 150) 3 x 220 1 x 380 + 2 x 150 (2 x 380 + 2 x 150)
ONDERGRONDSE KABELS
380kV
380kV
220kV
220kV 150kV 70kV
2
câbles en parallèle
2
CENTRALES
CENTRALES
COO
Stephanshof
Trois-Ponts
centrale thermique
Amel
thermische centrale
centrale thermique en projet
Amel [Amblève]
thermische centrale in ontwerp kerncentrale
centrale nucléaire
waterkrachtcentrale pompcentrale
centrale de pompage
Dor inne
ACHENE
Hogne (SNCB)
Dinant
rth
Hastière
Cierreux
Marche-enFamenne
Buissonville
existants
bestaande
en projet
in ontwerp
380kV
MERCATOR
380kV
220-150kV
MOLENBEEK
220-150kV
70kV
Herbaimont
70kV
MONT-LEZ-HOUFFALIZE Le
CHOOZ
ss
COURS D’EAU e
Forrières (SNCB)
50˚10'
Charneux
On
STATIONS
POSTES
e
MARCOURT
Romedenne
windmolenpark
parc d'éoliennes
Sankt-Vith [Saint-Vith]
Soy Ou
parallele kabels
Holzwarche
BRUME
SNCB Ciney
JAMIOLLE
13 14 15 16 17 18
70kV
Bütgenbach [Butgenbach]
ve
Miécret
Hanzinelle
NEUVILLE
3 x 380 (4 x 380)
10 1 x 150 + 1 x 70 (2 x 150 + 1 x 70) 11 4 x 70 12 3 x 150
2 x 150 + 2 x 70 (4 x 150)
150kV
che
Bronrome
Bomal
Florée
Clermont
PLATE-TAILLE
7 8 9
2 x 150 + 1 x 70 (3 x 150) 4 x 150 1 x 150 + 3 x 70 (4 x 150)
CABLES SOUTERRAINS
Bevercé
Sart-Bernard (SNCB)
Sommière
Froidchapelle
uitbatingsspanning lager dan de constructiespanning
Samenstellingtabel van de lijnen met meer dan 2 draadstellen:
centrale hydraulique
Gerpinnes
Thy-le-Château
lijn met 2 draadstellen van verschillende spanningen
50˚20'
THUILLIES
70(150)
3 4 5 6
es SNCB
tension d’exploitation inférieure à la tension de construction
Spa
Heid-deGoreux
Comblain
Am
Bois-deVillers
150 + 70
Tableau des compositions des lignes à plus de 2 ternes:
Gileppe G
2 de draadstel in aanbouw of in ontwerp
lignes à 2 ternes de tensions différentes
er
Vesdre
e
SNCB
RIMIERE
Grands-Malades
FARCIENNES
es
Stembert
Pepinster
Wierde
MONTIGNIES
MONCEAU
Andenne
Marche-les-Dames
DAMPREMY
EUPEN
T
2
Namur
FLEURUS
(met referentienummer in de samenstellingstabel) in aanbouw of in ontwerp
2 e terne en construction ou en projet
GARNSTOCK
Les Plenesses
LE VAL
SNCB
GOSSELIES
FIBER BATTICE
Statte GRAMME (SNCB)
SEILLES
CHAMPION
4
50˚30'
COGNELEE
S t-Servais
1 2
>2
Wanze
S T-AMAND
COURCELLES
Monsin
CLERMONT
TIHANGE
HenriChapelle
Welkenraedt (SNCB)
Leuze
Gembloux
LUY
4
Meuse
VIEUX GENAPPE
2 2
en construction ou en projet
3
Fooz
Glatigny
Court-S t-Et.
BAISY-THY
Saives
Hannut
Ceroux
1
1 2
50˚40'
BRAINE-L’ALLEUD
SNCB Baulers
Montzen (SNCB)
AVERNAS
Jodoigne
Ottignies (SNCB)
uitgerust
1
1
2 2
NAVAGNE
LIXHE
BERNEAU BASSE-WAVRE
voorzien
installés
(avec numéro de référence dans le tableau des compositions)
NMBS Landen
WATERLOO
LABECQ
70kV
Aantal draadstellen
>2
Tongeren
SQUERCQ
150kV
1 HERDEREN
S t-Truiden
ST-GENESIUS-RODE [RHODE-ST-GENÈSE]
220kV 220kV
Nombre de ternes
LABORELEC BUIZINGEN
380kV
220kV 220kV 70kV
IXELLES ELSENE
FOREST VORST
380kV 150kV
le Dij
WOLUWE-S T-L. ST-L. WOLUWE
DHANIS
Pellenberg
Uitbatingsspanning
Tension d’exploitation KNP
Kersbeek
BOVENGRONDSE LIJNEN
LIGNES AERIENNES
ZUTENDAAL
50˚ 50'
WIERTZ
Kessel-lo
2
Anthisnes
2
16
ZAVENTEM
MARCHIN
15
GODSHEIDE
(NMBS)
HARENHEIDE
Q. DEMETS K. ZUID/MIDI
2
SIKEL
Hasselt
HOENDERVELD
SCHAARBEEK HELIPORT
Halen
WIJGMAAL
1 : 500 000 Rivage (SNCB)
s
Lummen
DIEST
Poulseur
Abée-Scry
51˚ 00'
Dem
Dorenberg
Hte SARTE
EISDEN
WESPELAAR
2
GRIMBERGEN 3 KOBBEGEM MACHELEN RELEGEM
Ourth
Bekaert
Aarschot
VERBRANDE BRUG
e
GRAMME
HOUTHALEN
Muizen
TERLINDEN
Esneux
RIMIERE
Opglabbeek
KRUISBAAN
NMBS
Tisselt
HERCULES Dowchemical TIP
Nete Langveld Grote
PUTTE
MECHELEN
0) 70 (15
Les Spagnes AmpsinNeuville
OBERZIER ESSOCHEM
aa
1
LEEST
MALDEREN
HEIST/BERG
SIDAL Duffel
Willebroek
HOUT
GENBOS
Hermalle s/Huy CLERMONT
MEERHOUT
LINT
l
Vesdre
Ehein
VAN EYCK
M
Bornem
Hechtel
Geel/Oevel
Croix-Chabot
MAASBRACHT
Gerdingen
Magotteaux
0+
Ramet HEZE
SCHELLE -DORP
14
AWIRS
Herenthout
ROMSEE
Chênée
0
NYRSTAR
IvozRamet
Nijlen
MORTSEL
DILBEEK
s
Overpelt Infrax
51˚ 10'
BALEN
Olen
Herentals
aa
MOL
MASSENHOVEN
PETROL
pe
Grivegnée Angleur
Profondval
M
POEDERLEE 2
ZURENBORG WOMMELGEM
MERCATOR
Ru
(1 50 )
SERAING Ferblatil Jemeppe 17 Sclessin Ougrée LA TROQUE LE VAL Flémalle Sart-Tilman
St-Huibrechts-Lille
OVERPELT
22
BURCHT
OELEGEM
2
MHO
LOMMEL
15
MERKSEM
DAMPLEIN
2
BELLAIRE
70(220)
SCHELDELAAN
ZWIJNDRECHT
70
16
JUPILLE
Montegnée
DODEWAARD
16
BRESSOUX Glain
Hollogne
S t-JOB
NOORDERDOKKEN (NMBS)
ESSO
ALLO
CHERATTE
16
FN Monsin
Ans
EKEREN BAYER
CHERTAL Incin. Herstal Herstal
3
4
Saives Turnho ut
SOLVAY LILLO
0)
(15
70
51˚ 20'
Rijkevorsel
BASF
Alleur
0)
Fooz
+
Ravels
70(15
15 0
Kalmthout
ZANDVLIET POWER
38 0
ZANDVLIET
150 + 70
EKRAK
WATERLOPEN Rivieren en kanalen
Rivières et canaux
Pondrôme
VIREUX Couvin Meuse
Herbaimont
Chimay
50˚ 00'
Hatrival
Ou
VILLEROUX
r
NIEDERSTEDEM
VIANDEN S.E.O.
BAULER
Recogne
REVIN
MAZURES
FLEBOUR
Monceau-en-Ardennes
Sûre
Respelt
LONNY
Fays-les-Veneurs Longlier (SNCB)
m
49˚50'
Neufchâteau
Orgeo
Se ois
LUMES
Gembloux
Vi er
VESLE
re
ROOST TRIER Marbehan (SNCB)
Vierre
Villers-s/Semois
Chiny
e
HEINSCH
Bonnert
SNCB
lle
HEISDORF
Mo
se
70
BERTRANGE bre
Sam
1 : 1 000 000
Echelle 0
10
20
AUBANGE
LATOUR
Schaal
S t-MARD ROUVROY
30 km
ESCH-SUR -ALZETTE
MONT ST.MARTIN HERSERANGE
Fosses-la-Ville
BELVAL
Situation au
SCHIFFLANGE
stand op
1-1-2010 49˚30'
Differd. Arbed OXYLUX Belv. Arbed
MOULAINE
e
JEMEPPESOLVAY
ett
70(150)
+
Alz
0
49˚ 40'
Arlon 15
Schif.
LANDRES 4˚ 20'
4˚ 30'
4˚ 40'
4˚ 50'
5˚ 00'
5˚ 10'
5˚ 20'
5˚ 30'
5˚ 40'
5˚ 50'
VIGY
Institut Géographique National
6˚ 00'
6˚ 10'
6˚ 20'
6˚ 30'
6˚ 40'
Nationaal Geografisch Instituut
6˚ 50'
liste of abbreviations APERe
Association for the promotion of renewable energies
BBEMG
Belgian BioElectroMagnetic Group
BRuGEL
Brussels electricty and gas regulation
CREG
Commission for Electricity and Gas Regulation
CWaPE
Commission Wallonne pour l’Energie(Walloon Energy Regulation Commission)
EPRI
Electric Power Research institute
IBGE
Brussels Institute for Environnement Management
ICEDD
Institut de Conseil et d’Etudes pour le Développement Durable
SynERGRID
Federation of Belgian System Operators for Electricity and Gas
VREG
Vlaamse Reguleringsinstantie voor de Electriciteits- en Gasmarkt (Flemish Commission for Electricity and gas Control)
CORESO
Technical Coordination Service Center within the Central Western European region
EnTSO-E
European Network of Transmission System Operators for Electricity
ARP
access responsible party
EMF
electromagnetic fields
GIS
Gas insulated Switch gear
PCB’s
polychlorinated biphenyls
RuE
rational use of energy
kWh
kilowatt hour
MW
megawatt
MWh
megawatt hour (=1.000 kWh)
GWh
gigawatt hour (=1.000 MWh)
kV
kilovolt
head office
Boulevard de l’Empereur, 20 B-1000 Brussels T +32 2 546 70 11 F +32 2 546 70 10 www.elia.be info@elia.be
concept and editorial staff
Elia, department Communication graphic design and coordination
www.concerto.be illustrations
contacts
Eva Suls, T +32 2 546 73 78 Axelle Pollet, T +32 2 546 75 11 Ce document est également disponible en français Dit document is ook beschikbaar in het Nederlands April 2010
Renaud Collin photos
Olivier Polet, Guy Van Hooveld, Library Elia editor
Jacques Vandermeiren