ACCIONA Energy, a year affected by regulatory changes in Spain

Transcription

1 ACCIONA Annual Report 43 ACCIONA Energy, a year affected by regulatory changes in The new regulations had an impact amounting to 257 million euros on ACCIONA Energy s accounts. This situation forced the company to strengthen its action plan aimed at reducing costs and capital expenditure, stepping up services to customers, and bringing in equity partners. ACCIONA Energy-owned facilities produced 22,404 GWh in, 10% more than in the preceding year. In normal circumstances, the related economic magnitudes would have increased similarly; however, regulatory changes in in and (the latter in force since July ) had an impact of 257 million euros on the company in ; in a full year with average output and prices, the impact would be between 360 and 370 million euros. ACCIONA Energy s turnover (2.120 billion euros) was practically flat with respect to (+0.6%) because the increase in power generation revenues (mainly due to the higher wind and hydroelectric load factors in ) offset the reduction in that item due to regulatory changes. However, EBITDA fell by 13% to 979 million euros and EBT amounted to 7 million euros, 95.9% less than in the In the framework of the action plan, steps are being taken to find a financial partner to take a minority stake in the international renewable portfolio previous year, mainly due to impairments of renewable assets in and of goodwill ( billion euros). Action plan In line with the action plan for , implemented in February last year to respond to the first phase of regulatory changes, capital expenditure was cut by 53% in from 440 million euros to 205 million euros. Costs were cut by 39 million euros and divestments of assets in mature markets worth 271 million euros were arranged, of which 114 million euros were for 61.5 MW of operational capacity in South Korea (completed in ) and 157 million euros were for 150 MW of wind capacity in Germany, signed in the first quarter of The division s debt was reduced by 14.3% (from billion euros to billion euros). Under the action plan, the company has also begun to seek a financial partner to take a minority stake (up to 49%) in the international renewable portfolio (nearly 2.3 GW net). It has also enhanced the area of services to clients, having signed contracts or obtained commitments for 427 MW in the first quarter of 2014 for wind ACCIONA Energy output Total 20,379 22,404 Attributable 18, % +10.1% 19,971 and photovoltaic capacity in Australia, Canada, Mexico and Chile. It has also greatly strengthened wind turbine sales, and 1,560 MW in sales of ACCIONA Windpower s AW 3000 (3 MW) turbine had been signed in or were pending signature in the first half of COMPANY-OWNED ASSETS Strong growth in production in The increase in the company s power output in is due basically to higher production in (+15.9% with respect to ), attributable to both wind (+10%) and hydroelectric (+58%). ACCIONA Energy total output, by technology Technology Difference (%) Wind 17,376 18, % Hydroelectric 1,828 2, % Biomass % Solar thermal % Photovoltaic % Cogeneration Total 20,379 22, %

2 44 ACCIONA ACCIONA Annual Report 45 Total output by facilities in which ACCIONA has a stake was 22,404 GWh, and attributable output was 19,971 GWh (10% higher year-on-year in both cases). Facilities in generated 15,209 GWh, 2,089 GWh more than in. Wind and hydroelectric output increased by over 1,000 GWh in both cases, while there was a slight decline in solar thermal output. ACCIONA Energy total output, by country * Facilities outside generated 7,195 GWh, almost the same as in (-0.9%). Output was virtually flat in the USA and it decreased in Australia and Mexico (-14.5%). Output increased somewhat in Canada and by more in Portugal, while it decreased in Germany, South Korea and Hungary. The new operational capacity in Poland increased output in that country by 61%. Output increased by 25% in Italy due to the increased wind capacity and to the Countries Difference (%) Renewables Cogeneration 13,120 13, ,209 15, % +15.9% 0% USA 2,089 2, % Mexico 2,180 1, % Australia 984 1, % Canada % Portugal % India % Germany % Italy % South Korea % Greece % Poland % Croatia Hungary % Total 20,379 22, % * All of ACCIONA Energy's international facilities are renewable. Production in, by technology (Percentage of total output) wind 82.1% Hydroelectric 12.9% Solar thermal 2.5% Production in, by country (% of total) 67.9% USa 9.4% Mexico 8.3% Australia 4.5% Canada 2.5% Photovoltaic 0.4% Biomass 2% Cogeneration 0.1% Portugal 1.8% Germany 1.1% India 1.1% Italy 1.1% Other countries* 2.3% * Includes output in South Korea, Greece, Poland, Croatia and Hungary. stronger winds in southern Europe, which also benefited the farms in the Iberian Peninsula and Greece. accounted for 68% of ACCIONA s output in (3.5 points more than in ); the United States for 9.4%, and Mexico for 8.3%. They were followed in importance by Australia (4.5%), Canada (2.5%), Portugal (1.8%), and Germany, India and Italy (1.1% each). South Korea, Greece, Poland, Croatia and Hungary accounted for less than 1%. As regards technology, wind output expanded, particularly because of strong growth in, as did hydroelectric (by 57%) due to heavy precipitation in the year. Wind accounted for 82.1% of ACCIONA s electricity output and hydroelectric for 12.9%. They were followed at a distance by solar thermal (2.5%), biomass (2%), photovoltaic (0.4%) and cogeneration (0.1%). Over 5% of electricity demand in Electricity production by facilities owned by ACCIONA Energy in (15,209 GWh) represented 5.8% of national electricity demand (260,870 GWh) according to REE s Advance Report on the Spanish electricity system. Attributable output (13,422 GWh) accounted for 5.1%. The increase in power generation by ACCIONA Energy is due to higher wind and hydroelectric output in In terms of net power generation in 273,598 GWh ACCIONA had a 5.6% share (4.9% in attributable terms). The company s special regime output, i.e. excluding the ordinary regime hydroelectric plants, amounted to 13,246 GWh, i.e. 11.9% of total special regime output in 111,679 GWh. Total wind production by facilities in in which ACCIONA has a stake 11,410 GWh accounted for 21% of total wind production in 54,301 GWh while attributable wind output amounted to 9,626 GWh 17.7%. Total ACCIONA Energy facilities at year-end, by technology Technology Total capacity (MW) Attributable capacity ( MW) Wind 7,139 6,271 Hydroelectric Biomass Solar thermal Photovoltaic Cogeneration 9 9 Grand total 8,480 7,596

3 46 ACCIONA ACCIONA Energy footprint, by country Total numbers (MW) at Canada 181 USA ACCIONA Annual Report 47 Total installed capacity at year-end Germany 150 Poland Hungary Wind Hydro 912 Solar thermal 250 Biomass 57 Photovoltaic 3 Cogeneration Wind 628 Solar thermal 64 Portugal 165 Mexico 556 CO 2 emissions avoided by electricity production (million tonnes) Other countries 71 Total capacity installed in 2,506 MW (29.6%) 30 MW (28.6%) 5,974 MW (70.4%) Croatia 30 Greece % Italy 156 Wind 119 Photovoltaic 46 Costa Rica 42 India 86 Other countries 75 MW (71.4%) Chile Brazil South Africa Australia 305 Total: 8,480 MW Total: 105 MW Total Company-owned MW 8,480 Operational installation Projects under construction Industrial plants Attributable MW 7,596 (**) * Wind, in countries where technology is not specified. ** Attributable MW, proportionately consolidated. of the capacity authorized under the preceding regulations), 33 MW in Poland, and 42 MW in Costa Rica. ACCIONA s special regime hydroelectric output, 920 GWh, accounted for 12.8% of the 7,098 GW generated in. In, ACCIONA Energy avoided the emission of 15.1 million metric tonnes of CO2, 14% more than in As for solar thermal, the 430 GWh produced by the company (7.7% less than in ) accounted for 9.4% of Spanish output, while its 454 GWh of biomass-fired output (slightly more than the previous year) accounted for 9% of s total output with this technology. A smaller footprint ACCIONA installed 105 MW of renewable capacity all wind in. Of that total, 30 MW were in (the last After the Yeong Yang wind farm (61.5 MW) in South Korea was divested in, the net increase in the company s renewable capacity was 43.5 MW, and its total capacity stood at 8,480 MW at year-end. Wind accounts for 84.2% of that capacity and hydroelectric for 10.7%. Solar thermal plants account for 3.7%; photovoltaic plants, 0.6%; biomass, 0.7%; and cogeneration, 0.1%. The company s attributable capacity amounts to 7,596 MW million tonnes of CO 2 emissions avoided Considering the emission factor in each of the countries where ACCIONA generated renewable electricity in (which depends on the energy mix in each country), a total of 15.1 million tonnes of CO2 emissions were avoided. That is a 14.4% year-on-year increase in avoided emissions, equivalent to the atmospheric purification capacity of photosynthesis by 755 million trees. The increase in avoided emissions is due to increased output by the company and the higher emission factor in, where the generation mix was more biased towards coal than in previous years.

4 48 ACCIONA ACCIONA Annual Report 49 Wind Higher output and a presence in three new countries ACCIONA s total wind power output amounted to 18,399 GWh in, an increase of 1,023 GWh (5.9%) on the previous year. Wind farms in produced 11,410.4 GWh, up 10.3%, and those in other countries, 6,998.5 GWh, 0.5% less than in. accounted for 62% of our total wind power output. The USA accounted for 10.9% and Mexico for 10.1%. ACCIONA Energy total wind output, by country Australia provided 5.4%; Canada 3%; Portugal, 1.7%; and Germany, India and Italy 1.3% each. South Korea, Greece, Poland, Croatia and Hungary produced less than 1% each. In attributable terms, ACCIONA s wind output amounted to 15,998 GWh, an increase of 5.5% on. The company moved into the wind business in three new countries: Costa Rica, South Africa and Chile. more than 7,000 MW of operational wind capacity ACCIONA ended with 7,139 MW in company-owned wind capacity (6,272 MW attributable) in 14 countries. A total of 105 MW were installed in the year, of which 75 MW outside : 42 MW in the Chiripa wind farm in Costa Rica (the other 7.5 MW to complete the farm were installed in the first quarter of 2014). 33 MW in the Krobia (Gostyn) wind farm in Poland, with the result that the company now has 71 MW of capacity in that Central European country. In, 30 MW were installed in four wind farms, three of them experimental: 6 MW in the Experimental Area of Barasoain in Navarre, in addition to the 9 MW installed there in. 9 MW in the Vedadillo Experimental Area, also in Navarre. 6 MW in the Villanueva Research Wind Farm (Asturias). 9 MW in the Serra de Vilobí II wind farm in Catalonia. At the end of, installed capacity in amounted to 4,743 MW, 66.4% of ACCIONA s total installed capacity with this technology. The USA, with 628 MW, accounts for 8.8%; Mexico for 7.8%; Australia for 4.3%; Canada for 2.5% and Italy for 2.2%. They are followed by Germany (2.1%), Portugal (1.7%) and India (1.2%), while South Korea, Greece, Poland, Croatia and Hungary account for less than 1%. 188 MW under construction At year-end, ACCIONA had 188 MW under construction. Of which: MW in South Africa corresponding to the authorized capacity of the Gouda wind farm (138 MW nominal). That facility, being developed by a consortium in which ACCIONA has a 51% stake, will be completed in the first half of MW in the Punta Palmeras wind farm in Chile, which is wholly owned by the company and will be commissioned in the last quarter of MW in the Chiripa (Costa Rica) wind farm which had not been installed at year-end but were finally installed in the early months of These three countries, where ACCIONA previously had no operating facilities, expanded the scope of the Company s international portfolio. Countries Difference (%) 10,344 11, % USA 1,959 1, % Mexico 2,180 1, % Australia 984 1, % Canada % Portugal % India % Germany % Italy % South Korea % Greece % Poland % Croatia Hungary % Total 17,376 18, % ACCIONA Energy wind output Total Attributable 17,376 18,399 15,165 15, % +5.5% Installed capacity at year-end Other countries 2,396.7 MW (34%) Total: 7,139.4 MW 4,742.7 MW (66%) Capacity installed in Other countries 75 MW (71%) Total: 105 MW 30 MW (29%)

5 50 ACCIONA ACCIONA Annual Report 51 ACCIONA Energy total hydroelectric output ACCIONA Energy solar thermal capacity (MW) 1,828 2, Hydroelectric +57.7% Solar thermal Record output due to high precipitation ACCIONA has 912 MW of wholly-owned hydroelectric capacity in, in the form of 80 plants. Of these, 680 MW are registered as ordinary regime (conventional) and their output is sold in the electricity pool; the other 232 MW are registered in what, to date, was called the special regime. In, ACCIONA generated 2,882 GWh with its hydroelectric plants, 58% more than in 2011, due to very high precipitation in the year. Conventional plants accounted for 68% of that output (1,962.8 GWh) and special regime plants for the other 32% (919.7 GWh). Hydroelectricity represented 12.9% of ACCIONA s total output and 14.4% of its attributable output. Distribution of hydroelectric output in (GWh and %) Special regime 919 (32%) Ordinary regime 1,963 (68%) Slight decline in production ACCIONA Energy owns 314 MW of operational solar thermal generating capacity. Five 50 MW plants in (three in Extremadura and two in Andalusia) account for 250 MW, and a plant in the United States (Nevada desert) accounts for the other 64 MW. These plants, all of which use parabolic trough technology, produced 546 GWh in, 8.4% less than in the previous year. The plants in produced 7.7% less than in, while output by the Nevada plant was 11.2% lower. Solar thermal accounted for almost 2.5% of ACCIONA s total electricity output and 2.7% of its attributable output. ACCIONA Energy solar thermal output % 546

6 52 ACCIONA ACCIONA Annual Report 53 Photovoltaic ACCIONA Energy photovoltaic capacity Biomass ACCIONA Energy biomass capacity (MW) Major project in South Africa ACCIONA owns 49 MWp of installed capacity, of which 94% are located in Portugal, specifically in the 46 MWp Amareleja (Moura) plant. The remaining 6% are located in, where the company has mainly developed plants for customers (which amount to an additional 66.8 MWp). The company s photovoltaic facilities generated 95 GWh in (5.9% more than in ), of which 91.5 GWh are attributable to the Amareleja plant, which is part-owned by Mitsubishi Corporation. Total attributable output amounted to 63.3 GWh, of which 60 GWh were produced by the plant in Portugal. The consortium in South Africa led by ACCIONA Energy began the construction of the Sishen photovoltaic plant in. A plant with a rated capacity of 74 MW (94 MWp) was awarded in the second round of the PPE REBID program to foster renewable energy. The plant, jointly owned with South African group Aveng, is situated in Northern Cape province, near the Kalahari Desert, and will be operational in Distribution of photovoltaic output (GWh and %) Portugal 91.5 (96.5%) -5.9% 95 SPAIN 3.3 (3.5%) Almost 8,000 hours of annual output ACCIONA has three operational biomassfired power plants in : Sangüesa (25 MW), in Navarre; Briviesca (16 MW), in Castile and León; and Miajadas (16 MW), in Extremadura. The first two burn cereal straw, and the third burns woody agricultural waste. The combined output of these plants, which work continuously throughout the year, was 454 GWh in, representing nearly 8,000 equivalent annual hours. That was 0.9% more than in. It accounted for 2% of ACCIONA s total output and 2.3% of its attributable output. Electricity production from biomass was stable 57 ACCIONA Energy biomass output %

7 54 ACCIONA ACCIONA Annual Report 55 Wind turbines 1,560 MW in orders for the AW 3000 turbine ACCIONA Windpower, the Group s subsidiary specialized in wind turbine design, manufacturing and sale, produced turbines totalling MW in, 44% less than in the preceding year. In, ACCIONA Windpower signed orders for 945 MW and has commitments for another 615 MW 88% for third parties Of ACCIONA Windpower s order intake, 43% was for projects in Brazil, where variants of the 3 MW turbine with greater rotor diameters (116 and 125 meters) on 100 and 120 meter towers are proving very successful. In, the company signed three contracts for a total of 303 MW and will sign another three contracts for a total of 363 MW in the first half of installation and commissioning) and the cost of operating and maintaining it over its useful life (25 years on average). In alone, the company managed to cut the COE by 13% and expects to reach 25% by the end of This program delivers a wind turbine that is very competitive in the fastest-growing segment of the wind power business at present: 3 MW units. Of the total supplied, 129 MW were AW 3000 turbines (3 MW), and 49.5 MW were AW 1500 turbines (1.5 MW). The AW 3000 turbines were supplied to wind farms in Brazil (90 MW), Canada (30 MW) and (9 MW), and the AW 1500 turbines to a wind farm in Costa Rica. During the year, the company field installed 303 MW of wind turbines, some of them manufactured in previous years. In the AW 3000 platform, it installed 189 MW: in Brazil (96 MW), Poland (33 MW), Canada (30 MW) and (30 MW). In the 1.5 MW segment, it installed 114 MW: in Poland (58.5 MW), Costa Rica (42 MW) and (13.5 MW). The most positive development for ACCIONA Windpower in was in the commercial area, as the company signed orders for 945 MW and has commitments to sign for another 615 MW in the first half of 2014, making a total of 1,560 MW, entirely in the 3 MW platform. AW 3000 turbine orders Brazil 666 MW (43%) USA 300 MW (19%) Mexico 252 MW (16%) Canada 102 MW (6%) Turkey 57 MW (4%) Chile 45 MW (3%) South Africa 138 MW (9%) Customers 1,377 MW (88%) ACCIONA Energy 183 MW (12%) Total 1,560 MW Also in, it signed contracts to supply projects to customers in the US (300 MW), Canada (102 MW) and Turkey (57 MW), and in 2014 will sign one for Mexico (252 MW). As a result, ACCIONA Windpower will supply 1,377 MW (88% of the aforementioned total) to customers outside the ACCIONA Group. The other 12% 183 MW is for ACCIONA Energy: 138 MW for a wind farm in South Africa, for a consortium in which the company owns 51%, and 45 MW for a wind farm in Chile owned 100% by the company. As a result of new order intake, the company s manufacturing plants in will operate at full capacity in 2014 and part of Cost reduction In, ACCIONA Windpower undertook a program to reduce the cost of energy (COE) associated with each wind turbine; the COE combines a machine s capital cost (acquisition of components, manufacture, transport, Manufacturing plants in Brazil In, ACCIONA Windpower opened a turbine hub manufacturing plant in Brazil (Bahia state) and began building a nacelle assembly plant in that same state which will be operational in the second half of This initiative, together with the procurement of major turbine components in Brazil, aims to fulfil the local content requirements imposed by Brazil for the development of wind energy. ACCIONA Windpower is accredited with FINAME, which enables wind farm developers to acquire AW turbines with soft loans from the Brazilian Development Bank (BNDES). In 2014, ACCIONA is already manufacturing some turbine units in Brazil and in 2015 it will begin supplying projects in that country from its Bahía assembly plant.

8 56 ACCIONA ACCIONA Annual Report 57 EPC contracts for customers Energy supply In four countries As regards EPCs (turnkey projects for third parties), ACCIONA Energy signed contracts in, and has commitments for the first half of 2014, totalling 427 MW. The company will complete commissioning of the photovoltaic plant in Royalla, Australia (24 MWp) for FRW in spring This is ACCIONA Energy s first turnkey facility in Australia. Additionally, the company is to commence construction of the South Canoe wind farm (102 MW) in Nova Scotia (Canada) for local developers. The project will be completed in It will also design and build an ambitious 252 MW wind farm in Mexico, for which negotiations are currently concluding. In both cases, the wind farms will use ACCIONA Windpower 3 MW turbines. The company will build two photovoltaic plants in Chile totalling 49 MWp for a local utility. Additionally, ACCIONA will participate as a minority partner in other developers projects if that will enable it to land turnkey construction contracts. The company s experience in the development, construction and operation of its own facilities almost 8,500 MW is an asset in its services offer. 56% growth in sales to end users ACCIONA expanded the supply of renewable energies to large accounts in in. Its subsidiary ACCIONA Green Energy Developments supplied 5,110 GWh, an increase of 56% with respect to. ACCIONA sold electricity 100% renewable as certified by the Spanish National Markets and Competition Commission to a large number of companies and entities, including Adif, Acuamed, Telefónica and the Prado Museum. The company has signed additional contracts with other clients in 2014, among them Seat-Volkswagen, Canal Isabel II Gestión and Danone. ACCIONA supplied 5,110 GWh of renewable electricity to end users Electricity sales to final customers 307 1,100 3,287 5,110 Turnkey installations for customers (in 2014) Country Technology Capacity (*) Commissioned Australia Photovoltaic 24 1H 2014 Canada Wind Mexico Wind Chile Photovoltaic Total 427 (*) MW in wind; MWp in photovoltaic ACCIONA Green also manages sales to the Spanish electricity pool of power produced by Group installations and customerowned facilities, totalling 6,160 MW. In, the company sold 15,949 GWh to the market

9 58 ACCIONA Events after year-end Asset impairments At ACCIONA s annual earnings presentation at the end of February, the Company highlighted the impact of the regulatory measures in s electricity sector on its financial statements for. T he negative effect on ACCIONA Energy s EBT amounted to billion euros, due mainly to impairment of renewable assets in and of goodwill. T he impact on EBITDA was 257 million euros (applying the effects of the final part of the regulatory reform, still not definitively approved, from 14 July ). The full-year impact, assuming average production and current prices, will be around 360 to 370 million euros. THE IMPACT IN PHASES The regulatory measures in which have impacted ACCIONA s accounts are as follows: ct 15/, of 27 December, on fiscal A measures for energy sustainability, established a 7% levy on generation revenues, a fee for hydroelectric output and a new remuneration framework for solar thermal production. In a normalized year, the impact of this Act will be around 100 million euros before taxes. oyal Decree 2/ on urgent measures R for the electricity system and financial sector eliminated the pool+premium option for remunerating renewable ACCIONA Annual Report 59 energy (which had been adopted by the bulk of ACCIONA s facilities), leaving the choice between a fixed tariff and the pool price with no premium; additionally, the index to update that tariff was revised downward. This measure has a pre-tax impact of 60 to 70 million euros during an average year. oyal Decree Act 9/, of 12 July, R adopting urgent measures to ensure financial stability of the electricity system. This Act gave rise to the draft Royal Decree regulating electricity production from renewable sources, cogeneration and waste, and the draft Order approving remuneration parameters for those categories of power production facilities. These two legal provisions had not been enacted at the time of writing this Annual Report; however, their potential effects have been estimated in ACCIONA s financial statements. In a normalized full year, their pre-tax impact is around 200 million euros. Partner for the international portfolio As part of the plan established by ACCIONA to address this regulatory impact, and in addition to the measures highlighted at the beginning of this section of the Annual Report (cost cutting, capex reduction, and divestments in non-core countries), the Company announced plans to sell up to 49% of its international asset portfolio to a financial partner. This operation is expected to be completed in the first half of 2014, and will have an impact on ACCIONA Energy s net 2,273 MW, both operational and under construction, in 14 countries on five continents. It will enable the Company to reduce debt and drive growth in international markets. ACCIONA Energy will focus especially on emerging countries, which need to expand their energy capacity in line with economic growth and can do so using renewable sources, which are already competitive in some of those markets. The impairment of renewable assets in had an impact on EBT of billion euros ACCIONA INSTALLATIONS ACCIONAENERGY Energy sinternational international footprint Attributable capacity Net capacity Poland 71 MW Canada 103 MW Hungary 11 MW Portugal Croatia 142 MW USA 30 MW Italy 631 MW 156 MW Greece 35 MW Mexico 541 MW India 86 MW Costa Rica 32 MW As a result of these regulations, 40% of wind assets in, i.e. those that were commissioned prior to 2005, will lose their entitlement to a premium for electricity generated; additionally, remuneration parameters will be applied to those commissioned in or after 2005 based on criteria of reasonable returns on assets as established by the government. Operational assets Under construction Chile South Africa Australia 45 MW 118 MW 272 MW Net MW: 2,273 (1) 1 Assets that were proportionately to dateto willdate be equity (1) Consolidated assets have consolidated been calculated usingaccounted the proportional consolidation method. from 2014 due to changes in accounting standards. From 2014 onwards, due to accounting changes, the equity method will be used Wind: 2,131 MW Photovoltaic: 78 MW Solar thermal: 64 MW