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Alpiq Creates Structures For Future Growth

March 13, 2017
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Swiss energy company Alpiq notes that the digital transformation of the energy world covers the entire value chain from electricity generation to consumption. The integration of new renewable energies as well as the shift from traditional end customers towards prosumers present new and complex challenges to infrastructure in the energy industry. The Commerce & Trading and Energy Services growth areas already offer innovative services using digitalization as a response to the continued technology shift from centralized towards decentralized electricity supply and storage. More than 80 % of Alpiq's roughly 8,500 employees work in these two growth areas. In the future, Alpiq will focus on leveraging the opportunities arising from fundamental change in the energy markets to strengthen its position.

Generation Switzerland: dependent on wholesale prices and regulation

The Generation Switzerland business division concentrates on the production of electricity from Swiss hydropower and nuclear power. Conventional electricity generation depends on the medium-term recovery of wholesale prices and the necessary adjustment of asymmetric regulation in Switzerland, which currently makes economic operations impossible for pure electricity producers without their own distribution grid and without access to end customers bound by a monopoly. The process to open up to 49 % of the hydropower portfolio is not completed. Alpiq will not conclude the transaction unless all three criteria - price, contractual conditions and transaction security - have been fulfilled.

Alpiq strengthening its growth areas based on industry criteria

Based on industry criteria, Alpiq is now sharpening its profile in three individual business divisions: "Digital & Commerce", "Industrial Engineering" and "Building Technology & Design". This means that Alpiq is laying the foundation for future growth, creating added value and offering investors the opportunity to make targeted investments in the growth areas. Alpiq will retain control over these three business divisions.

The Digital & Commerce business division comprises the optimization of Alpiq's own power plants and also of decentralized generation units and new renewable energies from third parties as well as the trading and sale of structured products to fulfil the various customer requirements in Europe.
This business division will focus on the further development of artificial, self-learning intelligence in order to use digitalization to optimize and connect all flexible and decentralized solutions in the energy sector. In this area, Alpiq already offers smart energy optimization solutions for the wide range of requirements of its customers in Europe: from Flexitricity for the large-scale industry, with Xamax for SMEs down to GridSense for households. Energy systems will be increasingly connected and controlled individually in future. This covers decentralized energy generation systems, including new renewable energies and storage in buildings and vehicles. This division focuses on the new requirements of prosumers.

Industrial Engineering: competent partner for industrial customers in Europe

The Industrial Engineering business division covers the construction, operation and dismantling of power plants, the industrial plant business and the regulated, new renewable energies. This includes the dismantling of nuclear power plants, the planning, construction and operation of decentralized, environmentally friendly energy generation systems - including solar thermal power plants - as well as the operation and maintenance of thermal power plants and regulated, new renewable energies in Europe. This business division comprises the engineering expertise that Alpiq uses to meet the individual needs of industrial customers in the energy sector.

Building Technology & Design: focus on smart buildings and mobility

The Building Technology & Design business division covers building technology in Switzerland, where Alpiq is already a market leader and provides its customers with energy efficient end-to-end solutions on a one-stop-shop basis, also in the area of smart buildings. The neighboring markets of Germany, Italy and Austria will be targeted for further expansion into the areas of smart building technology, smart homes and building automation. Helion Solar, Switzerland's largest solar specialist, and Alpiq's entire mobility infrastructure are integral components of this business division and will be advanced further. International infrastructure projects in public transport will also be realized via this business division.

Investors gain opportunities to invest in an attractive portfolio

As a first step, the structures required will be created by bundling corresponding business fields so that different business models can be advanced in a targeted way while taking the individual growth dynamic into account. Following a market investigation, selected areas will be opened for investors in a second step over the course of 2018. Alpiq will retain control over these three business divisions. With the three business divisions, investors gain access to an attractive portfolio of efficient, profitable services with growth potential as well as to steady returns from the regulated, new renewable energies business. This means that Alpiq is laying the foundation for future growth, creating added value and offering investors the opportunity to make targeted investments in the growth areas.

Reducing net debt and maintaining access to capital markets remain a priority for the company.

Source: Alpiq

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