Germany-headed energy company MVV Energie AG will be pressing ahead with expanding renewable energies, boosting energy efficiency with environmentally-friendly district heating and developing new business models in the years ahead. "These are investments in the future of our group of companies and mark our contribution to successfully implementing the energy turnaround”, stressed MVV’s CEO, Dr Georg Müller, at the company’s press briefing for its 2017 financial year.
Owning and operating a range of waste-to-energy plants, heat plants, wind farms and biogas plants in Germany and the UK, the Mannheim energy player has invested nearly EUR 3 billion in growth and in modernising its grids and plants in recent years. It is now reaping the rewards of having acted early to align its business with the energy system of the future.
In the past 2017 financial year, MVV Energie generated further operating earnings growth of 5 percent to EUR 224 million. At over EUR 4 billion, the company’s sales also reached the previous year’s record level.
We asserted our position well in what is a challenging market. We increased our earnings for the third consecutive year and thus met the guidance we released during the year. That shows that we are on a good course and are managing to implement our strategy with sustainable success, commented Dr Georg Müller, CEO of MVV Energie.
Positive outlook with a continued high pace of investment
Driven by a substantial improvement in the financial result, pre-tax earnings (adjusted EBIT) rose by 22 percent to EUR 169 million. Adjusted annual net income after minority interests came to Euro 93 million. The cash flow from operating activities grew from EUR 274 million to EUR 474 million.
The company’s results were positively influenced above all by the strong performance of the environmental energy business and by cooler weather last winter compared with the previous year. On the other hand, as expected and already announced a year ago, the project development business was unable to match the record sales and earnings posted for 2016. Not only that, lower wind volumes meant that the company’s wind farms produced less electricity.
Looking to the years ahead, Dr Müller expects the underlying framework to present further challenges for energy industry players. He underlined his confidence looking forward:
Our corporate strategy, with its focus on robust growth, means we have laid a foundation enabling us to play an active role in this dynamic transformation process in future as well, he said.
Based on its operations and assuming normal weather conditions, MVV expects to generate further slight growth in sales and adjusted EBIT in the current 2018 financial year.
District heat expansion and phosphorous recovery
MVV will be maintaining a high pace of investment in the years ahead and intends to invest a further EUR 3 billion in the energy system of the future – of which EUR 300 million in the current 2018 financial year alone beginning on its own doorstep in Mannheim.
Here the company will invest around EUR 100 million in connecting its waste-fired CHP plant on the island location of Friesenheimer Insel to Mannheim’s district heating grid, which also provides heating to the towns of Heidelberg, Schwetzingen and Speyer, will make the environmentally-friendly district heating supply more renewable.
This way, we will reduce the primary energy factor (PEF) by a third, a measure also relevant for real estate owners, construction clients and investors, stressed Dr Müller.
In technical terms, MVV will combine this link-up to the district heating grid with a significant expansion in the volume of steam supplied to the Roche Group’s neighbouring Mannheim plant. This will involve building a new culvert underneath the Old Rhine.
In parallel, MVV intends to integrate an innovative phosphorous recycling technology into its Mannheim CHP plant. The technology will facilitate the recovery of this valuable resource and also reduce imports. The phosphorus recovery plant is currently in the permitting and approval process.
New CHP plant in Dundee, Scotland
Having successfully launched operations at its waste-to-energy (WtE) plant in Plymouth and at its biomass plant in Ridham (MVV Environment Devonport Ltd and MVV Environment Ridham Ltd) in the UK, the company has recently been awarded its third power plant investment project in the UK.
At the end of November 2017, MVV Environment Baldovie Ltd took over an existing waste incineration plant, Dundee Energy Recovery Ltd, in the city of Dundee that was nearing the end of its economic life.
MVV will invest EUR 135 million in total to build a new CHP plant in the direct vicinity and operate this for 25 years. The new CHP plant is designed for an annual throughput of 110 000 tonnes of waste. The predominant share of this will come directly from local authority partners in Dundee and Angus. Together with commercial waste, MVV will then achieve full capacity utilisation.
The new plant should commence operations in 2020 and will also be operated with combined heat and power (CHP) generation. With an overall efficiency rate of nearly 55 percent, it will produce electricity and heating energy with a capacity of around 10 MW each. The heating energy will be supplied as process steam to the neighbouring plant of the tyre manufacturer Michelin.
Drawing on decades of experience and our broad-based expertise, in recent years we have developed energy from waste into a paradigm of sustainability and of local and regional climate protection, ended Dr Müller.