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02|17
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Issue title:

Interview with the Gas-Union management board

Publication date:
08.02.2017
In this issue:

The presentations and speeches during the Handelsblatt Jahrestagung Energiewirtschaft are often not particularly exciting and stimulating. But the first day was remarkable. At around 9.30am the minister of economics and energy, Sigmar Gabriel, started his speech, and in the afternoon it became clear that this was his farewell speech as energy minister. I had already had the impression that he was absent minded and not really inspired. I wondered whether he would announce that afternoon that he would not run for the chancellorship. The date was publicly known. But my view was not shared by all participants. His speech was more backward oriented, he listed all achievements in energy policy during the ending electoral term. His visions were more about foreign policy: Germany and Europe should take Brexit as an opportunity to define with countries like the UK, but later also Ukraine or Russia, a new way of co-operation. On the other hand, economic co-operation within the euro-zone should be intensified. But one announcement on energy policy was finally made. Even before the next general election in September, the ministry of economics will publish a White Paper with proposals concerning a broader basis for the contribution for renewable energies will be published. The power sector shall no longer bear all costs of the Energiewende (energy transition) alone. The gas industry lobbyists can start thinking about the best arguments to prevent an inclusion of natural gas in the heating sector to the contribution.

Topic of the Month: Interview with the Gas-Union management board

Gas-Union is one of the regional wholesale companies that were located on the second layer of the traditional German delivery chain (between the importing gas companies and utilities). The shareholders are Mainova (34.27 %), Uniper (23.57 %), Kraftwerke Mainz– Wiesbaden (a joint venture of the two utilities Mainzer Stadtwerke and ESWE Versorgung Wiesbaden 15,91 %), Städtische Werke Kassel (9.18 %), Stadtwerke Essen and Energieund Wasserversorgung Mittleres Ruhrgebiet (EWMR) (each 5 %). Gas-Union holds the missing 1.8 per cent itself. The traditional delivery chain was dissolved ten years ago (some producers and gas importing companies still seem to be struggling over the exact date in arbitration procedures). After the dissolution, most market observers expected a quick disappearance of the regional gas companies. This has happened – at least when it comes to sales activities – but only to companies where either RWE or E.ON were the majority shareholders. Bayerngas, Enovos, GasVersorgung Süddeutschland (GVS) and Gas-Union continued to enjoy life. All companies changed over the last year and adjusted their business models to the changing market conditions. Now the companies face new challenges. ener|gate Gasmarkt is reporting continuously about these developments. All of the companies have to cope with thin sales margins. The storage and upstream businesses are big issues for some of the companies. Since 2007, Gas-Union has developed a small upstream segment and extended the storage business substantially over the last years. These are two segments that are currently causing trouble. The earnings for 2015 were not satisfactory (ener|gate Gasmarkt 08/16). ener|gate Gasmarkt talked to the two managing directors Oliver Malerius and Jens Nixdorf about the future strategy of the company.

ener|gate Gasmarkt: Mr Malerius, Mr Nixdorf, to start with, what will the sales volumes and earnings be for 2016?

Mr Nixdorf: The volume will be the same as in 2015. We can’t comment on the profitability because the annual profit and loss will not be determined before March. But what I can say is that 2016 will certainly be a transitory year again with earnings that are, as was the case in 2015, not satisfactory. But in 2018 at the latest we will achieve a reasonable level again.

Framework conditionsOrdinance provision on network access

Until March, the German ministry of economics wants to provide the draft for an amendment of the ordinance provision on access to gas networks (GasNZV). In a remote place on its web page (http://www.bmwi.de/Redaktion/DE/Textsammlungen/ Energie/wettbewerb-energiebereich. html) the ministry announced the initiative and published cornerstones for the amendment. The most important proposal: the TSOs shall be obliged to offer at all entry and exit point Within-Day capacity. So far this obligation has been restricted to border points and market area interconnection points because European regulation requires such an offer. Traders demand have been demanding for more than a year to offer Within-Day capacity also at connection points to storage facilities and to power plants. Already in January 2016 meetings took place on that topic with the BNetzA as well as with the ministry (ener|gate Gasmarkt 03/16). Trianel tried to enforce Open Grid Europe (OGE) to offer Within-Day capacity at the interconnection point to the power plant Hamm-Uentrop. The trading company filed at BNetzA a formal complaint against OGE. BNetzA rejected that complaint. The court procedure Trianel filed at the Higher Court (OLG) of Düsseldorf is still pending (ener|gate Gasmarkt 11/16). During the consultation on the potential for further market area integration (ener|gate Gasmarkt 01/17) most of the participating stakeholders mentioned Within- Day capacity booking beyond border points as the most promising internal measure to improve liquidity. On that point, a clarification is necessary: ener|gate Gasmarkt wrote in the last edition that the booking of Within-Day capacity was not on the list of measures in the BNetzA consultation paper. This was simply wrong. BNetzA listed Within-Day capacity booking as one market area internal measure.