Ms. Wittmann, how would you describe your first months on the EVN Executive Board?
Alexandra Wittmann: I joined EVN as the Chief Financial Officer on 1 September 2024. The issues here weren’t really new because I had previously served as CFO in various industrial and technology companies. However, I look forward to the many exciting challenges connected with the significant changes, not only in our company but also in the entire energy sector over the coming years.
Our plans call for average investments of EUR 900m annually in the near term, which means more than twice the amount in 2020/21. Three-fourths of these investments will flow into the networks, renewable generation and drinking water supplies for Lower Austria. We need to generate the necessary funds and will also need additional debt capital, at least on a temporary basis. One of my main responsibilities will be to explain these plans and convince our stakeholders – on both the equity and debt sides – especially the banks, rating agencies and shareholders.
The networks are the area with the highest investments. Why is this?
Stefan Stallinger: The investments required for our distribution network infrastructure have indeed reached historic dimensions. Our forecasts for the years up to 2030 include over EUR 3bn alone for Lower Austria. More than 50% of Austria’s total wind power is generated in EVN’s grid area – for photovoltaics, the comparable figure is currently 25%. And both areas will still be expanded significantly. We need to modernise and construct additional transformer stations and expand our power line capacity to integrate the additional volumes of electricity in the energy system and transport this energy to regions where the demand is higher. Our network investments will not only increase the transport capacity to handle the rising volumes of renewable electricity production, they also represent our reaction to changing consumption patterns. The growing use of e-mobility and the greater use of heat pumps are creating demand peaks that we need to manage. The networks will generally be smarter in the future because flexibility management is becoming more and more important as a means of balancing load peaks. Our investments in the network business are therefore not only concentrated on hardware. Software, intelligent control system and digitalisation are also important.
What progress have you made in expanding EVN’s renewable generation capacity?
Stallinger: We are making good progress in both wind power and photovoltaics. EVN currently has a very balanced pipeline of projects in various stages of development. By the end of the 2024 calendar year, we will have roughly 500 MW of wind power capacity in the networks and can then produce an average of 1.4 TWh of electricity per year. Our installed capacity for photovoltaics will total over 100 MWp when the projects now in progress are completed in the first quarter of 2025. In summary: We can confirm our expansion goals for 770 MW of wind power capacity and 300 MWp of photovoltaic capacity by 2030.
What do you think of the idea that renewable electricity will also contribute to decarbonisation in other sectors?
Stefan Szyszkowitz: We are convinced that renewable energy will become increasingly important across sectors. For example: We assume e-mobility will make a substantial contribution to reducing greenhouse gas emissions over the medium term. This is reflected in our pioneering approach to the expansion of e-charging infrastructure, of course together with corresponding high-performing networks. EVN has already gained a position as a leading provider of e-charging stations, and we still see substantial potential here – above all in public areas. In order to increase the acceptance of e-mobility in the population, we need a wide-ranging offering of easily accessible, low-barrier charging options that can be quickly integrated in customers’ daily routines. EVN is therefore working together with supermarket chains, for example, to install charging stations on their parking areas. We also see growth opportunities in charging offers for company fleets, trucks and buses in public local and regional transportation.
The use of renewable energy will also lead to further changes in the heating sector. EVN has already become Austria’s leading provider of natural heat and uses regional biomass for its production. We are continuously expanding our natural heat portfolio by consolidating district heating networks and expanding our generation capacity. In St. Pölten, we are currently constructing our fifth biomass combined heat and power plant and, at the energy hub in Theiss, we are pursuing new and innovative approaches. We have a warm water storage facility and a power-2-heat plant at that location. When we operate this plant with surplus electricity from solar power, we can produce and store warm water and thereby save biomass for the winter half of the year. Our plans include the increasing use of these power-2-heat systems for district heating supplies in the future because we can then use renewably produced electricity across sectors.
In addition to sector integration, which other possibilities do you see for the use of renewably produced surplus electricity?
Stallinger: We are currently working, for example, on a flagship project for large battery storage. The basis is formed by a pilot plant that we commissioned at our energy hub in Theiss during 2023/24. Specifically, we are combining the photovoltaic plant at this location with a 5 MW battery and can then optimise the marketing of surplus electricity economically in the day-ahead or intraday market. The test results to date give us reasons to be very optimistic. Instead of creating a surplus and overloading the energy system with electricity production from solar power, we can postpone the network feed-in. And that is good news not only for the energy system but also for EVN because we can market the electricity at more attractive prices. Based on the findings from this pilot project, we have developed a business model for a substantially larger storage battery with a capacity of up to 70 MW. This large storage battery is scheduled for commissioning – also in Theiss – by the end of 2027.
In other words, EVN is converting innovations into marketable, future-oriented business models. What else is needed for the successful transformation of the energy system?
Wittmann: Our organisation must adapt to the changes in our operating environment, and EVN is optimally positioned for these changes with its corporate culture. More than one hundred years of experience as an infrastructure company that has always worked to offer its customers attractive, state-of-the-art solutions have naturally produced an enormous pool of expert knowledge. That helps us to react quickly to the changes in the sector and to develop new business models that address current needs and challenges. Wide-ranging digitalisation and forward-looking software and control solutions are decisive factors for a successful transformation. But we, as management, are also challenged to deliver the necessary resources to optimally guarantee and advance the efficient use of digital applications. This is something I see as an exciting subject for the entire Group over the coming years.
However, transformation also means the continuous implementation and management of our Strategy 2030 without overlooking the necessary fine-tuning. Society, politics and framework conditions – in other words, our immediate operating environment – are changing continuously. And with our exacting reactions to these changes, we intend to strengthen EVN’s position for the long term.
Szyszkowitz: One concrete example illustrates these changes perfectly. Energy communities have recently become much more important – not least due to the creation of the necessary legal framework by our legislators. Our customers are increasingly becoming active participants in the energy system with the generation of photovoltaic electricity and their plans to market this electricity in the surrounding environment. Of course, that will also change EVN’s role as an energy supplier. Our subsidiary Energie Zukunft Niederösterreich GmbH currently administers more than 20,000 metering points with its E.GON invoicing and settlement software and is one of the leading service providers for energy communities in Europe.
Austria, and above all Lower Austria, were affected by dramatic flooding in September 2024 and these types of events are becoming more frequent. As a utility company, how do you deal with this?
Stallinger: As an operator of critical infrastructure, EVN prepares very carefully for many different types of crises. We regularly practice mastering these situations as best as possible and in the interests of our stakeholders. In this respect, we are not unprepared for the more frequent occurrence of extreme weather events. The investments to protect our plants and infrastructure have been intentionally increased over the past decades. Forecast models have also become more precise, and modern communications help us with crisis management. When I look back at the flooding in mid-September, our thanks as the Executive Board go out to our committed colleagues and their extraordinary achievements which provided our customers, our employees and our plants with highly professional protection and secured or enabled the rapid return of supplies.
Ms. Wittmann, you initially mentioned EVN’s shareholders. What dividend can they expect for 2023/24 and the coming years?
Wittmann: We plan to recommend a dividend of EUR 0.90 per share for the 2023/24 financial year. This also confirms the promise we made as part of our dividend policy for the appropriate participation for our shareholders in future earnings growth. Our dividend policy remains unchanged: We see an annual dividend of at least EUR 0.82 per share in the future. At the same time, we are aiming for the balanced use of funds to support the high investments of roughly EUR 900m annually in the coming years. To preserve our financial flexibility, we also want to maintain our ratings in the solid A range.
What are your goals – or perhaps also your wishes – for 2025 and beyond?
Szyszkowitz: Ideally, we – and here I mean all my colleagues in the EVN Group – will work together, responsibly and target-oriented on the realisation of the energy future. Our Strategy 2030 provides a clear and ambitious path to reach this goal. I am convinced that our employees and our management team have the necessary competence and enthusiasm to make this possible.
Wittmann: We need great flexibility and agility throughout our entire organisation as well as reliable and efficient processes to continue EVN’s success course. Here, the previously mentioned digitalisation and the use of AI can make a very important contribution. Another key requirement is a solid financial foundation to support the realisation of our extensive investment programme as planned.
Stallinger: The claim to stability also applies to our operating performance in all areas of the company – especially in view of the changing generation structures and consumption patterns. Because supply security is our central promise to our customers. Based on our investments in renewable generation capacity, capacity expansion and the technical upgrading of our networks as well as our extensive innovation initiatives, I am convinced we can master these challenges.