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Eneco, at the heart
of society
Annual Report 2012 Eneco Holding N.V.
Table of contents
2
Report of the Board of
Management
2
5
6
8
17
Message from the CEO
Main developments 2012
Developments
Who we are, what we do
Financial performance
20
Progress
20
23
44
47
Strategic KPIs
Performance in 2012
Sustainable business operations
Ecofys
48
Governance
48
51
52
54
56
57
59
60
67
Report of the Supervisory Board
Personal information Board of Management
Personal information Supervisory Board
Corporate Governance
Remuneration
Control
Shareholders
About this annual report
Assurance
69
Financial statements
70
75
86
91
113
114
117
119
121
Consolidated financial statements 2012
Notes to the consolidated financial statements
Notes to the consolidated income statement
Notes to the consolidated balance sheet
Notes to the consolidated cash flow statement
Segment information
List of principal subsidiaries, joint ventures and
associates
Company financial statements
Notes to the company financial statements
123
Other information
125
Glossary
Eneco Holding N.V. Annual Report 2012
1
Report of the Board of Management
Message from the CEO
Customers connect
with Eneco
Our energy world is changing. This was again apparent in 2012. Citizens
and businesses are becoming more and more aware that things should
and can change. They increasingly opt for a sustainable energy supply
and also want their costs to be predictable and affordable. Families and
businesses are becoming producers, generating clean energy locally on
a small scale and sharing it with their neighbours. It is our story, our
vision, which is now becoming a reality.
Eneco, my company
Satisfactory financial result
Eneco opts for sustainable energy and puts customers and their
The net result was € 233 million, a 14% increase compared with
needs first in its further refined strategy. Sustainable,
2011. Revenues rose by 5% to € 5.3 billion. In view of the market
decentralised and together, that is our vision and our
conditions in 2012, we are satisfied with the achieved result.
responsibility. We are building a business model aimed at saving
energy and generating energy in a sustainable manner, together
A changing world
with customers. And because the needs of our customers change,
The environment in which we work is dynamic and volatile. The
our role is also changing. Step by step, we are becoming each
section Developments describes the most important trends that
other's partners, a process in which we help customers to take
affect our management strategy. Some of these stand out. The
responsibility for their own energy supply. By involving them in the
global economic crisis, which continued in 2012 and which will
development of new services and products, we can be sure that
also be felt in 2013, also affected the energy market, in particular
these have added value for them. Examples include the product
the business-to-business segment. The low economic activity
HollandseWind®, in which customers benefit from wind energy,
slows down the transition to a sustainable energy supply, for
and ESCOs, a new form of energy performance contracts. The
example as a result of the low CO2 prices. Due to the high gas
pipeline that Stedin is installing in the Botlek industrial region for
prices, the operations of our new gas-fired energy plant are less
the transport of residual steam, which is subsequently used as a
efficient than anticipated at the beginning of this project. Other
source of energy, is another good example. The Smart Grids
activities that are affected by the economic situation are those in
Innovation Award, which was awarded to Joulz for the innovative
the area of maintenance, installation and renewal of energy
concept of a holiday park that is self-sufficient with respect to its
infrastructure. This is clearly noticeable for our infrastructure
energy supply, also shows how we generate ideas in collaboration
company Joulz that was forced to take drastic measures. Eneco
with our customers. Our mission is: 'sustainable energy for
will continue to monitor the costs over the next few years and
everyone'. That is what unites us. We wish to be a reliable partner
implement a major cost savings program.
for anyone with whom we work so that they can say: Eneco is my
partner for sustainability - Eneco is my company.
2
Report of the Board of Management Message from the CEO
However, external circumstances will not distract us from our
elements of the chain as well as on the system as a whole.
sustainability course: we will continue to invest in enhancing the
Dividing up the supply chain into separate parts would prevent us
sustainability of the energy we supply and our business
from achieving our social objectives.
operations. In the Netherlands, we are working on Eneco
Luchterduinen, a new wind farm in the North Sea; the biomass
Collaboration
plant Golden Raand in Delfzijl is nearing completion. In Great
We can only realise our ambitions by working together with other
Britain, we are developing an onshore wind farm for Scottish
parties. That is why we are always looking for ways in which
Water that will make the company partly self-sufficient in its
organisations and companies can help each other. For this reason,
energy supply. The development of the Norther offshore wind
we started a collaboration with WWF a few years ago and enter
farm in Belgium is making good progress. And in France, we
into a dialogue with political parties and government bodies about
collaborate with Fonroche Energy and the Swiss company Susi
our standpoints. We also have a responsibility towards our
Partners for the acquisition of solar installations. The transition
customers, the municipalities that are our shareholders and our
from central energy generation to sustainable and local energy
partners. In connection with our substantial investments, we also
generation near and by customers continues. This will change our
seek collaboration in the form of partnerships, both nationally and
business model. We are developing new business models and
internationally. This way, we spread the risks and we are able to
propositions in which providing advice to customers plays a bigger
invest in additional sustainable projects.
role. This results in added value, both for our customers and for
Eneco.
At the beginning of 2013, we took a big step by entering into a
long-term partnership with the Japanese company Mitsubishi
The target of the Dutch Government that, in 2020, sixteen
Corporation (MC). MC will have a 50% interest in the new offshore
percent of the energy that is consumed shall be generated in a
wind farm Eneco Luchterduinen that we are developing. The
sustainable manner – more than Europe requires from the
construction of this wind farm, that will be located off the Dutch
Netherlands - was good news. This ambitious goal indicates that
coast, will start in 2014. It is the intention that MC will get a 50%
the government attaches genuine importance to the promotion
interest in the existing Prinses Amalia Wind Farm and there are
of sustainability. Meeting this target requires strong development
possibilities for further cooperation in new projects, such as the
of sustainable energy sources such as wind power, solar power
British wind farm Navitus Bay, in which we already collaborate
and biomass as well as the development of smart grids that
with EDF, and the Norther Wind Farm in Belgium. We will also start
transport local sustainable energy from producer to consumer.
working together with housing corporations on the development
This means that close collaboration with energy companies is
of propositions that will be designed especially for this sector.
necessary, as well as creating stimulating conditions, such as a
favourable business climate, tax benefits for the generation of
We also need support from NGOs, organisations that are
green energy and higher CO2 prices. Due to their specific nature,
committed to sustainability and nature protection. Our
the contribution of the transport sector and built environment to
partnership with WWF resulted in concrete and challenging
the new government objectives will be limited. This means that
objectives in areas such as CO2 emissions reduction and higher
electricity production will play a large role. At present, 10% of the
sustainable production and supply to our customers.
electriity is produced in a sustainable manner. By 2020, this
should be at least 40% . With our experience and expertise, Eneco
is in an excellent position to make a fundamental contribution to
the achievement of this objective.
Excellent service and safety
The basic condition for realising our ambitions is that our
customers continue to appreciate the service that we provide.
Customer satisfaction has increased across the board. However,
At the same time, there is a noticeable positive development that
there is always room for improvement. The major power failures
more and more people want to generate green energy
in Rotterdam and Nieuwegein cast a shadow over the otherwise
themselves. The market and technological developments offer
good performance of our grid administrator Stedin. A detailed
increasingly better opportunities to make this possible. Examples
description of the preventive measures that have been taken to
include the decrease in the production cost of solar panels,
reduce the possible inconvenience to customers to a minimum in
combined with an increase in output. We see it as our task to
the event of an interruption are included elsewhere in this annual
stimulate and support these developments. We also notice that
report. Safety comes first in everything we do. Safety of our
citizens are becoming more outspoken about their expectations
employees as well as the employees of contractors on our
of companies and their business operations. Social media play an
building sites and, naturally, the safety of our customers and
important role in this respect. They give individuals a voice and
people living in the vicinity of our installations. We are proud to
connect them with each other and with companies. People expect
have further improved our safety performance in 2012.
transparency and honesty from companies, including Eneco.
Our vision 'Decentralised, sustainable, together' calls for a
company that is active in the entire energy supply chain, because
this change will have a revolutionary effect on the different
3
Report of the Board of Management Message from the CEO
Our organisation
In December, we welcomed Marc van der Linden as a new member
of the Board of Management. Marc has been working at Eneco
since 1997 and is familiar with every aspect of the company. We
thank Jurriaan Ruys for his substantial contribution to the
development of Eneco during his term as an interim member of
the Board.
Our new business model and our changing role, in which services,
advice and collaboration come first, require our employees to
develop new competences. We have great appreciation for their
committed and enthusiastic dedication during the past year. It is
our responsibility to ensure that they are well prepared and to
create a supportive work environment. The new sustainable
offices, which we started to use in 2012 and in which our
employees work according to the 'new style of working' principle,
stimulate collaboration and knowledge sharing.
Eneco has all the resources to take the lead on the path towards
a future-proof energy supply.
Jeroen de Haas
Chairman of the Board of Management Eneco Holding N.V.
4
Main developments 2012
• Customer base in the Netherlands and Belgium over 2.2 million (page 33)
• Partnership with Mitsubishi Corporation for offshore wind energy (page 28)
• Investment in energy generation and infrastructure EUR 712 million, including steam pipe network in Botlek area (page 25)
• First guaranteed energy efficiency contracts in the form of ESCOs concluded with Van Nelle design factory (page 25)
• Partnership with EDF Energy for the development of offshore wind farm Navitus Bay (page 28)
• 30,000 customers wish to purchase Toon smart thermostat, 5000 smart thermostats already installed (page 25)
• CO2-emissions own operations decreased by 37% compared with 2007 (page 44)
• Joulz first Dutch company to achieve level 5 on Corporate Social Responsibility ladder (page 44)
• Operational result own gas plant below forecast (page 36)
• Satisfactory financial result (page 17)
• Some major interruptions in Rotterdam and Nieuwegein (page 34)
• Safety performance improved, less incidents (page 37)
• Eneco implements cost-saving programme (page 18)
• Restructuring Joulz (page 18)
5
Developments
Developments in
the energy market
Eneco identifies different trends that support our vision on the
development of the energy market. That vision is that, over time, the
market is developing from centralised production of energy from fossil
fuels via a combination with decentralised sustainable energy to fully
decentralised sustainable energy production.
Changing the global balance of power
share their opinions via Twitter and Facebook directly and with
As a result of the rise of fast-growing economies, the role of the
everyone and find endorsement or a reply almost instantaneously.
eight leading industrial countries, the G8, has, in fact, been taken
Eneco responds to this development and is also using these
over by the G20, comprising the 19 most powerful countries plus
channels to spread news and offer customers the possibility to
the European Union. The differences between the interests of the
contact the company, which results in a continuous dialogue. We
traditional countries and emerging economies are often
support and have developed a directive for the use of social media
substantial. This will continue to be the case in the coming years.
by employees.
Consequently, a global approach to the climate problem is
becoming increasingly unlikely. If the current trend with regard to
energy consumption and the increase of the CO2 content in the
More uncertainty and greater risk awareness
The current price of CO2 emission rights is only a fraction of what
atmosphere continues, the world cannot avoid climate change as
it was expected to be a few years ago. Reasons for this include
the average temperature will reach dangerous heights. This will
the economic crisis and flaws in the European emissions trading
result in an increase in natural disasters. Since this development
scheme. The current carbon pricing in combination with the high
is not acceptable for many people, climate policy will tend to be
gas price results in lower returns on, for example, gas-fired energy
local rather than global in nature and the business community will
plants. The level of investment in new sustainable production or
play a larger role.
cleaner gas plants is too low. This is due to the uncertainty with
regard to the price of emission rights in the long term. In addition,
The growth rate of emerging economies is faster and more stable
the economic crisis has led to a growing awareness among risk
than the growth rate in the developed economies. The increasing
capital providers who are now less willing to provide money and
demand in emerging markets for energy and resources, such as
charge higher risk premiums. As a result, no investments are
natural gas, directly affects the European energy market. The
made. Moreover, there are the effects of climate change, which
competition for resources is increasing. In addition, investors from
also leads to greater uncertainty, increased risk awareness,
emerging economies will show increasing interest in the activities
fluctuations in energy prices and in the demand for and supply of
in the field of gas storage or sustainable energy production of
energy.
companies such as Eneco.
The ongoing economic crisis and the uncertainty in connection
Increasing individualisation and new connectedness
with the political solution for this crisis in Europe have led to
A stronger need for autonomy among customers and declining
economic instability in several European countries. Austerity
confidence in traditional systems stimulate the growth of
measures that also affect the support for sustainable energy are
decentralised energy generation. We notice the emerging of
taken in rapid succession; the current uncertainty about the future
cooperative arrangements between end users focussing on joint
support mechanism in the Netherlands is an example of this.
purchasing, energy efficiency and increasing the sustainability of
energy. Supported by new means of communication, new social
connections are developing, both locally and internationally. The
influence of social media is omnipresent and growing. Customers
6
Report of the Board of Management Developments
Market integration North-West Europe with focus on
national interests
Transition in phases
(Explanation of image)
The physical interconnection of the networks and the linking of
trading markets result in the further integration of both the
electricity and gas markets in North-West Europe. This will bring
prices closer together. At the same time, national authorities try
to safeguard the security of supply at a national level and to
support the development of sustainable energy. This focus on
national interests can disrupt surrounding markets, resulting in a
The energy market is developing in three stages: from centralised
energy production from fossil fuels to fully decentralised
sustainable energy production.
1
fossil fuel (coal and gas) and nuclear power plants. From a
growing need for European harmonisation.
single point and in one direction, electricity is sent over the
network to the consumers.
Decentralised electrification
The cost of solar panels continues to drop and the electricity price
The disadvantages are: substantial grid losses, limited re-use
is becoming more volatile but, on average, the price of electricity
of residual heat and high CO2 emissions. Customers have few
is declining due to a larger share of sustainable capacity. Local
options other than the possibility to switch to another
initiatives are playing an increasingly important role and electric
supplier. Eneco is convinced that, over time, this energy
transport is growing rapidly. Compared to 2011, the number of
landscape will change drastically.
all-electric cars in Netherlands almost doubled to approximately
2,000 vehicles (2011: 1,124 according to a publication of NL
Agency, a division of the Dutch Ministry of Economic Affairs). In
2
increasingly important role, in addition to the existing coal
number is expected to increase to 200,000 by 2020.
and nuclear power plants.
Furthermore, energy saving is a serious agenda item since the
combination with the Dutch standards for the energy efficiency of
3
Decentralised, Together.
electricity increasingly important for the operation of heat pumps
homes and new housing developments. As a result, the demand
for electricity and the number of connections will increase, while
the demand for gas and the number of connections to the gas
network will decrease.
Eventually, society will move to a smaller-scale sustainable
energy landscape. We refer to this as "SDT": Sustainable,
buildings (energy performance coefficient), this will make
and pumps in solar water heaters used for the heating of existing
In the next phase, there will be a transition in which (largescale) renewable energy and gas will be playing an
another publication, the Dutch government indicates that this
adoption of the EU Energy Efficiency Directive in 2012. In
The current energy supply is characterized by large-scale
•
Sustainable: wind turbines, solar panels, heating/cooling,
geothermal energy, bio-fermentation and green gas.
•
Decentralised: these installations are located close to
customers and are owned by customers.
•
Together: at and with the customer. From one-way to twoway traffic: smart grids and ICT solutions that link supply and
demand and take advantage of price fluctuations.
Partnerships between producers and suppliers will develop.
7
Who we are, what we do
Profile
Eneco Holding NV (‘Eneco Group') is the only integrated energy group in
the Netherlands that has the explicit ambition to produce, transport and
supply energy in a sustainable manner.
With approximately 7,000 employees, we serve 2.2 million
Network and engineering activities
business and domestic customers. The company’s shares are held
Stedin is responsible for the maintenance, management and
by 55 Dutch municipalities. Eneco’s head office is located in
development of gas and electricity networks located, in particular,
Rotterdam.
in the densely populated areas in the provinces of Utrecht and
Zuid-Holland. All of its statutory regulated tasks are performed in-
Sustainable production, supply and trading
house. The free, not statutory regulated activities, are carried out
Under the name Eneco, the group engages in the production,
by Stedin Services (Stedin Diensten). Stedin not only bears
trading, purchasing and supply of energy (electricity, gas, heating
responsibility for the safety and optimal functioning of the energy
and cooling), an increasingly large part of which is generated in a
grid, it also develops infrastructures for the transport of waste
sustainable manner. In addition, we develop sustainable and
flows such as CO2, steam and biogas (www.stedin.net).
decentralised energy solutions for customers. The energy com-
Joulz is a specialist in the safe design, installation and
pany also transports and distributes heating and cooling to
management of sustainable energy infrastructure. It offers a
customers and CO2 to horticultural businesses. Furthermore,
complete package of consulting and engineering services relating
Eneco continuously works on creating its own sustainable
to the energy grids and associated installations. Joulz offers its
portfolio and on sustainable production together with customers.
experience of more than a hundred years to a wide range of
Eneco's aim is to supply its customers 100% sustainable energy.
customers and, in particular, to national, regional and private grid
In addition to its own sustainable production, Eneco also
administrators as well as road authorities, utility companies and
purchases sustainable energy by concluding long-term purchase
the industry sector. In both small-scale and large-scale projects,
contracts with wind farm, biomass plant and solar energy plant
Joulz forms the link between parties. Together making sure that
operators. Eneco's activities also include the trading in CO2
it works, that is the power of Joulz (www.joulz.nl).
emission rights and the purchase of gas for its own gas plant or
8
gas plants from which it purchases electricity. In its own gas
Independent consultancy Ecofys
storage facilities, Eneco creates a gas reserve for periods when
Ecofys has both in-depth and extensive knowledge across the
there is an increased demand for gas. Eneco has operations in the
entire spectrum of energy and CO2 efficiency, sustainable energy,
Netherlands, Belgium, France, Germany and Great Britain. The
energy systems and markets and energy and climate policy.
energy company has grouped its activities logically in functional
Ecofys provides advice in these areas and has an independent
business segments. (www.eneco.nl)
position within the group. (www.ecofys.com/nl)
Report of the Board of Management Who we are, what we do
Business model
transition
Revenues from energy sales are higher than the costs that Eneco incurs
for, in particular, the production, purchase and transmission of energy.
This is how we now earn our money. But this business model is going
to change.
As customers are increasingly producing their own energy, we will
Eneco strategy is that we are working on creating a company that
be supplying less energy. However, the own generation capacity
focuses on energy efficiency and local sustainable energy
of customers will result in new types of demand, such as advice
generation solutions. We are changing from a traditional energy
on and the financing, installation and maintenance of those
supplier to a service provider that offers comprehensive solutions
facilities. They will also be using their new position to increase
for energy issues. This also requires a cultural change from our
their energy efficiency. This way, they save money and the
employees, who will increasingly need to connect with customers
environment. By giving our customers our full support, we assume
and understand their requirements.
our social responsibility. That is why we gladly aim for reducing
energy consumption. This starts with giving our customers better
The concept of Energy Service Companies (ESCO) is one of our
insight into their energy consumption, for example with the
new focal points. These are performance contracts with major
introduction of the Toon® thermostat.
customers, such as companies and housing corporations, that
reduce energy consumption with measures such as better
Changing in phases
insulation and more energy efficient heating systems.
Naturally, Eneco wishes to continue its sustainable operations
from a business economic point of view. We wish to demonstrate
our added value for customers, nature and the environment and
Sustainable customer relations
The ESCO concept is promising. It enables Eneco to get closer to
at the same time create economic value, now and in the future.
customers, to support them and to establish a more sustainable
To this end, we are changing our business model in phases. A
relationship with them. It also enables us to offer more new
transition from a central energy production and supply company,
innovative products and services.
to a central sustainable energy production company and
eventually to a situation in which customers, supported by Eneco,
generate their own sustainable energy locally. The essence of the
ENECO’S BUSINESS MODEL
3.5*
Energy purchases & transmission
Depreciation energy production assets
4.0
0.2
0.2
Depreciation distribution networks
Eneco Group
0.4
Personnel expenses
Energy sales
1.1
0.2
Energy distribution
Other services
0.7
Maintenance & overhead
Revenues
5.3
Expenses
5.0
Earnings before interest and tax
0.3
* Simplified representation of
the consolidated income statement
(x € 1 billion)
9
Customers rank first in
our strategy
The most important partners for Eneco are our customers, as is
apparent from our mission: sustainable energy for everyone. A mission
that stems from our commitment to society. This is only logical, because
our roots and justification lie in society. Eneco exists by the grace of its
customers and the confidence that is placed in us by society.
from society for our mission. By being transparent and honest. By
Our strategic direction
Customer first
our committed, outspoken and decisive way of working. This
Attention for our customers, the customers' needs and the
creates a strong relationship and connection between Eneco, our
relationship with our customers comes first at Eneco. That is why
customers and other partners. As a result, Eneco is perceived as
we do what we do. Ultimately, it is a question of how customers
being a reliable and trusted partner: Eneco and I, together for
experience our services and how enthusiastic they are about us.
sustainability. Eneco – that's my company.
This is why we involve our customers in the development of our
This confidence is crucial to us and we earn it by obtaining support
products and services. Products and services that make a
Our mission
difference for customers and that they are satisfied with.
Sustainable energy for everyone, that is our mission. This mission
connects us to our customers and clearly indicates what we
Energy efficiency
represent and strive to achieve: we aim to make sure that our
Together with our customers, we are lowering energy
customers can count on affordable, reliable and clean energy,
consumption. Eneco does this by providing customers insight into
today and in the future.
their energy consumption and by supplying practical products and
services such as smart meters, energy-efficient boilers and
Our vision
In the future, all energy will be sustainable. This energy will
increasingly be generated locally, by the customers themselves.
Energy generated from fossil fuels is becoming scarcer, pollutes
personal energy saving advice. This not only has financial and
environmental benefits, but is also ultimately sustainable: what
you do not use, you do not have to generate. And with more than
2.2 million customers, that makes a difference.
and makes us dependent on, in some cases, unstable regions in
the world. Consequently, it is also becoming increasingly
Generating energy together
expensive. This means that the energy world must change. SDT
Together with its customers, Eneco aims to make the local
is the answer; sustainable, decentralised, together. The roles of
production of energy accessible and cost-effective. Energy that is
producer and consumer will change completely. Customers will
needed at work and at home. Some of our customers are already
become producers and suppliers. We will need to work together
producing sustainable energy locally, for their own use and also
and communicate more closely with customers.
for others if they produce surplus energy. Instead of paying for
energy, they save energy and even earn money from energy. To
this end, Eneco develops tailor-made solutions together with
customers and other partners. For example, solar panels, micro
and regular wind turbines, biomass installations and solutions
that involve the use of heat pumps. In addition, we provide the
reliable and future-oriented energy infrastructures that enable
joint production.
10
Purchasing
Eneco gives its customers access to affordable, reliable and clean
energy. Customers can, of course, count on excellent customer
service. As a result of the rapid technological development and
declining costs, an increasing number of our customers will be able
to generate part of their energy requirement themselves. Eneco's
aim is that any additional energy that they require will be
generated from 100% sustainable sources. At present, all our
domestic and SME clients are supplied with 100% green
electricity, an increasingly large part of which is generated in a
sustainable manner together with our partners. To this end, Eneco
invests in energy production from wind and solar energy and
biomass in the most appropriate environment. In Great Britain, we
are investing in wind, France offers favourable conditions for solar
energy and in the Netherlands and Belgium, we focus on wind and
solar energy and energy generated from biomass.
Expertise
With over 100 years of experience and all the necessary skills
combined within one group, expertise is closely associated with
the Eneco Group. With the business units Eneco, Joulz, Stedin and
Ecofys, we offer a full range of services relating to the entire
energy chain: from sustainable generation, trading, transporting
and supplying renewable energy to designing and providing advice
on local energy solutions. We combine this with developing smart
energy infrastructures for two-way traffic.
Connecting leadership
To realise and accelerate our ambition, everyone's input is needed:
our customers, suppliers, scientists ... everyone. That is why we
actively seek to connect with all these partners and stimulate
mutual cooperation. Together with our partners, we devise new
business models that result in sustainable value for everyone. This
often includes carrying out many of our projects in collaboration
with others, in some cases with other energy companies. This
enables us to share risks and combine our knowledge and skills.
11
Link between strategy
and risks
Eneco has a number of important objectives which it pursues, its key
performance indicators (KPIs). An overview of these KPIs can be found
in the section Strategic KPIs [pagina]. The table below describes the
main strategic risks and the corresponding measures to manage these
risks. Subsequently, we describe a number of general risk in the form of
market and regulation risks and financial and operational risks.
Strategic risks
KPI 4: in 2013, 20% of the total retail supply portfolio is sustainably produced electricity
Risk
Explanation
Mitigating actions
Slower development of sustainable
strategy due to government policy such as
changing subsidy systems and structurally
low CO2 prices.
The price of these certificates is low due
to the large number of CO2 certificates
that have been issued. Frequent changes
in subsidy regimes lead to additional
uncertainty. Both of these factors slow
down the development of and investment
in sustainable energy.
We strive to convince government bodies
in various ways of the importance of
creating a stable investment and
financing climate with a level playing field
between the different technologies
(sustainable and fossil fuel).
Lower sustainable energy production due
to less wind force and/or sunshine.
When our wind turbines and solar panels
produce less energy as a result of
unfavourable weather conditions, our
sustainable electricity production
decreases.
We use weather trend analyses to
determine the optimal locations for
investing in new wind and solar power
production facilities.
KPI 6: In 2013, the average duration of interruptions of the energy supply is 14.7 minutes or lower (for electricity,
gas and heating)
12
Risk
Explanation
Mitigating actions
Temporary interruption of energy supply
due to faults in networks.
-
Each year, we make substantial
investments in the reliability of our
networks. Fault indicators in the
networks reduce the duration of
interruptions. We develop self-healing
grids. We have a certified asset
management programme. In the spring of
2012, a campaign was launched to
prevent damage to our networks
resulting from excavations by third
parties.
KPI 7: In 2013, 20% of the retail electricity supply portfolio is dark green electricity
Risk
Explanation
Mitigating actions
Decrease in dark green electricity sales due
to strong price competition from
alternative forms of energy generation.
In recent years, there was a strong
increase in price competition in the Dutch
electricity market. Dark green electricity
only has a small market share and is not
always the cheapest alternative.
Continuous price comparison with other
suppliers. Further expansion of
distinctive image, products and services.
Emphasise the social importance of
sustainable energy.
Risk
Explanation
Mitigating actions
Safety incidents due to insufficient safety
during construction and operation of
production facilities and energy
infrastructure.
We have extensive experience in the area
of safety with respect to (working on)
energy infrastructure and technical
installations. However, the growth in the
area of sustainable production leads to
new safety risks.
Eneco has an adequate safety policy and
safety organisation. The safety policy
applies for all our employees, materials
and contractors. Our management
stimulates safe conduct. We have an
incident reporting system, carry out risk
analyses, give training and carry out
workplace inspections.
KPI 9: In 2013, LTIR is 1.6 or lower
KPI 12: The credit rating of the Eneco group is at least ARisk
Explanation
Mitigating actions
Lower credit status, for example due to
forced unbundling or inadequate financial
results.
A forced unbundling of the Eneco
organisation leads to a less solid financial
basis and the loss of the many benefits
resulting from collaboration between the
different disciplines. Unbundling of the
company poses a threat to our
sustainability strategy.
Start legal proceedings against forced
unbundling.
Tools that are used to monitor the
financial performance include scenario
analyses and stress tests.
Risk
Explanation
Mitigating actions
Counter party risk in large investment
projects.
We will invest approximately € 900
million in the reliability of our networks
and energy production in 2013.
Complex projects are assessed by a team
of experts. Realised investments are
carefully evaluated. We take into account
the mix of realised investments and new
development investments that do not yet
generate result.
13
Market and Regulation risks
Risk
Explanation
Mitigating actions
Profitability of gas plants and biofermentation installations decreases due
to higher gas and biomass prices and/or
lower electricity price.
Due to the economic recession, the price
of electricity has dropped. The gas price
is linked to the continuously high oil price,
while the price of coal was significantly
lower. The price of biomass is volatile,
because this is usually purchased locally.
Hedging policy: In accordance with the
specified trading mandates, gas is
purchased (in advance) and/or electricity
is sold when the prices are relatively
good. However, this is not a solution for
structurally low prices.
Risk
Explanation
Mitigating actions
Operational performance is unsatisfactory,
for example due to interruptions in ICT
systems.
With respect to customers, interruptions
in ICT systems can result in incorrect
invoices which leads to reputational
damage. Interruptions in ICT systems
used for trading purposes can result in
significant financial damages.
Assurance activities, such as audits and
certification. Energy trade related
activities are run on a separate,
duplicated ICT platform. The Cyber
Security task force monitors the
adequacy of ICT security.
The maximum rate that we, as the grid
administrator, are allowed to charge is
insufficient to finance all the costs and
investments required for a reliable network
(regulated domain pricing).
Grid administration activities relate to the
long term and require adequate and
predictable pricing. Unexpected
deviations result in an uncertain
investment climate.
We participate in benchmarks for
controlling internal costs. Management
proactively participates in consultation
bodies and communicates with
government bodies to achieve proper
pricing.
Counterparty risk with banks relating to
lease-and-lease-back transactions.
Eneco has positions with five banks in the
form of deposits relating to lease-andlease-back transactions to an amount of
USD 1.8 billion at 31 December 2012
(2011: 2 billion). Eneco is exposed to the
related counterparty risk.
All five banks have a Standard & Poor’s
and/or Moody’s in the 'investment grade'
segment. The counterparty risk is
assessed frequently. We apply an active
policy with regard to settling the current
transactions. This resulted in the settling
of three of these contracts in 2012.
Financial and operational risks
A detailed explanation of the way in which we have organised risk management is included in the chapter on Governance, under Risk
management (page 57). This chapter also contains more information on risk tolerance.
14
Stakeholder dialogue
Eneco has a strong connection with society and respects the interests
of its stakeholders. Eneco takes these interests into consideration and
incorporates them where possible. This starts with involving
stakeholders in our strategy.
Assessment
discussions are aimed at various sectors: medical, government,
In 2012, an assessment was made by the management and the
private grid administrators and the rail industry. From these
Board to determine which stakeholders are deemed to be the
meetings, we have learned that, in some cases, there is a lack of
most important. On the basis of this assessment, we categorised
involvement with and, in particular, knowledge with respect to
the stakeholders by their impact on Eneco and the degree to
installation responsibility among the upper management of these
which they can be influenced by Eneco. This categorisation
organisations. With these round table discussions, Eneco aims to
enables us to focus and to select the appropriate approach.
increase the awareness of the importance of installation
responsibility in these organisations.
Approach
People and organisations are involved in our company in different
Dialogue with entrepreneurs
ways. That is why we choose different ways to enter into a
In the business segment, Eneco organises Business
dialogue with them about our strategy and activities.
Environmental Dinners to stimulate the dialogue on sustainable
operations with the management of companies. We also organise
Customers
Master classes on Corporate Sustainability for SME
Through our monthly digital newsletter that many customers
entrepreneurs.
receive, our website, which is visited by a large number of unique
visitors each month, and the various contacts with our call centre,
Colleagues
we involve our customers in the energy supply. We get valuable
Strategic alignment
feedback through the Eneco customer panel and the new Eneco
The Strategic Internal Alignment Monitor is a study that we carry
Forum.
out to determine the extent to which our staff actively supports
the mission 'sustainable energy for everyone' in their daily work.
Eneco customer panel ‘All for sustainability’
It offers insight into which targeted instruments departments can
Members of Eneco's customer panel can make suggestions and
use to realise desired behavioural changes. The aim is that
contribute to discussions with Eneco on solutions to further
employees apply the strategy in everything they say and do and
improve energy efficiency and sustainability. The feedback from
take the appropriate actions and make the right decisions in line
the customer panel is used to fine-tune communication proposals
with the strategy.
and marketing propositions.
Eneco Forum basis for co-creation
Shareholders
Dialogue with shareholders
The Eneco Forum enables customers to exchange information
The general meeting of shareholders took place twice in 2012, at
among themselves and with Eneco and to join discussions on a
the time of the release of the annual report and half-yearly report.
variety of energy-related topics. The feedback from the forum is
Besides the legal and statutory obligations, there are several
communicated to the appropriate department in the organisation.
moments in the year when Eneco involves its shareholders in the
The intention is that Eneco Forum increasingly becomes a channel
developments of the company, answers their questions and
for collaboration with customers. In time, we expect the emphasis
enters into a dialogue with them. This takes place during meetings
to shift from service to co-creation.
with the three main shareholders and during the meetings of the
shareholders’ committee. For all other shareholders, we organise
Round table discussions with sectors
working visits to important projects of Eneco, both proactively
Via Joulz, Eneco organises round tables discussions on the topic
and upon request. We also visit each of our shareholders
of installation responsibility and energy management. These
periodically. In addition, shareholders and other business
15
associates regularly receive newsletters and are also invited to
objectives of WWF. On Wednesday 9 May, Eneco, in its capacity
business associate events.
of partner of WWF Netherlands, hosted the WWF Next' event.
During that day, more than 240 representatives of companies
Local community
Stakeholder management essential
greenhouse gas emissions and sustainable energy. The central
Strategic Stakeholder Management is a method that we apply in
question was how companies can contribute to the reduction of
our projects to communicate with local stakeholders at an early
CO2 emissions.
stage in an open, transparent manner. The objective is to find the
common interests, to enhance the predictability of stakeholders
and to prevent surprises later on in the process as much as
possible. Subsequently, we proactively apply strategy aimed at
maintaining a sustainable relationship with the environment as
well as achieving the goals of the organisation.
For projects involving many and various stakeholders, we use an
environment monitor. In this database, we record all stakeholders,
issues, interests and actions. This proves to be a good way to
keep a good overview of complex projects.
Also in the construction of wind farms, we actively involve the
local community and other interested parties. Examples include
the 'Look Behind the Scenes' visits during the construction of the
wind farms Hoevensche Beemden and Zwartenbergseweg in the
province of Noord-Brabant.
Government bodies and NGOs
The activities of the Eneco Group are strongly affected by
regulations. There is still no level playing field between sustainable
and fossil fuel energy. We strive to communicate our views and
to protect our interests vis-à-vis regulatory authorities.
Three-point plan
During the election period, Eneco presented three points to the
political parties that should make the energy supply in the
Netherlands clean, reliable and affordable:
1.
The polluter pays; stimulate clean energy that is generated
2.
Let citizens, farmers and companies generate their own
3.
Maintain Dutch energy companies; create room to invest in
nationally.
energy.
the energy sector.
Facebook application ‘For sustainability’
In the beginning of September 2012, Eneco launched a Facebook
page under the name 'For sustainability' ('Voor duurzaam'), a
platform where customers and non-customers can share ideas on
sustainable energy with Eneco and with each other. We have
presented the results of the Facebook campaign to the energy
spokespersons of political parties VVD and PvdA that were
negotiating the formation of a government.
WWF
In connection with the cooperation that started several years ago,
Eneco conducts regular consultations with WWF on the follow-up
of the cooperation and the alignment of our strategy with the
16
discussed practical examples of energy efficiency, reducing
Financial performance
Key figures
(amounts in millions of euros)
2012
2011
2010
2009
2008
Results
Total revenues
1
5,256
5,007
4,922
5,245
4,943
Revenues from energy and energy-related
5,082
4,839
4,722
5,018
4,635
Gross margin energy and energy-related
1,620
1,442
1,294
1,325
1,262
Operating income before depreciation (EBITDA)
776
711
576
564
695
Operating profit (EBIT)
335
388
274
268
404
Net profit
233
204
141
177
272
Cash flow from operating activities
727
1,117
670
729
532
Capital
Equity
4,447
4,353
3,890
3,900
3,809
Interest-bearing debt
1,800
1,859
1,947
2,087
1,863
2
8,804
8,645
7,577
7,691
7,386
710
734
730
523
328
50.5%
50.4%
51.3%
50.7%
51.6%
8.8
8.8
6.2
7.4
11.4
6,839
6,596
6,622
6,137
5,419
4.3%
4.5%
4.6%
4.7%
4.9%
25,201
27,457
24,435
24,295
26,381
5,748
5,914
6,704
5,900
5,114
11,704
11,350
13,157
11,436
11,923
Balance sheet total
Investments in property, plant and equipment
Ratios
Equity/total assets
Interest coverage rate
3
Employees
Number of FTEs average
Absence due to illness
Sales volumes
Electricity (GWh)
Gas (million
4
m3)
District heat (TJ)
60
1
Total revenues: Revenues from energy and energy-related as well as other revenue.
2
Figures 2011 restated for comparative purposes.
3
Interest coverage ratio: Operating profit divided by financial income and expenses.
4
Including trading volumes Eneco Trade.
51.6
50.7
51.3
50.4
50.5
12
55
10
50
8
45
6
40
4
35
2
11.4
7.4
6.2
8.8
8.8
2008
2009
2010
2011
2012
0
2008
2009
2010
2011
EQUITY/TOTAL ASSETS
(in %)
2012
INTEREST COVERAGE RATE
17
Report of the Board of Management Financial performance
Eneco records
satisfactory result in
challenging market
Net profit up
Investments
Eneco Holding N.V. recorded a net profit of € 233 million in 2012,
Eneco Group is reinforcing its sustainability ambitions by creating
an increase of € 29 million (14%) compared with 2011. Revenues
a diversified portfolio of renewables assets. In 2012, Eneco
were up by 5% from € 5,007 million to € 5,256 million. Gross
invested € 120 million in several wind farms in the Netherlands,
margin and other operating revenues (non-energy revenue)
Belgium and the United Kingdom and € 103 million in the
improved by € 184 million (11%) to € 1,794 million. The
construction of the Golden Raand biomass power station in
acquisitions of Oxxio and the remaining 50% interest in the
Delfzijl. Replacing, expanding and increasing the sustainability of
Prinses Amalia Wind Farm (PAWF) in 2011, the expansion of
district heating networks absorbed € 32 million in 2012. The
selling activities in Belgium and higher transmission tariffs played
acquisition of and investment in solar farms in France and Belgium
a major role in this.
involved € 50 million. Eneco Group invested a total of € 712 million
in property, plant and equipment (2011: € 737 million), including
Operating expenses excluding depreciation, amortisation and
€ 367 million for replacement and expansion of the gas and
impairment rose by € 119 million to € 1,018 million, partly as a
electricity networks.
natural outcome of the expansion of activities, such as the
acquisitions of Oxxio and the remaining 50% interest in PAWF and
Operating profit and net profit
bringing the gas-fired Enecogen power plant, the Gasspeicher gas
The operating profit was € 335 million, 14% down on the previous
storage facility and several wind farms on line. There was also a
year when it had been € 388 million. In respect of market prices,
rise in maintenance and operating costs for the network activities,
it is expected that the current poor relationship between gas and
caused in part by additional repair costs and compensation
electricity prices (‘spark spread’) and the low prices for CO2 rights
following power cuts. Greater competition, adverse trends in
will continue for some time. This has led to an impairment of € 78
market prices and the economic crisis as well as the investment
million on electricity-related property, plant and equipment.
in expanding our position in the Belgian market, the rollout of the
Toon smart thermostat and the development of new wind farms
The share of profit of associates included non-recurring income of
also resulted in higher costs. Additions to provisions increased in
€ 56 million in connection with the sale of the interest in KEMA.
2012 as a result of adverse market price changes and the
Net financial expenses rose by 9% to € 88 million (2011: € 81
economic crisis: more customers (business and domestic)
million), partly because more interest for projects under
defaulted on payments. A provision was also formed in
construction could be capitalised in 2011. Income tax fell by € 24
connection with a restructuring of the engineering activities.
million to € 50 million because of the lower operating profit
combined with higher interest charges and a tax refund on
At € 776 million, operating income before depreciation,
discontinued operations.
amortisation and impairment (EBITDA) was 9% higher than the
previous year (€ 711 million). Eneco Group is focusing on cost
The overall net profit for Eneco Group rose by 14% from € 204
reductions, which will be made across the board. We have drawn
million to € 233 million.
up a programme that will lead to considerable savings in the next
few years, giving Eneco scope to maintain a high level of
investment in new renewable energy production and good
networks.
18
Report of the Board of Management Financial performance
Production, trading and supply
operation. In December a restructuring provision was formed for
In 2012, we entered into a strategic alliance with the French
€ 16.5 million.
company EDF for the development of the large offshore Navitus
Bay wind farm in England. This type of partnership is a significant
part of our strategy as it allows us to diversify our investments
Outlook
We have confidence in the further development of the business
and risks and develop renewables projects. An offshore wind
but in view of the major external uncertainties we are not making
alliance was formed with Mitsubishi Corporation of Japan in early
a forecast of the result for 2013.
2013. We also entered into a contract with waste processor AVR
which will allow waste heat from the Rijnmond waste processing
energy plant to be put to good use to heat homes and buildings
saving 95 kilotonnes of CO2 emission each year.
Compared with 2011, EBITDA on production, trading and supply
activities rose by € 32 million to € 282 million (2011: € 250
million). The outlook for the relationship between gas and
electricity prices (spark spread) combined with low CO2 prices is
to the detriment of less polluting gas-fired electricity generation.
Wind conditions were less favourable than in 2011 and below the
long-term average.
Competition in the supply market is fierce. Eneco is distinctive in
its Sustainable, Decentralised and Together strategy, which is
being put into practice with the successful introduction of the
HollandseWind, Toon and Zon&Zeker consumer products. Eneco
is further expanding its share of the retail market in Belgium with
an active market approach involving investment in intensive
market campaigns and expanding the organisation there in 2012.
Network and engineering activities
In 2012, our grid administrator Stedin started the construction of
a steam network which allows companies in the Port of
Rotterdam area to exchange steam and so achieve considerable
savings in energy and reductions of CO2 emissions. The first phase
will be completed in 2013; a second phase connecting more
companies will follow. We are also investing significant sums
replacing, modernising and increasing the sustainability of the
existing electricity and gas networks. Overall, EBITDA on network
and engineering activities were € 521 million in 2012, almost the
same as the € 515 million in 2011.
Total revenues of the network activities were up € 93 million,
mainly as a result of the required transmission tariff changes in
2012. Purchase and transmission costs rose by € 53 million,
partly because of higher prices for transmission purchases,
depreciation of network constructions, IT projects, higher network
operating costs, buying out cross-border lease agreements and
compensation for power cuts.
Engineering activities were hindered by the economic crisis with
less work in the contract market as a result of fierce price
competition. Revenue for activities outside Eneco Group grew in
2012 compared with 2011 but overall activity fell, leading to
lower margins and a disappointing utilisation rate. We took
several steps to face up to this situation, including a
reorganisation of the direct and indirect workforce, and developed
plans for process improvements, cost reductions and co-
19
Progress
Strategic KPIs
Performance at a glance
Eneco has formulated key performance indicators (KPIs) that represent
the main objectives of the company. In this overview, the strategic key
performance indicators are linked to the strategic themes.
The realisation and change compared with 2011 are described for
interruption duration for heating is now integrated in the existing
each KPI as well as the targets for 2013 and subsequent years
KPI that already included the interruption duration for electricity
as far as known. Mid-2012, a more clearly defined group strategy
and gas. We are still working hard on the further development and
was introduced to give further direction and focus to our
implementation of our more clearly defined strategy. The
ambitions. In connection with this, we have also reviewed all
development of our set of strategic KPIs is expected to be
existing strategic KPIs. Eight KPIs that were not sufficiently in line
finalised in 2013.
with the more clearly defined strategy are no longer included. Two
financial KPIs have been added (credit rating and ROACE). The
Customers first
Focus on and attention to the needs of our customers (short
term and long term), through which we create sustainable
value for all stakeholders
Realisation
1
Eneco retail customers [€ * million]
2
Customer satisfaction Stedin (score > 7)
3
Net Promoter Score Eneco [%]
1, 2
[%]
2011
Target
2012 6
Realisation
2012 6
Target
2013
2.2
≥ 2.2
2.2
≥ 2.2
73
≥ 75
76
≥ 75
-18
≥ -17
-14
≥ -13
Realisation
2011
Target
2012
Realisation
2012
Target
2013
Realisation
2011
Target
2012 6
Realisation
2012 6
Target
2013
9.9
≥ 15
12.6
≥ 20
154.1
≤ 300
226.9
≤ 300
Energy efficiency
Helping customers to reduce energy consumption by
providing insight and energy efficiency solutions
The KPI for energy efficiency is in development
Generating energy together
Accessible, local and profitable production of energy
together with customers
20
4
Share of sustainable electricity production in total supply
portfolio [%] 3
5
CO
2
per produced kWh [gram]
3 , 7
Progress Strategic KPIs
Purchasing
Providing affordable, reliable and clean energy, combined
with excellent customer service
6
Average energy supply interruption [minutes]
7
Dark green gas in retail supply portfolio [%]
8
Dark green electricity in retail supply portfolio [%]
3
3
Realisation
2011
Target
2012 6
Realisation
2012 6
Target
2013
13.8
≤ 14.7
19.5
≤ 14.7
0.4
≥ 0.5
1.0
≥ 0.5
14.3
≥ 20
16.1
≥ 20
2011
Target
2012 6
Realisation
2012 6
Target
2013
1,76
≤ 2,0
1,40
≤ 1,6
Realisation
2011
Target
2012 6
Realisation
2012 6
Target
2013
Expertise
Further improvement of quality in all aspects of business
operations as result of bundling of expertise and 100 years
of experience
Realisation
9
LTIR Group
4
Leadership
Eneco demonstrates leadership through its steady, costeffective strategy that can only be realised in cooperation
with society
10
CO 2 emissions reduction per employee compared with
2007 [%] 3
30
≥ 35
37
≥ 44
11
Employee motivation
7.1
≥ 7.2
7.5
-
12
Credit Rating
A-
≥ A-
A-
≥ A-
13
5
5.0
≥ 5.4
4.1
-
ROACE [%]
1
Customer satisfaction Stedin: the measurement method was changed, in particular with respect to weighing factors and new combinations. As
a result, this figure now represents our business more accurately. Because the customers’ questions remained the same, the figure for 2011
could be recalculated and is included in the table above for comparison purposes.
2
Customer satisfaction Stedin: In 2011, this figure was recalculated based on a 12-month rolling average. Starting from this year, the year-end
score is used because this gives an up-to-date view of the performance. The above 2011 figure has been adjusted with respect to this aspect
for comparison purposes.
3
Performance agreements have been concluded with WWF for 2013 with respect to these strategic KPIs.
4
LTIR: In contrast to last year, Oxxio is included in the scope. The figure for 2011 has been recalculated on the basis of this extended scope.
However, the change is not visible due to the fact that the number is rounded off.
5
Realisation 2012 excluding depreciation on electricity related property, plant and equipment: 5.1%
6
The scope of the strategic KPIs is described in the section 'Scope strategic KPIs' (page 62)
7
For description see section on CO2 emissions (page 44)
21
Progress Strategic KPIs
Dilemmas
In our daily operations, we encounter issues that slow down the
realisation of our ambitions. When this happens, we try to find a solution
and discuss alternatives with the chain partners. Issues that we
encountered in 2012 include the following.
Sustainable production capacity
Investing in infrastructure
Various factors have a limiting effect on the development of wind
Generating energy together is one of the three themes of our
projects. In Belgium, the Council of State takes a long time,
strategic framework. Smart grids are an important condition for
approximately three years, to process appeals, while the validity
the development of the local generation and two-way exchange
period of the permits is shorter. In the Netherlands, there is great
of energy. The challenge in this respect is that the possibilities for
uncertainty with respect to the awarding of subsidies under the
short-term adaptation of a comprehensive infrastructure, such as
SDE + subsidy scheme. This results in uncertainty about the
the gas and electricity infrastructure, are limited. The
financing and the timely realisation of wind farms. We exert our
corresponding depreciation periods are long and there is
influence to improve the preconditions for investing in sustainable
uncertainty with respect to market developments. Rapid
energy. Policy consistency, by continuing the SDE + subsidy
development of the energy market is required to achieve the
scheme in the Netherlands and making improvements to this
ambitions included in the government coalition agreement for a
scheme each year, is the most important message in this respect.
100% sustainable society in 2050. We foresee a substantial
increase in local sustainable energy production and take into
Chain responsibility
account the possibility that, in time, electricity in combination with
Some product categories have a higher than average risk profile.
new electric applications will replace gas. It is highly uncertain
One example is the purchase of solar panels. Our suppliers
whether the necessary adjustments to the infrastructure can be
(Astronergy, CSUN and Yingli) have been carefully selected by
realised if the level of investments remains constant.
Eneco and are seen as progressive organisations within the
sector. Because they operate in China, extra attention is paid to
Reduction of CO2 emissions own business operations
quality, social and environmental aspects. Although Eneco is a
Reduction of the CO2 emissions from our business operations can
relatively small customer for these vendors, we were able to
mainly be achieved in the area of mobility. The fuel consumption
negotiate warranties and supply conditions. All our suppliers have
of the vehicle fleet that we require to carry out activities on the
now agreed to our conditions and score sufficiently high on our
energy networks accounts for more than 85% of our footprint. A
sustainability scan. The large distance makes it difficult to carry
pilot study has shown that the main bottleneck is the limited
out regular checks to determine if the conditions are being
availability of filling stations that supply green gas, Eneco's
complied with. In order to realise a sustainable supply chain, we
preferred fuel, in the area where we carry out most of our network
have guaranteed compliance by engaging the services of a local
activities. There is a larger number of filling stations that supply
agency and by making use of the purchasing power of wholesale
natural gas (CNG), but CNG is only 10% cleaner than diesel.
companies (IBC Solar and Energiebau).
Despite the previously mentioned restriction, we still consider
green gas to be the only possibility to improve the sustainability
Security of supply
A growing concern with respect to the condition of our networks
are the damages resulting from excavation activities by third
parties, which are the cause of one third of supply interruptions.
Stedin aims to prevent this as much as possible and has
campaigned to draw attention to this issue together with
Netbeheer Nederland (Association of Energy Network Operators
in the Netherlands) and construction and infrastructure trade
organisation Bouwend Nederland.
22
of our vehicle fleet, since electric vehicles are not readily available.
Progress
Performance in 2012
Customers first
Customers are central in our actions and thinking. We connect with our
customers because we have a common goal: clean, affordable and
reliable energy, now and in the future. We continue to work on an even
better relationship with our customers, transparently and openly.
What did we want to achieve in 2012?
Our management and our employees are our ambassadors. They
Customers and service
Service remains one of our main pillars. Personal attention and
can ensure that our customers experience Eneco as an outspoken,
support are central elements in this respect. This includes
decisive and sustainable company and appreciate our services
optimisation of our website, the availability of self-service options
even more. The aim was to organise cooperation within our
and the introduction of a business portal with online invoices. We
company in such a way that customers experience us as service
have also developed the app Energy Manager, which gives
and customer oriented. Specifically, we have set ourselves the
customers even better and easier insight into their energy
goal for 2012 that the customer satisfaction score of at least
consumption. Personal account teams ensure that business
75% of the Stedin customers would be 7 or higher. Customer
customers have more direct and personal access to our company.
satisfaction of Eneco-customers is measured on the basis of the
Nowadays, customers express their opinion about our company
Net Promoter Score. For this score, we had set a goal for 2012
in the social media. We are monitoring social media closely and
of at least -17%.
respond immediately to what is being said on Facebook or
Twitter. Customers can communicate with our support service
What have we achieved?
online. They can also join discussions on sustainable energy by
• Target for Stedin customer satisfaction achieved: 76% (target
logging in to our Customer Forum.
2012: 75%, realisation 2011: 73%)
• Target for NPS achieved: -14% (target 2012: -17%, realisation
2011: -18%)
Working together for the customer
Within Eneco Group, we have implemented a number of
• Services further improved
development and cultural programmes aimed at further
• Higher customer loyalty
strengthening customer focus and collaboration. The positive
• Customers more enthusiastic about sustainable energy
effect of these is demonstrated by a number of propositions
involving different departments, such as the collaboration
between Eneco Retail and Eneco installation companies with
respect to Eneco's solar panel installation product Zon&Zeker®.
ENECO RETAIL CUSTOMERS
2012
2.2
million
23
Progress Performance in 2012
Personal page 'My Eneco' redesigned
to the new system, the year-end score 2012 was 76% (2011:
Early this year, the redesigned version of My Eneco was launched:
73% according to the new system, originally 69%).
an online environment that customers can visit for all their energy
matters. We have received a lot of comments from our customers,
both positive and negative, and tips for further improvement and
expansion. Changes that have been made on the basis of this
feedback include using new names for the different price
categories in all our communication. Furthermore, customers can
now print the invoices for their monthly advance payments in
addition to their annual bill. A new feature is the extensive
payment overview that enables customers to see which bills they
have and have not yet paid. The feedback also resulted in the
correction of a few errors.
Getting businesses interested in sustainable
energy
In October 2011, we started the business-to-business campaign
'sustainable business is profitable'. We have continued the
campaign in 2012 in more detail. The campaign is aimed at the
positioning of the company. We have strived to demonstrate that
sustainability is a model for making money rather than an
expense. In addition, we wished to position Eneco as the authority
on corporate sustainability and the partner of choice for
sustainable energy. The campaign was successful: we are
increasingly seen as the best partner with respect to corporate
Quickly resolving interruptions
We are also working on a higher customer satisfaction with
respect to how we handle infrastructure projects and
interruptions. Reliability of supply and process improvement are
keywords in the further improvement of the quality of our
services. We are making good progress in this area, for example
by automating customer processes and setting up Joulz own
24/7 interruptions desk.
sustainability and we leave the competition behind us.
Showing that sustainability works
We also undertake other activities to show that corporate
sustainability is the future. These include the successful
cooperation with the magazines Management Team and Sprout
in 2012. The cooperation resulted in 'Groen Succes' ('Green
Success'), a publication describing successful corporate
Customer satisfaction with Eneco improves
sustainability business cases, that was distributed together with
these magazines. We regularly organise Master Classes on special
The Net Promoter Score improved this year, showing that
themes (Green Success Live) for groups of customers and
customers increasingly recommend Eneco to friends and
business associates. In addition, we frequently publish articles on
acquaintances. One of the activities that contribute to better
our vision and our activities in the sustainable channels of
customer appreciation is the annual customer event at Rotterdam
Management Team and Sprout.
Zoo. Our monthly newsletter and the customer loyalty section of
our website also play an important role.
Customer satisfaction with service provided by Stedin
improved in 2012
Over the past years, Stedin also worked hard to achieve a higher
level of customer satisfaction. Stedin measures customer
satisfaction as the percentage of customers that award the
service provided a score of 7 or higher. Since mid-2012, a different
method of measurement is being applied that reflects the
activities of Stedin more accurately. This has led to a change in
the build up to a general customer satisfaction rating. According
NET PROMOTER SCORE ENECO
–14 STATUS
–25%
24
CUSTOMER SATISFACTION STEDIN
–17 TARGET
25%
75.0 TARGET
0.0%
76.0 STATUS
100.0%
Efficiency
Together with our customers, we are reducing energy consumption.
Eneco gives customers insight into their energy consumption, thereby
helping them to save energy, CO2 and money. This does not only have
financial and environmental benefits, it is also ultimately sustainable:
what you do not use, you do not have to generate. And with more than
2.2 million customers, that makes a difference.
What did we aim to achieve in 2012?
Energy Manager Expert for businesses
Customers are better able to understand their energy
With the Energy Manager Expert, companies can monitor their
consumption with practical products and services, such as smart
electricity and gas consumption any time of the day. It is
meters, energy efficient central heating boilers and personal
immediately clear which locations use energy at which moments
energy efficiency advice. Our aim for 2012 was to develop new
and what the effect is of energy efficiency measures. The Energy
products and services that help customers save energy.
Manager Expert also provides insight into unwanted energy
consumption, thus enabling visibly effective corrective measures.
As part of the Energy Manager, we now also offer an app for
• Introduction of intelligent thermostat Toon®
smart phones. On their personal page, customers can monitor the
• Improvement of Energy Manager for companies
effect of efficiency measures. The application calculates whether
• First energy efficiency contracts concluded via our Energy
the energy consumption of a company in a particular month or
Service Companies (ESCO's)
• Collaboration with customers on energy efficiency projects
quarter was higher or lower than in the previous year. These
results are displayed in handy mini-reports.
• Steps towards enhancing the awareness of energy consumers
Providing insight into energy consumption
Energy efficiency contracts
As a central element of our Sustainable, Decentralised and
In 2012, we developed practical products for both consumers and
Together strategy, we are developing new business models that
business customers that help them to better understand their
shape the future of Eneco, the Energy Service Companies
energy consumption. This awareness helps customers to truly
(ESCO's). These cover the entire chain of sales, advice, financing,
change their energy consumption pattern. Higher efficiency
production, operation, warranty management and monitoring.
results in lower energy consumption.
Customers experience us as the decentralised energy company
on location, their trusted partner that realises and operates all
Toon® Thermostat
energy-related matters. By agreeing and providing guaranteed
Toon® is the first thermostat that provides customers with insight
performance, we take care of all the problems of our customers.
into their own energy consumption and costs any time of the day.
Toon® turned out to be a success: 30,000 interested customers
Promising concept
responded. As from the end of May, we have supplied and
Via ESCO's, we offer new innovative products and services. To
installed the first 5,000 thermostats. The order portfolio for 2013
start with, we will be focusing on the segments with the greatest
is full. Two-thirds of the users recommend Toon® to others. In
savings potential: real estate and housing corporations. The poor
2013, we will further enhance the thermostat and expand its
situation in the new construction market is also an opportunity:
functionality, for example with a remote control app. Users will
there is an increased interest in renovation and energy efficiency.
also be able to compare their consumption to other households.
Housing corporations must pay closer attention to costs.
With Toon®, Eneco has found a way to start a relevant discussion
Outsourcing of non-core activities, such as energy management,
with the customers that not only concerns price.
offers good possibilities in this respect. Furthermore, the Dutch
government has imposed stricter requirements for the manner in
which housing corporations use the capital provided, resulting in
25
a decrease in available capital. Looking for ways to save money is
including Rijswijk, Rotterdam, Vlaardingen and Wijk bij Duurstede.
the logical next step. The role of tenants has also changed: they
For the provinces of Friesland and Zuid-Holland, we are carrying
want sustainable housing, but they do not want to worry about
out replacement projects and test projects.
anything. Corporations that formerly arranged and financed this
themselves, do not possess the required up-to-date knowledge
and funds. Eneco aims to provide an answer to these
developments with the ESCO model.
Awareness of customers and employees
Social Energy
Energy efficiency starts with awareness. To increase the
knowledge of customers about their energy consumption Stedin
First efficiency contracts closed
initiated the Social Energy project, with participants in city
In the last months of 2012, there was an increased interest in the
districts in The Hague and Utrecht. We give the residents insight
ESCO model. The first ESCO contracts have been concluded.
into their energy behaviour, compare their consumption and
Examples include the Van Nelle design factory and property
organise participants information sessions. We also stimulate
leased by the Government Buildings Agency. In the housing
awareness among our employees. We have formed the internal
corporation segment, we have concluded a strategic partnership
Social Energy community. Nearly one hundred employees
with Woonbron, which forms the start of the transfer of all the
participate and are introduced to new developments. This Social
energy installations to Eneco ESCO.
Energy approach also teaches us a lot about offering smart
meters to our customers as well as the installation and the
Saving energy together
acceptance of these meters.
Together with our customers, we are always looking for new ways
to save energy. To this end, we develop various forms of
Green idea, good idea
cooperation and participation.
Joulz has been running the internal campaign ' Green idea, good
idea ' since 2011. Since the start, employees have submitted over
Heijplaat will become more efficient
400 ideas. More than 50 ideas have actually been implemented.
The Rotterdam city district Heijplaat will become more
To reward employees for their sustainable ideas and promote
sustainable and will ultimately make use of natural energy sources
involvement with sustainability, Stedin and Joulz have jointly
such as the sun, wind and water. The objective is to become an
funded and planted half a hectare of forest in the nature reserve
energy-neutral district. We are one of the partners that are helping
Bentwoud.
the district to achieve this. The plans for the sustainable
metamorphosis were initiated by society, by the residents
themselves. The initiative received a ‘WWF Leaders for a Living
Planet’ award. This is an international award from WWF for
individuals, organisations and institutions that have made an
important contribution to nature conservation and promoting
sustainable development.
LED lighting: a source of energy efficiency for
municipalities
Our activities in the area of public lighting continue to expand. LED
lighting is energy efficient and saves costs. CityTec, part of Joulz,
offers municipalities an interesting business case. As a result, a
number of municipalities made the switch to LED lighting,
Eneco concludes contracts in which we truly guarantee improvement of energy efficiency. An example
is the Van Nelle design factory in Rotterdam. In this 82-year-old building, a Unesco monument, Eneco
will be replacing the heat installation, which will reduce gas consumption by 10-15%.
26
Generating energy
together
Some of our customers already generate their own sustainable energy
locally. For example by means of solar panels or wind turbines. This
energy is intended for their own use and, in case of overproduction, also
for others. Instead of simply paying for energy, they now save and
sometimes even earn money with the energy they produce.
Eneco strives to actively involve customers in sustainable energy.
• Total sustainable energy production increased from 9.9% in
We invest in increasing the share of sustainable production,
together with customers or through our own wind farms, solar
installations or biomass plants. The target for 2012 was to
2011 to 12.6% of the total supply in 2012
• 51% of the electricity sales is produced by Eneco or supplied
under purchase contracts (2011: 59%)
expand our sustainable production to 15% of the total supply
• In part due to start of operation Enecogen plant, CO2 emissions
portfolio (2011: 9.9%). An additional aim was to keep our CO2
per kWh of energy produced amounted to 226.9 grams (2011:
emissions per kWh of energy produced below 300 grams.
154.1)
• Introduction of Eneco Zon&Zeker®, enabling end users to
By developing interconnected services, we aim to offer more
customers the opportunity to generate their own energy. To this
end, we also provide the appropriate infrastructure in the form of
smart grids. Eneco enables customers who do not have the
possibility to generate their own energy to join in, by giving them
generate their own energy by means of solar panels
• Participations in several solar energy projects in the business
sector
• Investment of €273 million in onshore and offshore wind farms
and biomass and solar energy installations
the opportunity to participate in a wind or solar energy project.
• Further development of experience with smart grids
Furthermore, we are applying our knowledge and expertise in the
• Start of the construction of the steam pipeline network in the
area of infrastructures for the practical use of residual flows such
as steam and heat. Our ultimate goal is to reduce the CO2
emissions from the energy that we produce.
Botlek area
• Connection of an additional 6,000 home equivalents to the
district heating networks. Contract concluded with AVR for the
supply of residual heat in the Rotterdam area
1,050
732
742
872
913
1,039
875
700
525
350
Own production
175
Long-term contracted
wind farms
0
2008
2009
2010
2011
2012
WIND CAPACITY ENECO
(in MW)
27
Sustainable electricity production increases, but not
sufficiently
Netherlands, Belgium, Great Britain and France. As a result of
We have worked hard on expanding our sustainable electricity
energy production amounted to 226.9 grams/kWh in 2012 (2011:
these efforts, the average CO2 emissions resulting from our
production in 2012. The sustainable electricity production
154.1). This value does not include our purchasing contracts with
encompasses sustainable electricity that is either produced by
production facilities of which we have less than 50% ownership.
Eneco or supplied to Eneco under purchase contracts. The
If we also take these into account, our CO2 emissions per kWh
development of our own sustainable production capacity is on
amounted to 294.5 grams in 2012. The increase compared with
schedule, even though we did not achieve our objective. This is
2011 is caused by the fact that the gas-fired Enecogen energy
described in further detail elsewhere in this chapter. Due to the
plant came into production. As a result, the share of production
lower than expected demand for dark green products, the
from conventional resources increased at the expense of the
sustainable electricity production amounted to 12.6% of the total
production from sustainable resources.
supply portfolio, instead of our target of 15%. With WWF, we have
agreed a target of 20% for 2013, which we expect to be able to
achieve.
During the course of 2012, the demand for sustainable energy
Although electricity is produced in a sustainable manner as much
as possible, we still need gas plants, especially on windless and
cloudy days. Electricity generated from gas is the least polluting
alternative to sustainable energy generation. In 2012, 51% of the
total amount of electricity supplied by Eneco was generated by
our own production facilities or purchased under power purchase
agreements (2011: 59%). The main reason for the decrease
compared with 2011 is that, during 2012, it was often more
sensible to purchase electricity than to deploy our own gas plant
production capacity. The growth of our sustainable production
capacity and the start of operations at our gas-fired energy plant
Enecogen have resulted in an increase of our production capacity
by 5% to 2,740 MW (2011: 2,623).
amount of CO2 emissions per kWh of electricity produced. Fully
sustainable energy does not generate any CO2 emissions. At
present, all our domestic and SME customers are supplied with
sustainable energy, an increasingly larger part of which is
generated by Eneco itself or in collaboration with partners.
We have agreed with WWF that, in 2013, the average CO2
emissions per kWh of electricity generated by Eneco will not
exceed 300 grams. To this end, we invest in wind, solar and
biomass energy installations at the most suitable locations in the
CO2 PER PRODUCED KWH
28
premium product that helps customers in some segments to
enhance the visibility of their efforts in the area of sustainability.
For a number of major customers, we meet this demand by
providing customised solutions. With the combination of
HollandseWind® and an SMK foundation eco-label, we offer
companies the possibility to obtain a higher score on the CO2
Performance Ladder. In this manner, we help them to increase
their business. In order to spread our risks, we have wind energy
activities in a number of different countries. The successful
completion of our wind projects has resulted in a substantial
expansion of our wind energy portfolio. In the Benelux, Eneco is
market leader in the area of offshore wind energy. Good
important factor for the realisation of the planned growth.
The measure for the sustainability of our own production is the
0
production solutions increased. Wind energy is becoming a
cooperation with the right local and non-local partners is a very
CO2 emissions
226.9 STATUS
Together in wind energy
300.0 TARGET
500
Our aim is to complete different onshore wind energy projects
with a total capacity of approximately 100 MW each year and to
realise one offshore wind energy project about every three years.
At 1039 MW, our total onshore and offshore installed wind
capacity, generated by Eneco production facilities or supplied
under purchase contracts, exceeded the 1000 MW mark in 2012
(2011: 913 MW).
Onshore wind energy
Solar projects in the business market
In the Netherlands, we obtained a building permit for the
The projects that we have developed at DSM (Geleen), Tata Steel
construction of the Laaksche Vaart wind farm in the province of
(IJmuiden) and Philips (Best) in the Netherlands were all put into
Noord Brabant. Furthermore, we acquired the company
operation in 2012. In Amsterdam, we are developing a project on
WindWise, one of the developers of the Delfzijl Noord wind farm
the roofs of housing corporation Eigenhaard.
and other projects in and around the municipality of Delfzijl.
In Belgium, we realised a substantial number of projects, including
We obtained a number of permits in other countries. In Belgium,
nine locations at Wienerberger (stone factories), ten locations
we acquired permits for projects in Molenbaix, Herentals, Boneffe,
owned by the municipality of Destelbergen and nineteen locations
Arlon and Fauvilliers. There are still some follow-up procedures to
owned by the province of Oost-Vlaanderen. In 2012, there were
complete, but we trust that we can start the construction of these
a number of rapid developments in Belgium in the area of
projects in the coming years. In Great Britain we obtained permits
subsidies on solar energy. In Flanders, subsidies were significantly
for the expansion of the Tullo and Lochluichart wind farms.
reduced, as a result of which the market shifted to Wallonia and
Brussels. The Walloon government aims for a five-fold increase of
In 2012, we completed the construction of the Dutch wind farms
the installed capacity in Wallonia to 1,200 MWp in 2020.
Acrres, Hoevensche Beemden and Zwartenbergseweg. The
Romerswaal and Houten projects are under construction. In
Investments in solar energy production capacity
Belgium, the wind farms Ciney, Perwez and Eeklo became
Eneco has decided to expand its solar energy production capacity
operational. The Lochluichart project in Great Britain is under
by developing its own production facilities and through the
construction.
acquisition of existing parks. In 2012, these activities were mainly
focused on Belgium and France. The first result of a thorough
Offshore wind energy
exploration of the French market was the acquisition of 70
The next offshore wind farm that we have planned is Eneco
installations in the south of France, with a total capacity of 11.8
Luchterduinen. Van Oord and Vestas are the preferred partners
MW, from the French company Fonroche Energie. We also entered
for this project. Early 2013, we also entered into a partnership
into a partnership with this company aimed at investigating more
relating to this wind farm with the Japanese company Mitsubishi
suitable installations for the production of sustainable energy in
Corporation (MC). MC also intends to acquire half of the Prinses
France. We have entered into a similar partnership with the Swiss
Amalia wind farm. The development of the Norther offshore wind
company Susi Partners.
farm in Belgium is progressing according to plan. We have now
obtained the permits. We have sold 50 percent of the Navitus Bay
Together in biomass
project in Great Britain to EDF. We will continue the development
Producing energy from biomass is a sustainable process. Over
of this project, which will supply energy to approximately 775,000
time, we have gained considerable experience with biomass
households, together with EDF.
installations. At the end of 2012, our total installed capacity of
energy generated from biomass amounted to more than 10 MW.
Together in solar energy
We now have over 130 MW of biomass installations in
Solar energy is also very important to Eneco´s sustainability
development for the production of electricity, heating and green
approach. The general expectation is that there will be a rapid
gas.
increase of energy production by means of solar panels in the
Netherlands and that the parties involved will investigate all the
Investments in biomass production capacity
possibilities to support this expectation. Eneco´s aim is to take
In 2012, we made substantial progress with the construction of
the lead in this process and actively approach other parties. In
'Bio Golden Raand', the biomass energy plant in the municipality
2012, the solar energy portfolio increased to 29.5 MWp,
of Delfzijl. Work started in November 2011 and all major
encompassing 140 locations, in particular, in Belgium and France.
construction work was completed at the end of 2012. The plant
is expected to become operational by mid-2013. This power plant,
Eneco Zon&Zeker®
in which an amount of € 170 million has been invested, will have
In 2012, we introduced Eneco Zon&Zeker®, a complete package
a production capacity of 49.9 MW. The plant will convert waste
for the domestic market that enables consumers to generate their
wood from, for example, construction and demolition activities,
own energy by means of solar panels. Eneco Zon&Zeker® is now
into electricity.
also available for SMEs, through housing associations, as a special
offer for the employees of a number of large companies in the
Heating-cooling solutions
Netherlands and for specific target groups such as members of
A large part of the energy demand of our customers relates to
WWF. With Eneco Zon&Zeker®, we aim to achieve a distinctive
heating and cooling. Consequently, the propositions for heating
position in the consumer solar energy market in the Netherlands.
and cooling form an important part of our sustainability strategy.
To this end, we have acquired a strategic interest in the company
ZonIQ and we work as a mediator with Greenloans, which is a
service provided by ABN AMRO bank for green loans to consumer.
29
Growth continues
household customers and business customers in Noord-Brabant.
Heat networks are more environmentally friendly than
The acquisition is in line with Joulz’s strategy to expand its
conventional heating with gas and are energy efficient. Customers
activities in the field of sustainable energy infrastructures, such
can save a lot on gas, since no boiler is required in homes that are
as heating networks, and contributes to strengthening its national
connected to such a network. The number of heat network
coverage.
connections is being expanded year after year, which contributes
to the reduction of energy consumption. In Rotterdam, Utrecht
and The Hague, we taking significant steps together with regional
partners in improving the sustainability of the large district heat
networks. In 2012, we signed a contract with waste processing
company AVR for the supply of residual heat to our customers in
the Rotterdam area. For this purpose, a heat pipe will be installed
between the Botlek area and the city. In Utrecht, we are exploring
the possibilities for a biomass plant that produces both electricity
and heating.
The Harnaschpolder heating station was put into operation in
The smart grid of the future
Smart grids are necessary to make the energy supply of the future
as flexible as possible. In 2012, grid administrator Stedin further
determined its position in the field of smart grids. An internal
multidisciplinary team has determined which functionalities are
required to enable intelligent grid management development
during the coming years. We now have a good idea of the
challenges that lay ahead.
Current developments
Stedin is involved in a number of pilot projects to acquire useful
October 2012. The plant replaces the temporary boiler
experience with smart grids. In its capacity as coordinator of the
installation. The Harnaschpolder combined heat and power plant
Couperus project, Stedin received a grant for this purpose in
is the first of our heat production units that works with a large
2011. The technical side of this pilot project was completed in
heat pump that uses energy from the residue of the adjacent
2012 and the systems have been tested. Due to a delay in
wastewater treatment plant.
construction, the pilot project will not go live until February 2013,
with the arrival of the first residents. Stedin is also involved in
Despite the decline in new construction, Eneco is able to continue
projects of the Smart Energy Collective, Energieneutraal Heijplaat
its growth and to acquire new heating customers. Due to a
and Evander, which run more or less parallel to the Couperus
stronger focus on the renovation market and commercial real
Smart Grid project.
estate, our business is expanding by some 6,000 home
equivalents per year in both the residential and the office market.
Direct current offers possibilities
Housing corporations and real estate developers are responsible
In new development areas, direct current networks offer good
for most of this growth. Furthermore, there is an increasing
possibilities for substantial energy and cost savings.
demand for sustainable cooling. Cooling by means of groundwater
Infrastructure company Joulz develops smart concepts in which
and river water is a sustainable and financially attractive
the market and the media show increasing interest. Concepts for
alternative to traditional air conditioning.
a holiday park in the province of Zeeland and a business park in
the province of Flevoland have already demonstrated that the use
Joulz takes over the management of heating network
from Essent
of direct current definitely saves energy. Joulz and its partners
On 1 April 2012, Joulz took over the fault repair and maintenance
Intelligente Netten (Dutch Smart Grid Innovation Programme) for
activities on a large part of the district heating installations in the
the realisation of a direct current network in the Haarlemmermeer
province of Noord-Brabant from Essent Local Energy Solutions for
greenhouse horticulture area. In 2012, Joulz won the Smart Grids
a period of five years. The installations for which Joulz is
Innovation Award 2012 and a nomination for Sustainable
responsible supply district heating to approximately 43,000
Innovator for its smart concepts in the field of direct current.
have received a grant from the Nederlandse Innovatie Programma
ZON&ZEKER
With nine solar panels, an average household can generate sustainable energy with a value of
approximately 450 euros each year, but many people have no idea how to go about this. With Eneco
Zon&Zeker® we handle every aspect for our customers: the installation of high quality solar panels,
a unique Zon&Zeker warranty for guaranteed supply, 24-7 online insight into the functioning of the
solar panels and settlement of the resupplied surplus electricity.
30
Reusing residual flows
by means of partnerships, for example with waste energy plant
Residual flows such as steam and CO2 are not waste as far as
ARN. Our efforts in 2012 have resulted in a green gas portfolio
Eneco is concerned. On the contrary, they can form a valuable
of 15 million cubic meters.
contribution to the energy chain. This is why we continue to
develop new initiatives. We supply CO2 to the horticulture sector,
Green gas fuelled buses
where it is used in greenhouses to stimulate the growth of the
In cooperation with Agro Energy, Eneco has concluded a contract
crops. Our new steam network in the Botlek is also a prime
with waste energy plant ARN in Nijmegen for the purchase of 2.5
example.
million cubic meters of green gas per year until 2016. The green
gas is fed into the gas grid and Eneco supplies the corresponding
Steam pipe network Rotterdam Botlek
green certificates to bus company Hermes. As a result, the buses
Stedin is developing a steam transportation network in the
in the Arnhem-Nijmegen area will be fuelled by regionally produced
Rotterdam Botlek industrial area. In this region, different
green gas.
industries are located in close proximity to each other. Residual
steam from one company can be transported efficiently via a
steam network to be used in the production process of another
company. Reusing the steam in the primary process of another
company improves the energy efficiency of the entire chain. Lower
volumes of fossil fuels are needed and less CO2 and NOx is
released into the atmosphere. Once the network is fully
operational, CO2 emissions in the Rotterdam port area will be
reduced by 200 to 400 kilotons per year. The project thereby
contributes significantly to the climate targets of the city of
Rotterdam.
First customers connected to steam early 2013
Stedin invests in and will be the owner of the new steam
transportation network. The first customers with which transport
and connection agreements have been signed are waste
processing company and steam supplier AVR and chemical
company and steam user Emerald Kalama Chemical (EKC). The
steam network is now under construction and will become
operational in the spring of 2013. Plans are being made for a
second part of the network between EKC and Akzo Nobel. The
investment decision for this three-kilometre section of the
network will be make in the middle of 2013. If the decision is
positive, this extension can be operational by 2015.
Together in green gas
Our ambition is to continue to expand the production of green
gas, which is a sustainable alternative for natural gas. We do this
COUPERUS GETS SMART GRID
Couperus is a development project for smart grids. Eneco and Stedin are developing this project in
collaboration with a number of partners. We supply the sustainable energy for the heat pumps in the
300 apartments in the building, taking into account the grid load. As soon as it appears that the grid
load may become too high, we adjust the capacity. This is not only efficient, but also limits costs.
31
Purchasing
Eneco ensures that customers always have access to clean, affordable
energy that is generated and transported in a safe manner. An
increasing number of our customers generate part of their own energy.
Eneco aims to supply the remainder of their energy demand from 100%
sustainable resources.
Purchasing collectives, in which individuals and companies unite
dark green energy in our retail supply portfolio to 0.5% for gas
to jointly purchase energy, mainly focus on price. Eneco does not
and 20% for electricity.
participate in such initiatives in the Netherlands, because it wishes
to distinguish itself from other suppliers on the basis of
sustainable energy, not on the basis of the lowest price.
• With a result of 19.5 minutes, we did not meet the target for
average interruption duration (target 2012: 14.7 minutes and
Our aim is to win customers for our mission. We strive to make a
connection between the old energy world and the new
sustainable future, with the goal to reduce CO2 emissions
realisation 2011: 13.8 minutes)
• With a result of 1%, we did meet the target for the share of
dark green gas as a percentage of the retail supply portfolio
(target 2012: 0.5% and result 2011: 0.4%)
together with our customers. During the phase in which energy is
• With a result of 16.1%, the share of dark green electricity as a
not yet generated from 100% sustainable resources, we use gas
percentage of the retail supply portfolio was below target
since this is the cleanest fossil fuel. Our aim was to make optimal
(target 2012: 20% and realisation 2011: 14,3%)
use of our new gas plant for this purpose, in particular in periods
• Introduction of HollandseWind®
when the wind force is low. Customers must be able to count on
• Customer base stabilises at 2.2 million (target 2012 and
the availability of electricity, gas and heating. Our goal is to keep
realisation 2011: 2.2 million)
the availability of our energy supply at a very high level. The
• Eneco is successful in Belgium
average duration of interruption of the energy supply may not
• The utilisation rate of our Enecogen gas plant was lower than
exceed 14.7 minutes. This number is the weighted average of the
planned, because the price of electricity generated from gas did
maximum interruption duration for electricity, gas and heating.
not outweigh the price of electricity generated from coal in
See the section on Network reliability (page 34) for further
2012
details. Another important target was to increase the share of
HOLLANDSEWIND®
HollandseWind© is a product offered by Eneco consisting entirely of energy generated by Dutch wind
farms. Customers receive an annual wind force discount, which is calculated on the basis of the
average wind force in the Netherlands. The higher the wind force, the higher the discount. This way,
we let customers profit from the force of the wind. When the wind blows harder, the wind turbines
generate more energy. This results in a higher yield for Eneco. The product is available as a contract
for one, two or three years, with a fixed price for the full term of the contract.
32
Supply to the customer
the green electricity is generated by hydropower plants in Norway
Consumers and SMEs in the Netherlands
that have been operational for decades. Although this electricity
Consumers and SMEs in the Netherlands can choose between the
is sustainable, it does not contribute to the necessary further
brands Eneco and Oxxio. In Belgium, we are expanding the brand
increase of the sustainability of the energy supply. An increasing
Eneco.
share of the 100% green electricity that Eneco supplies to
consumers and SME customers is dark green electricity, because
The number of households in the consumer market in the
Eneco and its partners invest in new sustainable resources.
Netherlands that switched supplier increased again after a few
years of slight decrease. The number of suppliers with a licence
For 2012, we had set ourselves the target that 20% of the energy
to supply increased. Parties such as the Consumers' Association
that we supply to our retail customers would be dark green
and the home owners association ‘Vereniging Eigen Huis’ have
energy. The introduction of the product HollandseWind® was a
assumed the role of intermediary. In Belgium, the market was
success. However, customer demand for dark green electricity
liberalised at a later stage and the Belgian government is currently
was below our initial expectation. Consequently, the result of
applying an active policy to draw consumers' attention to the
16.1% (2011: 14.3) is below our 20% target. The fact that there
possibilities offered by the free market. Eneco's total number of
is only a limited supply of dark green gas is apparent from our
retail customers for electricity and gas stabilised at 2.2 million in
target of 0.5% for 2012. However, we have managed to exceed
2012. There was an increase in the number of Oxxio customers
this target by far, with a result for 2012 of 1,0% (2011: 0,41%).
and the number of Eneco customers in Belgium and a decrease in
the number of Eneco customers in the Netherlands. With its
unique positioning of customers taking energy into their own
hands, Oxxio was able to expand its customer base. The
campaign to give customers insight into their consumption by
means of the application MijnOxxio (MyOxxio) and an iPad is a
clear example of this positioning. As of September, customers can
choose between the products: Oxxio Budget, Oxxio iPad Inzicht
and Oxxio Bewust.
Campaigns increase brand awareness
In the Netherlands, we have introduced new products as part of
the campaign 'All for sustainability’, such as HollandseWind® and
the thermostat Toon®. These products contribute to the
realisation of our sustainability objectives. Consumers are
becoming increasingly aware of our sustainability vision: in a
survey conducted in 2012 they called Eneco the most sustainable
energy company.
HollandseWind® successful
HollandseWind® is wind energy combined with a wind force
discount. One year after the introduction, the number of
HollandseWind® customers amounted to nearly 100,000. Eneco
won an Effie award for the most effective advertising campaign
for this product.
Eneco Belgium is growing
In 2012, Eneco's retail market share in Belgium increased
substantially. More than 200,000 contracts were sold in a period
of one year thanks to the clear sustainability positioning, which is
also very popular in Belgium, and the frequent media attention.
The ranking of Greenpeace Belgium and the decision of WWF
Belgium to collaborate with Eneco confirm that Eneco is also one
of the most sustainable market participants in Belgium. In just one
year, Eneco's market share in Flanders grew to nearly 5%.
Agreements with WWF
One of the agreements that we made with WWF is that we will
supply dark green energy to consumers and SME customers. Dark
green means investments in new sustainable resources. Most of
33
Network reliability
degree of discharge is an indicator for possible interruptions,
Network reliability
which we are thus able to prevent.
Our energy networks are among the very best in the world. We
aim to maintain this position and, at the same time, prepare our
Incidents in Rotterdam and Nieuwegein
networks for enhancing the sustainability of the energy supply.
Maintaining the security of supply on the electricity network at
the usual high level posed a challenge in 2012. In general, the
The reliability of our networks is measured in terms of the average
performance of the networks was good. However, this good
interruption duration per customer over a period of one year. We
general performance was undermined by three major
have set maximum targets for our electricity, gas and district
interruptions in Rotterdam at the beginning of the year and an
heating networks. (See table Interruption duration energy
interruption resulting from strikes of lightning in the network in
networks).
the municipality Nieuwegein. These interruptions caused
substantial inconvenience for large groups of customers, of which
In 2012, Stedin made investments in the quality of our networks
we are well aware. In 2012, Stedin took a number of measures
to the amount of €374 million (2011: €388 million).
to prevent problems of this nature as much as possible.
Electricity network
The events in and around Rotterdam were cause for Stedin to ask
The investments in the electricity network include the
Kema to carry out an independent investigation. Kema concluded
construction of Station Oostland, the construction of an energy
that these interruption were the result of a chance concurrence of
infrastructure for Maasvlakte 2 and the large-scale renovations in
events. The condition of the network in Rotterdam is good and
the municipality Ronde Veenen and on the island Goeree
Stedin carries out the management and maintenance of the
Overflakkee. Part of the investment is aimed at reducing risks.
network properly and has invested sufficiently in the network. The
This is achieved by creating a stable network and limiting the
Kema's main recommendation was to pay more attention to
number and duration of interruptions as much as possible. In
security settings from the net. We have adopted this
addition, we are preparing the networks for sustainable and local
recommendation.
energy production.
In addition, we have carried out a comprehensive risk assessment.
Prevention and earlier detection of interruptions
On the basis of this assessment we have taken a number of
Information technology plays an increasingly larger role in grid
measures, always putting the interests of our customers first. The
management. We install state-of-the-art station automation
crisis team has been strengthened and trained.
systems that enhance the efficiency of the management of the
networks as well as our business operations. Another example of
Gas network
the smart application of ICT is the first self-healing grid in the
In 2012, the security of supply of the gas network was not as high
centre of Rotterdam, which enables us to reduce the duration of
as intended. The interruption duration amounted to 77 seconds,
an interruption to just a few seconds. Remote access fault
which is higher than the target of a maximum of 60 seconds. In
indicators, in the form of meters in our operations centre that
addition to a number of defects, the increase was, for a large part,
instantly show the location of the fault, enable us to trace defects
the result of safer working methods. By not letting employees and
more quickly and immediately send a field service engineer to the
the fire department work in the proximity of a gas outflow but,
right location. To reduce the number of interruptions, we are
instead, shutting the system down from a safe distance,
installing the so-called Smart Cable Guard in another part of the
customers are also cut off from the gas supply for a short period
centre of Rotterdam. This is a system that detects errors in cables
of time. A lot of attention is being paid to the replacement of cast
and connection sleeves on the basis of partial discharges. The
AVERAGE INTERRUPTION DURATION ENERGY SUPPLY (ELECTRICITY, GAS AND HEATING)
14.7 TARGET
0
34
19.5 STATUS
30
iron gas pipes. Grey cast iron is vulnerable to damage in places
where the ground moves, in certain types of soil and in places
where work is carried out or where there is heavy traffic. In total,
we will replace 2,000 kilometres of grey cast iron gas pipes.
Stedin is still on schedule to complete this entire replacement
process by 2029.
Interruption duration district heating networks
The actual duration of supply interruptions was well below target
in 2012. However, the target of 60 minutes will not be lowered
for 2013. The reason for this, is that up to the end of 2012, supply
interruptions only related to interruptions in the primary
distribution system. As of 2013, the secondary system (only
relevant for the district heating network in Rotterdam) will also be
included in the calculations. In addition, a lower target would not
have any effect on customer perception, since interruptions are
only noticeable after a period of time due to the buffering
functionality in the warm water system.
INTERRUPTION DURATION ENERGY NETWORKS
Number of
customers in
millions.
Interruption
duration (target
2012)
Interruption
duration (realised
2012)
Electricity
2.1
25 minutes
35.6
minutes
25 minutes
Gas
1.9
60 seconds
77 seconds
50 seconds
District heating
0.1
60 minutes
26 minutes
33 minutes
14.7
minutes
19.5
minutes
13.8
minutes
Type of energy
Average
interruption
duration
Interruption
duration (realised
2011)
35
Gas strategy
Eneco has an optimal mix of long-term and medium-term
contracts, price indexes and long-term and short-term flexibility.
Eneco now also supplies gas from the new Gate LNG terminal to
its energy plants and its customers. We have sufficient gas
available to be able to supply extra gas in exceptional situations.
The storage of gas in our gas storage facility Gasspeicher is also
important for trading. The gas volume that we have at our
disposal makes us less dependent on market prices. We will be
even better able to balance the portfolio. In addition to using our
own supply of gas, we also purchase gas and conclude purchase
contracts with third parties. At present, we have sufficient
flexibility to meet the demand for the next few years.
Gas plants
The operational performance of all the gas plants in the
Netherlands was lower than in the past in 2012. One of the
reasons for this, is the low demand in combination with the
extensive production capacity in the Netherlands. An even more
important factor is the high gas price compared with the price of
coal and the low CO2 price. The regular supply of sustainable
energy from Germany also plays a role. Consequently, gas plants
are barely able to compensate their marginal costs, as a result of
which, the number of operational hours is low.
36
Expertise
We put customers and their energy needs first in our efforts to design
and implement sustainable energy solutions. We use our knowledge and
skills to serve these customers, who can count on the expertise that we
have accumulated over the decades.
This is why we make targeted investments in technology,
stimulated Stedin and Joulz to train their own technicians. Sharing
knowledge and the safety and expertise of our staff. The
knowledge of market developments, technology and innovation
experience that we have gained over the past decades
on a structural basis is also important for the realisation of our
guarantees our ability to design, construct and maintain smart
ambitions. Our aim was to implement this by further developing
energy infrastructures and sustainable energy solutions. Safety is
knowledge management.
a core value of our organisation: this topic is always at the top of
the agenda.
• Safety performance improved; LTIR from 1.76 in 2011 to 1.40
in 2012 (target 2012: 2.0)
What did we want to achieve in 2012?
Eneco, Stedin and Joulz pay a lot of attention to safety. Safety is
part of our strategy for a good reason. It is logically embedded in
the development and maintenance of expertise in our company.
It is also a precondition for reliable management and a reliable
reputation. We strive to improve our safety performance by
developing a proactive safety culture. The LTIR score is regarded
• Stedin and Joulz started a two-year training programme for
technicians
• 250 Joulz employees participated in a learning on the job
programme
• Eneco Academy and Stedin Academy started structural sharing
of knowledge
as an important measure for our success in this area. Our ultimate
goal is an LTIR score of zero, but we have not yet been able to
achieve this in practice. This is why we set the target for 2012 at
a maximum of 2.0.
Safety first
Safety performance improved again
Safety is a top priority. Much attention is paid to preventing safety
incidents and, if they do occur, mitigating the effects thereof. We
We actively develop expertise and market knowledge in our
also attach great importance to securing the safety of the local
company. The shortage of talented technicians on the labour
community in the event of major incidents. The number of
market will continue over the next few years. This trend, in
accidents resulting in absence from work continues to decrease.
combination with the aging of the labour force within the sector
Our aim continues to be: zero accidents resulting in absence from
LTIR GROUP
1.4 STATUS
0
2.0 TARGET
2.5
37
work. In 2012, there were 15 accidents resulting in absence from
In the ‘Zafety’ project, Joulz combines a number of safety
work (2011: 19). In terms of the number of accidents resulting in
initiatives and provides easily accessible tools to ensure that
absence from work per one million hours worked (LTIR), the safety
knowledge with respect to safety and quality is available to
performance of Eneco Group amounted to 1.40 (2011: 1.76).
everyone. This covers a broad spectrum: from offering simulation
training and work preparation sessions using photos and Google
Proactive safety culture
Earth, to a test involving cameras that enable colleagues to
In 2012, the business segments brought their safety
remotely look over the shoulder of the technician on site (four-
management in line with the new corporate guidelines. These
eyes-principle).
guidelines are aimed at a more proactive safety culture. Such a
proactive safety culture means that employees feel responsible
for their own safety and the safety of others. It means that they
Expertise development
The shortage of talented technicians on the labour market will
are aware of the possible risks at the workplace and that
continue over the next few years. This trend, in combination with
supervisors and managers are noticeably involved in safety in
the aging of the labour force within the sector stimulated Stedin
connection with our activities.
and Joulz to train their own technicians.
Company-wide culture measurement
Training of new technicians at Stedin and Joulz
In all the business segments, we have carried out a culture
Stedin started the Technical Training Programme for young
measurement based on the Hearts & Minds method. This
technicians in 2012. This two-year programme aims to train young
measurement shows that our organisation has moved towards a
technicians to become technical professionals in a short period of
'calculated' safety culture over the past years. This phase on the
time. The programme encompasses a combination of professional
culture ladder means there is a greater involvement on the topic
training, practical experience and personal development. Joulz has
safety and that we have less of a wait-and-see attitude with
developed a technical talent programme, the Joulz Technical
respect to what can go wrong. We have to go through this phase
Traineeship (Joulz TT). This is a two-year programme aimed at
to eventually reach a proactive culture. Studies show that this is
young college and university level technicians.
a difficult phase. Ingrained patterns and existing cultures will need
to be replaced. In 2013, we will carry out another culture
measurement to determine whether we have again managed to
Joulz Company Academy
More than one hundred fully qualified gas and electricity
bring the safety culture to a higher level. This measurement is
technicians graduated from Joulz Company Academy in 2012. The
repeated every three years.
academy also offers Accreditation of Prior Learning (APL)
programmes for experienced technicians and people with
Incident reporting
experience in other disciplines. This enhances their chances to
In 2012, Stedin took significant steps to further improve safety
start or advance their career within our company. We have
awareness. Following the introduction of a new incident reporting
covenants with several Regional Community Colleges for these
system in December 2011, emphasis was placed on proactive
APL programmes.
reporting of unsafe situations. The objective to at least double the
number of reports was more than surpassed. The introduction of
the new incident reporting system also resulted in noticeable
improvements at Joulz and Eneco. Safety is increasingly becoming
a standard agenda item in the various meetings. We will use
targeted communication and training to further improve the
performance in 2013.
The growth of Joulz in the province of Noord-Holland has led to a
need for training facilities in this area. This is why we opened a
new Joulz Company Academy location in Amsterdam in November
2012. This academy also offers a learning on the job programme
for a group of people who have difficulty finding a job due to their
TRAINING PEOPLE FROM OTHER DISCIPLINES
JOU is the special training unit where students and people from other disciplines are trained to become
fully qualified electricity and gas technicians that will be able to join the technical teams at our various
locations in the near future. Students are linked to experienced supervisors and work together in
permanent teams. They participate in targeted training programmes at Joulz Company Academy.
38
background. We provide the training and the job and the
municipality takes care of any other obstacles for the participants,
for example by providing child care on days when they are
working.
Recruiting and developing talent for the future
Sharing knowledge of market developments, technology and
innovation on a structural basis is important for the realisation of
our ambitions. This is achieved through Eneco Academy and
Stedin Academy and the further development of knowledge
management.
Talent programmes
The annual talent programmes for so-called 'potentials' and
managers within Eneco Group commenced in May 2012. The
competence development in this group is based on the leadership
profile that Eneco strives for. These programmes will be
completed at the beginning of 2013. Both participants and
management rate these programmes as 'good' or 'very good'.
Career Development Centre
The current and future success of our sustainability strategy are
stimulated by means of internal job mobility aimed at optimal
qualitative and quantitative staffing. For this purpose, we created
the Career Development Centre in the fourth quarter of 2012. This
Centre supports employees in finding a new job within the Eneco
Group. The Career Development Centre is a collaboration between
the recruitment departments of Eneco, Stedin and Joulz.
39
To realise our ambitions, we apply a consistent strategy that is in
balance with the risks we face. The outcome is a financially healthy
company. We strive for wide support of our strategy in our company by
all parties involved. We assume our social responsibility in the chain in
which we carry out our activities. We also strive to reduce CO2
emissions, both in our own business operations and in the production
and supply chain.
This year, we shared our new strategy with our employees. For
• Introduction of a new leadership style that is suitable for the
the strategy to be successful, it is of the utmost importance that
our employees share our vision of the future. Connecting
leadership is a key concept in this respect, which we wanted to
introduce to our management in different ways. We also created
involvement through a modern form of participation.
energy company, now and in the future.
• With a score of 7.5, we amply met our target with respect to
employee motivation (target 2012: 7.2, realisation 2011: 7.1)..
• In 2012, 54.5% of the expenditures of energy company Eneco
were purchased from sustainable suppliers.
• Further reduction of the CO2 footprint of our own business
In our supply chain, we also seek cooperation to improve
sustainability. Our objective was that 50% of our purchases
(excluding energy) would be purchased from sustainable suppliers.
With a result of more than 54%, we have definitely achieved this
operations (page 44).
• Credit rating maintained at A- (target 2012 and realisation
2011: A-).
• ROACE 4.1% (excluding amortisation on electricity related
property, plant and equipment: 5.1%); target 2012 (5,4%) not
objective.
met (realisation 2011: 5.0)..
The basis for continuity of our company is a good balance
between risk and return, which is reflected in our stable credit
rating (A-) and the return on capital employed amounting to 5.4%
Connecting leadership is our response to developments that we
in 2012.
are seeing in society and within our organization. The speed of
information exchange and knowledge development is increasing,
CREDIT RATING
2012
A40
society is open and transparent and networks and communities
At the end of 2012, the ratio of men and women within Eneco
are becoming more important. By connecting with our
Group in terms of FTEs was as follows:
surroundings in which we wish our organisation to be successful,
we can realise our mission 'sustainable energy for everyone'. In
our view, connecting with our stakeholders -customers,
colleagues, employees, suppliers, partners, shareholders and
competitors – is a precondition. The style that corresponds to
connecting leadership is best described by the African saying, "If
you want to go fast, go alone, if you want to go far, go together".
Men
Women
5,488
1,510
78.4%
21.6%
(Total at year-end 2012: 6,998 FTEs)
The proportion of women in the top of the organisation is 17%;
Management profile
The leadership philosophy of Eneco has been translated to a
management profile, in which competencies are linked to the
themes Business, People and Knowledge. Developing the
competencies in this management profile is one of the
this is a fairly good reflection of the proportion of women in the
organisation as a whole. Actions that we take to increase this
percentage by creating awareness on this topic at upper
management levels include:
instruments to further enhance connecting leadership within
Eneco. The competencies are linked to management profiles and
• a baseline measurement regarding the importance of and
reasons for diversity
are part of the evaluation cycle.
• round table discussions
• case study discussions with management and participatory
Diversity
Eneco can only realise its vision of Sustainable, Decentralised,
Together, if it keeps in close contact with its customers and
society. That is why we attach great importance to the fact that
bodies
• stimulate recruitment and selection of women for vacancies
and succession
the composition of our staff is a good reflection of community in
• addressing the development of female employees
which we operate. We strive to offer equal opportunities for both
• consultations with Rhea, the women's network of Eneco
men and women, natives and immigrants, people with a disability
and people who have difficulty finding a job. Religion, age, racial
Committed employees
or ethnic origin and sexual orientation do not play a role in our
Employee Motivation Survey (EMS)
evaluation. It is our fundamental belief that diversity results in
Employees are essential for the realisation of our strategic
better decision making and more creativity in teams. To stimulate
objectives. Each year, we examine the satisfaction and motivation
diversity, our current focus is on changing the ratio of men and
of our employees by means of the Employee Motivation Survey.
women in the company, in close consultation with the Central
In 2012, the average satisfaction score at Eneco was 7.5, which
Works Council. In view of the current ratio, this is expected to
is equal to the national figure. Compared with 2011 (7.1), the
generate the most results. We also believe that the competencies
scores increased on all the themes that were part of the survey.
attributed to women are necessary to maintain and enhance the
relationship with our relevant environment during the coming
Items that were measured include motivation, commitment,
years. This is why we have started to draw explicit attention to
loyalty, vitality, turnover and retention and customer orientation
the topic of diversity in our management layers to also realise
of the employees. The scores are the average of the last surveys
diversity with respect to other groups in a natural manner. Our
that were carried out in 2012 among employees of Eneco, Stedin
ultimate goal is to achieve a 30% proportion of women in
and Joulz. Although the business segments separately determine
management positions.
the frequency with which the survey is carried out, they all apply
EMPLOYEE MOTIVATION
7.2 TARGET
0
7.5 STATUS
10
41
the same methodology. The questionnaires are largely the same,
includes the partial financing of the Eneco Luchterduinen wind
with room for specific points of attention for each of the business
farm that will be constructed off the Dutch coast. Such strategic
segments. At Eneco Group, the survey is conducted by research
partnerships enable us to be successful in the realisation of our
agency Effectory. In 2012, the business segments Ecofys and
mission 'sustainable energy for all'.
Oxxio were not included in the scope. Ecofys was not included
due to its independent position within the Eneco Group and Oxxio
because it is positioned as an independent brand within the Eneco
Group. The management of employee satisfaction is the
responsibility of the different business segments.
Suschainability® through sustainable
procurement
Eneco stands for leadership and therefore takes the lead in
assuming its supply chain responsibility (Suschainability®) for its
customers and society, of which sustainable procurement is an
Modern Participation
important element. A good and sustainable relationship with our
In May 2012, Eneco employees elected the members for their
suppliers is very important to us.
new works councils. This was the start of a new form of employee
participation: network participation. Eneco takes the lead in the
Netherlands with this modern form of employee participation. No
Together with suppliers for sustainability
We enter into a dialogue with our strategic suppliers about how
blueprint exists for network participation. For this reason, there
we can improve sustainability, safety and responsibility within our
will be a trial period of two years. On the basis of key performance
supply chain. With those strategic suppliers that do not yet meet
indicators, we will be monitoring the progress and results on a
our standards, we aim to reach agreement on an improvement
quarterly basis. Three main features and benefits of networked
programme to enable them to meet these standards in the
participation are:
foreseeable future.
1.
Collaboration between works council members and non-
Both the energy company Eneco and Joulz apply a sustainable
elected colleagues through joint participation in theme and
purchasing policy. All suppliers must comply with either the Eneco
knowledge groups.
Supplier Code of Conduct or the Joulz Supplier Code of Conduct.
2.
Early dialogue between works council and management.
Suppliers from which we purchase for an amount of more than
3.
New members in the works council: every two years, 50% of
10,000 euros a year, also need to complete the sustainability
the works council members step down; the maximum term
scan developed by Eneco, which must result in a sustainability
of office is two periods of four years.
level of 'Starter' or higher. For the purchase of indirect goods and
services, we apply the sustainability criteria of NL Agency. The
Collaboration
Supplier Code of Conduct is based on the ISO26000-directive.
Leadership stands for reliable management; a steady and
profitable strategy. It also stands for collaboration. Collaboration
50 % sustainable procurement
that we realise through strategic partnerships. For example by
In 2012, 54.5% of the purchases of energy company Eneco were
joining forces with WWF for a sustainable energy supply. But also
sustainable purchases. Our objective was 50 percent. In 2013, we
with other energy companies. A recent example is Navitus Bay:
will be reviewing the extent to which the policy should be
our offshore wind farm in Great Britain where Eneco UK works
harmonised and be made applicable for the entire Eneco Group.
together with EDF Energy. In view of the size and complexity of
this project, the input of EDF Energy is very valuable to us.
Another example is the partnership with Mitsubishi Corporation,
which we announced in the beginning of 2013. This partnership
SUSTAINABLE CATERING
The catering in our head office is organic and healthy. The supplier has completed the sustainability
scan and signed the Supplier Code of Conduct. This was an important condition for obtaining the
contract. Where possible, the catering company uses local suppliers. The products are produced in a
manner that takes into account animal welfare and contain no harmful colouring agents or
preservatives. They have not been transported over a distance of more than 300 food miles (480
km) 'from farm to fork'.
42
Sustainable purchasing primary process case studies
Solar panels from China
Some product categories have a higher than average risk profile.
One example is the purchase of solar panels. Our suppliers
(Astronergy, CSUN and Yingli) have been carefully selected by
Eneco and are seen as progressive organisations within the
sector. Although Eneco is a relatively small customer for these
vendors, we were able to negotiate warranties and supply
conditions. All of our suppliers have now agreed to our conditions
and score sufficiently high on our sustainability scan. The large
distance makes it difficult to carry out regular checks to determine
if the conditions are complied with. In our pursuit of a sustainable
supply chain, we have guaranteed compliance by engaging the
services of a local agency and by making use of the purchasing
power of wholesale companies (IBC Solar and Energiebau).
A company in perfect financial health
Our strategy and a financially healthy company go hand in hand.
This is necessary for the realisation of our ambitious plans for
investment in sustainable energy and energy efficiency concepts.
The reverse also applies: with our strategy, we aim to guarantee
the long-term strong financial health of our company.
For Eneco, financially sound means having a credit rating of A- and
achieving our target with respect to the return on average capital
employed (ROACE). The first requirement has been met, because,
just like in 2011, our creditworthiness was rated A- by external
parties. In the past, we calculated RO(A)CE by dividing earnings
before interest and tax (EBIT) by capital employed at 31
December. However, as of 2012, we calculate ROACE by
deducting a 25% tax rate from EBIT and dividing the result by the
average capital employed for the year. As a result, the
Purchase of energy flows
Where relevant, Eneco develops Codes of Conduct for the
purchase of energy flows. An example is the Code of Conduct for
REDD + that we have developed this year in collaboration with
IUCN and WWF. The Board of Management has adopted this
code. This year, Eneco also adopted the renewed Sustainability
Charter for biomass that it developed in close collaboration with
WWF. The Charter is a statement in which we describe how we
assess the sustainability of our biomass projects and trade deals.
Biomass involves sustainability risks, such as displacement
comparative figure for 2011 dropped from 6.4 to 5.0%. This
adjustment further improves the transparency and control of this
KPI. In 2012, we realised a ROACE of 4.1% (excluding
impairments on electricity-related fixed assets: 5.1%) while the
target was 5.4%. The main reasons for not achieving our goal
were the operating results of Eneco and Joulz, which were below
expectation. Consequently, cost saving programmes have been
initiated during the past year to bring ROACE back to the desired
level. The main effects of these programmes are expected to be
noticeable as of 2013.
effects (i.e., the use of agricultural land for biomass production)
and social issues, in particular with respect to imported biomass.
The Charter contains clear standards with which our biomass
projects and trade deals must comply.
Examples own business operations
Together with Alphabet, Eneco is improving the sustainability of
the personal lease car fleet. Employees who qualify for a lease car
can now select cars with maximum standard emissions of
120 g CO2/km. In 2012, Eneco and Stedin relocated to
sustainable offices. The catering in these offices is also as organic
and healthy as possible.
ROACE
4.1 STATUS
0.0%
5.4 TARGET
10.0%
43
Progress
Already 37% less CO2
emissions per employee
Eneco's internal business operations are CO2 neutral since 2008. This
means that we optimise the reductions where possible and compensate
remaining CO2 emissions with CO2 certificates. Unfortunately, we will
not be able to meet the ambitious target that we formulated in 2008
to achieve a 50% reduction for Eneco Group in 2013 compared with
2007. The result for 2012 was 37%. However, we do expect to be able
to realise a further reduction to 44% in 2013.
CO2 certificates
a negative impact on the CO2 emissions per employee.
Eneco strives to improve its efficiency as much as possible and to
Nevertheless, Joulz was still able to improve its efficiency.
reduce its CO2 emissions. For areas of our internal business
operations that still generate CO2 emissions, we purchase REDD
or Gold Standard CO2 certificates to compensate (page 45)
these emissions. Purchase takes place before publication of the
annual report relating to the year in which the CO2 emissions
occurred. All the CO2 certificates required for the years 2008 to
2012 have been delivered and paid in full by Eneco.
The results can also be attributed to the relocation of the three
business segments Eneco, Stedin and Joulz to sustainable offices.
These relocations not only reduced our CO2 emissions with
respect to housing, but also improved the sustainability of
commuter traffic and reduced traffic between different office
locations due to the close proximity of the new offices to public
transport nodes and a new mobility policy. The increased
CO2 EMISSIONS REDUCTION PER EMPLOYEE
Realisation 2012
(compared with 2007)
Projection 2013
Eneco Group
37%
44%
Eneco
48%
53%
Stedin
51%
57%
Joulz
17%
25%
CO2 emissions decrease
In 2012, the CO2 emissions of Eneco Group per employee were
37% lower than the emissions in 2007. Last year, we reported a
reduction of 30%. Due to the nature of the activities, there are
substantial differences between the business segments Eneco,
availability of green gas has enabled us to meet 38% of our total
gas requirement in a sustainable manner. However, this reduction
is tempered by the growth of our car fleet due to the increase in
the number of field technicians.
CO2 EMISSIONS PER EMPLOYEE - ENECO GROUP
2007 1
2012 1
Mobility
2,8
2,7
Housing
1,8
0,3
Paper
0,1
0,0
CO2 emissions/ employee
4,6
2,9
[tons CO2/employee]
1
Rounded numbers
Joulz and Stedin. Half of Joulz's footprint relates to emissions
from company vehicles, the sustainability of which is not easy to
Environmental Management System
improve. In addition, there was a restructuring at Joulz as a result
In 2012, the safety management system was revised to
of which the percentage of direct employees, such as technicians,
incorporate environmental management. Following the document
increased compared with the percentage of indirect employees.
assessment at the end of 2012, the framework procedures for
The footprint of direct employees is bigger, due to the fact that
ISO 14001 are now in place and operational control will be further
they need to travel more in connection with their work. This has
specified in 2013. Certification will be possible at a later stage,
depending on the relevance to the business.
44
Progress Sustainable business operations
In 2013, Joulz obtained a level 5 CO2 performance ladder
vehicles. The average emissions standard of our vehicle fleet is
certificate, which is the highest rung on the ladder. Joulz was also
171 grams of CO2 per kilometre; the average emissions of the
the first company in the Netherlands to obtain a level 5
company vehicle fleet amount to 188 grams of CO2 per kilometre
performance ladder certificate in the area of Corporate Social
and the average emissions of the lease vehicle fleet to 134 grams
Responsibility.
of CO2 per kilometre.
CO2-compensation
Energy consumption
REDD (Reduced Emissions from Deforestation and forest
In 2010, we started to replace the natural gas used for the
Degradation) is a new instrument for the financing of forest
heating of our business premises with green gas. Due to the
protection. Reasons for deforestation are the money that is made
higher availability of green gas, the share of green gas in our total
from cutting down trees and using the land for the cultivation of
energy consumption increased again in 2012. As a result of the
crops such as soy an oil palms. In contrast, not much money is
relocation to sustainable offices and the implementation of the
earned by leaving the forests intact. Since deforestation is one of
new method of working, the amount of energy used for space
the main causes of climate change, investing in forest protection
heating decreased by 31% per square metre. Electricity
is highly important. Through these investments, it is possible to
consumption per square metre decreased by 13% (compared with
earn money by leaving the forests intact, which discourages
2007). In absolute terms, the decrease in energy consumption can
deforestation. This is the essence of REDD. Eneco and WWF wish
mainly be attributed to the fact that the number of square metres
to stimulate the new instrument. To do this properly, Eneco and
of office and warehouse space decreased while the number of
WWF have entered into agreements with respect to the use of
employees increased.
REDD certificates.
Projection 2013
Gold Standard projects have strict criteria: the investments must
Unfortunately, we will not be able to meet the ambitious target
relate to sustainable energy projects in developing countries.
of 2008 to achieve a 50% CO2 emissions reduction for Eneco
Projects that could not be realised without the sale of CO2
Group in 2013 compared with 2007. The is mainly due to the fact
certificates. Another condition is that the local population must
that the development of electric vehicles is not progressing as
benefit from the projects.
quickly as we anticipated at that time, in particular in the area of
company vehicles. However, we do expect to be able to realise a
Mobility
further CO2 emissions reduction to 44% in 2013. Although there
Both Eneco and Stedin have a strict parking policy and encourage
are differences in the contribution of each of the business
the use of public transport. Eneco rewards employees who travel
segments due to the nature of their activities, each of them will
to work by bicycle. The lease policy for the entire group is aimed
take further steps in 2013:
at improving sustainability. Lease car drivers are given the
opportunity to opt for a more sustainable alternative by offering
them public transport passes. It has also been decided that only
cars that have a maximum emissions standard of 120 grams of
CO2 per kilometre may be used.
Higher fuel consumption
Since 2007, the fuel consumption of our vehicle fleet increased
by 33 percent. This is due to the increase in the number of
CO2 EMISSIONS REDUCTION PER EMPLOYEE COMPARED WITH 2007
37 STATUS
0%
35 TARGET
100%
45
Progress Sustainable business operations
• In order to switch all the vehicles in our lease vehicle fleet to
vehicles with CO2 emissions per kilometre of 120 grams or less,
we have offered lease car drivers the possibility to select a new
car under an accelerated exchange scheme. This scheme allows
drivers of lease cars with CO2 emissions higher that 120 grams
per kilometre to immediately select a new clean lease car. A
sufficient number of lease car drivers have responded positively
to this proposal, which means that the average CO2 emissions
of our lease vehicle fleet will drop to 120 grams or less per
kilometre during the course of 2013.
• In 2013, we will be using more green gas as a replacement for
natural gas. It is expected that sufficient amounts of green gas
will be available in 2013, to meet Eneco Group’s entire gas
demand.
• In 2013, Joulz will start to use a new office at the Willemsplein
in the centre of Rotterdam. This building is being renovated
completely with a range of sustainable aspects, including a
direct current network that will reduce the energy consumption.
Joulz other office building in Heinenoord received an 'Excellent'
rating according to the Breeam system. The aim is to obtain a
'Very Good' or higher rating for the office in Rotterdam.
We expect that the measures described above will contribute to
achieving a reduction of CO2 emissions by the end of 2013 of
around 44%. It is also expected that Stedin will improve the
sustainability of its business operations to 57% less CO2
emissions per employee, Eneco to 53% and Joulz to 25% less
CO2 emissions per employee.
46
Progress
Ecofys
Experts in energy
The independently operating consultancy firm Ecofys, of which Eneco is
100% shareholder, possesses in-depth knowledge across the entire
spectrum of energy and CO2 efficiency, sustainable energy, energy
systems and markets and energy & climate policies.
Wedging the gap
this field. Tianjin is one of the seven Chinese regions where such
In June 2102, a number of Ecofys experts published an article in
pilot systems are being developed.
the magazine Nature Climate Change. Ecofys proposes a new
approach — called ‘wedging the gap’ — consisting of 21 coherent
worldwide initiatives that together would trigger greenhouse-gas
emission reductions of around 10 giga tonnes of carbon dioxide
equivalents by 2020. This supports and goes substantially
beyond the emission reductions proposed by national
governments. The Ecofys approach would play a significant part
in bridging the gap between current emission trends and the
internationally supported objective to limit the global temperature
In Kenya, Ecofys supervises the development of a 25MW wind
farm where turbines are being installed on a tea plantation.
Ecofys’s contribution to this project varies from mapping the
landscape to optimising the performance of the wind farm.
Emissions reduction through the WWF Climate Savers
programme
For WWF International, Ecofys is investigating the emission of
increase to 2° Celsius. the publication can be downloaded at
carbon dioxide by companies that participate in the WWF Climate
Nature Climate Change.
Savers Programme. One of the main findings of this study is that
over thirty large companies have managed to reduce carbon
International activities
dioxide emissions by 100 million tons between 1999 and 2011.
Ecofys carries out projects in about 50 countries and is an
This figure is equivalent to twice the current annual emissions of
important partner of international climate organisations. Ecofys
Switzerland. The study also provides insight into the potential for
was present at the UNFCCC-climate conferences in Doha and
further reductions. Ecofys has calculated that the cumulative
contributed to the ‘Annual Negotiators Guidebook’. Negotiators
CO2 reduction per year could increase to 350 million tonnes in
of many countries have been using the annual series of this
2020. If other major corporations in the same business sectors
guidebook for more than five years.
followed the leadership of Climate Savers companies, between
500 and 1000 million tonnes of emissions could be avoided
In 2012, Ecofys won a number of prominent contracts that
annually in 2020, an amount roughly comparable to the current
enhance its visibility in the United States and China. In the US,
annual emissions of Germany. More information on the WWF
Ecofys is carrying out a project that should demonstrate how data
Climate Savers programme can be found on wwf.panda.org.
centres can contribute to improving the possibilities for feeding
sustainably generated electricity into the electricity network. In
China, Ecofys is leading a consortium that advises the Chinese
Tianjin region on the development of a local emissions trading
system. In this project, Ecofys collaborates with locale experts in
For WWF, Ecofys is investigating the CO2 emissions reduction potential of 'The New Way of Working'
for the Netherlands by the year 2020. Elements that are taken into consideration include the reduction
of commuter traffic, reduction of business trip related traffic and less office space. In collaboration
with KPN, Ecofys developed the 'Saving Calculator', a tool that is used to assess the financial and
environmental effects of ICT applications.
47
Governance
We hereby present the Annual Report and Annual Financial Statements
over the financial year 2012 as prepared by the Board of Management.
The year 2012 was another turbulent year. The crisis on the
strategic framework, including the strategy relating to
financial markets and the economic market developments also
Sustainable, Decentralised and Together (SDT).
affected Eneco in 2012, as described in the report of the Board
of Management. Nevertheless, the company achieved a
In November 2012, the Supervisory Board approved the Euro
satisfactory result. This also enabled the company to maintain its
Commercial Paper (ECP) programme to the amount of €750
A-/stable outlook credit rating.
million. A similar programme was started in 2009. The new
programme is an update of the existing programme, in which a
The Supervisory Board is proud of Eneco's achievements in 2012.
number of facts have been updated. The decision was also taken
The company is in a good position to implement the anticipated
to request a STEP label, making the Notes ECB eligible and
future transformation. However, it is also well aware that
allowing the buyer of the Notes to use them as collateral at ECB.
significant steps must be taken to realise this challenge.
The STEP label is applicable in approximately 60% of the
corporate ECP programmes and is expected to become important
On 18 April 2012, the company said farewell to Mr Klaas Westdijk,
for liquidity and pricing after implementation of Basel III and
Chairman of the Supervisory Board since July 2000. We thank
Solvency II regulations. Eneco uses the funds obtained from
Mr Westdijk for his many efforts in various areas in the interest of
issuing the Notes for general business purposes, for both the grid
the company during his many years of service.
administrator and the energy company. No collateral has been
provided in connection with this ECP programme.
As of 1 December 2012, Mr Marc van der Linden was appointed
member of the Board of Management. He succeeds Mr Douwe
Both the Audit Committee and the Supervisory Board monitor
Kras who died on 7 December 2011 due to an illness. It is a credit
the developments in the financial markets closely. In this context,
to our management development programme that we have again
the Treasury Statute was updated and the Treasury Plan 2012
been able to appoint someone from within the organisation. We
was approved. The financial statements over 2011, the
wish Mr Van der Linden success in his new position.
management letter 2011, the audit report 2011 and the audit
plan 2012 were discussed in the presence of Deloitte
Throughout the year 2012, Mr Jurriaan Ruys held the position of
Accountants.
interim-member of the Board of Management. The Supervisory
Board also thanks him for his contribution.
Periodic reports kept the board informed about major projects,
the financial position of the organisation and the development of
Agenda items
the customer base. Both the Audit Committee and the entire
Again in 2012, Eneco concentrated on the further development
board have discussed the quarterly financial reports and several
and implementation of its sustainability strategy. In connection
aspects of the business operations were discussed in greater
with this, the Supervisory Board held several discussions on
detail. In addition, periodic reports were provided through the
intended major investments, such as investments relating to
Audit Committee, regarding the status and development of risks
offshore wind energy at sea off the coast of the Netherlands and
relating to the cross-border leases and activities aimed at the
Great Britain, as well as the continuation of the heating supply in
settlement of transactions. A number of Post Investment reports
Rotterdam and the corresponding long-term purchase contracts.
about previous large investments and acquisitions were also
Final approval decisions with respect to these projects were taken
discussed. The lessons learned from this are of particular
in December. A number of investments relating to the expansion
importance for the organisation.
of existing wind farms in Scotland were also approved as well as
investment proposals for solar energy projects in Belgium and
During the General Shareholders’ Meeting in April, the financial
France. The details of these projects are included in the report of
statements for 2011 were adopted. Dividend was paid out in
the Board of Management.
April.
The Supervisory Board also discussed the progress of the
The safety policy is a fixed item on the board's agenda. Accidents
organisation's strategic and operational focal points.
resulting in absence from work are always discussed. Cases in the
Presentations concerning these subjects were held a number of
area of safety were also discussed.
times during the Supervisory Board meetings. During a theme
meeting in November, we discussed the implementation of the
The Supervisory Board regularly discusses the strategy and the
associated risks identified by the company. The Audit Committee
48
Governance Report of the Supervisory Board
reviews the results of the appraisal by the Board of Management
At the Supervisory Board’s recommendation, Mr Joop Drechsel
of the setup and functioning of the internal risk management and
was reappointed as a member of the Supervisory Board for a
control system and any significant changes in the system.
period of two years on 18 April 2012.
We have taken note of the advice issued by the Central Works
Remuneration of the Supervisory Board
Council during each meeting.
The proposal for periodic indexation of the remuneration of the
Supervisory Board that is to be submitted for approval by the
shareholders' meeting every three years, was approved by the
The Supreme Court has posed prejudicial questions to the
European Court in Luxembourg in connection with the appeal
General Meeting of Shareholders on 18 April 2012.
procedure started by the State of the Netherlands in 2010
against the group prohibition in the Independent Network
Meetings and other activities
Management Act.
In 2012, there were seven regular board meetings, one of which
partially without the presence of the Board of Management.
Topics that were discussed during this meeting include the report
The periodic consultations with shareholding municipalities
Rotterdam, Dordrecht and The Hague and the Shareholders
of the Remuneration Committee.
Committee were continued in 2012. These consultations were
constructive and contributed to a good mutual understanding.
The General Shareholders' Meetings, which were held in April and
in September, were attended by a majority of the members of the
Supervisory Board. The consultation meetings of the Central
Composition of committees
The Supervisory Board has seven members. In 2012, there were
three committees:
Works Council were attended by two members of the Supervisory
Board in rotation. The Audit Committee convened six times and
the Remuneration Committee convened once. The Appointment
a) a Selection and Appointment Committee: Edo van den Assem
(chairman), Mirjam Sijmons, Kees van Dongen and Klaas de Vries;
b) a Remuneration Committee: Kees van Dongen (chairman),
Mirjam Sijmons and Edo van den Assem;
and Selection Committee convened twice and conducted several
conference calls in connection with the recruitment, selection and
appointment of the new member of the Board of Management.
Eneco complies with the rules for good corporate governance as
laid down in the Dutch Corporate Governance Code. As Eneco
c) an Audit Committee: John Lintjer (chairman), Joop Drechsel and
Holding N.V. is a dual-board company, but is not listed on the stock
Henk Dijkgraaf.
exchange, some stipulations are obviously not applicable. In cases
where no specific decree applies, the relevant best practice criteria
Appointments
are implemented.
At the Supervisory Board’s recommendation, Mr Edo van den
Assem was appointed as a member of the Supervisory Board for
a period of four years at the General Shareholders’ Meeting on 18
April. He succeeded Mr Klaas Westdijk as chairman of the
There is also a difference with regard to fully privately-owned
organisations, since Eneco's activities are partially regulated and
partially non-regulated.
Supervisory Board.
As far as the regulated activities are concerned, Eneco complies
with the relevant stipulations in legislation and regulations.
ATTENDANCE OVERVIEW
20-01
12-03
18-04
22-06
07-09
09-11
14-12
E.H.M. van den Assem
*1
*1
x
x
x
x
x
C.P.G. van Dongen
x
x
x
-
x
x
x
H.G. Dijkgraaf
x
x
x
x
-
x
x
J.G. Drechsel
x
-
x
x
x
x
x
J. Lintjer
x
x
x
x
x
x
x
M. Sijmons
x
x
x
x
x
x
x
K.G. de Vries
x
x
x
x
x
x
x
N.J. Westdijk
x
x
x
*2
*2
*2
*2
1
Mr Van den Assem joined and was appointed chairman of the Supervisory Board per 18 April 2012
2
Mr Westdijk stepped down per 18 April 2012.
49
Eneco’s company strategy is such that the network manager can
carry out its legal tasks in total freedom. This is supervised by the
network manager's own Supervisory Board, which mainly consists
of independent third parties.
Eneco’s web site includes a page regarding corporate governance
(http://www.eneco.com/organisation/management/Pages/
corporate-governance.aspx) It also includes a page relating to
investor relations.
The remuneration report over 2012 is available on Eneco's
website. In addition, reference is made to the note to the financial
statemenst (page 87) that includes a specification of the
remuneration of members of the Board of Management and the
Supervisory Board.
Recommendation
Eneco concluded the year 2012 with a satisfactory result. The
Supervisory Board is pleased with this result. We thank the
management and all employees for their dedication and efforts.
Taking into account the current market conditions, the board looks
towards the future of the company with confidence.
We recommend that the shareholders adopt the 2012 Financial
Statements.
On behalf of the Eneco Holding N.V. Supervisory Board
E.H.M. van den Assem
Rotterdam, 1 March 2013
50
Personal information Board of Management
J.F. (Jeroen) De Haas
(1959)
A.J. (Guido) Dubbeld
(1971)
C.J. (Kees-Jan) Rameau
(1962)
(Marc) van der Linden,
1972
Chairman of the Board of
Management Eneco Holding N.V.
Member of the Board of Management
Eneco Holding N.V.
Eneco Holding N.V.
Eneco Holding N.V.
Jeroen de Haas was appointed chairman of
the Board of Management on 1 January
2007. He has been a member of the Board
of Management since July 2000 and held
the position of vice-chairman since 2006.
Since 1996, he was General Manager of the
Enercom energy company cooperative, six
members of which merged with Eneco in
July 2000. Prior to this Mr De Haas was
General Manager of RCCIVEV, a unit of
Roccade. He studied Dutch Law in Utrecht.
Guido Dubbeld has been appointed member
of the Board of Management as Chief
Financial Officer of Eneco Holding N.V. as of
1 April 2011. He joined Eneco in 2002 and
held the positions of Risk Manager and
Manager Finance & Control. As from 2007,
he has been working as the Director of
Eneco Energy Trade.
Kees-Jan Rameau was appointed a member
of the Board of Management of Eneco on 1
April 2008. He started his career at Eneco
as Strategy Director at the beginning of
2004. At the beginning of 2007, he was
appointed Business to Business Director.
With effect from 1 December 2012, Marc van der
Linden has been appointed member of the Board
of Management of Eneco Holding N.V. He joined
Eneco in 1997 and has held several positions prior
to his appointment, including those of business
analyst, product manager at Eneco
Warmte(Heating), director of Eneco Energy
Projects, director of Eneco Installatiebedrijven
(Installation Companies) and director of the
Business Unit Wind. Prior to joining Eneco he
worked at Van Gansewinkel Groep. He holds a
degree in Economics from Tilburg University.
Additional functions
• Member of the Supervisory Board of
Movares Group B.V.
• Member of the Supervisory Council of
Rotterdam University
• Member of the Advisory Board Port of
Amsterdam
• Chairman Employers Association WENb
(until 1 April 2013)
• Member of the Advisory Board Executive
MBA in European Utility Management by
Jacobs University in Bremen (Germany)
• Member of the Fundraising Board Utrecht
University
• Clean Energy Ambassador of WWF
Before Guido joined Eneco, he worked for
several financial institutions, including
MeesPierson, HypoVereinsbank (Munich)
and UBS AG (Zurich). He holds a degree in
Economics from Erasmus University
Rotterdam with a specialisation in
International Finance.
Additional function
• Member of the Supervisory Board Stedin
Netbeheer B.V.
Before Rameau joined Eneco, he worked at
the Boston Consulting Group, TPG (now
TNT) and McKinsey & Company, where he
was active in the fields of strategy, finance
and operations. He studied Applied Physics
at Delft University of Technology and holds
an MBA from INSEAD, Fontainebleau.
Additional functions
• Member of the Advisory Board Agro
Energy
• Member of the Advisory Board Energy
MBA Nyenrode
• Member of the Board of Management
Koninklijke Vereniging van Gasfabrikanten
in Nederland (KVGN)
51
Personal information Supervisory Board
Ir. E.H.M. van den Assem Ir. C.P.G. van Dongen,
(1949)
1940
Ir. H.G. Dijkgraaf, 1946
Drs. J.G. Drechsel, 1955
• Chairman of the Supervisory Board since
18 April 2012
• Chairman of the Selection and
appointment committee
• Member of the Remuneration Committee
• Member of the Supervisory Board MCB
International B.V.
• Member of the Supervisory Board TBI
Holdings B.V.
• Member of the Supervisory Board Flight
Simulation Company
• Member of the Advisory Board DAS
Rechtsbijstand
• Member of the Advisory Board Mentha
Capital
• Member of the Board metal industry
employers' association FME-CWM
• Industrial advisor IK Investment Partners
Limited
• Member of the Supervisory Board since 25
April 2007
• Member of the Audit Committee
• Director of Sasol Limited in Johannesburg
(South Africa), member of the Audit
Committee and chairman of the
Remuneration Committee and the Risk,
Safety, Health and Environment
Committee
• Member of the Supervisory Board Royal
Tropical Institute (KIT)
• Vice-chairman and treasurer Curatorium of
the Netherlands Institute for the Near
East (NINO)
• Member of the Board, Southern AfricanNetherlands Chamber of Commerce
• Member of the Supervisory Board since 14 July
2000
• Member of the Audit Committee
• Member of the Supervisory Board Telegraaf
Media Groep N.V.
• Member of the Supervisory Board Fleura Metz
B.V.
• Chairman of the Supervisory Board Travix N.V.
• Chairman of the Supervisory Board Park ’N Fly
Inc.
• Chairman of the Supervisory Board Park Mobile
International B.V.
• Member of the Supervisory Board TRX Inc
• Member of the Advisory Board Rare Diseases
Association
May 2003
• Chairman of the Remuneration Committee
• Member of the Selection and Nomination
Committee
• Member of the Policy Committee for social
and legal affairs Uneto-VNI
Previous main position:
Entrepreneur
Previous main positions:
Chairman of the Board of Management TBI
Holdings B.V. , Chairman of the Board of
Management and CEO of Cofely Nederland
B.V., member of the Boards of Management
of Hagemeyer N.V., DAF Trucks N.V. and
Alcatel Nederland B.V.
52
Present main position:
President-Director Shell Nederland B.V.,
CEO N.V. Nederlandse Gasunie, CEO
GasTerra B.V.
Chairman of the Board of Management BCD N.V.
Drs. J. Lintjer, 1943
Drs. M. Sijmons, 1960
Mr. K.G. de Vries, 1943
Mr. J.W. Weijers, 1951
• Vice-chairman of the Supervisory Board
since 20 May 2005
• Chairman of the Audit Committee
• Executive Director K.G. Holding N.V.
• Chairman Philippine Netherlands
Business Council
• Member of the Advisory Board Plan
Nederland
• Member of the Advisory Board Allseas
April 2007
• Member of the Selection and Appointment
Committee
• Member of the Remuneration Committee
• Member of the Supervisory Board
University of Leiden
• Member of the Advisory Board Nintes
• Member of the Board De Volkskrant
Foundation
• Member of the Board Promotie Den Haag
Marketing & Events
April 2007
• Member of the Selection and Appointment
Committee
• Member of the Senate of the Dutch
Parliament
• Member of the Parliamentary Assembly of
the Council of Europe
• Member of the Supervisory Board
Koninklijke Haskoning
• Chairman of the Board Centrum
Arbeidsverhoudingen
Overheidspersoneel
• Company Secretary
Previous main position:
Vice-President Asian Development Bank
Present main position:
Member of the general management ANWB
Member of the Dutch House of
Representatives, Minister of the Interior
and Kingdom Relations, Minister of Social
Affairs and Employment, Chairman of the
Social and Economic Council and General
Manager of the Association of Netherlands
Municipalities (VNG)
53
Governance
Corporate governance at
Eneco Group
Eneco complies with the rules for good corporate governance as laid
down in the Dutch Corporate Governance Code. Corporate governance
concerns the relationship between the Board of Management, the
Supervisory Board and the General Shareholders' Meeting. As Eneco is
not listed on the stock exchange and Eneco's activities are partially
regulated and partially non-regulated, some stipulations are not
applicable.
Deviations from Corporate Governance Code
The members of the Selection and Appointments Committee Edo
As Eneco is not listed on the stock exchange, some stipulations
van den Assem (chairman), Mirjam Sijmons, Kees van Dongen and
are not applicable. In cases where no specific decree applies, the
Klaas de Vries provide advise with respect to the selection and
relevant best practice criteria are implemented. See our corporate
appointment of members of the Board of Management.
website for an overview of the stipulations that are not applicable.
The members of the Audit Committee, John Lintjer (chairman),
Deviations due to Eneco's partially regulated activities
Joop Drechsel and Henk Dijkgraaf, monitor important financial
Eneco also deviates from the Corporate Governance Code with
matters and risk management. The Audit Committee discusses
respect to stipulations for fully privately-owned organizations,
these matters six times a year in the presence of the external
since Eneco's activities are partially regulated and partially non-
auditor at least twice a year and, if applicable, in the presence of
regulated. Eneco’s company strategy is such that the grid
Internal Audit. The Supervisory Board presents the financial
operator can carry out its legal tasks in total freedom.
statements to the General Shareholders' Meeting for adoption.
Governance roles
Supervisory Board
The Supervisory Board consists of seven members (page 52).
The Supervisory Board of Eneco Holding N.V. provides advice to
the Board of Management and supervises the policy of the Board
of Management and the general performance of the company.
The Supervisory Board of Eneco Group has appointed three
committees:
• A Remuneration Committee
• A Selection and Appointments Committee
• An Audit Committee
Board of Management
The Board of Management is responsible for the daily
management of the organisation and is ultimately responsible for
the performance of the holding and its subsidiaries::
• Develops the strategy and long-term planning
• Monitors the risk profile
• Manages division and staff directors.
• Prepares the financial statements
• Evaluates the ‘key performance indicators’ and the business
plans of the divisions and the other business units.
The members of the Remuneration Committee, Kees van Dongen
(chairman), Edo van den Assem and Mirjam Sijmons, provide
advice with respect to the remuneration of the members of the
Board of Management.
54
The Board of Management is appointed by the Supervisory Board
and is accountable to the General Shareholders'' Meeting. Eneco's
Board of Management consists of four members (page 51).
Governance Corporate Governance
Shareholders
The shares of Eneco Holding N.V. are held by 55 municipalities
(page 59).
Within six months after the closing of the financial year, or more
frequently if deemed necessary by the Supervisory Board or
Board of Management, Eneco organises a General Shareholders'
Meeting. During this annual Meeting, the annual report is
discussed and the financial statements are adopted. The General
Shareholders' Meeting is also responsible for appointing the
members of the Supervisory Board.
Code of Conduct
Eneco can only fulfil its role in society properly if the highest
standards of behaviour are adhered to. That is why we apply
codes of conduct throughout the company, including integrity
standards that all personnel must comply with. Employees in each
of the business segments can contact a confidential counsellor to
report issues relating to integrity. The text of our Code of Conduct
is published on our corporate website.
55
Governance
Remuneration
Board of Management
remuneration policy
The General Meeting of Shareholders of Eneco Holding adopted the
Board of Management remuneration policy on 20 May 2005. The
primary terms of employment of the Board of Management are
determined on the basis of this policy. The secondary terms of
employment are subject to a separate regulation: Algemene Regeling
Arbeidsvoorwaarden Raad van Bestuur (General Regulation Terms of
Employment Board of Management).
Starting point
Socially relevant results determine remuneration level
The desired market position for the terms of employment of the
In 2012 as well, the remuneration of the members of the Board
chairman and the members of the Board of Management is the
of Management was based on performance criteria relating to
median level in the general market for board members. Another
socially relevant results. The three main criteria for variable
general starting point is that the remuneration policy must enable
remuneration were:
Eneco to recruit and retain qualified management for the
organisation. In other words, the remuneration should be
competitive and comparable to the remuneration for top
• Financial performance, including EBIT, Credit Rating ratios and
cost reduction
management in the business market. Two policy principles are
• Safety; LTIR
leading in this respect: the market principle and the moderation
• Implementation of the sustainability strategy, including
principle.
alignment of customers and employees in terms of customer
satisfaction and employee satisfaction, sustainable purchasing
Market principle
and sustainable investments
Eneco should be regarded as a normal, commercial and marketoriented company.
Each year, Eneco publishes a remuneration report on its website
describing the details of the remuneration of the members of the
Moderation principle
Board of Management. This report (in Dutch) is accessible via this
In view of the history of Eneco and the fact that 100% of the
link: http://corporatenl.eneco.nl/Organisatie/Bestuur/Pages/
shares of Eneco are held by public shareholders (municipalities),
Raad_van_Bestuur.aspx.
the Supervisory Board applies a moderate remuneration policy.
For this reason, the benchmark with companies of similar size and
complexity in the private sector is not fully applied to the current
remuneration policy for Eneco board members. Each year, the
Supervisory Board, having heard the position of the General
Meeting of Shareholders, determines to what extent this
moderation principle can be applied, without affecting the labour
market position of Eneco. In 2012, the Supervisory Board did not
see any reasons to make major changes to the current
implementation of this moderation principle.
56
Governance
Control
Risk management
Eneco Group
Risk management is essential for the realisation of our strategic
ambitions. We identify and mitigate the risks that may impede the
achievement of our goals, which enhances our chances for success.
The Board of Management is responsible for the risk management
Stress tests
of the company as a whole. It has delegated this responsibility to
Eneco applies stress tests to its financial forecasts to include the
each of the business management teams of the underlying
impact of risks in the evaluation of the financial robustness of the
segments. The managers concerned are supported in this
strategy. In addition to obtaining insight into the possible effects
responsibility by functions such as safety and compliance ("second
of these risks, measures are defined to control the risks.
line"). The overall coordination lies with the finance department.
Internal audit carries out additional audits ("third line") and reports
Audit Risk Committee
the results to the Board of Management and the Audit
Each management level has its own Audit Risk Committee: at
Committee.
Board of Management level and at segment level (senior
management teams). The risk assessments and the status of
Risk management framework
control measures and mitigating activities are discussed
The main components of the risk management framework are:
periodically by these ARCs. The Audit Committee of the
Supervisory Board monitors the adequate functioning of the risk
ECRS
management activities as a whole.
The COSO model dating from 2004 is the worldwide standard for
Enterprise Risk Management. Therefore, this model has been
Risk tolerance
selected as the basis for Eneco’s internal risk management and
Management is aware of the risk tolerance of the company and
control system, which goes by the name Eneco Control & Risk
the limits that must be observed in business operations.
System (ECRS). The first version of the ECRS was introduced in
Enterprise-level risk limits have been translated into various
2005. Each year, the ECRS is adapted to keep up with the latest
specific policy principles and guidelines that apply within Eneco in
developments with respect to risks, business developments and
areas such as safety, trade mandates, authorisations and the
external influences.
code of conduct.
The Eneco Control and Risk System (ECRS) consists of a risk
Our risk tolerance is categorised by the types of risk distinguished
assessment methodology, a set of control measures and a
by Eneco:
methodology that management can use to determine the
effectiveness of the control measures (see In Control statement).
Safety
The construction and operation of production facilities is a central
Financial control framework
aspect of our strategy. These activities lead to safety risks. In this
Eneco applies a financial control framework that defines the main
respect, we apply the principle of ''zero tolerance''. Accidents
financial restrictions on the strategy. These restrictions include
resulting in absence from work are considered to be significant
minimum requirements for the ratios for solvency and cash flow
incidents and more serious incidents (hospitalisation, fatal
in relation to net debt, using a credit rating of around A (Standard
accident) are regarded as critical or unacceptable.
and Poor's) as the guideline.
Financial
Eneco pursues a growth and transformation strategy that
includes substantial investments in new and existing activities.
57
Governance Control
The strategy is translated into a ten-year strategic financial rolling
self-assessments that were carried out by the different segments
forecast that is updated each quarter on the basis of the latest
in 2012, the Board of Management is of the opinion that the
insights. Our financial risk tolerance is derived from the financial
internal control system is adequate and functioned effectively in
control framework. Risks that can result in exceeding or not
2012.
meeting tolerance limits defined in the financial control framework
form an important part of the risk management framework. Limits
The inherent limitations of each risk management and control
are exceeded or not met when the annual profit or cash flow are
system must, however, be taken into account. We will therefore
€ 20 million or more above forecast or when the annual balance
never be able to absolutely guarantee that we will achieve our
sheet total is € 100 million or more below forecast.
company objectives or that no material errors, losses, fraud or
breaches of legislation and regulations will occur.
Integrity
An important risk, in the form of unethical or fraudulent behaviour
of employees, is the integrity risk. Eneco can only play its part
The Board of Management will incorporate Enterprise Risk
properly if the highest standards of conduct are applied. The
Management in greater detail in 2013 using the Eneco Control &
Eneco Code of Conduct and the underlying guidelines define
Risk System. The Board of Management has no reason to assume
desired conduct and how to act with integrity. Considerable
that the Eneco Control & Risk System will not function properly
attention is paid to integrity awareness of employees during work
in 2013.
meetings and workshops. There is an integrity reporting centre
and employees can also contact one of the confidential
counsellors for the adequate and confidential handling of integrity
incidents. A baseline measurement was carried out in 2012 with
respect to how employees experience integrity.
Reputation
A good and reliable reputation is essential to our existence.
Negative attention is considered to be a top risk.
The risk of not achieving our strategic goal, which is the realisation
of a sustainable and reliable energy supply, is also classified as a
reputation risk. Not meeting the reliability requirements with
respect to our network management activities or supply activities
is ranked as a top risk. This also applies to the inability to fulfil our
sustainability commitments to WWF in connection with the
Climate Savers initiative.
In addition to obtaining insight into the possible effects of these
risks, we have determined control measures for these risks.
In Control statement
Since 2007, the Board of Management of Eneco Holding N.V.
issues an In Control statement. This is also the case for 2012.
As a company with social responsibility, we adhere to the initial
scope of the Dutch Corporate Governance code relating to internal
control; in other words, an adequate and effective implementation
of all the objectives of the Eneco Control & Risk System (ECRS).
We do not, therefore, make use of the possibility offered by the
Corporate Governance Monitoring Committee to limit the scope
to financial reporting risks only.
The Board of Management is aware of its responsibility for the
internal control of Eneco. The Board of Management has applied
the Eneco Control & Risk System as an instrument to guarantee
that the realisation of strategic, operational and financial
objectives is monitored, reporting is reliable and legislation and
regulations are complied with. On the basis of the results of the
58
Forward looking statement
Governance
Shareholders
The shares of Eneco are held by 55 Dutch Municipalities.
Municipalities
Percentage of shares
Rotterdam
31.69%
The Hague
16.55%
Dordrecht
9.05%
Leidschendam-Voorburg
3.44%
Lansingerland
3.38%
Delft
2.44%
Zoetermeer
2.34%
Pijnacker-Nootdorp
2.10%
Municipalities holding less then 2% of the shares
Aalsmeer
Giessenlanden
Ouderkerk
Achtkarspelen
Goeree-Overflakkee 1
Papendrecht
Alblasserdam
Gorinchem
Ridderkerk
Albrandswaard
Haarlemmerliede & Spaarnwoude
Rijswijk
Ameland
Hardinxveld-Giessendam
Schiedam
Amstelveen
Heemstede
Schiermonnikoog
Barendrecht
Hellevoetsluis
Sliedrecht
Bernisse
Hendrik-Ido-Ambacht
Spijkenisse
Binnenmaas
Kollumerland c.a.
Strijen
Bloemendaal
Korendijk
Uithoorn
Brielle
Krimpen aan den IJssel
Vianen
Capelle aan den IJssel
Leerdam
Westvoorne
Castricum
Lingewaal
Zandvoort
Cromstrijen
Molenwaard 2
Zederik
Dongeradeel
Nederlek
Zwijndrecht
Ferwerderadiel
Oud-Beijerland
1
Municipality since 1 January 2013 following the merger of the municipalities Dirksland, Goedereede, Middelharnis and Oostflakkee
2
Municipality since 1 January 2013 following the merger of the municipalities Graafstroom, Liesveld and Nieuw-Lekkerland.
59
Governance
About this annual report
Integrated annual report
Since 2010, we report on our financial and strategic performance in our
annual report. This is a development process in which we strive for
continuous improvement and further optimisation of our data and
systems. Eneco only publishes an online version of its integrated annual
report. This report can also be downloaded in full or in part in the form
of a PDF document.
Scope
Choices
Eneco's performance in the area of sustainability forms an integral
The redefined strategy is leading for our integrated report.
part of the strategy of the group and is described in this report in
Revenues, the impact on people and the environment and risks
general terms. For detailed information on the financial
are managed according to the Integrated Thinking principle. Our
performance, we refer to the notes to the consolidated financial
aim is to make the strategy tangible and measureable to provide
statements [LINK]. With respect to the non-financial performance,
clear insight into the progress that we make. In 2011, we defined
Eneco Group reports on the entities over which it has decisive
20 strategic KPIs that were of material importance to our core
control. Ecofys has an independent position within Eneco and is
activities. In 2012, we have refined these KPIs to ensure
consequently not included in the consolidation. There are
alignment with the strategic framework. At the same time, we
differences between the entities of Eneco. As a result, uniform
assessed the risks associated with our strategy and the dilemmas
measurement of the sustainability performance of these entities
that we face. This process was initiated by the Board of
is not always possible. This means that some KPIs have a limited
Management and was implemented by the relevant staff
scope and have been specially developed for a specific Eneco
departments and management of the business segments. The
entity. It has been agreed with WWF that the WWF KPIs relate to
result of this structured process is reflected in the setup and
the energy company. See the Scope overview for further details.
content of this annual report. The central element is our mission
with a clear focus on our customers. In contrast to previous annual
Unless specified otherwise, the definitions and reporting
reports, the activities and performance of our business segments
principles are unchanged from last year. Where possible,
are presented as an integrated whole: efficiency, generating
quantitative information is compared to the corresponding figures
energy together and purchasing. Connecting leadership, expertise
in previous years. The reporting principles for the critical key
and customer orientation support the realisation of this strategy.
performance indicators (KPIs) are described in the table strategic
KPIs.
The set of strategic KPIs and the financial and non-financial risks
controlled by the Board of Management are now more in line with
Internal operations include the assets of business entities of
the strategy. Consequently, the categorisation of KPIs and risks
Eneco Group over which we have decisive control. The scope does
differs from last year. The set of KPIs still covers the themes
not include the production units for electricity, heating and
safety, increased sustainability of the energy supply, security of
cooling. Nor does it include energy supplier Oxxio that was
supply, customer satisfaction, employees and enhancing the
acquired in 2011. The emissions resulting from the internal
sustainability of our business operations. Five strategic KPIs are
business operations of Ecofys are not included to emphasize
directly derived from our agreements with WWF.
Ecofys’ independent position.
Factors such as responsibility, definition, scope, calculation
Our intention to expand our scope with our production units and
method, required resources and systems, process and quality
energy supply to our clients is taking shape. A link with our
assurance have been defined for each strategic KPI. Agreements
strategic framework has been created and we have been working
with respect to reporting are also in place. Developments are
on getting support to manage our environmental impact in the
reported periodically for each KPI. These developments are
chain. We expect to be able to report our chain footprint next year.
60
Governance About this annual report
discussed with the managements of the Eneco entities
concerned. Adjustments are made where necessary.
Controle and assurance
The audit of the annual financial statements by Deloitte
Accountants has resulted in an audit report that is included in the
Annual Financial Statements. The assurance engagement with a
limited degree of certainty with regard to the strategic KPIs (page
20 and 21) for 2012, with the exception of the KPI 'Credit Rating',
has resulted in an assurance report. Deloitte Accountants was not
asked to provide assurance with regard to the KPI 'Credit Rating'
since the result of this KPI is not determined by Eneco.
Furthermore, Deloitte Accountants was not asked to provide
assurance with regard to other information included in this report
and any earlier years included in this report for comparison
reasons. Consequently, no assurance is provided for information
in the integrated annual report other than the 12 strategic KPIs
for 2012 and 2011.
Feedback welcome
We look forward to receiving feedback on this report. You can
send us your feedback by completing an online form or by sending
an e-mail to [email protected].
You can also register if you want to receive news about Eneco or
the Prospect newsletter. Stedin and Joulz publish their own
annual report (in Dutch) that will be available online on their own
websites www.stedin.net and www.joulz.nl.
Board of Management Eneco Holding N.V.
Jeroen de Haas, chairman
Kees-Jan Rameau
Guido Dubbeld
Marc van der Linden
61
Scope strategic KPIs
The following overview indicates which business segments of Eneco
Group are involved with which strategic KPIs. Structural reporting with
respect to our KPIs started in 2011. No comparative figures are
available for previous years. Consequently, the scope is limited to 2011
and 2012.
Number
Description
Stedin
Joulz
Oxxio
V
1
Sustainable electricity production in relation to total supply portfolio
V
2
Grams of CO2 per kWh produced
V
3
Average interruption duration energy supply
V
4
Dark green gas in relation to total retail supply portfolio
V
5
Dark green electricity in relation to total retail supply portfolio
V
6
LTIR Group
V
V
V
7
CO2 emissions reduction per employee compared with 20071
V
V
V
8
Employee motivation2
V
V
V
9
Credit Rating
V
V
V
V
10
ROACE
V
V
V
V
11
Eneco retail customers
V
12
Customer satisfaction Stedin (score > 7)
13
Net Promotor Score Eneco
V
V
V
V
1
Oxxio is not included in the scope because it was not part of the group in the baseline measurement year 2007.
2
Following the acquisition, Oxxio was positioned as an independent brand within the Eneco Groep, as part of the multibrand strategy. The management
of employee satisfaction is the responsibility of the different business segments.
62
Eneco
GRI index
Description
Explanation
Reference
Strategy and Analysis
1.1
CEO statement
1.2
Major consequences, risks and opportunities
Message from the CEO (page 2)
Eneco has explained the main risks in the risk
paragraph
Message from the CEO (page 2), Link
between strategy and risks (page
12)and Dilemmas (page 22)
Organisation profile
2.1
Organisation name
2.2
Main products and/or services
Eneco Holding N.V.
2.3
Operational structure
2.4
Location head office
2.5
Countries in which the organisation operates
Profile (page 8)
2.6
Ownership structure and legal form
Notes to the Financial Statements
(page 75)
2.7
Sales markets
Profile (page 8)
2.8
Organisation size
Profile (page 8), Key figures (page
17)
2.9
Significant changes relating to the size, structure or ownership
during the reporting period
Not applicable
2.10
Awards won
Not applicable
Profile (page 8)
Profile (page 8), organisation chart
Rotterdam
Reporting parameters
3.1
Reporting period
1 January 2012 to 31 December 2012
3.2
Date of most recent previous report
Financial year 2011
3.3
Reporting cycle
Calendar year
3.4
Contact point
Feedback button on each page
3.5
Process for defining report content
About this annual report (page 60)
3.6
Boundary of the report
3.7
Statement regarding any limitations on the scope of the report
3.8
Basis for reporting on joint ventures, subsidiaries, leased
facilities, outsourced operations, and other entities that can
lead to significant changes
3.9
Data measurement techniques and the bases of calculations,
including assumptions and techniques underlying estimations
applied to the compilation of the indicators and other
information in the report. Explain any decisions to
substantially diverge from the GRI Indicator Protocols.
Key figures (page 17)
Strategic KPIs (page 20)
Emission factors conversion table (in
Dutch) [http://
beheer.corporatenl.eneco.nl/
SiteCollectionDocuments/PDF/
Toelichting-Enecovoetafdruk-2012.pdf]
3.10
Explanation of the effect of any re-statements of information
provided in earlier reports, and the reasons for such restatement.
3.11
Significant changes from previous reporting periods in the
scope, boundary, or measurement methods applied in the
report.
3.12
GRI content index
GRI index
3.13
Policy and current practice with regard to seeking external
assurance for the report.
The scope / of LTIR, ROACE and customer
satisfaction Stedin have been changed and
are explained.
Governance, Commitment, en Engagement
4.1
Governance structure
Governance (page 54)
Corporate site, governance
4.2
The Chairman of the highest governance body is also an
executive officer.
4.3
Number of members of the highest governance body who are
independent.
4.4
Mechanisms for shareholders and employees to provide
recommendations or direction to the highest governance
body.
Eneco Holding N.V. has a Board of
Management consisting of three members
and a Supervisory Board consisting of seven
members. Their additional functions are listed
under Personal information Supervisory
Board, Personal information Board of
Management.
63
Description
Explanation
Reference
4.5
Linkage between compensation for members of the highest
governance body, senior managers, and executives and the
organisation’s performance (including social and
environmental performance).
Remuneration (page 56)
4.6
Processes in place for the highest governance body to ensure
conflicts of interest are avoided.
4.7
Process for determining the qualifications and expertise of the
members of the highest governance body for guiding the
organisation’s strategy on economic, environmental, and
social topics.
4.8
Internally developed mission or values statements, codes of
conduct and principles relevant to economic, environmental
and social performance and the status of their
implementation.
Code of Conduct (page 54)
4.9
Procedures of the highest governance body for overseeing the
organisation’s identification and management of economic,
environmental, and social performance, including relevant
risks and opportunities, and adherence or compliance with
internationally agreed standards, codes of conduct, and
principles.
Governance (page 54), Code of
Conduct (page 54)
4.10
Processes for evaluating the highest governance body’s own
performance, particularly with respect to economic,
environmental, and social performance.
(page 48)
4.11
Explanation of whether and how the precautionary approach
or principle is addressed by the organisation.
Risk profile (page 12)
Supply chain responsibility (page 42)
4.12
Externally developed economic, environmental, and social
charters, principles, or other initiatives to which the
organisation subscribes or endorses.
Supply chain responsibility (page 42)
4.13
Memberships in associations and/or national/international
advocacy organisations
4.14
List of stakeholder groups engaged by the organisation.
Stakeholder dialogue (page 15)
4.15
Basis for identification and selection of stakeholders with
whom to engage.
4.16
Approaches to stakeholder engagement, including frequency
of engagement by type of stakeholder group.
Partially applicable
4.17
Key topics and concerns that have been raised through
stakeholder engagement and how the organisation has
responded to those key topics and concerns.
Eneco primarily selects (possibly with the aid
of benchmarks, markscans, assessment, etc.)
on professional qualities regardless of
gender, religion or race.
Governance, Corporate site,
governance
Memberships include Meer met Minder and
Slim met Gas, UNETO/VNI, Energie
Nederland, Netbeheer Nederland, de Groene
Zaak and Eurelectric.
Management Approach (DMAs)
64
DMA
EC
Disclosure on Management Approach
Economic
Financial situation (page 17),
Financial Statements (page 69),
DMA
EN
Environment
(page 44), About this annual report
(page 60)
Connecting leadership (page 40)
DMA
LA
Labour
Expertise (page 37)
Leadership (page 40), Committed
employees (page 41):
DMA
HR
Human rights
Code of Conduct (page 54), Supply
chain responsibility (page 42), About
this annual report (page 60)
DMA
SO
Society
Code of Conduct (page 54), Safety
(page 37), About this annual report
(page 60)
DMA
PR
Product responsibility
Suppy cfhain responsibility (page 42)
Mission and vision, Strategy, (page
10) About this annual report (page
60)
Indicators
Indicator
Description
Explanation
Reference
Economic indicators
EC1
Direct economic value generated and
distributed, including revenues, operating
costs, employee compensation, donations and
other community investments, retained
earnings and payments to capital providers and
governments.
Financial Statements (page 69)
Key Figures (page 17)
EC8
Development and impact of infrastructure
investments and services provided primarily for
public benefit.
Key Figures (page 17), Financial
Statements (page 69) – investeringen
Message from the CEO (page 2)
Developments (page 6)
Link between strategy and risks (page
12)
Generating energy together (page 27)
Expertise (page 37)
Environmental indicators: internal business operations
EN3
Direct energy consumption by primary energy
source.
- Absolute gas consumption for housing [m3]:
1,302,771 (2011:1,049,242, 2010: 1.207.972).
Reference year 2007: 1,347,957.
- Absolute fuel consumption for the total car fleet [litre]:
5,817,295. (2011: 5,666,503, 2010: 5,576,188).
Reference year 2007: 4,386,647.
Sustainable business operations (page
44)
EN4
Indirect energy consumption by primary source
Absolute electricity consumption for housing [GWh]:
15,7 (2011: 18.2, 2010: 18.4). Reference year 2007:
21.6.
- Absolute heating consumption for housing [GJ]: 24.132
(2011: 30,583, 2010: 29,265). Reference year 2007:
31,303.
44)
EN16
Total direct and indirect greenhouse gas (only
GRI 3.1)
- CO2 emissions per employee per theme and in total
[ton/employee]
- CO2 savings compared with 2007 per employee per
theme and in total [%]
- Absolute CO2 emissions per theme and in total [kton]:
mobility 21.8 (2011: 22.4, 2010: 23.4 and 2007: 19.9),
housing 2,4 (2011: 3.1, 2010: 3.8 and 2007: 12.8) and
paper 0.2 (2011: 0.2, 2010: 0.2 and 2007: 0.5). Total
24.3 (2011: 25.8, 2010: 27.4 and 2007: 33.1).
- Absolute CO2 savings compared with 2007 per theme
and in total [%]: mobility 1.9 (2011: -2.6 en 2010: -3.6),
housing 10.4 (2011: 9.6 and 2010: 9.0) and paper 0.3
(2011: 0.2 and 2010: 0.2).
The applied emission factors are based on conversion
tables as included on the Eneco website.
44)
Explanation of the manner in which CO2 emissions
resulting from internal business operations are
compensated. Compensation takes place by means of
Gold Standard CO2 certificates, at the latest in the year
following the year in which the CO2 emissions occurred.
44)
Average number of FTEs: Key Figures
(page 17)
EN26
Initiatives to mitigate environmental impacts
44)
http://beheer.corporatenl.eneco.nl/
SiteCollectionDocuments/PDF/
Toelichting-Eneco-voetafdruk-2012.pdf
(in Dutch)
Social indicators
LA1
Total workforce by type, contract and region
(only GRI 3.1)
89% of employees have a permanent employment
contract (information on earlier years not available).
LA4
Rates of injury, occupational diseases, lost
days, absenteeism and number of work-related
fatalities by region.(only GRI 3.1)
85% of the employees are covered by a collective
employment agreement (information on earlier years
not availabler).
LA7
Rates of injury, occupational diseases, lost
days, absenteeism and number of work-related
fatalities by region.(only GRI 3.1)
- Lost Time Injury Rate (LTIR)
- Absence due to illness [%]
Key Figures (page 17)
Expertise (page 37)
No fatal accidents. Other indicators/groupings not
applicable for Eneco.
65
Indicator
Description
Explanation
Reference
LA13
Composition of governance bodies and
breakdown of employees per category
according to gender, age group, minority group
membership and other indicators of diversity.
- Percentage of women in management positions [%]:
19.8 (2011: 16.2, information on earlier years not
available).
- Diversity by gender and age [%]: 78.4% men 21.6%
women ( 2011: 78.9/21.1, information on earlier years
not available).
- Breakdown by age [%]: 21 is 55+ (2011: 20), 26% is
age 45-54 (2011: 27), 24 is age 35-44 (2011: 25), 25 is
age 25-35 (2011: 23) en 5 is age 15-24 jar (2011: 5).
Information on 2010 and earlier years not available.
HR2
Percentage of significant suppliers and
contractors that have undergone screening on
human rights and actions taken.
HR4
Total number of incidents of discrimination and
actions taken.
There were no reports of discrimination (2011: 1, no
information available on earlier years) and 3 reports of
sexual intimidation (no historic information available).
SO5
Public policy positions and participation in
public policy development and lobbying.
Eneco has published position statements on its website
on topics such as biomass and nuclear energy
Eneco corporate website: http://
corporatenl.eneco.nl/visie/standpunten
- Percentage of supplied electricity in the Retail supply
portfolio qualifying as "Dark green". [%]
- Percentage of supplied electricity in the Retail supply
portfolio generated by Eneco by means of biomass that
meets the Eneco Guidelines regarding biomass or by
means of natural gas, the use of which is compensated
through Gold Standard VERs. [%]
- Electricity label: not part of annual report but included
on Eneco website
Purchasing (page 32)
Connecting leadership (page 40):
Suschainability®
Product responsibility
PR3
Type of product and service information
required by procedures, and percentage of
significant products and services subject to
sucha information requirements.
http://beheer.corporatenl.eneco.nl/
activiteiten/Purchasing/Pages/
Default.aspx
PR5
Policy regarding customer satisfaction,
including results of surveys measuring
customer satisfaction.
- Customer loyalty of Eneco customers according to
results of the Net Promoter Score, an international
indicator for customer loyalty. [%]
- The percentage of satisfied or very satisfied Stedin
customers [%]
Customers fist (page 23)
PR6
Programs for adherence to laws, standards and
voluntary codes related to marketing
communications, including advertising,
promotion and sponsorship.
The Code of Conduct is published on Eneco’s corporate
website.
The core companies each have their own informative
customer website.
http://corporatenl.eneco.nl/
Organisatie/Codes-en-reglementen
www.eneco.nl
www.stedin.net
www. Joulz.nl
Sector specific
66
EU1
Installed capacity, broken down by primary
energy source and by regulatory regime.
Installed Eneco-owned capacity and/or capacity covered
by PPAs categorised by technology [MW]: 2,740 (2011:
2,613)
EU2
Net energy output broken down by primary
energy source and by regulatory regime.
Percentage of produced electricity (in Eneco-owned
facilities and/or covered by PPAs) in relation to total
supply portfolio. [%].
EU3
Number of customers by type of customer
group.
Number of retail customers (consumers and SME
customers). Partially applicable.
EU6
Management approach to ensure short-term
and long-term availability and reliability.
Asset management Stedin certified in accordance with
PAS55 and NTA 8120
District heating network is part of energy company. Is
now outside scope.
See Stedin annual report on
www.stedin.net
EU8
Research and development activity and
expenditure aimed at a reliable electricity
supply and promoting sustainable
development.
EU11
Average generation efficiency of thermal
production units by energy source and by
regulatory regime.
EU14
Programmes and processes to ensure the
availability of a skilled workforce.
Expertise (page 37)
EU16
Policies and requirements regarding health and
safety of employees and employees of
contractors and subcontractors.
Expertise (page 37)
EU29
Interruption duration indicator.
Purchasing (page 34): network reliability
Average CO2 emissions of one kWh over the course of
one year, generated by an electricity production facility
of which Eneco has at least 50% (indirect) ownership.
[gr/kWh]
- The average interruption duration in the electricity
network in minutes per customer
- The average interruption duration in the gas network
in seconds per customer
- The average interruption duration in the district heating
network in minutes per customer
Governance
Assurance
Assurance report
Independent limited assurance report on Key Performace Indicators of Eneco Holding N.V.
To: Shareholders, Supervisory Board and Corporate Executive Board and other stakeholders of Eneco Holding N.V.
We have performed a limited assurance engagement on the Key Performance Indicators (kpi’s) as included on pages 20 and 21 of the
integrated annual report for the year2012 of Eneco Holding N.V. in Rotterdam, except for the kpi ‘Credit Rating’.
In addition we have reviewed whether the integrated annual report has been prepared in accordance with the application level B of the
Sustainability Reporting Guidelines (G3.1) of the Global Reporting Initiative.
Management’s responsibility
Management is responsible for the preparation of the integrated annual report in conformity with the Sustainability Reporting Guidelines
(G3.1) of the Global Reporting Initiative. This responsibility includes: designing, implementing and maintaining internal control relevant
to the preparation and fair presentation of the Corporate responsibility report that are free from material misstatement, whether due
to fraud or error, selecting and applying appropriate criteria and making estimates that are reasonable in the circumstances. The scope
of the integrated annual report is subject to management’s selection of goals, key performance indicators and reporting policies applied
which are set out in the paragraph about this report of the integrated annual report.
Auditor’s responsibility
Our responsibility is to express a limited assurance conclusion on the key performance indicators mentioned above based on our
engagement. We conducted our engagement in accordance with Dutch law, including Standard 3410N “Assurance engagement relating
to Sustainability reports”. This requires that we comply with ethical requirements and plan and perform the engagement to obtain limited
assurance about whether the key performance indicators are not materially misstated.
We did not perform any assurance procedures on the forward-looking statements, such as targets, expectations and ambitions, disclosed
in the integrated annual report. Consequently, we draw no conclusion on these statements.
A limited assurance engagement with respect to an integrated annual report involves performing procedures to obtain evidence about
the information disclosed in the integrated annual report. The procedures performed depend on the practitioner’s judgment, but their
nature is different from, and their extent is substantially less than, a reasonable assurance engagement, and consequently they do not
enable us to obtain the assurance necessary to become aware of all significant matters that might be identified in a reasonable assurance
engagement.
Our procedures on this engagement included:
• Reviewing the processes and systems for data gathering, including the aggregation of the data as included in the integrated annual
report;
• Performing inquiries;
• Performing analytical review procedures;
• Inspecting internal and external documentation and verifying to what extent these documents and data support the information
included in the integrated annual report;
• Assessing the company’s stated application level B according to GRI’s guidelines.
This engagement was conducted by a multidisciplinary team consisting of assurance and sustainability experts.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
67
Governance Assurance
Conclusion
On the basis of the procedures we have performed, nothing has come to our attention that causes us to believe that:
- the kpi’s as included on pages 20 and 21 of the integrated annual report for the year to December 31, 2012, except for the kpi ‘Credit
rating’ have not been prepared, in all material respects, in accordance with the Sustainability Reporting Guidelines (G3.1) of the Global
Reporting Initiative;
- the integrated annual report has not been prepared in accordance with the application level B of the Sustainability Reporting Guidelines
(G3.1) of the Global Reporting Initiative.
Comparative information
We did not perform any assurance procedures on the key performance indicators other than for the years 2012 and 2011.
Rotterdam 1 March 2013
Deloitte Accountants B.V.
Was signed
K.G. Auw Yang
68
Financial statements
70
Consolidated income statement
Consolidated balance sheet
Consolidated statement of comprehensive income
Consolidated cash flow statement
Consolidated statement of changes in equity
70
75
1 Accounting principles
2 Accounting policies
3 Revenues from energy sales and transmission and
4
5
6
7
8
9
10
11
12
energy related activities
Other revenues
Employee benefits expense
Remuneration of the Board of Management and
Supervisory Board
Share of profit of associates and other capital
interests
Financial income
Financial expenses
Income tax
Result after tax on discontinued operations
Government grants
71
72
73
74
75
119
Company income statement
Company balance sheet
119
121
120
121
77
121
86
3 Equity
4 Interest-bearing debt
5 Contingent assets and liabilities
6 Auditor's fees
121
86
121
121
122
86
86
Other information
123
87
1 Events after the reporting date
2 Profit appropriation
123
88
3 Independent auditor's report
123
123
89
89
89
90
90
91
91
15 Business combinations
16 Associates
94
17 Deferred taxes
18 Derivative financial instruments
95
19 Other financial assets
20 Assets/liabilities held for sale
98
93
94
96
98
99
100
23 Cash and cash equivalents
24 Equity
100
25 Provisions for employee benefits
26 Other provisions
102
27 Interest-bearing debt
28 Trade en other payables
1 Accounting policies
2 Financial assets
13 Property, plant and equipment
14 Intangible assets
21 Trade receivables
22 Other receivables
List of principal subsidiaries, joint ventures and 117
associates
100
103
104
105
29 Operating leases
30 Contingent assets and liabilities
105
31 Related party transactions
32 Financial risk management
107
33 Capital management
34 Events after the reporting date
112
106
108
112
Notes to the consolidated cash flow statement 113
Segment information
114
69
Consolidated income statement
x € 1 million
Note
Revenues from energy sales and transmission and
energy-related activities
3
Purchases of energy and transmission and energyrelated activities
Gross margin
Other revenues
4
Gross margin and other operating revenues
Employee benefits expenses
Cost of contracted work and other external
5
costs 1
2012
2011
5,082
4,839
3,462
3,397
1,620
1,442
174
168
1,794
1,610
374
363
588
507
Depreciation and impairment of property, plant and
equipment
13
399
291
Amortisation and impairment of intangible assets
14
42
32
56
29
1,459
1,222
Other operating expenses 1
Operating expenses
Operating profit
335
388
Share of profit of associates
7
63
3
Financial income
8
13
6
Financial expenses
9
– 101
– 87
310
310
10
– 50
– 74
260
236
11
– 26
– 32
234
204
1
–
233
204
Profit before income tax
Income tax
Profit after income tax from continued operations
Profit after income tax from discontinued operations
Profit after income tax
Of which:
Attributable to non-controlling interests
Attributable to shareholders of Eneco Holding N.V.
1
70
2011 figures restated for comparative purposes.
Consolidated balance sheet
x € 1 million
Note
At 31 December 2012
At 31 December 2011
Non-current assets
Property, plant and equipment
13
6,670
6,326
Intangible assets
14
416
450
16
39
32
17
6
9
Financial assets
·
Associates
·
Deferred income tax assets
·
Derivative financial instruments
18
85
85
·
Other financial assets
19
64
72
7,280
6,974
Total non-current assets
1
1
Current assets
Assets held for sale
7
94
Intangibe assets
30
34
Inventories
52
44
21
825
804
2
8
Other receivables
22
270
211
18
118
197
Cash and cash equivalents
23
220
279
1,524
1,671
8,804
8,645
20
Trade receivables
Current income tax assets
Total current assets
Total assets
1
Equity
Equity attributable to Eneco Holding N.V.
shareholders
24
4,444
4,353
Non-controlling interests
24
3
–
4,447
4,353
25
Total equity
Non-current liabilities
Provisions for employee benefits
25
28
Other provisions
26
73
57
1
17
346
313
18
119
66
27
1,726
1,719
Other liabilities
28
295
224
2,587
2,404
11
Deferred income tax liabilities
Total non-current liabilities
1
Current liabilities
Liabilities held for sale
1
20
3
25
3
6
Other provisions
26
29
14
18
109
173
27
74
140
28
1,552
1,544
1,770
1,888
8,804
8,645
Trade and other liabilities
1
Total current liabilities
Total equity and liabilities
1
1
71
Consolidated statement of comprehensive income
x € 1 million
2012
2011
234
204
–
307
2
2
Unrealised gains and losses that will not be reclassified to profit
or loss
Revaluation regulated networks to fair value
Unrealised gains and losses that may be reclassified to profit or
loss
Translation result
Unrealised gains and losses on cash flow hedges
– 57
59
15
– 15
Total other comprehensive income
– 40
353
Total comprehensive income
194
557
1
–
193
557
Deferred tax liabilities on cash flow hedges
Of which:
Total comprehensive income attributable to non-controlling
interests
Total comprehensive income attributable to shareholders of
Eneco Holding N.V.
72
Consolidated cash flow statement
x € 1 million
2012
2011
234
204
81
Adjusted for:
·
Interest income and expense recognised in profit or loss
88
·
Income tax
50
74
·
Share of profit of associates and other capital interests
– 63
–3
·
Proceeds from discontinued operations
·
Depreciation, amortisation and impairment
·
·
·
Movements in working capital
·
Movements in provisions, deferred taxes, derivatives and
other
26
32
441
323
Proceeds from sale of tangible and intangible assets
8
4
Impairment of assets held for sale
1
4
– 71
323
76
149
790
1,191
Cash flow from business operations
Dividend received from associates and other capital interests
Interest paid
19
3
– 91
– 78
Interest received
4
4
Income tax paid/received
5
–3
727
1,117
Cash flow from operating activities
Issued loans granted
–5
–
3
1
– 23
– 108
–
–2
–1
–
Proceeds from disposal of associates
79
–
Acquisition of other capital interests
–4
–
– 710
– 734
Repayments of loans granted
Acquisition of subsidiaries
Proceeds from disposal of subsidiaries
Acquisition of associates
Proceeds from disposal of property, plant and equipment
10
6
Investments in intangible assets
–2
–3
1
–
Cash flow from investing activities
– 652
– 840
Dividend payments
– 102
– 71
–
– 24
– 50
– 189
– 718
– 318
Proceeds from disposal of intangible assets
Repayment of non-current interest-bearing debt
Repayment of current interest-bearing debt
Non-current interest-bearing debt issued
11
38
Current interest-bearing debt issued
725
295
Cash flow from financing activities
– 134
– 269
Movements in cash and cash equivalents
– 59
8
Balance of cash and cash equivalents at 1 January
279
241
–
30
220
279
Balance of cash and cash equivalents acquisition of subsidiaries
Balance of cash and cash equivalents at 31 December
73
Consolidated statement of changes in equity
Equity attributable to Eneco Holding N.V. shareholders
x € 1 million
At 1 January 2011
Share
premium
Revaluation
reserve
Translation
reserve
Cash flow
hedge
reserve
Retained
earnings
Undistribu
ted profit
Total
Noncontrolling
interests
Total equity
497
381
668
–1
– 56
2,250
141
3,880
10
3,890
Fair value adjustment
regulated networks
–
–
307
–
–
–
–
307
–
307
Reclassification net
depreciation regulated
networks
–
–
– 30
–
–
30
–
–
–
–
Translation result
–
–
–
2
–
–
–
2
–
2
Unrealised gains and
losses on cash flow
hedges
–
–
–
–
59
–
–
59
–
59
Deferred tax liabilities on
cash flow hedges
–
–
–
–
– 15
–
–
– 15
–
– 15
Total income and
expenses in the financial
year, recognised directly
in the equity
–
–
277
2
44
30
–
353
–
353
Profit (-loss) after income
tax 2011
–
–
–
–
–
–
204
204
–
204
Total income and
expenses for the
financial year
–
–
277
2
44
30
204
557
–
557
Profit appropriation
2010
–
–
–
–
–
70
– 70
–
–
–
Dividend payments
relating to 2010
–
–
–
–
–
–
– 71
– 71
–
– 71
Movements in noncontrolling interests
–
–
–
–
–
– 13
–
– 13
– 10
– 23
At 31 December 2011
497
381
945
1
– 12
2,337
204
4,353
–
4,353
Reclassification net
depreciation regulated
networks
–
–
– 42
–
–
42
–
–
–
–
Translation result
–
–
–
2
–
–
–
2
–
2
Unrealised gains and
losses on cash flow
hedges
–
–
–
–
– 57
–
–
– 57
–
– 57
Deferred tax liabilities on
cash flow hedges
–
–
–
–
15
–
–
15
–
15
Total income and
expenses in the financial
year, recognised directly
in the equity
–
–
– 42
2
– 42
42
–
– 40
–
– 40
Profit (-loss) after income
tax 2012
–
–
–
–
–
–
233
233
1
234
Total income and
expenses for the
financial year
–
–
– 42
2
– 42
42
232
193
1
194
2011
–
–
–
–
–
102
– 102
–
–
–
Dividend payments
relating to 2011
–
–
–
–
–
–
– 102
– 102
–
– 102
Movements in noncontrolling interests
–
–
–
–
–
–
–
–
2
2
Reclassification
–
–
–
1
2
–3
–
–
–
–
497
381
903
4
– 52
2,478
233
4,444
3
4,447
At 31 December 2012
74
Paid-up and
called-up
share capital
1.
Accounting principles
1.1
General information
Eneco Holding N.V. (‘the company’) is a two-tier company incorporated under Dutch law, with its
registered office in Rotterdam. It is the holding company of subsidiaries and joint ventures (referred
to as a group as ‘Eneco’). Eneco’s activities are in energy supply, including the production, purchase
and sale, transmission, distribution and delivery of energy, heating and cooling and the construction,
management and operation of networks, promoting and providing information on the effective and
economic use of energy, and research and development into new energy products and services.
The consolidated financial statements have been prepared by the company’s Board of Management
for publication on 8 March 2013. The 2012 financial statements were signed by the Supervisory
Board during its meeting on 1 March 2013 and will be presented for adoption by the General
Shareholders' Meeting to be held on 27 March 2013.
Unless otherwise stated, all amounts in the financial statements are in millions of euros.
The company's consolidated financial statements have been prepared in compliance with the
International Financial Reporting Standards (IFRS) in force at 31 December 2012, as adopted by
the European Commission, and with the provisions of Part 9, Book 2 of the Dutch Civil Code. Where
necessary, accounting policies of joint ventures and associates have been aligned with those of
Eneco Holding N.V. The consolidated financial statements have been prepared on a going-concern
basis using the accrual basis of accounting.
The company income statement is presented in an abridged form pursuant to the provisions of
Section 402, Part 9, Book 2 of the Dutch Civil Code.
1.2
New and amended IFRS standards
The accounting policies in these financial statements are consistent with those in the 2011 financial
statements.
The European Commission has adopted the following amended IFRS standard that is relevant to
Eneco:
IFRS 7 ‘Financial Instruments: Disclosures’ has been amended to improve the transparency of
reporting of financial assets. This amendment has no effect on Eneco.
Amendments and interpretations which had not been adopted by the European Commission on 1
March 2013 are not addressed further.
1.3
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Eneco Holding N.V.,
its subsidiaries and the relevant proportion of the joint ventures, non-consolidated associates and
other capital interests.
Subsidiaries
A subsidiary is an entity where the company exercises control. This means that the company
controls, directly or indirectly, that entity's financial and business operations with the purpose of
gaining economic benefits from the activities of that entity. In general, the company holds more
than half the shares in its subsidiaries.
75
The financial statements of a subsidiary are recognised in the consolidated financial statements
according to the full consolidation method from the date on which control is obtained until the date
on which that control no longer exists. Potential voting rights which can be exercised immediately
are also taken into account when determining whether control exists. Pursuant to the full
consolidation method, 100% of the assets, liabilities, income and expenses from subsidiaries are
recognised in the consolidated financial statements. Balance sheet positions, intercompany
transactions and results on such transactions between subsidiaries are eliminated.
Non-controlling interests consist of the capital interests of minority shareholders in the fair value
of the identifiable assets and liabilities when a subsidiary is acquired and the non-controlling interest
in subsequent changes to the equity. Non-controlling interests in the equity and results of
subsidiaries are disclosed separately.
Joint ventures
A joint venture is an entity in respect of which there are contractual undertakings with one or more
parties under which they have joint decisive control over that entity. The financial statements of a
joint venture are recognised in the consolidated financial statements using the proportional
consolidation method applying the accounting policies of Eneco Holding N.V., from the date on
which joint control is obtained until the date on which that joint control no longer exists. Under the
proportional consolidation method the assets, liabilities, income and expenses of joint ventures are
recognised in the consolidated financial statements in proportion to the interest in that joint
venture.
Associates
An associate is an entity where there is significant influence over the financial and operating
strategy, but not control. In general, 20% to 50% of the voting rights are held in an associate.
The share in associates is recognised in the consolidated financial statements using the equity
accounting method, in which initial recognition is at historical cost with the carrying amount being
adjusted for the share in the result. Dividends received are deducted from the carrying amount.
Associates are recognised from the date on which substantial influence has been obtained until the
date on which that influence no longer exists. Results on transactions with associates are
eliminated in proportion to the interest in the associate. Impairment losses on associates are not
eliminated.
Losses on associates are recognised up to the amount of the net investment in the associate,
including both the carrying amount and any loans granted to the associate. A provision is only
formed for the share in further losses if Eneco has assumed liability for those losses.
Other capital interests
Other capital interests are investments in entities in which Eneco has an interest but where neither
control nor significant influence can be exercised. These interests are carried at fair value. If its fair
value cannot be reliably measured, a capital interest is carried at historical cost. Dividends are
recognised through the income statement when they fall due.
76
2.
Accounting policies
2.1
General
The principal accounting policies used when preparing the 2012 financial statements are
summarised below.
Judgements, estimates and assumptions
In preparing the financial statements, management used judgements, estimates and assumptions
which affect the reported amounts and rights and obligations not disclosed in the balance sheet.
In particular, they relate to the revenues from sales to retail customers, the useful life of property,
plant and equipment, the fair value of the relevant assets and liabilities, impairment of assets and
the size of provisions. The judgements, estimates and assumptions that have been made are based
on market information, knowledge, historical experience and other factors that can be deemed
reasonable in the circumstances. Actual results could, however, differ from the estimates.
Judgements, estimates and assumptions are reviewed on an on-going basis. Changes in accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only
that period. If the revision also affects future periods, the change is made prospectively in the
relevant periods. Any points of particular importance with regard to judgements, estimates and
assumptions are set out in the notes to the income statement and balance sheet items.
Impairment of assets
There is evidence of an impairment when the carrying amount of an asset is higher than the
recoverable amount. The recoverable amount of an asset is the higher of the sale price less costs
to sell and the value in use. An asset's value in use is based on the present value of estimated future
cash flows calculated using a pre-tax discount rate which reflects the time value of money and the
specific risks of the asset. The recoverable amount of an asset which does not independently
generate a cash flow and is dependent on the cash flows of other assets or groups of assets is
determined for the cash-generating unit of which the asset is part.
A cash-generating unit is the smallest identifiable group of assets separately generating cash flows
that are significantly independent of the cash flows from other assets or groups of assets. Cashgenerating units are distinguished on the basis of the economic interrelationship between assets
and the generation of external cash flows and not on the basis of separate legal entities.
Goodwill is allocated on initial recognition to one or more cash-generating units in line with the way
in which the goodwill is assessed internally by the management.
Impairment tests are performed each half year. If there is evidence of impairment, the recoverable
amount of the relevant asset or cash-generating unit is determined. The recoverable amount of
goodwill is determined each year.
When the carrying amount of assets allocated to a cash-generating unit is higher than the
recoverable amount, the carrying amount is reduced to the recoverable amount. This impairment is
recognised through the income statement. Impairment of a cash-generating unit is first deducted
from the goodwill attributed to that unit (or group of units) and then deducted proportionately from
the carrying amount of the other assets of that unit (or group of units).
Impairment may be reversed through the income statement if the reasons for it no longer exist or
have changed. Impairment is only reversed up to the original carrying amount less regular
depreciation. Impairment losses on goodwill are not reversed.
Foreign currencies
The euro (€) is Eneco's functional currency and the currency in which the financial statements are
presented. Transactions in foreign currencies are translated into euros at the exchange rate
prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies on the reporting date are translated into euros at the exchange rate prevailing on the
reporting date. Foreign currency exchange differences that arise on translation are recognised
through the income statement.
77
If the functional currency of a foreign subsidiary, joint venture or associate is not the euro, foreign
currency exchange differences arising from translation are recognised as translation differences in
equity. The accumulated translation difference is recognised through the income statement when
a foreign subsidiary, joint venture or associate is sold.
Netting off
Assets and liabilities with a counterparty are netted off if there is a contractual right and the
intention to do so. In the absence of an intention or actual netted settlement, the existence of an
asset or liability is determined for each contract.
2.2
Revenues
Revenues are recognised when it is probable that the economic benefits will be attributed to Eneco
and the revenues can be reliably measured. Revenues are recognised less discounts, taxes and
levies, such as energy tax and value added tax. Amounts that are invoiced and collected for third
parties are not recognised as revenues.
Energy supply and transmission
Revenues from the sale of energy and transmission services to end users are recognised at the time
of supply, when the rewards of ownership and risk of any impairment are transferred to the
customer.
Energy-related activities
Revenues from the construction, maintenance and leasing of energy installations and equipment
and the sale of solar panels are recognised as revenues from energy-related activities.
Services and construction contracts
Revenues are recognised through the income statement using the percentage of completion
method when they become sufficiently certain. The extent to which performance has been delivered
is determined on the basis of either the relationship between the costs incurred and the total
expected costs or an analysis of the work performed.
Trading of energy commodities and CO2 emission rights
When sale and purchase contracts for energy commodities and emission rights not concluded for
the company's own use but for trading purposes are entered into, countervailing sales and purchase
contracts are concluded at virtually the same time. Gains and losses arising from such trading
transactions are netted and recognised as Other revenues from the time the relevant transactions
are concluded. Gains and losses arising from the revaluation to fair value of a trading contract are
recognised directly through the income statement as Other revenues.
Government grants
Government grants are recognised when it is reasonably certain that the conditions related to
receiving the grants have been or will be met and that the grants have been or will be forthcoming.
Grants related to income as a contribution to costs are recognised as revenues in the period in which
those costs are incurred. Grants contributing to the cost of an asset are deducted from the asset's
cost and reflected in the depreciation throughout the useful life of the asset.
2.3
Purchase cost of energy
The purchase cost of energy contracts and commodities intended for the company's own use are
recognised in the same period as that in which the revenues from the sale are realised.
2.4
Financial income and expenses
Financial income and expenses comprise interest income from outstanding investments, dividend
revenues, interest charges on borrowings, foreign exchange rate gains and losses and gains and
losses on financial hedge instruments recognised through the income statement. Interest income
and expense are recognised using the effective interest method. Dividend revenues from other
capital interests are recognised when they fall due.
78
2.5
Income taxes
Income taxes comprise current taxes and movements in deferred taxes. These amounts are
recognised through the income statement unless they concern items that are recognised directly
through equity.
Current tax is the likely amount of income taxes payable or recoverable in respect of the taxable
profit or loss for the year under review and is calculated on the basis of applicable tax legislation
and rates.
Income taxes comprise all taxes based on taxable profits and losses, including taxes which
subsidiaries, associates or joint ventures must pay on distributions to Eneco Holding N.V.
Additional income taxes on the result before dividend distributions are recognised at the same time
as the obligation to distribute that dividend is recognised.
2.6
Networks and network-related assets in the regulated domain
Networks and network-related assets in the regulated domain are measured at fair value less
accumulated depreciation and impairment.
The fair value of these network assets is measured by regular appraisals performed by independent
external valuers. If in the interim the fair value differs significantly from the carrying amount, the
revaluation will be adjusted. An increase in the carrying amount as a result of a revaluation of
networks and network-related assets in the regulated domain is recognised directly in equity
through the revaluation reserve. A reduction in the carrying amount is also recognised directly in
equity through the revaluation reserve up to the amount of any previous increase in the same asset.
If that figure is exceeded, the excess is recognised as a charge in the income statement.
The difference between depreciation based on the revalued carrying amount and depreciation based
on the original cost, less deferred tax, is transferred periodically from the revaluation reserve to
retained earnings.
Other property, plant and equipment
Other property, plant and equipment is recognised at cost less accumulated depreciation and
impairment. Cost comprises the initial acquisition price plus all directly attributable costs. Cost of
assets constructed by the company comprises the cost of materials and services, direct labour and
other directly attributable costs. Contributions towards cost from third parties and government
grants are deducted from the cost, provided they are not contributions from customers. Cost
includes an estimate of the present value of the cost of dismantling, demolishing and removing the
item when it ceases to be used and of restoring the site on which it is located, if there is a legal or
constructive obligation to do so. Financing costs (interest) directly attributable to the purchase,
construction or production of an eligible asset are recognised in cost. If an asset comprises multiple
significant components with differing useful lives, these components are recognised separately.
Expenditure incurred subsequent to initial recognition
Expenses incurred at a later date are only added to the carrying amount of an asset if and to the
extent that the condition of the asset is improved compared to the originally formulated
performance standards. Repair and maintenance are recognised through the income statement in
the period in which the costs are incurred.
Depreciation
The depreciation charge for each period is recognised through the income statement using the
straight-line method based on estimated useful life, taking into account the estimated residual
value. Useful lives and residual values are reassessed annually and any changes are recognised
prospectively. Land, sites and assets under construction are not depreciated.
79
The following useful lives are applied:
Category
Buildings
25 - 50
Machinery and equipment
10 - 50
Networks, regulated
10 - 50
Other operating assets
2.7
Useful economic life in years
3 - 25
Leases (Eneco as lessee)
A lease where Eneco, as lessee, has in fact all the benefits and risks of ownership is designated as
a finance lease; otherwise, such agreements are recognised as operating leases.
Property, plant and equipment acquired on a finance lease are recognised, when the lease
commences, at the lower of fair value of the leased asset and the present value of the lease
instalments. These assets are then recognised pursuant to the accounting policies for property,
plant and equipment. Lease instalments are broken down into interest and repayment components.
The interest component is based on a constant periodic rate of interest on the carrying amount of
the investment. The interest component is recognised through the income statement in the relevant
period. The repayment component is deducted from the lease obligation.
Operating lease instalments are recognised in equal amounts through the income statement over
the term of the lease.
2.8
Goodwill
The acquisition price of a subsidiary, joint venture or associate is equal to the amount paid to
purchase the interest. If the acquisition price is higher than the share in the fair value at the date
of acquisition of the identifiable assets, liabilities and contingent liabilities, the excess is recognised
as goodwill. Any shortfall is recognised as a gain (bargain purchase) through the income statement.
Goodwill is measured at cost less impairment. Goodwill is allocated to one or more cash-generating
units. Goodwill is tested for impairment annually.
Goodwill purchased on acquisition of subsidiaries and joint ventures is recognised in the balance
sheet as intangible assets. Goodwill paid to acquire an interest in an associate is included in the
cost of acquiring that associate.
2.9
Other intangible assets
Other intangible assets comprise customer databases acquired with acquisitions, software and
licences, concessions, permits, rights and development costs. The related costs are capitalised if it
is probable that these assets will have an economic benefit and their costs can be reliably measured.
Other intangible assets are recognised at cost less accumulated amortisation and impairment.
Customer databases
A customer database obtained from an acquiree is initially recognised at fair value. This value is
determined on the date of acquisition on the basis of the most recent comparable transactions if
the economic conditions are comparable or, if they are not, the fair value is determined from the
present value of the estimated future net cash flow from this asset.
Software
Software is capitalised at cost. Cost of standard and customised software comprises the one-time
costs of licences plus the costs of making the software ready for use. All costs attributable to
software which qualifies as an intangible asset are recognised at cost. Costs of software
maintenance are recognised as an expense in the period in which they are incurred.
80
Development costs
Development costs are the costs of applying knowledge acquired through research by the company
or a third party for a plan or design for the manufacture or application of improved materials,
products, processes, systems or services, prior to the commencement of commercial manufacture
or use. Development costs are only capitalised if they can be regarded as intangible assets. If this
is not the case, they are recognised as an expense in the period in which they are incurred. Research
costs are the costs of research aimed at the acquisition of new scientific or technical knowledge
and understanding and are recognised through the income statement in the period in which they
are incurred.
Amortisation
Amortisation is recognised as an expense on the basis of the estimated useful life from the time
that the relevant asset is taken into use. Other intangible assets are amortised using the straightline method unless the declining balance method better reflects the benefits from the asset. The
residual value of these assets is nil.
The following useful lives are applied:
Category
Customer databases
5 - 20
Licences
3 - 30
Software
Concessions, permits and rights
Development costs
2.10
Useful economic life in years
3-5
3 - 30
5
Emission rights
Emission rights are categorised on initial recognition either as rights intended for the company's
own use or as rights destined to be traded.
Emission rights held for periodic redeeming to the government for actual CO2 emissions (company's
own use) are recognised as intangible assets and recognised at cost. Rights of a current nature are
presented as intangible assets. A provision, also carried at cost, is formed for this redemption
obligation. If a shortfall in the quantity required for redeeming is expected, an addition, charged
through the income statement, is made to this provision for the lower of the market value of that
shortfall or the penalty expected to be due for that shortfall.
Emission rights held for trading purposes are recognised as derivative financial instruments. The
profit or loss arising from revaluing these rights to fair value is recognised directly through the
income statement as Other revenues.
2.11
Deferred taxes
Deferred taxes are calculated using the balance sheet method for the relevant differences between
the carrying amount and taxable value of assets and liabilities. Deferred taxes are measured using
the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled, based on applicable tax rates and tax laws. Deferred taxes are recognised at face value.
A deferred tax asset is recognised for tax losses carried forward and for the settlement of unused
tax credits if and to the extent it is probable that future taxable profit will become available, so
enabling an offset of unrelieved tax losses and unused taxed credits.
Deferred tax liabilities are recognised for temporary differences arising from investments in
subsidiaries and joint ventures, unless the time at which the temporary difference will be settled
can be determined and it is probable that the temporary difference will not be settled in the near
future.
81
Deferred tax assets and liabilities are offset if there is a legally enforceable right to set off tax assets
against tax liabilities and where the deferred tax assets and liabilities relate to taxes levied by the
same tax authority on the same taxable unit.
2.12
There is exposure to risks in operational and financing activities arising from developments in the
prices of energy commodities (electricity, gas, oil, etc.), foreign currencies, interest rates and
emission rights. Derivative financial instruments such as financial option, future and swap contracts
are used to manage these risks. In the case of commodity contracts, the instruments are
categorised as for own use, trading or hedging when the transaction is entered into. Derivative
financial instruments other than commodity contracts are generally only entered into to hedge risk.
Measurement and recognition
Derivative financial instruments are measured at fair value, which is based on listed bid prices for
assets held or for liabilities to be issued and current offer prices for the assets to be acquired or the
obligations held (mark-to-market).
Derivative financial instruments with a positive value are recognised as current (settlement within
one year) or non-current (settlement after one year) assets. Instruments with a negative value are
recognised as current or non-current liabilities. Assets and liabilities with each counterparty are
netted off if there is a contractual right and the intention to settle the contracts net.
Movements in the fair value of derivative financial instruments are recognised directly through the
income statement, unless the derivative financial instruments are for own use or risk hedging.
Own use
Contracts are classified for own use if they are settled by physical delivery or receipt of energy
commodities or emission rights in line with the company's needs. Transactions based upon these
contracts are recognised through the income statement in the period in which delivery or receipt
takes place (accrual accounting).
Hedge accounting
Contracts are classified as hedging instruments if the risk of fluctuations in current or future cash
flows which could affect the result is hedged. If the hedge can be attributed to a particular risk or
to the full movement in the transaction (energy contracts) associated with an asset, liability or highly
probable forecast transaction, the attributed derivative financial instruments are recognised as
hedging instruments.
If the conditions for hedge accounting are met, the effective portion of the changes to the fair value
of the derivative financial instruments concerned are recognised directly in the equity through the
cash flow hedge reserve. The ineffective portion is recognised through the income statement.
Amounts recognised through equity are recognised through the income statement when the
hedged asset or liability is settled. When a hedge instrument expires, is sold, terminated or
exercised, or when the conditions for hedge accounting are no longer met, although the underlying
future transaction has yet to take place, the accumulated result remains in equity until the forecast
future transaction has taken place. If the forecast future transaction is no longer likely to take place,
the cumulative result is transferred directly from equity to the result.
2.13
Other financial assets
Other financial assets are mainly long-term items with a term of more than one year, such as loans,
receivables and prepayments due from associates, joint ventures or third parties. Long-term
receivables, loans and prepayments are measured at amortised cost using the effective interest
method.
82
2.14
Assets/liabilities held for sale
Assets/liabilities held for sale and discontinued operations are classified as held for sale when the
carrying amount will be recovered through a sale transaction rather than through continuing use.
The classification is only made if it is highly probable that the assets/liabilities or operations are
available for immediate sale in their present condition. The sale is expected to be completed within
one year. Assets/liabilities held for sale are measured at the lower of the carrying amount preceding
classification as held for sale and fair value less costs to sell.
2.15
Inventories
Inventories are recognised at the lower of weighted average cost and net recoverable amount. Cost
of inventories is the purchase price including directly attributable costs incurred to bring the
inventories to their current location and state. Net recoverable amount is the estimated sales price
in the ordinary course of business less forecast costs of sale. Impairment of inventories is recognised
through the income statement if the carrying amount exceeds the net recoverable amount.
2.16
Trade and other receivables
Trade and other receivables have a term of less than one year. These receivables also include the
net amounts that on the reporting date have yet to be billed for energy supplied or transmission
services rendered. Receivables are measured at amortised cost less impairment losses. Receivables
with a term of less than one year are not discounted.
2.17
Cash and cash equivalents comprise cash and bank balances and deposits.
2.18
Pensions
Pension liabilities of almost all business units have been placed with the industry-wide pension
funds: Stichting Pensioenfonds ABP (ABP) and the Stichting Pensioenfonds Metaal en Techniek
(PMT). The flexible retirement scheme for utility companies has been transferred to an insurance
company for the sector as a whole. A limited number of employees have individual plans insured
with various insurance companies (defined-contribution plans).
The ABP and PMT pension plans aim to provide a pension corresponding to 70% of the pensionable
salary at the state retirement age. Employees may opt to retire earlier or later (ABP: between 60
and 70, PMT: from 62 upwards) than the state retirement age, in which case their pension is
adjusted accordingly. The flexible retirement plan is being phased out and is no longer applicable
for employees born after 1949.
A defined-contribution plan is a plan in which a fixed contribution is paid for the benefit of an
employee without any further claim by or liability to that employee. Liabilities in respect of
contributions to pension and related plans on the basis of available contributions are recognised as
an expense in the period to which they relate.
A defined-benefit plan is a plan in which the employee is promised a pension the value of which is
dependent on age, salary and years of service. In both 2011 and 2012 the ABP, PMT and flexible
retirement plans qualified as multi-employer defined-benefit plans. There is a liability under these
plans, the value of which is defined by the present value of pensions proposed for future distribution
at the reporting date less the fair value of the fund assets after taking into account unrecognised
actuarial gains and losses and unrecognised past service pension costs. The information required
to determine this liability for each participating employer cannot be determined by ABP, PMT or
the insurer of the flexible retirement plan for utility companies, because they have no consistent
and reliable way of allocating fund assets and plan obligations to individual employers taking part
in the plans. This is a consequence of the nature of the plans which expose employers taking part
in these plans to actuarial risks related to current and former employees of other employers also
taking part in the plans. Consequently, it is not possible to state whether there are surpluses or
83
deficits for a given employer. In the event of future shortfalls, pension funds may only adjust future
contributions and only within a limited range. The relevant plans have therefore been treated as
defined contribution plans.
Other provisions for employee benefits
A provision is recognised for the obligation to contribute towards the health insurance premiums
of retired employees. A provision is also recognised for the obligation to pay out amounts related
to long-service benefits and on the retirement of employees. These liabilities are calculated at the
reporting date using the projected unit credit method, using a pre-tax discount rate which reflects
the current market evaluation of the time value of money.
2.19
Other provisions
A provision is recognised when, due to a past event, there is a present legal or constructive
obligation that is of an uncertain size or that will occur at an uncertain future date, and where its
settlement will probably lead to an outflow of funds.
Provisions that will be settled within one year of the reporting date, or that are of limited material
significance, are recognised at face value. Other provisions are recognised at the present value of
the expected expenditure. The specific risks inherent to the relevant obligation are taken into
account when determining this expenditure. The present value is calculated using a pre-tax discount
rate which reflects the current market valuation of the time value of money. The determination of
the expected expenditure is based on detailed plans in order to limit the uncertainty regarding the
amount.
Decommissioning
A provision is recognised that equals the present value of the expected costs where there is an
obligation to dismantle, demolish or remove an item of property, plant or equipment when it ceases
to be used. The initial recognition of the decommissioning provision for an asset is included in the
cost of that asset. Interest is added periodically to the decommissioning provision.
Onerous contracts
A provision for onerous contracts is recognised when it is probable that the unavoidable costs of
meeting the contractual obligations exceed the economic benefits to be derived from the contract.
Restructuring
A restructuring provision is recognised if a detailed plan for the restructuring has been approved
and its main features have been announced to those affected by it.
2.20
On initial recognition, interest-bearing debt is carried at fair value plus the transaction costs directly
attributable to this debt. Subsequent to initial recognition, interest-bearing debt is recognised at
amortised cost using the effective interest method.
2.21
Leases (Eneco as lessor)
A lease where Eneco, as lessor, has in fact all the benefits and risks of ownership is designated as
an operating lease; otherwise, such agreements are recognised as finance leases.
Property, plant and equipment made available to third parties by means of an operating lease is
recognised in accordance with the accounting policies for property, plant and equipment. Lease
instalments are allocated to the various periods so that a constant annual return is made on the
net investment.
Property, plant and equipment made available to third parties by means of a finance lease is
recognised as a receivable for the net investment in the assets. Lease instalments are then broken
down into interest and repayment components based on a constant periodic rate of interest. The
84
interest component is recognised through the income statement in the relevant period. The
repayment component is deducted from the lease obligation.
2.22
Trade and other payables
Trade payables and other financial instruments are recognised at amortised cost.
85
3.
Revenues from energy sales and transmission and energy
related activities
2012
2011
Electricity
2,486
2,499
Gas
2,232
2,019
District heat
258
225
Energy-related activities
106
96
5,082
4,839
Total
Sales to large-volume consumers are billed monthly based on meter readings. Billing for sales to
retail consumers is based on meter readings taken throughout the year. The amount of energy and
transmission services supplied to retail consumers during the reporting period and the resulting
revenues are, therefore, estimated in part on the basis of historical consumption information,
standard customer profiles and applicable energy tariffs.
The geographical breakdown of revenues is presented in the segment information.
4.
5.
Other revenues
2012
2011
Operation of street lighting
51
65
Infrastructural works
57
34
Subsidy and payment collection services
15
19
Other
51
50
Total
174
168
2012
2011
268
261
Social security contributions
37
36
Pension contributions
36
34
Other employee benefits
33
32
374
363
Employee benefits expense
Wages and salaries
Total
Including capitalised employee benefits, total employee benefits were € 462 million (2011: € 432
million).
Other employee benefits include € 1.2 million for individual severance arrangements for employees
who have left (2011: € 1.6 million).
Headcount
The table below shows headcount by business segment expressed in full-time equivalents (FTE) at
year-end:
86
FTE
At 31 december 2012
At 31 december 2011
3,088
2,959
Stedin
1,249
1,187
Joulz
2,558
2,442
Other
103
85
Total
6,998
6,673
Energy company Eneco
In 2012, average headcount expressed in FTEs was 6,839 (2011: 6,596).
6.
Remuneration of the Board of Management and
Supervisory Board
The remuneration policy for the Board of Management proposed by the Supervisory Board was
approved at the General Shareholders’ Meeting on 20 May 2005. The remuneration of the Board
of Management is set by the Supervisory Board on the recommendation of the Remuneration
Committee.
The remuneration report for 2012 will be published on Eneco Holding N.V.'s website.
Mr van der Linden was appointed statutory member of the Board of Management on 1 December
2012 to replace Mr Ruys who, following the sudden death of Mr Kras in December 2011, held the
position of non-statutory member of the Board of Management in an acting capacity from 1 January
2012 to 31 December 2012.
The remuneration of the members of the Board of Management consists of a fixed salary and a
variable salary. The variable salary amounts to a maximum of 20% of the total salary. In 2012, the
variable salary was also dependent on performance criteria including socially-relevant results. The
three main criteria for the variable salary were financial performance (including EBIT, credit rating
ratios and cost savings), safety (LTIR) and the implementation of the sustainability strategy
(including alignment of customers and employees as expressed in customer and employee
satisfaction and sustainable purchases and investments).
The pension agreements for Messrs de Haas, Rameau, Dubbeld and Van der Linden have been
brought under Eneco Holding N.V.'s standard pension plan.
The current employment contracts with Messrs de Haas, Rameau, Dubbeld and Van der Linden are
for an unlimited time with a period of notice for the company of four months. Messrs de Haas,
Rameau, Dubbeld and Van der Linden have each been appointed as members of the Board of
Management for a period of four years. Messrs Rameau, Dubbeld and Van der Linden are entitled
to payment of 12 months salary and Mr de Haas is entitled to 24 months salary if dismissed by the
company.
The Budget Agreement 2013 Tax Measures Implementation Act (Wet uitwerking fiscale
maatregelen Begrotingsakkoord 2013) came into effect in 2012. One of the measures is that
employers must pay a one-off 'crisis levy' of 16% of the salary from current employment (including
any bonuses) that they paid their employees during 2012, insofar such wages exceeded € 150,000.
Eneco is applying the interpretation of the Dutch Accounting Standards Board that the crisis levy
is not part of the directors’ remuneration as it does not include an element of remuneration. The
crisis levy for the directors charged to the result in 2012 was € 0.12 million.
87
Total remuneration was as follows:
Remuneration of the Board of Management
Gross salary
Variable
remuneration
Pension
contributions
Total 2012
J.F. de Haas
472
114
80
666
C.J. Rameau
355
86
60
501
G.A.J. Dubbeld
297
58
43
398
20
–
3
23
–
84
–
84
1,144
342
186
1,672
x € 1.000
M.W.M. van der Linden (from 1
December 2012)
Estate of D.J. Kras
Total
Payments
termination
employment
Total 2011
72
–
616
52
353
670
66
54
–
462
329
67
46
–
442
189
–
24
–
213
1,506
296
248
353
2,403
Gross salary
Variable
remuneration
Pension
contributions
J.F. de Haas
454
90
H.J. Machielsen
192
73
C.J. Rameau
342
D.J. Kras
G.A.J. Dubbeld (from 1 april 2011)
x € 1.000
Total
Remuneration of the Supervisory Board
The remuneration of the chairman of the Supervisory Board is € 36,500 per year. The other
members of the Supervisory Board each receive an annual fee of € 28,700. Members of committees
each receive an additional annual payment as follows:
Committee
€
Audit committee
5,200
Remuneration committee
3,150
Selection and appointments committee
3,150
Works Council committee
1,600
The fixed expense allowance is € 1,150 per annum.
7.
Share of profit of associates and other capital interests
The associates are included in the list of principal subsidiaries, joint ventures and associates in these
financial statements.
2012
2011
Share in net profit of associates
26
2
Result disposal of associates
37
–
–
1
63
3
Dividend received of other capital interests
Total
The 31% interest in KEMA was sold on 28 February 2012 at a book profit, including a non-recurring
dividend, of € 56 million.
88
8.
9.
Financial income
2012
2011
Interest income
13
6
Total
13
6
2012
2011
Financial expenses
Interest expense
96
84
Interest added to provisions
3
3
Other
2
–
Total
101
87
10. Income tax
The company and almost all its Dutch subsidiaries form a fiscal unity for corporate income tax
purposes.
The table below shows the income taxes:
Current tax expense /gain
2012
2011
1
–2
Movements in deferred taxes
49
76
Income tax
50
74
2012
2011
Profit before income tax
310
310
Participation exemption
– 63
–7
The table below shows the current tax expense:
Non tax-deductible expenses
Depreciation at non-statutory rates
Addition to provisions treated differently for tax
purposes
Taxable profit
Carry forward of losses
6
8
– 149
– 387
12
–
116
– 76
– 113
66
Taxable amount
3
– 10
Nominal tax rate
25.0%
25.0%
1
–2
Current tax expense/gain
Losses available for relief can be carried forward until 2021.
89
The table below shows the effective tax burden expressed as a percentage of the profit before
income tax:
Nominal tax rate
2012
2011
25.0%
25.0%
–5.1%
–0.6%
Effect of:
- Participation exemption
- Non tax-deductible expenses
0.2%
0.7%
- Tax incentives (Energy Investment Allowance)
–1.4%
–1.4%
- Other
–2.6%
0.3%
Effective tax burden
16.1%
24.0%
11. Result after tax on discontinued operations
Various operations which were classified as discontinued operations in 2011 were settled in 2012.
It was decided to maintain the 'discontinued operations' classification for the remaining operations
at the end of 2012. In total, the impairment and operating results of these operations in 2012 were
€ 26 million negative, recognised as results on discontinued operations, including € 22 million in
impairment. The revenue from the operations classified as discontinued operations was € 7 million
and the expenses were € 11 million. The cash outflows were € 2 million. Eneco expects to effect
the disposal of these operations during 2013.
12. Government grants
Government grants recognised in the result were as follows:
Environmental Quality of Electricity Production
(MEP scheme)
2011
62
50
Energy Investment Allowance (EIA scheme)
1
4
Stimulation Sustainable Energy Production (SDE
scheme)
5
2
68
56
Total
90
2012
All amounts in millions of euros unless stated otherwise.
13. Property, plant and equipment
Land and
buildings
Machinery
and
equipment
Regulated
networks
Other
operating
assets
Assets under
construction
Total
Cost
At 1 January 2011
70
1,553
5,823
145
506
8,097
Revaluation regulated networks
–
–
619
–
–
619
Investments
4
100
386
3
241
734
Acquisitions
–
242
–
1
–
243
Disposal of consolidated group
companies
–1
–2
–
–
–
–3
Disposals
–3
– 242
– 10
– 31
–
– 286
– 19
– 27
–
–1
–
– 47
18
528
2
10
– 569
– 11
Translation differences
–
1
–
–
1
2
At 31 December 2011
Reclassification to assets held for
sale
Reclassification other
69
2,153
6,820
127
179
9,348
Investments
8
41
357
15
289
710
Acquisitions
9
32
–
–
6
47
Disposals
–2
–8
–9
–4
–7
– 30
sale
43
–2
–
1
–2
40
5
76
–
45
– 126
–
132
2,292
7,168
184
339
10,115
At 31 December 2012
Accumulated depreciation and
impairment
At 1 January 2011
28
623
1,906
104
5
2,666
Revaluation regulated networks
–
–
210
–
–
210
Annual depreciation and
impairment
2
90
193
10
–4
291
Disposal of consolidated group
companies
–1
–1
–
–
–
–2
Disposals
–2
– 110
–3
– 29
–
– 144
sale
–
1
–
–
–
1
–4
3
–
1
–
–
At 31 December 2011
23
606
2,306
86
1
3,022
Annual depreciation and
impairment
–6
184
207
14
–
399
–
1
–
–
–
1
Disposals
–1
–4
–4
–3
–1
– 13
sale
29
–2
–
1
–
28
5
–
–
3
–
8
50
785
2,509
101
–
3,445
At 31 December 2011
46
1,547
4,514
41
178
6,326
At 31 December 2012
82
1,507
4,659
83
339
6,670
Acquisitions
At 31 December 2012
Carrying amount
91
Regulated networks
The Regulated networks category also includes non-regulated assets required for cash generation
in the regulated domain and, therefore, for gas and electricity distribution and transmission
activities. Regulated network activities are subject to regulation by the Office of Energy Regulation
of the Netherlands Competition Authority (NMa).
Fair value of networks in the regulated domain
The fair value of networks and network-related assets in the regulated domain was established by
an independent external valuer as at 1 January 2010, based on the Regulated Asset Value and
related assumptions as used in the regulatory framework. The fair value is derived from a valuation
model and not from observable market prices. Measurement is based on a return of 6.2% and future
transmission tariffs as set by Office of Energy Regulation. The fair value of the regulated networks
fell by € 78 million in 2010, resulting in a fall of € 58 million in the revaluation reserve. Consequently,
the depreciation charge fell by € 2.2 million.
The fair value of the regulated networks was reassessed at 1 October 2011. As a result, there were
increases in measurement of the regulated network assets of € 409 million, the revaluation reserve
of € 307 million and deferred tax liabilities of € 102 million. Consequently, depreciation rose by €
3.0 million in the reporting period. At 31 December 2012, the carrying amount of the regulated
networks at historical cost was € 3,449 million (2011: € 3,246 million).
Capitalised interest
During the reporting period, € 8 million (2011: € 23 million) of attributable interest was capitalised
for property, plant and equipment as required by the relevant reporting standards. The
capitalisation rate for interest in 2012 was 4.6% (2011: 4.8%)
Assets under construction
Assets under construction were mainly the wind farms and Golden Raand biofuel power station.
Lease-and-leaseback transactions
Between 1997 and 2000, lease-and-leaseback transactions were entered into for a large part of
the gas, electricity and district heating networks. Eneco retained legal and economic ownership of
these networks. See Note 30 30 (page 106) for further information on these transactions.
Impairment
At year-end 2012, the management performed an impairment analysis of the electricity-related
property, plant and equipment and intangible assets of the Eneco cash-generating unit, principally
because of the deterioration in the relationship between gas and electricity prices in combination
with the low price of CO2. The analysis established that the carrying amount of these assets was
higher than the value in use, which was based on expected future cash flows. These cash flows are
based on Eneco’s long-term plans. The pre-tax discount rate which reflects the risks of the activities
was 9% (2011: 9%). No account was taken of long-term growth. Based on this analysis, the
management applied impairment proportionately to the property, plant and equipment and
intangible assets of € 65 million and € 13 million respectively. These amounts were recognised in
the income statement in Depreciation and impairment of property, plant and equipment and
Amortisation and impairment of intangible assets.
The calculation of the value in use of the electricity-related assets is most sensitive to the following
assumptions: discount rate, growth figure applied for extrapolating cash flows beyond the 5-year
plan and the life of the assets of 25 years. An adjustment of 0.5% to the discount rate would change
the impairment by some € 32 million.
92
14. Intangible assets
Goodwill
Customer
databases
Licences and
software
Concessions,
permits and
rights
Development
costs
Total
579
Cost
At 1 January 2011
170
107
63
234
5
Investments
–
–
3
–
–
3
Acquisitions
–
75
3
11
–
89
Disposals
–
–
– 13
–
–2
– 15
Reclassification
other
–3
–
16
–
1
14
At 31 December
2011
670
167
182
72
245
4
Investments
–
–
1
1
–
2
Disposals
–
–
–3
–1
–
–4
Reclassification
other
1
–
10
–1
–
10
168
182
80
244
4
678
At 1 January 2011
–
45
54
96
5
200
Annual depreciation
and impairment
–
13
6
11
2
32
Disposals
–
–
– 13
–
–2
– 15
Reclassification
other
–
–
5
–1
–1
3
At 31 December
2011
–
58
52
106
4
220
Annual depreciation
and impairment
–
14
8
20
–
42
Disposals
–
–
–2
–
–
–2
Reclassification
other
–
–
3
–1
–
2
At 31 December
2012
–
72
61
125
4
262
At 31 December
2011
167
124
20
139
–
450
At 31 December
2012
168
110
19
119
–
416
At 31 December
2012
Accumulated
depreciation and
impairment
Carrying amount
Cash-generating units for goodwill are generally the business segments. All goodwill is allocated to
the Eneco segment. The value in use of the cash-generating units is based on expected future cash
flows derived from the 2013 budget, the 5-year plans and thereafter the ‘terminal value’. No
account is taken of long-term growth. The pre-tax discount rate, which assumes the same
theoretical debt/equity ratio as in 2011 and reflects the risks of the activities, was 9% (2011: 9%).
See Note 13 (Property, plant and equipment) for information on the impairment analysis and
impairment of the electricity-related property, plant and equipment and intangible assets of the
Eneco cash-generating unit.
93
Customer databases relate mainly to Oxxio, which was acquired in 2011, and to REMU N.V., which
was acquired in 2003.
Concessions, permits and rights consist of € 150 million paid in 2005 to take over an agreement
covering the delivery of up to 820 MW of electricity by Rijnmond Energy C.V. There was an addition
of € 45 million in 2008 for licences granted for existing and future wind farms in Belgium on the
acquisition of Eneco Wind Belgium S.A. (formerly: Air Energy S.A.).
15. Business combinations
Eneco acquired various solar farms from Fonroche, a French company, in the fourth quarter of 2012.
This acquisition strengthens Eneco’s market position in France. The acquisition was of the entire
share capital and control of various specially incorporated companies for a total acquisition price of
€ 44 million. € 22 million was paid in cash at 31 December 2012 and the remainder of the acquisition
price is expected to be paid in the first half of 2013 once the vendor has met its final obligations.
The solar farms acquired contributed revenue of € 0.4 million and an operating profit of nil from the
acquisition date.
At acquisition date
Fonroche
44
Working capital including cash and cash equivalents
–4
Provisions
4
Net identifiable assets and liabilities
44
Transaction result
–
Consideration paid (in cash and cash equivalents)
44
Consideration paid in 2012 (in cash and cash equivalents)
22
Cash and cash equivalents acquired (-) / disposed (+)
–
Cash acquired (-) or disposed of (+)
22
16. Associates
Movements in the value of associates were as follows in 2012:
Carrying amount at 1 January
Acquisitions
Reclassification from/to assets held for sale
Share in result after tax of associates
94
2012
2011
32
74
1
–
42
– 42
26
2
Dividend received
– 19
–2
Disposals
– 42
–
–1
–
Carrying amount at 31 December
39
32
The table below summarises the financial data of the associates:
At 31 December 2012
At 31 December 2011
Assets
133
154
Liabilities
104
106
2012
2011
354
290
34
1
Revenues
17. Deferred taxes
The table below shows the net deferred tax assets and liabilities:
Assets
At 31 December 2012
At 31 December 2011
At 31 December 2012
At 31 December 2011
Property, plant and
equipment
–
–
371
338
Intangible assets
–
–
15
12
Cash flow hedges
–
–
– 15
–2
Losses available
for relief 1
6
9
– 13
– 27
Provisions
–
–
– 12
–7
Receivables
–
–
–
–1
6
9
346
313
Total
1
Liabilities
1
Deferred tax assets and liabilities related to cash flow hedges have been recognised through equity.
The regulations for preventing double taxation create the deferred tax liability presented under
losses available for relief for the losses carried forward at non-resident participating interests.
The table below shows the expiry periods for temporary differences available for relief at 31
December 2012:
Expiry periods for differences available for relief after 31 December 2012
1 - 50 yrs
Intangible assets
1 - 30 yrs
Cash flow hedges
1 - 30 yrs
Losses available for relief
1 - 10 yrs
Provisions
1 - 10 yrs
No deferred tax asset has been recognised on pre-consolidation and other losses of € 7.0 million
(2011: € 66.9 million) since it is not certain whether sufficient taxable profits will be available in the
future at the associates which are not members of the fiscal unity. The tax regulations state that
this relief is only available against profits made in the years 2013 to 2019.
95
18. Derivative financial instruments
The table below shows the fair value of derivative financial instruments:
At 31 December 2012
At 31 December 2011
Assets
Liabilities
Interest rate swap contracts
–
Currency swap contracts
1
Energy commodity contracts
CO2-emission rights contracts
Total
Assets
Liabilities
13
–
11
71
11
6
174
131
201
170
28
13
70
52
203
228
282
239
118
109
197
173
85
119
85
66
203
228
282
239
Classification
Current / short-term
Fixed / long-term
Total
The table below shows the fair value of derivative financial instruments for which movements in
fair value have been recognised through the income statement:
At 31 December 2012
Assets
CO2-emission rights contracts
Total
At 31 December 2011
Liabilities
Assets
Liabilities
1
–
2
2
119
106
148
136
28
13
70
52
148
119
220
190
107
91
165
152
41
28
55
38
148
119
220
190
Classification
Fixed / long-term
Total
The table below shows the fair value of derivative financial instruments for which movements in
fair value have been recognised in equity through the Cash flow hedge reserve:
At 31 December 2012
At 31 December 2011
Assets
Liabilities
Assets
Liabilities
Interest rate swap contracts
–
–
13
–
11
71
9
4
55
25
53
34
Total
55
109
62
49
12
18
32
21
Fixed / long-term
43
91
30
28
Total
55
109
62
49
Classification
These instruments are used in cash flow hedge transactions to hedge interest rate, currency and
energy price risks.
The following hierarchy was used for the measurement of the financial instruments.
96
Level 1
Level 1 recognises financial instruments whose fair value is measured using unadjusted quoted
prices in active markets for identical instruments.
Level 2
Level 2 recognises financial instruments whose fair value is measured using market prices or pricing
statements and other available information. Where possible, the measurement method uses
observable market prices. Level 2 energy commodity contracts are measured using market prices
or pricing statements for periods in which an active market exists for the underlying commodities
such as electricity, gas (title transfer facility), oil-related prices and emission rights. Other contracts
are measured by agreement with the counterparty, using observable interest rate and foreign
currency forward curves. Illiquid contracts are not recognised as instruments in this category.
Level 3
Level 3 recognises financial instruments whose fair value is measured using calculations involving
significant inputs that are not based on observable market data.
The hierarchy of derived financial instruments measured at fair value at 31 December 2012 was as
follows:
31 December 2012
Level 1
Level 2
Level 3
Total
43
159
–
202
1
–
–
1
44
159
–
203
2
142
–
144
Interest rate and currency swap contracts
–
84
–
84
2
226
–
228
Level 1
Level 2
Level 3
Total
29
241
–
270
2
10
–
12
31
251
–
282
3
219
–
222
2
15
–
17
5
234
–
239
Assets
Liabilities
31 December 2011
Assets
Liabilities
Note 24 presents the movements in the cash flow hedge reserve.
The cash flow hedge instruments are derivative financial instruments that are subject to net
settlement between parties. The table below shows the periods in which the cash flows from the
cash flow hedges are expected to be realised:
97
At 31 December 2012
At 31 December 2011
Expected cash flow
Within 1 year
– 37
61
Within 1 to 5 years
178
199
After 5 years
– 32
– 22
Total
109
238
The total cash flow hedges recognised through the income statement in the future are recognised
in the Cash flow hedge reserve after deduction of taxes. The table below shows the periods in which
the cash flows from the cash flow hedges are expected to be realised:
At 31 December 2012
At 31 December 2011
Expected recognition in result after tax
Within 1 year
–
–8
202
101
4
– 22
206
71
At 31 December 2012
At 31 December 2011
Other capital interests
8
3
Related party receivables
2
1
Other receivables
54
68
Total
64
72
At 31 December 2012
At 31 December 2011
Buildings
–
15
Assets disposal group
7
37
Associates
–
42
Total assets
7
94
Liabilities disposal group
3
11
Total liabilities
3
11
Total held for sale
4
83
Within 1 to 5 years
After 5 years
Total
19. Other financial assets
20. Assets/liabilities held for sale
98
Various assets/liabilities which were classified as discontinued operations in 2011 were settled in
2012. The interest in KEMA was sold in 2012 (see Note 7 Share of profit of associates and other
capital interests) and the buildings were taken back into continuing operations (see Note 13
Property, plant and equipment).
21. Trade receivables
At 31 December 2012
At 31 December 2011
852
829
Energy receivables
Other trade receivables
Less: impairments
75
78
– 102
– 103
825
804
Total
The table below shows the aged analysis of the outstanding receivables:
At 31 December 2012
At 31 December 2011
662
665
Prior to due date
After due date
·
under 3 months
109
90
·
3 to 6 months
30
22
·
6 to 12 months
36
35
·
over 12 months
90
95
Principal amount
927
907
Less: impairments
– 102
– 103
825
804
At 31 December 2012
At 31 December 2011
6
5
7
Total
The table below shows the aged analysis of the impaired receivables:
·
Prior to due date
After due date
·
under 3 months
9
·
3 to 6 months
9
8
·
6 to 12 months
19
22
·
over 12 months
59
61
102
103
Totaal
Movements in the impairment losses on receivables were as follows:
99
At 1 January
Additions through income statement
Withdrawals
Reversal of earlier write-offs
Other movements
At 31 December
2012
2011
103
92
32
21
– 31
– 55
–
–8
–2
53
102
103
Trade receivables have a term of less than one year. In view of their short-term nature, the carrying
amount of trade receivables is their fair value.
22. Other receivables
Prepayments and accrued income
1
Margin calls
Other receivables
1
Total
1
At 31 December 2012
At 31 December 2011
96
84
31
–
143
127
270
211
In view of their short-term nature, the carrying amount of other receivables is their fair value.
23. Cash and cash equivalents
Cash and cash equivalents comprised bank balances, cash and deposits of € 220 million at 31
December 2012 (2011: € 279 million). Term deposits and blocked accounts which are not freely
available were € 55 million at 31 December 2012 (2011: € 86 million).
24. Equity
At 31 December 2012
At 31 December 2011
Share capital
497
497
Share premium
381
381
Revaluation reserve
903
945
Translation reserve
Cash flow hedge reserve
Retained earnings
Undistributed result for the financial year
Equity attributable to Eneco Holding N.V.
shareholders
Total equity
4
1
– 52
– 12
2,478
2,337
233
204
4,444
4,353
3
–
4,447
4,353
Share capital
Eneco Holding N.V.’s authorised share capital is € 2 billion, divided into 20 million shares with a
nominal value of € 100 each. At 31 December 2012, 4,970,978 shares had been issued and fully
paid. There were no changes in 2012. Eneco Holding N.V. has only issued ordinary shares.
100
Share premium
Eneco Holding N.V. was incorporated in 2000. Shareholders then holding shares in N.V. Eneco
acquired a shareholding in the company by contributing their interests in N.V. Eneco to Eneco
Holding N.V. Insofar as the value of that interest exceeded the nominal value of the shares in Eneco
Holding N.V. that excess value was taken to share premium. The share premium can be considered
as paid-up share capital.
Revaluation reserve
The revaluation reserve relates to the measurement of networks and network-related assets at fair
value. The difference between depreciation in 2012 based on the revalued carrying amount and
depreciation based on the original historical cost, less deferred tax, has been transferred from the
revaluation reserve to retained earnings. The revaluation reserve is not freely at the disposal of the
shareholders.
Translation reserve
Assets and liabilities of foreign group companies denominated in foreign currency and foreigncurrency funding of those subsidiaries relating to long-term loans denominated in foreign currency,
after tax, are translated into euros at the reporting date at the exchange rate prevailing on the
reporting date. Foreign currency exchange differences arising on this are recognised in the
translation reserve in equity. The results of foreign group companies are translated into euros at
the average rate. The difference between the profit after income tax at the average rate and based
on the exchange rate prevailing on the reporting date is recognised through equity in the translation
reserve. If an investment in a foreign operation is ended or reduced, the related accumulated
translation differences are recognised through the income statement. The translation reserve is not
freely at the disposal of the shareholders.
The cash flow hedge reserve recognises gains and losses in the fair value of the effective portion
of derivative financial instruments designated as cash flow hedges for which the hedge transaction
has not yet been settled. Consequently, Eneco meets the conditions for cash flow hedge accounting.
The cash flow hedge instruments are mainly forward and swap contracts agreed with other market
parties in order to cover the market price risks of purchasing and selling energy commodities. This
reserve also recognises the effective portion of hedging with interest rate and currency swap
contracts. The cash flow hedge reserve is not freely at the disposal of the shareholders.
The movements in the cash flow hedge reserve were as follows:
At 1 January 2011
Newly defined cash flow hedges in
financial year
Movements in fair value cash flow
hedges
Energy
commodities
Interest rate swap
contracts
Currency swap
contracts
Total
– 17
–5
– 34
– 56
17
1
–
18
12
–3
– 10
–1
– 15
–
2
– 13
Non-effective portion of cash flow
hedges
–6
–
–
–6
Discontinued cash flow hedges
44
2
–
46
At 31 December 2011
35
–5
– 42
– 12
Newly defined cash flow hedges in
financial year
13
–
–
13
Movements in fair value cash flow
hedges
– 11
–2
– 53
– 66
–1
1
13
13
Non-effective portion of cash flow
hedges
–2
–
–
–2
2
–
–
2
36
–6
– 82
– 52
Discontinued cash flow hedges
At 31 December 2012
101
Distributable results
A dividend of € 20.52 per share was paid in 2012 (2011: € 14.28). The non-distributable capital
was € 1,031 million at 31 December 2012 (2011: € 1,027 million).
Minority interests
This relates to the third party share in the equity of subsidiaries of which Eneco Holding N.V. is not
the owner of 100% of the shares.
25. Provisions for employee benefits
Health insurance for
pensioners
Long-service benefits
Total
At 1 January 2011
5
23
28
Additions
–
5
5
–1
–1
–2
At 31 December 2011
4
27
31
Additions
–
3
3
–1
–1
–2
Released
–
–1
–1
At 31 December 2012
3
28
31
Withdrawals
Withdrawals
Classification
102
Current
1
2
3
Non-current
2
26
28
At 31 December 2012
3
28
31
The following actuarial assumptions were used for the provisions:
2012
2011
Discount rate at balance sheet date
2.5%
3.3%
Future salary increases
1.0%
1.2%
Expenditures from the provisions for employee benefits are made over the long term. The provisions
are remeasured annually using current employee information and properly reflect the expected cash
flows.
26. Other provisions
Decommissioning
provision
Onerous contracts
Reorganisation
At 1 January 2011
26
13
Additions
10
1
8
Other
Total
10
5
54
4
13
28
–
2
3
13
–4
–1
–8
–2
– 15
Released
–4
–1
–
–8
– 13
Reclassification
–2
6
–1
1
4
At 31 December 2011
34
18
7
12
71
5
34
21
4
64
Acquisition
Withdrawals
Additions
Acquisition
4
–
–
–
4
–1
– 11
–6
–5
– 23
Released
–
– 10
–1
–3
– 14
Reclassification
2
–1
–1
–
44
30
21
7
102
Withdrawals
At 31 December 2012
Classification
Current
–
13
14
2
29
Non-current
44
17
7
5
73
At 31 December 2012
44
30
21
7
102
Interest at 5% has been added to the provisions in 2012 (2011: 5%).
Decommissioning
The decommissioning provision is of a long-term nature. The cash flows will generally occur after
ten years and within twenty years. The amounts are the best estimate and are reviewed annually
for expected future movements in the cost of removing assets.
Onerous contracts
Expenditure on onerous contracts will be made within three years. The provision is a good reflection
of the cash flows in view of the relatively short remaining term of the contracts.
Restructuring provision
In 2012, € 21 million was added to the restructuring provision, mainly in respect of the Joulz
segment. The restructuring plan for Joulz was announced to the employees affected and
implementation started in 2012.
Other
Expenditure on the other provisions is expected to be made over a longer period. This expenditure
is difficult to estimate. The current amounts are the best estimate on the reporting date.
103
27. Interest-bearing debt
Interest-bearing debt was:
At 31 December 2012
At 31 December 2011
1,792
1,847
8
12
Total
1,800
1,859
Classification
At 31 December 2012
At 31 December 2011
Private loans
Green and subordinated loans
Current
74
140
Non-current
1,726
1,719
Total
1,800
1,859
No collateral has been issued for the interest-bearing debt.
The private loans are predominantly loans from institutional investors and banks and included €
224 million in US dollars (2011: € 208 million), € 176 million in Japanese yen (2011: € 200 million)
and € 92 million in pounds sterling (2011: € 90 million). The "green fund" loans were borrowed to
finance specific sustainable energy infrastructure investments. Investors enjoy tax advantages on
green funds and so the interest charges are below the market interest rate. Loans consisted of
private loans and issued commercial paper.
The credit facilities are explained in Note 32.
Repayment obligations for the first year after the reporting date are recognised under current
liabilities.
Interest rates are fixed on borrowings of € 1,552 million (2011: € 1,572 million) (fair value risk).
Variable interest rates that track market rates apply to the other borrowings (cash flow interest
rate risk). Derivative financial instruments (interest rate swap contracts) have been used for certain
variable interest rates.
The table below shows the average interest rate (excluding capitalised interest) and the fair value
of the loans:
2012
Average interest
rate 1
Fair value of loans
1
2011
5.7%
5.6%
2,073
1,937
The fair value of the loans is estimated using the present value method based on relevant market
interest rates.
104
28. Trade en other payables
Trade creditors
Accruals and deferred income
1
Pension contributions
Other liabilities
Total
1
At 31 December 2012
At 31 December 2011
839
827
451
530
5
2
552
409
1,847
1,768
1,552
1,544
295
224
1,847
1,768
Classification
Current 1
Non-current
Total
1
1
29. Operating leases
Costs and liabilities of operating leases
Eneco has operating lease agreements for IT facilities and the vehicle fleet. There are also rental
agreements for land and a number of business premises. A cost of € 59 million (2011: € 56 million)
has been recognised through the income statement in this respect. The minimum obligations under
these agreements fall due as follows:
At 31 December 2012
Within 1 year
At 31 December 2011
61
56
Within 1 to 5 years
163
151
After 5 years
185
152
Total
409
359
Revenues from operating leases
Equipment and energy installations are leased for periods of 5 to 15 years while the assets
concerned remain the property of Eneco. The lease covers making the equipment available to users
and maintenance. Revenues of € 40 million (2011: € 40 million) have been recognised through the
income statement.
The minimum receivables from non-terminable lease agreements fall due as follows:
Within 1 year
At 31 December 2012
At 31 December 2011
35
28
Within 1 to 5 years
108
87
After 5 years
114
92
Total
257
207
105
30. Contingent assets and liabilities
Energy purchase and sale commitments
Eneco has energy purchase commitments of € 9.7 billion (2011: € 12.4 billion) under contracts
relating to 2013 and later years. The purchase commitments comprise energy contracts for the
company's own use with various energy generators. There are sales commitments of € 3.2 billion
(2011: € 3.9 billion) for 2013 and later years.
There are commitments of € 1.0 billion (2011: € 0.3 billion) for the purchase of heat until 2038.
Lease-and-leaseback transactions
Between 1997 and 2000, lease-and-leaseback transactions were entered into for a large part of
the gas, electricity and district heating networks.
These assets are leased for a long period to third parties who have leased the same assets back to
Eneco. Eneco is entitled to purchase the sub-leasing rights held by third parties at the end of the
lease-back periods, which are between 2015 and 2025.
The table below shows the transactions concluded:
Number of
transactions
Transaction value
Costs of early
termination
Value of investments
Electricity networks
7
1,602
645
557
Gas networks
3
494
194
181
District heating networks
2
524
211
204
Total 31 December 2012
12
2,620
1,050
942
Total 31 December 2011
15
2,899
1,154
993
x USD 1 million
The transaction values are the appraised values at the time the lease-and-leaseback transactions
were entered into, defined for US fiscal purposes on valuation principles prevailing under US tax
regulations. Three transactions were terminated early during 2012 (2011: 0), one with a term to
2021 and two to 2025.
Income from lease-and-leaseback transactions is recognised in the year the transaction occurred
less the costs expected at that time to be incurred throughout the remaining term. These expected
costs are recognised in the balance sheet as Other non-current liabilities. The lease-and-leaseback
transactions may restrict the ability to sell the assets. These assets may be sold (in full or in part)
subject to certain conditions. If these conditions are not complied with, termination conditions may
come into force.
Conditional and unconditional contractual obligations and rights exist in connection with these
lease-and-leaseback transactions. The financial obligations and rights cancel each other out and, as
they have been transferred to third parties, are not recognised in the balance sheet.
The company has provided security in respect of these obligations in the form of mortgages and
pledges on parts of the gas, electricity and district heating networks. In connection with the risk of
forced early termination of the lease-and-leaseback transactions, the company has also provided
additional security in the form of letters of credit to a value of USD 393 million (2011: USD 476
million), which are covered by subordinated collateral rights in respect of the network.
When the lease-and-leaseback transactions were entered into, some of the proceeds received were
invested in US Treasury Bonds or bonds with almost the same creditworthiness. These bonds can
be used at a later date to purchase the sub-leasing rights. The market value of these investments
on the reporting date amounted to USD 942 million (2011: USD 993 million).
The difference between the costs of early termination and the value of the investments will develop
as follows in the coming years:
106
x USD 1 million
Costs of early termination
Value of investments
Difference
2013
2014
2015
2020
2025
1,054
1,060
1,063
282
44
956
970
984
251
44
98
90
79
31
–
The portion of the costs of early termination that must contractually be covered by letters of credit
depends on the corporate credit rating of Eneco, which, at the reporting date, was ‘A-’ according to
Standard & Poor's.
Investment obligations
At 31 December 2012 Eneco had entered into investment obligations with a total amount of € 272
million (2011: € 465 million).
Other obligations and guarantees
At 31 December 2012 there were existing other payment obligations of € 580 million (2011: € 809
million), payable from 2013.
Eneco has issued guarantees of approximately € 31 million (2011: € 20 million).
Eneco has formed fiscal unities for corporate income tax and VAT purposes. Eneco Holding N.V.
and the subsidiaries in these fiscal unities are jointly and severally liable for the tax obligations of
the fiscal unities.
31. Related party transactions
Associates, joint ventures and parties with whom decisive control is jointly exercised over an entity
listed in these financial statements and the company's Management and Supervisory Boards are
considered as related parties. Shareholders in Eneco with significant influence are related parties.
Sales to and purchases from related parties are on terms of business normally prevailing with third
parties. Receivables and liabilities are not covered by collateral and are paid by bank transactions.
The table below shows the trading transactions with the principal related parties:
Sales
2012
Associates
Purchases
2011
2012
2011
94
84
18
17
Joint ventures
3
11
54
22
Other capital interests ( >
20%)
1
6
21
12
Assets
Associates
Liabilities
At 31 December 2012
At 31 December 2011
At 31 December 2012
At 31 December 2011
22
19
1
–
Joint ventures
1
1
8
4
Other capital interests ( >
20%)
2
2
–
3
Note 6 provides details of the remuneration of members of the Management and Supervisory
Boards. Other than this functional relationship, they and Eneco have no relationship other than that
of customer and supplier on normal conditions of supply. Eneco applies the exemption from
disclosures on related party transactions with government-related entities. The Municipality of
107
Rotterdam has significant influence. There is no relationship other than the shareholder
relationship, except that of customer and supplier on normal arm’s length terms and conditions.
32. Financial risk management
Normal business activities involve exposure to credit, commodity market, interest rate and liquidity
risk. Eneco's policy is designed to minimise the adverse consequences of unforeseen circumstances
on its financial results. The aims formulated to this end are derived from the company's strategic
objectives. Procedures and guidelines have been drawn up in accordance with these objectives and
are evaluated at least once a year and, if required, adjusted.
The Board of Management is responsible for risk management. In this context, it sets out
procedures and guidelines and ensures they are complied with. Authority to commit Eneco is
specified in the Corporate Authority Manual. Mandates have also been drawn up for all business
units, including Eneco’s purchasing and trading department and sales channels, to manage
commodity (electricity, gas, heating, emission rights and fuels) risks.
The Board of Management and senior management regularly review the results, key figures such
as changes in working capital and the trading position, the principal risks and the measures to
manage them. Stress tests are developed for the principal identified risks and incorporated in the
long-term financial plan. This clarifies the impact of risk on operations. Senior management reports
to the Board of Management by means of an In Control Statement every year.
The internal Audit & Risk Committee, Commodity Risk Committee and Investment Risk Committee
are in charge of the formulation and application of the company's risk policy and advise the Board
of Management accordingly.
The Supervisory Board exercises supervision over the course of business and risk management by
conducting reviews of strategic plans, budgets, critical performance indicators, forecasts, results
and the risk policy.
32.1
Credit risk
Credit risk is the risk of a loss if a counterparty or its guarantor cannot or will not meet its obligations.
For the purposes of managing this risk, a distinction is drawn between debtor risk and counterparty
risk, including the risk Eneco runs on cross-border lease transactions.
Debtor risk
Debtor risk is the risk that a debtor fails to pay a receivable. Most receivables are of limited size
and there are a great number of debtors. The Board of Management does not consider this to be
a concentration of risk.
Policy is designed not to provide customers with any credit going beyond normal supplier credit as
set out in the applicable conditions of supply. Policy is also formulated at a decentralised level within
the organisation. The effectiveness of that policy is monitored at the corporate level and
adjustments are made as required.
Measures in place to limit debtor risk are:
• an active debt collection policy;
• credit limits, bank guarantees and/or margining (cash collateral) for business customers;
• recourse to debt collection agencies and different collection methods for current and former
customers.
The amount of a receivable is adjusted pursuant to a set procedure. The adjustment depends on
the time that the receivable has remained outstanding and the probability that it will not be paid
in full. There are also individual reviews for business customers.
108
Counterparty risk
Counterparty risk is the risk that a trading partner cannot or will not meet its delivery or payment
obligations. This risk is primarily encountered in trading in energy commodities, emission rights and
interest rate and foreign currency hedge transactions. The basis for the management of this risk is
set out in the Counterparty Mandate (part of the Eneco Energy Trade commodity mandate) and the
Treasury Charter drawn up by the Board of Management.
The counterparty risk management methods are set out in the Counterparty Mandate drawn up by
the Board of Management. The size of the counterparty risk is primarily determined by the
replacement value of the future deliveries and the commodity delivered which has not yet been paid
for. The replacement value is calculated each day for each counterparty based on current market
prices for future deliveries. The risk position is measured against the risk tolerance. That tolerance
is drawn up for each contract party on the basis of an assessment of the creditworthiness of that
counterparty derived from a public or internal rating and/or alternative assessment methods.
Counterparty risk is limited by:
•
•
•
•
•
•
•
•
setting financial limits based on the financial strength of the counterparty;
setting trading volume restrictions for each counterparty (position management),
the use of standard agreements, in particular based on EFET and ISDA terms;
use of third-party margining and clearing;
use of bilateral margining agreements with counterparties;
executing risk-reducing transactions with counterparties leading to partly-offsetting positions;
requiring additional guarantees from counterparties, e.g. bank guarantees;
credit insurance taken if necessary to cover exposures exceeding the limits.
Third-party margining and clearing is in place for futures. This transfers the counterparty risk of a
futures contract to a clearing bank. This bank is linked to a clearing house that facilitates settlement
of futures transactions through exchanges such as ENDEX (European Energy Derivatives Exchange
N.V.), EEX (European Energy Exchange A.G.) and the ECX (European Climate Exchange). Every day,
the clearing house settles interim changes in market value with its clearing banks which in turn
settle with the market parties concerned (margin calls). This neutralises counterparty risk for each
party to the contract.
Bilateral margining implies similar daily settlement directly with the counterparty to the transaction.
The contract with the counterparty sets an initial minimum value (threshold). Bilateral margining is
only applied if the threshold is exceeded.
The margining system creates liquidity risk and so risk policy is designed to monitor and match
counterparty risk by forward trading and liquidity risk by margining. There is a system for monitoring
internal limits using regular (often daily) reports, to manage both risks.
Eneco holds positions in the form of deposits at five European banks in connection with the leaseand-leaseback transactions (see Note 30). On the reporting date, these were USD 1.8 billion (2011:
USD 2 billion). All the banks have investment grade ratings from Standard & Poor’s and/or Moody’s.
The counterparty risk is reviewed frequently and this may result in positions being moved where
possible to a different party.
The maximum credit risk is equal to the carrying amount of the financial assets, including derivative
financial instruments and receivables under cross-border leases as disclosed in the note on
Contingent assets and liabilities.
Financing instruments
Management of financing instruments is set out the Treasury Charter drawn up by the Board of
Management and Supervisory Board. Counterparty risk on borrowing money is very limited. The
assessment criteria formulated in the Treasury Charter are taken into account when lending money.
They call for a counterparty to have a credit rating of at least A+ (Standard & Poor's) or Aa (Moody's).
Counterparty risk is further reduced by dispersion across a number of parties, predetermined limits
for each counterparty and maximum lending terms.
109
The counterparty risk for financial instruments (swap contracts) is limited by:
• the use of framework agreements on ISDA terms;
• margining as a result of the agreed credit support agreements;
• procedures for regular assessment of counterparty risk.
32.2
Market risk
Market risk is the exposure to changes in value in current or future cash flows and financial
instruments arising from changes in market prices, market interest rates and exchange rates.
Price risk
Exposure to market price risk on the commodity portfolios for purchasing and supply to customers
is initially limited by back-to-back transactions for purchase and sales obligations, for which
derivative financial instruments are also used. Structured hedging strategies are used where backto-back hedging is not possible, or only with excessively high transaction charges. In these cases,
derivative financial instruments which have an historically strong correlation with the price risks to
be hedged are used. These instruments are deployed within a conservative mandate and limit
structure that includes on-going registration, monitoring and analysis of trading positions and
market value.
The market price risk on the company’s own generation and long-term structured commodity
purchase contracts is also limited through back-to-back transactions and structured hedging
strategies as described above. It should be noted that there is no liquid energy trading market for
exposures that lie further in the future and they are difficult or impossible to hedge.
Price risks inherent to energy commodity trading portfolios and emission rights are managed using
position limits, MtM limits, Value at Risk (VaR) measures and stop-loss limits. The limits that can
best be applied to manage risks are determined for each business activity. VaR represents the
potential loss on a portfolio in the event of a poor scenario over a 10-day period, at a 95% confidence
level. VaR calculations are based on price history and include data such as correlations between
products, markets and time periods. Retrospective testing is conducted to check the calculated VaR
values and the model used is checked. The risk managers and energy traders are notified each day
of both the VaR in each individual portfolio and the proprietary trading position. Limit infringements
are reported immediately. The VaR for the proprietary trading portfolio at 31 December 2012 was
€ 0.9 million (2011: € 0.8 million). The average VaR in 2012 was € 1.5 million (2011: € 2.3 million).
Eneco’s trading department ceased proprietary trading (trading aiming to generate profits based
on positions taken for own account) in the second half of 2012.
Foreign currency risk
Foreign currency risk is the exposure to changes in value of financial instruments arising from
changes in exchange rates. The Treasury department is responsible for managing the group’s other
foreign currency risk. Companies included in the consolidation are not permitted to maintain open
positions in foreign currencies in excess of € 250,000 without the Treasury department’s approval.
Based upon the aggregate foreign currency position and the associated limit set for open positions,
the Treasury department determines whether hedging is desirable and the strategy to be followed.
Foreign currency risk attaching to commodity-related financial instruments is managed in
accordance with the price risk.
Loans were entered into in 2009 in US dollars, Japanese yen and pounds sterling to meet the
group’s funding requirements. The group has hedged the foreign currency risk for the full term of
these loans using cross-currency swap contracts.
Interest rate risk
Interest rate risk is the exposure to changes in value in financial instruments arising from changes
in market interest rates. The Treasury department manages interest rate risk. The interest rate risk
policy is aimed at managing the net financing liabilities through fluctuations in market interest rates.
A specified range for the proportions of loans at fixed and variable interest rates serves as the base
110
tool. Eneco uses derivative financial instruments such as interest rate swap contracts to achieve
the desired risk profile. If all other variables remain constant, it is estimated that a general increase
of 1% in Euribor (for a period of twelve months) would lead to a decrease in profit before tax of €
0.1 million (at 31 December 2011: € 0.1 million).
32.3
Liquidity risk
Eneco is a capital-intensive business. Its financing policy is aimed at the development and retention
of an optimum financing structure taking into account its current asset base and investment
programme. The criteria are access to the capital market and flexibility at acceptable financing costs.
Financing is drawn centrally and apportioned internally. Subsidiaries are financed by a combination
of equity and intercompany loans.
A specific liquidity risk arises from margining through clearing houses. Risk limits have been set to
cover both the outstanding balance and price change sensitivity for the purposes of managing this.
This risk is the subject of daily reports to senior management and monthly reports to the Board of
Management. The sensitivity of the margin call to a 1% price change was € 0.1 million in 2012
(2011: € -0.4 million). Another liquidity risk arises from the margining of the market value of the
cross-currency swap contracts entered into with a number of banks. If the market value of these
contracts exceeds the contractual limits, Eneco has to deposit the excess with these banks. At 31
December 2012, Eneco had deposited a total of € 31 million (2011: nil).
Great importance is attached to managing all the above risks to avoid Eneco finding itself in a
position in which it could not meet its financial obligations. In addition, liquidity needs are planned
on the basis of long, medium and short-term cash flow forecasts. The cash flow forecasts
incorporate operating and investing cash flows, dividends, interest payable and debt redemption.
The Treasury department sets this capital requirement against available funds. A report is
submitted to the Board of Management every month.
Daily callable credit facilities up to € 116 million (2011: € 100 million) have been agreed with a
number of banks for overdrafts on current accounts. There is also a committed credit facility
available up to an amount of € 1.25 billion up to October 2016 (2011: € 1.25 billion.). An extension
to October 2017 for a maximum of € 1.1 billion was agreed in 2012. This facility was not drawn
during 2012. Eneco also has a syndicated guarantee and letter of credit facility of € 200 million
available to 1 December 2014. Under this facility, Eneco can obtain guarantees to cover
counterparty risk on contracts with energy suppliers to the extent that those risks exceed the
agreed limit.
The table below shows forecast nominal cash outflows and any interest arising from financial
instruments over the coming years. The cash flows from derivatives are based on the prices and
volumes in the contracts.
A of 31 December 2012
Within 1 year
Within 1 to 5 years
After 5 years
Total
Derivative financial
instruments
486
152
35
673
158
843
1,626
2,627
Trade and other payables
1,552
104
191
1,847
Total
2,196
1,099
1,852
5,147
111
As of 31 December 2011
1
Within 1 year
Within 1 to 5 years
After 5 years
Total
Derivative financial
instruments
173
31
34
238
227
568
1,887
2,682
Trade and other payables 1
1,544
89
135
1,768
Total 1
1,944
688
2,056
4,688
33. Capital management
The primary aim of capital management at Eneco is to maintain good creditworthiness and healthy
solvency to support operations and minimise the cost of debt. Eneco regards both capital and net
debt as relevant elements of its financing and so of its capital management. Eneco can influence
its capital structure by altering the proportions of equity and debt. Net interest-bearing debt
(excluding discontinued operations) is defined as long-term and current interest-bearing debt less
cash and cash equivalents.
No changes were made to the aims, policy and processes for capital management in 2012 and
2011.
Eneco monitors its capital using the 'Financial Management Framework', which sets out various
ratios that have to be regularly monitored by the Board of Management. One of these ratios is
equity/total assets. Eneco’s policy is to keep this above 45%. At year-end 2012, it was 50.5%
(2011: 50.4%).
34. Events after the reporting date
On 21 January 2013, Eneco sold a 50% interest in the Eneco Luchterduinen offshore wind farm to
Mitsubishi Corporation (‘MC’). The sale is making a positive contribution to the profit for 2013. Eneco
and MC also entered into a long-term alliance with the aim of increasing co-operation to other
offshore wind energy projects in Europe. As part of this, Eneco and MC decided to co-operate in
Eneco’s Prinses Amalia Wind Farm that has been operational since 2008.
112
Notes to the consolidated cash flow statement
The cash flow statement has been prepared using the indirect method. To reconcile the movement
in cash and cash equivalents, the result after tax is adjusted for items in the income statement and
movements in balance sheet that did not affect receipts and payments during the year.
The cash flow statement distinguishes between cash flows from operating, investing and financing
activities. The cash flow from operating activities includes interest and income tax payments and
interest and dividend receipts. Development costs, investments in and disposals of non-current
assets (including financial interests) are included in cash flow from investing activities. Dividends
paid out are recognised as outgoing cash flow from financing activities.
Movements in working capital
Working capital consists of inventories and current receivables less short-term non-interest-bearing
debt. The table below shows movements in working capital recognised in the cash flow from
operating activities:
2012
Movements in intangible current assets
Movements in inventories
2011
4
–9
–8
– 13
Movements in trade receivables
– 24
78
Movements in other receivables
– 23
– 58
Movements in non-interest bearing debt
– 20
325
Total
– 71
323
113
Segment information
Segment information
Business segments are based on Eneco’s internal organisation and management reporting
structure.
Eneco group’s business segments are the three core businesses: Eneco, Stedin and Joulz. The Eneco
segment purchases, generates, trades and sells electricity, gas and district heating and constructs,
maintains and manages district heating networks. The Stedin segment is the manager of the gas
and electricity networks. The Joulz segment is the infrastructure company which includes
consultancy, engineering, construction and management of energy infrastructures and the
maintenance of lighting and parking facilities.
Transfer prices for internal products and services are on arm’s length prices and terms.
The group accounting policies are also applied in the segment reports.
Revenues and profit by business segment
2012
Revenues from energy sales and
transmission, energy-related activities and
other operating revenues
Inter-segment operating revenues
Purchases of energy and energy-related
and other operating expenses
Operating profit before depreciation,
amortisation and impairment
Annual depreciation and impairment
Operating profit
2011
Revenues from energy sales and
transmission, energy-related activities and
other operating revenues
Inter-segment operating revenues
Purchases of energy and energy-related
and other operating expenses
Operating profit before depreciation,
amortisation and impairment
Annual depreciation and impairment
Operating profit
114
Segment
Energy
Company
Eneco
Segment
Stedin
Segment
Joulz
4,067
1,081
42
10
– 3,827
Eliminations
and nonallocated
Total
108
–
5,256
399
– 451
–
– 561
– 516
424
–
4,480
282
530
–9
– 27
776
– 235
– 199
–7
–
– 441
47
331
– 16
– 27
335
Segment
Energy
Company
Eneco
Segment
Stedin
Segment
Joulz
Eliminations
and nonallocated
Total
3,914
995
98
–
5,007
117
3
413
– 533
–
– 3,781
– 508
– 486
479
–
4,296
250
490
25
– 54
711
– 115
– 200
–8
–
– 323
135
290
17
– 54
388
Balance sheet by business segment
Segment Energy
Company Eneco
Segment Stedin
Segment Joulz
Eliminations and
non-allocated
Total
4,233
4,653
373
– 494
8,765
39
–
–
–
39
4,272
4,653
373
– 494
8,804
Equity and non-current
liabilities
2,989
4,363
40
– 358
7,034
Current liabilities
1,283
290
333
– 136
1,770
4,272
4,653
373
– 494
8,804
Segment Energy
Company Eneco
Segment Stedin
Segment Joulz
Eliminations and
non-allocated
Total
4,272
4,463
369
– 491
8,613
32
–
–
4,304
4,463
369
– 491
8,645
Equity and non-current
liabilities 1
2,832
4,212
50
– 337
6,757
Current liabilities
1,472
251
319
– 154
1,888
Total equity and liabilities 1
4,304
4,463
369
– 491
8,645
At 31 december 2012
Assets
Assets
Associates
Total assets
Liabilities
At 31 December 2011
Assets
Assets 1
Associates
Total assets 1
32
Liabilities
1
Other data by business segment
Segment
Energy
Company
Eneco
Segment
Stedin
Segment Joulz
Total
and intangible assets
329
374
9
712
Depreciation/amortisation of property, plant
and equipment and intangible assets
235
199
7
441
Segment
Energy
Company
Eneco
Segment
Stedin
Segment Joulz
Total
and intangible assets
342
388
7
737
Depreciation/amortisation of property, plant
and equipment and intangible assets
115
200
8
323
2012
2011
115
Revenues by country
Netherlands
Belgium
Other
Totaal
116
2012
2011
5,076
4,883
169
112
11
12
5,256
5,007
List of principal subsidiaries, joint ventures and associates
Subsidiaries
Name
AgroPower B.V. *
Seat
Delft
100%
Rotterdam
100%
Den Haag
100%
Utrecht
100%
Eneco B.V. *
Rotterdam
100%
Eneco België B.V. *
Rotterdam
100%
Eneco Business B.V. *
Rotterdam
100%
Eneco Energy Trade B.V. *
Rotterdam
100%
Eneco Gasspeicher B.V. *
Rotterdam
100%
Eneco Installatiebedrijven B.V. *
Rotterdam
100%
Eneco International B.V.
Rotterdam
100%
Eneco Retail B.V. *
Rotterdam
100%
Eneco Rozendaal B.V.
Rotterdam
100%
Eneco Solar, Bio & Hydro B.V. *
Rotterdam
100%
Eneco Strategic Assets B.V.
Rotterdam
100%
Eneco Supply B.V. *
Rotterdam
100%
Eneco Warmte & Koude B.V. *
Rotterdam
100%
Eneco Wind B.V. *
Rotterdam
100%
Waver (B)
100%
London (UK)
100%
Eneco Windmolens Offshore B.V.
Rotterdam
100%
Joulz B.V. *
Rotterdam
100%
N.V. Eneco Beheer *
Rotterdam
100%
Nike-Eneco-Solar N.V.
Laakdal (B)
100%
Offshore Windpark Q7 B.V.
IJmuiden
100%
Oxxio Nederland B.V. *
Leusden
100%
Capelle aan den
IJssel
100%
Stedin Netbeheer B.V. *
Rotterdam
100%
Windenergie Rijnkanaal B.V. (former name: Windpark Ecofactorij
B.V.)
Rotterdam
100%
Utrecht
100%
Windpark de Beemden B.V. (former name: Windpark Zwartenberg
B.V.)
Rotterdam
100%
Windpark De Graaf B.V.
Oosterhout
100%
Utrecht
100%
Windpark Martens B.V.
Oosterhout
100%
Windpark Martina Cornelia B.V.
Rotterdam
100%
Windpark Oudenstaart B.V.
Rotterdam
100%
Windpark Romerswaal B.V.
Rotterdam
100%
Windpark Sabina-Henricka B.V.
Rotterdam
100%
Utrecht
100%
Rotterdam
100%
BioEnergieCentrale Delfzijl B.V.
CityTec B.V. *
Ecofys Netherlands B.V.
Eneco Wind Belgium S.A. (former name: Air Energy S.A.)
Eneco Wind UK Ltd.
Stedin Meetbedrijf B.V. *
Windpark Afrikahaven B.V.
Windpark Logistiekweg B.V.
Windpark van Luna B.V.
Windpark van Pallandt B.V. *
Eneco Holding N.V. has issued a declaration of joint and several liability for the subsidiaries marked
with an *, pursuant to Section 403(1f), Part 9, Book 2 of the Dutch Civil Code.
117
Joint ventures
Name
Enecogen v.o.f.
Navitus Bay Development Limited
Warmtetransportbedrijf Amstelland Zuid-Amsterdam (WAZA) B.V.
Seat
Rotterdam
50%
London (UK)
50%
Rotterdam
39%
Associates
Name
Groene Energie Administratie B.V.
Seat
Rotterdam
30%
A full list of companies has been filed with the trade registry in Rotterdam pursuant to Section 379
of Part 9, Book 2 of the Dutch Civil Code.
118
Company income statement
x € 1 million
2012
2011
Share of profit of subsidiaries
266
242
Other results after income tax
– 33
– 38
233
204
119
Company balance sheet
Before appropriation of profit
x € 1 million
Note
At 31 december 2012
At 31 december 2011
7,240
6,977
Non-current assets
Financial assets
2
Current assets
Receivables from associates
173
150
Current income tax assets
28
–
Other receivables
32
–
96
124
329
274
7,569
7,251
Total current assets
Total assets
Equity
Share capital
497
497
Share premium
381
381
Revaluation reserve
903
945
Translation reserve
4
1
– 52
– 12
2,478
2,337
233
204
3
4,444
4,353
4
1,531
1,566
77
12
1,608
1,578
Retained earnings
Undistributed profit
Total equity
Non-current liabilities
Other liabilities
Total non-current liabilities
Current liabilities
Liabilities to associates
Current tax liabilities
208
5
1,289
1,266
–
13
20
36
Total current liabilities
1,517
1,320
7,569
7,251
Other liabilities
120
4
1.
Accounting policies
The company financial statements have been prepared in accordance with the provisions of Part 9,
Book 2 of the Dutch Civil Code, and the same accounting policies have been applied as in the
consolidated financial statements as permitted by Section 362(8), Part 9, Book 2 of the Dutch Civil
Code, except that subsidiaries are carried at net asset value. The descriptions of the activities and
structure of the enterprise as stated in the Notes to the consolidated financial statements also
apply to the company financial statements.
2.
Financial assets
At 1 January 2011
Other
receivables
Derivative
financial
instruments
Deferred
income tax
assets
Total
6,324
4,762
1,504
17
9
32
242
–
–
–
–
242
Adjustment fair value regulated networks
307
–
–
–
–
307
Movements in deferred tax assets
–1
–
–
–
–
–1
Movements in loans to subsidiaries
–
–
–
–
28
28
Movements in other loans
–
33
–
–
–
33
52
–
4
–
–
56
1
–
–
–
–
1
– 13
–
–
–
–
– 13
5,350
1,537
21
9
60
6,977
266
–
–
–
–
266
Movements in fair value of capital financial
instruments
Movements in non-controlling interests
At 31 December 2011
Movements in deferred tax assets
–
–
–
–
– 24
– 24
Movements in loans to subsidiaries
–
29
–
–
–
29
Movements in other loans
–
–
2
–
–
2
Movements in fair value of capital financial
instruments
3.
Subsidiaries
Receivables
from
subsidiaries
–3
–
–
–9
–
– 12
2
–
–
–
–
2
At 31 December 2012
5,615
1,566
23
–
36
7,240
Equity
Details of changes in equity are set out in the Consolidated statement of changes in equity in the
consolidated financial statements. The individual components of equity are disclosed in Note 24 24
(page 100)to the consolidated financial statements.
4.
Interest-bearing debt is mainly the private loans obtained from institutional investors as set out in
note 27 to the consolidated financial statements.
5.
Contingent assets and liabilities
Eneco Holding N.V. has issued a declaration of joint and several liability pursuant to Section 403(1)
(f), Part 9, Book 2 of the Dutch Civil Code for the principal subsidiaries marked with an * in the list
121
of subsidiaries, joint ventures and associates and those similarly indicated in the full list filed with
the trade registry in Rotterdam.
The company is acting as guarantor for the obligations that are related to the lease-and-leaseback
transactions as reported in Note 30 to the consolidated financial statements.
Eneco Holding N.V. and almost all its subsidiaries form a fiscal unity for corporate income tax
purposes. All companies in this fiscal unity are jointly and severally liable for the tax obligations of
the fiscal unity. Eneco Holding N.V. is also a member of a fiscal unity for VAT purposes, covering
part of the group. All companies in this fiscal unity are jointly and severally liable for the tax
obligations of the fiscal unity.
6.
Auditor's fees
The fees below were recognised in the 2012 income statements of the company and its subsidiaries
for audit and consultancy services by Eneco's external auditor, Deloitte Accountants B.V., as defined
in Section 1.1 of the Audit Firms Supervision Act (Wet toezicht accountantsorganisaties - Wta), and
include those charged by entities associated with the auditor in the Deloitte network.
x € 1.000
Audit of the financial statements
Other audit engagements
Other non-audit services
Total
2012
2011
862
1,138
1,507
896
246
331
2,615
2,365
The fee for the audit of the Eneco Holding N.V. financial statements included audit work on the
consolidated and company financial statements of this company.
Other audit engagements are the audit of the statutory financial statements of subsidiaries and
related engagements. Other non-audit services are those permitted by Wta as define and include
those charged by entities associated with the auditor in the Deloitte network. (2012: € 215,000
and 2011: € 309,000).
Eneco Holding N.V.
Board of Management
Supervisory Board
J.F. (Jeroen) de Haas, chairman
E.H.M. (Edo) van den Assem, chairman
C.J. (Kees-Jan) Rameau
C.P.G. (Kees) van Dongen
G.A.J. (Guido) Dubbeld
H.G. (Henk) Dijkgraaf
M.W.M. (Marc) van der Linden
J.G. (Joop) Drechsel
J. (John) Lintjer
M. (Mirjam) Sijmons
K.G. (Klaas) de Vries
122
Other information
1.
Events after the reporting date
See note 34 (page 112) to the consolidated financial statements for events after the reporting date.
2.
According to the company’s articles of association the Board of Management may, with the
approval of the Supervisory Board, increase the reserves by an amount equal to, at most, half of
the profit available for distribution. The remaining portion is at the disposal of the General
Shareholders’ Meeting. The General Shareholders’ Meeting can decide to distribute all or part of
the remaining portion. Undistributed profit is added to the reserves.
Proposal appropriation of the profit for 2012
At the time of publication of this annual report, a proposal for appropriation of the 2012 profit had
not yet been adopted.
3.
Independent auditor's report
To: The shareholders of Eneco Holding N.V.
Report on the financial statements
We have audited the accompanying financial statements 2012 of Eneco Holding N.V., Rotterdam.
The financial statements include the consolidated financial statements and the company financial
statements. The consolidated financial statements comprise the consolidated income statement,
the consolidated balance sheet as per December 31, 2012, the consolidated statement of
comprehensive income, the consolidated cash flow statement and the consolidated statement of
changes in equity for the year then ended, and notes, comprising a summary of the significant
accounting policies and other explanatory information. The company financial statements comprise
the company balance sheet as per December 31, 2012, the company income statement for the year
then ended and the notes, comprising a summary of the accounting policies and other explanatory
information.
Management's responsibility
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with International Financial Reporting Standards as adopted by the European Union
and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the Report of the
Board of Management, as included on page 2 through 66, in accordance with Part 9 of Book 2 of
the Dutch Civil Code. Furthermore management is responsible for such internal control as it
determines is necessary to enable the preparation of the financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This
requires that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness
123
of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion with respect to the consolidated financial statements
In our opinion, the consolidated financial statements give a true and fair view of the financial
position of Eneco Holding N.V. as per December 31, 2012 and of its result and its cashflows for
the year then ended in accordance with International Financial Reporting Standards as adopted by
the European Union and with Part 9 of Book 2 of the Dutch Civil Code.
Opinion with respect to the company financial statements
In our opinion, the company financial statements give a true and fair view of the financial position
of Eneco Holding N.V. as per December 31, 2012 and of its result for the year then ended in
accordance with Part 9 of Book 2 of the Dutch Civil Code.
Report on other legal and regulatory requirements
Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we
have no deficiencies to report as a result of our examination whether the Report of the Board of
Management, to the extent we can assess, has been prepared in accordance with Part 9 of Book
2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been
annexed. Further we report that the Report of the Board of Management, to the extent we can
assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch
Civil Code.
Rotterdam, March 1, 2013
Deloitte Accountants B.V.
Was signed
K.G. Auw Yang
124
Glossary
Allocation
COSO
The administrative determination of which portion of the
supplied energy will be charged to which supplier. It is not
possible to determine which supplier has supplied the energy
by means of metering (in the network or of the customer’s
meter). Allocation rules have been drawn up for the settlement
of supply and transmission costs. The allocation method has
been used since 1 January 2002.
A model for the establishment and maintenance of an internal
control structure.
Counterparty risk
The risk that a business with which an agreement has been
made cannot fulfil its (financial) obligations.
Covenant
Audit Committee
Agreement between different parties.
A committee comprising members of the Supervisory Board
which supervises the Company’s important financial matters.
Credit rating
Organic material originating from plants. The biomass used for
energy purposes comprises cultivated vegetation and waste.
This rating represents an assessment of the credit risk of an
organisation. The rating is determined by specialised agencies
that award ratings such as AAA, AA, A, BBB, etc. depending on
the creditworthiness of a company.
Business Review
Dark green
The periodical reporting to the Board of Management.
CO2 prices
Dark green energy is energy that is generated from new
sustainable resources which contributes to further enhancing
the sustainability of the energy supply. Examples of
sustainable resources include wind and solar energy and
biomass. Hydropower is usually not dark green, because this
form of energy generation already exists for quite some time
and therefore does not contribute to further enhancing the
sustainability of the energy supply. Dark green energy supplied
by Eneco includes energy generated by its own energy
production facilities and the sustainable production of partners
with which it has long-term Power Purchase Agereements
(PPAs).
Cost that industrial companies are required to pay for the
emission of CO2. The price is charged per ton.
Degree day
Biomass
Capacity tariff
The tariff whereby the costs of transmitting gas and electricity
charged by the grid administrator are not dependent on the
actual consumption but on the type of connection
CO2
Greenhouse gas which is regarded as one of the causes of
climate change.
CO2 rights
Rights that are allocated to industrial companies in Europe.
These rights correspond to the standard that has been set for
the emission of CO2. This standard was determined by the
European Committee. Companies which emit less CO2 by
investing in cleaner processes, can trade the CO2 rights which
they do not use on the CO2 market. Companies which have an
above standard emission are required to purchase additional
CO2 rights on the CO2 market.
A degree day is a calculation unit that is applied to exclude the
varying outdoor temperatuur from energy consumption
calculations.
Disputes Commission
Virtually all consumers’/households’ complaints can be put
before this Commission in The Hague. The decision of the
Commission is binding.
EFET
European Federation of Energy Traders.
Compliance
Complying with the rules laid down by legislation or by the
company and any supervisory bodies. Also used for
departments of companies or commodity exchanges that
ascertain whether trade is being conducted in accordance with
the regulations.
EFET or ISDA contracts
A (standard) framework contract under which trading partners
can close deals. Reciprocal guarantees, rights and obligations
as well as rules for calculation, or netting principles, are defined
in these framework contracts.
Company management in the broadest sense. The system of
responsibilities of all the parties (that can be) involved in the
management of a company, such as the Board of Management,
Supervisory Board, shareholders, banks and any other parties
which have provided capital to the company.
125
Energie Nederland
ISO
The branch organisation for all the companies in the
Netherlands active in the field of the generation, transmission
and trade in or supply of gas, electricity and/or heat. The
federation promotes the interests of the associated companies
and is the contact point for the authorities, politicians and
interest groups. EnergieNed carries out the dialogue with
these parties at a national and international level on behalf of
its members. www.energiened.nl.
Non-governmental organization established in 1947 to
promote international quality standards. ISO stands for
International Organisation for Standardization.
Energy Service Company (ESCO)
Lease-and-leaseback
A new form of contract with agreements relating to
guaranteed energy saving measures. Through ESCO's, Eneco
coordinates the entire chain of sales, advice, financing,
production, operation, warranty management and monitoring.
The leasing, for a fixed period of time, of property, plant and
equipment to foreign parties that are then leassed back from
the same parties for own use.
Kyoto protocol
The Kyoto protocol, or Kyoto Accord, was established in the
Japanese city of Kyoto in 1997 and regulates the reduction of
greenhouse gas emissions.
LTIR
Enterprise Risk Management (ERM)
The process of planning, organising, managing and controlling
the activities of an organisation to minimise the chances of
financial, strategic and operational risks.
Lost Time Injury Rate. This is the unit of measurement of the
safety performance of an organisation. It is calculated by
comparing the number of accidents resulting in absence per
one million hours with the actual number of productive hours.
Green gas
Margining and clearing
Gas that is generated from biomass and that is supplied at
natural gas quality.
The covering of a price or exchange rate risk of a particular
investment position.
Methods to neutralize reciprocal counter-party risks. In
margining the change in value of the underlying contracts is
revised and calculated financially against bank accounts
intended for this purpose on a regular basis (generally daily).
Clearing involves a similar process but then via a third party
appointed for this purpose – the so-called clearing member.
Imbalance
Marked-to-market value
Electricity imbalance occurs due to differences between
programmes submitted in advance and the actual consumption
or generation of electricity. TenneT corrects this and passes
the imbalance costs on to the company that caused the
imbalance.
Indicates the net present value of a contract or collection of
contracts.
In control statement
MWp
A declaration by the Board of Management stating that the
achievement of targets is being monitored, that the reporting
is reliable and that legislation and regulations are being
complied with.
Unit for electric power from solar energy.
Independent Network Management Act (Wet
Onafhankelijk Netbeheer, WON)
Net Promotor Score (NPS)
Hedging
The Independent Network Management Act (Wet
Onafhankelijk Netbeheer, WON) was passed in November
2006. This act stipulates that energy companies separate their
networks and the management thereof from their commercial
activities, and that the energy infrastructure remains in the
hands of the government.
MWe
Unit for electric power.
MWt
Unit for thermal power.
The degree to which customers recommend a supplier to
friends and acquaintances. The number is calculated by
subtracting the percentage of detractors from the percentage
of promoters.
Netbeheer Nederland
Dutch association that looks after the interests of national and
regional electricity and gas grid administrators.
Interconnection
126
The connection of the Dutch gas and electricity networks to
foreign networks for the importing and exporting of energy.
Operational Excellence
ISDA
Power Purchase Agreement (PPA)
International Swaps and Derivatives Association.
A long-term contract with a producer for the purchase of
electricity.
The strategy of optimising processes at the lowest costs.
Programme responsible parties
Swap constructions
Parties with programme responsibility match the demand for
electricity to the supply for the following day so as to prevent
underutilization/overloading of the transmission network and
contribute to the balance of the supply system. This is a
consequence of the statutory obligation of programme
responsibility applicable to everybody connected to the
electricity network.
Constructions whereby two parties take over each others
obligations/liabilities. Used in foreign currency trading to
indicate that it involves the discounted purchase or sale of
foreign currencies while, at the same time, a similar amount is
bought or sold via a foreign exchange forward contract.
TTF
The TTF (Title Transfer Facility) is a virtual trading point for gas.
Reconciliation
A system for calculating the planned and used quantities of
energy between the parties with programme responsibility.
Energy companies with programme responsibility must plan
the consumption of their customers for the following day and
submit this plan to the network manager. The companies base
their estimates on consumption profiles. Deviations from the
pattern cause imbalance and that incurs costs. Reconciliation
is the settlement of the difference between the expected and
actual consumption.
Remuneration Committee
Committee comprising members of the Supervisory Board that
is responsible for developing and monitoring the remuneration
policy for Board of Management members within the company.
Unbundling
The separation of the network company from the generating,
trading and supply activities of an energy concern.
x-factor
The Office of Energy Regulation, which is part of the Dutch
Competition Authority Nma, determines the so-called x-factor.
With this effectiveness stimulus the regulator aims to improve
the efficiency of the transmission companies, which are by
nature monopolists in their areas, by adjusting tariffs each
year. The x-factors indicate the percentage by which the
transmission tariffs will be reduced or may be increased.
ROACE
Return on Average Capital Employed. An important indicator
of the profitability of a company. Is calculated by subtracting a
25% tax ratio from the net result and dividing this number by
the average capital invested.
Rotterdam Climate Initiative (RCI)
The Rotterdam Climate Initiative is a platform for government,
institutions, companies and citizens to cooperate in reducing
the CO2 emission by 50% and strengthening the economy in
the Rotterdam area.
Shipping
The responsibility of everyone connected to the Dutch gas
network to plan the daily production, distribution and
consumption of gas. This planning must be submitted to the
national grid administrator in the form of programmes. The
supplier performs the shipping responsibility task on behalf of
the customer.
Sparkspread
The difference in development between the electricity prices
and the gas price, which determines the profitability of an
electricity plant.
Stimulation scheme sustainable energy generation (SDE)
Subsidy scheme effective since 2008 for producers of
sustainable energy.
Suppliers model
In the suppliers model the supplier is the only contact point for
the retail energy customer. In this model the supplier’s bill also
includes the costs of energy transmission.
127
Disclaimer
This annual report contains statements relating to the future. These statements can be recognised
by the use of wording such as ‘anticipated’, ‘expected’, ‘forecasts’, ‘intends’, and similar expressions.
Published by
Eneco Holding N.V.
Communication & Public Affairs
P.O. Box 1003
3000 BA Rotterdam
The Netherlands
Telephone: Int. + 31 (0)88 896 0312
www.eneco.com
Text and realisation
Bondt Communicatie
These statements are subject to risks and uncertainties and the actual results and events can differ
considerably from the current expectations. Factors that could lead to this include, but are not
confined to, the general economic situation, the situation in the markets in which Eneco Group
operates, the behaviour of customers, suppliers and competitors, technological developments and
legal provisions and stipulations of regulatory bodies that affect the activities of Eneco Group. Future
results could also be influenced by factors including, but not limited to, financial risks, such as foreign
currency risks, interest risks and liquidity and credit risks. Eneco Group does not accept any liability
or obligation related to the adjustment or revision of the current forecasts on the basis of new
information or future events or for any other reason.
All the photographs published in this annual report are copyrighted.
Design and project management
C&F Report Amsterdam B.V.
This annual report is only published on the Internet in Dutch-language and English-language
versions. In the case of any discrepancy between language versions, the Dutch version prevails.
Photography
Eneco
Eneco, Ecostroom, Toon, Zon&Zeker and Eneco Windstroom are registered trademarks of Eneco B.V.
Eneco Holding N.V.
P.O. Box 1003
3000 BA Rotterdam
e Netherlands
www.eneco.com

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