APERe
Association for the promotion of renewable energies
BBEMG
Belgian BioElectroMagnetic Group
BREEAM
BRE Environmental Assessment Method
BRUGEL
Brussels Electricty and Gas Regulation
CREG
Commission for Electricity and Gas Regulation
CWAPE
Commission Wallonne pour l’Energie
IBGE
Brussels Institute for Environmental Management
ICEDD
Institut de Conseil et d’Etudes pour le Développement Durable
ICNIRP
International Commission on Non-Ionizing Radiation Protection
OVAM
Openbare Vlaamse Afvalstoffenmaatschappij
SYNERGRID
Federation of Belgian System Operator for Electricity and Gas
VREG
Vlaamse Reguleringsinstantie voor de Electriciteits- en Gasmarkt
(Flemish Commission for Electricity and Gas Control)
CORESO
Technical Coordination Service Center within the Central Western European region
CWE
Central Western Europe
ENTSO-E
European Network of Transmission System Operators for Electricity
ITVC
Interim Tight Volume Coupling
ARP
Access responsible party
EMF
Electric and Magnetic Fields
GIS
Gas insulated Switchgear
PCB’s
Polychlorinated biphenyls
RUE
Rational Use of Energy
kWh
Kilowatt hour
MW
Megawatt
www.eliagroup.eu
www.elia.be
Table of content
www.50hertz.com
Head office Elia
Boulevard de l’Empereur 20, B-1000 Brussels
T +32 2 546 70 11 - F +32 2 546 70 10
info@elia.be
Contacts
Lise Mulpas, T +32 2 546 73 75
Axelle Pollet, T +32 2 546 75 11
Annual
Report 2011
Concept and editorial staff
Elia, department Communication
Graphic design and coordination
www.witvrouwen.be
Illustrations
Renaud Collin
Photos Elia
Alain Schroeder, Antonio Caliaro,
Benjamin Miesse, Danny Gys, Eric Figon, Eric Herchaft,
Guy Van Hooveld, Michel Vanden Eeckhoudt, Olivier Polet,
Wim Beddegenoodts, Photothèque Elia
A responsible company
serving its customers and the community
in Belgium and Germany
Photos 50Hertz
Jan Pauls, Andreas Teich, EnBW
Editor
Jacques Vandermeiren
MWh
Megawatt hour (=1.000 kWh)
gWh
Gigawatt hour (=1.000 MWh)
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Dieses Dokument ist auch auf Deutsch verfügbar.
kV
Kilovolt (=1.000 Volts)
Avril 2012
ELIA ANNUAL REPORT 2011
List of abbreviations
EXECUTIVE REPORT
Foreword*
Profile and values
Key events 2011*
Prospects and challenges 2012*
The Elia share in 2011
2
4
6
12
14
ECONOMIC REPORT
Grid operation
Infrastructure
Investments
The Elia grid in Belgium
The 50Hertz Transmission grid in Germany
Grid maintenance
Market operation
Preventive management of critical grid situations
Preparing for the future: research and development*
24
28
29
30
33
34
36
40
43
ENVIRONMENTAL REPORT
Environmental objectives and indicators
50
SOCIAL REPORT
Staff policy
Knowledge management
Employee safety and welfare
Corporate social responsibility Stakeholder relations
64
68
70
74
77
CORPORATE GOVERNANCE STATEMENT Composition of management bodies*
Significant events in 2011*
Remuneration of the Board of Directors
and Management Committee*
Features of the internal control and risk management systems*
Description of the risks and uncertainties facing the company*
92
96
101
FINANCIAL REPORT Consolidated financial statements IFRS*
Notes to the consolidated financial statements*
Joint auditors’ report on the consolidated financial statements
Regulatory framework and tariffs*
Information about the parent company*
108
113
154
156
160
GRI Index
Reporting parameters
161
163
*These chapters form the annual report cf. article 119 of the Belgian company code.
84
87
APERe
Association for the promotion of renewable energies
BBEMG
Belgian BioElectroMagnetic Group
BREEAM
BRE Environmental Assessment Method
BRUGEL
Brussels Electricty and Gas Regulation
CREG
Commission for Electricity and Gas Regulation
CWAPE
Commission Wallonne pour l’Energie
IBGE
Brussels Institute for Environmental Management
ICEDD
Institut de Conseil et d’Etudes pour le Développement Durable
ICNIRP
International Commission on Non-Ionizing Radiation Protection
OVAM
Openbare Vlaamse Afvalstoffenmaatschappij
SYNERGRID
Federation of Belgian System Operator for Electricity and Gas
VREG
Vlaamse Reguleringsinstantie voor de Electriciteits- en Gasmarkt
(Flemish Commission for Electricity and Gas Control)
CORESO
Technical Coordination Service Center within the Central Western European region
CWE
Central Western Europe
ENTSO-E
European Network of Transmission System Operators for Electricity
ITVC
Interim Tight Volume Coupling
ARP
Access responsible party
EMF
Electric and Magnetic Fields
GIS
Gas insulated Switchgear
PCB’s
Polychlorinated biphenyls
RUE
Rational Use of Energy
kWh
Kilowatt hour
MW
Megawatt
www.eliagroup.eu
www.elia.be
Table of content
www.50hertz.com
Head office Elia
Boulevard de l’Empereur 20, B-1000 Brussels
T +32 2 546 70 11 - F +32 2 546 70 10
info@elia.be
Contacts
Lise Mulpas, T +32 2 546 73 75
Axelle Pollet, T +32 2 546 75 11
Annual
Report 2011
Concept and editorial staff
Elia, department Communication
Graphic design and coordination
www.witvrouwen.be
Illustrations
Renaud Collin
Photos Elia
Alain Schroeder, Antonio Caliaro,
Benjamin Miesse, Danny Gys, Eric Figon, Eric Herchaft,
Guy Van Hooveld, Michel Vanden Eeckhoudt, Olivier Polet,
Wim Beddegenoodts, Photothèque Elia
A responsible company
serving its customers and the community
in Belgium and Germany
Photos 50Hertz
Jan Pauls, Andreas Teich, EnBW
Editor
Jacques Vandermeiren
MWh
Megawatt hour (=1.000 kWh)
gWh
Gigawatt hour (=1.000 MWh)
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Dieses Dokument ist auch auf Deutsch verfügbar.
kV
Kilovolt (=1.000 Volts)
April 2012
ELIA ANNUAL REPORT 2011
List of abbreviations
EXECUTIVE REPORT
Foreword*
Profile and values
Key events 2011*
Prospects and challenges 2012*
The Elia share in 2011
2
4
6
12
14
ECONOMIC REPORT
Grid operation
Infrastructure
Investments
The Elia grid in Belgium
The 50Hertz Transmission grid in Germany
Grid maintenance
Market operation
Preventive management of critical grid situations
Preparing for the future: research and development*
24
28
29
30
33
34
36
40
43
ENVIRONMENTAL REPORT
Environmental objectives and indicators
50
SOCIAL REPORT
Staff policy
Knowledge management
Employee safety and welfare
Corporate social responsibility Stakeholder relations
64
68
70
74
77
CORPORATE GOVERNANCE STATEMENT Composition of management bodies*
Significant events in 2011*
Remuneration of the Board of Directors
and Management Committee*
Features of the internal control and risk management systems*
Description of the risks and uncertainties facing the company*
92
96
101
FINANCIAL REPORT Consolidated financial statements IFRS*
Notes to the consolidated financial statements*
Joint auditors’ report on the consolidated financial statements
Regulatory framework and tariffs*
Information about the parent company*
108
113
154
156
160
GRI Index
Reporting parameters
163
165
*These chapters form the annual report cf. article 119 of the Belgian company code.
84
87
2˚50'
2˚40'
2˚30' E. Greenwich
3˚00'
3˚20'
3˚10'
3˚40'
3˚30'
4˚00'
3˚50'
4˚20'
4˚10'
4˚30'
4˚50'
4˚40'
5˚10'
5˚00'
5˚30'
5˚20'
6˚10'
6˚00'
5˚50'
5˚40'
6˚30'
6˚20'
6˚˚50'
6˚40
7˚00'
NAVAGNE
51˚30'
T HOR NT ONB ANK
B E R NE AU
LIXHE
13
2
Vis é
(S NC B )
S oignies
50˚30'
)
50
70
NOOR DL AND
ZANDVL IE T
P OW E R
E louges
(1 5
AME R C ΠU R
70(15 0)
0)
C E NT R AL E
MAR C INE L L E
P É R ONNE S
C iply HAR MIG NIE S
2
P âturages
B INC HE
15 0
B AS F
DAMP R E MY
Namur
- S NC B
2
Namur
S am bre
J E ME P P E S OL VAY
TERGNEE
L A P R AY E
F OU R
EKEREN
pp
3
4
5
6
e
+ 70
b lè
Y voir
(S NC B )
Dorinne
2
ACHÊNE
ACHÊNE
-SNCB
Hogne
(S NC B )
3d P
S tephans hof
T rois - P onts
Meu s e
e
e
Aarts elaar
Hatrival
- S NC B
P
150 +
70
0+
15
22
pompc entrale
Ou
VIL L E R OU X
windmolenpark
bes taand
in ontwerp
met produc tie injec tie
380kV
MERCATOR
380kV
220- 150kV
MOL E NB E E K
220- 150kV
70kV
Herbaimont
70kV
WATE R LOP E N
R ivieren en kanalen
K ontic h
MAZURES
1-1-2012
B AU L E R
F L E B OU R
Monc eau- en- Ardennes
W AAR L OOS
20
70 (2
F ays - les - Veneurs
)
L onglier (S NC B )
Se
m
49˚50'
Neufc hâteau
Orgeo
P E T R OC HIM
B U IS S E R E T
2
C HAMP - DE C OU R R IE R E
FE LUY
70
(1 5
0)
C has s art
12
S eneffe
L U ME S
G embloux
S ombreffe
V ie rr
VESLE
Marbais
(S NC B )
L iberc hies
o is
MAR C HE - L E Z- E C AU S S INNE S
R OOS T
GOUY
G OS S E L IE S
B AS C OU P
70(150)
Heppignies
(30) s ud
0)
T R IVIE R E S
70+ 3 0 (1
Arlon
AU VE L AIS
50)
FLE UR US
J umet
(1 5
70(150)
70
70(150
(1
50
)
C iply
P âturages
)
Anderlues
HAR MIG NIE S
C S MAR C INE L L E
2
DAMP R E MY
C AR AL
F OC
E s tinnes
0
15
49˚30'
0
+
0
MAL F AL IS E
1 : 150 000
HE IS DOR F
70
B E R T R ANG E
J E ME P P E S OL VAY
bbrere
Sa
S amm
70
(1
50
)
50 )
L A P R AY E
F AR C IE NNE S
1 : 1 000 000
Echelle
Schaal
S t- MAR D
- S NC B
P ONT - DE - L OU P
0
5
10
20
S t- MAR D
AUBANGE
L AT OU R
R OU VR OY
30 km
HE R S E R ANG E
Marc hienne
MOULAINE
F os s es - la- Ville
MONT IG NIE S
E S C H- S U R
- AL ZE T T E
MONT S t.MAR T IN
150 + 70
22
15
+
MONC E AU
L ANDR E S
2˚40' E. Greenwich
Grid Elia
2˚50'
3˚00'
3˚10'
3˚20'
3˚30'
3˚40'
3˚50'
4˚00'
4˚10'
4˚20'
4˚30'
4˚40'
4˚50'
5˚00'
5˚10'
5˚20'
5˚30'
5˚40'
5˚50'
Differd.
Arbed
OXY L U X
B elv. Arbed
B E L VAL
Situation au
S C HIF F L ANG E
stand op
1-1-2012
49˚30'
B INC HE
L A P R AY E
F OU R
F . DE F E R
B L ANC HIS S E R IE
C harleroi
70 (1
+
2
3dP
F ontaine
l’E vêque
0
G illy
C E NT R AL E
MAR C INE L L E
P E R ONNE S
150 + 70
B ous s u
E louges
70(150)
TERGNEE
AME R C ΠU R
70
70
P iéton
(S NC B )
15
lle
(1 5
se
70
Mo
70
0+
70
L a L ouvière
B onnert
Arlon
- S NC B
0)
15
0+
15
HE INS C H
P
)
J E MAP P E S
B OE L
LL
Villers - s /S emois
C hiny
S c hif.
VIGY
Institut Géographique National
6˚00'
6˚10'
6˚20'
6˚30'
6˚40'
Berlin
110
220
380 / 220 kV
HVDC/DC link
400 kV
Grid connection offshore
150 kV
Frankfurt (Oder)
Potsdam
TenneT
110
380+220
Magdeburg
System users :
Our customers include the regional distribution system operators as well as power
plants, pump storage plants, wind farms
and big industry connected to the transmission system.
Cottbus
Halle
Leipzig
110
Saxony
Legend
Dresden
Weimar
Switching Station (in large
part with tranErfurt
sition to distribution system operators)
Pump storage plant
As at : December 2011
planned / under construction
St-AMAND
L A C R OY E R E
B OE L T C C
B OE L HF
VIL L E /HAINE
Mons
COURCELLES
K eumiée
B OE L
F OU R
e
0
3d
0
50
1 5 0 +7
(1
150 + 70
+7
OB OU R G
P E T IT MAR AIS
16
70
B AU DOU R
15 0
150 + 70
49˚40'
AIR
L IQU IDE
C . S t- G HIS L AIN
70(150)
G HL IN
e tt
150 + 30
30(150)
Operating voltage ( kV )
PSE Operator
Poland
SaxonyAnhalt
Eisenach
Hesse
Wind power plant onshore / offshore
Marbehan
(S NC B )
Vierre
A lz
Mais ières
TE R TR E
220 kV
e
T R IE R
CENTRALE
SENEFFE
line
Brandenburg
Lower Saxony
under construction
S ûre
R es pelt
380 kV
Conventional power plant
( lignite- or hard-coal fired, nuclear
or gas turbine power plant )
NIE DE R S TE DE M
R ec ogne
line planned /
under construction
Grid connection offshore 150 kV
planned / under construction
S TATIONS
exis tant
en projet
Situation au
Stand op
r
380 kV
waterkrac htc entrale
(1) E lia déc line toute res pons abilité c onc ernant les données relatives aux ins tallations appartenant
à des tiers .
E lia wijs t alle verantwoordelijkheid af voor wat betreft data i.v.m. ins tallaties van derden.
B AS T OG NE
Hatrival
REVIN
LONNY
49˚50'
thermis c he c entrale in ontwerp
(2) S ont représ entées toutes les unités pour les quelles un c ontrat C IP U a été c onc lu avec E lia.
S taan op de kaart alle produc tie- eenheden waarvoor met E lia een C IP U c ontrac t is afges loten.
(C IP U = C ontrac t for Injec tion of P roduc tion U nits ).
Momignies
LINT
7
thermis c he c entrale
R ivières et c anaux
0 (2
Herbaimont
380 + 220
C himay
L IE R
S C HE L L E
kernc entrale
parc d' éoliennes
VIANDE N
S .E .O.
T ems e
P R ODUC TIE E E NHE DE N (2)
C OUR S D’E AU
P ondrôme
line
kabel eigendom van een derde (1)
3dP
c entrale hydraulique
F orrières
(S NC B )
Other companies
Other companies
parallele kabels
C ierreux
W AL G OE D
S C HE L L E DOR P
70kV
c entrale de pompage
C harneux
3dP
3d
150kV
P OS TE S
C ouvin
B erc hem (NMB S )
F ourmies
220kV
70kV
0)
C HOOZ
3dP
W ilrijk
ss
Hoboken
MERCATOR
rth
VIR E U X
MOR T S E L
220kV
150kV
c entrale nuc léaire
S ankt- Vith
[S aint- Vith]
380 / 220 kV
50˚00'
MHO
0
Amel
[Amblève]
3 x 220
1 x 380 + 2 x 150 (2 x 380 + 2 x 150)
380kV
2
MecklenburgWestern-Pomerania
3 x 150 (4 x 150)
3 x 150 + 1 x 70 (4 x 150)
Neubrandenburg
380 kV planned / under construction
1 x 220 + 2 x 70
ONDE R G R ONDS E K AB E LS
UNITE S DE P R ODUC TION (2)
Ame l
1 x 70 (4 x 150)
380kV
c âble appartenant à un tiers (1)
COO
70
(220)
MONT - L E Z- HOU F F AL IZE
OE L E G E M
P
3d
2 x 150 (4 x 150)
c âbles en parallèle
Holzwarc he
BRUME
Marc he- enF amenne
On
Meus e
2
3
W ilrijk IS VAG
B ütgenbac h
[B utgenbac h]
B uis s onville
R omedenne
NE U VIL L E
W OMME L G E M
2
S t.- P AU W E L S
2 x 150 + 2 x 70 (4 x 150)
13
14
15
16
17
18
50˚10'
2
3
3dP
P E T R OL
3 x 70
10 1 x 150 + 1 x 70 (2 x 150 + 1 x 70)
11 4 x 70
12 3 x 150
1 x 150 + 3 x 70 (4 x 150)
2 x 150 (2 x 380 + 2 x 150)
MAR C OU R T
Has tière
Le
ZU R E NB OR G
1 x 150 + 2 x 70 (3 x 150)
3 x 380 (4 x 380)
avec injec tion de produc tion
P L AT E - T AIL L E
Hoveniers tr.
4 x 150
x3
8
2
T abakves t
7
8
9
2 x 150 + 1 x 70 (3 x 150)
c he
ve
S oy
Ou
2
Moons tr.
S t.- Niklaas
C iney
- S NC B
Dinant
J AMIOL L E
Oever
B U R C HT
S amens tellingtabel van de lijnen
met meer dan 2 draads tellen:
c entrale thermique en projet
C iney
DAMP L E IN
B elliards tr.
B E VE R E N
3dP
C AB LE S S OUTE R R AINS
S pa
W ar
Miéc ret
ME R K S E M
ZW IJ NDR E C HT
3dP
P
3d
P
3d
s
aa
M
3d P
P
ile
lijn eigendom van een derde (1)
ligne appartenant à un tiers (1)
G ileppe
G
B R U ME
- S NC B
S C HE LDE LAAN
C . ZW IJ NDR E C HT
er
B ronrome
B omal
Hanzinelle
220+150
S olre- S t- G éry
B otermelk
uitbatings s panning lager
dan de c ons truc ties panning
0+
22
+ 36
150
NOOR DE R DOK K E N (NMB S )
F INA
ESSO
K AL L O
lijn met 2 draads tellen
van vers c hillende s panningen
70(150)
)
W arnant
C lermont
F roidc hapelle
9
150 + 70
38
36
T hy- le- C hâteau
BRABO
lignes à 2 ternes de
tens ions différentes
tens ion d’exploitation inférieure
à la tens ion de c ons truc tion
1
2
0 (2 x
+ 22
380
G erpinnes
0
T HU IL L IE S
OOR DE R E N
0)
0
38
s
aa
M
50)
7 0 (1
3dP
s
38 0
MASTAING
+1 5
150 +
S OL VAY
Mons anto
Degus s a
L IL L O
e
38 0+
1 : 150 000
in aanbouw of in ontwerp
2 de draads tel in aanbouw of in ontwerp
c entrale thermique
220
L obbes
- S NC B
7 e HAVE NDOK
K E T E NIS S E
150+70
T uron
S art- B ernard
(S NC B )
S ommière
50˚10'
Ve
e
dr
B everc é
F lorée
en c ons truc tion ou en projet
T ableau des c ompos itions des
lignes à plus de 2 ternes :
Heid- deG oreux
C omblain
es
Ves dre
P epins ter
- S NC B
H te S AR T E
W
2
G rands - Malades
B AY E R
50˚00'
70(150)
S tembert
P epins ter
50
+1
Am
B ois - deVillers
E UP E N
L es P lenes s es
S oiron
W ierde
MONT IG NIE S
G AR NS T OC K
P T - R E C HAIN
F loriffoux
F AR C IE NNE S
MONC E AU
Marc he- les - Dames
150+7 0
L obbes
DOEL
HE IMOL E N
3d P
70
+
0
15
)
(7 0
AU VE L AIS
FLE UR US
Andenne
(met referentienummer in
de s amens tellings tabel)
Schwerin
380 kV
50˚20'
50˚20'
G OS S E L IE S
2
2P
3d
5
GOUY
d’H eur
4
B AS C OU P
T R IVIÈ R E S
70
15
70
ZANDVLIET
+
S t- S ervais
L A C R OY È R E
V/HAINE
0
0
+7
0+
7
15 0
P E T IT MAR AIS
(1
)
0
0
50
15
22
0 +
B AU DOU R
(1
+
15 0 70
3dP
G HL IN
B AT T IC E
S tatte GRAMME
(S NC B )
S E IL L E S
CHAMPION
OB OU R G
220
RIMIERE
F IB E R
R OMS É E
W anze
COGNELEE
St-AMAND
COURCELLES
C L E R MONT
TIHANGE
W aret
12
FE LUY
CENTRALE SENEFFE
>2
4
50˚30'
38
Harc hies
70
2
P E T R OC HIM
C HAMP - DE C OU R R IÈ R E
Quevauc amps
1
2
2 e terne en c ons truc tion ou en projet
W elkenraedt (S NC B )
0
L E VAL
(C . S E R AING )
L euze
G embloux
15
Mons in
R OMS É E
- S NC B
L A T R OQU E
Ivoz
AW IR S
C roixC habot
4
HenriC hapelle
3d P
T humaid e
3dP
CHEVALET
NIVE L L E S
3
S E R AING
Ais c he- en- R efail
S auvenière
MAR C HE - L E ZÉ C AU S S INNE S
L ens
AIR L IQ.
TE R TR E
D
C HE R T AL
B R E S S OU X
J U P IL L E
3dP
2
0)
C HIÈ VR E S
VIE U X
G E NAP P E
B aulers
- S NC B
15 (70)
C OR B AIS
y le
(7
1
ANT OING
AVELIN
B aulers
B raine- le- C omte
- S NC B
Montzen
(S NC B )
0
F ooz
3dP
1
2
2
Güstrow
Hamburg
As at : December 2011
B raine- le- C .
G AU R AIN
C arrière
du Milieu
3d
er
nd
De
nd
re
50˚40'
W AT T INE S
T ournai
- S NC B
R onquières
15
3d P
S aives
12
70
C ourt- S t- É t.
B AIS Y - T HY
Ath
(S NC B )
t
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15
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80
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1
1
1
2
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2
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Hannut
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70kV
Aa nta l dra a ds tellen
(avec numéro de référenc e dans
le tableau des c ompos itions )
3
OIS QU E R C Q
150kV
1
B orgloon
3d P
T HIE U L AIN
B landain
MAR QU AIN 70(150)
L anden
J odoigne
Ottignies (S NC B )
B R AINE - L ’AL L E U D
C L AB E C Q
220kV
N ombre de ternes
B E R NE AU
B AS S E - W AVR E
W AT E R L OO
Hoves
380kV
220kV
50˚40'
+ 70
+
E nghien (S N C B )
[E dingen (NMB S )]
380kV
70kV
T ongeren
2
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50˚50'
15 0
0
Deux- Ac ren
70
Ors maal
S t.-GENES IUS -R ODE
[R HODE-S t-GENÈS E]
U itbatings s panning
150kV
HE R DE R E N
10
51˚10'
51˚00'
De
B U IZING E N
L anaken
220 kV
B OVE NG R ONDS E LIJ NE N
T ens ion d’exploitation
S AP P I
3dP
1 : 150 000
R ivage
(S NC B )
LIG NE S AE R IE NNE S
3d P
B R US TE M
L AB OR E L E C
MEKINGEN
DOT T IG NIE S
[DOT T E NIJ S ]
70(150)
B ilzen
Alken
S t.- T ruiden
F OR E S T
VOR S T
Herfelingen
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[R enaix]
MOU S C R ON
[MOE S K R OE N]
15
2
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P
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Sc
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MOE N AVELGEM
70
18
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DROGENBOS
16
Maas mec helen
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150(380)
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50˚50'
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L ANG E R L O
2
G ODS HE IDE
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3dP
51˚00'
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(NMB S )
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+
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3d
0
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Ourth
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3d P
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B ekaert
S T AL E N
P aals teens tr. C . L ANG E R L O
2
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15
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15
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2
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2 Oos t
70(150)
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1 5 0 +7 0
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Legend
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Zonhoven
W INK S E L E
W IL S E L E
K es s el- lo
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2
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MOL E NB E E K
(NMB S ) 0 )
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0
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7
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Amps inNeuville
0
W E VE L G E M
Dorenberg
B OIS
L ' IMAG E
15
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BRUEGEL
R OMS É E
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+
HE U L E
W OR T E G E M
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OBERZIER
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W IJ G MAAL
HOE NDE R VE LD
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(NMB S )
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3
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)
38
70
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P
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150 + 70
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11
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T E R L INDE N
ME R C HT E M
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2
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70(150)
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1 5 0 +7
1
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T is s elt
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S IDAL Duffel
70
3dP
S T ADE N
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(1
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G erdingen
MEERHOUT
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2
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70
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16
AW IR S
Hec htel
G eel/Oevel
7
BUGGENHOUT
P IT T E M
1 5 0 +7 0
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W illebroek
B aas rode
S t.- G IL L IS DE NDE R MONDE
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3dP
3d
B ornem
DR ONG E N
NY R S T AR
Nijlen
S C HE L L E
- DOR P
ZE L E
B AL E N
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Herentals
150
P
L OK E R E N
P AP IE R F AB R IE K
38 0 +
HE ZE
Ru
HAM
Overpelt
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MASSENHOVEN
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150
+70
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L A T R OQU E
L E VAL
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3d P
2
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2
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3d
G E NT R E C HT E R OE VE R
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T ems e
K E NNE DY L AAN
2
L ANG E R B R U G G E
HORTA R IN G V AAR T
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51˚10'
BAEKELAND
NEST
AAL T E R
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2
MOR T S E L
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16
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4
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P
S t.- J OB
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2
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36
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15
+
15
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2
380 + 150
2
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L IL L O
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B AY E R
B L AU W E T OR E N
R a vels
3d
P
3d
51˚20'
ZE E B R U G G E
R ijkevors el
B AS F
Energinet.dk
Denmark
51˚20'
NOOR DL AND
3
K oekhoven
B rec ht
FN
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3d P
0
K almthout
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P OW E R
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2
3d
49˚40'
Denmark
51˚30'
2
S oc olie
CBR
GEERTRUIDENBERG
B L IG HB ANK
Jena
Gera
220 kV
Chemnitz
Thuringia 380 kV
Zwickau
380 kV planned / under construction
ČEPS
Czech Republic
380 / 220 kV
Other companies
Bavaria
line
380 kV
line planned /
under construction
380 kV
TenneT
Nationaal Geografisch Instituut
6˚50'
Grid 50Hertz
ELIA GROUP 2011
EXECUTIVE REPORT
1
About this report
The employees of the Elia Group, which is located in the heart of the European electricity
market, work day and night to deliver high-quality electricity to homes, businesses and
industries in Belgium and Germany – and to ensure security of supply. Providing this
public utility service involves continually ensuring balance between energy produced and
consumed, proactively adapting grid infrastructure in order to facilitate the transition to green
energy and providing high-quality service at the best cost.
At a time when the European electricity system is evolving at an increasingly rapid pace, the Elia Group is fully
committed to playing a leading role by
harnessing and deploying creativity at
all levels, including in international cooperation, engineering, grid development,
system operation, market mechanisms
and consultancy.
This approach is based on actively
listening to our customers, regulators,
the political authorities and other system
operators. It underlies a fair balance between profit for shareholders, welfare for
people and preservation of the planet
- Profit, People, Planet. This difficult and
delicate balancing act is the only way to
guarantee long-term success in the light
of the major investments and innovation
that the Elia Group and the power grid
industry as a whole must deploy over
the next two decades.
There is no longer any doubt whatsoever that the energy challenges of the 21st
century will give rise to a technological
revolution – for power systems – whose
scope and consequences will far exceed the impact of market deregulation
begun 15 years ago.
The 2011 Annual Report looks at what
our 1,800 employees are doing in
Belgium and Germany in their ongoing
desire to meet the needs of our customers, develop our skills and take initiative.
Our goal – yesterday, today and tomorrow – is to help ensure a secure electricity supply, improve the competitiveness
of our businesses and the welfare of our
citizens, and deliver a fair return for our
shareholders.
For the third year in a row, this is part of
a GRI (Global Reporting Initiative) approach focusing on clarity and transparency.
1,800
The number of Elia Group
employees, in Belgium and
Germany, working around the
clock to ensure the security
and quality of the power supply
to the public and industry.
2
ELIA GROUP 2011
EXECUTIVE REPORT
Foreword by the Chairman
of the Board of Directors
Against the backdrop of the earthquake
in Japan, its terrible aftermath and signs
of instability in several Gulf countries,
questions – some of them fundamental
– have been asked about the energy
mix in a number of European countries,
including Germany and Belgium. This
questioning has been accompanied
by increased awareness of the major
role played by electricity transmission
system operators in ensuring that the
development of power generation facilities becomes a reality.
The already significant development
of variable renewable energies such
as wind and solar power sped up as
the EU and its Member States’ pledge
to combat climate change and global
warming, with the ultimate target of zero
CO2 emissions, was recently confirmed.
However, such renewable energy
sources are often located in geographic
areas with little or no industry, as in the
case of the major offshore wind farms
in northern Europe and the large-scale
photovoltaic plants to be constructed in
southern Europe and North Africa.
Therefore, new transmission facilities
must also be built to transmit the power
generated by those sources to major
consumption centres in the centre of the
continent. The variability of the energy
sources calls for very high flexibility (in
both directions) from other generation
facilities, and access to storage facilities.
No plans can be made for the develop-
ment of hydropower plants and, more
specifically, pumping stations without
first commissioning transmission infrastructure capable of transporting large
volumes of electricity all over Europe.
The transition towards these new energy sources also entails the complete
transformation of electricity systems
and, more specifically, the development
and management of power transmission
and distribution systems. The grids of
the future – whether offshore grids or
onshore electricity highways – have yet
to be developed, and specific aspects
of those grids have yet to be invented,
while their management will call for flexibility and a capacity for innovation and
creativity similar to that underpinning the
current electricity systems.
Since its creation in 2001, the Elia
Group – now one of the top five electricity transmission system operators in
Europe – has consciously established
itself as a leader. Its two core businesses, in Belgium and Germany, are at the
forefront of market development mechanisms and play a pioneering role in the
large-scale integration of wind power.
Owing to its knowledge and expertise,
the Group is ideally positioned to benefit
from the opportunities that such future
developments represent.
The Elia Group’s desire and capacity
to achieve its mission for its customers and the community at large can be
demonstrated by any number of factors,
not least: the extension of Elia’s mission
to include the operation of the offshore
grid in the North Sea; the stability and
visibility provided by the tariffs for the
2012-2015 period, approved by the
Belgian regulator; positive changes in
the German regulatory framework; and
the knowledge garnered by the Group
through its participation in the Atlantic
Wind Connection project to build the
first direct-current offshore grid along
the East Coast of the United States.
In this connection and on behalf of the
entire Board of Directors, I want to extend my thanks and appreciation for the
pioneering work carried out by Daniel
Dobbeni at the helm of the Elia Group,
culminating in its incorporation in the
BEL 20 index in March 2012, and to the
Presidency of the European Network
of Transmission System Operators for
Electricity (ENTSO-E). I would also like
to wish the same success to Jacques
Vandermeiren, who is due to take over
the reins from Daniel Dobbeni in the
second half of 2012.
Luc Van Nevel
Chairman of the Board of Directors
ELIA GROUP 2011
EXECUTIVE REPORT
3
Foreword by the Chairman
of the Management Committee
The past 10 years at our company have
seen a series of major developments,
leading to the construction of the Elia
Group as we know it today. Independent, impartial and dedicated to its
customers and the community, Elia has
two core businesses in Europe and is
firmly focused on the progress and opportunities provided by the development
of the European energy mix. The Group
derives extra strength from the cultural
diversity of both its staff and the environment in which it operates – a mixture
of European, national and regional
legislation, proven and prospective
technologies, maturity and renewal, and
the challenges of the future, which are
truly opportunities for each and every
one of us.
Since its establishment in June 2001,
Elia has developed into a thriving and
dynamic company, as evidenced by the
following milestones: its appointment
as the electricity transmission system
operator for Belgium and the entry of
Publi-T into our shareholding structure
(2002); its acquisition of the engineering company subsequently known
as Elia Engineering (2004); its listing
on the stock exchange, well received
by the markets (2005); the establishment of the Belpex power exchange
and market coupling between France,
Belgium and the Netherlands (2006);
the launch of the regional coordination
centre Coreso in collaboration with RTE
and National Grid (2009); its acquisition
of 50Hertz Transmission in cooperation
with its Australian financial partner IFM;
the start of market coupling with nine
countries (November 2010) using the
Cosmos algorithm developed by Belpex
and Elia; its acquisition of a stake in
the first project to build a direct-current
offshore grid along the East Coast of the
United States (2011). In addition to these
notable achievements, Elia’s tariffs are
among the lowest in Europe – proof,
if needed, that growth and efficiency
can be combined for the benefit of our
customers.
All these initiatives are the result of a
joint effort by every one of our employees, who work around the clock to
ensure the safe and secure operation
of the electricity system as well as its
development to meet the expectations
of our customers and the community.
They also reflect our commitment to
establishing a genuine internal electricity
market which is both competitive and
reliable, and our support for energy and
climate policies in Europe generally and
in Belgium, Germany and their respective regions in particular.
Our day-to-day activities to ensure the
safety of individuals and installations
include what many consider to be the
obvious – a constant and competitively
priced power supply of unparalleled
quality.
By encouraging our employees and
subcontractors to focus on this mission
at all times we have, over the years,
been able to establish ourselves as a
driving force in Europe.
Developing this role is a more important aim for us now than ever before:
over the coming decades, the energy
landscape in Europe – and electricity
grids in particular – will be completely
revolutionised. To help us cope with this
change, we intend to learn, innovate,
experiment and cooperate. The Atlantic
Wind Connection project demonstrates
our desire to anticipate change and to
get the Elia Group ready for action, for
the benefit of our customers and the
community at large in the countries
where we operate.
Our incorporation in the BEL 20 index in
March 2012 represents another opportunity for the Group and also underlines
the importance of our role and mission.
I am convinced it will provide us with the
means for continued growth through
the development of high-performance
offshore and onshore grids interconnecting generation and consumption.
Daniel Dobbeni
Chairman of the Management
Committee
4
ELIA GROUP 2011
EXECUTIVE REPORT
Elia Transmission
Elia Group
Business Development
Research & Development
50Hertz Transmission
Profile
The Elia Group is organised around its two major transmission system operators:
Elia in Belgium and 50Hertz Transmission in Germany.
Elia, the Belgian transmission system
operator, holds licences for its 380 kV to
150 kV national grid and for its 70 kV to
30 kV grids in Belgium’s three regions.
50Hertz Transmission, one of Germany’s four grid operators and active in
the northeast part of the country, is held
jointly by Elia (60%) and Industry Fund
Management (40%).
The Elia Group is one of the top five
transmission system operators in Europe and one of the top 15 in the world.
It actively sets an example in terms of its
independent outlook, of being a driving
force behind the development of the
European market, its commitment to
ensuring security of supply and contributing to the integration of renewable
energies.
It operates under the legal entity Elia
System Operator, a listed company
(with a public float of 52.10%) whose
core shareholder is Publi-T, a municipal
holding company. It has nearly 1,800
employees and helps ensure security
of supply for 30 million consumers in
Belgium and Germany.
Given its strategic position at the crossroads between electricity markets in
western, eastern and northern Europe,
the Elia Group securely manages imports, exports and transits of electrical
energy over its grids. It also plays a key
role in directly and indirectly integrating national markets in the shareholder
structure of APX-Belpex-Endex and
EPEX (power exchanges), CASC.EU and
EMCC (capacity auction offices), Gridlab
(a training centre) and Coreso (the
regional cross-border flow monitoring
centre). The Elia Group provides its customers and local authorities with a range
of consultancy and engineering services
driven by in-house skills and expertise
for very-high-voltage equipment, IT tools
designed specifically for managing grids
and market models.
The Elia Group is a driving force in the
construction of Europe’s future electricity superhighways (both offshore and
onshore) and is involved in multiple international projects. In 2011, it acquired
- via its subsidiary Eurogrid International
- a shareholding in the Atlantic Wind
Connection project to build the first
direct current offshore grid off the East
Coast of the United States. The expertise and skills acquired will be used to
design and develop future offshore grids
in the North Sea and the Baltic Sea to
connect major wind farms.
The Elia Group follows the rules on
corporate governance and the corporate governance codes applicable to
listed companies. Its approach incorporates respect for the environment and
supports specific sustainable development policies at European, national and
regional level.
Elia System Operator has been quoted
on the regulated Brussels Euronext
market since June 2005.
ELIA GROUP 2011
EXECUTIVE REPORT
5
Values
“We are a team of professionals with the ambition to create shared wins for our
customers and the community and to develop the European electricity market in a
reliable, sustainable and efficient way.”
This is the mission statement drawn
up by Elia in 2008 and intended to give
each and every employee in the company a clear view of our objectives and priorities. When reflected in the company’s
values, it communicates the framework
within which employees exercise and
develop their activities within the Group
and with respect to the outside world:
entrepreneurship, integrity, empathy and
responsibility.
Shared company values
Entrepreneurial, ethical, caring and responsible –
these values underpin how we conduct our business
and meet the Group’s objectives.
6
ELIA GROUP 2011
EXECUTIVE REPORT
Key events 2011
2011 was marked by a significant number of key events in both Belgium and Germany
relating to the markets, the development of our grids, technology and Group management
bodies.
13 JANUARY
EXTRAORDINARY GENERAL MEETING
APPROVES EXPANSION OF BOARD OF
DIRECTORS TO 14 DIRECTORS
22 MARCH
EUROPEAN COMMISSION OETTINGER
CELEBRATES MARKET COUPLING OF
9 COUNTRIES
To better respond to changes in Elia’s
activities and its shareholder structure, a proposal was made to expand
the Board of Directors from 12 to 14
members at an Extraordinary General
Meeting of shareholders. The motion
was passed.
Four months after the simultaneous
launch of price coupling in 5 countries
(CWE) and volume coupling with the
Scandinavian countries (ITVC) (covering generation capacity of 1,800 TWh
and some 60% of European consumption), the stakeholders met in Brussels
to celebrate this key stage which, as
European Energy Commission Oettinger
stressed, sets an example for all of
Europe. The following stages will involve
the transition to the flow-based model
and the extension to other countries.
17 FEBRUARY
COUPLING OF THE BELGIAN AND
DUTCH INTRADAY MARKETS
Elia and TenneT (the Belgian and Dutch
transmission system operators respectively) and the Belpex and APX-Endex
power exchanges introduced an implicit
intraday capacity allocation system at
the Belgian-Dutch border. This crossborder intraday market meets a real
need on the part of stakeholders who
want to continue trading electricity
practically up to real time, especially
given the integration of a growing share
of renewable energy.
13 APRIL
KING ALBERT II VISITS ELIA
King Albert II visited the Elia site on
Avenue de Vilvorde in the presence of
Energy Minister Paul Magnette. The
King, who is particularly interested in
energy issues, visited the National Control Centre and the Edison high-voltage
substation where demonstrations were
organised for him. He also met with
young Elia trainees.
23 APRIL
GRAMME-ACHÊNE 380 KV
CONNECTION RESTORED
The Gramme-Achêne 380 kV
connection, which was damaged
during the devastating storm on 14
July 2010 and temporarily replaced by
an emergency line, was restored a few
weeks earlier than planned thanks to
the committed efforts made by Elia and
contractors.
ELIA GROUP 2011
EXECUTIVE REPORT
7
Baltic 1 is the first German offshore wind
farm in the Baltic Sea and has been
connected to the 50Hertz onshore grid.
The farm was officially opened by German
Chancellor Angela Merkel.
29-30 APRIL
ELIA JOINS FORCES WITH
WETENSCHAPSEXPO SCIENCES
10 MAY
TWO NEW DIRECTORS APPROVED
BY ORDINARY GENERAL MEETING
17 JUNE
PILOT PROJECT ON
HIGH-TEMPERATURE CONDUCTORS
Expo Sciences, organised by Jeunesses
Scientifiques de Belgique and Jeugd,
Cultuur en Wetenschap, brings together
students from around the country. The
aim was to make even the youngest
schoolchildren more aware of sciences
and future careers in science. Elia
organised a special competition. The
Elia exhibit featured a mock-up, learning
materials and expert explanations
giving young people a chance to learn
about the many activities and career
opportunities at Elia.
OF SHAREHOLDERS
IN GÜSTROW
The Ordinary General Meeting of
Shareholders approved the appointment of two new directors, Miriam
Maes (independent director) and Steve
Stevaert (further to a proposal by core
shareholder Publi-T). It also approved
the motion to renew the directorships of
the 14 directors and the appointment of
the auditors.
50Hertz began practical experiments on
the latest generation of high-temperature
conductors used to transmit bigger
capacities of current, in the Güstrow
high-voltage substation pilot project in
Mecklenburg-Pomerania. The results are
promising for deploying this technology
in the 50Hertz grid in response to rising
loads.
30 APRIL
ANGELA MERKEL INAUGURATES
BALTIC 1
German Chancellor Angela Merkel
inaugurated Germany’s first commercial
offshore wind farm. Baltic 1 is located in
the Baltic Sea, 16 km from the coastline,
and is connected to the 50Hertz grid. It
comprises 21 wind turbines with a total
capacity of 50 MW. With this project,
the Elia Group deployed the expertise
– unique in Europe – that will contribute
significantly to future developments in
the North Sea and Baltic Sea.
16 JUNE
GREENING TRANSPORTATION
INFRASTRUCTURE FOR ELECTRIC
VEHICLES LAUNCHED
The Greening Transportation Infrastructure for Electric Vehicles project,
sponsored by the European Union via
the TEN-T (Trans-European Transport
Network) plan, was launched in Copenhagen. Elia is part of a consortium
which includes Austrian TSO Verbund,
industrial partners, public services and
ONGs. Objective: study the options and
conditions for developing the infrastructure needed to support the sustainable
use of electric vehicles.
JUNE
EUROPEAN BACKING FOR ELIA’S
LIFE+ PROJECT
The European Commission agreed to
subsidise for five years the LIFE+ project
to manage woodland corridors around
high-voltage lines in an environmentally sustainable way while respecting
biodiversity. This innovative pilot project,
which is also supported by the Walloon
Region authorities, will be expanded to
European scale by sharing knowledge
with other European transmission system operators, i.e. a potential of around
300,000 km of green corridors.
8
ELIA GROUP 2011
EXECUTIVE REPORT
EU Energy Commissioner Günther
H. Oettinger officially opens the new
50Hertz control centre in Neuenhagen.
The centre is fitted out with state-ofthe-art technology to ensure safe and
secure grid management.
27 JUNE
INAUGURATION OF THE NEW 50HERTZ
CONTROL CENTRE IN NEUENHAGEN
28 JUNE
DANIEL DOBBENI APPOINTED
CHAIRMAN OF ENTSO-E FOR
17 AUGUST
FIRST HELIBORNE OPERATIONS
ON LIVE LINES
50Hertz’s entire very-high-voltage grid
in northern and eastern Germany is
managed from its new, super-modern
control centre in Neuenhagen, near Berlin. The inauguration of this extremely
safe and secure control centre was
attended by European Energy Commissioner Günther H. Oettinger and the
State Secretary at the Federal Ministry
for Economy and Technology, Jochen
Homann.
The centre plays a critical role in
integrating large volumes of renewable
energy.
A SECOND TWO-YEAR TERM
Heliborne operations on a live 380 kV
line were carried out for the first time
in Belgium on the Achêne-Lonny line.
The main benefit was that the line could
remain in service during the work. This
is critically important given the major
flows of energy that transit over the Elia
grid. The purpose of the pilot project
was to assess the feasibility of carrying
out other heliborne operations on live
lines in the future.
ENTSO-E, the European Network of
Transmission System Operators for
Electricity, represents the 41 operators of a grid comprising more than
300,000 km of overhead lines in 34 interconnected countries and over which
electricity flows freely, from Portugal to
Bulgaria and from Norway to Italy. The
grid forms the foundation for the internal
electricity market because it enables
supply across Europe, promotes
competition between suppliers and it
enhances security of supply. ENTSO-E
is responsible for drafting grid codes
and the Ten-Year Network Development
Plan for the Europe-wide transmission
system.
22 JULY
PARTICIPATION IN
ATLANTIC WIND CONNECTION
Elia acquired - via Eurogrid International
- a shareholding in the Atlantic Wind
Connection project to develop the first
direct current high-voltage offshore grid
off the East Coast of the United States.
In so doing, Elia has joined forces with
Google, Marubeni, Good Energies and
Atlantic Grid Development. Elia also
signed a long-term consultancy contract
with the project developer.
26 AUGUST
PHILIP HEYLEN JOINS ELIA BOARD OF
DIRECTORS
Following the resignation of Johan De
Roo, who had sat on the Elia Board
of Directors since 2001 on behalf of
Publi-T, the Elia Board approved the
appointment of Philip Heylen further to
a proposal by core shareholder Publi-T.
Philipe Heylen is the alderman for culture and tourism for the city of Antwerp.
ELIA GROUP 2011
EXECUTIVE REPORT
9
Live maintenance work: this
pilot project is paving the way
for alternative maintenance
methods no longer requiring
decommissioning.
LATE AUGUST
VISION OF AN OFFSHORE GRID
IN THE NORTH SEA
Elia published its future vision of the
development of an offshore grid in the
North Sea. The concept was developed
in consultation with the developers of
wind farms off the Belgian coast and is
based on the step-by-step development
of an offshore grid offering benefits
comparable to the onshore grid in terms
of reliability thanks to its meshed structure, optimised investment and lower
number of subsea cables running to the
coast and connecting it to the onshore
grid.
31 AUGUST
50HERTZ ORGANISES 4th SECURITY
OF SUPPLY CONFERENCE
Nearly 200 representatives of the
electricity industry, universities and associations met in Cottbus to attend the
conference organised by 50Hertz on
measures in order to safeguard security
of operation in the light of the evolution
of the energy sector, specifically the
ongoing development of renewables.
The conference was held against the
backdrop of the consequences of Germany’s moratorium on closing down its
nuclear power facilities.
13 SEPTEMBER
PUBLIC CONSULTATION FOR STEVIN
The public consultation on the regional land-use plan for the Stevin
project (upgrading the 380 kV grid
between Zomergem and Zeebrugge)
was organised at the initiative of the
Flemish government’s Spatial Planning
department. The plan was provisionally
passed by the Flemish government. Elia
will organise information sessions for all
towns involved.
22 SEPTEMBER
CREG CONSULTS ON DRAFT
TARIFF METHODOLOGY
CREG launched a consultation on its
draft decrees establishing calculation
methods and tariff conditions for connecting to and accessing the grid for
transmission purposes.
30 SEPTEMBER
AGREEMENT ON ELEANORE
COOPERATION
3E, Alstom Grid, CG, CMI, DEME Blue
Energy, Eurogrid International (in which
Elia holds 60% and IFM 40%) and SAG
joined forces within the Eleanore project
to jointly develop, operate and finance
targeted projects in the North Sea, the
Baltic Sea, the Celtic Sea and the Irish
Sea.
1 OCTOBER
INTERNATIONAL COOPERATION IN
SYSTEM OPERATION AND CONTROL
In October 2011, the Netzregelverbund
cooperative venture in grid management and control was launched with
a test involving Danish transmission
system operator Energinet.dk. Netzregelverbund aims to optimise the use of
control energy while avoiding instances
of activation in opposite directions in
two zones. Following positive results
in Germany, the initiative can now be
implemented across national borders.
10
ELIA GROUP 2011
EXECUTIVE REPORT
14 OCTOBER
RENEWABLE ENERGY SURCHARGE
FORECAST BY GERMAN TSOS
20 OCTOBER
CONTRACT WITH SAUDI ELECTRICITY
COMPANY
13 NOVEMBER
FEDERAL DEVELOPMENT PLAN
FOR 2010-2020 APPROVED
In coordination with German regulator
Bundesnetzagentur, 50Hertz and the
three other German transmission system operators published their forecasts
for the EEG renewable energy surcharge
(as per Germany’s Renewable Energy
Sources Act) for 2012. Forecast injections of renewable energy will result in
a surcharge of approximately €15 billion
for Germany. The surcharge, payable
by end consumers to support renewable energy, will be 3.592 cents/kWh,
slightly higher than in 2011 (3.530 cents
per kWh).
A consortium comprising Elia, RTE
International and Tractebel Engineering
signed a framework contract with Saudi
Electricity Company (SEC) to provide
engineering consultancy services for
the SEC Transmission division. These
services encompass asset management and asset maintenance services,
maintenance practices, asset performance management practices, grid
system analysis practices and training
practices.
The 2010-2020 federal development
plan for the transmission system submitted by Elia was approved by Energy
Minister Paul Magnette. It was accompanied by an environmental impact
assessment and was subject to a broad
public consultation.
10 NOVEMBER
RGI IN FAVOUR OF SUSTAINABLE
GRID DEVELOPMENT
System operators and environmental
protection associations have joined
forces in the Renewables Grid Initiative
(of which the Elia Group is a founding member) to sustainably upgrade
electricity systems in preparation for
the wholesale integration of renewable
energy. To that end, they jointly submitted the “European Grid Declaration on
Electricity Network Development and
Nature Conservation in Europe” to the
European Energy Commissioner.
17 NOVEMBER
ALBERTO POTOTSCHNIG,
DIRECTOR OF ACER, ATTENDS ELIA
CUSTOMER DAY
Every year, Elia organises a Customer
Day where it focuses on informing customers, enhancing dialogue with them
and intensifying exchanges on issues of
interest to them. Two discussion panels
led to especially valuable exchanges
with André Pictoel, head of VREG,
Alberto Potoschnig, head of the Agency
for the Cooperation of Energy Regulators (ACER) and Dominique Woitrin,
Technical Director at CREG.
ELIA GROUP 2011
EXECUTIVE REPORT
11
Alberto Pototschnig, Director
of the Agency for the Cooperation
of Energy Regulators (ACER), takes
part in a discussion panel at the Elia
Customer Day.
24 NOVEMBER
JACQUES VANDERMEIREN FUTURE
CEO OF ELIA
DECEMBER
50HERTZ TIGHTLY CONFINED
FOLLOWING GERMAN MORATORIUM
On 24 November the Elia Board of
Directors approved the appointment of
Jacques Vandermeiren, Chief Corporate Officer and Vice-Chairman of the
Management Committee, as the future
general manager and chairman of the
Elia Management Committee. In the
second half of 2012, Jacques Vandermeiren will succeed Daniel Dobbeni,
who will continue to guide and support
the Group’s European and international
growth.
ON NUCLEAR ENERGY
30 NOVEMBER
50HERTZ FULLY COMPLIES
WITH ENTSO-E COMPLIANCE TEST
Following a two-day Compliance
Monitoring audit carried out by ENTSOE at the 50Hertz control centre to test
whether procedures comply with the
standards defined in the Operation
Handbook of the European Network
of Transmission System Operators for
Electricity, the German transmission
system operator was declared to be
100% compliant. This was the second
time 50Hertz passed the test, after being the first TSO to be audited in 2008.
The German government’s decision
to shut down eight nuclear reactors in
March 2011 and to gradually phase out
the remaining sites over the next 10
years has significant repercussions on
the operation of the German and European transmission system. The German
TSOs, including 50Hertz, were faced
with a drastic reduction in their room
for manoeuvre, especially during the
winter months. All steps had to be taken
– enhanced coordination, appropriate
operating methods, postponement of
maintenance works, market-level work
and suspension of generation unit overhauls – in order to ensure the stability of
the transmission system and security of
supply.
22 DECEMBER
APPROVAL OF TARIFFS FOR 2012-2015
In Belgium, the Commission for Electricity and Gas Regulation (CREG) approved the proposal submitted by Elia
in accordance with the CREG rules on
electricity transmission tariffs for the
period from 2012 to 2015 (inclusive). The
tariffs were drawn up following consultation between the regulator and Elia in
order to send appropriate tariff signals
to the market players, for both injection
and offtake, and to meet the company’s
needs in terms of pursuing its mission.
12
ELIA GROUP 2011
EXECUTIVE REPORT
Daniel Dobbeni will hand over
the reins as CEO of Elia to
Jacques Vandermeiren at the
end of Q1 2012.
Prospects and challenges 2012
The Elia Group is preparing for the challenges of the future by implementing a series
of initiatives relating to both system operation or market integration and the development
of new activities or the acquisition of new skills.
Elia plans to develop a
genuine meshed offshore
grid in the North Sea.
Tariffs for 2012-2015
The electricity transmission tariffs for
the period from 2012 to 2015 were approved by CREG in late December 2011.
They send appropriate tariff signals to
the market players, bearing in mind an
increase in costs explained by external
factors (inflation over four years, drop
in income from transmission capacity auctions involving neighbouring
countries, increase in control energy
needs due to the growth in intermittent
energy sources). This is accompanied
by performance incentives for efficiency
and replacement investments for Elia in
order to maintain the quality of supply
provided to our customers.
Future vision for an offshore
grid in the North Sea
The transposition into Belgian law of the
‘third package’ of European directives
aimed at developing a single electricity market expanded Elia’s scope for
involvement into the development of an
offshore grid in the North Sea. Elia had
anticipated the decision by publishing
its vision for developing the first offshore
grid in the North Sea offering benefits
comparable to the onshore grid in terms
of reliability. It also presented a cost/
benefit ratio that is more beneficial than
individual connections for each wind
farm by reducing the number of subsea
cables to the coast and enabling better
integration with other infrastructure
projects off the Belgian coast.
This concept, developed in consultation with the developers of wind farms
off the Belgian coast, is currently
being discussed with all of the project
stakeholders with a view to specifically defining the construction of two
offshore platforms and the connection
of future wind farms in question as well
as the financial and legal framework for
this major project at both Belgian and
European level.
Ongoing cooperation with
Elia subsidiary 50Hertz
Transmission
The Group’s priorities for 2012, in collaboration with financial partner IFM, are
to continue the successful cooperation
and the exchanges of expertise seen in
2011, intensify bonds between teams,
define a joint mission and deploy all
efforts to ensure the Elia Group is in the
lead group of European TSOs in terms
of independence, innovation and commitment to building the transmission
system of tomorrow.
ELIA GROUP 2011
EXECUTIVE REPORT
13
This project involves the construction of the first offshore
grid along the East Coast of the United States.
Maintaining grid security:
a growing challenge
Integration of the European
electricity market
International initiatives:
Atlantic Wind Connection
Rising energy exchanges between
transmission systems in different countries following market liberalisation and
fluctuating energy flows on transmission grids due to the growing share of
renewable energy sources were already
major challenges to secure network
operation.
Efforts to ensure security of supply
were further complicated by the drop in
generation capacity due to the German
government’s decision to shut down its
eight oldest nuclear reactors, as well as
decisions by Germany, Switzerland and
Belgium to decommission their nuclear
facilities over the next two decades,
while the construction of large production units is being postponed year after
year. The Elia Group is particularly vigilant in this respect and helps to coordinate the activities of European TSOs. In
this respect, it promoted the option of
having its own storage and generating
resources to cover its reserve energy
needs. While this provision was not
included in the law passed in December
2011, Elia will continue to defend it.
The Elia Group will continue its activities
begun in 2006, when Belpex was created and trilateral market coupling was
launched, to create a true European
electricity market. The Group’s activities
in 2012 will be guided by the implementation of the flow-based mechanism
within the North-West regional market,
the continued development of crossborder intraday markets and the active
contribution to the production of framework guidelines from the European
Commission.
Eurogrid International, in which Elia
holds a 60% stake, acquired a shareholding in the Atlantic Wind Connection
project to develop the first high-voltage
direct current offshore grid off the East
Coast of the United States, thus joining
forces with Google, Marubeni, Good
Energies and Atlantic Grid Development.
The decision to include the project in
the portfolio of PJM (a regional transmission organisation) could emerge in
2012-2013, moving the project into the
concrete realisation phase.
New interconnections
Transition in the Group
leadership
The Elia Group aims to lead the way in
developing infrastructure to ensure security of supply and the competitiveness
of European companies. Examples:
the interconnection between the grids
operated by Elia in Belgium and National
Grid in the UK, the direct current interconnection between the Elia grid and
the Amprion grid in Germany to create
a pilot project for the development and
implementation of future European
superhighways, the interconnection with
Poland, the enhancement of interconnections with countries neighbouring
Elia in Belgium and 50Hertz in northern
and eastern Germany.
When it approved in November 2011 the
appointment of Jacques Vandermeiren,
Chief Corporate Officer and Vice-Chairman of the Management Committee, as
the future Chief Executive Officer and
Chairman of the Elia Management Committee, the Board of Directors defined
the conditions governing the optimum
succession for all parties concerned by
the success of the Elia Group. Jacques
Vandermeiren will, in the second half
of 2012, succeed Daniel Dobbeni, who
will continue to make his experience
available to the company and support
the Group’s European and international
development, especially within the decision-making bodies of its subsidiaries.
14
ELIA GROUP 2011
EXECUTIVE REPORT
The Elia share in 2011
Overall, 2011 was a volatile and negative year for stock market indexes, mainly due to
the crisis of confidence in the euro. However, the Elia share has continued to perform well.
Now that the company is resolutely European in scope, the Group’s risk profile
improved significantly, contributing
to share stability throughout the year.
With the exception of a brief upsurge
to €32.33 in late May (following the
announcement of Germany’s moratorium on nuclear power stations) and a
brief drop to €27 in early August (first
peak in the euro crisis), the share acted
defensively. It should also be noted that
the payment of a dividend of €1.40 on
25 May 2011 did not have an impact on
the share price.
The liquidity of the share rose by 64%
(from 23,096 shares per day to 37,972
shares per day on average), whereas
it had grown by 115% in 2010. This is
mainly due to the increase in the public
float.
The lowest price in 2011 was €26.50
on 9 August 2011 and the highest price
was reached on 31 May at €32.33.
Overall, in 2011 the Elia share outperformed the BEL 20 index by 23.63%.
In fact the BEL 20 was down 19.2%.
The Elia share ended 2010 at €28.66.
The price at the end of 2011 was
€29.93, up 4.43%. If the dividend of
€1.40 is taken into account, the share
price rose 9.32% during the year.
PRICE AND EXCHANGE VOLUME TRENDS IN 2011
■ Price
Price (€)
■ Volume
Volume (’000)
32
200
180
31
160
140
30
120
100
29
80
60
28
40
20
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
OCT
NOV
DEC
0
ELIA GROUP 2011
EXECUTIVE REPORT
ELIA SHARE TRENDS COMPARED
WITH THE BEL20 INDEX IN 2011
■ Elia ■ Bel20
115
110
105
100
95
90
85
80
75
70
JAN
FEB
MAR
APR
MAY
JUN
ELIA SHARE TRENDS COMPARED
WITH ITS PEERS IN EUROPE IN 2011
JUL
AUG
SEPT
OCT
NOV
DEC
■ Elia ■ Tema ■ Red Electrica ■ National Grid ■ DJ Utility index
125
115
105
100
95
85
75
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
OCT
NOV
DEC
15
16
ELIA GROUP 2011
EXECUTIVE REPORT
The Elia share has been performing
well compared to other listed system operators
since early 2008.
With the exception of UK system
operator National Grid (up 13.2%),
Elia’s results were better than those
of its listed counterparts: Spain’s Red
Electrica (down 6.07%) and Italy’s Terna
(down 17.6%). By way of comparison,
the electricity sector as a whole was
down 19.85% in 2011 (see previous
Month
Volume
table). The Elia share has been performing well compared to other listed system
operators since early 2008.
With 60,355,217 shares issued, the
market capitalisation represented
€1,806,431,645 at the end of December.
In 2011, 9,758,889 Elia shares in all were
Closing
price
(daily average)
Price
traded on the Euronext Brussels market,
i.e. 35.9% of the freely tradable shares.
The table below gives an overview of
the monthly statistics for the Elia share
on Euronext Brussels in 2011.
Freefloat
turnover
Market
capitalisation
Highest
Lowest
Rate
In € m
January
27,476
29.17
29.60
28.67
2.12
1,761
February
30,604
28.46
29.20
28.27
2.25
1,718
March
50,698
28.79
29.25
27.72
4.29
1,738
April
19,194
29.95
29.95
28.80
1.34
1,808
May
46,837
32.33
32.33
28.92
3.79
1,951
June
31,733
29.45
31.91
28.54
2,57
1,777
July
17,731
28.50
29.30
28.50
1.37
1,720
August
34,180
30.45
30.45
26.50
2.89
1,834
September
59,516
30.38
30.98
28.60
4.82
1,771
October
66,998
29.35
30.59
29.00
5.18
1,771
November
49,375
29.35
29.81
28.22
4.00
1,771
December
16,642
29.93
29.93
28.30
1.29
1,806
37,972
29.93
32.33
26.50
35.93
1,806
Year-to-date
ELIA GROUP 2011
EXECUTIVE REPORT
The Elia share is certified
by several institutions for
corporate social responsibility.
Appointment of two liquidity
providers for the Elia share
A sustainable and socially
responsible company
In late 2009 Elia concluded a liquidity
provider contract with KBC Securities
and Banque Degroof, both of which are
officially recognised by NYSE Euronext.
These two financial institutions have
been continually present in the order
book for the Elia share since 1 December 2009 and are involved in both sales
and purchases.
Elia was rated by Vigeo, an extrafinancial agency which analyses every
company in six areas:
• relations with customers/suppliers;
• human rights;
• environmental policy;
• external social policy;
• corporate governance;
• human resources.
The Elia share and its codes
The Elia share is also included in Kempen’s SNS SRI Universe and ASN Bank.
SHARE INDEX
On 31 December 2011, Elia’s share was
included in the BEL Mid index. Elia’s
weight on that date was 7.23%, ranking
it fourth in the index.
Elia was also certified by ECPI, a ratings company specialising in corporate
social responsibility (ESG (Environmental, Social & Governance) research) and
obtained the ECPI Ethical EMU Equity
label.
Elia share
on the market
Elia strips
on the market
Euronext Brussels
Euronext Brussels
Index
BEL MID
-
Ticker
ELI
ELIS
BE 0003822393
BE 0005597688
Code Bloomberg
ELI BB
ELI BB
Reuters code
ELI BR
ELI BR
Market
ISIN
17
18
ELIA GROUP 2011
EXECUTIVE REPORT
SHAREHOLDER STRUCTURE
Shares
% Shares
% Votings rights
27,383,507
45.37
45.37
Publipart
1,526,756
2.53
2.53
Arco Group
5,306,880
8.79
8.79
Other free float
26,138,074
43.31
43.31
60,355,217
100.00
100.00
Publi-T
Total
Transparency
regulations and
disclosure of interests
Under Belgian legislation on transparency, shareholdings of at least 5% (or
a multiple of 5%) must be reported to
FSMA and to the company in question.
No transparency reports were sent to
Elia in 2011.
Shareholder structure
The shareholder structure of Elia System
Operator SA as at 31 December 2011 is
given above.
Dividend
On 28 February 2012, the Elia Board
of Directors decided to propose at the
general meeting of shareholders of
15 May 2012, in accordance with the
dividend policy and subject to approval
of the profit appropriation by the annual
general meeting of shareholders, a
normal dividend of €88,7 million or €1.47
per share (gross). This gives a net result
of €1,1025 per share without VVPR strip
and €1,1613 per share with VVPR strip.
The following paying agents will pay out
dividends to shareholders: Fortis Bank,
ING Belgium, KBC-Bank/CBC Banque
and Dexia Bank. Dividend payouts for
shares held in a stock account will be
settled automatically by the bank or
stockbroker. Elia will pay out dividends
on registered shares directly to shareholders.
ELIA GROUP 2011
EXECUTIVE REPORT
Dividend policy
Investors
Elia is obliged by its articles of association to pay out at least 85% of profit
gained, after retaining 5% for the legal
reserve. This represents a payout ratio
of 81% of recorded profit.
For any questions regarding the Elia
share, please contact:
Following the introduction of multi-year
tariffs, part of the net profit derived from
offsetting decommissioning gains in the
tariffs must be reserved under equity.
As a result, the overall payout ratio fell
slightly but this situation enhanced Elia’s
(self-)financing capacity.
Elia
Investor Relations Department
Boulevard de l’Empereur 20
B-1000 Brussels
Belgium
Tel.: +32 2 546 72 39
Fax: +32 2 546 71 80
E-mail: bert.maes@elia.be
Information about the Group (press
releases, annual reports, share prices,
disclosures, etc.) can be found on
the Elia website www.elia.be in three
languages (French, Dutch and English).
Elia’s financial newsletter Investor News
provides investors with up-to-date information about the company. Just sign
up on the website to receive it electronically.
Financial calendar
29 february 2012 (8 a.m.)
Early April 2012
15 May 2012
15 May 2012
Late May 2012
31 August 2012 (8 a.m.)
15 November 2012 19
Publication of the 2011 annual results
Availability of the 2011 annual report
General meeting of shareholders
Interim statement for Q1 2012
Payment of 2011 dividend (coupon nr. 7)
Publication of half-yearly results for 2012
Interim statement for Q3 2012
ELIA GROUP 2011
ECONOMIC REPORT
01
Economic
report
In the face of the challenges posed by changes in
the energy mix, the Elia Group – organised around
its two TSO activities, Elia Transmission in Belgium
and 50Hertz Transmission – is pursuing its role as a
leading player in the sector in Europe by taking a raft of
initiatives aimed at the integration of electricity markets
and of renewable energy sources and at security of
supply for its customers and the community.
21
22
ELIA 2010
ECONOMIC REPORT
We have added another mechanism,
not to cut costs this time, but rather to maximise
the expenditure providing the best return for
consumers. The aim is to encourage Elia to draw
up an investment budget for the maintenance
it undertook to carry out, with a focus on highquality power supply – and hence on consumers’
best interests.
Guido Camps
DIRECTOR FOR PRICING AND ACCOUNT CONTROL, CREG
“The ‘cost +’ tariff method we are
applying is generally accepted by all
regulators. The aim of the first incentive
mechanism, applied during the 20082011 period, was to cut operational expenditure (OPEX) based on the premise
that monopoly companies naturally tend
to overspend.
Providing incentives
for sound business
management
“In the case of monopoly companies,
i.e. companies with no competition, the
regulator ensures that consumers get
the best possible service at the best
possible price. In other words, it has to
see to it that the company’s outlay really
suits the consumer. In this context, we
believe that the introduction of incentive
mechanisms could contribute to sound
business management.
To that end, a target was set to reduce
OPEX and pass on the first €25 million of
savings to consumers and the next €25
million to the company.
That target was reached, and we can
safely say that both parties – the regulator and the regulated company – are
satisfied.
“For the 2012-2015 tariff period, we will
continue to apply the ‘cost +’ method
and have retained the first mechanism on the same grounds as before.
However, we have also added another
mechanism, not to cut costs this time,
but rather to maximise the expenditure
providing the best return for consumers.
“What kind of expenditure, you may
ask? Grid infrastructure, has a very long
lifespan. It represents the most significant cost factor in terms of investment,
finance, amortisation and maintenance.
With this in mind, we introduced the new
incentive to encourage Elia to realise the
maintenance investments it undertook
to carry out, with a focus on high-quality
power supply – and hence on consumers’ best interests.
“To round off, I should point out that this
mechanism is the result of an agreement
between Elia and the regulator.”
ELIA GROUP 2011
ECONOMIC REPORT
23
Hans-Peter Erbring
MANAGER RESPONSIBLE FOR OPERATING THE 50HERTZ ELECTRICITY SYSTEM
With some 41% of wind power generation capacity
in Germany installed within our control area, 50Hertz can
justifiably be considered the ‘European champion’ of integrating
renewables. On windy days, more than 9,700 MW of wind are
injected into our control area.
“As a power transmission system
operator responsible for managing
the electricity system in northern and
eastern Germany, 50Hertz has unique
experience in integrating power generated from renewable energy sources.
With some 41% of wind power generation capacity in Germany installed
within our control area, 50Hertz can
justifiably be considered the ‘European
champion’ of integrating renewables.
Exchanges with neighbouring countries are intensifying and constantly
changing based on the ever-increasing
volumes of renewable energy.
On windy days, more than 9,700 MW of
wind power – equivalent to the electricity generated by nine nuclear power
stations – are injected into our control
area. When demand in our area is low,
this energy (which is given priority in
line with European directives) must
be safely transported to south-east
Germany. One of the many roles of
the control centre is to ensure safe
transmission in real time, a task made
even more challenging by the gradual
closure of nuclear power stations. The
number of critical situations on the grid
and measures taken to resolve them
has grown considerably.”
James Matthys-Donnadieu
HEAD OF THE EUROPEAN MARKET INTEGRATION DEPARTMENT
Intraday markets are becoming increasingly important for
the technical and economical operation of the electricity system
due to the growth in power generation from more variable
renewable energy sources.
“Intraday markets are a tool used by
market players to buy and sell electricity in the space of a given day, ideally
at any time and as close as possible to
physical delivery. This enables them to
balance their generation and consumption portfolios at the lowest possible
cost, based on (unforeseen) variations
due to weather – in the case of wind
power, for example – or the breakdown
of a particular generation unit. Intraday
markets are becoming increasingly
important due to the growth in power
generation from more variable renew-
able energy sources such as wind or
solar power.
The cross-border intergration of Member States’ electricity market, through
the transmission capacities, allows market players to access larger volumes of
electricity at competitive prices with a
view to balancing their portfolios.
The Belgian and Dutch intraday markets
have been successfully integrated since
February 2011. In March 2012, this integration will be extended to all Scandi-
navian countries via the interconnection
cable between the Netherlands and
Norway. Belgian electricity suppliers will
immediately benefit from an integrated
intraday market running from Belgium
to Finland.
“The integration of intraday markets
from the whole of North West Europe is
scheduled for late 2012.”
24
ELIA GROUP 2011
ECONOMIC REPORT
Belgium emerges, year on year, as one of
the best countries in Europe in terms of quality
of electricity supply.
Grid operation
The Elia Group’s grids are part of the European continental interconnected system
running from Portugal to Bulgaria and from Norway to Italy.
The Belgian and German control centres maintain an instantaneous balance between
generation and consumption and manage energy flows in close collaboration with the
transmission system operators from neighbouring countries.
A number of factors are radically changing the centres’ role, leading to a need
for increasingly sophisticated tools and
skills:
•
•
•
•
increasing exchanges of energy
between national electrical systems
following market liberalisation;
the variability of energy flows on the
transmission systems due to the
growing share of energy generated
by renewable, and intermittent,
sources (especially wind energy and
photovoltaic panels);
the reduction of generation capacity following the German government’s decision in March 2011, in
the wake of events at Fukushima, to
shut down its eight oldest nuclear
reactors (with a generation capacity
of some 8,000 MW, or more than
two-thirds of total consumption in
Belgium);
Germany, Switzerland and Belgium’s
decision to abandon nuclear energy
in the next two decades;
•
•
the growing share of energy generated by generation units connected
to the distribution systems that do
not contribute to management of the
electrical system;
the postponement, year after year,
of construction of large generation
units due to the difficulties involved
in obtaining permits and the uncertainties associated for example with
the financial and economic crisis.
Against this fast-changing backdrop,
the Elia Group in cooperation with the
operators of the interconnected grids is
developing new skills and tools:
•
ithin a few months, 50Hertz and
w
its three fellow German TSOs have
used a wide range of means to deal
with the reduction in voltage regulation tools in certain geographical
areas and to increase transmission
capacities including, when necessary, cancellation of maintenance
work, with a view to optimising the
stability of the electrical system and
security of supply;
•
•
•
Elia, coordinating with the FPS Energy and the Federal Crisis Centre,
has set out coordinated measures
that will be taken in the event of a
power shortage;
an intraday adjustment mechanism,
enabling the market players to align
their level of generation with their
customers’ consumption throughout
the day, was introduced in collaboration with Dutch TSO TenneT and
the Belgian power exchange Belpex
and its Dutch counterpart APXEndex;
on the initiative of Elia and the
Coreso coordination centre, the
phase-shifting transformers of
Amprion in Germany, TenneT in the
Netherlands and Elia are managed in
a coordinated way so as to shore up
the commercial capacities allocated
to the market players and increase
security of supply.
However, these measures, some of
which are temporary in nature, are no
substitute for the new generation and
transmission facilities units required
in Belgium and Germany to cover the
demand for electricity.
ELIA GROUP 2011
ECONOMIC REPORT
2’19’’
Spread across all customers,
the average duration of
interruptions was 2 minutes
and 19 seconds per customer
(Average Interruption Time).
Security of supply
Security of supply in Belgium remained
at a high level in 2011. The average
number of interruptions on the Elia grid
per consumer (Average Interruption
Frequency) was 0.0903, equivalent to
one interruption per customer every
7.8 years.
The average duration of interruptions
was 25 minutes and 44 seconds.
Spread across all customers, the
average duration of interruptions was
2 minutes and 19 seconds per customer
(Average Interruption Time1), equivalent to an average availability of more
than 99.999%, which is higher than the
average for the last decade. Belgium
thereby emerges, year on year, as one of
the best countries in Europe in terms of
quality of electricity supply.
In Germany, the integration of an even
higher proportion of renewable energy
was the main challenge for operational
security. Special measures, stipulated
by German legislation (Article 13 of the
Energy Industry Act (EnWG)), had to
be applied more frequently because of
critical situations due to extensive renewable generation (wind and photovoltaic
energy). At least one of these measures
had to be applied for some 213 days of
the year. Thanks to close cooperation
between 50Hertz Transmission and the
other stakeholders in the electricity system and the expertise of the team at the
control centre, no incidents or interruptions of supply were recorded in 2011.
25
Consumption
Electricity consumption as recorded on
Elia’s transmission system is a good
indicator of economic life. It has been
scrutinised very closely since the start
of the economic crisis in October 2008,
not only by the Elia Group, but also by
external observers in search of signs of
an economic recovery in Europe.
1 The AIT is an indicator that can vary widely from year to year
depending on the location and complexity of the incidents and
the time at which they occur. Customers may experience very
different power interruptions. As the number of incidents entailing
interruptions is very limited, the annual overall figures cannot really
be considered as valid statistics on which to base conclusions about
the observed trends
Security of supply
Thanks to close cooperation between 50Hertz
Transmission and the other stakeholders in the
electricity system and the expertise of the team
at the control centre, no incidents or interruptions
of supply were recorded in 2011.
26
ELIA GROUP 2011
ECONOMIC REPORT
CONSUMPTION INDICATOR
■ 2008 ■ 2009 ■ 2010 ■ 2011
GWh
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
OCT
NOV
DEC
Consumption indicator
Consumption peaks
Imports and exports
In Belgium, the consumption indicator2
for the Elia control area fell by 3.7%, from
86.6 TWh in 2010 to 83.4 TWh in 2011.
On an annual basis, this consumption
indicator reached its highest value in
2005 (89.5 TWh).
In Belgium, the maximum consumption on
the Elia grid in 2011 was 13,208 MW, recorded between 5.45 p.m. and 6 p.m. on
11 January 2011. This is 5.9% lower than
the all-time record, set on 17 December
2007 (14,033 MW) and 4.6% lower than
the maximum value recorded in 2010
(13,845 MW on 1 December 2010).
In 2011, the import trend of the Belgian
control area became more marked, with a
balance of 2.61 TWh, after 2010 had seen
a net import balance of 0.55 TWh.
The rising import trend recorded until
2008, which was reversed in 2009 due
in particular to the economic crisis, was
picked up again in 2010.
Physical exchanges of electricity with
neighbouring countries via the Elia grid
totalled 23.92 TWh in 2011 – down 1.3%
from 24.24 TWh in 2010. The increase
in imports (up 7.0%) went on in 2011,
mainly from France (up 128.0%), while
exports decreased (down 10.1%), mainly
to France (down 56.9%).
The monthly values recorded in 2011
were down from the equivalent months
in 2010, but were up on the equivalent
months in 2009, except for September
and October.
Overall, consumption in 2011 was 0.5%
lower than in 2010 for industrial customers connected directly to the Elia grid,
and 5.1% lower for industrial, business
and residential customers of the distribution system operators.
2 The
Elia consumption indicator covers most of the electricity
consumption in Belgium. It includes all the generation capacity
connected to the Elia grid, and the import-export balance. The
share of consumption provided directly by the generation facilities
connected to the distribution grids is not included in the indicator.
The lowest consumption (6,232 MW)
was recorded between 6.15 a.m. and
6.30 a.m. on 24 July 2011. This annual
low was 0.7% lower than the minimum
value in 2010 (6,278 MW on 25 July
2010).
In Germany, the maximum load in the
50Hertz control area was 10,162 MW or
2,890 MW lower than in 2010.
50Hertz imported 16.3 TWh of electricity
in 2011 (17.8 TWh in 2010), mainly from
the Czech Republic and TenneT Germany, and exported 34.4 TWh (29.4 TWh
in 2010), mainly to Poland and TenneT
Germany. As a result, net exports of
electricity were up 56% from 11.6 TWh to
18.1 TWh.
ELIA GROUP 2011
ECONOMIC REPORT
27
IMPORTS AND EXPORTS – ELIA GROUP (per month)
(GWh)
(GWh)
(GWh)
Change (%)
Change (%)
2011
2010
2009
2011-10
2011-09
Elia System Operator
France
import
export
7,221
2,330
3,167
5,409
1,832
6,642
128.0
-56.9
294.2
-64.9
Netherlands
import
export
4,514
7,004
7,383
5,313
5,787
3,769
-38.9
31.8
-22.0
85.8
Luxembourg
import
export
1,532
1,318
1,846
1,122
1,868
910
-17.0
17.5
-18.0
44.9
Total
import
export
13,267
10,652
12,395
11,844
9,486
11,322
7.0%
-10.1%
39.9%
-5.9%
Balance
Exp-Imp
Exp+Imp
-2,615
23,919
-552
24,239
1,835
20,808
374.1%
-1.3%
-242.5%
15.0%
50Hertz Transmission
Poland
import
export
432
5,136
167
5,331
134
5,616
61
-4
69
-9
Czech Republic
import
export
1,705
1,850
2,922
494
2,314
914
-71
73
-36
51
Denmark
import
export
2,087
1,238
691
2,742
1,284
1,800
67
-122
38
-45
TenneT GmbH
import
export
12,113
26,180
14,067
20,874
13,301
22,498
-16
20
-10
14
Net offtake from the grid
Net offtake is a measure of the volumes
of energy taken from the Elia grid. In the
case of local generation, some or all of
the power generated is consumed directly
on the site of the industrial customer or
distribution system operator. The level of
local generation was significantly higher
than in 2010 (up 6.4%).
Since energy generated and consumed
locally is not drawn from the Elia grid, it is
not counted as part of the net offtake, although it is included in the domestic consumption indicator. In 2011, net offtakes
were 4.4% down on 2010, from 76,390
TWh in 2010 to 73,052 TWh in 2011.
In 2011 a net volume of 59 TWh was
drawn off from the 50Hertz grid. The net
offtake of electricity was 6.3% lower than
during the same period last year (63 TWh).
The maximum offtake within the 50Hertz
grid was 10,162 MW in 2011. This is 28%
less than the maximum offtake in 2010
(14,058 MW), a result of additional decentralised generation, mainly wind and solar,
connected to distribution grids.
Balancing generation and
consumption to meet the
needs of the market
Balancing generation and consumption
is primarily the responsibility of market
players, in particular Access Responsible
Parties (ARPs). ARPs are expected to
ensure the best possible balance between
their supply sources and their customers’
consumption. To this end, each ARP
must inform Elia, one day ahead, of all
the energy exchanges it will perform, on a
quarter-hourly basis for each point on the
grid. This applies to injections and offtakes,
exchanges between ARPs, imports and
exports. The residual imbalance for the
Belgian control area is offset in real time by
Elia using energy reserves available under
contract with generators and industrial
customers in Belgium.
In Belgium, the volume of energy activated
by Elia to ensure the balance of the control
area was 1,092 GWh in 2011, as opposed
to 844 GWh the year before.
The control power needed to offset
the difference between generation and
consumption in the 50Hertz control
area amounted to 1,383 GWh in 2011,
compared with 1,703 GWh in 2010.
28
ELIA GROUP 2011
ECONOMIC REPORT
Infrastructure
LENGTH OF THE HIGH-VOLTAGE GRID AT 1-1-2012
Voltage (kV)
Elia
Underground cables (km)
Overhead lines (km)
Total (km)
2012
2011
2012
2011
2012
2011
380
-
-
891
891
891
891
220
5
-
297
297
302
297
150
433
427
2,007
2,008
2,440
2,435
70
280
280
2,381
2,382
2,661
2,662
36
1,921
1,927
8
8
1,929
1,935
30
127
141
22
22
149
163
2,766
2,765
5,606
5,614
8,372
8,379
2012
2011
2012
2011
2012
2011
55
55
6,830
6,830
6,885
6,885
AC 220
3
3
2,862
2,862
2,865
2,865
AC 150
75
-
-
-
75
-
DC 400
15
15
-
-
15
15
150
73
9,690
9,690
9,840
9,765
2
2
13
23
15
25
150
75
9,705
9,715
9,855
9,790
Total Elia
50Hertz
AC 380
Transmission grid
AC 110
Total 50Hertz
The figures do not include networks
not owned by Elia.
For the overhead lines, the figures
shown are geographical lengths, i.e. the
sum of the geographical lengths of the
overhead lines (whether or not they were
in operation) that are given in the table.
Parallel circuits are counted only once.
For the underground cables, the figures
shown are electrical lengths, i.e. the
sum of the lengths of the connecting
circuits in operation which are given in
the table. Parallel circuits are counted
only once.
Note the emergence of 220-kV underground cables for connecting up a
customer facility whereas previously
overhead lines were systematically used
for this voltage. This reflects the development of technology.
The total length of the network of underground cables has decreased, after
some connections were put in reserve.
ELIA GROUP 2011
ECONOMIC REPORT
Each infrastructure project is based on criteria
relating to the reliability, economic efficiency and
sustainability of the proposed options.
Investments
Investments by the Elia Group in its transmission systems are driven by
various factors.
The need to meet the connection and
upgrade requirements of industrial
customers and distribution system operators, to cope with changing demand
in terms of both volume and localisation
of energy drawn, to replace facilities at
the end of their service life or bring them
in line with environmental requirements,
to contribute to the liberalisation of the
market, and to promote the integration
of renewable energy sources. Each
infrastructure project is based on criteria
relating to the reliability, economic
efficiency and sustainability of the proposed options.
29
30
ELIA GROUP 2011
ECONOMIC REPORT
The Elia grid in Belgium
20
More than 20 projects to
connect up new industrial
customers or modify existing
connections were studied
from a technical and economic
perspective in 2011.
Connections requested by
industrial customers
More than 20 projects to connect up
new industrial customers or modify
existing connections were studied from
a technical and economic perspective
in 2011.
Elia has also used underground cables
to put in place an electrical connection
to the new 220-kV high-voltage substation at Berneau on behalf of Fluxys
(operator of the natural gas transmission
system). This connection was established on a loop of the existing LixheJupille line.
In the case of the GlaxoSmithKline
site at Wavre, 36 kV connections were
laid between Louvain-la-Neuve and
Basse-Wavre, on the one hand, and
the customer’s site, on the other, to
enable the initial phase of the scheduled load increase. At a subsequent
stage, a 150 kV connection will upgrade
the Basse-Wavre substation, using a
150/36 kV transformer.
Grid upgrades to keep up
with electricity consumption
About ten projects to upgrade the transformation capacity to medium voltage
or extend the medium-voltage facilities
were launched in 2011 to deal with
an increase in consumption in some
distribution systems. Examples are the
36 kV Destelbergen and 70 kV Recogne
facilities.
Facility replacement
programme
In 2011, Elia continued to implement its
programme to renovate its facilities, allowing it to maintain the high level of reliability it offers its customers. Examples
include the replacement of 36 kV
facilities in the Botanique high-voltage
substation in Brussels and a number
of other projects such as the replacement of a 36/12 kV transformer in the
Wichelen substation.
Integration of decentralised
and/or onshore renewable
energy generation
Elia, in close collaboration with the distribution system operators, conducted a
number of studies enabling the safe integration of decentralised generation or
renewable energy generation at minimal
cost for the community.
Significant achievements in this regard
in 2011 were the renovation of the
high-voltage substation at Monceau-enArdennes with a view to connecting up
local generation in the area and the 150kV injection project at Rijkevorsel making use of a new 150 kV underground
connection at a branch point on the
existing Massenhoven – Sint-Job line.
Projects falling outside
current investment plans
The very high winds that hit Wallonia on
14 July 2010 caused a lot of damage,
and the Elia transmission system was
no exception.
The night following the storm Elia put in
place a temporary back-up solution to
supply the town of Dinant. Within a few
days, Elia also implemented a 380 kV
back-up line to restore the France-Belgium interconnection and established a
back-up supply for the Tihange nuclear
power plant’s ancillary services.
ELIA GROUP 2011
ECONOMIC REPORT
31
Final version of the development plan
The final version of the plan is the culmination of a process including
an impact assessment and consultation of the general public, the
Federal Council for Sustainable Development (FRDO/CFDD), the SEA
Advisory Committee (of the Federal Public Service Health, Food Chain
Safety and Environment), the authorities and the regulators.
The various components of the grid
that had been damaged were subsequently repaired or replaced and work
on reconstructing the final damaged line
was completed on 6 July 2011. Thanks
to the commitment of Elia’s staff and
subcontractors, all these activities were
carried out without causing any delays
to the works scheduled at the start of
the year.
Stevin: extension of the
380 kV grid to the coast
Through the Stevin project, involving a
380 kV line between Zomergem and
Zeebrugge, Elia wants to achieve four
objectives: to connect up the second
phase of offshore wind farms off the
Belgian coast; to connect up many
decentralised renewable energy generation units; to create a subsea interconnection between the Belgian and UK
grids; and to enhance security of supply
in West Flanders, and in particular
around the port of Zeebrugge.
International projects
Interconnection with Germany: ALEGrO project
The studies conducted in 2011 confirmed the advantageous nature of a DC connection between the German
and Belgian grids, which will be a first in the Central
West Europe region. The project, which has been given
the name ‘ALEGrO’ (Aachen Liège Electric Grid Overlay), will consist of a very high voltage DC cable (with
power of 1,000 MW to 1,600 MW) running for around
100 km between the Lixhe substation in Belgium and
the Oberzier substation in Germany. In 2011, Elia and
transmission system operator Amprion decided to
launch the initial phase with a view to laying down the
technical aspects and to starting up the authorisation
procedures. Commissioning of ALEGrO is planned by
2017.
Interconnection with France
The studies launched in 2010 by Elia and French
transmission system operator RTE and as part of the
10-year ENTSO-E development plan will lead to an
upgrade of the transmission capacity between Belgium
and France by 2018-2020. Therefore, a feasibility study
was started to assess the impact on security of supply, electricity market integration and renewable energy
integration. This phase will conclude with a concrete
investment proposal based on the results of a cost/
benefit analysis.
32
ELIA GROUP 2011
ECONOMIC REPORT
The direct-current subsea link
will be connected on both sides
of the English Channel to AC/DC
conversion stations.
International projects
Interconnection with the UK: the Nemo project
Elia and National Grid have continued their joint works aimed at creating a subsea DC
connection, of some 130 km in length, between their grids with a view to increasing market
liquidity and enhancing security of supply in both the UK and Belgium. The DC connection
comprises two separate cables (one with a positive voltage, and the other with a negative
voltage). The two ends are connected to a high-voltage substation, a converter station for DC/
AC conversion and connection to the existing 380 kV onshore grids. The actual conversion will
be carried out by power electronic semiconductor components. The connection will have a
capacity of between 700 MW and 1,300 MW, depending on the findings of the ongoing study.
While the technical study was completed in 2011, significant steps were also taken in defining
the regulatory framework following, for example, a consultation of the market players organised
jointly by the Belgian regulator CREG and its UK counterpart OFGEM. It put forward a regulatory
model specifically for interconnectors, with Nemo as the pilot project. The connection is due to
be commissioned by 2017-2018.
In 2011, important steps were taken in
the permit procedures. For example,
the environmental impact report (‘planMER’ or ‘milieu-effectenrapport’), which
includes alternatives and additional
environmental aspects, was approved
in May. On 22 July, the government of
the Flemish Region outlined the new
infrastructure (route, location of highvoltage substations, requirements) in its
draft regional land-use plan (‘GRUP’ or
‘gewestelijk ruimtelijk uitvoeringsplan’).
The route proposed by the Flemish
government comprises 47 km of connections, including 10 km underground.
The overhead connection follows
existing routes and corridors as much
as possible. The public consultation
period that is provided for in the context
of this procedure came to an end; after
assessing objections (this process
is currently in progress), the Flemish
government should announce its final
decision in the spring of 2012. Depending mainly on whether building permits
are granted, commissioning is expected
in late 2014.
Federal development plan
approved
In November 2011, the Federal Minister
for Energy approved the final version
of the development plan 2010-2020 for
the electricity transmission system. The
plan presents a detailed estimate of
transmission capacity needs, based on
a series of underlying hypotheses and
is in line with the 10-year development
plan drawn up by ENTSO-E.
The plan was drawn up in cooperation
with the Directorate General for Energy
of the Federal Public Service Economy,
SMEs, Self-employed and Energy and
the Federal Planning Bureau, taking particular account of the prospective electricity study. The final version of the plan
is the culmination of a process including
an impact assessment and consultation
of the general public, the Federal Council for Sustainable Development (FRDO/
CFDD), the SEA Advisory Committee (of
the Federal Public Service Health, Food
Chain Safety and Environment), the
authorities and the regulators.
ELIA GROUP 2011
ECONOMIC REPORT
33
The 50Hertz Transmission grid
in Germany
North connection Schwerin
for connecting Hamburg
wind farms
The connection comprises a number
of sections, including one – in Mecklenburg-Western Pomerania – that was
completed in July 2010. The public consultation relating to the second change to
the schedule for the section in Schleswig
Holstein is finished and a decision on
whether or not permission will be granted
is expected in 2012.
Southwest interconnection
The first part of the connection, between Lauchstädt and Vieselbach, was
commissioned in December 2008. For
the second part, between Vieselbach
and Altenfeld, the planning authority put
forward a draft decision in late December 2011 and planning permission is
expected soon. Appeals against this
could delay the project for another year.
The regional planning procedure for the
third part, between Altenfeld and the
border with Bavaria, was completed in
March 2011. The approval document is in
preparation.
Bärwalde – Schmölln
Ring north of Berlin
First national grid
development plan
The regional planning procedure has
been completed and the final route has
been decided. The connection will be
built in at least two phases to ensure the
security of supply to the Hennigsdorf
metallurgical industry. The procedures
relating to the two phases are carried
out in coordination with the planning
authority.
Uckermark connection
The regional planning permission procedure has been completed, while the
approval procedure is still ongoing. Intensive information campaigns and dialogue
are under way with politicians, citizens
and local environmental associations.
International projects
Interconnection with Poland
The regional planning procedure is expected
to be submitted in the winter 2011-2012.
The regional planning procedure has
been completed. Preparations are being
made for the approval procedure.
In 2012, 50Hertz and the three other
German system operators Amprion,
TenneT and EnBW TNG will publish a
grid development plan that will reflect the
expected developments in the German
electrical infrastructure over the next
10 years and a 20-year forecast. It will
also include specific recommendations
on the expansion and construction of
transmission systems in Germany, based
on a range of technical options including
specifically the abandonment of nuclear
energy by 2023.
From the start of the process, the stakeholders’ involvement is crucial. Against
this backdrop, the German TSOs have
launched a website about the process
and the consultation (www.netzentwicklungsplan.de).
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ELIA GROUP 2011
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First live works in
Belgium: the helicopter
from which the basket is
suspended prepares for
take-off.
Grid maintenance
Major technological breakthroughs have also been made in preventive and corrective
maintenance, calling for better expertise from teams.
Thanks to the expertise of the teams in the field
responsible for preventive and corrective maintenance
of the transmission system and for the execution of the
replacement investments, security of supply has been
at a very high level for more than a decade.
Preventive maintenance
of the Belgian grid
This outcome is the result of a programme of preventive maintenance
and replacement policies based on the
technologies used in the grid and the
condition of the components that make
up the infrastructure. This programme
is driven by operating experience
feedback from in-depth analyses of the
causes of each incident, even though
most of them did not have any impact
on customers. Elia is also continuing to
work on standardising and harmonising
components, databases and working
procedures.
In the case of lines, cables and pylons,
preventive maintenance encompasses
a number of types of inspections,
such as infrared or camera inspection
of all 20,000 or so pylons, which are
inspected several times a year.
As regards high-voltage substations,
preventive maintenance is scheduled
on some 11,750 infrastructure elements
across Belgium. In 2011, almost 16,950
operations were carried out by teams
in the field, covering preventive maintenance (11,700), inspections (4,500) and
legal checks (750).
As far as investments in replacements
are concerned, synergies are sought
between investments in upgrading,
replacement and worker safety. In 2011,
some €68.6 million was invested in
upgrading end-of-life equipment. Many
projects were carried out, including the
replacement, at all voltage levels, of
circuit breakers, isolators, bus bars and
line sets, voltage and current transformers, lightning arresters, meter boxes,
protection relays and remote monitoring
systems. Maintenance and replacement activities are performed by many
subcontractors and around 600 Elia
ELIA GROUP 2011
ECONOMIC REPORT
35
The inspection of overhead
line conductors using a
remote-control robot was
tested successfully in 2011.
16,950
In 2011, almost 16,950
operations were carried out
by our teams in the field, i.e.
almost 46 operations a day
staff, of whom two-thirds work in the
field and one-third provide technical and
administrative support.
In 2011, a number of innovations were
tested out in the field so as to expand
the range of methods at the departments’ disposal and plan work such
that it caused as little disruption as possible to operation of the grid.
LIVE WORKS
Heliborne work on a live 380-kV line
were carried out for the first time in Belgium, on the Achêne – Lonny interconnection. Nearly 150 marking spheres
were replaced while the line was kept
in service. Keeping lines in service is
becoming essential for certain connections due to the increase in energy
transmission volumes. This pilot project
was organised in coordination with the
Federal Public Service Economy and
the relevant authorities.
ROBOT FOR LINE MONITORING
Elia and RTE jointly carried out tests
for using a robot to inspect the cables
of their overhead lines, with a view to
detecting both more quickly and more
reliably those areas where maintenance
work is needed, in addition to using the
traditional methods at their disposal.
650 pylons, 300 km
Maintenance work in Germany
carried out in 2011 was on some
650 pylons, what accounts for
300 km of power lines.
Preventive maintenance
of the 50Hertz grid
In Germany, the maintenance programme planned for 2011, worth around
€50 million, was carried out. The priorities in this programme were upgrades of
the steel conductors of overhead lines
and the continued replacement of the
insulators in these lines. Work carried
out in 2011 was on some 650 pylons,
which accounts for 300 km of power
lines.
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ELIA GROUP 2011
ECONOMIC REPORT
Market operation
Following the liberalisation of the internal electricity market, the role of the market
facilitator became crucial to the mission of power transmission system operators.
NL
Integration of the European
markets
As in previous years, Elia continued
its drive for further integration of the
Belgian and German electricity markets with their neighbouring markets
and thus contributed to the efforts to
meet the objective set by the European
Commission of achieving an integrated
electricity market by 2014.
Long-term markets
During 2011, transmission system operators of the Central West Europe (CWE)
region, in collaboration with the TSOs
of Central South Europe (CSE) and the
Swiss TSO, laid down a shared set of
harmonised rules governing explicit
capacity auctions covering 12 borders.
These rules, approved by the concerned regulators in November 2011,
are implemented by CASC.EU, which
acts as the inter-regional auctioneer for
the market players.
DE
B
FR
CH
AT
SI
IT
Figure: borders
covered by harmonised
auction rules
G
ELIA GROUP 2011
ECONOMIC REPORT
37
The CWE market is coupled
with the Scandinavian
market through the interim
tight volume coupling (ITVC)
mechanism.
Those two coupling mechanisms
(price and volume) are combined in a
sequential process in which flows on
the connections between Germany,
Denmark and Sweden are calculated in
advance (by EMCC), followed by a CWE
region price coupling mechanism (jointly
put in place by APX-Endex, Belpex and
EPEX Spot) and by a market splitting
mechanism for the Scandinavian market
(implemented by Nord Pool Spot).
Day-ahead markets
ONE YEAR OF CWE AND ITVC
MARKET COUPLING
‘Price coupling’ enables the volumes
of electricity traded and market prices
to be calculated on the basis of the
information provided by the transmission system operators (transmission
capacities available at the borders)
and the power exchanges (purchase
and sale offerings). The mechanism
was initially set up in October 2006 in
Continental Europe to couple together
Belgian, French and Dutch prices. It
uses the Cosmos algorithm developed
by Belpex, Elia and N-Side.
This price coupling mechanism was
expanded to include Germany on 9
November 2010 and so become the
CWE area, and was complemented by
interim tight volume coupling (ITVC) for
the Scandinavian market (Denmark,
Finland, Norway, Estonia and Poland
using the Swepol cable). The NorNed
interconnector between the Netherlands and Norway was integrated into
this volume coupling system in January
2011. In April, the implicit border allocation mechanism of the CWE region was
extended to the BritNed interconnector,
thereby establishing coupling between
the CWE market with its price coupling
mechanism and the APX-Endex dayahead market in the UK.
The CWE price coupling mechanism
and the ITVC coupling mechanism led
to price convergence or prices that were
the same most of the time on the dayahead markets of the CWE countries,
including Belpex in Belgium.
In 2011, the prices of the four coupled
intraday markets in CWE converged
some 65.75% of the time, and prices
in Belgium and France were the same
99.18% of the time, while in Belgium and
the Netherlands they converged 71.28%
of the time.
The CWE market coupling mechanism
has also reduced price volatility by combining the liquidity of the region’s dayahead markets with the ability to avoid
negative prices in periods of low energy
demand coupled with a high level of
renewable generation in Germany.
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ELIA GROUP 2011
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29 %
PRICE CONVERGENCE IN CWE 2011
The record volume in 2011,
recorded on 16 December,
was 73,300.1 MWh, i.e. 29%
of the daily consumption on
the Elia grid.
All equal : 65,753%
All different : 0,411%
DE=BE=NL<>FR : 0,103%
DE=NL<>FR=BE : 22,443%
BE=FR=NL : 5,160%
BE=FR : 5,160%
BE=NL : 0,263%
DE=NL : 0,046%
Market coupling has led to an improvement in the utilisation of import/export
capacities at the borders between Belgium and the Netherlands and between
Belgium and France on a day-to-day
basis, with average daily volumes of
8,424 MWh for imports and 5,656 MWh
for exports.
THE BELPEX DAY-AHEAD MARKET
At the end of 2011, some 35 market
players – generators, suppliers, traders,
banks and industrial users – were registered and operating on Belpex.
Volumes have steadily increased since
Belpex was launched in 2006 (with the
exception of 2009 when consumption decreased considerably due to
the financial and economic crisis). This
growth continued in 2011. Volumes traded on the Belpex day-ahead market in
relation to the Belgian load are up from
13.7% in 2010 to 14.8% in 2011. The
traded volume has also increased, from
an average daily volume of 32,446 MWh
in 2010 to 33,839 MWh in 2011.
The record volume in 2011, recorded on
16 December, was 73,300.1 MWh, i.e.
29% of the daily consumption on the
Elia grid.
The average price on the Belpex dayahead market was €49.37/MWh, slightly
lower than the average for the Netherlands (€53.03/MWh) and Germany
(€51.12/MWh) but slightly higher than the
average for France (€48.89/MWh).
account of the physical limits of the
transmission system, was examined by
a feasibility report published in March
2011. The results were presented to the
stakeholders involved in June 2011 at a
public forum in Amsterdam. An updated
version was published in October and
can be found on the Elia website. Work
in this regard will continue in 2012.
Intraday markets
ONGOING PROJECTS
Elia, in cooperation with Belpex and all
the other transmission system operators
and power exchanges in the CWE region, Scandinavia and the UK, is paving
the way for a price coupling mechanism
for the North West Europe (NWE) region. A process and a unique algorithm
will be implemented that will form the
cornerstone for the gradual extension of
the mechanism to the rest of Europe.
Furthermore, throughout 2011, the
TSOs and power exchanges of the
CWE region continued their joint efforts
to study the feasibility of a flow-based
method for implicit daily allocation.
This method, which aims to take better
The intraday markets are important
tools, in particular in light of the growing
share of intermittent energy sources
(wind and solar power) in the energy mix
because they allow suppliers to balance
their generation with the consumption of
their customer in near-real time.
The intraday market in Belgium is operated by Belpex. In 2011, it maintained its
strong growth, with a trading volume of
363.4 GWh as opposed to 275.6 GWh
in 2010. In total, 5,613 contracts were
concluded, compared with 6,896 in
2010.
ELIA GROUP 2011
ECONOMIC REPORT
39
Ongoing projects
Elia, in cooperation with Belpex and all the other
transmission system operators and power exchanges in the CWE region, Scandinavia and the
UK, is paving the way for a price coupling mechanism for the North West Europe (NWE) region.
The plans for implicit allocation of crossborder intraday transmission capacities
on the interconnection between Belgium
and the Netherlands came to fruition in
February 2011, when the Elbas trading
platform used for the Nordic and German markets came online. Since it was
put in place, it has been responsible for
intraday imports of 61.9 GWh from the
Netherlands and exports of 206.7 GWh
in the other direction.
Moreover, the integration of the Belgian
and Dutch intraday markets with the
Scandinavian intraday market is scheduled for March 2012, in the wake of the
introduction of an implicit allocation
mechanism on the NorNed connection
between the Netherlands and Norway.
This will make it possible to trade electricity between Belgium and Finland on
an intraday basis in a single transaction.
Complete integration of the intraday
markets of the NWE region (including a
mechanism for implicit allocation of the
cross-border intraday capacity between
Belgium and France) is expected by the
end of 2012.
Belgian balance and
ancillary services markets
Elia has taken a number of initiatives to
anticipate the integration of significant
volumes of generation from variable renewable energy sources in the balance
and ancillary services markets.
A new methodology for evaluating the
reserve volume, based on probabilistic
modelling – and therefore capable of
reflecting the impact of errors in the
forecasts for wind and photovoltaic
energy on balancing the system – has
been introduced. On this basis, the
methodology and resultant volumes
for 2012 were approved by CREG in
May 2011. Furthermore, preparations
are being made for synergies with the
Netherlands and Germany.
Increasing market
transparency
In 2011, Elia continued to support the
FEBEG drive to increase the transparency of power generation data on the
Belgian market. Elia now publishes on
its website data relating to the availability of generation units (daily updates of
generation availabilities) and unplanned
unavailabilities (in the form of Urgent
Market Messages).
German market
COOPERATION IN GRID
MANAGEMENT AND CONTROL
October 2011 saw the launch of the
‘Netzregelverbund’, a cooperative initiative relating to grid management and
control, with a trial period involving the
Danish transmission system operator Energinet.dk. It aims to optimise
the use of control energy while avoiding instances of activation in opposite
directions in two zones. Following good
results in Germany, the initiative can
now be implemented across national
borders, with a corresponding trial period starting in January 2012. Potential
partners are Elia, CEPS, Swissgrid and
TenneT NL.
Netzregelverbund
The ‘Netzregelverbund’, a cooperative initiative relating
to grid management and control, aims to optimise the
use of control energy while avoiding instances of activation in opposite directions in two zones.
40
ELIA GROUP 2011
ECONOMIC REPORT
Better coordination between
European electricity transmission
system operators is the key
to security of supply.
Preventive management
of critical grid situations
As a power transmission system operator, the Elia Group is taking a series of preventive
measures to maintain the balance of the grid and a secure power supply.
Managing the balance
between generation and
consumption
As electricity cannot be stored in any
great quantity (except by means of hydraulic pumping units), generation must
be tailored at all times to consumption in
this large grid – consumption that is the
result of the actions and needs of more
than 500 million inhabitants.
Transmission system operators such as
Elia and 50Hertz maintain this balance
in their respective control area within
strict limits and in compliance with common rules.
To this end, each of the 41 transmission system operators reserves from
generators, through European calls for
tender, a generation capacity enabling
them to adjust upwards or downwards
the quantity of energy injected in their
respective grid.
This generation capacity is differentiated
according to the speed of response
and the duration of the intervention.
First of all, some generation units are
equipped to adjust their generation almost automatically based on deviations
from the frequency of reference (50 Hz
in Europe) and the frequency measured
on the grid, which depends on the
instantaneous imbalance between the
quantities of energy injected and taken
off the entire interconnected grid. All
the generation units connected to the
large European grid will consequently
react together to immediately offset the
simultaneous loss of 3,000 MW (3 million kW), i.e. the equivalent of two of the
largest generation units, irrespective of
their location in continental Europe. The
system operators, to which the defective
powers stations are connected, will
then use other means of generation
to restore this automatic intervention
capability as quickly as possible, until
the situation is back to normal.
Black-start: progressive
reconstruction of the grid
In the event of an interruption of the
power supply across a wide geographical area, the system operator
concerned will use generation units
specially equipped to start up autonomously, known as ‘black-start’ units.
Each system operator has contracts for
black-start services with generators in
its area and regularly checks whether
these units can start up independently
as required. In 2011, Elia conducted
detailed tests in two units located in Belgium. These generation units gradually
allow to resupply a growing segment of
the transmission system and therefore
the other generation units can be restarted, while at the same time connecting up more and more consumers so
as to continuously maintain a balance
between the quantity of energy injected
into the grid and the quantity of energy
taken off it.
ELIA GROUP 2011
ECONOMIC REPORT
41
Following a fire at the Bruegel
substation, a booklet was sent to
local residents to tell them about
current facilities in that node of the
power transmission system.
Transmission system
operators such as Elia
and 50Hertz maintain this
balance in their respective
control area within strict
limits and in compliance
with common rules.
Crisis simulation: teams
under pressure performing
vigilance tests to improve
procedures
In the event of a crisis, the level of preparation of the teams mobilised to restore
normality is key. Elia has from the outset
had an emergency plan setting out the
roles and responsibilities of the various
players in the event of a major problem
in the electricity transmission system.
These procedures are regularly tested
in simulation exercises. In 2011, Elia put
in place the action plan that emerged
from the large-scale crisis exercise in
late 2010. Moreover, preparations for the
next international crisis exercise were
started. The exercise will be organised
in 2012 in cooperation with the French
and Dutch system operators and the
regional technical coordination centre
Coreso.
Earth Hour: raising
awareness to enable better
management
As in previous years, Elia and its fellow
system operators took appropriate
measures for Earth Hour, an initiative
organised by the World Wildlife Fund to
draw attention to climate change and
the energy issue. Elia puts its sites on
partial alert to safeguard the operational
security of the grid.
Fire at the Bruegel
substation
The violent storm that hit Belgium on 28
June 2011 had many impacts across the
entire grid. The main incident occurred
at the Bruegel high-voltage substation,
one of the major junctions in the 380-kV
Belgian and European grid. Following a lightning-strike, a fire broke out
on one of the three poles of a 380 kV
transformer, caused by the combustion of the mineral oil contained in the
transformer.
The emergency response services
acted quickly, mobilising fire-fighters
from Asse, Zellik, Zaventem, Brussels
and Opwijk and the Civil Protection
Agency and the emergency services,
after the emergency plan had been put
into action by the mayor of Dilbeek. An
on-site operations control room was set
up. Having established the type of response required, the fire-fighters put out
the fire by spraying a mixture of water
and aqueous film-forming foam (AFFF)
at it to lower the temperature (measured
using an infrared camera).
Remarkably, despite the violent impact
of the lightning and the fire, there was
no interruption of the power supply provided to Elia’s Belgian customers.
42
ELIA GROUP 2011
ECONOMIC REPORT
Procedure for shortage
in generation
Plan to revise the
reconstruction code
Despite all the preventive measures that
have been taken, extreme situations
resulting from a substantial shortage
of power generation remain a possibility. To that end, a procedure was
devised by Elia in close consultation
with the Belgian Government Coordination and Crisis Centre (GCCC) and the
Federal Public Service Economy. Note
that ENTSO-E flagged up the risk of a
Europe-wide shortage in certain periods
(period of intense and prolonged freezing) of the winter of 2011-2012 following,
for instance, the shutdown of several
nuclear units in Germany.
The proper operation of the electricity
transmission system is of vital importance for the community and for business and industry. The electrical system
was designed to work at a very high
level of reliability, but the risk of an interruption cannot be ruled out completely,
and therefore grid reconstruction codes
were drawn up and have been implemented for several years now. They
define the operating procedures to be
deployed by control centres, balance
responsible parties, grid users and other
system operators in the event that the
grid has to be fully or partially reconstructed.
In 2010, the Elia reconstruction code
was fundamentally overhauled, while
in 2011 simulator training was introduced for the concerned staff. Elia also
received a positive opinion from CREG
about this revision of the reconstruction code, in terms both of content and
structure and of instructiveness. The
public version of the code was presented at the Elia Customer Day.
Cooperation with the
Belgian Government
Coordination and Crisis
Centre (GCCC)
Elia cooperates closely with the Belgian
Government Coordination and Crisis
Centre (GCCC) to continuously improve
the processes relating to emergency
plans. Therefore a training session was
organised for the GCCC operators
to familiarise them with the electrical
systems and the levels of severity of potential grid incidents. A consultation was
also organised between the managers
of the respective crisis centres to give
them a better understanding of their
structures and their mutual expectations.
ELIA GROUP 2011
ECONOMIC REPORT
43
Preparing for the future :
research and development
The growing share of variable renewable energy sources and of decentralised generation in
the energy mix is causing a radical and lasting change in electrical systems and how they are
managed, making innovation essential for transmission system operators.
Against this backdrop, the Elia Group
established a Research & Development
and Knowledge Management Department which, in close cooperation with
ENTSO-E and the European Electricity
Grid Initiative, is participating in a number of European projects.
57%
At the end of 2011, the Elia Group had
a portfolio of 13 projects in which the
Group is cooperating with one or more
Belgian, German or other European
partners. At the same time, the Group is
involved in some 10 initiatives involving
cooperation in R&D projects which will
start up in 2012 or are currently being
assessed by the funding institutions
concerned.
50Hertz is also working, as part of academic partnerships, on some 10 studies
that aim to analyse and assess specific
issues that are relevant to management
of the electrical system, e.g. reconstruction of the 50Hertz grid, studies of
regional grids, and planning simulations
of generation units.
COMPLETED IN 2012
AFTER, ANM, Ecogrid, e-Mobility, GRID+,
Improvement of Grid Integration of RES,
MOSYTRAF, OffshoreGrid, Optimate, RegModHarz,
SUSPLAN, Twenties, 7MW-WEC-by11
43%
PROPOSALS OR STARTING IN 2012
ADELE-ING, Aiolus, e-Highways 2050,
eStorage, High Temperature Conductors, iTesia,
Pegase, SDL Batt, SLim, Space Optimised
Overhead Conductor Systems
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ELIA GROUP 2011
ECONOMIC REPORT
B-EEGI
REGMODHARZ
SUSPLAN*
Elia is a key partner in the B-EEGI
platform, a collaboration platform of
five Belgian system operators (Eandis,
Elia, Infrax, Ores and Sibelga) as part of
the European Electricity Grid Initiative
(EEGI). Through this platform, the partners want to develop a joint vision of the
innovation activities and objectives and
therefore benefit from some leverage
vis-à-vis regional, Belgian and European
support programmes. By participating
and actively investing in R&D projects,
the B-EEGI partners are helping to meet
the objectives of the European Strategic
Energy Technology Plan (SET Plan).
The RegModHarz project brings together, alongside 50Hertz, distribution
system operators, IT and component
manufacturers, research institutes,
universities and sponsors of renewable energy. It is one of the six German
regional models supported by the public
‘E-Energy’ programme which analyses the challenges and opportunities
involved in the integration of renewable
energy sources.
50Hertz is a stakeholder in the
SUSPLAN project coordinated by
SINTEF (FP7* research area ENERGY-2007-7.3-05). The project aims
to develop regional and pan-European
recommendations for more effective integration of renewable energy into future
infrastructures. It adopts an integrated
approach for electrical, gas and heat
infrastructures.
E-HIGHWAYS 2050
Elia and 50Hertz are jointly participating
in the ‘e-Highways 2050’ programme
facilitated by ENTSO-E and coordinated
by RTE (as part of the FP7 call ENERGY.2012.7.2-1). Following the ENTSO-E
Study Roadmap towards a Modular
Development Plan on pan-European
Electricity Highways System 2050
(MoDPEHS) developed by 50Hertz and
coordinated by the ENTSO-E working
group on electricity highways by 2050,
the consortium comprising transmission
system operators and external partners
aims to develop tools for a long-term
planning schedule containing design
options for future European electricity
highways.
ELIA GROUP 2011
ECONOMIC REPORT
45
FP7 Projects *
The Seventh Framework Programme (FP7) bundles all research-related EU initiatives together under a common roof playing a crucial role in reaching the goals of growth, competitiveness and employment, along with a new Competitiveness and Innovation Framework
Programme (CIP), Education and Training programmes, and Structural and Cohesion Funds
for regional convergence and competitiveness.
ECOGRID*
TWENTIES*
OPTIMATE*
The European EcoGrid project comprises a demonstration on the Danish island
of Bornholm of the effective operational
management of a power distribution
system entailing strong penetration of a
wide range of variable sources (almost
50%). The Elia Group is conducting
the research on the implementation of
these market concepts on a large scale
throughout continental Europe.
The TWENTIES project aims to identify
and test the technical resources that
facilitate the large-scale penetration
of renewable energy, and in particular
wind energy. A number of partners are
making a contribution to these efforts:
Belgian universities, such as the Catholic University of Leuven (KULeuven), the
Université libre de Bruxelles (ULB) and
the University of Liège (ULg), and the
Coreso regional technical coordination centre. Elia is responsible for six
demonstration activities (NETFLEX –
Enhanced Network Flexibility). Elia and
50Hertz will be involved in assessing the
potential for deployment of these tools
on a European scale.
Five transmission system operators (in
Germany, Belgium, France and Spain)
have been cooperating with seven
distribution system operators since
2009 as part of a three-year research
project. This project aims to evaluate the
advantages and disadvantages of market models designed to integrate vast
sources of renewable energy sources.
Elia and 50Hertz are contributing to the
development of market models for the
Central West Europe region.
ESTORAGE
The storage of electrical energy will
become more and more important in
Europe, in particular because it can be
deployed rapidly to ensure a continuous balance between renewable energy
and consumption. The eStorage project
aims to enhance the technology of
pump-storage equipment and to assess
the market models enabling its integration and its rapid deployment.
ELIA GROUP 2011
ENVIRONMENTAL REPORT
02
Environmental
report
Elia and 50Hertz aim to serve as a role model for
the market and the community. The environmental
dimension, i.e. a concern for the future of the planet,
is an integral part of all the Group’s activities.
47
48
ELIA 2010
ENVIRONMENTAL REPORT
All partners involved in the Renewables Grid
Initiative share a single vision: for up to 100% of the
power integrated into the electricity system to come
from renewable sources. We must help people to
understand that, with the appropriate development of
grid infrastructure in Europe, we will open the doors
to a climate-friendly future, based on decentralised
generation and the large-scale integration of
renewable energy.
Stephan Singer
DIRECTOR GLOBAL ENERGY POLICY, WWF
Grids are the key
“The WWF’s vision is for 100% of all energy worldwide – not just electricity – to
come from renewable sources by 2050.
Such a vision calls for ambitious actions
to be taken by all players – industry,
governments and consumers. The
European energy sector can and must
lead by example. That is why the WWF
is closely involved with the Renewables
Grid Initiative (RGI). Power transmission system operators like 50Hertz and
Elia are demonstrating the leadership
needed to establish a power supply that
is not only renewable, but also economically viable, reliable and affordable.
“Electricity from renewable energy
sources – primarily wind, biomass and
solar power – is available in abundance
across Europe and in neighbouring
areas such as North Africa. To effectively capitalise on these resources,
greatly expand their use and facilitate
a smooth transition from fossil fuel and
nuclear power to widespread decentralised generation and renewables by the
middle of the 21st century, we need to
manage interconnections in a coordinated way and consolidate and develop
a sophisticated infrastructure of power
transmission systems. Otherwise, we will
not be able to hit our climate targets or
provide consumers with a reliable power
supply from renewable sources. The
WWF appreciates that system operators
like 50Hertz and Elia are taking its side
in the debate to promote the cause of
renewables.
“At the moment it is difficult to obtain
public approval for fresh investment in
infrastructure. We will not win people
over by adopting a merely technocratic approach. We must come up with
a convincing argument, a compelling
story, a vision of a better and cleaner
world, shared by left- and right-wing
politicians alike, by parliaments and in
cities and villages.
“All partners involved in the Renewables
Grid Initiative share a single vision: for
up to 100% of the power integrated into
the electricity system to come from renewable sources. We must help people
to understand that, with the appropriate
development of grid infrastructure in
Europe, we will open the doors to a
climate-friendly future, based on decentralised generation and the large-scale
integration of renewable energy.”
ELIA GROUP 2011
ENVIRONMENTAL REPORT
49
Andreas Förster
SYSTEM OPERATIONS
The diligence and know-how of our employees,
combined with continuous training efforts, help us meet
our environmental obligations.
“Environmental protection is a key
consideration in the planning, development and operation of our power
transmission system. As Environmental Manager at corporate level, I
continually ensure the follow-up and
improvement of the 50Hertz environmental management system.
My work is highly varied: I am responsible for properly implementing environmental legislation into our operational procedures and providing expert
advice to colleagues responsible for
environment at regional centres. I also
work closely with numerous departments on environmental matters, from
development projects to hazardous
waste transportation, not to mention
permit management, pollution control
and water conservation.
“Through the integration and transmission of a significant share of renewable
energy, 50Hertz is making a considerable contribution to climate protection.
To ensure the transmission of energy
that produces little or no pollution, we
must establish new connections. The
connection of Baltic 1, the first wind
farm in the Baltic Sea owned by the
generator EnBW, in April 2011, is an
important milestone for our company
and demonstrates our commitment to
the integration of renewables.
“The diligence and know-how of our
employees, combined with continuous training efforts, help us meet our
environmental obligations.”
Valérie Legat
MOBILITY COORDINATOR
We want to implement a proactive policy that garners
the widespread support of all our colleagues by providing
them with the means to actively contribute to green mobility
on a daily basis.
“Mobility has become a key challenge
for Elia, which has several administrative offices dotted around the Brussels
region as well as facilities and sites
spread across Belgium as a whole. We
want to implement a proactive policy
that garners the widespread support
of all our colleagues by providing them
with the means to actively contribute
to green mobility on a daily basis.
“The provision of carpooling vehicles,
as of 2011, means that employees can
leave their own cars parked at home,
even if they are required to travel
during the day (near their workplace).
Since December 2011, our fleet of
carpooling vehicles has included two
fully electric cars, translating our aims
into concrete action.
“Elia is also the first company in Belgium to have signed up to Blue-bike,
the shared bike scheme at Belgian railway stations. Our employees have five
bikes at their sole disposal at Schaerbeek station, enabling them to reach
our site in Avenue de Vilvorde in just a
few minutes. The bikes not only save
time and money and reduce our environmental footprint, but also improve
our staff’s well-being: scientific studies
have shown that employees who cycle
to work are in a better health condition.”
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ELIA GROUP 2011
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LIFE+ Elia: ecological
management of the
corridors beneath our
high-voltage lines
Environmental objectives
and indicators
Elia has undertaken to meet certain environmental obligations in relation to its activities,
especially those concerning the decontamination of polluted soil, waste disposal, the
installation of transformer tanks to prevent oil discharge, and compliance with noise
regulations and legislation on greenhouse gas emissions and asbestos. Elia also has a
duty to set an example in terms of the rational use of energy and the conservation and
protection of nature.
Elia must also ensure that its facilities
and investment projects are accepted
by the community, in terms of their human and environmental impact as well
as their cost-effectiveness (i.e. their cost
to the community at large).
With this in mind, Elia has undertaken
various initiatives such as planting native species in the corridors beneath
overhead lines, environmental offsetting
measures and energy audits at highvoltage substations and administrative
sites.
The main environmental indicators that
are relevant to Elia’s activities and their
development over time are detailed
hereafter.
1. Energy
REDUCING THE ENERGY
CONSUMPTION OF ADMINISTRATIVE
AND TECHNICAL BUILDINGS
Energy audits were performed in various administrative buildings and Elia’s
existing high-voltage substations. The
audits led to the establishment of action
plans which were implemented at three
of Elia’s ten sites. To reduce heating
consumption, Elia decided to install a
new system for switching the heating
on and off automatically from a mobile
phone on a trial basis in 25 high-voltage
substations. This system will mean that
the temperature is high enough when
the people who have to work there
arrive, while also limiting the heating at
times when nobody is there.
New buildings adhere to the principles
of sustainable construction. As a result,
in 2007 the national control centre building was awarded the title of ‘exemplary
building’ by the Brussels Institute for
Environmental Management (BIM/IBGE).
The new administrative building under
construction nearby (Quai Monnoyer,
along the Brussels Canal) will not only
be very energy-efficient (passive building), but will also bear the BREEAM
‘Very Good’ label, awarded to buildings
that are healthy for their occupants, with
low grey energy and water consumption, and whose plots are developed
to respect biodiversity. The building
recently received an award from the
BIM/IBGE as part of a call for ‘2011 exemplary building’ projects, making it the
second exemplary building constructed
by Elia.
ELIA GROUP 2011
ENVIRONMENTAL REPORT
51
LIFE+ Elia Project
There will be scope for this innovative
pilot to be extended across Europe
via knowledge-sharing with other
European TSOs, yielding a potential
300,000 km of green corridors.
2. Biodiversity
IMPACT OF OVERHEAD LINES
ON AVIFAUNA
PLANTING OF TREES AND HEDGES
AROUND OUR FACILITIES
JOINT STATEMENT FOR NATURE
CONSERVATION AND GRID
DEVELOPMENT
At the request of Elia, Natagora and
AVES are conducting a study to more
successfully identify the collision and
electrocution risks posed to birds by
overhead lines. The Research Institute
for Nature and Forest (INBO), Bird
Protection Flanders (Vogelbescherming
Vlaanderen) and the Flemish association
Natuurpunt are also taking part in the
study. Provisional results demonstrate
the need to improve the visibility of
overhead lines in areas where waterfowl
and certain rare species are present. In
general, birds face practically no risk of
electrocution because of the difference between the distance separating
our conductors and the wingspans of
the most common species. The study
will identify which measures should be
taken or which areas should be avoided
for new projects.
The report and an accompanying map
are scheduled for spring 2012.
This project, which involves planting
flower meadows and bushes under some
ten pylons, has been ongoing since 2008
in collaboration with Faune & Biotopes
asbl. The areas serve as a refuge for local
fauna on open farmland. Very positive
results have already been observed.
Various transmission system operators,
including the Elia Group, TenneT, RTE
and Terna, and environmental protection
associations such as the World Wildlife
Fund, Friends of the Earth and Greenpeace, brought together under the
Renewables Grid Initiative, submitted a
joint statement entitled European Grid
Declaration on Electricity Network Development and Nature Conservation in
Europe, to the European Commissioner
for Energy Günther H. Oettinger.
The aims of the joint statement are to
generate consensus around crucial grid
expansion with a view to integrating renewables, to combine grid development
and nature conservation, and to encourage transparency and public dialogue.
Joint statement
The aims of the joint statement are to generate
consensus around crucial grid expansion with a view
to integrating renewables, to combine grid
development and nature conservation, and to
encourage transparency and public dialogue.
Indigenous defensive hedges (consisting
of hawthorn, dog rose and blackthorn
bushes) are planted each year around the
high-voltage substations to better integrate the facilities into the landscape and
to host the local fauna. Thorny shrubs also
serve as barriers to discourage intruders. By late 2011, a total of almost 12 km
of indigenous hedges had been planted
around some 17 Elia high-voltage substations, totalling more than 40,000 plants.
Various plots of land around and
within high-voltage substations were
also developed to be more welcoming
to biodiversity. Depending on the type
of environment surrounding those plots,
flower meadows, hedges or borders were
planted. In 2011, three plots covering a
surface area of more than 5,000 m² were
developed.
Even in urban areas Elia does its best to
promote biodiversity. As such, various
green spaces at Elia’s site on Avenue de
Vilvorde, near the Port of Brussels, were
completely overhauled to make the area
more conducive to urban biodiversity
and to enable easier maintenance without the need for weed killer.
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ELIA GROUP 2011
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Nest boxes are installed on highvoltage pylons for kestrel falcons.
BREAKDOWN
OF CO2 EMISSIONS
Fixed assets 54%
Energy 4%
SF6 and refrigeration gas 13%
Annual procurement 20%
Trips made by staff
and visitors 9%
Waste 0%
DEVELOPMENT OF FOREST
CORRIDORS – LIFE+ ELIA PROJECT
LIFE+ Elia is a five-year European project being rolled out by Elia to transform some 130 km of forest corridors
(corridors 50 m wide beneath Elia lines
in forests, where the vegetation is kept
low to protect the lines) into fully-fledged
‘ecological corridors’. Instead of using
rotary slashers every five to eight years
(hardly beneficial to biodiversity and
costly for Elia), Elia is going to restore
more stable environments under its
lines (such as bogs, shrubs, grasslands
managed via grazing, etc.), which will be
easier, less expensive to maintain and
more beneficial to biodiversity. French
TSO RTE has been included in the project, so prospective developments can
be tested in the various climates that
exist in France.
For this project, costing €2.55 million,
Elia is to obtain subsidies of €1.166
million from the EU (via the LIFE+ programme) and €815,000 from the Walloon Region (DGARNE). Elia will contribute some €460,000 and RTE €110,000.
As such, this project will involve partnerships between private players (Elia and
RTE), public bodies (Walloon Region)
and associations (CARAH and Solon).
Solon asbl will manage the project in
constant coordination with Elia.
NEST BOXES
A ‘best practices guide’ will be produced describing the various methods
of managing corridors and demonstrating their financial value. There will also
be scope for this innovative pilot to be
extended across Europe via knowledgesharing with other European TSOs,
yielding a potential 300,000 km of green
corridors.
3. Emissions and waste
Emission source (general)
Since its inception in 2001, Elia has installed dozens of nest boxes for kestrel
falcons on the pylons of various highvoltage lines. Three nest boxes were
also put up on particularly high pylons
to house peregrine falcons. Volunteers
keep track of births in both Wallonia
and Flanders. In 2011, 178 eggs were
counted and 158 young birds were
ringed.
GREENHOUSE GASES
Elia recorded its greenhouse gas emissions using the Bilan Carbone © method.
For the sake of completeness, all emissions were analysed, including those
caused by electricity dissipated as heat
during transmission through the grid.
Emissions
Percentage
Energy in buildings
3,170
4.1
SF6 and refrigeration gases
9,859
13.0
15,241
20.1
Travel
7,113
9.4
Waste
238
0.3
40,335
53.1
75,956
100.00
Annual procurement
Fixed assets
Total
ELIA GROUP 2011
ENVIRONMENTAL REPORT
53
-25%
A target has been set to
reduce direct emissions
by 25% by 2016.
The overall figures were as follows (excluding grid losses):
In 2011, Elia launched a project to
reduce its carbon footprint. Action areas
will address both direct emissions (such
as staff travel and the energy consumed
by Elia’s buildings) and indirect emissions. A target has been set to reduce
direct emissions by 25% by 2016.
SF6
SF6 gas has been used in electrical
equipment for over 30 years as an electrical insulator in high- and very highvoltage devices. Gas Insulated Switchgear (GIS) is used in densely populated
areas because it is more compact
than traditional outdoor switchgear
which uses air as an insulator. In the
case of medium-voltage facilities, Elia
uses mainly vacuum-circuit breaking
chambers as an alternative to SF6. This
alternative is not available for high- and
very-high voltage devices.
Elia has drawn up investment and maintenance policies to limit the risk of SF6 loss.
To this end, manufacturers must guarantee a very stringent maximum percentage of loss throughout the lifetime of the
facilities. The maintenance policy keeps
operations involving compartments containing SF6 to an absolute minimum. The
volume of SF6 gas installed in the Elia grid
(from 36 kV up to and including 380 kV)
comes to 53.08 tonnes. Consumption
of SF6 gas (as a replacement and as a
top-up in the event of a leak) is tracked
closely using a system that monitors each
bottle of SF6. The SF6 leak percentage for
all Elia facilities was 0.70% in 2011. This
is one of the best results recorded for
European TSOs.
Maintenance of facilities containing
SF6 is carried out by certified teams in
accordance with EU Regulation No.
305/2008. The first Elia employees were
certified in 2010 on the basis of the
Flemish Decree of 4 September 2009
on the certification of technicians with
the task of recovering fluorinated greenhouse gases from high-voltage facilities.
For certification, Elia provides Synergrid
(test centre) with access to its experts
(jury) and the appropriate equipment to
perform practical tests.
HAZARDOUS WASTE
Elimination of PCBs
Since the end of 2005, none of Elia’s
equipment has contained more than
500 ppm of PCB (polychlorobiphenyl).
Elia has undertaken to decontaminate
transformers with concentrations below
500 ppm which are still in operation, or
to replace those transformers before the
end of their service life. The funds needed to complete this project have been
earmarked. In 2011, 7 transformers were
decontaminated by an accredited firm,
representing 59 tonnes of mineral oil.
Asbestos
Small quantities of solid asbestos can
be found when carrying out works in the
high-voltage substations. They are then
put in appropriate bags and brought to
accredited treatment facilities.
Batteries
The installation of batteries, which are
very common in high-voltage substations, requires a permit to be issued.
Environmental legislation in this area is
aimed chiefly at preventing possible acid
leaks from such batteries. Elia is promoting the use of dry batteries instead,
as they involve no risk of leakage. Wet
batteries now account for just 20% of all
batteries installed in the grid.
Accidental soil pollution
Elia manages over 12,000 plots of
ground, spread right across Belgium.
To prevent waste dumping (fly-tipping)
on this land and protect the surrounding
environment (soil, ground and surface
water, etc.) in the event of accidental
pollution, Elia can call on the services
of a specialist firm seven days a week
to remove all contamination as quickly
as possible. Our operational teams also
have the appropriate equipment, e.g.
absorption mats, to intervene on site.
In 2011, there were 13 interventions
of various kinds, including one major
intervention: the elimination of pollution
in the wake of a fire involving a 380 kV
transformer at the Bruegel high-voltage
substation (Dilbeek). The debris and
oil collected in the recovery tank after
the transformer was damaged were
eliminated. Work was also undertaken
to treat soil polluted by the mineral oil
around the tank, dispersed while the
fire was being extinguished. Measures
to monitor the evacuation of rainwater
into drainage facilities were stepped up,
although the collection tanks did their
job perfectly well.
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ELIA GROUP 2011
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4. Products and services
EMPHASIS ON GREEN
PROCUREMENT
Elia’s Purchasing and Environment departments now include ecological criteria in new calls for tender. The procurement of more sustainable products is
a significant action area for companies
aiming to reduce their environmental
impact. Indeed, Elia encourages industrial players to adopt more responsible
production methods. Respect for the
environment has been added as a criterion for selecting suppliers and should
be considered in the same light as price
or safety. The supplier’s environmental policy, the energy consumption of
the product for its entire service life,
transparency regarding product components, and other factors are taken into
account. A Green Procurement policy
has been drawn up covering the areas
just mentioned.
LIMITING ENVIRONMENTAL IMPACT
Noise
Transformers at high-voltage substations generate low-frequency noise, the
level of which must comply with legally
defined values, according to the area’s
designated land use as stipulated in
the land-use plans. Whenever changes
or extensions are made to its facilities,
Elia uses simulations to ensure that the
prevailing values are not exceeded and
makes any appropriate adjustments.
Elia follows up on all noise-related
complaints from local residents. Such
complaints may relate to noise generated at high-voltage substations or by
electrical conductors, mainly when there
is fog or heavy rainfall. In 2011, four
complaints were made about highvoltage substations. Noise studies and
simulations were conducted for three
of them. Remediation studies are also
underway to limit noise in relation to a
number of previous complaints.
TRANSFORMER TANKS
Since transformers contain large quantities of mineral oil, new equipment is
systematically installed in a watertight
tank with an oil-water separator to
prevent environmental pollution in the
event of a leak. In addition to separators, Elia is installing coalescence filters
to guarantee compliance with surface
water quality environmental standards in
the event of a leak.
In Flanders, in the wake of the Vlarem
legislation, all existing transformers must
be fitted with a tank if they are upgraded,
modified, replaced or moved. In Wallonia,
all existing transformers will have to be fitted with a tank and a hydrocarbon separator by 2015. An investment programme
was established in 2004 for 540 voltage
transformers and 800 backup or earthing
transformers. The programme was updated in 2011 and includes an additional investment budget of €8,000,000 over five
years. In 2011, 28 power transformers
and 28 auxiliary and earthing transformers were fitted with tanks, representing an
investment of €1,000,000.
SOIL POLLUTION
Since Elia was set up, soil studies have
been conducted on over 200 sites
across Flanders, in accordance with
Flemish soil legislation. These studies
showed that our transformers, though
potentially responsible for local soil
pollution, posed little or no risk to the
environment. At sites where significant
soil pollution was observed, this had
been there previously and was the result
not of electricity transmission activities
but rather of earlier or nearby industrial
activities (gas plants, blast furnaces,
chemicals, etc.). Decontamination of
the Lier high-voltage substation was
carried out this year and approved
by the Flanders Public Waste Agency
(OVAM). Decontamination of the Ruien
high-voltage substation was carried out
over seven months while the substation
remained operational. Decontamination
of the Wilsele substation was temporarily suspended with a view to integrating
a development project at the site. In late
2011, three decontamination projects
were rolled out (for the Merksem site,
the Langerbrugge substation and
the Zwevegem substation which has
been classified). The Merksem decontamination project was approved in late
December.
ELIA GROUP 2011
ENVIRONMENTAL REPORT
55
Concerned about its responsibility for its employees
and society, Elia has been actively contributing
to the advancement of scientific knowledge on
electric and magnetic fields. That’s why it concluded
a cooperation agreement with various research
centres and universities forming part of the Belgian
BioElectroMagnetic Group (BBEMG).
Soil legislation was implemented in the
Brussels-Capital and Walloon Regions
after Elia was established. Elia anticipated said legislation by conducting
analyses and studies in several of its
high-voltage substations. It has thus
ringfenced the future costs of potential decontamination projects which
are updated in accordance with the
changing legislation. In 2011, a proposal
was made to the Brussels Institute for
Management of the Environment (IBGE/
BIM) regarding the management of
pollution risks relating to heavy metals
for Elia’s new site at Quai Monnoyer. For
the Ville-sur-Haine site, Elia was able,
under Article 92bis of the Walloon Soil
Decree, to submit a decontamination
proposal via a special procedure. At the
request of the Walloon Waste Bureau,
additional tests were performed and a
decontamination proposal can be made
from early 2012.
ELECTRIC AND MAGNETIC FIELDS
The magnetic field produced by the
electricity system has a very low frequency (50 Hz), much lower than that
used by mobile phones and microwaves
for example, and its intensity declines
rapidly the further you move from the
source.
There are concerns amongst the public
about the potential impact of magnetic
fields on human health. International
scientific studies carried out over the
past four decades have not established
a correlation between 50 Hz magnetic
fields and health problems. Concerned
about its responsibility for its employees and society, Elia has been actively
contributing to the advancement of
scientific knowledge on this subject.
In 2009, it renewed its cooperation
agreement, including full guarantees of
scientific independence, with various research centres and universities forming
part of the Belgian BioElectroMagnetic
Group (BBEMG). The BBEMG studies the effects of electric and magnetic
fields generated by the transmission and
use of electrical energy at work and in
our day-to-day lives. In addition, Elia has
access to the results of high-level international research in the field through the
Electric Power Research Institute in the
United States.
Elia also measures magnetic fields on
site at the request of local residents. It
received more than 250 such requests
in 2011, resulting in some 200 field
measurements.
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ELIA GROUP 2011
ENVIRONMENTAL REPORT
In the absence of specific Belgian
legislation in this area, Elia applies the
European recommendations issued by
the International Commission on NonIonising Radiation Protection (ICNIRP)
and the Council of the European Union.
When planning new investments, magnetic fields are simulated at the study
phase. The area in which the magnetic
field of overhead lines has an effect can
be reduced through new technologies
such as the compact arms of pylons.
Furthermore, Elia avoids inhabited areas
as much as possible when building new
facilities.
illustrates that the strategy adopted by
Elia is keeping to an absolute minimum
the impact of grid developments on archaeology, landscapes, views, magnetic
fields and biodiversity.
ENVIRONMENTAL STUDIES
Strategic environmental assessment
of the 2010-2020 development plan
Environmental assessment
of investment projects
The federal development plan sets out
the investment programme needed
to meet future transmission capacity
needs. The plan has been subject to a
strategic environmental assessment, the
aim of which is to identify any potentially
significant effects that might support the
decision between defined alternatives.
The impact of the selected alternatives
is in turn assessed in comparison to the
existing grid. For instance, when looking
at impact on biodiversity, all selected
alternatives affect 4.92 ha of habitat, i.e.
only 0.75% of the impact caused by the
existing grid (657 ha). This comparison
The plan and environmental study
were discussed in a public consultation. Some 17 responses were made by
individuals, professional federations and
public authorities. Significant remarks
were taken into account in the final
version of the plan. The federal development plan was approved by the Federal
Minister on 13 November 2011.
In 2011, around 100 grid modernisation
and extension projects were rolled out.
To obtain the relevant permits, environmental studies must occasionally be
conducted depending on both the specific legislation for the relevant regions
and the type and scale of the project
in question. In the Flemish Region, a
formal environmental study (“plan-MER”)
was approved for the Stevin project
(380 kV connection between Zomergem
and Zeebrugge). Since high-voltage
substations are not automatically
subject to the “plan-MER”, tests were
performed for the installation of the
Horta and Schoondale substations.
A project-level MER exemption was
approved for the second circuit of the
existing Massenhoven-Meerhout connection. In the Walloon Region, an environmental impact assessment memo
was drafted for an underground 150 kV
connection cable between Corbais and
Basse-Wavre.
6. Transport
SMART MOBILITY
A plan was launched in November 2011
to improve mobility. It covers a wide
range of actions intended to facilitate
trips made by employees, including
both commuting and travel during working hours. These actions include the
lending of bikes for journeys between
railway stations and the workplace, the
promotion of transit offices enabling
employees to work close to home
once or twice a week, the promotion
of teleconferencing tools, the provision
of electric vehicles and pool cars, and
other measures.
ELIA GROUP 2011
ENVIRONMENTAL REPORT
Support for environmental
policies
DECENTRALISED GENERATION
In cooperation with the relevant distribution system operators and regional bodies, Elia is planning for the integration of
decentralised generation units as part
of regional sustainable development
initiatives.
In Flanders, a number of geographical areas have been identified for the
connection of cogeneration facilities for
horticultural purposes and of renewable energy facilities, most notably at
Merksplas, Lier and Rijkevorsel. Plans
to connect an area in the far north of
the Campine region (Hoogstraten Meer) are currently being examined.
Spurred on by the Minister for Energy
of the Flemish Region and in cooperation with the Flemish regulator, VREG,
and the distribution system operators,
Elia offers connection contracts based
on the prerequisite of safe operation of
the grid. Whilst waiting for the Stevin
project, this approach has released 114
MW of additional transmission capacity
for the connection of 27 projects, previously on a waiting list. In Wallonia, the
study conducted by Elia in partnership
with the ICEDD and APERe revealed
great potential for accommodating
wind-power generation in the region
spanning the south of the province of
Liège and the north of the province of
Luxembourg. On the scale of the Walloon Region, the potential of the Elia
grid, without significant upgrading of
the existing infrastructure, is between
2,000 MW and 3,000 MW of windpower generation. Elia has entered into
a constructive dialogue with the relevant
regional authorities about these works
with a view to devising an optimum grid
development scenario.
GFLEX
GFlex is a flexible procedure for connecting wind farms. Field tests were
performed in 2011 in the East Loop
region, with the implementation of
automatic procedures for detecting
overloads and issuing instructions to
reduce wind-farm generation. The procedure enables the connection of such
generation facilities with crucial flexibility,
from the perspective of the generators
in question and the operational security
of the electrical system.
Rational use of energy
(RUE) and renewable energy
sources
PROMOTING RUE AMONGST
OUR CUSTOMERS
As part of its public service obligations
in Flanders, Elia implements an action
plan each year aimed at encouraging
Rational Use of Energy (RUE) amongst
its industrial customers. In this context,
Elia provides its customers with the
resources required to make recurrent
savings of 2.5% on their primary energy
consumption for each MWh supplied,
57
in the case of facilities connected at
between 36 kV and 70 kV. The objective
set for 2011 was savings of 37.8 GWh
of electric power, while savings of
41.6 GWh have been made. 48 projects
were introduced and our customers
undertook to invest in some 44 energysaving projects.
Thanks to the initiatives Elia has taken
amongst its industrial customers, cumulative energy savings since 2003 stood
at 497 GWh at the end of December
2011, i.e. some 162,000 tonnes of CO2.
Support for renewable
energy sources: integration
of offshore wind farms
For the offshore wind farms in the North
Sea that already exist or are under
construction, Elia is helping to finance
subsea connection cables to the tune
of €25 million per connection, applying special measures to deal with the
generation fluctuations associated with
such units, and purchasing the green
certificates awarded to them in accordance with the relevant legislation.
OFFSHORE GRIDS:
A VISION FOR THE FUTURE
The new Electricity Act, approved in
late December 2011 as part of efforts
to transpose the third package of EU
energy legislation, assigns Elia the role of
offshore grid operator subject to optimal
conditions for the community.
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ELIA GROUP 2011
ENVIRONMENTAL REPORT
Offshore grids: a vision for the future
Elia’s vision entailing the development of an offshore
grid in the North Sea set itself the ambitious aim of establishing – in several stages – the first North Sea grid,
offering comparable benefits to onshore grids in terms
of reliability.
In August 2011, anticipating on the Act
to be published, Elia revealed its vision
entailing the development of an offshore
grid in the North Sea. Elia set itself the
ambitious aim of establishing – in several
stages – the first North Sea grid, offering
comparable benefits to onshore grids
in terms of reliability. It also presented a
cost/benefit ratio proving that the North
Sea grid would be more advantageous
than individual connections to each wind
farm, as it would reduce the number
of underwater cables to the shoreline
and enhance integration with other
infrastructure projects along the Belgian
coast.
The concept – devised in consultation
with developers of wind farms along
the Belgian coast – is currently being
discussed with all project stakeholders with a view to setting out concrete
plans for the installation of two offshore
platforms, the connection of prospective
wind farms, and the establishment of the
required financial and legal framework
for this major undertaking for Belgium
and Europe.
Elia also concluded various cooperation
agreements to acquire the means and
resources it needs to play a leading role
in the development of future wind farms:
• participation in the ‘Friends of the
Supergrid’ project, an initiative
launched in March 2010, which
brings together various industrial
actors that join forces to create a
social, political and regulatory base
for a future offshore grid;
•
•
•
articipation in the Renewables Grid
p
Initiative, geared to boosting power
generation from renewable sources
and the transmission capacity required for its development;
a strategic cooperation agreement
with Alstom in intelligent systems
and the integration of renewable
energy sources;
the Eleanore cooperation agreement
with 3E, Alstom Grid, CG Power
Systems, CMI, DEME Blue Energy
and SAG, through Eurogrid International, aiming to make an active
contribution to the development
of future offshore infrastructure in
Europe.
Support for renewable
energies: green certificates
Federal and regional legislators have
developed market mechanisms aimed
at encouraging investment in facilities
for generating electricity from renewable sources. These include the ‘green
certificates’ awarded to generators by
the regulator, vouching for the green
credentials of their electricity. Suppliers
produce the certificates annually in proportion to their sales, with the proportion
being set by law.
As a transmission system operator, Elia
is required by law to purchase the certificates offered to it at a minimum price.
Elia returns these certificates to the
market via the power exchange Belpex.
The balance between the price at which
Elia purchases the certificates and the
price at which they are sold on Belpex
is passed on to the consumers through
transmission tariffs.
Under the new mechanism supporting
renewable energy in Wallonia, the Walloon Energy Commission (CWAPE) has
also obliged Elia to buy back certificates
offered by individuals with photovoltaic
panels, at a regulated price. In this particular case, certificates bought by Elia
cannot subsequently be put back on the
market. The costs will be borne by the
consumers.
Germany
ENERGY
By constructing new, modern operations buildings, 50Hertz is aiming to
reduce both heating bills and operational costs in line with its long-term
objectives.
BIODIVERSITY
Flora and fauna are systematically taken
into consideration from the planning
phase of new construction projects,
and protected as part of the operational
management of installations. 50Hertz
cooperates closely with local environmental and forestry bureaus.
ELIA GROUP 2011
ENVIRONMENTAL REPORT
59
The 50Hertz control area – which includes 15 GW
of installed renewable capacity – has a very high
proportion of decentralised generation. Most of that
power is generated by wind facilities connected
primarily to distribution systems.
ECOLOGICAL MANAGEMENT
OF OVERHEAD LINES
EMISSIONS AND WASTE
MANAGEMENT
A study into the ecological management
of overhead lines, funded by the European Union and conducted in collaboration with local partners, helped to establish differentiated forest management on
a regional scale and improved compatibility with the landscape. The aim of the
study is to enhance biodiversity in the
corridors beneath lines while enabling
the safe operation of the relevant installations and promoting social acceptance of overhead lines. A pilot project
is underway beneath two high-voltage
lines in the Thuringia region. Once the
relevant sections of line have been listed
and mapped out, action plans will be
drafted. For example, target habitats will
be defined, as well as implementation
strategies and proposals for maintaining
the corridors.
As part of its responsible conduct and
internal monitoring measures, 50Hertz
has undertaken to support German
industry’s voluntary commitment to
reduce emissions of sulphur hexafluoride (SF6). An electronic waste detection method, introduced in 2010, was
applied and optimised as part of efforts
to decommission and decontaminate
polluted sites.
ENVIRONMENTAL EXPENDITURE
In 2011, 50Hertz established preventive
measures for the repair of transformer
oil tanks, and measures to manage
noise and eliminate residual pollution
during the construction of new installations.
DECENTRALISED GENERATION
The 50Hertz control area – which
includes 15 GW of installed renewable
capacity – has a very high proportion
of decentralised generation. Most of
that power is generated by wind facilities connected primarily to distribution
systems. To ensure the integration and
safe transmission of this decentralised
power to major consumption centres
in southern and western Germany,
50Hertz cooperates closely with local
distribution system operators, for both
operational and planning purposes. This
ensures the coordinated development of
transmission and distribution systems.
ELIA GROUP 2011
SOCIAL REPORT
03
Social
report
The social dimension is central to the Elia Group’s
activities. It addresses various aspects and is
shaped by a commitment to all internal and external
stakeholders.
61
62
ELIA 2010
SOCIAL REPORT
The renewable energy market will continue to develop
– that much is certain. As a result, we urgently need
to develop not only our regional grids, but also the
electricity highways that will run between northern
Germany and industrial centres in the south and west
of the country.
Erwin Sellering
MINISTER-PRESIDENT OF MECKLENBURG-WESTERN POMERANIA
Renewable energy:
a fantastic opportunity for
our region
“Renewable energy is a crucial sector
for the future of Mecklenburg-Western
Pomerania. Compared with other ­länder,
our prospects for wind power, solar
power and biomass are very good. It is
truly a fantastic chance for us.
Local government has clearly recognised and proactively encouraged
opportunities to embrace this avenue of
development.
“We are leading the way when it comes
to renewable energy, and should take
pride in our role. Our region already
generates almost half of its electricity from renewable sources, with wind
accounting for some 60% of that. Following on from Baltic 1, other offshore
wind farms will be developed along our
coastline. We are also working to identify more onshore wind sites.
will run between northern Germany and
industrial centres in the south and west
of the country.
“Our aim is clear: we want to ensure that
our region generates all its energy from
renewable sources and also establishes
itself as an exporter. This would help to
create more jobs for the future. The development of renewable power generation necessarily entails the creation of a
value chain involving thousands of jobs.
Between now and 2020, around 20,000
people will build their future careers on
this sector.
“The strategy adopted by the regional
government of Mecklenburg-Western
Pomerania is justified daily by its success, and we intend to stick with it.”
“The renewable energy market will
continue to develop – that much is
certain. As a result, we urgently need
to develop not only our regional grids,
but also the electricity highways that
That is why modern, large-capacity
power transmission systems play such
a vital role in hitting renewable energy
development targets. The investment
they require must also be decently
remunerated.
ELIA GROUP 2011
SOCIAL REPORT
63
Cora Tellmann
STAFF MANAGEMENT
I studied economics and management. I joined 50Hertz in
2009 and followed a training programme there for university
and technical college graduates.
“More than 650 people work at
50Hertz to ensure a reliable and highquality power supply. New employees
arrive at the company in a number of
ways. Personally, I studied economics and management. I joined 50Hertz
in 2009 and followed a training
programme there for university and
technical college graduates. After
18 months’ training, I joined the HR
Department.
“Working for a company like this is
really motivating and enjoyable. This
is where the future is being mapped
out for our modern societies, which
are becoming increasingly dependent
on a reliable and sustainable power
supply. I take part in different projects
involving HR tools, especially skills development. This includes reviewing the
training programme for young recruits
and updating the new competency
model. I was also fortunate enough to
be involved in the “Power II” project to
optimise the internal strategy.
Our competency model serves as a
basis for a wide range of HR tools
such as training for employees and
managers, recruitment, and succession and replacement planning. The
model is vital to the continuous development of our employees, which is
essential in Germany for demographic
reasons if nothing else.”
Sandra Van Eesbeek
DIGITAL COMMUNICATION
Endeavours like Climbing for Life really help to forge ties
between participants: facing the same challenge and motivating
each other in such a way can only boost solidarity. This event
broadened people’s day-to-day social contacts at work.
“I was lucky enough to be one of the
125 employees and partners of the Elia
Group to climb the Col du Galibier as
part of the Climbing for Life initiative.
Although I do sport regularly, a challenge on this scale forced me to train
frequently and push myself to the limit.
I had to grit my teeth more than once
and my calves suffered, but the camaraderie of the event kept me going.
“While climbing, I had time to think,
particularly about the 20 asthma and
cystic fibrosis sufferers who also took
part in this challenge. This was a massive achievement for them. It was hard
enough for those of us in good health,
so just imagine what it must have been
like for anyone with restricted lung
capacity! The fact that one of those individuals was a colleague of mine from
Elia only motivated me even more.
“Endeavours like this really help to
forge ties between participants: facing
the same challenge and motivating
each other in such a way can only
boost solidarity. We were all working
towards the same demanding goal,
and I saw plenty of people egging each other on to get to the top
together.
The event created a sense of positivity
and broadened people’s day-to-day
social contacts at work.
“And the idea that pushing yourself
beyond your limits can help to raise
awareness of issues like asthma and
cystic fibrosis only serves to reinforce
the shared sense of achievement.”
64
ELIA GROUP 2011
SOCIAL REPORT
Staff policy
In carrying out its activities, Elia relies on the professionalism and expertise of some 1,785 staff,
including 1,168 in Belgium, of whom half (49.91%) have joined the company since it was founded
in 2001, thereby creating an excellent blend of experience and innovation.
The Elia Group faces a variety of challenges, in a constantly and rapidly
changing energy environment. These
include the need to:
• identify and attract young people,
often in advanced technical disciplines, and train them in the specific
skills needed in its activities – both
traditional activities, such as highvoltage technology and new ones,
e.g. all the disciplines related to
smart grids and market operation
and regulation;
• ensure career development opportunities for staff within the company
and continue to enhance their skills
in areas of activity that are changing
year by year;
• expand its activities internationally;
• develop its innovation capacities;
• anticipate the company’s HR needs
and expand its skills base to meet
the challenges of tomorrow’s world;
• integrate newcomers with older,
more experienced staff who possess valuable knowledge and
experience;
•
ut in place performance managep
ment mechanisms designed to motivate and develop staff according to
their own personal aspirations and
the specific needs of the company.
Against this backdrop, Elia has introduced policies on staff recruitment and
retention, skills management, training,
mobility and motivation.
These policies are rooted in the values
of the company’s mission statement,
which Elia believes are an essential
foundation underpinning the way its
employees should operate, both within
the company and in their dealings with
outside players. Those values are:
• Entrepreneurship: actively seek
opportunities and show the courage, along with others, to take the
plunge with regard to improvements,
overhauls or chances to help Elia
to develop and serve its customers
better.
• Empathy: be open and attentive to
the feelings and opinions of others
and demonstrate your desire to
understand them while maintaining
your own authenticity.
•
•
Integrity: be open, loyal and honest
to others, respecting them and their
professional ethics. Make commitments and keep your word.
R
esponsibility: be aware of the
importance of your work and hence
carry it out successfully using the
appropriate resources, while at the
same time respecting others and
organisational constraints and accepting the consequences of your
actions.
Recruitment
Elia took on 111 new employees in 2011
in the wake of both retirements and the
creation of new positions.
The proportion of employees with more
than 10 years’ seniority has fallen gradually from 68% in 2002 to 52.31% in 2011.
Women account for 18.84% of staff and
are playing an increasingly significant
role in key jobs for the Group’s strategy
and future.
ELIA GROUP 2011
SOCIAL REPORT
65
COMPOSITION OF THE ELIA STAFF 31/12/2011
Men
Women
Total
FTE
Elia
50Hertz
Elia
50Hertz
Elia
50Hertz
Elia
50Hertz
7
6
0
0
7
6
6.5
6
Supervisory staff
305
58
77
11
382
69
375.8
68.5
Employees
636
462
143
138
779
600
755.53
597.4
Total
948
526
220
149
1,168
675
1,137.83
671.9
Management
Partnerships with schools
and universities
Top Employer 2012
In 2011, for the fifth year in a row, Elia
took part in the Top Employer survey organised by the independent experts at
CRF (Corporate Research Foundation)
and once again won the coveted title
of Top Employer for 2012. Five criteria
are considered in the selection process:
primary working conditions, training opportunities, internal promotion opportunities, secondary working conditions
and corporate culture. The title, which
was awarded to 45 Belgian companies,
is a further boost to Elia’s profile as a
leading employer on the labour market.
Job fairs
As in previous years, job fairs were a
particularly useful aid to Elia’s recruitment activities. In 2011, in addition to
traditional fairs, Elia took part in a job
fair on board a train travelling through
seven major Belgian cities with a view to
meeting student engineers. The initiative went down very well with students.
Attending these events allows Elia’s
recruitment specialists to meet talented
young people. Selected candidates
are then invited to take part in the first
phase of the recruitment procedure.
Elia’s areas of activity, especially those
relating to high-voltage technology, are
not necessarily well catered for in school
and university curricula. For this reason,
Elia has developed a partnership policy
with educational establishments to offer
significant added value to universities
and technical colleges and enable
students to gain practical experience in
the various disciplines associated with
operating a transmission system. This
is a very valuable learning experience
for students and is a chance for Elia to
attract young people to the company.
Elia Challenge
Each year, students from a number of
technical colleges have the chance to
complete an end-of-college project on a
subject relating to high voltage with the
aid of Elia specialists.
The programme includes a visit to a
high-voltage substation and completion
of a project on technologies used in
high-voltage grids and Elia’s activities.
The colleges receive assistance from
Elia in the form of financial support. The
projects are then presented to members
of Elia’s management.
Technical Education Trophy
For a number of years, Elia has organised a Technical Education Trophy
aimed at educating secondary school
students in scientific and technical
subjects.
The Trophy was revamped for the 20102011 academic year as Elia decided to
place the initiative within the broader
context of the Young Belgian Scientists
initiative. In this context, upper secondary school students from all sections
were contacted and invited to work on
a scientific or technical project which
they presented at the Science Expo on
29 and 30 April 2011 at Tour & Taxis
in Brussels. The event featured more
than 200 projects from all over the
country, 17 of which were in competition for the Elia Trophy. In the year 5-6
category, first prizes were awarded to
schools from each language community: Broederschool Sint-Niklaas for
‘Wind turbine’, and Centre scolaire Eddy
Merckx for ‘What can be connected to
a dynamo?’. In the year 3-4 category,
the first prize was awarded to pupils at
Notre-Dame Immaculée d’Evere for their
project ‘From batteries to rechargeable
batteries’. The panel also decided to
award a special prize to a second-year
class from Sacré-Cœur de Linthout for
its project ‘This is not just wind’.
66
ELIA GROUP 2011
SOCIAL REPORT
Elia has developed a partnership policy with
educational establishments to offer significant
added value to universities and technical
colleges and enable students to gain practical
experience in the various disciplines associated
with operating a transmission system.
Elia also set up a fun learning stand,
focusing on the electricity transmission system and operated by field staff.
The stand aroused the enthusiasm and
curiosity of the young people.
Student work placements
Elia conducts a policy of student work
placements for final-year secondary
school, college and university students.
Such placements allow students to get
to know the company and its activities.
By talking to Elia staff and experiencing the working environment, they may
discover a real passion for our line of
work. Student work placements are
also an ideal springboard to subsequent
employment with Elia.
Skills management
Elia bases its skills management policy
on a skills catalogue which includes five
generic skills, defined for all Elia staff in
line with the company’s values. Skills
are generally analysed at various stages
of an employee’s career: in the appraisal
when an employee is hired or changes
jobs, in the development interviews for
both managerial/supervisory staff (the
Midyear Review held each summer) and
employees (during the annual Jobdate),
as well as in the training provided to
develop specific skills, and so on.
For managerial/supervisory staff, a
number of extra specific skills have been
defined for each job family. For employees hired after 2002, the skills are
supplemented with a description of the
tasks specific to each job category. Various operational divisions also defined
catalogues of specific technical skills.
Both the managerial/supervisory staff
and employees hired under the new
staff rules are subject to a Performance
Management process, including an
interview at the start of the year to lay
down the objectives that have to be met
and the activities that have to be carried
out, an appraisal interview at the end of
the year and a development interview.
For employees hired under the old staff
rules, there is currently only a development interview.
ELIA GROUP 2011
SOCIAL REPORT
67
At Expo Sciences, secondary
school students learned about
the activities carried out by
power transmission system
operators, mainly in the form of
fun learning boards.
Training
Technical training
Elia offers its employees a wide range
of training. Detailed in a mini-catalogue,
the courses on offer include training
on behavioural skills, such as assertive
communication, and training related to
Elia’s activities, including the Campus
Elia training course, the Elia Business
Game with its individual versions for
specific target groups (middle management, foremen at Grid Services, etc.),
the Elia’s Activities training course and
language classes. The IT Department
also offers specific training on IT and associated tools. In addition, training pathways have been established for certain
target groups including junior managers,
middle managers, assistants to senior
managers, newcomers to particular
departments and project managers. In
addition, Elia allows staff to take part in
external training programmes (e.g. at
the Vlerick Leuven Ghent Management
School), subject to certain conditions
(motivation for application, compliance
with entry criteria, etc.).
Elia has established a wide range of
technical training programmes so as to
continuously improve the skills of its field
staff, who play a crucial role in safely
managing the grid and ensuring supply quality in Belgium. Elia is currently
working on an integrated skills management and monitoring system, which will
provide added support for the training
programmes.
Based on the various catalogues of
existing skills, Elia is planning new training programmes to meet the Group’s
increasingly specialist needs.
In addition to the basic training required
for our professional activities and safety
compliance (certification training, training modules tailored to different target
groups, etc.), new training programmes
are being established focusing primarily
on technological developments. Training
procedures have also been defined to
support internal restructuring within the
Asset Management Department in 2011.
Training in figures
Average training time per employee
2010: 54.07 hours
2011: 37.90 hours
Learning coverage
(at least one day of training)
2010: 73.43%
2011: 74.23%
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ELIA GROUP 2011
SOCIAL REPORT
In Germany
Professionalism is defined as the ability
of an employee to act appropriately,
reasonably and responsibly both from
an individual and social perspective and
in a wide range of situations.
Knowledge management
Knowledge management activities are based on six strategic criteria: acquiring and
maintaining critical knowledge, managing knowledge loss (departing staff), being equipped
with appropriate tools and methodologies, learning and measuring, coordinating and
collaborating with a view to extracting lessons from acquired experience.
Benchmarks were established with
Solvay and the French system ­operator
RTE with regard to processes, cata­
loguing and loss of knowledge.
­Analyses were conducted with Knoco
Ltd consultants to gauge knowledge
and assess knowledge flow. The analyses focused on Elia’s two operational
departments in Belgium: Asset Management and Energy & System Management. In 2012, after the assessments,
a general knowledge management
framework will be established to manage best practices at Elia, initially within
the Safety and National Control Centre
departments.
In Germany
50Hertz Transmission is also keen to
create an environment to attract and
train employees with skills in technical
fields and also in market operation and
regulation.
Excellence is fostered to ensure employees maintain a consistently high level of
professionalism and motivation and an
appropriate attitude towards safety.
Facing the impending departure of staff
reaching the age limit, 50Hertz has established a programme for succession,
knowledge transfer, leadership development and talent management.
Professionalism is defined as the ability
of an employee to act appropriately, reasonably and responsibly both from an
individual and social perspective and in
a wide range of situations.
An initial staff satisfaction survey to
develop and improve services and the
work environment was conducted in autumn 2011. The participation rate – over
80% – meant that recorded results were
largely representative. An action plan
will be rolled out in 2012 on this basis.
RECRUITMENT
On 31 December 2011, 50Hertz
employed 695 people, including 20
apprentices and 7 trainees. Women
account for 22% of the workforce and
3.3% of 50Hertz staff have a disability.
Following a significant increase in employee numbers as a result of both the
extensive investment plans already in
place or scheduled for the near future,
and the development of new activities
(Renewable Energy Act and internationalisation of the energy market), the
average seniority has fallen from 21.5
to 18.1 years and the average age from
43.9 to 43.1.
PARTNERSHIP WITH UNIVERSITIES
AND RESEARCH CENTRES
50Hertz has established a network
to facilitate exchanges and long-term
contact with academic institutions,
including eight partner universities in its
geographical area. By way of example,
partnerships have been entered into
with the Technical Universities of Berlin,
Magdeburg and Cottbus. Professors
with extensive expertise in electricity
grids, high-voltage engineering and
ELIA GROUP 2011
SOCIAL REPORT
M3
Knowledge Content
Knowledge base and
social networks
M4
Benchmark
processes, audit,
monitoring
M5
M2
Extent
Collaboration
Interface with
universities
and experts
Knowledge securing
Manage the risk
associated with the
loss of knowledge
Piloting
decision
69
Go/No Go
decision
M1
M6
Perimeter:
act oncurrent
and future
knowledge
Capturing and
using lessons from
experience
PILOTING 2011/2012
energy legislation can thus attract
young talents to 50Hertz Transmission’s
areas of activity. To strengthen these
ties, a chair was created in 2010 at the
University of Cottbus, which boasts a
leading Research and Development
Department. Exchanges between
50Hertz Transmission and the academic
teaching staff are stimulated by lectures
and visits to research premises and
operational sites. 50Hertz also offers
students opportunities to deepen their
knowledge and acquire professional
experience through work placements,
seminars and final dissertations.
DEPLOYMENT 2013/2015
KNOWLEDGE MANAGEMENT
Due to the technical nature and complexity of management activities relating
to the power transmission system,
vocational training and skills development are also priorities at 50Hertz. Work
is also underway to draft a policy for the
management of high-potential employees in line with the needs of 50Hertz.
The policy is scheduled for implementation in 2012.
By redefining skills management and
updating the long-term succession programme, the Power II project will help
the company to cope with significant
demographic challenges and the general decrease in the active population.
The number of technical apprenticeship
contracts will also be increased. Such
apprentices continue to work for at
least one year in the company after they
have completed their apprenticeships.
Several trainees and PhD students were
also recruited in 2011.
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ELIA GROUP 2011
SOCIAL REPORT
Employee safety and welfare
The Elia Group prioritises the safety and welfare not only of its employees and the personnel
of companies with which it works but also of its customers and the public as a whole.
The company makes sure that its facilities are as safe and reliable as possible.
Elia has set a target of zero accidents or incidents on the basis of four action areas.
1 - Welfare policy
as a key aspect of the
company’s management
responsibilities
Elia includes risks assessment techniques in its management, management
systems, procedures and activities.
As such, safety is integrated at source
into both our infrastructure and our work
processes and methods.
2 - Continuous training
and coaching
Training, education and the continuous
involvement of employees in both operational safety risks and corporate risks
help to support and consolidate the establishment of constant risk awareness
as a part of the corporate culture. Elia’s
training programmes are based not only
on solid theory, but also practical implementation and feedback from the field.
They include the provision of technical
training as well as basic safety training
for line managers and employees. Informal learning in the workplace also helps
to identify strengths and weaknesses,
which can then be taken into account
in the efforts to prevent accidents and
incidents.
3 - Embedding safe conduct
in the corporate culture
This approach calls for involvement at
all levels of the company (line management, foremen, committees and employees), compliance with work methods, procedures and instructions and
the notions of order and cleanliness.
The principles of the Stop-Think-Act-Review (STAR) safety campaign contribute
to safety in the workplace and at home,
when organising work and in the event
of unforeseen circumstances. The involvement of the CEO, the Management
Committee and line management, both
in the field and via action programmes,
is a vital part of embedding the safety
reflex in the corporate culture.
4 - Performance
Management and
operational monitoring
Safety and security help to ensure
the effectiveness and quality of our
activities. Elia strives to follow up and
continuously improve its safety results
through monitoring and objective assessment, based on universally agreed
and relevant indicators.
Safe conduct must also be integrated
into employee Performance Management and must entail key aspects such
as personal development and career
advancement.
Health
In addition to mandatory check-ups
under occupational health obligations
(assessment of individual health risks),
all members of staff are given access
to flu vaccines. In 2011, Elia also helped
to raise awareness of the importance
of good diet and the potential impact of
alcohol- and drug-related issues.
ELIA GROUP 2011
SOCIAL REPORT
71
Daniel Dobbeni, CEO
“Our safety objective in the Elia Group is zero accidents.
The reason is simple: the severity of an accident – and its
potential impact on the health of our employees – cannot be
known in advance.
Therefore, any accident – whether it involves you or your
colleagues or occurs at or outside work – is one too many.
Establishing a permanent safety reflex is our only option, and
putting it into practice depends entirely on us.”
Results
In recent years, the continued efforts
undertaken by Elia with a view to systematically improving the level of safety
– through the active implementation
of the Plan–Do–Check–Act principle –
have produced excellent results, making
Elia one of the safest industrial companies not only in Belgium, but also in
Europe.
These results vindicate the approach to
the intrinsic safety of the facilities as well
as to operational safety in carrying out
our activities.
Moreover, these results fully justify the
Elia Group’s belief that ‘any accident is
one accident too many’, since aiming to
prevent even the smallest of accidents is
the best way to avoid serious occupational accidents. A minor oversight or an
innocent fall can have unfortunate consequences. Our employees have managed to drastically reduce accidents
due to slipping and falling by never
losing sight of this principle, through
concrete action and awareness-raising
campaigns about cleanliness in our industrial facilities, workshops and offices.
In 2011, a number of events, including
a fluid accident, proved that positive
safety results can be maintained only
through constant vigilance and continuous critical assessment of not only our
rules, procedures and instructions, but
also how they are applied and adjusted
to ever-changing real-life situations.
Safety and welfare of
subcontracted staff
To encourage the safety reflex amongst
subcontractors and reward their positive
safety results, various objective safety
and quality parameters have been
incorporated into both the organisation
and implementation of activities in the
field. These parameters are then taken
into account when selecting contractors and outsourcing work. The results
are evaluated and discussed with the
subcontractors in a spirit of dialogue.
The approach of existing and potential
subcontractors to quality and safety is
also audited. An action plan is defined
as and when necessary to raise the level
of their operation and results to the level
Elia is looking for. And end is put to the
cooperation with subcontractors who
do not adequately follow safety policy
or do not attain the required level for
safety-related parameters and results.
Wider commitment to safety
Elia Group employees and its subcontractors’ staff are not the only ones
who are required to heed the potential
risks of high-voltage infrastructure: the
same goes for anybody going near our
facilities. At the request of various fire
brigades, Elia organised sessions dealing with the specific risks and the safety
measures to be taken during emergency
activities near our facilities. Elia also
regularly makes its facilities available to
emergency teams and services so that
they can conduct exercises in the most
realistic possible context. Preventive
actions were also undertaken in the
construction sector in collaboration
with the National Action Committee for
Health and Safety in the Construction
Industry (CNAC/NAVB). In this connection, around 20 advisors were trained in
the safety risks posed by our facilities in
their activities. Awareness-raising activities were also organised with FedBeton
(Belgian Federation for ready-mixed
concrete).
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ELIA GROUP 2011
SOCIAL REPORT
Frequency and
severity rates
A total of seven accidents leading to
incapacity for work were recorded for
around 16,950 interventions in the field,
including a fluid accident – which could
have been avoided through compliance
with procedures and the use of available
personal protective equipment at the
time – and a commuting accident involving an unhitched trailer from another
vehicle.
AWARENESS-RAISING CAMPAIGN
Various campaigns were organised in
2011 to raise awareness of the importance of good diet and the potential
impact of alcohol- and drug-related
issues.
ELIA FREQUENCY RATE
ELIA SEVERITY RATE
10
0,5
8
0,4
6
Elia
Elia
0,28
0,3
5,1
4,6
4
0,2
0,14
2
2,7
2,8
0,10
0,1
1,7
0,01
0,03
0,0
0
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
ELIA GROUP 2011
SOCIAL REPORT
73
To encourage the safety reflex amongst
subcontractors and reward their positive safety
results, various objective safety and quality
parameters have been incorporated into both the
organisation and implementation of activities in the
field. These parameters are then taken into account
when selecting contractors and outsourcing work.
In Germany
OCCUPATIONAL HEALTH AND SAFETY
50Hertz came close to the target of zero
industrial accidents in 2011. Occupational health and safety is an integral
part of the company and a key objective. The Shopper fall-protection system,
developed in cooperation with 50Hertz,
is due to be certified soon by the relevant inspection body. The system was
developed by 50Hertz staff (lines team)
and managers from the professional association of which 50Hertz is a member.
The new system will help to enhance the
safety of line mechanics.
Work clothing and individual protective
equipment were also improved and are
used by members of staff to provide
maximum protection. Subcontracted
staff must be registered and certified
with regard to safety. This contributes
to meeting the appropriate qualification
of all workers in the field of occupational
safety. A questionnaire was also drawn
up for subcontractors in cooperation
with the Purchasing Department, to assess their occupational safety.
A contract was signed with the German
occupational health association (BAD)
to provide counselling to employees
and management. The relevant services
are available to anybody experiencing
work-related psychological issues. The
programme is supported by employee
representatives. Cooperation with these
services was optimised and the bond of
trust strengthened.
ACCIDENT STATISTICS
One occupational accident was recorded in 2011 leading to 9 days of incapacity for work - a remarkable achievement
and a sign of the efforts undertaken in
that area.
Some eight commuting accidents were
recorded, mainly due to poor weather
conditions. No serious injuries were
sustained.
19 employees of companies working for
50Hertz sustained minor injuries during
working hours.
74
ELIA GROUP 2011
SOCIAL REPORT
The Elia Fund is
aimed at people with
disabilities in the broad
sense of the term.
Corporate social responsibility
The Elia Group plays a crucial role in community welfare, the economic success of its
companies and the success of various other organisations. To this end, Elia is a socially
responsible company in all its activities:
•
•
•
•
•
•
•
•
s upporting European, federal and
regional energy and climate targets;
ensuring the integration of green energy in our grids, including offshore;
developing tomorrow’s grid in the
most cost-effective way for the community;
ensuring permanent dialogue with
all stakeholders in our activities:
customers, employees, people living near our facilities, students, the
general public;
maintaining and developing the grid
in an environmentally friendly and
cost-effective way for the community;
undertaking various social initiatives
in both Belgium and Germany;
promoting technical and scientific
studies for young people;
and many other activities.
Elia is also a member of Business &
Society, the benchmark for corporate
social responsibility (CSR) in Belgium,
and provides support and resources to
companies aiming to incorporate social
responsibility into their management
and activities by:
• sharing best practices;
• developing new CSR solutions;
• sharing information on various aspects of CSR with stakeholders.
Awareness branding
campaign
The Elia Group wants its various stakeholders to understand the importance
of what it does, among other things, for
the economy and the community. To
this end, in 2008 the company rolled out
a branding campaign, with a view to:
• coming across as a dynamic employer offering good future prospects so as to attract the new staff it
needs to maintain the efficiency and
quality of its service;
• gaining the trust of local residents
and public authorities, sustained by
a determination to identify the most
appropriate solutions in a spirit of
constructive dialogue;
•
•
gaining the confidence of investors
so as to have the capital for the
investments required to safeguard
the sustainable development of its
activities;
enabling citizens to better understand and support Elia’s role in
implementing energy and environmental policy, at federal level and
within the three regions of Belgium.
The 2011 campaign revolved around
two main activities: preparing tomorrow’s grids for the challenges posed by
renewable energy, and creating a European electricity market. The campaign
was rolled out at two key points (June
and September), using a giant power
plug as a metaphor for the high-voltage
grid. Surveys showed a significant increase in awareness and understanding
of the relevant challenges. The European Commission cited the campaign
as an example, and ENTSO-E is looking
into the possibility of carrying out a
similar activity at European level.
ELIA GROUP 2011
SOCIAL REPORT
75
The 2011 campaign revolved around two main
activities: preparing tomorrow’s grids for the
challenges posed by renewable energy, and creating
a European electricity market. The campaign was
cited as an example by the European Commission.
Elia Fund: wonder and
discovery for all
Since it was established, Elia has ensured that its mission to promote security of supply and the electricity market
has been reflected on the social front,
by creating the Elia Fund in cooperation
with specialists from the King Baudouin
Foundation. The Foundation – an ideal
partner for such a project – independently and transparently manages the
Fund in keeping with the company’s
values.
The Elia Fund is aimed people with
disabilities in the broad sense of the
term (people with a mental, physical
or sensory disability, older people,
families with young children, and so
on) and supports projects that offer
these individuals transparent and nondiscriminatory access to tourist, cultural
and sporting facilities, in the same way
as everybody else. The Fund, which has
an annual budget of some €250,000,
places an emphasis on ‘wonder and
discovery’.
In 2011, the panel of independent
experts selected 22 projects which
focused strongly on the integration of
disabled people in as broad a context
as possible.
•
•
•
PROJETS 2011
•
•
•
•
•
•
•
adem dus ik ben” - Vereniging
“Ik
personen met een handicap (VFG)
Kreative und musikalische Kurse
für Menschen mit und ohne
eingeschränkter Mobilität - Kreative
Werkstatt Büllingen
Toneel de Kloef Vrijetijdsondersteuningscentra
Opstap – De Kloef
Viactive - ASBL Sports Seniors
Samen bergen overwinnen
- VZW Horizont
Quatro avec Tibou - ASBL
Association des Sourds et
Malentendants du Tournaisis
Proeven van kunst en cultuur
- VZW Sjarabang
•
•
•
•
•
•
•
•
•
•
•
€250,000
The Fund, which has an annual budget of
some €250,000, places an emphasis on
‘wonder and discovery’.
•
•
•
Le Musée Magritte avec un
Visioguide - Fédération Francophone
des Sourds de Belgique
Netwerk Aalst - Centrum voor
hedendaagse kunst
Tous à bord - ASBL Génération
Nouvelle
Outdoor: beperkt!? - VZW
De Stroom
Ciné-ma différence - Centre de
Diffusion Cinématographique
Montois
Personen met een beperking op de
planken - VZW Sperwer
Comment sonne mon handicap ?
- ASBL Cinetik
Therapie op een paardenrug
- G-Seppe VZW
Tous aux plaines de vacances
- ASBL Badje
Kapitein op eigen schip
- Vormingscentrum Handicum
La voile dans un fauteuil
- asbl ForceDouce
Low-budget zomerkampen
- Jeugdvereniging De Jojo
La couleur des Sens
- ASBL Passe Muraille
NTGent overbrugt drempels
- NTGent
Imaginaire du Monstre
- Atelier Graphoui
IJspret voor iedereen
- St Margaretha vzw
DG-Inklusiv - Begleitzentrum
Griesdeck
76
ELIA GROUP 2011
SOCIAL REPORT
Whether it involves climbing
a high-voltage pylon (under
supervision) or scaling the
Col du Galibier (the legendary
stage of the ‘Tour de France’),
Elia takes part in a number of
events in which participants
push their boundaries for the
benefit of the community.
Télévie
In 2011, as in previous years, operational staff managed to persuade quite
a number of employees, friends and
family members to lay aside their fears
and climb one of Elia’s high-voltage
pylons (not connected to conductors
of course). The aim of this initiative is to
raise funds for cancer research as part
of Télévie. The event is carefully supervised by both Elia professionals and a
group of volunteer para-commandos
from the Mons area to ensure the safety
of the participants.
International wheelchair
tennis tournament
For the third year in a row, Elia supported the Belgian Wheelchair Tennis Open.
This wheelchair tennis tournament
brings together internationally renowned
sportsmen and shows how sport contributes to the integration of people with
reduced mobility.
Climbing for Life
More than 100 Elia Group employees
from Belgium and Germany and a number of customers took on the challenge
of the Col du Galibier, the legendary
climbing stage of the Tour de France.
The aim of the initiative, launched by
Flemish Minister-President Kris Peeters,
was to raise awareness and funds for
people with asthma and cystic fibrosis.
The event gave participants the chance
not only to push themselves harder
than ever before, but also to socialise
in a different setting, forge new ties, get
to know themselves and others, and
establish a network which they could
potentially use in their professional lives.
Museum aan de Stroom
Elia formed a partnership with the
Museum aan de Stroom (MAS), which
opened in Antwerp in May 2011. The
company will use the museum to
promote its activities in connection with
the Métropole social theme, thereby
boosting its profile, especially among
potential young recruits. This will enable
Elia to firmly establish itself in the Antwerp region which is home to a number
of major customers as well as the
company’s administrative headquarters
for Flanders.
Company visits
Elia organises guided visits for interested
groups, featuring a presentation of
the company followed by a visit to
a control centre and a high-voltage
substation. These visits allow people to
find out about the transmission system
operator’s activities. They usually take
place at Elia’s premises on the site at
Avenue de Vilvorde in the Brussels port
area, which is also home to the Elia
Training Centre and the national control
centre. Requests can be made to elia@
znz.be.
In Germany
In keeping with its values, 50Hertz
Transmission showed its commitment
to community welfare and sustainable
development by supporting various
projects for the conservation of nature
and the environment, as well as social
initiatives geared towards young
people. In 2011, 50Hertz established a
partnership with the world-renowned
Konzerthaus Berlin and supported
concerts by the talented young cellist
Sol Gabetta. By promoting the revival
of the traditional autumn crosscountry run Rennsteig-Herbstlauf in
Thuringia, 50Hertz also confirmed
its social commitment in a region
where significant grid extensions are
scheduled. 50Hertz is also the main
partner of the Windstärken (Wind
Forces) exhibition which began in
autumn 2011 at the German Museum
of Technology. The aim of the exhibition
is to raise public awareness of the
scientific, technological and economic
impact of wind on electricity.
ELIA GROUP 2011
SOCIAL REPORT
77
Stakeholder relations
Elia engages in open and transparent dialogue with its customers, suppliers,
shareholders, potential investors, authorities and the community at large, as well as
with Group staff members.
Relations with suppliers
Elia aims to build up a long-term, mutually beneficial relationship with its suppliers. Its procurement policy is therefore
based on the following principles:
• an objective selection and award
procedure;
• compliance with Belgian and EU
legislation;
• a constant quest for new partners
and innovative solutions;
• a preference for suppliers that support our goal of operating, maintaining and developing a secure and
reliable electricity system;
• a preference for suppliers that
provide the best possible service to
both external and internal customers;
• a preference for suppliers that use
their knowledge and experience to
reduce our costs by minimising the
total cost of ownership;
• a preference for contracting work
and framework agreements in which
the purchase of goods is linked to
the provision of the corresponding
services and the continual qualification of suppliers;
• a
•
preference for results-based commitments (or service level agreements) rather than means-based
commitments;
c
ontinuous assessment and
improvement of quality, individual
safety and the environment.
Relevant certification (SCC, BeSaCC,
ISO9001, ISO14000, and so on) is an
important criterion in the selection of
suppliers.
Relations with investors
The task of the Investor Relations Department is to ensure transparent communication with financial analysts and
current and potential investors. Two-way
communication between investors and
management has been established to
comment on the company’s results,
strategy and decisions and to understand the concerns of shareholders and
analysts as well as the perception of the
market.
More than ten roadshows were organised with the CEO and CFO for the
benefit of the hundred or so institutional
investors in Europe’s major financial
centres. The Group also took part in the
Belgian Excellence Investment Seminar
co-organised by NYSE and ING in New
York. In between roadshows, investors and analysts had a chance to talk
to the CEO or CFO, either in person or
by video conference. In addition, the
Elia Group attended many national and
international investment conferences as
well as the annual events organised by
the Vlaamse Federatie van Beleggingsclubs en Beleggers (VFB). Elia’s financial
newsletter ‘Investor News’ provides
investors with up-to-date information
about the company on a regular basis.
78
ELIA GROUP 2011
SOCIAL REPORT
Relations with employees
INDUSTRIAL RELATIONS
Sectoral agreements
To fulfil its role in Joint Committee 326,
Synergrid (of which Elia is a member)
provides various support and consulting
services on social issues for its members, including:
• d
rawing up transitional procedures
for collective labour agreements
concluded at sectoral and company
levels;
• s
upport for employers’ organisations
to prepare for the social dialogue;
• a
ssistance for members in finding
solutions to any industrial disputes;
• m
anagement of sectoral joint bodies.
Following the establishment of a draft
cross-industry agreement in early 2011,
the caretaker government introduced
a number of implementing measures
at national level, such as the maximum
wage increase of 0.3%. The discussions
will be continued in 2012.
A collective labour agreement was
signed on training activities in sectoral
companies. Within Joint Committee
218, a sectoral collective labour agreement was signed on 24 June 2011 on
purchasing power, mobility, training,
early retirement and time credits.
Group-level agreements
Company labour agreements were concluded for the transposition of collective labour agreement 90 (bonus linked
to achievement of a set of collective
results) at Elia and Elia Engineering. The
joint works council (Elia System Operator, Elia Asset and Elia Engineering) met
regularly in 2011. It was provided with
detailed information on the financial and
economic situation of the Elia Group,
and at the annual extraordinary works
council meeting.
Elia’s three committees for prevention
and protection at work (CPPTs) and Elia
Engineering’s CPPT met regularly, separately or jointly, with particular regard
to the welcoming of new employees
and the 2012 annual action plan for
safety. On the initiative of the CPPTs,
the joint working group for ‘collective
labour agreement 100 – alcohol and
drug abuse prevention policy’ drafted a
prevention policy on the consumption
of such substances at work, approved
by the Works Council meeting of 17
October 2011 and annexed to the work
regulations.
On 19 September 2011, the following collective labour agreements were
signed:
• a collective labour agreement under
the terms of which a single trade
union delegation would be established as from 1 October 2011 for
Elia Asset and Elia System Operator,
following restructuring within Asset
Management;
• a collective labour agreement under
the terms of which Elia Asset, Elia
System Operator and Elia Engineering would form a single technical
operating unit after the 2012 social
elections, for the Works Council, and
for the Committee for Prevention and
Protection at Work.
The dialogue with employee representatives was constructive, and no social
conflicts arose.
50Hertz Transmission
50Hertz Transmission maintains close
and constructive relations with employee representation bodies through the
‘Mitbestimmung’ (co-decision) system.
In 2011, employee representatives were
closely involved with the POWER internal project which comprises a series
of initiatives intended to strengthen the
strategic aims and services of 50Hertz.
Employee representatives are also kept
abreast of changes in the financial and
economic situation via the Economic
Committee.
ELIA GROUP 2011
SOCIAL REPORT
79
Alongside industrial relations in official staff
representative bodies, the Elia Group offers many
opportunities for employees in both Germany
and Belgium to meet, exchange information and
engage in dialogue.
Internal relations
in the company
Alongside industrial relations in official
staff representative bodies, the Elia
Group offers many opportunities for employees in both Germany and Belgium
to meet, exchange information and
engage in dialogue. These are organised at company level – e.g. meetings in
the field between the CEO and employees – and within specific divisions (local
information sessions). Departmental or
team meetings are also held.
Specific sessions were organised in
Belgium in the Asset Management division, following organisational changes
introduced in 2011, and in Germany, in
connection with the POWER project.
In addition, there are various communication channels providing regular
information to Group staff (website, enewsletters, company magazine, noon
meetings, etc.).
In 2011, for the first time, Belgian and
German employees were given opportunities to meet: the sporting challenge
in Belgium, the sports day in Berlin, the
climb up the Col du Galibier by German
and Belgian staff, and the joint meeting
between Belgian and German management teams.
Relations with customers
The Customer Relations Department
and its account managers are the
bedrock of Elia’s dealings with customers. 2011 was characterised by the
specific need for exchanges on new
2012-2015 tariffs. Despite the uncertainty surrounding tariffs until the final
few days of 2011, Elia endeavoured to
keep its customers well informed about
new tariff mechanisms. Accordingly,
tariff information sessions were held on
28 December 2011 to ensure a sound
understanding of 2012-2015 tariffs.
80
ELIA GROUP 2011
SOCIAL REPORT
The Users’ Group, set up by Elia as a
primary channel for exchanges with grid
users, held a number of meetings to this
end. With regard to DSOs, a consultation was held at CREG and followed by
various bilateral meetings. Elia also set
up a process to review the collaboration
agreement within Synergrid with a view
to incorporating the new tariff rules into
the agreement.
Each year, Elia organises a special
day for its customers, to keep them
informed, strengthen dialogue and
increase the number of exchanges on
matters that concern them. The 2011
edition attracted record numbers of
people. Two discussion panels gave
rise to some very interesting debates.
The first, consisting of Noémie Laumont
(Edora), Marcel Cailliau (FEBEG), Francis
van Gijseghem (ODE Vlaanderen), André
Pictoel (VREG President, the Flemish
regulator) and the head of the Elia Customer Relations Department, focused
on the integration of decentralised
generation.
The second, on the development and
regulation of the European market,
featured Alberto Pototschnig (Director
of the Agency for the Cooperation of
Energy Regulators (ACER)), Dominique
Woitrin (Technical Director of CREG),
Anne-Malorie Geron (Head of Markets
at Eurelectric), Catherine Vandenborre
(CEO of Belpex) and Daniel Dobbeni
(President of ENTSO-E).
Customers receive a monthly e-newsletter and can consult detailed and
transparent information published on
the Elia website. They can also access
relevant applications and information via
the extranet in an efficient, user-friendly
and secure way.
Customers’ Day
Each year, Elia also
organises a special day
for its customers, to keep
them informed, strengthen
dialogue with them and
increase the number of
exchanges on matters
that concern them.
ELIA GROUP 2011
SOCIAL REPORT
81
50,000
questions are fielded by the
regional technical secretariats
each year.
Relations with the
authorities, residents and
the general public
Elia takes care to inform the relevant administrative bodies and authorities and
the people living near its facilities about
what it is doing (regardless of whether
it relates to its investment, maintenance
or emergency intervention projects)
and how this may affect their daily lives,
especially during works carried out by
subcontractors or maintenance teams.
Information meetings with the public
and authorities, a hotline to regional
technical secretariats in Brussels,
Merksem and Namur and round-theclock website access at www.elia.be
are just a few of the ways Elia caters
for individuals and public authorities
requiring information. A lot of information meetings were organised in 2011 as
part of the public consultation on permit
procedures for the Stevin project.
Elia was also heard at a hearing organised by the Belgian Federal Parliament’s
Economy Committee in connection with
Minister Paul Magnette’s bill amending
the Act of 29 April 1999 relating to the
organisation of the electricity market,
and the Act of 12 April 1965 on the
transmission of gaseous products.
The regional technical secretariats field
around 50,000 questions each year.
Information meetings with
the public and authorities,
a round-the-clock hotline to
regional technical secretariats
in Brussels, Merksem
and Namur and website
access at www.elia.be are
just a few of the ways Elia
caters for individuals and
public authorities requiring
information.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
04
Corporate
governance
statement
With a view to meeting certain obligations, Elia is transparent,
neutral and non-discriminatory towards all stakeholders
involved in its activities.
At Elia, corporate governance is based on two pillars:
• t he Corporate Governance Code which Elia adopted
as a benchmark;
• t he Act of 29 April 1999 on the organisation of the
electricity market and the Royal Decree of 3 May 1999
on the management of the electricity transmission system
applicable to Elia as a transmission system operator.
83
84
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
e
i
a
l
g
r
Composition
of management bodies
Board of Directors1
CHAIRMAN
Van Nevel, whose chairmanship was renewed
on 10 May 2011, independent
• Luc
Corporate Governance Committee
Willemarck, Chairman
Murphy
Luc Van Nevel, until 10 May 2011
Miriam Maes, from 10 May 2011
• Thierry
• Jane
•
•
VICE-CHAIRMEN
Vermeiren, whose vice-chairmanship
was renewed on 10 May 2011, Publi-T
Thierry Willemarck, whose vice-chairmanship
was renewed on 10 May 2011, independent
• Francis
•
Audit Committee
De Meersman, Chairman
de Smet
laude Grégoire
C
• Clement
• Jacques
DIRECTORS
•
•
•
•
•
•
•
•
•
•
•
•
ennifer Debatisse, whose term of office was renewed
J
on 10 May 2011, Publi-T
Clement De Meersman, whose term of office
was renewed on 10 May 2011, independent
Johan De Roo2, until 25 August 2011, Publi-T
Jacques de Smet, whose term of office was renewed
on 10 May 2011; independent
Claude Grégoire, whose term of office was renewed
on 10 May 2011, Publi-T
Philip Heylen3, from 25 August 2011, Publi-T
Jean-Marie Laurent Josi, whose term of office
was renewed on 10 May 2011, independent
Miriam Maes4, whose term of office was renewed
on 10 May 2011, independent
Jane Murphy, whose term of office was renewed
on 10 May 2011, independent
Dominique Offergeld, whose term of office was renewed
on 10 May 2011, Publi-T
Steve Stevaert , whose term of office was renewed
on 10 May 2011, Publi-T
Leen Van den Neste, whose term of office was renewed
on 10 May 2011, Publi-T
HONORARY CHAIRMAN
•
Ronnie Belmans6
•
Remuneration Committee
Laurent Josi, Chairman
acques de Smet
J
Francis Vermeiren
• Jean-Marie
•
•
1Composition of the Elia System Operator and Elia Asset Boards of Directors as at 31 December 2011.
As of 13 January 2011, the Boards have 14 members.
2On 25 August 2011, the Elia System Operator and Elia Asset Boards of Directors accepted the
voluntary resignation of Johan De Roo, effective from midnight on 24 August 2011. Philip Heylen was
co-opted on 25 August 2011 as a non-independent director and replacement for Johan De Roo. He
was appointed permanently by the Extraordinary General Meeting of Elia System Operator and Elia
Asset on 26 October 2011.
3
See reference 4.
4Following the expansion of the Boards of Directors to 14 members, on 13 January 2011 Miriam Maes
was co-opted as an independent director and Steve Stevaert was co-opted as a non-independent
director. They were appointed permanently by the Ordinary General Meeting of Elia System Operator
and Elia Asset on 10 May 2011.
5
idem
6
This means he is no longer required to attend Board meetings.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
u
o
p
Auditors
Peat Marwick Goerdeler Réviseurs
d’Entreprises SCRL, represented by Alexis Palm
E
rnst & Young Réviseurs d’Entreprises SCRL,
represented by Marnix Van Dooren
• K
lynveld
•
Management Committee
Dobbeni, Chairman and Chief Executive Officer
Vandermeiren, Vice-president and Chief
Corporate Officer
J
an Gesquière, Chief Financial Officer
H
ubert Lemmens, Chief Innovation Officer
R
oel Goethals, Chief Officer European Activities &
Participations
F
rank Vandenberghe, Chief Officer Energy
& System Management
M
arkus Berger, Chief Officer Asset Management
• D
aniel
• J
acques
•
•
•
•
•
Secretary-General
• P
ierre
Bernard until 10 May 2011
Pattou from 10 May 2011
• G
regory
Board of Directors
The Boards of Directors of Elia System Operator and Elia Asset are the same and, since the amendment to the articles of
association on 13 January 2011, have consisted of 14 members, none of whom perform a management role within either
of those two companies. Half of the members are independent
directors in keeping with the conditions laid down in both Article 526ter of the Companies Code and the articles of association, and having received a positive opinion from CREG on their
independence.
=
eli
a
+
85
50 He
r tz
In accordance with provisions stipulated by legislation and the
articles of association, these Boards of Directors are supported
by three committees – a Corporate Governance Committee, an
Audit Committee and a Remuneration Committee – which are
the same for Elia System Operator and Elia Asset. The Boards
ensure the effective operation of these committees.
APPOINTMENT OF DIRECTORS
The following changes were made to the Board of Directors
in 2011:
• Following the expansion of the Boards of Directors to 14
members, on 13 January 2011 Miriam Maes was co-opted
as an independent director and Steve Stevaert was coopted as a non-independent director. They were appointed
permanently by the Ordinary General Meeting of Elia System Operator and Elia Asset on 10 May 2011.
• On 10 May 2011, the terms of office of 14 directors, of whom
seven were independent and seven were not, were renewed by the general meeting of Elia System Operator and
Elia Asset for a period of six years. CREG issued a positive
opinion on the appointment of the independent directors.
• Johan De Roo voluntarily resigned from his post as director.
His resignation was accepted by the Boards of Elia System
Operator and Elia Asset on 25 August 2011 with effect from
midnight on 24 August 2011.
• The Boards of Elia System Operator and Elia Asset co-opted Philip Heylen on 25 August 2011 as a non-independent
director and replacement for Johan De Roo. He was appointed permanently by the Extraordinary General Meeting
of Elia System Operator and Elia Asset on 26 October 2011.
The directorships will expire at the end of the 2017 general
meeting for the financial year ending on 31 December 2016.
The six-year term diverges from the term of four years recommended by the Belgian Corporate Governance Code, a fact
justified by the technical, financial and legal specificities and
complexities associated with the tasks of the transmission system operator, which call for greater experience in those areas.
86
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
It should be remembered that the corporate governance rules
for the appointment of independent and non-independent
members of the Elia System Operator and Elia Asset Boards
and their committees, as well as their roles, are subject to specific procedures. The appointment procedures are laid down
in the Act of 29 April 1999 on the organisation of the electricity
market and in the company’s articles of association.
The annual auditors’ fees for auditing the simplified and consolidated annual accounts of Elia System Operator, and the
simplified and consolidated annual accounts of Elia Asset and
Elia Engineering were set at €150,000 (€90,000 for Elia System
Operator, €50,000 for Elia Asset and €10,000 for Elia Engineering), to be indexed annually based on the cost-of-living index.
The Act of 29 April 1999 on the organisation of the electricity market gave the Corporate Governance Committee the
important task of putting forward candidates for the role of independent director. The directors are appointed based on the
candidate list drawn up by the Corporate Governance Committee. For each candidate, the Committee takes into account
an up-to-date CV and a signed formal declaration outlining the
independence criteria as stipulated by legislation applying to
Elia and the articles of association. Then the general meeting appoints the independent directors. These appointments
are submitted to CREG for its opinion on the independence of
each independent director. A similar procedure applies where
an independent directorship becomes vacant during the relevant term of office and where the Board co-opts a candidate
put forward by the Corporate Governance Committee.
BOARD OF DIRECTORS’ ACTIVITY REPORT
One of the Corporate Governance Committee’s tasks is to
act as a nomination committee for independent directors. For
the appointment of non-independent directors, no nomination committee has been established to make recommendations to the Board. This arrangement, which diverges from the
Corporate Governance Code, is due to the fact that the Board
constantly seeks consensus, wherever possible. Moreover, no
significant decision can be made without a majority among the
groups of independent directors and non-independent directors respectively.
APPOINTMENT OF COMMITTEE MEMBERS
The terms of office of the chairmen, vice-chairmen and members of the various committees supporting the Board of Directors were renewed by the Board of Directors’ meeting of 10
May 2011, for a period of three years.
Miriam Maes was appointed as a member of the Corporate
Governance Committee by the Board of Directors on 10 May
2011, as a replacement for Luc Van Nevel.
AUDITORS
At the ordinary general meetings of Elia System Operator and Elia Asset on 10 May 2011, Ernst & Young Réviseurs
d’Entreprises and Klynveld Peat Marwick Goerdeler Réviseurs
d’Entreprises were reappointed as auditors, represented by
Marnix Van Dooren and Alexis Palm respectively.
The auditors were reappointed for a period of three years. Their
terms of office are due to expire following the 2014 ordinary
general meeting for the financial year ending on 31 December
2013.
Under the Act of 29 April 1999, the Board of Directors:
• defines the company’s general policy, values and strategy
– by transposing those values and strategy into primary
guidelines, the Board takes into account corporate social
responsibility and diversity, both in terms of gender and
generally;
• exercises the powers bestowed on it by the Belgian Companies Code and by the Act of 29 April 1999 on the organisation of the electricity market, with the exception of
powers delegated to the Management Committee;
• takes any action deemed helpful or necessary to achieve
the object of the company, with the exception of those actions falling within the scope of the powers attributed or
delegated exclusively to the Management Committee, and
the powers reserved for the general meeting by law or the
articles of association;
• exercises the powers bestowed on it by the articles of association;
• exercises general control, for example over the Management Committee in accordance with statutory restrictions
regarding access to commercial data and other confidential
information relating to grid users and its processing;
• monitors and evaluates the effectiveness of the committees
supporting the Board.
In 2011, the Boards of Directors of Elia System Operator and
Elia Asset met on ten and eight occasions respectively. The
following members were absent at one or more Board meetings: Claude Grégoire (13 January 2011), Steve Stevaert and
Thierry Willemarck (24 March 2011), Johan De Roo (10 May
2011), Jean-Marie Laurent Josi, Leen Van den Neste and Francis Vermeiren (23 June 2011), Clement De Meersman, Philip
Heylen and Miriam Maes (11 October 2011), and Jennifer Debatisse, Clement De Meersman, Jean-Marie Laurent Josi, Miriam
Maes, Jane Murphy, Leen Van den Neste, Francis Vermeiren
and Thierry Willemarck (23 December 2011).
Members who are unable to attend usually have a representative. Under Article 19.4 of the Elia System Operator articles of
association and Article 18.4 of the Elia Asset articles of association, members who are absent or prevented from attending may give their prior written permission authorising another
member of the Board to represent and vote on their behalf. No
member can represent more than two directors.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
87
Significant events in 2011
Changes to the articles of association
The articles of association of Elia System Operator and Elia Asset were amended in 2011 with a view to expanding the Board
to 14 members, and in line with the new Act of 20 December
2010 on the exercise of certain rights of shareholders.
The amendments to the articles of association must comply
with the rules laid down in this regard in the Belgian Companies
Code and by the company’s articles of association (in particular
Articles 28 and 29 of the articles of association of Elia System
Operator and Articles 27 and 28 of the articles of association
of Elia Asset).
The full latest version of the articles of association can be found
on the company’s website.
Extension of the Board of Directors
to 14 members
The Boards of Elia System Operator and Elia Asset were extended from 12 to 14 members by the extraordinary general
meeting of 13 January 2011. The Boards comprise seven independent and seven non-independent directors.
This extension reflects the growth in the supervisory role performed by the Board of Directors of Elia System Operator in the
wake of international developments, in particular the acquisition
of 50Hertz Transmission and non-regulated activities.
Since the Boards of Elia Asset and Elia System Operator must
comprise the same members under Article 9bis(§3) of the Act
of 29 April 1999 on the organisation of the electricity market,
both Boards were expanded to include 14 members.
As a result, the articles of association were amended as follows:
• The first sentence of Article 12.1 of the articles of association was amended in light of the expansion of the Board of
Directors from 12 to 14 members.
• A new Article (12.4) was added to the articles of association
to enable the Board of Directors to validly deliberate and
decide whether, in the event of one or more directorships
being vacant, the Board of Directors should temporarily
comprise fewer than 14 members.
• Article 13.5.2 of the articles of association was amended so
as to modify the application rights of A and C shareholders
in light of the expansion of the Board of Directors from 12
to 14 members.
Following the extension, two new directors were appointed:
one independent and the other non-independent.
New Act of 20 December 2010 on the
exercise of certain rights of shareholders
The new Act of 20 December 2010 on the exercise of certain
rights of shareholders (rerferred to below as the Act on Shareholders’ Rights), which entered into force on 1 January 2012,
increased the rights of shareholders through its amendments
to the Companies Code. Elia System Operator and Elia Asset
amended their articles of association on 26 October 2011 to
bring them into line with the new provisions by 1 January 2012.
The following amendments were made to the articles of association of Elia System Operator:
• Article 24.1 of the articles of association was amended in
the wake of the new rule regarding the right to question
shareholders. The company must receive questions in writing by no later than the sixth (6th) day preceding the general
meeting.
• Article 24.3 of the articles of association was amended in
the wake of the new rule regarding participation by proxy in
general meetings.
• Article 26.1 of the articles of association was amended in
the wake of the new rule regarding the right to include topics in the agenda of the general meeting.
• Article 26.2 of the articles of association was amended following the extension of the number of days by which the
Board could defer the general meeting.
• Article 27 of the articles of association was amended in the
wake of the new rule regarding the right to participate in
general meetings and, where applicable, exercise the right
to vote at meetings.
• Article 28.3 of the articles of association was amended in
the wake of the new rule regarding votes by mail at general
meetings.
• Article 30 of the articles of association was amended in the
wake of the new rule regarding the publication of general
meeting minutes.
• Article 31 of the articles of association was amended in
the wake of the new rule regarding the period within which
the Board of Directors is expected to submit the necessary
documents to auditors.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
Eurogrid International, a 60% subsidiary of Elia,
acquired a 10% stake in the initial phase of the Atlantic
Wind Connection project for the establishment of the
first offshore high-voltage direct-current grid along the
East coast of the United States. Elia is cooperating
with Google, Marubeni, Good Energies and Atlantic
Grid Development on this project. Specifically, the
project will help to develop Group expertise for
similar prospective projects in Europe, such as
offshore grids and power highways of the future.
Renewal of the terms of office of Board
members, Board committee members
and the Chairman and Vice-Chairmen;
appointment of a new Secretary General
Following the expiry of their terms of office, the seven independent directors and seven non-independent directors were
reappointed for a six-year period by the Elia System Operator
and Elia Asset general meeting of 10 May 2011. The new directorships will expire following the 2017 general meeting for the
financial year ending 31 December 2016.
At the time of their reappointment, the directors satisfied all
conditions of independence as laid down in Article 526ter of
the Companies Code. Thierry Willemarck, Clement De Meersman, Jean-Marie Laurent Josi and Luc Van Nevel said they
would resign if the total duration of their terms of office reached
12 years, as provided for in Article 526ter(§2).
On 10 May 2011, the chairmanship of Luc Van Nevel and vicechairmanships of Francis Vermeiren and Thierry Willemarck
were renewed for a period of three years or less if required by
the aforementioned legal provisions (see above).
The terms of office of the members of the various committees
supporting the Board were also renewed for a three-year period on 10 May 2011 (see above).
Reappointment of auditors
Ernst & Young Réviseurs d’Entreprises and Klynveld Peat Marwick Goerdeler Réviseurs d’Entreprises, represented respectively by Marnix Van Dooren and Alexis Palm, were reappointed
as auditors for a period of three years (see above).
Appointment of a new Secretary General
Gregory Pattou was appointed Secretary General of Elia System Operator and Elia Asset, replacing Pierre Bernard, who
resigned.
Stakeholding in Atlantic Wind Connection
Eurogrid International, a 60% subsidiary of Elia, acquired a
10% stake in the initial phase of the Atlantic Wind Connection
project for the establishment of the first offshore high-voltage
direct-current grid along the East coast of the United States.
Elia is cooperating with Google, Marubeni, Good Energies and
Atlantic Grid Development on this project. Elia also concluded
a long-term consultancy contract with the project developer.
Specifically, the project will help to develop Group expertise for
similar prospective projects in Europe, such as offshore grids
and power highways of the future.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
Reacquisition by the company
of its own shares
The permission granted to the Elia System Operator Board
of Directors for the reacquisition by the company of its own
shares in the event of a serious threat, as defined in Article 37
of the articles of association, was renewed for a period of three
years with effect from the date of publication of the decision
taken by the extraordinary general meeting of 26 October 2011.
New head of the Management Committee
Jacques Vandermeiren was appointed as the future CEO and
Chairman of the Elia Management Committee at the Board
meeting of 24 November, following the proposal of the Corporate Governance Committee. He will succeed Daniel Dobbeni
in the second half of 2012. In the year to come, Elia will continue
to benefit from the expertise of Daniel Dobbeni amongst other
things for the follow-up and consultancy regarding European
and international energy markets and mandates within bodies
of subsidiaries and sector associations.
2012-2015 tariff proposal
The Commission for Electricity and Gas Regulation (CREG)
approved the proposal made by Elia in keeping with the regulator’s rules regarding tariffs for electricity transmission from
2012 up to and including 2015.
The tariffs were calculated following a consultation between
the regulator and Elia with a view to providing market players
with appropriate tariff indicators, for both power injection and
offtake, and to meeting the needs of the company to enable
it to perform its duties. The new tariffs also take into account
changes in the energy climate during the first tariff period from
2008 to 2011, against a backdrop of economic uncertainty and
in the absence of the third package of European directives.
Incentive mechanisms were put in place for consumers and
the company so as to promote effective management while
maintaining the excellent level of grid reliability seen in Belgium
for a number of years.
Removal of the capital increase reserved
for personnel
Owing to turbulence on the financial markets on the one hand
and the failure to transpose into Belgian law the third package of European directives on the other, the Board of Directors
– following the advice of the Management Committee – decided to remove the capital increase reserved for personnel (on
which it intended to vote) from the agenda of the Extraordinary
General Meeting of 26 October.
89
Remuneration Committee
In addition to its usual support role to the Board of Directors and
in accordance with both Article 526quater of the Companies
Code and the Act of 29 April 1999 on the organisation of the
electricity market, the Remuneration Committee is required
to make recommendations to the Board of Directors with
regard to remuneration policy and the individual remuneration
of Management Committee members and directors. The
Remuneration Committee also draws up a remuneration report
for presentation at the ordinary general meeting.
The Remuneration Committee met on 12 occasions particularly regarding the succession process of the Chairman of the
Management Commitee by 2012.
The company evaluates its supervisory staff on a yearly basis
in accordance with its performance management policy. This
policy also applies to members of the Management Committee. Accordingly, the Remuneration Committee evaluates the
members of the Management Committee on the basis of a
series of quantitative and qualitative collective and individual
targets. As noted elsewhere, remuneration policy for the variable portion of the Management Committee’s remuneration
was adapted to take account of the implementation of multiyear tariffs. Consequently, since 2008 the salary scheme for
members of the Management Committee has included, among
other things, an annual variable remuneration and a long-term
incentive staggered over the multi-year regulation period. The
variable remuneration has two parts: the attainment of quantitative collective targets, and individual performance, including
progress on business projects.
As part of the process aimed at ensuring continuity within the
Management Committee, the Remuneration Committee also
made recommendations to the Corporate Governance Committee regarding the succession of the Chairman of the Management Committee. In addition, the Remuneration Committee drafted a proposal in connection with the capital increase
reserved for personnel scheduled for 2011 and 2012 (see ‘Significant events’ for more on these two points).
Audit Committee
In addition to its usual support role to the Board of Directors
and in accordance with both Article 526bis of the Companies
Code and the Act of 29 April 1999 on the organisation of the
electricity market, the Audit Committee is responsible for:
• examining accounts and controlling budgets;
• monitoring financial reporting procedures;
• ensuring the effectiveness of internal control and risk
­management systems;
• monitoring internal audits and their effectiveness;
• following up on the statutory audit of annual accounts;
• evaluating and ensuring the independence of auditors;
• making proposals to the Board of Directors as to the (re)
90
•
•
•
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
appointment of auditors and the conditions of such (re)
appointments;
investigating any issues surrounding the resignation of
auditors and making proposals as to what actions, if any,
should be taken in this respect;
verifying the nature and extent of non-audit services provided by auditors;
ensuring the effectiveness of external audit procedures.
Pursuant to Article 96(§1)9° of the Belgian Companies Code,
this report must justify the independence and accounting
and auditing competence of at least one member of the Audit
Committee. The obligation for at least one member of the Audit Committee to have the necessary accounting and auditing
competencies is also laid down in the articles of association.
Clement De Meersman, the Chairman of the Audit Committee, is an independent director and has extensive experience
and competence in accounting and auditing. He holds a degree in electromechanical engineering and a PhD in applied
sciences, both from KULeuven. He has completed executive
training courses at IMD in Switzerland and the Vlerick Management School. He was a visiting student researcher at MIT
(USA) and the Institute of Technology in Tokyo. He began his
working life at KULeuven as an assistant professor before pursuing a career outside academia at a company affiliated to the
Michelin Group, active in the development, manufacture and
sale of high-resistance tyres. In 1986, he left this job to join
the Dutch DSM Group as a business unit director in charge
of the development and sale of plastic materials, composites
and high-performance products for the transport and automotive industry. In early 1994, he became the CEO of Deceuninck
NV/SA, a position he held until 2009. Clement De Meersman
is also a board member at Deceuninck, Koramic Industries,
ANL, Plasticvision, VKC and Smartroof. He is a member of the
advisory board at Verhelst and ING Kortrijk, and used to sit on
the board of Roularta.
The Audit Committee may investigate any matter that falls
within its remit. It is given the resources it needs to perform this
task, has access to all information (with the exception of commercial data concerning grid users) and can call on internal and
external experts for advice.
The Audit Committee met on six occasions in 2011.
The Committee examined the annual accounts for 2010, drawn
up in accordance with both Belgian GAAP and IFRS. It then analysed the quarterly results as at 31 March 2011, the half-yearly
results as at 30 June 2011 and the figures for the first three
quarters as at 30 September 2011, drawn up in accordance
with Belgian GAAP and IFRS. The Committee took note of the
audits and recommendations made. The further expansion of
risk management within the company was also approved by
the Committee. An action plan was drawn up for each of the
audits so as to improve the quality of procedures and of the
checks carried out and thereby reduce the associated risks.
The Committee monitored these action plans from a number of
perspectives (timetable, results, priorities) on the basis, among
other things, of an activity report from the internal audit department. The Committee concluded that these action plans were
being carried out properly and within the agreed time-frames.
The 2012 audit plan was submitted to and approved by the
Committee.
Corporate Governance Committee
In addition to its usual support role to the Board of Directors
and in accordance with both the Act of 29 April 1999 on the
operation of the electricity market and the articles of association, the Corporate Governance Committee is responsible for:
• putting forward candidates to the general meeting to be
appointed as independent directors;
• giving prior approval for the appointment and/or resignation
(where applicable) of Management Committee members;
• examining – at the request of any independent director,
the Chairman of the Management Committee, CREG or
any other federal or regional regulatory body – all cases of
conflicts of interests between the system operator on the
one hand and a dominant shareholder, municipal shareholder or company associated with or linked to a dominant
shareholder on the other, with a view to reporting to the
Board of Directors (this task aims to strengthen the directors’ independence above and beyond the procedure detailed in Article 524 of the Belgian Companies Code, which
the company also applies);
• providing its opinion in cases of incompatibility on the part
of members of the Management Committee and personnel;
• ensuring the application of provisions laid down by law, regulations, decrees and other acts relating to the organisation of the electricity market, evaluating their effectiveness
in view of the objectives for the independent and impartial
operation of the transmission system, and reporting annually on this matter to the Board of Directors and regulatory
bodies;
• holding – at the request of at least one third of members –
Board meetings in accordance with the formalities for calling meetings as laid down in the articles of association.
The Committee met on three occasions in 2011. As far as confidentiality rules permit, the Committee is kept regularly informed
of issues of importance, such as the purchase of ancillary services and the content of the infrastructure project portfolio, so
as to ensure the liberalisation of the electricity market.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
91
From left to right: Frank Vandenberghe, Hubert Lemmens,
Markus Berger, Daniel Dobbeni, Jan Gesquière, Roel
Goethals, and Jacques Vandermeiren.
Management Committee
The Management Committee was established on 29 July
2003, pursuant to Article 9 of the Act of 29 April 1999 on the
organisation of the electricity market. It is responsible for transmission system operation and the day-to-day management of
the system operator, as well as for exercising the other powers
delegated to it by the Board of Directors and the powers assigned to it by the articles of association.
The Management Committee usually meets formally at least
once a month. Members also attend informal weekly meetings.
Members who are unable to attend usually have a representative. In accordance with the Committee’s internal rules of procedure, an absent member may authorise another member to
represent him or her by giving prior written permission. Nobody
must represent more than two members.
In 2011, the Management Committee met on 13 occasions for
Elia System Operator and 11 occasions for Elia Asset.
Each quarter, the Management Committee reports to the Board
of Directors on the company’s financial situation (in particular
on the balance between the budget and the results stated). It
also reports on transmission system operation at each Board
meeting. As part of its responsibilities to report on operation of
the transmission system in 2011, the Committee kept the Board
informed of changes in legislation and case law which applied
to the company, especially developments in the transposal of
the third package of European directives, important decisions
by regulators and administrations, grid management, the situation facing subsidiaries, the acquisition of shares by Eurogrid
International in the AWC project to develop an offshore grid
along the East coast of the United States, the development of
international projects and the 2012-2015 tariff proposal.
CODE OF CONDUCT
Elia has a Code of Conduct to prevent staff and those with
leadership responsibilities in the Group from breaking any laws
on the use of privileged information and market manipulation
during transactions associated with Elia activities. The Code of
Conduct lays down a series of regulations and communication
obligations for stock exchange transactions by those individuals, in accordance with the provisions of Directive 2003/6/EC
on insider trading and market manipulation and the Act of 2
August 2002 on monitoring of the financial sector and other
financial services.
CORPORATE GOVERNANCE CHARTER AND COMMITTEES’
INTERNAL RULES OF PROCEDURE
The Corporate Governance Charter and the internal rules of
procedure of the Board of Directors, Management Committee,
Audit Committee, Remuneration Committee and Corporate
Governance Committee were amended by the Board of Directors on 25 May 2010. The Corporate Governance Charter can
be found on the company’s website (www.elia.be).
TRANSPARENCY RULES – NOTIFICATIONS
In accordance with the Act of 2 May 2007, the Royal Decree
of 14 February 2008 on the disclosure of major shareholdings
authorised on the regulated market, and various provisions of
the Royal Decree of 14 February 2008, Elia was informed of the
declaration of transparency by the Arco Group (Arcofin, Arcopar, Arcoplus, Auxipar, Arcosyn and Interfinance) and Publi-T
on 30 March 2011.
The full text of this declaration of transparency can be found
on www.elia.be.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
Remuneration of the Board
of Directors and Management
Committee
Procedure applied in 2011 with a view
to devising the remuneration policy and
remunerating directors and Management
Committee members
Pursuant to Article 16.1 of the Elia System Operator articles
of association and Article 15.1 of the Elia Asset articles of association, the Remuneration Committee drew up a draft policy
for the remuneration of directors and Management Committee
members and submitted it to the Board of Directors.
The Remuneration Committee also made various recommendations regarding the remuneration of directors and Management Committee members.
The composition and activities of the Remuneration Committee
are covered in greater detail on page 89 of the annual report.
Remuneration of directors
Total remuneration paid to the 14 Elia directors in 2011 was
€551,875.34 (€281,275.17 for Elia System Operator and
€270,600.17 for Elia Asset). The table below lists the individual
gross sums paid to each director for Elia System Operator and
Elia Asset combined:
Luc Van Nevel
46.674 € 1
Francis Vermeiren
48.966 €
Thierry Willemarck
40.403 €
Jennifer Debatisse
30.634 € 2
Clement De Meersman
40.280 €
Johan De Roo
19.664 € 3
Jacques de Smet
56.192 €
Claude Grégoire
40.762 € 4
Philip Heylen
15.076 € 5
Jean-Marie Laurent Josi
46.064 €
Miriam Maes
37.388 € 6
Jane Murphy
37.870 €
Dominique Offergeld
31.116 €
Steve Stevaert
30.634 € 7
Leen Van den Neste
30.152 € 8
These figures were calculated on the basis of ten meetings of
the Board of Elia System Operator and eight meetings of the
Board of Elia Asset in 2011. The Audit Committee met on six
occasions, the Corporate Governance Committee on three
occasions and the Remuneration Committee on twelve occasions.
Directors’ remuneration consists of a basic remuneration of
€25,000 per annum (€12,500 for Elia System Operator and
€12,500 for Elia Asset) plus an additional €800 (€400 for Elia
System Operator and €400 for Elia Asset) for each meeting
after the eighth Board meeting of the year, including meetings
with regulators. The remuneration is 50% more for the Chairman and 20% more for each Vice-Chairman of the Board of
Directors.
An additional fixed remuneration of €6,000 per year per committee (€3,000 for Elia System Operator and €3,000 for Elia
Asset) is awarded to directors who sit on a support committee,
with an additional remuneration of €800 (€400 for Elia System
Operator and €400 for Elia Asset) for each additional committee meeting (i.e. each meeting after the three covered by the
basic remuneration), including meetings with regulators.
This remuneration is included in the company’s operating costs
and is indexed annually in accordance with the consumer price
index. All remunerations are paid on a pro-rata basis during the
director’s term of office.
Directors receive an advance on their annual remuneration at
the end of the first, second and third quarters. The advance is
calculated on the basis of the basic indexed fee and on a prorata basis in relation to the duration of the directorship during
the quarter in question. A detailed account is prepared during the month of December for the financial year. This account
takes into consideration any additional remuneration on top of
the basic remuneration.
Directors do not receive any other benefits in kind, stock options, special loans or advances. Neither Elia System Operator
nor Elia Asset has issued credit to or on behalf of any Board
member.
1
2
3
4
5
6
Luc Van Nevel is no longer a member of the Corporate Governance Committee, as of 10 May 2011.
Jennifer Debatisse’s fees are paid to the company Interfin.
Johan De Roo is no longer a member of the Board of Directors, as of 25 August 2011.
Claude Grégoire’s fees are paid to the company Socofe.
Philip Heylen became a Board member on 25 August 2011.
Miriam Maes became a Board member on 13 January 2011 and a member of the Corporate Governance
Committee on 10 May 2011.
7 Steve Stevaert became a Board member on 13 January 2011.
8 Leen Van den Neste’s fees are paid to the company Arcopar (with the exception of the €7,538 paid in Q1).
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
93
Remuneration policy
Variable remuneration
The Remuneration Committee evaluates the members of the
Management Committee once a year. The change in the basic
remuneration is linked to the position of each member of the
Management Committee with respect to a benchmark salary
in the general marketplace and the assessment of his individual
performance.
The Remuneration Committee evaluates Management Committee members at the end of each year based on several
qualitative and quantitative targets. Since 2008, the variable
portion of the remuneration has comprised two components.
The first is based on the attainment of a number of targets set
by the Remuneration Committee at the start of the year, with a
maximum of 25% of variable remuneration for the individual targets and 75% for the attainment of the Elia Group’s collective
targets (‘short-term incentive plan’). The second is based on
multiannual criteria covering a period of four years (‘long-term
incentive plan’).
Since 2004, the HayGroup methodology has been used to
weight each management position and ensure that remuneration is in line with the going market rate.
Management Committee members’ remuneration consists of
the following components:
• basic salary;
• short-term variable remuneration;
• long-term variable remuneration;
• pension and other benefits.
Basic remuneration
In view of the many changes that have taken place since the
positions were last weighted, such as the company’s listing
on the stock exchange in 2005, the acquisition of 50Hertz
Transmission, the diversification and internationalisation of the
company’s activities as well as internal operational structural
changes, five Management Committee positions, including
that of Chairman of the Management Committee, were reevaluated following the Hay Study. The Remuneration Committee decided to apply the new benchmark salary as of January
2011.
Given general market conditions in late 2011, it was decided
– based on the proposal of the Chairman of the Management
Committee – not to increase the recurring remuneration of
Management Committee members on 1 January 2012 beyond
inflation.
All the members of Elia’s Management Committee have employee status.
In 2011, the basic remuneration for the Chairman of the Management Committee totalled €384,831.27. The recurring remuneration paid to the other members of the Management Committee totalled €1,492,153.77 (€1,007,044.50 for Elia System
Operator management and €485,109.27 for Elia Asset management). Therefore a total basic remuneration of €1,876,985.04
was paid to members of the Management Committee in 2011.
SHORT-TERM VARIABLE REMUNERATION
In 2011, short-term variable remuneration paid to the Chairman
of the Management Committee stood at €178,434.98. Variable remuneration paid to other members of the Management
Committee totalled €490,951.12 (€309,788.93 for Elia System
Operator management and €181,162.19 for Elia Asset management). Therefore, a total of €669,386.10 of variable remuneration was paid to Management Committee members in 2011.
LONG-TERM VARIABLE REMUNERATION
In 2011, no payments were made under the plan relating to
the second pillar. Performance for the 2008-2011 period will
be evaluated in early 2012 under the long-term incentive plan.
No other variable remuneration was paid in 2011.
CONTRIBUTIONS TO THE CORPORATE PENSION SCHEME
Since 2007, all pension plans for Management Committee
members have been ‘defined contribution’ plans, meaning that
the amount paid, excluding tax, is calculated on the basis of
annual remuneration. In 2011, Elia System Operator paid a total
of €102,095.62 to the Chairman of the Management Committee. For the other members of the Management Committee,
Elia paid a total of €342,901.05 (€231,374.91 for Elia System
Operator management and €111,526.15 for Elia Asset management).
Other benefits
Other benefits awarded to members of the Management Committee, such as guaranteed income in the event of long-term
illness or an accident, healthcare and hospitalisation insurance, invalidity insurance, life insurance, other allowances, assistance with public transport costs, provision of a company
car, employer-borne costs and other small benefits are in line
with the regulations applying to all company managerial/supervisory staff members.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
MANAGEMENT COMMITTEE MEMBERS HOLD THE FOLLOWING ELIA SYSTEM OPERATOR SHARES:
Number of Elia System
Operator shares
Management Committee member
Daniel Dobbeni Chief Executive Officer – Chairman of the Management Committee
8,822
Jacques Vandermeiren Chief Corporate Officer – Vice-Chairman of the Management Committee
1,841
Markus Berger Director Asset Management
5,790
Jan Gesquière Chief Financial Officer
4,670
Roel Goethals Director European Activities & Participations
3,024
Hubert Lemmens Chief Innovation Officer
4,655
Frank Vandenberghe Director Energy & System Management
2,682
The cost of other benefits in 2011 was valued at €35,225.73 for
the Chairman and €258,571.59 for the other members of the
Management Committee (€165,076.10 for Elia System Operator management and €93,495.49 for Elia Asset management).
There were no Elia stock options for the Management Committee in 2011.
Shares held by members of the
Management Committee and directors
Total remuneration for 2011
This section contains the information required to be disclosed
under the aforementioned legislation and not included in other
parts of the annual report.
In 2011, total remuneration for the Chairman of the Management Committee stood at €700,587.60, of which 25% was variable. Total remuneration paid to other members of the Management Committee stood at €2,584,577.54 (€1,713,284.45 for
Elia System Operator management and €871,293.09 for Elia
Asset management), of which 19% was variable. Therefore, in
2011, total remuneration for all Management Committee members stood at €3,285,165.13.
PROVISIONS OF MANAGEMENT COMMITTEE
EMPLOYMENT CONTRACTS AND SEVERANCE BENEFITS
The employment contracts concluded with members of the
Management Committee, including the Chairman, when they
were hired did not contain any specific terms as regards notice
of dismissal.
Information to be communicated under Article 96 of the Belgian Companies Code and article 34 of the Royal Decree of 14
November 2007 on the obligations of issuers of financial instruments admitted to trading on a regulated market
Pursuant to Article 4.3 of the articles of association, all Elia System Operator and Elia Asset shares have the same rights, regardless of the class to which they belong, except as otherwise
stated in the articles of association.
In this context, the articles of association state that specific
rights are associated with class A and class C shares regarding (a) the appointment of Management Committee members
(Article 13.5.2 of the articles of association of Elia System Operator and Article 12.5.2 of the articles of association of Elia
Asset) and (b) the approval of decisions by the general meeting
(Articles 28.2.1 and 28.2.2 of the articles of association of Elia
System Operator and Article 27.2 of the articles of association
of Elia Asset).
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
95
SHAREHOLDER STRUCTURE AT THE BALANCE SHEET DATE
Shares
% Shares
% Voting rights
27,383,507
45.37
45.37
Publipart
1,526,756
2.53
2.53
Group Arco
5,306,880
8.79
8.79
Other free float
26,138,074
43.31
43.31
60,355,217
100.00
100.00
Publi-T
Total
Shareholder structure at the balance
sheet date
On 31 December 2011, the shareholder structure of Elia System Operator NV/SA was as indicated above.
Process of drafting financial information
and communications
Elia has taken all possible and appropriate measures to reasonably assure that the financial information communicated
both within and outside the company takes into account the
risks facing the companies of the group and respect the true
and fair view principle, in accordance with the applicable legal
and regulatory framework.
The budget process is a key component of the internal control
mechanism that was established to assess and verify accounting, financial and economic information and also to determine
its regulated tariff. For Elia, it is crucial to be able to draw up reliable budgets in view of the many elements of uncertainty such
as wind forecasts and volumes of offtakes from the grids. The
process of drawing up budgets involves identifying the roles
and responsibilities of the departments involved so as to provide the best possible forecasts on the basis of the information
that is available. These budgets are checked by line management and then by the internal monitoring body and ultimately
approved by the responsible management bodies.
The regulators play a monitoring role, approving the proposed
multi-year tariff. Budget monitoring is a collective objective for
the whole of the Elia Group and is carried out on an ongoing
basis by budget managers and Controlling using, for example,
frequently tested tools. The monthly, quarterly and annual reporting process is based on procedures relating to the budgeted items and real items. The accounts and consolidated
assessment are drafted on the basis of the Group’s accounting
manual which is regularly updated to take into account internal and external factors. This reporting follows a schedule and
checklists that have been drawn up in advance in consultation
with various departments that are involved. The outcome of
this process is frequently verified by the Controlling Department and the Internal Audit Department.
The Accounting Department drafts the financial information
under the responsibility of the Accounting & Finance Manager,
based on the reporting process described above. The Group
results are discussed on a monthly basis by the Accounting
and Controlling Department, which makes analyses of and
comparisons between the budget, economic and historical
information. The final result is submitted to the Executive Committee for approval and the quarterly and annual results are
systematically submitted to the Audit Committee and the Board
of Directors for approval. The actions of the staff and managers
of the Accounting and Controlling Department are guided by
the principles described in the ‘Social report’ chapter.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
Features of the internal control
and risk management systems
The reference framework for internal control and risk management, established by the Management Committee and approved by the Elia Board of Directors, is based on the COSO
II framework developed by the Committee of Sponsoring Organisations of the Treadway Commission. The framework has
five closely linked basic components, providing an integrated
procedure for internal control and risk management systems:
control environment, risk assessment, control activities, information and communication, and monitoring.
Financial reporting is organised in such a way as to meet all
reporting obligations while ensuring consistency between various reports and avoiding inefficiencies.
The structured approach developed by Elia helps to ensure
that financial data is both exhaustive and precise, taking into
account the deadlines for activity reviews and the actions of
key players so as to ensure adequate control and accounting.
INTEGRITY AND ETHICS
The use and inclusion of these concepts in Elia’s various procedures and activities enables the company to control its activities, improve the effectiveness of its operations, optimally
deploy its resources, and ultimately achieve its objectives. The
implementation of COSO II at Elia is described below.
1. Control environment
ORGANISATION OF INTERNAL CONTROL
Pursuant to the Elia articles of association, the Board of Directors has established various committees to help it fulfil its
duties: the Management Committee, the Audit Committee,
the Remuneration Committee and the Corporate Governance
Committee. The Elia Board of Directors is responsible for evaluating the effectiveness of the internal control and risk management systems.
The Board has charged the Audit Committee with the task of
monitoring: (i) the financial reporting procedure; (ii) the effectiveness of internal control and corporate risk management
systems; (iii) the internal audit and its effectiveness; (iv) the
statutory audit of annual and consolidated accounts, including
the follow-up of any issues raised or recommendations made
by external auditors; (v) the independence of external auditors.
The Audit Committee meets quarterly to discuss the above
points.
The Finance Department helps the Management Committee to
provide, in a timely manner, correct and reliable financial information to aid not only decision-making with a view to monitoring the profitability of activities, but also effective management
of corporate financial services. External financial reporting –
one of Elia’s duties – includes (i) statutory financial and tax reporting; (ii) consolidated financial reporting; (iii) specific reporting obligations applicable to public companies; (iv) reporting
obligations under the regulatory framework.
Elia’s integrity and ethics are a crucial aspect of its internal
control environment. The Management Committee and management regularly discuss these principles, on which the corporate rules established to clarify the mutual rights and obligations of the company and its employees are based. These rules
are disseminated to all new employees, and compliance with
them is formally included in employment contracts. The Code
of Conduct also helps to prevent employees from breaking any
Belgian legislation on the use of privileged information or market manipulation and suspicious activities.
Management consistently ensures that employees comply with
internal values and procedures and – where applicable – take
any actions deemed necessary, as laid down in the company regulations and employment contracts. A particular focus
is laid on compliance with confidentiality rules, primarily by
means of a specific confidentiality clause in employment contracts, but also through various measures applied in the event
of noncompliance.
By virtue of its legal status as a power transmission system
operator, Elia abides by a large number of statutory and regulatory rules setting out various fundamental principles such
as confidentiality, transparency and non-discrimination. With
a view to meeting these specific obligations, Elia has drawn
up an Engagement Programme (approved by the Corporate
Governance Committee) and produced a roadmap identifying
which control initiatives should be taken, and in which order.
The Compliance Officer reports annually to the relevant regulatory bodies in this regard.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
97
The structured approach developed by Elia helps
to ensure that financial data is both exhaustive and
precise, taking into account the deadlines for activity
reviews and the actions of key players so as to ensure
adequate control and accounting.
ROLES AND RESPONSIBILITIES
COMPETENCIES
Elia’s internal control system relies on clearly defined roles and
responsibilities at all levels of the organisation. The roles and
responsibilities of the various committees* established within
Elia are primarily identified in the legal framework applicable to
Elia, the articles of association and the Corporate Governance
Charter.
Under the supervision of the Chief Financial Officer, the Accounting Department is responsible for statutory financial and
tax reporting and the consolidation of the Elia Group’s various
subsidiaries. The Controlling Department monitors analytical
accounting and reporting and assumes responsibility for all reporting in a regulatory context. The Investor Relations Department is responsible for specific reporting applicable to companies listed on the stock exchange.
With a view to ensuring its various activities are performed reliably and effectively, Elia clearly spells out the vital importance of
its employees’ competencies and expertise in its recruitment,
training and retention procedures. The Human Resources Department has drawn up the appropriate policies and defined all
jobs in order to identify the relevant roles and responsibilities as
well as the qualifications needed to fulfil them.
Elia has drawn up a policy for the management of generic and
specific competencies in line with the company’s values, and
promotes training so as to enable all its employees to effectively perform the tasks allocated to them. Requirements with
regard to competency levels are continually analysed by means
of formal and informal (self-)assessments at various stages of
an employee’s career.
As regards the financial reporting process, the tasks and responsibilities of all employees in the Accounting Department
have been clearly defined with a view to producing financial
results that accurately and honestly reflect Elia’s financial transactions. A detailed framework of tasks and responsibilities has
been drawn up to identify the main control duties and the frequency with which tasks and control duties are performed.
Training programmes on financial reporting are offered to all
employees involved directly or indirectly with that task. The
training lays an emphasis on the existing regulatory framework,
accounting obligations and actual activities, with a high level of
understanding enabling participants to address the appropriate issues.
An IFRS Accounting Manual is used by all entities within the
scope of consolidation as a reference for accounting principles
and procedures, thus ensuring consistency, comparability and
accurate accounting and reporting within the Group. The Finance Department has the appropriate means (including IT
tools) to perform its tasks; all entities within the scope of consolidation use the same ERP software, which has a range of integrated controls and supports task separation as appropriate.
Elia also clarifies the roles and responsibilities of all its employees by providing a description of its procedures, in keeping
with the Business Process Excellence methodology, and of
each job.
* See the sections relating to the committees for more information.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
2. Risk assessment
Risk assessments are crucial in helping Elia to achieve its strategic objectives as defined in its mission. The Board of Directors and Risk Manager jointly and regularly identify and assess
key financial and non-financial strategic risks. The risks are
assessed qualitatively or quantitatively and according to their
probability. The Risk Manager then makes recommendations.
Based on the assessment, preventive, remedial and corrective
action plans are implemented wherever existing internal control
activities need to be strengthened.
The objectives set for the entire Group feed through to each
level of the organisation. Assessments are performed annually
to determine how well those objectives have been achieved.
As part of its responsibilities, the management establishes an
effective internal control system to ensure accurate financial reporting, among other things. It emphasises the importance of
risk management in financial reporting by taking into account,
with the Audit Committee, a whole range of associated activities and risks. It ensures that risks are truly reflected in financial
results and reports.
Financial risk assessments primarily involve the identification
of:
(i) significant financial reporting data and its purpose;
(ii) major risks involved in the attainment of objectives;
(iii) mechanisms for controlling misreporting risks.
Financial reporting objectives include (i) ensuring financial statements comply with widely accepted accounting principles; (ii)
ensuring that the information presented in financial results is
both transparent and accurate; (iii) the use of accounting principles appropriate to the sector and the company’s transactions;
(iv) ensuring the accuracy and reliability of financial results.
The activities undertaken by Elia, as a power transmission system operator, in relation to its physical installations contribute
significantly to financial results. Therefore, appropriate procedures and control systems have been established to ensure the
exhaustiveness and physical existence of installations.
Elia has established an enterprise risk management (ERM) culture to ensure constant control. This approach incorporates
the key policies and procedures set out in the risk management
recommendations and Risk Management Charter.
Risk awareness is supported by the delegation of relevant responsibilities to all employees as part of their specific activities,
as defined in the Charter.
CONTINUOUS ASSESSMENT
Employing a simultaneously top-down and bottom-up approach enables Elia to identify and, where possible, quickly
anticipate events and react to any incidents occurring inside
or outside the organisation which might affect the attainment
of objectives.
TOP-DOWN APPROACH BASED ON STRATEGIC RISKS
Strategic risk assessments are covered in a quarterly report
to the Audit Committee. Action plans or specific additional assessments are put forward in the report in view of prospective
events, whether they are perceived as threats or potential opportunities.
BOTTOM-UP APPROACH WITH REGARD TO BUSINESS
With a view to identifying new risks or evaluating changes in
existing risks, the Risk Manager and management line remain
in constant contact and look out for any change that may call
for the relevant risk assessment and associated action plans
to be amended.
Various criteria are used to determine the need to re-evaluate financial reporting procedures and associated risks. They
place an emphasis on risks associated with changes in the financial and regulatory context, industrial practices, accounting
standards and corporate developments such as mergers and
acquisitions.
Operational management assesses the relevant risks and puts
forward action plans. Any significant changes to assessment
rules must be approved by the Board of Directors.
In general, Risk Management helps Elia to maintain its value for
stakeholders and the community, works with all departments
with a view to optimising Elia’s ability to achieve its strategic
objectives, and advises the company regarding the possibility
or nature of future risks.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
99
Elia disseminates relevant information to
its employees to enable them to fulfil their
responsibilities and achieve their objectives.
3. Control activities
MAIN CONTROL ACTIVITIES
Elia has established control activities at its various structural
levels so as to ensure compliance with standards and internal procedures geared to the proper management of identified
risks. These include:
(i)clear task separation as part of procedures, preventing the
same person from initiating, authorising and recording a
transaction – policies have been drawn up regarding access to information systems and the delegation of powers;
(ii)integrated audit methods as part of procedures so as to link
end results with the transactions supporting them;
(iii)data security and integrity through the appropriate allocation of rights;
(iv)appropriate documentation of procedures through the use
of the Business Process Excellence Intranet, which centralises policies and procedures.
Departmental managers are responsible for establishing activities to control the risks inherent to their department.
Elia takes all necessary measures to adapt its control activities
where internal or external events are liable to affect existing
processes.
FINANCIAL REPORTING PROCEDURE
For all significant financial reporting risks, Elia sets out appropriate control mechanisms to minimise the probability of error. Roles and responsibilities have been defined in connection
with the closing procedure for financial results.
Measures have been established for the continual follow-up of
each stage, with a detailed agenda of all activities undertaken
by Group subsidiaries; control activities are performed to ensure quality and compliance with internal and external requirements and recommendations.
During closing, a specific test is performed to ensure control
over significant unusual transactions (e.g. through data mining
software), accounting lines and adjustments at the end of the
relevant period, company transactions and critical estimates.
All of these controls combined sufficiently ensure the reliability of financial results. Regular internal and external audits also
contribute to financial reporting quality.
In identifying those risks affecting the achievement of financial
reporting objectives, the management takes into account the
possibility of misreporting associated with fraud and takes appropriate action where internal control needs to be strengthened. Internal Audit performs specific audits based on the risk
assessment for potential fraud, with a view to avoiding and
preventing any instances of fraud, and data mining software is
used in areas susceptible to fraud.
4. Information and communication
Elia disseminates relevant information to its employees to enable them to fulfil their responsibilities and achieve their objectives. Financial information is needed for budgeting, forecasts
and ensuring compliance with the regulatory framework. Operational information is also vital for the production of various reports. As such, Elia records recent and historical data needed
for corporate risk assessments. Multiple communication channels are used: manuals, memos, emails, bulletin boards and
intranet applications.
Established information systems are used to structure information from a range of different sources so as to ensure: (i)
transactions are recorded and monitored in real time; (ii) data is
entered within a time-frame and at a level of detail that meets
risk management requirements; (iii) the quality of information
through discussions at different levels: the information owner
validates the relevant data before publication, the management
checks its accuracy and reliability, and IT risks (such as the
quality of IT developments or the stability of data transmission)
are followed up by action plans.
Financial results are reported internally and validated at different levels. The management responsible for financial reporting
regularly meets other internal departments (operational and
control departments) to identify financial reporting data. It validates and documents the critical assumptions underpinning
booked reserves and the company’s accounts.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
Financial information is needed for budgeting,
forecasts and ensuring compliance with the
regulatory framework. Operational information is
also vital for the production of various reports.
As such, Elia records recent and historical data
needed for corporate risk assessments.
At Group level, consolidated results are broken down into segments and validated by means of a comparison with historical
figures and a comparative analysis between forecasts and actual data. This financial information is reported monthly to the
Management Committee and is discussed quarterly with the
Audit Committee. The Chairman of the Audit Committee then
reports to the Board of Directors.
5. Monitoring
Elia continually re-evaluates the adequacy of its risk management approach. Monitoring procedures include a combination
of monitoring activities carried out as part of normal business
operations, in addition to specific ad-hoc assessments on selected topics.
Monitoring activities include (i) monthly reporting of strategic
indicators to the Management Committee and the management; (ii) follow-up on key operational indicators at departmental level; (iii) a monthly financial report including an assessment
of variations as compared with the budget, comparisons with
preceding periods and events liable to affect cost controlling.
Consideration is also given to third-party feedback from a
range of sources, such as (i) stock market indices and reports
by ratings agencies; (ii) share value; (iii) reports by federal and
regional regulators on compliance with the legal and regulatory
framework; (iv) reports by security and insurance companies.
Comparing information from external sources with internally
generated data and ensuing analyses allows Elia to keep on
making improvements.
Internal Audit also plays a key role in monitoring activities by
conducting independent reviews of key financial and operational procedures in view of the various regulations applicable
to Elia. The findings of those reviews are reported to the Audit
Committee to help it monitor internal control and risk management systems and corporate financial reporting procedures.
The Group’s legal entities are also subject to external audits,
which generally entail an evaluation of internal control and remarks on (annual and quarterly) statutory and consolidated financial results. External auditors make recommendations for
improving internal control systems. The recommendations,
action plans and their implementation are reported annually
to the Audit Committee, which in turn reports to the Board of
Directors on the independence of the auditor or statutory audit
firm and drafts a motion for a resolution on the appointment of
external auditors.
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CORPORATE GOVERNANCE STATEMENT
101
Description of the risks
and uncertainties facing
the company
1. Regulatory and income risks
INTERNATIONAL
The two transmission system operators in the Elia Group proactively anticipate European legislation, new directives and
regulations being prepared at EU level or awaiting transposition
into Belgian and German law in order to minimise uncertainties.
Elia and 50Hertz Transmission are European leaders when it
comes to the components of the European Commission’s third
package of directives aimed at developing a single electricity
and gas market, as regards both the independence and impartiality of the management.
The provisions of the third package were transposed into Belgian and German law in 2012. Under these provisions, Elia System Operator and 50Hertz will be subject to new procedures,
such as certification as a full-owned unbundled TSO. The timetable and results of these new procedures at European level
may include regulatory risks for both companies.
Elia and 50Hertz are also founding members of the European Network of Transmission System Operators for Electricity
(ENTSO-E), which was set up in December 2008 and brings
together 41 transmission system operators from 34 countries,
including the EU Member States. Amongst other things, ENTSO-E performs the role of the European Network of Transmission System Operators provided for in the third package. The
Chairman of the Management Committee was re-elected as
president of the association for another two years in June 2011.
NATIONAL
The Belgian legal framework was established when the first EU
Directive on the internal electricity market was transposed by
the Electricity Act of 29 April 1999. The company’s net profit
is largely determined by the fair return, which, for the period
2008-2011 contains an ‘incentive’ component spread over four
years. Elia’s result will therefore be influenced annually, either
positively or negatively, by its ability to achieve and/or exceed
the efficiency improvement factor, by changes to Belgian linear
bonds (10-year OLOs), and by the federal regulator’s analysis
of the various budget items. On 22 December 2011, the tariffs
and mechanisms determining Elia’s profitability as Belgium’s
transmission system operator were approved by CREG for a
new four-year tariff period, effective 1 January 2012. That approval was provisional since the third package of European directives had not been transposed into Belgian by that date. In
addition, one or more customers may submit an appeal to the
Brussels Court of Appeal to contest the tariffs approved by
CREG. This results in a legislative and regulatory risk likely to
negatively impact the company’s profitability.
On the other hand, Elia’s turnover also depends on the energy
drawn off from its grid, and therefore on the level of business
activity of its customers. The decline in residential consumption
prompted by the slowdown in economic activity in 2009 has resulted in an income deficit compared with the tariffs approved
by the regulator for 2008-2011. Under prevailing legislation, this
deficit and the extra costs, such as additional financing, must
be offset by the tariffs for the next regulatory period. The impact on the electricity consumption of Elia’s various customer
segments and the uncertainty surrounding the outlook for an
upturn in business amongst industrial customers continue to
pose a risk to Elia’s cash flow.
The regulatory framework for 50Hertz is based on an initial
cost assessment and defines a revenue ceiling and efficiency
incentives. It fixes the grid tariffs that include the remuneration based on a fixed return on capital invested for a five-year
tariff period. The return for other regulatory periods will have
to be confirmed subsequently. The German regulator has also
defined a specific remuneration system for investments in the
grid called ‘investment budgets’. To this end, 50Hertz files a
request for approval of these budgets to ensure appropriate remuneration during the regulatory period. The investment budgets for various projects are currently in the approval process.
Specific rules apply to costs and income generated by support
programmes for renewable energy sources and cogeneration.
The German government’s decision to shut down eight nuclear
power stations following the incident in Japan results in additional costs for managing technical constraints on grids. The
time it takes to offset the costs incurred means that 50Hertz
prefinances its costs, which may have an impact on its cash
flow and on its profit as defined by HGB accounting rules.
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ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
REGIONAL
POWER OUTAGES
The regulatory framework entails risks at regional level in Belgium. For instance, contradictions between the various regulations, including the grid codes, can hinder the exercise of the
company’s activities. The further development of and changes
to these regulations may also impact the company’s liability in
the event of a power outage on the grid or – in the context of
a reform of the State – the division of powers between federal
and regional authorities, including the power to approve transmission tariffs.
In addition, the regulatory uncertainty surrounding certain surcharges linked to, among other things, the green certificates
mechanism means a risk that may affect cash flow and investment requirements.
The reliability of the transmission systems operated by Elia
and 50Hertz is among the best in Europe. Nonetheless, unforeseen events, such as unfavorable weather conditions, may
occur which interrupt the smooth operation of one or more infrastructure components. In most cases, these incidents have
no impact on consumers’ power supply because the meshed
structure of the grids operated by Elia and 50Hertz means that
consumers can be reached via a number of different connections. However, in extreme cases an incident in the electricity
system may lead to a local or widespread outage (known as a
blackout). Such outages may be caused by natural phenomena, unforeseen incidents or operational problems, either in Belgium or abroad. Elia regularly holds crisis management drills so
that it is ready to deal with the most unexpected and extreme
situations. The general terms and conditions of its standard
contracts limit the liability of Elia and 50Hertz to a reasonable
level while its insurance policy is designed to offset the financial
repercussions of these risks.
2. Operational risks
SECURITY OF SUPPLY
Every year, Elia and 50Hertz Transmission seek to contract the
reserves needed to ensure continual balance between production and consumption in their respective zones. To that end,
they analyse, at both national and European level, how the
growing proportion of intermittent renewable energy generation units can be integrated without compromising the security.
The growth across Europe in the number of cogeneration and
renewable energy units connected to distribution systems and
the future connection of large offshore wind farms also create
new challenges for operational grid management and require
the further development of their infrastructure.
These developments, changing trends in offtake and the enhancement of interconnection capacity between EU member
states are dependent on securing permits and approvals from
local, regional, national and international authorities. The need
to obtain such approvals and permits within certain timeframes
represents a risk to timely implementation. Moreover, these approvals and permits can be contested in the relevant courts.
Enhanced coordination at European level during the planning
phase as well as during the phase immediately preceding real
time has made it possible to minimise the impact of loop flows
on available transmission capacity for commercial purposes.
However, intervention to limit this - transmission capacity to
guarantee reliability and supply quality as for as possible - cannot be ruled out, especially in view of the growing share accounted for by variable production (wind, solar).
RISKS ASSOCIATED WITH ELECTRONIC, IT AND
TELECOMMUNICATION TECHNOLOGIES
The incorporation of electronic, IT and telecommunication technologies in electricity transmission systems for the purposes
of operational management, communication and surveillance
(such as smart grids) modifies the nature of electricity systems
and infrastructure used by TSOs such as Elia and 50Hertz.
Failures in the telecommunications network or IT systems used
to operate the electricity system may harm the latter’s performance. Elia takes appropriate measures to back up the IT network and associated systems to the maximum extent allowed
by technical and financial considerations. It has drawn up and
regularly tests recovery plans for the most critical IT systems.
However, component failures in the telecommunication network and IT systems are impossible to rule out. Where systems
do fail, Elia will strive to minimise the impact on customers.
ENVIRONMENTAL RISK
Elia’s results may be affected by outgoings needed to keep up
with environmental legislation, including costs associated with
implementing preventive or corrective measures or settling
third-party claims. The company’s environmental policy is developed and monitored in such a way as to manage these risks.
Where Elia might in any way be liable for decontamination, the
appropriate provisions are set aside. Additional analyses are in
progress and could lead to a revision of existing provisions or
the adoption of new provisions. The same holds true for electric and magnetic fields.
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CORPORATE GOVERNANCE STATEMENT
103
Every year, Elia and 50Hertz Transmission seek
to contract the reserves needed to ensure
continual balance between production and
consumption in their respective zones. To that
end, they analyse, at both national and European
level, how the growing proportion of intermittent
renewable energy generation units can be
integrated without compromising the security.
RISK OF LEGAL DISPUTES
Although the company operates in such a way as to minimise
the risk of legal disputes, it may nonetheless become involved
in such disputes. Where necessary, the appropriate provisions
are laid aside for this.
SAFETY AND WELFARE
Elia operates facilities that may cause harm to the natural or
human environment or for which accidents or external attacks
may have major repercussions. Persons working in or near
electricity transmission facilities may be exposed, in the event
of an accident, error or negligence, to the risk of electrocution.
The safety and welfare of individuals (both Elia personnel and
third parties) is a daily priority for the Elia Group’s management,
supervisory staff and personnel, and substantial resources are
invested in safeguarding them. Each year, an action plan is
approved and implemented based on developments in safety
figures.
RISKS ASSOCIATED WITH INEFFICIENT INTERNAL
CONTROL MECHANISMS
All internal processes can have an impact on the company’s
results in some way. The multi-year tariff mechanism increases
the need for year-on-year increases in the company’s overall
efficiency. To this end, the efficiency of internal processes is
monitored regularly, using performance indicators and/or audits, to ensure they are kept under proper control. This is overseen by the Audit Committee, which controls and monitors
the work of the Internal Audit & Enterprise Risk Management
Department.
3. Financial risks
The Group is exposed to various financial risks in the exercise
of its activities: market risk (namely interest rate risk, inflation
risk, tax risk and limited exchange risk), liquidity risk and credit
risk. The risks the company faces are identified and analysed
in order to establish appropriate limits and controls and monitor
risks and compliance with such limits. To this end, the Group
has defined responsibilities and procedures specifically for the
financial instruments to be used and the operating limits for
managing them. These procedures and related systems are
revised on a regular basis to reflect any changes in market conditions and the activities of the Group. The financial impact of
these risks is limited, as Elia and 50Hertz are operating under
the Belgian or German regulatory framework. See the ‘Regulatory framework’ section.
To finance its investments and to achieve its short- and longterm strategic goals, Elia and 50Hertz turn to the capital
markets. At the time of writing, the economic and financial
environment in Europe has been shaken by the debt crisis affecting banks and the member states of the EU. This tension
on the capital and credit market in a highly interdependent financial system may have an impact on loans to companies,
in some cases reducing the financing capacity of Elia and/or
50Hertz. This situation could have an adverse effect on Elia’s
and 50Hertz’s future growth and on the pursuit of their objectives. Elia is partly financed with floating rate bonds. Although
a financing policy has been approved that strives to achieve an
optimal ratio between fixed and variable interest rates and appropriate financial instruments are used to mitigate the financial
risk, a change in interest rates can have an impact on financial
104
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
The risks the company faces are identified
and analysed in order to establish appropriate
limits and controls and monitor risks and
compliance with such limits.
charges passed on in a subsequent regulatory tariff period (or
in the same period in the event of an exceptional change in
charges). Financial charges are also related to the credit rating
of the company. Elia cannot guarantee total protection in the
event of significant movements in interest rates or in the event
of a downgrading of its rating, or Eurogrid GmbH’s rating. For
more information, see the section on ‘Financial risk and financial derivatives’ in the annual report.
ATLANTIC WIND CONNECTION
4A. New business developments
4B. Specific risks relating to Elia’s
acquisition of 50Hertz
The Elia Group strives to anticipate new opportunities relating
to its core business, both inside and outside the Belgian regulated framework. The launch of international projects abroad
may create risks associated with foreign regulations or uncertainties regarding the business plans to be drawn up. Efforts
to identify and assess risks are carried out in parallel to the
business plan in order to assess and manage the various risks.
OFFSHORE GRID IN THE NORTH SEA
Belgium has an installed generating capacity of 195 MW in offshore wind farms, comparable to Germany (195 MW) and the
Netherlands (247 MW). The North Sea offshore grid project is
part of a broader project to interconnect Belgium, the Netherlands, Germany, Denmark, Norway and the United Kingdom
in a North Sea grid (North Sea Grid Initiative). Elia factors in
risk areas such as technical feasibility, financial risks, impact on
customers, environmental risks and permit risks.
This is the first direct current high-voltage offshore grid, located
off the East Coast of the United States. Elia is part of the consortium of companies that own the project. Elia takes account
of the risks inherent in a business activity in a country whose
legislative and regulatory framework and whose permitting
procedures are different, while also factoring in the project’s
financial aspects and governance.
As regards the acquisition of 50Hertz by Elia and IFM (through
Eurogrid International CBVA/SCRL and Eurogrid GmbH), the
possibility of a limited or non-existing recourse to Vattenfall
concerning certain risks relating to the activities of 50Hertz
cannot be excluded, nor can it be excluded that certain risks
are not covered by representations and guarantees or allowances provided by Vattenfall. 50Hertz operates within the German legal and regulatory framework and may be subject to
other constraints than Elia. Elia holds only 60% of the 50Hertz
shares; the other 40% are held by IFM.
ELIA GROUP 2011
CORPORATE GOVERNANCE STATEMENT
5. Contextual factors
MACRO-ECONOMIC RISKS
In recent months, all European economies have faced greater
uncertainty and volatility, while the recovery expected after
the multifaceted economic and financial crisis that emerged
in 2007/2008 has proven to be premature. Even if the current
liquidity crisis can be avoided, there remains uncertainty about
how to solve the underlying long-term structural economic
problems, such as national account imbalances and diverging levels of competitiveness between EU countries. Against
this uncertain backdrop, an extended period of slow economic
growth can have a negative impact on volumes of electricity
transmitted and plans to develop the current grid and electricity generation assets (including renewable energy sources). In
addition, the impact of the financial crisis has magnified the
(upward and downward) volatility of factors influencing the financial results in connection with the current fair return mechanism, such as the Belgian 10-year linear bond and interest
rates in Germany.
105
HUMAN RESOURCES RISK
Elia pursues an active image and recruitment policy to maintain
an appropriate level of expertise and know-how in a tight labour market. This is an ongoing risk, bearing in mind the highly
specialised and complex nature of its business.
IMAGE RISK
Generally speaking, circumstances may arise that have a negative impact on the company’s image. Elia has an internal control mechanism to guarantee the confidentiality of data. Despite
this, external parties may pass on information in their possession that could have an impact on the company’s share price.
MISCELLANEOUS
Elia realises that there might be other risks of which the company is not yet aware. Some risks may seem limited today but
increase in the future. The subdivisions used give no indication
of the potential consequences of the listed risks.
Elia and 50Hertz Transmission are European
leaders when it comes to the components of the
European Commission’s third package of directives
aimed at developing a single electricity and gas
market, as regards both the independence and
impartiality of the management.
ELIA GROUP 2011
FINANCIAL REPORT
05
Financial
Report
The results of the year 2011 in details.
107
108
ELIA GROUP 2011
FINANCIAL REPORT
Consolidated financial
statements IFRS
Consolidated income statement
Notes
2011
2010
(5.1)
1,188.2
939.5
(5.3.1)
(5.9)
(5.9)
1,182.3
933.6
90.2
(638.4)
(158.4)
(140.9)
(26.8)
98.0
(457.2)
(133.9)
(127.5)
(31.1)
308.0
281.9
0.0
0.0
286.5
(8.0)
308.0
560.4
(5.4)
(128.6)
(123.2)
(5.6)
14.2
(142.8)
1.4
21.8
(145.0)
(1.2)
180.8
436.0
(43.3)
(34.0)
Profit from continuing operations
137.5
402.0
Profit for the period
137.5
402.0
Profit attributable to:
Owners of the Company
Non-controlling interest
137.5
0.0
401.7
0.3
PROFIT FOR THE PERIOD
137.5
402.0
(in million €) – Year ended 31 December
CONTINUING OPERATIONS
Revenue
Raw materials, consumables and goods for resale
Gross profit
Other income
Services and other goods
Personnel expenses
Depreciation, amortization, impairment and changes in provisions
Other expenses
(5.2)
(5.3.1)
(5.3.2)
(5.3.3)
(5.3.4)
Results from operating activities, before non-recurring items (REBIT)
Gain on bargain purchase
Non-recurring services and other goods
RESULTS FROM OPERATING ACTIVITIES (EBIT)
NET FINANCE COSTS
Finance income
Finance costs
Share of profit of equity accounted investees (net of income tax)
Profit before income tax
Income tax expense
(5.5)
Earnings per share (€)
Notes
31.12.2011
31.12.2010
Basic earnings per share
Diluted earnings per share
(5.7)
(5.7)
2.28
2.28
7.36
7.36
The accompanying notes are an integral part of these consolidated financial statements.
ELIA GROUP 2011
FINANCIAL REPORT
109
Consolidated statement of comprehensive income
2011
2010
137.5
402.0
(3.9)
1.3
(16.3)
5.5
0.1
(13.3)
(3.1)
1.1
25.9
(8.8)
0.0
15.1
Total comprehensive income for the period
124.2
417.1
Profit attributable to:
Owners of the Company
Non-controlling interest
124.2
0.0
416.8
0.3
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
124.2
417.1
(in million €) – Year ended 31 December
Notes
PROFIT FOR THE PERIOD
Other comprehensive income
Effective portion of changes in fair value of cash flow hedges
Tax on effective portion of changes in fair value of cash flow hedges
Defined benefit plan actuarial gains and losses
Tax on defined benefit plan actuarial gains and losses
Exchange differences on translation of foreign operations
Other comprehensive income for the period, net of income tax
(5.4)
(5.4)
(6.12)
(6.12)
110
ELIA GROUP 2011
FINANCIAL REPORT
Consolidated statement of financial position
ASSETS
31.12.2011
31.12.2010
5,145.1
4,994.1
3,150.5
1,753.6
120.3
30.6
84.9
5.2
3,010.9
1,751.1
114.7
29.2
79.5
8.7
698.7
909.9
16.3
281.6
10.0
385.6
5.2
14.5
513.8
6.3
366.0
9.3
5,843.8
5,904.0
31.12.2011
31.12.2010
2,046.9
2,007.2
2,046.9
1,500.6
8.5
67.6
(23.3)
493.5
2,007.2
1,500.6
8.5
51.4
(20.7)
467.4
Non-controlling interest
0.0
0.0
Non-controlling interest
0.0
0.0
3,203.5
3,211.0
(in million €)
Notes
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Trade and other receivables
Investments in equity-accounted investees
Other financial assets (including derivatives)
Deferred tax assets
(6.1)
(6.2)
(6.3)
(6.4)
(6.5)
(6.6)
CURRENT ASSETS
Inventories
Trade and other receivables
Income tax receivable
Cash and cash equivalents
Deferred charges and accrued revenues
(6.7)
(6.8)
(6.9)
(6.8)
TOTAL ASSETS
EQUITY AND LIABILITIES
(in millions €)
Notes
EQUITY
Equity attributable to owners of the Company
Share capital
Share premium
Reserves
Hedging reserve
Retained earnings
(6.10)
NON-CURRENT LIABILITIES
Loans and borrowings
Employee benefits
Derivatives
Provisions
Deferred tax liabilities
(6.11)
(6.12)
(7.3)
(6.13)
(6.6)
2,918.5
108.1
35.2
53.7
67.6
2,917.3
103.8
31.4
44.6
93.3
Other liabilities
(6.14)
20.4
20.6
593.4
685.8
0.0
24.5
366.1
26.0
176.8
0.1
43.6
448.8
14.0
179.3
5,843.8
5,904.0
CURRENT LIABILITIES
Loans and borrowings
Provisions
Trade and other payables
Income tax payables
Accruals and deferred income
TOTAL EQUITY AND LIABILITIES
(6.11)
(6.13)
(6.15)
(6.16)
ELIA GROUP 2011
FINANCIAL REPORT
111
Consolidated statement of changes in equity
Foreign
Hedging
currency
reserve translation
(in million €) – Year ended 31 December
Share
premium
BALANCE AT 1 JANUARY 2010
1,207.3
8.5
(18.7)
-
168.2
1,365.4
1.7
1,367.1
Profit for the period
OCI: cash-flow hedges
OCI: actuarial gain/(loss)
-
-
(2.0)
-
-
401.7
17.1
401.7
(2.0)
17.1
0.3
-
402.0
(2.0)
17.1
Total comprehensive income for the year
-
-
(2.0)
-
418.8
416.8
0.3
417.1
299.7
(6.4)
-
-
-
-
(1.6)
(66.6)
(1.6)
299.7
(6.4)
(66.6)
(2.0)
-
(1.6)
299.7
(6.4)
(2.0)
(66.6)
BALANCE AT 31 DECEMBER 2010
1,500.6
8.5
(20.7)
-
518.8
2,007.2
-
2,007.2
BALANCE AT 1 JANUARY 2011
1,500.6
8.5
(20.7)
-
518.8
2,007.2
-
2,007.2
Profit for the period
-
-
-
-
137.5
137.5
-
137.5
OCI: cash-flow hedges
-
-
(2.6)
-
-
(2.6)
-
(2.6)
OCI: actuarial gain/(loss)
OCI: exchange differences
-
-
-
0.1
(10.8)
-
(10.8)
0.1
-
(10.8)
0.1
Total comprehensive income for the period
-
-
(2.6)
0.1
126.7
124.2
-
124.2
Dividends
-
-
-
-
(84.5)
(84.5)
-
(84.5)
1,500.6
8.5
(23.3)
0.1
561.0
2,046.9
-
2,046.9
Retained earnings Eurogrid GmbH at
acquisition date
Shares issued
Costs of shares issued
Deconsolidation non-controlling interest
Dividends
BALANCE AT 31 DECEMBER 2011
Retained
earnings
Non
controlling
Total
interests
Share
capital
Total
equity
112
ELIA GROUP 2011
FINANCIAL REPORT
Consolidated statement of cash flows
2011
2010
137.5
402.0
(5.4)
(5.5)
(5.6)
134.3
58.7
(1.4)
124.0
16.6
1.2
(6.1 - 6.2)
(6.1 - 6.2)
(5.3.4)
(5.3.3)
(7.2)
(6.6)
139.7
11.7
12.2
(25.3)
1.1
(15.3)
(0.2)
0.0
0.0
114.5
7.6
1.0
(2.6)
0.9
17.4
3.3
0.0
(286.5)
453.0
399.4
(2.3)
219.2
1.0
(53.4)
(42.3)
0.3
(43.0)
(12.7)
119.2
60.1
122.2
123.9
(139.6)
(49.5)
(135.7)
(19.9)
386.2
367.7
(288.3)
0.0
0.0
(0.8)
0.1
7.1
(199.5)
(278.8)
(21.2)
(0.0)
8.6
2.3
(281.9)
(488.6)
0.0
0.0
(84.5)
0.0
0.0
0.0
299.7
(6.5)
(66.6)
(210.0)
297.6
(2.0)
(84.5)
312.2
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
19.8
191.3
Cash & Cash equivalents at 1 January
Cash & Cash equivalents at 31 December
Net variations in cash & cash equivalents
365.9
385.7
19.8
174.6
365.9
191.3
(in million €) – Year ended 31 December
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the period
Adjustments for:
Net finance costs
Income tax expense
Profit or loss of equity accounted investees, net of tax
Depreciation of property, plant and equipment and amortisation
of intangible assets
Gain on sale of property, plant and equipment and intangible assets
Impairment losses of current assets
Change in provisions
Change in fair value of derivatives
Change in deferred taxes
Changes in fair value of financial assets through profit or loss
Change in non-cash items
Gain on bargain purchase
Cash flow from operating activities
Change
Change
Change
Change
Change
in
in
in
in
in
inventories
trade and other receivables
other current assets
trade and other payables
other current liabilities
(6.7)
(6.8)
(6.8)
(6.15)
(6.14 - 6.16)
Changes in working capital
Interest paid
Income tax paid
(5.4)
(5.5)
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment and intangible assets
Acquisition of subsidiary net of cash acquired
Acquisition of equity accounted investees
Acquisition of investment
Proceeds from sales of investments
Interest received
(6.1 - 6.2)
(7.1)
(5.4)
Net cash used in investing activities
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue share capital
Expenses related to issue share capital
Dividends paid (-)
Repayment of borrowings (-)
Proceeds from withdrawal borrowings (+)
Non-controlling interest
Net cash flow from (used in) financing activities
(6.10)
ELIA GROUP 2011
FINANCIAL REPORT
Notes to the consolidated
financial statements
1. Reporting entity
115
2. Basis of preparation
2.1. Statement of compliance
2.2. Functional and presentation currency
2.3. Basis of measurement
2.4. Use of estimates and judgements
2.5. Approval by the board of directors
115
115
115
115
115
116
3. Significant accounting policies
3.1. New, revised and amended standards and interpretations
3.2. Basis of consolidation
3.3. Foreign currency translation
3.4. Financial instruments
3.5. Balance sheet items
3.6. Income statement items
116
116
117
118
118
119
123
4. Segment reporting
4.1. Segment Elia Transmission (Belgium)
4.2. Segment 50Hertz Transmission (Germany)
4.3. Reconciliation of segments with total of group
124
124
126
128
5. Items of the consolidated income statement and other comprehensive income
5.1. Revenue
5.2. Other income
5.3. Operating expenses
5.3.1. Cost of materials, services and other goods
5.3.2. Personnel expenses
5.3.3. Depreciation, amortisation, impairment and changes in provisions
5.3.4. Other expenses
5.4. Finance income and expenses
5.5. Income taxes
5.6. Share in the results of associates
5.7. Basic earnings per share
5.8. Other comprehensive income
128
128
128
129
129
129
129
129
129
130
131
131
131
113
114
ELIA GROUP 2011
FINANCIAL REPORT
6. Items of the consolidated statement of financial position
6.1. Property, plant and equipment
6.2. Intangible assets
6.3. Non-current trade and other receivables
6.4. Equity-accounted investees
6.5. Other financial assets
6.6. Deferred tax assets and liabilities
6.7. Inventories
6.8. Current trade and other receivables
6.9. Cash and cash equivalents
6.10. Shareholders’ equity
6.11. Interest-bearing loans and borrowings
6.12. Employee benefits
6.13. Provisions
6.14. Other non-current liabilities
6.15. Trade and other payables
6.16. Accruals and deferred income
131
131
133
134
134
135
135
136
137
137
137
138
139
143
143
143
144
7. Miscellaneous
7.1. Effect of new acquisition
7.2. Deconsolidation of Belpex NV/SA
7.3. Financial risk and derivative management
7.4. Commitment and contingencies
7.5. Related parties
7.6. Subsidiaries, joint ventures and associates
7.7. Subsequent events
7.8. Relationship with auditors
7.9. Declaration by responsible persons
144
144
146
146
150
151
152
153
153
153
ELIA GROUP 2011
FINANCIAL REPORT
1. Reporting entity
2. Basis of preparation
Established in Belgium, Elia System Operator SA (the ‘company’
‘Elia’) has its registered office at Boulevard de l’Empereur 20,
B-1000 Brussels. The company’s consolidated financial statements for the 2011 financial year include those of the company
and its subsidiaries (together referred to as the ‘Group’) and the
Group’s interest in joint ventures and associates.
2.1. Statement of compliance
The company is a limited liability company, with its shares listed
on NYSE Euronext Brussels, under the symbol ELI.
With the acquisition of German TSO 50Hertz, in cooperation
with Industry Funds Management (IFM), the Elia Group develops, maintains and operates two major electricity networks
located in Central and North West Europe: the Belgian transmission grid interconnected with France and the Netherlands
and 50Hertz Transmission grid interconnected with Poland,
Hungary and Denmark. These two grids connect producers to
major industries and distribution system operators and ensure
electricity imports and exports from and to other European
countries in an efficient, reliable and secure way. Elia owns the
entire Belgian very high voltage grid (150 to 380 kv) and some
94% (ownership and user rights) of the high-voltage grid (30
to 70 kv) with 5,606 km of overhead lines and 2,766 km of
underground cables. 50Hertz owns the entire network (220 to
380 kv) in its geographical area as well as the transmission grid
in the Hamburg area and off-shore connections in the Baltic
sea. The 50Hertz grid comprises 9.705 km of overhead lines
and 150 km of underground cables. Elia Group’s investment
in interconnection capacity with its neighbours makes it the
most open and interconnected transmission system operator
in Europe.
115
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards (IFRS), as adopted for use in the European Union. The
Group has applied all new and revised standards and interpretations published by IASB and applicable to the Group’s activities which are in force for financial years starting on 1 January
2011.
2.2. Functional and presentation currency
The financial statements are presented in million euro (the functional currency of the Group), rounded to the nearest hundred
thousand, unless stated otherwise.
2.3. Basis of measurement
The financial statements have been prepared on a historicalcost basis, except for the derivative financial instruments,
which are estimated at fair value. Non-current assets and disposal groups held for sale are valued at the lowest of the carrying amount and the fair value less cost to sell, and employee
benefits are valued at the present value of the defined benefit
obligations, less plan assets. Changes in fair value of financial
assets are recorded through profit and loss.
2.4. Use of estimates and judgements
The preparation of financial statements in accordance with
IFRS requires management to make judgements, estimates
and assumptions that could affect the reported amounts of assets and liabilities and revenue and expenses. The estimates
and underlying assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the
basis for making judgements regarding the carrying amounts
of assets and liabilities. Actual results could differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects this period, or in the period in which the estimate is revised and future periods if the revision affects both
current and future periods.
116
ELIA GROUP 2011
FINANCIAL REPORT
Information about significant areas of estimation uncertainty
and critical judgements in applying accounting policies that
have the most significant effect on the amounts recognised in
the consolidated financial statements is included in the following Notes:
• D
eferred tax assets are recognized for the carry forward
of unused tax losses and unused tax credits to the extent
that it is probable that future taxable profit will be available
against which the unused tax losses and unused tax credits
can be utilized. In making its judgment, management takes
into account elements such as long-term business strategy
and tax planning opportunities. Tax receivable: recovery
of the tax receivables of Elia System Operator is deemed
highly probable (see Note 5.5).
• Credit risk related to customers: management closely reviews
the outstanding trade receivables, also considering ageing,
payment history and credit risk coverage (cf. Note 7.2).
• Employee benefit obligations: the defined-benefit obligations
are based on actuarial assumptions such as discount rate
and expected rate of return on plan assets, which are extensively detailed in Note 6.12.
• Provisions for environmental issues: at each year-end an estimate is made of future expenses in respect of soil pollution,
based on the advice of an external expert.
Provisions for “litigation” and for “rights to use land” are
based on the value of the claims filed or on the estimated
amount of the risk exposure. The expected timing of the
­rela­t­­ed cash outflow depends on the progress and the duration of the associated process/procedures (cf. Note 6.13).
• Impairment: the Group performs annual impairment tests on
goodwill and on cash-generating units for which there are
indicators that the carrying amount might be higher than the
recoverable amount. This analysis is based upon assumptions such as market evolution, market share, margin evolution and discount rates (see Note 6.2).
• Lease accounting: more information can be found in Note 7.4.
• H
edging: changes in the fair value of the derivative hedging
instrument designated as a cash flow hedge are recognised
directly in other comprehensive income (OCI) to the extent
that the hedge is effective. To the extent that the hedge is
ineffective, changes in fair value are recognised in profit or
loss (see Note 7.3).
• Fair value adjustments for business combinations: in accordance with IFRS 3 ‘Business Combinations’, the Group
re-measures the assets, liabilities and contingent liabilities
acquired through a business combination to fair value.
Where possible, fair value adjustments are based on external appraisals or valuation models, e.g. for contingent liabilities and intangible assets which were not recognized by
the acquiree. Internal benchmarks are often used for valuing
specific production equipment. All of these valuation methods rely on various assumptions such as estimated future
cash flows, remaining useful economic life etc. (see Note 7.1).
The accounting policies set out hereafter have been applied
consistently to all the periods presented in these financial statements and have been applied by all Group entities.
2.5. Approval by the Board of Directors
These consolidated financial statements were authorised for
issue by the Board of Directors on 22 March 2012.
3. Significant accounting policies
3.1. New, revised and amended standards
and interpretations
THE GROUP HAS APPLIED THE FOLLOWING
INTERPRETATIONS AND AMENDMENTS:
•
•
•
•
mendment to IAS 24 Related Party Disclosures (applicaA
ble to financial years as from 1 January 2011): clarifies the
definition of a related party and modifies certain relatedparty disclosure for government-related entities.
Amendment to IAS 1 Presentation of financial statements
– Clarifies that an entity will present an analysis of other
comprehensive income for each component of equity, either in the statement of changes in equity or in the notes
to the financial statements (applicable to financial years as
from 1 January 2011).
Amendment to IAS 27 Consolidated and Separate Financial Statements (amendments applicable to financial years
beginning on or after 1 July 2010).
Amendment to IAS 34 Interim financial reporting – Provide
guidance to illustrate how to apply disclosure principles in
IAS 34 (amendments applicable to financial years beginning on or after 1 January 2011).
None of the above amendments to the policies for financial reporting had a significant impact on the consolidated financial
statements.
The following amended and new standards are effective but
are not applicable to the Group:
• Amendment to IAS 32 Financial Instruments: Presentation
— Classification of Rights Issues (applicable to financial
years as from 1 February 2010).
• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (applicable to financial years as from 1 July 2010).
• Amendment to IFRS 1 First-time Adoption of International
Financial Reporting Standards — Limited exemption from
comparative IFRS 7 disclosures for first-time adopters (applicable to financial years as from 1 January 2011).
• Amendment to IFRIC 14 IAS 19 The Limit on a Defined
Benefit Asset, Minimum Funding Requirements and their
Interaction — Prepayments of a Minimum Funding Requirement (applicable to financial years as from 1 January 2011).
• Amendment to IFRS 3 Business combinations (applicable
to financial years as from 1 July 2010).
• Amendment to IFRS 7 Financial Instruments – Guidance on
the interaction between quantitative and qualitative disclo-
ELIA GROUP 2011
FINANCIAL REPORT
•
sures about the nature and extent of risks associated with
financial instruments (applicable to financial years as from
1 January 2011).
Amendment to IFRIC 13 Loyalty Programmes (applicable
to financial years as from 1 January 2011).
The standards and interpretations listed hereafter are published on the date of approval of these consolidated financial
statements but are not yet effective, and the Group did not
opt for early adoption 1 :
• Amendment to IFRS 7 Financial Instruments: Disclosures
on derecognition (applicable to financial years as from
1 July 2011).
• Amendment to IFRS 7 Financial Instruments: Disclosures
– Amendments enhancing disclosures about offsetting of
financial assets and financial liabilities (applicable to financial years as from 1 January 2013).
• Amendment to IFRS 1 First time adoption, on fixed dates
and hyperinflation (applicable to financial years as from
1 July 2011).
• Amendment to IAS 12 Income taxes - Deferred taxes: recovery of underlying assets (applicable to financial years as
from 1 January 2012).
• Amendment to IAS 1 Presentation of Financial statements
– Amendments to revise the way other comprehensive income is presented (applicable to financial years as from
1 July 2012).
• Amendment to IAS 19 Employee benefits – amended
Standard resulting from Post-Employment Benefits and
Termination Benefits projects (applicable to financial years
as from 1 January 2013).
• IFRS 9 Financial instrument – Classification and measurement (applicable to financial years as from 1 January 2013).
• IFRS 10 Consolidated financial statements: defines the
principles of control and establishes controls as the basis for consolidation (applicable to financial years as from
1 January 2013).
• IFRS 11 Joint operations: reflection of joint arrangements
by focusing on the rights and obligations of the arrangement rather than its legal form (applicable to financial years
as from 1 January 2013).
• IFRS 12 Disclosures of interests in other entities (applicable
to financial years as from 1 January 2013).
• IFRS 13 Fair value measurement (applicable to financial
years as from 1 January 2013).
• IAS 27 (revised 2011) Separate financial Statements (applicable to financial years as from 1 January 2013).
• IAS 28 (revised 2011) Investments in Associates and Joint
Ventures (applicable to financial years as from 1 January
2013).
1The Group does not expect any major impact on its financial statements in the period of their initial
application of the other standards and interpretations listed hereafter, except for IFRS 10 and IFRS 11, for
which Elia started the assessment of their impact on its financial statements in 2011.
117
3.2. Basis of consolidation
1. SUBSIDIARIES
A subsidiary is an entity that is controlled by the company.
Control means that the company has the power to directly
or indirectly govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that are currently exercisable or
convertible are taken into account. The financial statements of
subsidiaries are included in the consolidated financial statements from the date that control commences until the date that
control ceases. The accounting policies of subsidiaries have
been changed when necessary to align them with the policies
adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests
to have a deficit balance.
2. ASSOCIATED COMPANIES
Associated companies are those companies in which the
company has significant influence, but not control, over the
financial and operating policies. The consolidated financial
statements include the Group’s share of the total recognised
profits and losses of associated companies on the basis of the
equity method, from the date that significant influence commences until the date that significant influence ceases. When
the Group’s share of the losses exceeds its interest in an associated company, the Group’s carrying amount is reduced to nil
and further losses are not recognised except to the extent that
the Group has incurred legal or constructive obligations or has
made payments on behalf of an associated company.
3. JOINT VENTURES
‘Joint ventures’ refers to jointly controlled entities, established
pursuant to a contractual agreement and subject to the required approval for strategic, financial and operating decisions.
Investments in joint ventures are consolidated proportionally:
a proportionate part of the assets, equities & liabilities and
income and expenditure statements must be in accordance
with IFRS as applied by Elia, with similar items in the consolidated figures grouped into the same category. The gain or loss
realised via the acquisition will be recognised as a surplus or
as gain on bargain purchase. If, following integration, the joint
venture takes over a controlled entity (authorised to manage,
either directly or indirectly, the financial and operating activities of the subsidiary in question to derive benefit from those
activities), the requirements set out in IFRS 3 Business Combinations must be applied.
4. LOSS OF CONTROL
Upon the loss of control, the Group derecognizes the assets
and liabilities of the subsidiary, any non-controlling interests
and the other components of other comprehensive income related to the subsidiary. Any surplus or deficit arising on the loss
of control is recognized in profit or loss. If the Group retains any
interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently
118
ELIA GROUP 2011
FINANCIAL REPORT
it is accounted for as an equity-accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
5. ELIMINATION OF INTRA-GROUP TRANSACTIONS
Intra-group balances and any unrealised gains or losses or
revenue and expenses arising from intra-group transactions
are eliminated when preparing the consolidated financial statements.
Unrealised gains from transactions with associated companies
are eliminated to the extent of the Group’s interest in the entity.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence for
impairment.
3.3. Foreign currency translation
FOREIGN CURRENCY TRANSACTIONS AND BALANCES
Transactions in foreign currencies are converted into the functional currency of the Group, at the foreign exchange rate on
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies on the balance sheet date are
converted at the foreign exchange rate on that date. Foreign
exchange differences arising on conversion are recognised in
profit or loss.
Non-monetary assets and liabilities denominated in foreign
currencies that are valued in terms of historical cost are converted at the exchange rate on the date of the transaction.
FOREIGN OPERATIONS
A foreign operation is an entity that is a subsidiary, associate,
joint venture or branch of the reporting entity, the activities of
which are based or conducted in a country or currency other
than those of the reporting entity.
The financial statements of all Group entities that have a functional currency different from the Group’s presentation currency are translated into the presentation currency as follows:
• Balance sheets are translated at the exchange rate at reporting date.
• Income statements are translated at the average exchange
rate of the year.
• Shareholder’s equity is translated at historical exchange
rate.
Exchange differences arising from the translation of the net
investment in foreign subsidiaries, joint ventures and associates at closing exchange rates are included in shareholder’s
equity under “cumulative translation adjustments” as part of
the “Other comprehensive income”. At disposal of foreign subsidiaries, joint ventures and associates, cumulative translation
adjustments is recognized in the income statement as part of
the gain/loss of the sale.
3.4. Financial instruments
DERIVATIVE FINANCIAL INSTRUMENTS
The Group sometimes uses derivative financial instruments to
hedge its exposure to foreign exchange and interest rate risks
arising from operating, financing and investment activities. In
accordance with its treasury policy, the Group neither holds
nor issues derivative financial instruments for trading purposes.
However, derivatives that do not qualify for hedge accounting
are accounted for as instruments held for trading purposes.
Derivative financial instruments are recognised initially at fair
value. Any gain or loss resulting from changes in the fair value is
immediately booked in the income statement. Where derivative
financial instruments qualify for hedge accounting, the reflection of any resultant gain or loss depends on the nature of the
item being hedged.
The fair value of interest rate swaps is the estimated amount that
the Group would receive or pay to terminate the swap at the end
of the reporting period, taking into account the current interest
rates and the current creditworthiness of the swap counterparties and the Group. The fair value of forward exchange contracts is their quoted market price at the end of the reporting
period, i.e. the present value of the quoted for ward price.
DERIVATIVES USED AS HEDGING INSTRUMENTS
Cash-flow hedges
Changes in the fair value of the derivative hedging instrument
designated as a cash flow hedge are recognised directly in
other comprehensive income (OCI) to the extent that the hedge
is effective. To the extent that the hedge is ineffective, changes
in fair value are recognised in profit or loss.
If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, hedge
accounting is discontinued prospectively. The cumulative gain
or loss previously recognised in OCI remains there until the forecast transaction occurs. When the hedged item is a non-financial asset, the amount recognised in OCI is transferred, where
justified, to the carrying amount of the asset. In other cases the
amount recognised in OCI is transferred to profit or loss in the
same period that the hedged item affects profit or loss.
When a derivative or hedge relationship terminates, cumulative
gains or losses still remain in OCI provided that the hedged
transaction is still expected to occur. If the hedged transaction
is no longer expected to take place, the cumulative unrealised
gain or loss is removed from OCI and is immediately recognised in profit or loss.
Hedging of monetary assets and liabilities
Hedge accounting is not applied to derivative instruments that
economically hedge monetary assets and liabilities denominated in foreign currencies. Changes in the fair value of such
derivatives are recognised in profit or loss of foreign currency
gains and losses.
ELIA GROUP 2011
FINANCIAL REPORT
3.5. Balance sheet items
Depreciation methods, remaining useful lives and residual values of the property, plant and equipment are reassessed annually and are prospectively adjusted as the occasion arises.
PROPERTY, PLANT AND EQUIPMENT
Owned assets
Items of property, plant and equipment are stated at cost (including the directly allocated costs such as finance costs) less
accumulated depreciation and impairment losses (see chapter
“Impairment”). The cost price of self-produced assets comprises the cost of materials, of direct labour and, where relevant, of
the initial estimate of the costs of dismantling and removing the
assets and restoring the site where the assets were located.
If parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Leased assets
Leases under the terms of which the Group assumes substantially all the risks and rewards of ownership are classified as
finance leases. Fixed assets used via a finance lease are stated
at an amount equal to the lower of the fair value and the present
value of the minimum lease payments at the start of the lease,
less accumulated depreciation (see hereafter) and impairment
losses (see chapter “Impairment”). Lease payments are accounted for as described in the chapter “Expenses”.
Subsequent costs
The Group recognises in the carrying amount of an item of
property, plant and equipment the cost price of replacing part
of such an item when that cost is incurred if it is probable that
the future economic benefits embodied in the item will flow to
the Group and the cost price of the item can be assessed reliably. All other costs are recognised in profit or loss as and
when they are incurred.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of each component of an item
of property, plant and equipment. Land is not depreciated. The
applied depreciation percentages are as follows:
%
Administrative buildings
2.00
Industrial buildings
2.00 – 4.00
Overhead lines
2.00 – 4.00
Underground cables
2.00 – 5.00
Offshore cables
2.50 - 5.00
Substations (facilities and machines)
2.50 – 6.67
Remote control
3.33 – 12.50
Dispatching
4.00 - 10.00
Other property plant and equipment:
fitting out rented buildings
contractual period
Vehicles
6.67 – 20.00
Tools and office furniture
6.67 – 20.00
Hardware
119
25.00 – 33.00
Dismantling obligation
Provision is made for decommissioning and environmental
costs, based on future estimated expenditures, discounted
to present values. An initial estimate of decommissioning and
environmental costs attributable to property, plant and equipment is recorded as part of the original cost of the related property, plant and equipment.
Changes in the provision arising from revised estimates or discount rates or changes in the expected timing of expenditures
that relate to property, plant or equipment are recorded as adjustments to their carrying value and depreciated prospectively
over their remaining estimated economic useful lives; otherwise such changes are recognised in the income statement.
The unwinding of the discount is included within the income
statement as a financing charge.
Derecognition
An asset is no longer recognised on the balance sheet when
the asset is subject to disposal or when no future economic
benefits are expected from its use or disposal. Gains or losses
arising from the de-recognition of the asset from the balance
sheet (which is determined as the difference between the net
disposal proceeds and the carrying amount of the asset) are
included in profit or loss during the year in which the asset was
derecognised from the balance sheet.
INTANGIBLE ASSETS
Business combinations and goodwill
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group. Control is the power
to govern the financial and operating policies of an entity so as
to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that currently are exercisable.
The Group measures goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interest in the
acquiree; plus
• if the business combination is achieved in stages, the fair
value of the pre-existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such
amounts generally are recognised in profit or loss.
120
ELIA GROUP 2011
FINANCIAL REPORT
Transactions costs, other than those associated with the issue
of debt or equity securities, that the Group incurs in connection
with a business combination are expensed as incurred.
Any contingent consideration payable is measured at fair value at
the acquisition date. If the contingent consideration is classified
as equity, then it is not re-measured and settlement is accounted
for within equity. Otherwise, subsequent changes in the fair value
of the contingent consideration are recognised in profit or loss.
Goodwill is stated at cost price less accumulated impairment
losses. Goodwill is allocated to cash-generating units and is
not amortised but tested annually for impairment (see chapter
“Impairment”). In the case of associated companies, the carrying amount of goodwill is included in the carrying amount of the
investment in the associated company.
%
Licences
Concessions
Computer software
20.00
contractual period
20.00 - 25.00
Depreciation methods, remaining useful lives, and residual values of intangible assets are reassessed annually and are prospectively adjusted as the occasion arises.
INVESTMENTS
Each type of investment is recognised on the date of the transaction.
Investments in equity securities
Computer software
Software licences acquired by the Group are stated at cost
less accumulated amortisation (see below) and impairment
losses (see chapter “Impairment”).
Expenditure for research activities undertaken with the prospect of developing software within the Group is recognised in
profit or loss as expenditure as incurred. Expenditure for the
development phase of software developed within the Group is
capitalised if:
• the costs of development can be measured reliably;
• the software is technically and commercially feasible and
future economic benefits are likely;
• the Group plans - and has sufficient resources - to complete development;
• the Group plans to use the software.
The capitalised expenditure includes cost of material, direct labour costs and overhead costs that are directly attributable to
preparing the software for its use. Other costs are recognised
in profit or loss as incurred.
Investments in equity securities are undertakings in which the
Group does not have significant influence or control. This is the
case in undertakings where the Group owns less than 20% of
the voting rights. Such investments are designated as availablefor-sale financial assets and are measured at fair value. Any resulting changes in fair value, except those related to impairment
losses and foreign exchange gains and losses, are recognised
directly in other comprehensive income (OCI). On disposal of an
investment, the cumulative gain or loss previously recognised
directly in equity in OCI is recognised in profit or loss.
Investments in debt instruments
Investments in debt securities classified as held for trading purposes or as being available-for-sale are carried at fair value, with
any resulting gain or loss respectively recognised in profit or loss
or directly in equity. The fair value of these investments is determined as the quoted bid price at the end of the reporting period.
Impairment charges and foreign exchange gains and losses
are recognised in profit or loss. Investments in debt securities
classified as held to maturity are measured at amortised cost.
Other investments
Licenses, patents and similar rights
Expenditure on acquired licences, patents, trademarks and
similar rights is capitalised and amortised on a straight-line basis over the contractual period, if any, or the estimated useful
life.
Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as expenditure as incurred.
Amortisation
Amortisation is recognised in profit or loss on a straight-line
basis over the estimated useful life of intangible assets, unless
the useful life is indefinite. Goodwill and intangible assets are
tested systematically for impairment on each end of the reporting period. Software is amortised from the date it is available for
use. The estimated useful lives are as follows:
Other investments held by the Group are classified as availablefor-sale and are measured at fair value, with any resulting gain
or loss recognised directly in equity. Impairment charges are
recognised in other comprehensive income (OCI) (see chapter
“Impairment”).
TRADE AND OTHER RECEIVABLES
Construction work in progress
Construction work in progress is stated at cost price plus profit
based on progress made to date, less a provision for foreseeable losses and less progress billing. The cost price comprises
all expenditure directly related to specific projects, plus an allocation of fixed and variable overheads incurred during the
Group’s contract activities based on normal operating capacity.
ELIA GROUP 2011
FINANCIAL REPORT
Lease receivables
Receivables from lease contracts are stated at an amount
equal to the present value of the future net lease payments
at the start of the contract. The values of the receivables are
reduced in the course of the lease contract by the amount of
the lease payments associated with the reimbursement of the
principal amount.
Trade and other receivables
Trade receivables and other receivables are measured at amortized cost, less the appropriate allowance for amounts regarded as unrecoverable.
INVENTORIES
Inventories (spare parts) are stated at the lower of cost and
net realisable value. Net realisable value is the estimated selling price less the estimated costs of completion and selling
expenses. The cost of inventories is based on the weightedaverage-cost-price method. The cost includes the expenditure
incurred in acquiring the inventories, and the direct costs of
bringing them to their location and making them operational.
Write-offs of inventories to net realisable value are recognised
in the period in which the write-off occurred.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash balances, bank balances and deposits that can be withdrawn on demand. Overdrafts that are repayable on demand and form an integral part
of the Group’s cash management are included as a component
of cash and cash equivalents for the purpose of the statement
of cash flows.
IMPAIRMENT
The carrying amount of the Group’s assets, excluding inventories (see chapter “Inventories”) and deferred taxes (see chapter
“Income taxes”), are reviewed at the end of the reporting period for each asset to determine whether there is any indication
of impairment. If any such indication exists, the recoverable
amount of the asset is estimated.
The recoverable amount of goodwill and intangible assets with
an indefinite useful life and intangible assets that are not yet
available for use is estimated at the end of each reporting period.
An impairment loss is recognised whenever the carrying amount
of an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in profit or loss.
Recognised impairment losses relating to cash-generating
units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units and then to reduce
the carrying amount of the other assets in the units on a prorata basis.
After recognition of impairment losses, the depreciation costs
for the asset will be adjusted for future.
121
An impairment loss in respect of a financial asset measured
at amortised cost is calculated as the difference between its
carrying amount and the present value of the estimated future
cash flows discounted at the asset’s original effective interest
rate. Losses are recognised in profit or loss and reflected in an
allowance account against loans and receivables or held-tomaturity investments securities. Interest on the impaired asset
continues to be recognised. When an event occurring after the
impairment was recognised causes the amount of impairment
loss to decrease, the decrease in impairment loss is reversed
through profit or loss.
Impairment losses on available-for-sale financial assets are
recognized by reclassifying the losses accumulated in the fair
value reserve in equity to profit or loss. The cumulative loss
that is reclassified from equity to profit or loss is the difference
between the acquisition cost, net of any principal repayment
and amortisation, and the current value, less any impairment
loss recognized previously in profit or loss. Changes in cumulative impairment losses attributable to application of the
effective interest method are reflected as a component of interest income. If, in a subsequent period, the fair value of an
impaired available-for-sale debt security increases and the increase can be related objectively to an event occurring after
the impairment loss was recognised, then the impairment loss
is reversed, with the amount of the reversal recognised in profit
or loss. However, any subsequent recovery in the fair value of
an impaired available-for-sale equity security is recognised in
other comprehensive income.
Calculation of the recoverable amount
The recoverable amount of intangible assets and property,
plant and equipment is determined as the higher of their fair
value less costs to sell or value in use. In assessing value in use,
the expected future cash flows are discounted to their present
value using a pre-tax discount rate that reflects both the current market assessment of the time value of money and the
risks specific to the asset.
The Group’s assets do not generate cash flow that is independent from other assets and the recoverable amount is therefore
determined for the cash-generating unit (i.e. the entire highvoltage network) to which the asset belongs. This is also the
level at which the Group administers its goodwill and reaps the
economic benefits of acquired goodwill.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed.
Impairment loss on other assets is reversed if there have been
changes in the estimates used to determine the recoverable
amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
122
ELIA GROUP 2011
FINANCIAL REPORT
SHARE CAPITAL
Transaction costs
Transaction costs in respect of the issuing of capital are deducted from the capital received.
Dividends
Dividends are recognised as a liability in the period in which
they are declared.
the projected unit credit method and is the amount of future
benefit that employees have earned in return for their service in
the current and previous periods. The obligation is discounted
to its present value and the fair value of any related assets is
deducted. The discount rate is the yield as at the end of the
reporting period on high-quality bonds having maturity dates
that approximate to the terms of the Group’s obligations and
that are denominated in the currency in which the benefits are
expected to be paid.
INTEREST-BEARING LOANS
Interest-bearing loans are recognised initially at fair value less
related transaction costs. Subsequent to initial recognition,
interest-bearing loans are stated at amortised cost price with
any difference between cost price and redemption value being
recognised in profit or loss over the period of the loans on an
effective interest basis.
EMPLOYEE BENEFITS
Defined-contribution plans
Obligations related to contributions to defined-contribution
pension plans are recognised as an expense in profit or loss
as incurred.
Defined-benefit plans
For defined-benefit plans, the pension expenses are assessed
on an annual basis by accredited actuaries separately for each
plan by using the projected unit credit method. The estimated
future benefit that employees have earned in return for their
service in the current and prior periods is discounted to determine its present value, and the fair value of any plan assets is
deducted. The discount rate is the interest rate as at the end of
the reporting period on high-quality bonds which have maturity
dates that approximate the terms of the Group’s obligations and
that are denominated in the currency in which the benefits are
expected to be paid. When the benefits of a plan are improved,
the portion of the increased benefit relating to past service by
employees is recognised as an expense in profit or loss on a
straight-line basis over the average period until the benefits become vested. To the extent that the benefits are vested immediately, the expense is recognised immediately in profit or loss.
All actuarial gains and losses as at 1 January 2004, the date
of transition to IFRS, were recognised in the opening reserves.
Actuarial gains and losses are immediately recognised as liabilities and do not affect the income statement, but are immediately recognised in OCI. The amount charged in profit or loss
consists of current service cost, interest costs, the expected
return on any plan assets and the past service cost.
Where the calculation results in a benefit to the Group, the recognised asset is limited to the balance of past service costs
and the present value of any future refunds from the plan or
reductions in future contributions to the plan.
Other long-term employee benefits
The Group’s net obligation in respect of long-term service benefits, other than pension plans, is assessed on an annual basis
by accredited actuaries. The net obligation is calculated using
Short-term employee benefits
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised as for the amount expected to be paid
out under a short-term cash bonus or profit-sharing plans if the
Group has a legal or constructive obligation to pay this amount
as a result of the past service provided by the employee and
the obligation can be estimated reliably.
PROVISIONS
A provision is recognised in the balance sheet when the Group
has a current legal or constructive obligation as a result of a
past event and it is likely that an outflow of economic benefits
- of which a reliable estimate can be made - will be required
to settle the obligation. If the effect is material, provisions are
determined by discounting the expected future cash flows at
a pre-tax rate that reflects the current market assessment of
the time value of money and, where appropriate, of the risks
specific to the liability.
If the Group expects to recover some or all of the provisions
from a third party, the compensation is only included as a separate asset if it is virtually certain that said compensation will be
awarded. The cost connected to a provision is included in profit
or loss net of any compensation.
The total estimated cost of dismantling and disposal of an asset are, if applicable, recognised as property, plant and equipment and depreciated over the asset’s entire useful life. The
total estimated cost of dismantling and of disposal of the asset,
is posted as provisions for the discounted current value. If the
amount is discounted, the increase of the provision due to the
lapse of time is classified as finance expenses.
TRADE AND OTHER PAYABLES
Trade and other payables are stated at amortised cost.
GOVERNMENT GRANTS
Government grants are recognised when it is reasonably certain that the Group will receive the grant and that all underlying
conditions will be met. Grants related to an asset are presented
under other liabilities and will be recognised in the income statement on a systematic basis over the expected useful life of the
related asset. Grants related to expense items are recognised
in the income statement in the same period as the expenses,
for which the grant was received. Government grants are pres­
ented as other operating income in the income statement.
ELIA GROUP 2011
FINANCIAL REPORT
3.6. Income statement items
REVENUE
Revenue is recognised when it is probable that the company
will enjoy the economic benefits associated with the transaction and the income can be measured reliably and recovery of
the compensation due is likely.
123
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
INCOME TAXES
Income taxes comprise current and deferred tax. Income tax
expense is recognised in profit or loss, except to the extent that
it relates to items recognised directly in equity.
Goods sold and services rendered
Revenue from services and the sale of goods is recognised in
profit or loss when the significant risks and rewards of ownership have been transferred to the buyer.
Current tax is the expected tax payable on taxable income of
the year, using tax rates enacted or substantively enacted at
the end of the reporting period, and any adjustments to tax
payable in respect of previous years.
Construction work in progress
As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised
in profit or loss in proportion to the stage of completion of the
contract. An expected loss on a contract is immediately recognised in profit or loss.
Transfer of assets from customers
The revenue from customers (financial contribution) for the
construction of connections and related grid enhancement to
the high-voltage grid is recognised in profit or loss on the basis
of the stage reached in recovery of the underlying property,
plant and equipment.
EXPENSES
Operating lease payments
Payments made under operating leases are recognised in
profit or loss on a straight-line basis over the term of the lease.
Lease incentives received to conclude the leasing agreement
are recognised in profit or loss as an integral part of the total
lease expenses.
Finance lease payments
Payments made under finance lease payments are apportioned
between the financing charges and the reduction of the outstanding liability. The financing charges are allocated to each
period of the total lease term so as to produce a constant periodic rate of interest over the remaining balance of the liability.
Deferred tax is recognised using the balance sheet method, on
temporary differences arising between the carrying amounts
of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences: the initial
recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor
taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is
probable that they will not reverse in the foreseeable future. In
addition, deferred tax is not recognised for taxable temporary
differences arising from initial recognition of goodwill. Deferred
tax is measured at the tax rates that are expected to be applied
to the temporary differences when they are reversed, based on
the laws that have been enacted or substantively enacted by
the reporting date. Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the
same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be
realised simultaneously.
A deferred tax asset is recognised only to the extent that it is
likely that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reduced to
the extent that it is no longer likely that the related tax benefit
will be realised.
FINANCE INCOME AND EXPENSES
Finance expenses comprise interest payable on borrowings,
calculated using the effective interest rate method, foreign
exchange losses, gains on currency hedging instruments
offsetting currency losses, results on interest rate hedging
instruments, losses on hedging instruments that are not part
of a hedge accounting relationship, losses on financial assets
classified as for trading purposes and impairment losses on
available-for-sale financial assets as well as any losses from
hedge ineffectiveness. Net finance expenses comprise interest
on loans, calculated using the effective interest rate method
and foreign exchange gains and losses.
Interest income is recognised in profit or loss as it accrues using the effective interest rate method.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay
the related dividend.
124
ELIA GROUP 2011
FINANCIAL REPORT
4. Segment reporting
The Group has opted for a geographical segmentation since
this segmentation forms the basis of the Company’s internal
management reporting and enables the Chief Operating Decision-Maker (CODM) to evaluate and assess the type and financial profile of its activities in a transparent way.
Pursuant to IFRS 8, the Group has identified the following operating segments based on the aforementioned criteria:
• E lia Transmission (Belgium), which comprises Elia
System Operator and the companies whose activities are
directly linked to the role of Belgian transmission system
operator (i.e. group before the acquisition of 50Hertz);
• 5 0Hertz Transmission (Germany), which comprises
Eurogrid International SCRL and companies whose activities are directly linked to the role of transmission system
operator in Germany.
The two operating segments also have been identified as the
cash generating units of the group, as the group of assets managed by both segments independently generates cash flows.
The Chief Operating Decision-Maker (CODM) has been identified by the Group as being the Boards of Directors, the CEO’s
and the Executive Committees of each segment. The Chief
Operating Decision-Maker periodically reviews the Group’s
segments performance against a certain number of indicators,
such as revenue, EBITDA and operating profit.
Results Elia Transmission
The Company’s geographical segments are mainly characterized by common revenue and cost drivers and the same public
service mission in their respective geographical area, but they
distinguish themselves mainly at the level of the specific country related regulatory frameworks. For more details around this
topic we refer to the chapter on “Regulatory framework and
tariffs”.
The information presented to the CODM follows the IFRS accounting policies of the Group, therefore no reconciling items
have to be disclosed. Intergroup transactions are concluded on
an at arm’s length basis.
As described by IFRS 8 the Group is required to report segment information about each operating segment that exceeds
certain quantitative thresholds. Since the operational activities
of Atlantic Grid (see Note 7.1) do not exceed the threshold, its
operations have been aggregated in the reporting segment
50Hertz Transmission (Germany), because its activities are
regularly evaluated by the CODM of that segment.
4.1. Segment Elia Transmission (Belgium)
KEY FIGURES
(See table below)
2011
2010
Difference (%)
801.8
(102.3)
354.0
251.7
10.6
(128.2)
(29.8)
105.7
763.3
(107.1)
336.8
229.6
17.0
(129.7)
(20.8)
94.6
5.1
(4.5)
5.1
9.6
(37.6)
(1.2)
43.3
11.7
Total assets**
Capital expenditures
4,473.8
118.1
4,518.1
113.9
(1.0)
3.7
Net financial debt
2,448.1
2,385.2
2.6
(in million €) – for the period ended 31 December
Revenue
Depreciation, amortization, impairment and changes in provisions
EBITDA*
Operating profit (EBIT)*
Finance income
Finance costs
Income taxes
Basic earnings, attributable to the Owners of the Company
BALANCE SHEET
* EBIT = earnings before interest and taxes
EBITDA = EBIT + depreciation / amortization + changes in provisions
** This section includes a reclassification of the figures per 31 December 2010 for comparison reasons
ELIA GROUP 2011
FINANCIAL REPORT
125
In 2011, Elia Transmission’s revenue in Belgium increased to €801.8 million, up 5.1% compared to the same period last year.
The table hereafter provides more details of changes in the various revenue components.
2011
2010
Difference (%)
Grid connection revenue
Grid use revenue
Revenues from the reversal of surpluses from previous years
(decision by the regulator)
Ancillary services revenue
International revenue
Other revenue
34.8
533.0
33.6
539.2
3.6
(1.1)
46.0
108.2
23.5
53.7
34.1
115.2
28.0
50.3
34.9
(6.1)
(16.1)
6.8
Subtotal revenue
799.2
800.4
(0.1)
2.6
(37.1)
n.r.
801.8
763.3
5.0
(in million €) – for the period ended 31 December
DETAIL REVENUE
Deviations from approved budget (settlement mechanism)
TOTAL REVENUE
Grid connection revenue rose by 3.6%, mainly due to an increase in the number of new connections by industrial customers compared to the previous year.
Grid use revenue remained more or less at the same level as
in 2010. The lower volumes as a result of the economic crisis,
mild temperatures and the rise in decentralised generation (especially in the second half of 2011) compared with the previous
year were offset by surplus revenue from grid imbalances.
Revenue from reversal of surpluses from previous years
increased by 34.9% to €46 million as agreed with the regulator in the tariffs for 2008-2011. As a result, all the remaining
surpluses from the period from 2002 up to and including 2006
were returned to customers. The disappearance of these tariff
surpluses is one of the reasons for the rise in tariffs for the
period 2012-2015.
Ancillary services revenue dropped by 6.1% due to a lower
level of off-takes from the Elia grid and lower purchasing costs,
which have to be passed on.
International revenue fell by 16.1% compared to 2010, mainly
as a result of further optimisation of the utilisation of border
capacity due to market coupling with Belgium’s neighbours.
Other revenue rose slightly from €50,3 million to €53.7 million, primarily on account of the application of IAS 19 2 (up €7.4
million), the deconsolidation of Belpex (down €2.9 million) and a
decrease in own produced assets (down €1.1 million).
In comparison with the tariff approved for 2011 by CREG in
late 2007 as regards non-controllable costs and revenue, an
operational tariff deficit of €2.6 million has been established (to
be passed on to the tariffs of the next tariff period).
The EBITDA (up 5.1%) and the EBIT (up 9.6%) rose sharply in
2011 compared with 2010, mainly due to the increase in revenue.
Net finance expenses (up 4.4%) were adversely affected by
the absence of capital gains on the sale of Belpex in 2010 (€8.4
million), which was partly offset by more revenue from surplus
cash and lower general bank charges.
Income tax expense (up 43.3%) rose more rapidly than the
net profit, both because tax-free capital gains were achieved
on financial fixed assets (cf. Belpex) in 2010 and due to an increased taxable profit in 2011 (for example due to higher OLOs)
and taxes on the efficiency gains made in both 2010 and 2011
at the marginal rate of 33,99%.
2 IAS 19: Annual recalculation of recoverable costs in relation to future retirement obligations.
126
ELIA GROUP 2011
FINANCIAL REPORT
Consolidated IFRS profit after income tax rose by 11.7%
from €94.6 million in 2010 to €105.7 million in 2011 due to the
following items 3 :
1. increase in regulated profit due to high OLOs (+€10.3 million);
2. increased additional savings and revenue ( +€1.8 million);
3. court ruling on the CREG decision regarding 2009 decision of CREG on regulated balances 2010 having an influence on 2010 and 2011 4 (- €1.7 million);
4. absence of the 2010 costs pertaining to the capital increase for acquisition of 50Hertz minus costs for Eurogrid
International (+€6.1 million);
5. absence of the 2010 capital gains (60%) on the sale and
deconsolidation of Belpex in 2010 (- €5.1 million);
6. decrease in IFRS adjustments in 2011 compared to 2010
(- €0.3 million).
Total assets decreased slightly (by 1%) to €4,473.8 million,
while the net financial debt went up 2.6% or €62.9 million,
primarily as a result of an increase in working capital due to
repayment of the outstanding tariff surpluses.
Results 50Hertz Transmission
4.2. Segment 50Hertz Transmission
(Germany)
The table hereafter shows the 2011 results of 50Hertz Transmission’s transmission system operator activities in Germany
as per International Financial Reporting Standards (IFRS).
The results of 50Hertz Transmission for 2011, consolidated at
Eurogrid International level (60% proportional consolidation),
include the entire 12 months for the first time, in contrast with
the 2010 figures, which reflected only the period from June to
December (inclusive). Consequently, the 2011 figures are best
compared to the 12-month pro forma figures for 2010 (last column) compiled in accordance with International Financial Reporting Standards (IFRS).
3 Items 1-5 relate to the regulatory framework in Belgium.
4In a decision of 25 June 2010 relating to 2009, CREG (federal regulator) indicated that it did not agree
with certain aspects of the results. Elia contested several provisions of this decision before the Court
of Appeal. The Court of Appeal’s final decision of 31 May 2011 was factored into the figures for 2011.
Elia received CREG’s final decision with regard to financial year 2010 on 17 February 2012. In line with
the decision of the Court of Appeal regarding 2009 the federal regulator has decided that the obtained
efficiency gains had, according to the Royal Decree of 8 June 2007, to be taxed at the marginal rate of
33,99%.
2011
2010
Difference
2010
12 months
7 months
%
12 months
unaudited
Pro forma
Revenue
477.7
275.0
73.7
475.0
Depreciation, amortization, impairment and changes
in provisions
(in million €)
60% proportional consolidation – for the period ended 31 December
(38.6)
(20.3)
90.1
(38.9)
REBITDA*
94.9
72.6
30.7
124.1
EBITDA*
94.9
351.2
(73.0)
402.6
Operating profit (REBIT*)
56.3
52.3
7.7
85.2
Operating profit, including non-recurring items (EBIT*)
56.3
330.8
(83.0)
363.7
Finance income
3.6
4.8
(25.0)
1.3
Finance costs
(14.6)
(15.3)
(4.6)
(17.7)
Income taxes
(13.5)
(13.2)
2.3
(23.7)
Basic earnings, including non-recurring items,
attributable to the Owners of the Company
31.8
307.1
(89.6)
323.6
Basic earnings, excluding non-recurring items,
attributable to the Owners of the Company
31.8
28.6
11.2
45.0
1,370.3
1,386.8
(1.2)
-
152.3
107.5
41.6
-
84.8
166.3
(49.0)
-
BALANCE SHEET
Total assets
Capital expenditures
Net financial debt
*EBIT = earnings before interest and taxes
REBIT = recurring EBIT (excluding one-off items)
EBITDA = EBIT + depreciation / amortization + changes in provisions
REBITDA = recurring EBITDA (excluding one-off items)
ELIA GROUP 2011
FINANCIAL REPORT
127
50Hertz Transmission’s revenue remained fairly stable compared to the same period last year. This revenue is described in
more detail in the table below.
2011
(in million €) – for the period ended 31 December
2010
Difference (%)
Pro forma
DETAIL REVENUE
Vertical grid revenue
369.8
384.0
(3.7)
Horizontal grid revenue
13.6
17.3
(21.4)
Ancillary services revenue
56.2
76.4
(26.5)
Other revenue
37.7
28.4
32.8
477.3
50.1
(5.7)
0.5
(31.1)
n.r.
477.7
475.0
0.6
Subtotal revenue
Deviations from approved budget (settlement mechanism)
TOTAL REVENUE
Vertical grid revenue pertains to the use of the 50Hertz grid.
The 3.7% downturn is a result of lower volumes drawn from
the grid mainly as a result of a larger share of decentralised
generation.
Horizontal grid revenue pertains to revenue for the use of the
sea cable between Germany and Denmark (Kontek cable) as
well as all revenue from auctioned transmission capacity on
the border with the Czech Republic, which also connects the
50Hertz grid with TenneT Germany. The 21.4% downturn is due
mainly to lower price differences between Denmark (Nord Pool
Spot) and Germany (EPEX Spot) thanks to the market coupling
with Benelux, Germany and France.
ue. This PPA exercise was carried out for Eurogrid GmbH (German financing and acquisition structure above 50Hertz Transmission), yielding Eurogrid GmbH a one-off and definite income
(gain on bargain purchase) of €477.5 million (€286.5 million for
60%). The absence of this one-off profit in 2011 explains the
sharp drop compared to 2010 in EBITDA, EBIT and net profit,
including non-recurring items. In 2011 it became apparent that
no further modifications are needed for the 2010 PPA.
The drop in REBITDA and REBIT is mainly due to one-off corrections in 2010 (€5.5 million), the absence of one-off auction
revenue booked in 2010 (€9.6 million) and higher personnel and
maintenance costs (€9.6 million).
Ancillary services revenue concerns mainly passing on to
grid users costs (generation reserve capacity and balancing
costs) that 50Hertz incurs in order to balance generation with
demand in the area. This revenue fell significantly due to ongoing optimisation of system control between the four German
TSOs and due to the fact that the revenue from the EEG 5 imbalances is allocated directly to EEG activity.
The net finance expenses were positively influenced by more
revenue from surplus cash (strong improvement in cash position due to a drop in working capital for EEG) as well as lower
general bank costs.
Other revenue pertains primarily to telecom revenue, subsidies, capitalised costs of own works, technical services and
expertise to third parties and contributions from customers.
The sharp rise is the result of a one-off EEG bonus of €11.4 million 6.
The net financial debt consists of a €500 million 10-year Euro­
bond issued in October 2010 and a cash position of €355 million, of which €43.8 million is related to EEG activities. Of these
amounts, 60% has been consolidated.
Owing to the acquisition of 50Hertz Transmission, the corresponding purchase price has been recorded in the financial
statement of 2010. Under IFRS a goodwill allocation or a gain
on bargain purchase has been made with the help of a Purchase Price Allocation or ‘PPA’. In a PPA, all property, debts
and (conditional) services to be identified are valued at fair val-
The net profit (excluding non-recurring topics) decreased in
line with the lower operating profit.
5EEG refers to the German subsidy mechanism for renewable energy, where the transmission system
operator is required to pay the feed-in tariff to the producer of renewable energy and to sell that energy
on the German energy exchange. The difference between the feed-in and sale price is offset via a
monthly fee approved by the government. The entire mechanism is neutral in terms of net profit for
50Hertz.
6The entire mechanism is usually neutral in terms of net profit for 50Hertz, except when a bonus is
approved by the BNetzA for handling the EEG activities.
128
ELIA GROUP 2011
FINANCIAL REPORT
4.3. Reconciliation of segments with total of group
Consolidated results
(in million €) - for the period ended 31 December
Revenue
Depreciation, amortization, impairment and
changes in provisions
2011
2011
2011
2011
Elia Transmission
(Belgium)
50Hertz Transmission
(Germany)
Consolidation
entries
Elia Group
801.8
477.7
(1.1)
1,278.4
(102.3)
(38.6)
0.0
(140.9)
REBITDA
354.0
94.9
0.0
448.9
EBITDA
354.0
94.9
0.0
448.9
Operating profit (REBIT)
251.7
56.3
0.0
308.0
Operating profit, including non-recurring items
(EBIT)
251.7
56.3
0.0
308.0
10.6
3.6
0.0
14.2
Finance costs
(128.2)
(14.6)
0.0
(142.8)
Income taxes
(29.8)
(13.5)
0.0
(43.3)
Basic earnings, including non-recurring items,
attributable to the Owners of the Company
105.7
31.8
0.0
137.5
Basic earnings, excluding non-recurring items,
attributable to the Owners of the Company
105.7
31.8
0.0
137.5
4,473.8
1,370.3
(0.3)
5,843.8
118.1
152.3
0.0
270.4
2,448.1
84.8
0.0
2,532.9
Finance income
BALANCE SHEET
Total assets
Capital expenditures
Net financial debt
The Group has no concentration of customers in neither of the operating segments.
5. Items of the consolidated income statement
and other comprehensive income
The 2010 figures include the 50Hertz Transmission (Germany)
segment for the period from May to December, whereas the
2011 figures consist of both segments for the full period, being
January to December.
(in million €)
Revenue
Other income
Total revenue and other income
The following table further details “Other income”, as indicated
in Note 5.1 “Detail revenue”:
(in million €)
5.1. Revenue
Detail revenue
5.2. Other income
2011
2010
1,188.2
90.2
939.5
98.0
1,278.4
1,037.5
2011
2010
Own production
Bonus previous year
Optimal use of assets
Services and technical expertise
Changes in non-current assets related
to application of IAS 19
Transfers of assets from customers
Subsidies and grants
Offshore revenue (horizontal)
Revenue from penalty
Belpex activities
EEG bonus 2011
Other
13.5
1.5
13.1
7.8
13.4
0.0
11.6
5.7
4.6
18.6
(1.2)
10.5
0.0
0.0
6.8
15.0
(2.8)
14.4
1.8
4.0
3.7
2.9
0.0
43.3
Total other income
90.2
98.0
ELIA GROUP 2011
FINANCIAL REPORT
The other income, section Other, mainly consists of proceeds
from sale of tangible assets, recoverable amounts of claims
paid by insurance companies, etc.
5.3.3. DEPRECIATION, AMORTISATION, IMPAIRMENT
AND CHANGES IN PROVISIONS
(in million €)
5.3. Operating expenses
5.3.1. COST OF MATERIALS, SERVICES AND OTHER GOODS
(in million €)
2011
2010
Purchase of ancillary services
Raw materials, consumables and goods
for resale
Services and other goods (excl. purchase
of ancillary services)
Non-recurring services and other goods
414.2
267.3
5.9
5.9
224.2
0.0
189.9
8.0
644.3
471.1
Depreciation of property,
plant and equipment
Depreciation of intangible assets
Total of depreciation
Note
2011
2010
6.1
6.2
131.2
8.6
139.8
113.6
8.5
122.1
0.4
0.4
1.0
1.0
1.1
(0.3)
(0.1)
0.7
2.7
3.3
(1.7)
4.3
140.9
127.4
Impairment of inventories
and trade receivables
Total of impairment
Provisions for litigation
Environmental provisions
Other provisions
Total of provisions
6.13
6.13
6.13
Total
Total
The “purchase of ancillary services” line includes the costs for
services which enable the Group to balance generation with
demand, to maintain voltage levels and to manage congestions
on its grids. The increase compared to last year is mainly due to
the 50Hertz network with exceptional weather conditions (very
windy in December) and the decision of the German government to close eight nuclear power plants. These costs are recovered in future tariffs with a delay of two years.
The “services and other goods” line is related to maintenance
of the grid, services provided by third parties, insurance, consultancy, etc.
The 2010 non-recurring services and other goods relate to oneoff costs regarding the acquisition of 50Hertz in May 2010
5.3.2. PERSONNEL EXPENSES
(in million €)
2011
2010
Salaries and wages
Social security contributions
Pension costs
Employee benefits (other than pensions)
Share-based payment with reduction
Other personnel expenses
113.9
28.5
6.1
6.5
0.0
3.4
94.1
26.8
6.6
2.5
0.1
3.8
Total
158.4
133.9
For more information regarding employee benefits, see Note
6.12 Employee Benefits.
129
A detailed description of provisions is provided in Note 6.13.
The variance for impairment in respect of inventories and receivables during the year can be found in Note 7.3 “Financial
risk and derivative management”.
5.3.4. OTHER EXPENSES
2011
2010
Taxes other than income tax
Net loss on disposal/sale of property,
plant and equipment
Other
Bonus-malus settlement of previous year
13.6
12.1
2.9
1.4
8.9
2.7
16.3
0.0
Total
26.8
31.1
(in million €)
The 2010 expenses classified as “Other” consisted mainly of
a settlement of a claim of €11.4 million, which did not occur in
2011.
5.4. Finance income and expenses
(in million €)
Finance income
Interest income on investment trust, bank
deposits, cash and cash equivalents
Other financial income
Finance costs
Interest expense on eurobonds
and other bank borrowings
Interest expense on derivatives
Other financial costs
Net finance expense
recognised in profit or loss
2011
2010
14.2
21.8
6.6
7.6
6.0
15.8
142.8
145.0
131.0
11.4
0.4
120.0
13.4
11.6
(128.6)
(123.2)
130
ELIA GROUP 2011
FINANCIAL REPORT
The other financial income consists of the moratorium interests
which are computed on the tax claim (we refer to Note 5.5
below). The decrease in other financial income results from the
sale of Elia’s stake in Belpex, which generated a gain of €8.4
million.
The item ‘Gain on disposal of shares’ in 2010 is mainly related
to the sale of the stake in Belpex to APX-ENDEX (see Note 7.2),
and ‘Other tax-free income’ in 2010 includes the tax impact on
the gain from bargain purchase, realised through the acquisition of 50Hertz (see Note 7.1).
For more details on net debt and loans, see Note 6.11.
Elia received a tax assessment in early 2008 in view of taxation
of the remaining tariff surpluses as at 31 December 2004. The
income taxes paid total €93.8 million, including an administrative charge of 10% and an increase due to insufficient prepayments. Having consulted its tax advisor and CREG and given
that similar tariff surpluses accounted for by other companies
in the sector were not taxed, Elia management decided to file
a complaint, but it was rejected by the tax authorities. By matter of consequence, Elia has filed a judicial claim for the full
amount, including moratorium interest.
5.5. Income taxes
RECOGNISED IN PROFIT OR LOSS
The consolidated income statement includes the following taxes:
(in million €)
Current year
Adjustments prior years
Total income tax expenses
Origination and reversal
of temporary differences
Total deferred tax
Total income tax recognised
in profit or loss
2011
2010
43.4
15.3
58.7
16.5
0.1
16.6
(15.4)
(15.4)
17.4
17.4
43.3
34.0
RECONCILIATION OF THE EFFECTIVE TAX RATE
The tax on the company’s profit (loss) before tax differs from
the theoretical amount that would arise using the Belgian statutory tax rate applicable to profits (losses) of the consolidated
companies as follows:
(in million €)
2011
2010
Profit after tax
Share of profit of equity accounted
investees
Profit for the period
136.1
403.2
1.4
137.5
(1.2)
402.0
Income tax expenses
Profit before tax
43.3
180.8
34.0
436.0
61.5
33.99%
(2.3)
1.8
(0.5)
(0.1)
0.0
(19.0)
1.9
148.2
33.99%
(14.6)
1.9
(2.5)
(102.1)
0.1
(16.9)
19.9
Income tax using the domestic
corporation tax rate
Domestic corporate income tax
Effect of the foreign tax rate
Non-deductible expenses
Gain on disposal of shares
Other tax free income
Adjustments prior years
Tax incentives (notional interest deduction)
Other
Total income tax expenses
in profit or loss
43.3
34.0
In 2009, the tax authorities made a similar decision on the increase of tariff surpluses in 2005 and 2006. Elia received a
tax assessment of €35.8 million, including an administrative
charge of 10% and an increase due to insufficient prepayment,
and decided to file a complaint about this in line with the case
of 2004.
The tariff surpluses that led to the additional assessment will be
systematically settled in tariffs over the years to come (refund to
consumers) in accordance with CREG decision, meaning that
this solely is a matter of a timing difference between a surplus
generated in the past and a refund in the subsequent years.
If Elia’s complaint is rejected, the corporate income tax paid
on the remaining surpluses will automatically be offset by ‘recoverable taxes’ on the refund given to consumers in 2005,
2006 and 2007 and subsequent periods. In that way the basic
amount of the corporate income tax can be recovered in full.
If a balance is still outstanding, it will be settled using the tariff
mechanism.
On Friday 23 December, the Brussels Court of First Instance
ruled in favour of Elia in its tax dispute 7 with the Belgian tax
authorities. As a result of the ruling, the tax authorities must reimburse Elia €118.4 million, consisting of €80.2 million in taxes
that were paid twice and which therefore must be reimbursed
with 100% certainty, €5.1 million in prepayments, €8.5 million in
administrative tax increase and €24.6 million in interest. However, the tax authorities lodged an appeal on 6 February 2012,
thus suspending the ruling by the Court of First Instance. The
Court of Appeal is not expected to rule on the case until 2014
at the earliest.
Deferred income taxes are discussed in Note 6.6 (‘Changes in
deferred tax assets and liabilities resulting from movements in
temporary differences during the financial year’).
7Elia’s tariffs are based on estimated income and costs as well as budgeted volumes. At the end of each
tariff period, this results in tariff surpluses or deficits that must be factored into future tariffs. However,
in 2008 the tax authorities ruled that tariff surpluses from the past (2003-2004) should be taxed
immediately while Elia, in consultation with the regulator, considered this to be a debt in respect of future
tariffs. All such tariff surpluses have actually been returned to consumers since the end of 2011.
ELIA GROUP 2011
FINANCIAL REPORT
5.6. Share in the results of associates
5.8. Other comprehensive income
2011
2010
H.G.R.T.
APX-Endex
Coreso
Subtotal - associates
0.4
1.0
0.0
1.4
(1.3)
0.1
0.0
(1.2)
Total
1.4
(1.2)
(in million €)
The share in the results of joint ventures can be found in Note
4.2 Segment 50Hertz Transmission (Germany). All companies
related to the 50Hertz Transmission segment are joint ventures. There are no joint ventures in other segments.
The basic earnings per share (EPS) are calculated by dividing
the net profit attributable to the shareholders of the company
(€137.5 million) by the weighted average number of ordinary
shares outstanding during the year (60,355,217).
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number
of shares on 31st of December
Total comprehensive income includes both the result of the
period recognised in the income statement and the other comprehensive income recognised in equity. Other comprehensive
income includes all changes in equity other than owner-related
changes, which are analysed in the statement of changes in
equity.
The following table analyses the deferred taxes and the changes
in fair value booked in equity by item of other comprehensive
income:
INCOME TAXES RECOGNIZED
IN OTHER COMPREHENSIVE INCOME
2011
2010
Derivatives
Actuarial gains (losses)
on employee benefits
1.3
1.0
5.5
(8.8)
Total
6.8
(7.8)
(in million €)
5.7. Basic earnings per share
Issued ordinary shares on
1st of January
Impact of the shares issued
in January 2010
Impact of the shares issued
in June 2010
2011
2010
60,355,217
48,270,255
-
12,045
-
6,267,657
60,355,217
131
RECOGNIZED IN OTHER COMPREHENSIVE INCOME
2011
2010
Net changes in fair value of interest
rate swaps
3.9
3.1
Finance income
3.9
3.1
Recognised in:
Hedging reserve
3.9
3.1
(in million €)
54,549,957
The hedging reserve is discussed in detail in Note 7.3.
Diluted earnings per share
Diluted earnings per share (EPS) is determined by adjusting
the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for
the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.
The diluted profit is equal to the ordinary profit per share, since
there are no convertible bonds or share options.
6. Items of the consolidated
statement of financial position
6.1. Property, plant and equipment
(in million €)
Share capital and reserves per share
Share capital and reserves per share totalled €33.9 per share
on 31 December 2011, compared with a value of €36.80 per
share at the end of 2010. This decrease is due to the use of
“weighted average number of shares” instead of “number of
shares at reporting date” in the formula.
High-voltage substations
and transformers
Lines and cables
Land on which substations, lines
and cables are located
Facilities used for network operation
Administrative buildings, furnishings
and vehicles
Total property, plant
and equipment
2011
2010
1,580.9
1,256.1
1,515.8
1,202.6
98.9
142.1
93.0
130.7
72.5
68.9
3,150.5
3,011.0
132
ELIA GROUP 2011
FINANCIAL REPORT
(in million €)
Land
and
buildings
Machinery
and
equipment
Furniture
and
vehicles
Other
tangible
assets
Assets
under
construction
Total
143.1
3,983.3
123.4
11.2
121.2
4,382.2
48.0
703.1
9.9
0.0
86.9
847.9
ACQUISITION VALUE
Balance at 1 January 2010
Acquired by business combinations
Other acquisition
5.5
70.6
3.4
0.1
113.6
193.2
(3.1)
(25.1)
(14.7)
0.0
0.0
(42.9)
1.2
76.6
2.7
(2.4)
(78.1)
0.0
BALANCE AT 31 DECEMBER 2010
194.7
4,808.5
124.7
8.9
243.6
5,380.4
Balance at 1 January 2011
Disposals
Transfers from one heading to another
194.7
4,808.5
124.7
8.9
243.6
5,380.4
Other acquisition
7.5
83.5
7.7
0.2
183.8
282.7
Disposals
0.0
(14.8)
(2.2)
0.0
(7.8)
(24.8)
Transfers from one heading to another
0.6
121.9
0.9
2.0
(125.5)
(0.1)
(0.2)
(6.7)
(0.8)
0.0
0.0
(7.7)
202.6
4,992.4
130.3
11.1
294.1
5,630.5
Deconsolidation business combinations
BALANCE AT 31 DECEMBER 2011
DEPRECIATION AND IMPAIRMENT
Balance at 1 January 2010
(21.9)
(2,144.8)
(115.6)
(10.1)
0.0
(2,292.5)
Depreciation of the period
(2.0)
(107.0)
(4.4)
(0.2)
0.0
(113.6)
Withdrawals and disposals
2.4
19.7
14.6
0.0
0.0
36.7
Transfers from one heading to another
0.0
0.1
(3.0)
2.9
0.0
0.0
BALANCE AT 31 DECEMBER 2010
(21.5)
(2,232.0)
(108.4)
(7.4)
0.0
(2,369.4)
Balance at 1 January 2011
(21.5)
(2,232.0)
(108.4)
(7.4)
0.0
(2,369.4)
(131.6)
Depreciation of the period
(2.6)
(123.0)
(5.5)
(0.5)
0.0
Deconsolidation business combinations
0.1
5.3
0.8
0.0
0.0
6.2
Withdrawals and disposals
0.0
12.5
2.2
0.0
0.0
14.7
(0.1)
2.0
0.0
(1.8)
0.0
0.1
(24.1)
(2,335.2)
(110.9)
(9.7)
0.0
(2,480.0)
At 1 January 2010
121.2
1,838.5
7.8
1.1
121.2
2,089.7
At 31 December 2010
173.1
2,576.5
16.2
1.4
243.6
3,011.0
At 1 January 2011
173.1
2,576.5
16.2
1.4
243.6
3,011.0
At 31 December 2011
178.5
2,657.3
19.3
1.4
294.1
3,150.5
Transfers from one heading to another
BALANCE AT 31 DECEMBER 2011
CARRYING AMOUNT
The most important projects in Belgium are the upgrading and/
or extension of substations (Bruegel-380 kv / Seraing-220 kv
/ Bruges-150 kv / Ruien-150 kv / Monceau-150 kv / Schaarbeek-150 kv / Zurenborg-150 kv / Wijgmaal-150 kv / Machelen-150 kv and Gouy-150 kv), the construction of overhead lines
(Harmignies-Monceau 70 kv and Tihange-Gramme 150 kv) and
the construction of underground cables (Basse-Wavre-Louvain
36 kv / Zeebrugge-Blauwe Toren 150 kv / Brecht-Rijkevorsel
150 kv and Mechelen-Muizen 70 kv).
The most important onshore projects in Germany relate to the
“South-West-Coupling-Line”, the “Uckermark Line”, the extension of substation Wolmirstedt (€15,7 million), investments in
the new transmission control center and the construction of a
new 380/110 kv substation in North Freiberg.
The offshore capital expenditure in Germany includes the connection with the offshore wind farms, Baltic I and Baltic II, in
the Baltic Sea.
ELIA GROUP 2011
FINANCIAL REPORT
Application of the IAS 23 Borrowing Costs standard had an impact of €5.3 million on the 2011 acquisition of the assets using
an average interest rate of 4.22%
133
Other liabilities relating to new investments are described in
Note 7.4.
6.2. Intangible assets
(in million €)
Goodwill
Software
Licences/
Concessions
Total
ACQUISITION VALUE
Balance at 1 January 2010
1,707.8
37.7
1.1
1,746.6
Obtained by business combinations
0.0
1.7
17.8
19.5
Acquired, others - own construction capitalised
0.0
8.3
2.6
10.9
Deconsolidation business combinations
0.0
(2.7)
0.0
(2.7)
BALANCE AT 31 DECEMBER 2010
1,707.8
45.0
21.5
1,774.3
Balance at 1 January 2011
1,707.8
45.0
21.5
1,774.3
0.0
10.9
0.2
11.1
1,707.8
55.9
21.7
1,785.4
(16.5)
Acquired, others - own construction capitalised
BALANCE AT 31 DECEMBER 2011
DEPRECIATION AND IMPAIRMENT
Balance at 1 January 2010
0.0
(16.2)
(0.3)
Deconsolidation business combinations
0.0
1.4
0.0
1.4
Depreciations
0.0
(7.2)
(0.9)
(8.1)
BALANCE AT 31 DECEMBER 2010
0.0
(22.0)
(1.2)
(23.2)
Balance at 1 January 2011
0.0
(22.0)
(1.2)
(23.2)
Depreciations
0.0
(7.4)
(1.2)
(8.6)
BALANCE AT 31 DECEMBER 2011
0.0
(29.4)
(2.4)
(31.8)
At 1 January 2010
1,707.8
21.5
0.8
1,730.1
At 31 December 2010
1,707.8
23.0
20.3
1,751.1
At 1 January 2011
1,707.8
23.0
20.3
1,751.1
At 31 December 2011
1,707.8
26.4
19.4
1,753.6
CARRYING AMOUNT
Software comprises both IT applications developed by the
company for operating the grid and software for the Group’s
normal business operations.
The goodwill, amounting to €1,707.8 million, relates to the following past transactions:
(in million €)
See Note 5.3.3 for the impact of depreciations in intangible assets on profit or loss.
Acquisition of participations in Elia
Asset by Elia System Operator - 2002
Acquisition of participations in Elia
Engineering by Elia Asset - 2004
Total
2011
2010
1,700.1
1,700.1
7.7
7.7
1,707.8
1,707.8
134
ELIA GROUP 2011
FINANCIAL REPORT
IMPAIRMENT TEST FOR CASH-GENERATING UNIT ELIA
TRANSMISSION (BELGIUM) CONTAINING GOODWILL
In 2002, the acquisition of Elia Asset by the company for an
amount of EUR 3,304.1 million resulted in a positive consolidation difference of €1,700.1 million. This positive consolidation
difference is the result of the difference between acquisition
value of this economic entity and carrying amount of the assets
of Elia Asset. This difference consists of different elements such
as the fact that (i) Elia was appointed as a TSO for a period of
20 years, (ii) Elia has unique resources in Belgium as Elia is the
owner of the whole very-high-voltage network and is the owner
of (or has the right to use) 94% of the high-voltage network,
and hence only Elia is entitled to propose a development plan,
and (iii) Elia has the TSO know-how. At the date of acquisition,
the qualification or the quantification in euro of these elements
could not be performed on an objective, transparent and reliable basis and therefore, the difference could not be allocated
to specific assets and was considered unallocated. Therefore,
this difference has been recognised as goodwill since the first
adoption of IFRS at 1 January 2005. The regulatory framework,
in particular the offsetting in the tariffs of the decommissioning
of fixed assets, applicable as from 2008 onwards, did not have
an impact on this accounting treatment.
The goodwill, as described above and the goodwill resulting
from the acquisition of Elia Engineering in 2004 were allocated
to the single cash-generating unit for the impairment test determined, since the income and expenses were generated by one
activity, specifically the ’regulated activity in Belgium’, which will
also be considered as one cash-generating unit. As a result,
the company assigned the carrying amount of the goodwill to
one unit, the regulated activity in Belgium. Since 2004, annual
impairment tests have been conducted and did not result in
recognition of any impairment losses. Cash-generating units to
which goodwill has been allocated are tested for impairment at
least annually as the higher of their fair value less cost to sell or
value in use, applying the assumptions hereafter and using the
following valuation methods.
The impairment test was conducted by an independent expert
and was based on the following valuation methods and applying the following assumptions (according to fair value less cost
to sell methodology):
1. discounting of future cash flows and using the “Regulated
Asset Base” or “RAB” as the basis for the estimation of the
terminal value;
2. discounting of future dividends;
3. comparison between the previously mentioned impairment methods and those used by some comparable West
European listed companies, such as Red Electrica España, Enagas, Terna, Snam Rete Gas, National Grid and
Fluxys;
4. market valuation based on the company’s share price.
The future cash flows and future dividend methods are based
on Elia’s 2010-2020 business plan.
The key assumptions used for this valuation are
• risk-free rate of 4.66%, based on Belgian 10-year bond rates;
• cost of debt of 5.20%;
• tax rate of 33.99%;
• market risk premium of 6.00%;
• perpetual growth rate of 1.25%.
The independent analyses did not result in recognizing an
impairment loss on goodwill in 2011. Based on current know­
ledge, reasonable changes in key assumptions (including discount rate and OLO) would not generate material impairments
for the cash-generating unit Elia Transmission (Belgium).
6.3. Non-current trade and other
receivables
(in million €)
2011
2010
Tax receivables
Other amounts receivable
118.4
1.8
111.9
2.8
120.2
114.7
Total
Long-term receivables consist of the basic amount of tax receivable (€93.8 million) and the cumulative moratorium interest
that the company could recover in the future. A detailed description can be found in Note 5.5.
6.4. Equity-accounted investees
INVESTMENTS IN ASSOCIATED COMPANIES
2011
2010
At 1 January
Acquisition of subsidiary
Sale of subsidiary
Share of (loss)/profit
29.2
0.0
0.0
1.4
9.4
21.1
(0.1)
(1.2)
At 31 December
30.6
29.2
(in million €)
135
ELIA GROUP 2011
FINANCIAL REPORT
Summary of financial data on equity-accounted investees, not corrected for the group’s ownership percentage:
Name
Assets
Liabilities
Revenues
Profit/(loss)
Interest held %
H.G.R.T.
APX-Endex
Coreso
31.8
937.0
2.8
0.1
902.7
1.5
0.0
30.7
3.5
2.6
2.7
0.1
24.5
20.0
28.5
TOTAL
971.6
904.3
34.2
5.4
-
H.G.R.T.
APX-Endex
Coreso
33.3
915.4
2.8
0.1
876.1
1.4
0.0
34.7
4.8
2.6
4.5
0.1
24.5
20.0
28.5
TOTAL
951.5
877.6
39.5
7.2
-
2010
2011
The summary of financial data of joint ventures can be found in Note 4.2 Segment 50Hertz Transmission (Germany). All companies
related to the 50Hertz Transmission segment are joint ventures. There are no joint ventures in other segments.
6.5. Other financial assets
2011
2010
Immediately claimable deposits
Others
13.6
71.3
13.4
66.1
Total
84.9
79.5
(in million €)
‘Immediately claimable deposits’ classified at fair value for
which the changes in fair value are recognised in OCI. The risk
profile of these investments is discussed in Note 7.3.
The item ‘Others’ is mainly related to a recoverable amount of
a portion of the pension liability - see Note 6.12.
6.6. Deferred tax assets and liabilities
RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
Assets
(in million €)
Property, plant and equipment
Intangible fixed assets
Inventories
Interest-bearing loans and other non-current financial liabilities
Employee benefits
Provisions
Accrued charges and deferred income
Other items
Net tax asset / (liability)
Liabilities
2011
2010
2011
2010
(7.6)
(8.2)
(0.9)
11.4
34.2
0.1
0.0
(23.8)
(2.9)
(7.4)
(1.1)
9.8
32.5
0.1
0.0
(22.3)
(63.4)
0.0
0.0
0.0
1.1
2.0
(0.3)
(7.0)
(61.1)
0.0
0.0
0.0
0.9
(2.1)
0.0
(31.0)
5.2
8.7
(67.6)
(93.3)
136
ELIA GROUP 2011
FINANCIAL REPORT
CHANGES IN DEFERRED TAX ASSETS AND LIABILITIES RESULTING FROM MOVEMENTS
IN TEMPORARY DIFFERENCES DURING THE FINANCIAL YEAR
Recognised
Recognised
in other
in income comprehensive
statement
income
1 january
(in million €)
Acquired
by business
combinations
31 december
2010
Tangible fixed assets
Intangible fixed assets
Other financial assets
Inventories
Interest bearing loans and other long term
financial liabilities
Employee benefits
Provisions
Other items
0.5
(7.1)
0.0
(1.0)
(9.6)
(0.3)
0.0
(0.1)
0.0
0.0
0.0
0.0
(55.0)
0.0
0.0
0.0
(64.1)
(7.4)
0.0
(1.1)
8.6
47.7
0.1
(30.6)
0.2
(6.3)
(0.6)
(0.7)
1.1
(8.9)
0.0
0.0
0.0
0.8
(1.5)
(21.9)
9.9
33.3
(2.0)
(53.2)
18.2
(17.4)
(7.8)
(77.6)
(84.6)
Tangible fixed assets
Intangible fixed assets
Inventories
Interest bearing loans and other long term
financial liabilities
Employee benefits
Provisions
Accruals and deferred income
Other items
(64.1)
(7.4)
(1.1)
(7.1)
(0.7)
0.2
0.0
0.0
0.0
0.0
0.0
0.0
(71.1)
(8.2)
(0.9)
9.9
33.3
(2.0)
0.0
(53.2)
0.2
(3.5)
4.1
(0.2)
22.4
1.3
5.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
11.4
35.3
2.1
(0.2)
(30.8)
TOTAL
(84.6)
15.4
6.8
0.0
(62.4)
TOTAL
2011
EFFECT OF CHANGES IN TEMPORARY DIFFERENCES
DURING THE FINANCIAL YEAR
Changes in temporary differences during the year are reflected
in profit or loss as income tax expense (also see Note 5.5).
UNRECOGNISED DEFERRED TAX ASSETS
For the following items no deferred income taxes are recognised in the balance sheet:
(in million €)
2011
2010
Notional interest deduction
122.8
122.3
122.8
122.3
Not recognised
tax asset / (liability)
The Belgian government has announced late 2011 that the system of notional interest deduction will undergo some changes.
The amount that was not used from the past remains recoverable from future tax profits. The new rules regarding the method
of release for a given year haven’t been finalized. Therefore the
Group has opted not to recognize the deferred tax asset consistent with last year.
The Group profit or loss account reserve includes €44.6 million
of distributable reserves retained by subsidiaries and equityaccounted entities, intended to be distributed as dividend to
the Group in the future.
6.7. Inventories
(in million €)
2011
2010
Raw materials and consumables
Write-off
28.2
(11.9)
25.9
(11.4)
Total
16.3
14.5
The warehouse primarily stores replacement and spare parts
for maintenance and repair work on the Group’s high-voltage
substations, overhead lines and underground cables.
ELIA GROUP 2011
FINANCIAL REPORT
6.8. Current trade and other receivables
(in million €)
Projects for third parties
Other trade receivables and advance
payments
Levies
VAT, other taxes
Other
Deferred charges and accrued income
Total
2011
2010
4.4
4.0
196.2
16.2
40.4
24.4
5.2
287.2
0.0
125.2
97.3
9.4
286.8
523.1
The decrease compared to last year is mainly due to decrease
in outstanding customers and the decrease in VAT. The item
‘Other’ consists of EEG related items.
The Group’s exposure to credit and currency risks, and impairment losses related to trade and other receivables, are shown
in Note 7.3.
DOUBTFUL AMOUNTS
(in million €)
2011
2010
Not past due
Past due 0-30 days
Past due 31-60 days
Past due 61 - one year
More than one year
Total (excl. Impairment)
184.7
8.9
0.8
2.3
(0.7)
196.0
254.0
11.9
(5.8)
26.1
0.7
286.9
Doubtful amounts
Amounts write offs
21.9
(21.7)
15.2
(14.9)
196.2
287.2
Total
6.9. Cash and cash equivalents
137
Bank-account balances earn interest in line with the variable
rates of interest on the basis of daily bank deposit interest. The
Group’s interest rate risk and the sensitivity analysis for financial assets and liabilities are discussed in Note 7.3.
6.10. Shareholders’ equity
SHARE CAPITAL AND SHARE PREMIUM
Number of shares
Outstanding on 1January
Issued against cash payment
Outstanding on
31 December - paid
Ordinary shares
2011
2010
60,355,217
0
48,270,255
12,084,962
60,355,217
60,355,217
In January 2010 the Elia Group gave its personnel the opportunity to subscribe to an Elia System Operator SA capital increase (tax tranche) which resulted in a €0.3 million increase in
the share capital and the number of shares outstanding rose by
13,919 shares without nominal value.
Elia launched a second capital increase for a nominal amount
of €299.4 million, between 8 and 18 June 2010, with a view to financing the acquisition of a 60% stake in German grid operator
50Hertz Transmission, which was fully subscribed. During the
subscription period with preferential rights for existing shareholders, whereby for every four preferential rights they could
take up one new share at a price of €24.80, 91.84% of the
shares available (11,085,617 of the 12,071,043 new shares on
offer) were subscribed. On 22 June 2010, the other 3,941,704
rights were offered to institutional investors in a private placement. All remaining preferential rights were sold as scrips for
€0.20 per scrip, bringing the share purchase price to €25.60.
The new shares were listed for the first time on 25 June 2010.
(in million €)
2011
2010
The capital of Elia System Operator SA increased from €1,207.3
million to €1,500.6 million in 2010 taking into account the costs
for capital increases.
Balance at bank
Call deposits
34.4
351.2
128.7
237.2
RESERVES
385.6
365.9
Total
Short-term deposits are invested for periods that vary from a
few days and a few weeks to several months, depending on
immediate cash requirements, and report interest in accordance with the interest rates for the short-term deposits. The
interest rate of interest-bearing investments at the end of the
reporting period varies from 0.15% to 2.00%. An amount of
€6 million is limited in use as result of contractual conditions
related to a subsidy granted by the European community.
In accordance with Belgian legislation, 5% of the parent company’s statutory net profit must be transferred to the legal reserve each year until the legal reserve represents 10% of the
capital.
Within the tariff mechanism, Elia must reserve in shareholders’
equity the realised surplus passed on in the tariffs as a result
of decommissioning fixed assets (decrease in Regulated Asset
Base).
In 2010, this amounted to €16.2 million. The General Meeting
of 10 May 2011 decided to include that amount in the legal
reserve.
138
ELIA GROUP 2011
FINANCIAL REPORT
As per 31 December 2011 the Group’s legal reserve amounts
to €67.6 million. This reserve can only be paid to shareholders
in the event of liquidation.
The Board of Directors can propose the payment of a dividend
to shareholders up to a maximum of the available reserves and
the profit carried forward from previous financial years of the
parent company, including the profit of the financial year ended
31 December 2011. Shareholders must approve the dividend
payment at the Annual General Meeting of Shareholders.
HEDGING RESERVE
The hedging reserve comprises the effective portion of the
cumulative net change in fair value of cash-flow hedging instruments in respect of hedged transactions that have not yet
occurred.
The Board of Directors’ meeting of 28 February 2012 proposed
a gross dividend of €1.47 per share. This dividend is subject to
approval by shareholders at the Annual General Meeting on 15
May 2012 and was not included as a liability in the consolidated
financial statements of the Group.
The total dividend will be calculated on the number of shares
outstanding on 28 February 2012 which correspond to a total
of €88.7 million.
The net profit includes also the realised surplus as a result of
decommissioning of fixed assets of €16.1 million to be booked
in equity. The Board of Directors’ meeting of 28 February 2012
decided to suggest to the Annual General Meeting that this
amount be allocated to the legal reserve. The amount has not
yet been posted in the reserve on 31 December 2011.
DIVIDEND
6.11. Interest-bearing loans and borrowings
After the balance sheet date, the Board of Directors put forward the dividend proposal indicated below.
A general overview of loans and accrued interest is given below:
(in €)
Per ordinary share entitled to dividend
2011
2010
1.47
1.40
At the General Meeting of Shareholders on 10 May 2011, the
Board of Directors approved payment of a gross dividend of
€1.40 per share, which will yield a net dividend of €1.05 per
share or a net dividend of €1.19 per share with a VVPR strip,
yielding a total amount of €84.5 million.
2011
2010
Long term borrowings
2,850.2
2,848.9
Accrued Interests
Subtotal non-current borrowings
68.3
2,918.5
68.4
2,917.3
0.0
0.0
0.0
0.1
0.0
0.1
2,918.5
2,917.4
(in million €)
Short term borrowings
Accrued Interests
Subtotal current borrowings
Total
Information concerning the terms and conditions of the outstanding interest-bearing loans and borrowings is given below:
(in million €)
Shareholders Loan tranche A
Eurobond issues 2004 / 10 years
Eurobond issues 2004 / 15 years
Eurobond issues 2009 / 7 years
Eurobond issues 2009 / 4 years
Eurobond issues 2010 / 10 years
European Investment Bank
European Investment Bank
TOTAL
Maturity
Amount
Interest
rate before
hedging
Interest
rate after
hedging
Current
proportion of
the interest (%)
%
%
Fixed
Variable
2022
2014
2019
2016
2013
2020
2016
2017
495.8
499.4
498.9
498.7
499.6
297.8
40.0
20.0
2.76
4.75
5.25
5.63
4.50
3.88
4.27
4.79
4.99
4.75
5.25
5.63
4.50
3.88
4.27
4.79
79.83
100.00
100.00
100.00
100.00
100.00
100.00
100.00
20.17
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-
2,850.2
-
-
96.72
3.28
ELIA GROUP 2011
FINANCIAL REPORT
Information concerning the contractual maturities of the
Group’s interest-bearing loans and borrowings (current and
non-current) is given below:
(in million €)
Shareholders Loan
tranche A
Eurobond issues
European
Investment Bank
European
Investment Bank
Total
Less
Face than 1
1-2
value year years
3-5
years
More
than 5
years
495.8
0.0
0.0
0.0
495.8
2,300.0
40.0
0.0
0.0
500.0
0.0
1,000.0
40.0
800.0
0.0
20.0
0.0
0.0
20.0
0.0
2,855.8
0.0 500.0 1,060.0 1,295.8
50Hertz Transmission (Germany) has pension schemes and
early-retirement plans, mainly based on collective bargaining
or works council agreements. The level of benefits or contribution to be provided depends on the salary and years of service
of the participants.
The total net liability for employee benefits obligations are as
follows:
(in million €)
Defined benefit plans
Other employee benefits
Subtotal
Others (restructuring)
Total provisions for employee benefits
6.12. Employee benefits
In Belgium collective agreements regulate the rights of company employees in the electricity and gas industries.
These agreements provides so called “pension supplements”
based on the annual salary and the career within the company
of the employee. If the employee deceases, the supplements
are partially revertible to the heritor (wife/orphan). The benefits
granted are linked to Elia’s operating result. There is neither an
external pension fund nor group insurance for these liabilities,
which means that no reserves are constituted with third parties. The obligations are qualified as a defined benefit.
The collective agreement determines that active staff hired
from 1 January 1993 to 31 December 2001 and all managerial/
executive staff hired prior to 1 May 1999 are granted the same
guarantees via a defined-benefit pension scheme. Obligations
under these defined-benefit pension plans are funded through
a number of pension funds for the electricity and gas industries
and through insurance companies.
‘Salary scale’ personnel recruited after 1 June 2002 and management staff recruited after 1 May 1999 are covered by defined-contribution pension plans. For payments made after 1
January 2004, the law requires an average annual return over
the career of at least 3.25% for the employer’s contributions
and at least 3.75% for employees’ contributions, with any deficit being covered by the employer. Given that the actual return
on plan assets has been above the guaranteed minimum return, no provision has been established to cover any deficit.
Elia Transmission Belgium also has early-retirement schemes
and other post-employment benefits such as reimbursement
of medical expenses and price subsidies, as well as other longterm benefits (seniority payments). Not all of these benefits are
funded.
139
2011
2010
53.7
53.8
52.6
50.2
107.5
102.8
0.6
1.0
108.1
103.8
140
ELIA GROUP 2011
FINANCIAL REPORT
In following tables the detail is shown of the outstanding provision for employee benefits, with the split between pension cost and
non-pension costs. In this annual report the same split has been made for the 2010 figures. In last year’s annual report this split
was not yet disclosed.
DEFINED BENEFIT PLAN FOR COMPLEMENTARY PENSIONS
2011
2010
Defined benefit obligation at the beginning of the period
Acquired by business combinations
Service Cost
Interest Cost
Contributions from plan participants
Gains (losses) on changes of plans
Gains (losses) on curtailments or settlements of plans
Special termination benefits
Actuarial gains (losses)
Benefits paid
(172,3)
0,0
(4,3)
(7,4)
(0,5)
0,0
0,0
0,0
(7,6)
15,0
(180,3)
(11,9)
(4,0)
(7,5)
(0,6)
0,0
0,0
0,0
17,0
14,9
DEFINED BENEFIT OBLIGATION AT THE END OF THE PERIOD
(177,1)
(172,3)
Fair value of plan assets at beginning of the period
Acquired by business combinations
Expected (not actual) return on plan assets
Company contributions
Plan participants contributions
Gains (losses) on curtailments or settlements
Actuarial gains (losses)
Benefits paid
119,7
0,0
5,6
17,5
1,0
0,0
(5,5)
(14,9)
94,4
7,1
5,1
19,5
1,0
0,0
7,4
(14,8)
FAIR VALUE OF PLAN ASSETS AT END OF PERIOD
123,4
119,7
(53.7)
(52.6)
Service Cost
Interest Cost
Plan participants contributions
Expected return on plan assets
Actuarial gains (losses)
Gains (losses) on changes of plans
Special termination benefits
(4,3)
(7,4)
(0,1)
5,6
0,0
0,0
0,0
(4,0)
(7,5)
(0,1)
5,1
0,1
0,0
0,0
TOTAL NET PERIODIC BENEFIT COST
(6,2)
(6,4)
(in million €)
MOVEMENT IN THE PRESENT VALUE OF THE DEFINED BENEFIT OBLIGATIONS
MOVEMENT IN THE FAIR VALUE OF PLAN ASSETS
FUNDED STATUS
FUNDED STATUS OF THE PLAN
EXPENSE RECOGNISED IN PROFIT OR LOSS
ELIA GROUP 2011
FINANCIAL REPORT
141
POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS
2011
2010
(54,8)
0,0
(2,1)
(2,1)
0,0
(56,7)
(5,0)
(1,8)
(2,5)
0,0
0,0
0,0
(1,9)
(4,0)
4,7
0,0
0,0
1,5
5,3
4,4
(60,2)
(54,8)
4,6
0,0
0,0
4,6
0,9
0,0
(0,3)
(3,4)
0,8
3,4
0,0
4,1
0,1
0,0
(0,1)
(3,8)
6,4
4,6
(53,8)
(50,2)
Service Cost
Interest Cost
Plan participants contributions
Expected return on plan assets
Actuarial gains (losses)
Gains (losses) on changes of plans
Special termination benefits
Gains (losses) on curtailments or settlements
(2,1)
(2,1)
0,9
0,0
(1,3)
0,0
(1,9)
0,0
(1,8)
(2,5)
0,1
0,0
0,0
0,0
1,5
0,0
TOTAL NET PERIODIC BENEFIT COST
(6,5)
(2,7)
(in million €)
MOVEMENT IN THE PRESENT VALUE OF THE DEFINED BENEFIT OBLIGATIONS
Defined benefit obligation at the beginning of the period
Acquired by business combinations
Service Cost
Interest Cost
Contributions from plan participants
Gains (losses) on changes of plans
Gains (losses) on curtailments or settlements of plans
Special termination benefits
Actuarial gains (losses)
Benefits paid
DEFINED BENEFIT OBLIGATION AT THE END OF THE PERIOD
MOVEMENT IN THE FAIR VALUE OF PLAN ASSETS
Fair value of plan assets at beginning of the period
Acquired by business combinations
Expected (not actual) return on plan assets
Company contributions
Plan participants contributions
Gains (losses) on curtailments or settlements
Actuarial gains (losses)
Benefits paid
FAIR VALUE OF PLAN ASSETS AT END OF PERIOD
FUNDED STATUS
FUNDED STATUS OF THE PLAN
EXPENSE RECOGNISED IN PROFIT OR LOSS
142
ELIA GROUP 2011
FINANCIAL REPORT
ACTUARIAL ASSUMPTIONS
Pension plans
ACTUARIAL GAINS AND LOSSES RECOGNISED
IN OTHER COMPREHENSIVE INCOME
2011
(%)
Elia Transmission (Belgium)
Inflation rate
Discount rate at 31 December
(not including inflation)
Future salary increases
(not including inflation)
Expected return on plan assets
(not including inflation)
Future pension increases
(not including inflation)
Medical cost trend rate
50Hz Transmission (Germany)
Inflation rate
Discount rate at 31 December
(not including inflation)
Future salary increases
(not including inflation)
Expected return on plan assets
(not including inflation)
Future pension increases
(not including inflation)
Medical cost trend rate
2010
2.00
2.00
2.00
2.36
2.00
2.00
4.50
5.25
0.00
1.00
0.00
1.00
2.50
1.75
2.10
3.25
3.50
2.50
5.00
5.00
1.00 / 2.50 /
3.00 / p.a.
1.00 / 1.75 /
2.00 / p.a.
n/a
n/a
The expected return on plan assets is determined by asset category, with each asset category having its own estimated rate
of return.
SENSITIVITY ANALYSIS
The impact of a change of 1% on medical costs is as follows:
(in million €)
Increase
of 1%
Decrease
of 1%
(0.2)
(2.9)
0.2
2.3
Aggregate of the service
and interest costs
Defined benefit obligation
The impact of increase of 1% on discount rate and inflation
medical costs is as follows:
Discount rate
Inflation
16.8
(17.4)
(%)
2011
2010
Equity securities
Bonds
Property
Other (cash included)
23.28
55.90
5.37
15.45
23.78
54.34
5.54
16.34
100.00
100.00
(in million €)
Defined benefit obligation
DETAILED SUMMARY OF PLAN ASSETS
Total plan assets
(in million €)
2011
2010
Cumulative amount at 1 January
Recognised in the period
10.4
(10.8)
(15.7)
26.1
Cumulative amount at 31 December
(0.4)
10.4
The following table presents the historical overview of the key
indicators of the last five years :
(in million €)
Defined
benefit obligation
Fair value
of plan assets
(Surplus) / Deficit
2011
2010
2009
2008
2007
(237.4)
(228.4)
(236.9)
(240.0)
(258.9)
128.7
(108.7)
124.3
(104.1)
95.2
(141.7)
98.5
(141.5)
116.9
(142.0)
Recoverable amount in future tariffs
In accordance with a study report issued by the CREG, it is
virtually certain that some of the liability related to the pension
scheme total of €70.1 million will be accepted by the CREG as
reasonable expenses and will therefore be passed on in future
tariffs. Since this amount can be recovered by Elia from third
parties, in accordance with IFRS principles (IAS 19), it will be
classified as an asset item. The amount is included under other
financial assets (see Note 6.5).
ELIA GROUP 2011
FINANCIAL REPORT
143
6.13. Provisions
Environment
Litigation
Rights use
of lines
Total
BALANCE AT 1 JANUARY 2010
13.9
4.8
0.0
18.7
Acquired by business combinations
During financial year: increase in provisions
During financial year: utilization provisions
During financial year: reversals of provisions
2.1
3.8
(0.4)
0.0
8.3
20.4
(2.2)
(3.4)
39.8
1.5
(0.4)
0.0
50.2
25.7
(3.0)
(3.4)
BALANCE AT 31 DECEMBER 2010
19.4
27.9
40.9
88.2
Long-term portion
Short-term portion
1.9
17.5
7.3
20.6
35.4
5.5
44.6
43.6
BALANCE AT 1 JANUARY 2011
19.4
27.9
40.9
88.2
During financial year: increase in provisions
During financial year: utilization provisions
During financial year: reversals of provisions
1.7
(1.8)
(0.3)
4.8
(0.3)
(14.8)
2.7
(2.1)
0.0
9.2
(4.2)
(15.1)
BALANCE AT 31 DECEMBER 2011
19.0
17.6
41.5
78.1
Long-term portion
Short-term portion
7.7
11.3
9.5
8.2
36.5
4.9
53.7
24.4
(in million €)
The changes in provisions for environment are mainly related
to further soil research and remediation on certain sites in Flanders and to the results of the preventive screening and detailed
analysis of sites in the Brussels-Capital Region and the Walloon Region. The estimates are based on the appraisal of an
external expert bearing in mind the BATNEEC (Best Available
Techniques Not Entailing Excessive Costs) principle.
The provision for litigation has been established to cover potential payment as a result of cases in which legal proceedings
have been instituted against Elia by a third party or in which Elia
is involved in a legal dispute.
6.14. Other non-current liabilities
2011
2010
Investments grants
Other
8.1
12.3
7.0
13.6
Total
20.4
20.6
(in million €)
6.15. Trade and other payables
TRADE AND OTHER PAYABLES
The provision ‘Rights of use of land’ consists of potential payment to landowners for easement rights related to overhead
lines built in the past by the former owners of 50Hertz Transmission.
These estimates are based on the value of claims filed or on the
estimated amount of the risk exposure.
The expected timing of the related cash outflow depends on
the progress and duration of the associated procedures.
(in million €)
2011
2010
Trade debts
VAT, other taxes
Remuneration and social security
Dividend
Levies
Other
223.1
4.5
24.3
3.3
79.4
31.5
298.1
12.7
24.3
3.1
75.3
35.2
366.1
448.7
Total
The changes in provisions are discussed in Note 5.3.3.
The decrease is mainly related to the decrease of ‘unpaid invoices to suppliers’.
144
ELIA GROUP 2011
FINANCIAL REPORT
7. Miscellaneous
6.16. Accruals and deferred income
(in million €)
Accruals and deferred income
Balance settlement mechanism Belgium
Balance settlement mechanism Germany
Total other current liabilities
2011
2010
89.9
15.2
71.7
61.1
49.9
68.3
176.8
179.3
The following table presents overview of 2011
Belgium
Germany
0.0
9.1
(9.4)
62.6
Discount future tariffs
(9.4)
71.7
Moratorium interest on income tax
24.6
0.0
Balance settlement mechanism
15.2
71.7
(in million €)
To be refunded to the tariffs
of current period
Balance period prior years
to be refunded into the tariffs
- period to be determined
7.1. Effect of new acquisition
ACQUISITION OF 10% OF ATLANTIC GRID IN 2011
Description of the deal
On 22 July 2011, Eurogrid International, in which Elia has a 60%
stake, joined partners Google, Marubeni, Good Energies and
Atlantic Grid Investments (AGI) in the Atlantic Wind Connection project. Atlantic Wind Connection aims to develop the first
high-voltage DC offshore grid in the USA, which should make
it possible to integrate up to 7,000 MW of offshore wind power
into the grids of New Jersey, Delaware, Maryland and Virginia.
Eurogrid International acquired a strategic minority stake of
10% in the first segment of the project and a minority stake of
5% in the four other segments. Eurogrid International acquired
the participation via its newly established, wholly owned subsidiary E-Offshore A LLC. Elia’s stake was €1.2 million (part in
consolidated figures 60% or €0.8mio).
Contribution to the result of the Group
Eurogrid International holds through its subsidiaries a stake of
10% in Atlantic Grid A.
ACQUISITION OF 50HERTZ TRANSMISSION IN 2010
Effect of acquisition in 2011
In 2011 no further modifications are needed for the 2010 PPA.
Description of the deal
On 12 March 2010, Elia and IFM announced the acquisition of
50Hertz from the Vattenfall Group. This was completed on 19
May 2010.
It comprised all shares held by 50Hertz Transmission, including the wholly owned subsidiary 50Hertz Offshore and its two
minority shareholdings EMCC (20.0%) and CAO (12.5%).
With a view to this acquisition, Elia and IFM set up the holding
company Eurogrid International SCRL/CVBA. In total, 60% of
Eurogrid International’s shares are owned by Elia System Operator NV/SA and Elia Asset NV/SA (the latter holding a single
share), and 40% of them are held by IFM Luxembourg.
The shares held by 50Hertz Transmission were acquired via
Eurogrid GmbH, a private German limited-liability company established on 2 March 2010. Eurogrid GmbH is a wholly owned
subsidiary of Eurogrid International.
The acquisition price for all shares held by 50Hertz was
€464.6 million. Via Eurogrid GmbH, Elia paid €278.8 million for
a 60% stake.
Following the shareholders’ agreement with IFM, the 50Hertz
figures are included in the Elia figures at a rate of 60% using the
proportionate consolidation method.
ELIA GROUP 2011
FINANCIAL REPORT
145
Pre-acquisition
carrying amounts
Fair value
adjustments
Recognised values
on acquisition
32.4
1,413.8
0.3
2.9
222.6
0.0
0.0
88.2
(10.8)
(84.0)
0.0
(402.6)
(131.8)
(182.8)
0.0
(8.6)
0.0
0.0
0.0
2.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
32.4
1,405.2
0.3
2.9
222.6
2.5
0.0
88.2
(10.8)
(84.0)
0.0
(402.6)
(131.8)
(182.8)
948.2
(6.1)
942.1
Gain on bargain purchase
-
-
(477.5)
Consideration paid
-
-
464.6
Cash acquired
-
-
0.0
NEW BUSINESS COMBINATION
-
-
464.6
Total
(in million €)
Intangible assets
Property, plant and equipment
Other financial assets
Inventories
Trade and other receivables
Deferred tax assets
Cash and cash equivalents
Other current assets
Employee benefits
Provisions
Loans and borrowings
Trade and other payables
Deferred tax liabilities
Other current liabilities
Net identifiable assets
Gain on bargain purchase (2010)
•
Owing to the acquisition of 50Hertz Transmission, the corresponding purchase price has to be recorded in the financial
statement.
Under IFRS an allocation of acquired goodwill or a gain on
bargain purchase needs to be made by executing a Purchase
Price Allocation or ‘PPA’. In a PPA, all separately identifiable
assets and (contingent) liabilities are measured at fair value.
This PPA exercise was carried out for Eurogrid GmbH (German
financing and acquisition structure above 50Hertz Transmission), whereby the value of the equity of 50Hertz was determined to €942,1 million, and finally resulted in a gain on bargain
purchase of €477.5 million of which 60% is reflected in the income statement of the Group.
Gain on bargain purchase
100%
60%
Equity 50Hertz per 31/05/2010 (2)
464.6
942.1
278.8
565.3
Gain on bargain purchase
at 31/12/2010 = [(2)-(1)]
477.5
286.5
Acquisition costs 50Hertz
(13.3)
(8.0)
464.2
278.5
(in million €)
Parent's company value of investment (1)
Total non-recurring items
This amount is compliant with the estimation of the fair value of
the net assets of 50Hertz to be within a range of €890.3 million
and €984.1 million. This fair value exercise was performed with
the assistance of an independent valuation expert based on
three methodologies and applying the following assumptions:
•
discounting
of future free cash flows (“FCF”) using the “Regulated Asset Base” or “RAB” as basis for the estimation of
the terminal value FCF (“DCF method”) due to the nature
of the business the net cash flow can be negative due to
expected investment plans;
discounting of future expected dividends as estimated by
the Company (“DDM method”).
These analyses are based on financial prospects (business
plan) prepared by management (not certified by the independent expert) for the period 2010 -2028 taking into account
the current regulatory framework as described under chapter
‘Regulatory framework and tariffs’.
The business plan takes into account the expected positive
impact of
• the implementation and entry into force as of 1 January
2010 of the AusgleichMechV compensation mechanism for
the compensation of public services obligations in respect
of the promotion of renewable energy sources (EEG), which
allows to treat certain costs related to this mechanism as
pass through costs and to include those costs in the tariffs;
• an expected positive impact of the implementation of the
“Korridor model” as of 1 January 2010, providing for a new
treatment of the major part of system services (regulating power, compensation of network losses, re-dispatch),
which allows to include most of these costs in the revenue
cap;
• a further optimisation of the costs relating to various support services (IT, insurance, cash pooling, consulting and
various support services).
146
ELIA GROUP 2011
FINANCIAL REPORT
The future cash flows and future dividends are based on the
business plan prepared by the management during the first
quarter of 2010 applying the current German tariff mechanism for the period 2010-2028 as and using the following assumptions:
• period 2010-2018 mainly driven the management’s investment schedule which includes more capital expenditures
than in the past years;
• for the period 2019 -2028 driven by Elia’s and IFM’s investment schedule at a level which is closer to or even below the
operating cash flow. The net RAB is nearly on a constant
level in the years after 2021. The terminal value is based on
the net RAB value which is assumed to be in a steady state
in 2028. Basic assumptions are therefore that depreciation
expenses balance capital expenditure and that there is no
change in working capital.
s the activity as ‘TSO’ is an activity with a long term perspecA
tive, the cash flows have been projected over the period 20102028.
The applied discount rate of 5.7% (cost of equity 7.2% and the
cost of debt of 5.1%) is in line with the WACC that results from
applying the after-tax cost of equity and cost of debt rates set
by the regulator BNetzA to 50Hertz (which amounts to 5.8%)
and also with the WACC (weighted costs of capital) used by
financial analysts for peer group companies. For purposes of
the DDM method a pay-out ratio of 100% of the profit under
German GAAP was assumed (which is not binding for the
actual future pay-out ratio), market approach on the basis of
prospective EBIT and EBITDA multiples (“Market approach”)
and those used by some comparable West European listed
companies, such as Red Electrica corpororation SA, Enagas,
Terna, Fluxys, Snam Rete Gas, National Grid and Redes Energiticas Nacionais S.A.
• The market approach method was primarily used to validate the results of the DCF and DDM valuation methods.
he Company agrees with the conclusions of its independT
ent expert to consider that the DCF method better reflects the
steady state of the asset base with regard to terminal value.
In particular, the P/E multiple was not retained due to a lack
of comparability to peers as a result of (amongst other things)
different regulatory regimes, depreciation methods and nonregulated income. In addition, due to 50Hertz’ investment
schedule and one-off costs, forecasted net income, EBIT and
EBITDA differ significantly and especially net income shows a
high fluctuation from year to year, resulting in a wide overall
value range which limits the relevance of the market approach
method. As such, the preliminary range of fair value of the net
assets is consistent with the valuation range resulting from the
DCF method.
The purchase price paid for the acquisition of 50Hertz results
from negotiations between the parties following a competitive
sale process. Vattenfall has released no information as to the
reasons why 50Hertz has been sold with a bargain on purchase
price. However, as stated in its annual report 2009, Vattenfall’s
debt position has increased over the past few years, while its
cash flow decreased, and Vattenfall AB announced in that context that it intended to improve profitability through concrete
measures, amongst other things by re-prioritising and reducing its investments and divesting non-core assets. In addition,
Vattenfall is subject to certain unbundling requirements under
the Third Energy Package.
7.2. Deconsolidation of Belpex NV/SA
In October 2010 Elia sold its whole participation of 60% in its
subsidiary Belpex NV/SA, the Belgian power exchange. The
figures of Belpex NV/SA were fully consolidated in the figures
at 31 December 2009.
Elia and the Dutch transmission system operator TenneT BV
both sold their shares in Belpex to APX-ENDEX Holding BV,
the Dutch power exchange, as part of the integration of power
exchanges in the North-Western Europe region.
EFFECT OF DISPOSAL OF BELPEX NV/SA
ON THE FINANCIAL POSITION OF THE GROUP
Total
(in million €)
Intangible assets
Trade and other receivables
Cash and cash equivalents
Non controlling interests
Loans and borrowings
Trade and other payables
Other current liabilities
2010
(1.3)
(9.3)
(0.1)
2.0
5.0
1.9
0.1
Net identifiable assets and liabilities
(1.7)
Consideration received
Cash and cash equivalents disposed of
11.4
(0.1)
Net cash inflow
11.3
7.3. Financial risk and derivative
management
PRINCIPLES OF FINANCIAL RISK MANAGEMENT
The Group aims to identify each risk and set out strategies to
control the economic impact on the Group’s results.
The Internal Audit & Risk Management Department defines the
risk management strategy, monitors the risk analysis and reports to the management and the Audit Committee. The financial risk policy is implemented by determining appropriate policies and setting up effective control and reporting procedures.
Selected derivative hedging instruments are used depending
on the assessment of risk involved. Derivatives are used exclusively as hedging instruments. The regulatory framework in
which the Group operates considerably restricts their effects
on profit or loss (see the ‘Regulatory framework and tariffs’
chapter). The major impact of increased interest rates, credit
ELIA GROUP 2011
FINANCIAL REPORT
risk, etc. can be settled in the tariffs, in accordance with the
applicable legislation.
CREDIT RISK
Credit risk encompasses all forms of counterparty exposure,
i.e. where counterparties may default on their obligations to
the company in relation to lending, hedging, settlement and
other financial activities. The company is exposed to credit risk
from its operating activities and treasury activities. In respect of
its operating activities, the Group has a credit policy in place,
which takes into account the risk profiles of the customers. The
exposure to credit risk is monitored on an ongoing basis, resulting in a request to deliver bank guaranties from the counterparty for some major contracts.
147
At the end of the reporting period there were no significant
concentrations of credit risks. The maximum credit risk is the
carrying amount of each financial asset, including derivative financial instruments.
(in million €)
2011
2010
Loans and receivables
Cash and cash equivalents
Balance at bank
196.2
385,6
13,6
287.0
366.0
13.4
Interest rate swaps used for hedging
Assets
Liabilities
0.0
(35.2)
0.0
(31.4)
560,2
635.0
Total
The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:
Doubtful debtors
Impairment
losses
Remaining
balance
3.7
(3.4)
0.3
Changes during the year
11.5
(11.5)
0.0
BALANCE AT 31 DECEMBER 2010
15.2
(14.9)
0.3
BALANCE AT 1 JANUARY 2011
15.2
(14.9)
0.3
6.8
(6.8)
0.0
22.0
(21.7)
0.3
(in million €)
BALANCE AT 1 JANUARY 2010
Changes during the year
BALANCE AT 31 DECEMBER 2011
Trade and other receivables are recorded without taking into
account receivables which have been impaired. The impairment loss recognised in 2011 is mainly related to a settlement
of receivables, which finally could be recovered in the future
tariffs.
LIQUIDITY RISK
CURRENCY RISK
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans,
confirmed and unconfirmed credit facilities, commercial paper
program, etc. For medium- to long-term funding, the Group
uses bonds. The maturity profile of the debt portfolio is spread
over several years. The Group Treasury frequently assesses its
funding resources taking into account its own credit rating and
general market conditions.
The Group is not exposed to any significant currency risk, either from transactions or from exchanging foreign currencies
into euro, since it has only limited foreign investments or activities and less than 1% of its costs are expressed in currencies
other than the euro.
Liquidity risk is the risk that the Group may not be able to meet
its financial obligations. The Group limits this risk by constantly
monitoring cash flows and ensuring that there are always sufficient credit line facilities available.
148
ELIA GROUP 2011
FINANCIAL REPORT
Referring to the bond issues in 2009 and 2010, access to sources of funding should sufficiently be available.
(in million €)
Non-derivative financial liabilities
Unsecured bond issues
Unsecured financial bank loans
and other loans
Trade and other payables
Derivative financial liabilities
Interest rate swaps used for hedging
Of which cash flow hedges
BALANCE AT 31 DECEMBER 2010
Non-derivative financial liabilities
Unsecured bond issues
Unsecured financial bank loans
and other loans
Trade and other payables
Derivative financial liabilities
Interest rate swaps used for hedging
Of which cash flow hedges
BALANCE AT 31 DECEMBER 2011
Carrying
amount
Expected
cash
outflows
6 mths
or less
6-12
mths
1-2
years
2-5
years
>5
years
2,293.1
(2,916.0)
(106.1)
(5.8)
(112.4)
(1,237.0)
(1,454.7)
555.8
439.4
(726.8)
(439.8)
(8.6)
(439.4)
(6.7)
0.0
(16.0)
0.0
(48.0)
0.0
(647.5)
0.0
31.4
31.4
(49.9)
(49.9)
(6.2)
(6.2)
(5.6)
(5.6)
(8.7)
(8.7)
(17.7)
(17.7)
(11.8)
(11.8)
3,319.7
(4,132.5)
(560.3)
(18.1)
(137.1)
(1,302.7)
(2,114.0)
2,294.4
(2,806.1)
(101.0)
(11.6)
(597.0)
(1,187.8)
(908.7)
555.8
450.1
(711.8)
(450.3)
(9.6)
(450.1)
(6.8)
0.0
(16.0)
0.0
(87.1)
0.0
(592.4)
0.0
35.2
35.2
(40.5)
(40.5)
(5.4)
(5.4)
(5.6)
(5.6)
(5.9)
(5.9)
(17.7)
(17.7)
(5.9)
(5.9)
3,335.5
(4,008.7)
(566.1)
(24.0)
(618.9)
(1,292.6)
(1,507.0)
Details of the used and unused available credit facilities are given below:
Credit line facilities
(in million €)
Maturity
Available
amount
Average
basic interest
Amount
used
not used
Confirmed credit line
31/03/2014
150.0
Euribor + 0,55 %
0.0
150.0
Confirmed credit line
31/05/2014
75.0
Euribor + 0,55 %
0.0
75.0
Confirmed credit line
01/06/2014
75.0
Euribor + margin
when concluding the deal
0.0
75.0
Confirmed credit line
14/06/2016
210.0
Euribor + 0,55 %
0.0
210.0
Confirmed credit line
not limited
72.0
Monthly average
of EONIA + 0,4%
0.0
72.0
Uncommitted Credit Line Facility
-
70.0
Euribor + margin
when concluding the deal
0.0
70.0
Uncommitted Credit Line Facility
-
100.0
Euribor + margin
when concluding the deal
0.0
100.0
European Investment Bank
-
125.0
Euribor + 0,05 %
60.0
65.0
Belgian dematerialised treasury notes
-
250.0
Euribor + margin
when concluding the deal
0.0
250.0
60.0
1,067.0
TOTAL
1,127.0
ELIA GROUP 2011
FINANCIAL REPORT
149
INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of changes
in market interest rates. The Group’s exposure to the risk of
changes in market interest rates relates primarily to the Group’s
long-term debt obligations with floating interest rates.
The Group manages its interest rate risk by having a balanced
portfolio of fixed and variable rate loans and borrowings. To
manage this, the Group enters into interest rate swaps, in
which the Group agrees to exchange, at specified intervals,
the difference between fixed and variable rate interest amounts
calculated by reference to an agreed-upon notional principal
amount. These swaps are designated to hedge underlying
debt obligations.
(in million €)
Carrying
amount
Fair
value
Carrying
amount
Fair
value
2011
2011
2010
2010
Financial assets
Sicav
13.6
13.6
13.4
13.4
Total
13.6
13.6
13.4
13.4
Financial Liabilities
Derivative financial
liabilities (Interest
rate swap)
Interest bearing
loans and
borrowings
(35,2)
(35,2)
(31,4)
(31,4)
(395,8)
(395,8)
(395,8)
(395,8)
Total
(431,0
(431,0)
(427,2) (427,2)
The table (see Note 6.11) shows the average interest rate at the
balance sheet date.
Fair-value hierarchy
SENSITIVITY ANALYSIS
Changes in the interest rates will not affect the consolidated
result in the short and long term as the Group operates within a
regulatory framework where the consequences of fluctuations
in financial expenses are mainly recovered in tariffs, except for
the items which are directly recognized through OCI.
HEDGING
All financial derivatives the Group enters into relate to an underlying transaction or forecasted exposure, depending on the
expected impact on the income statement, and if the stringent
IAS 39 criteria are met, the Group decides on a case-by-case
basis whether hedge accounting will be applied. The following
sections describe the transactions whereby hedge accounting
is applied. At 31 December 2011 the Group has no transactions which do not qualify for hedge accounting.
Fair value
In accordance with the hedge accounting rules, all derivative
financial instruments are accepted as cash-flow hedges and
valued at fair value. Consequently, the portion of the gain or
loss on the derivative financial instrument that can be considered an effective hedge is reflected directly in equity (hedging
reserves net of tax).
Interest-rate swaps have an interest rate varying from 4.23% to
4.41%. As at 31 December 2011, the Group held hedging instruments with a contracted reference value of €395.8 million.
The net fair value of the swaps as at 31 December 2011 totalled €35.2 million and was entirely composed of liabilities. The
amounts are included as derivatives at fair value.
As at 31 December 2011, no financial expenses resulting from
ineffective cash-flow hedges are included in profit or loss.
The overview below shows the fair values and carrying
amounts of derivative financial instruments. As the loan has a
variable interest rate, the carrying amount of the loan is equal
to the fair value.
The above fair value of ‘sicavs’ belongs to level 1, i.e. valuation
is based on the (unadjusted) listed market price on an active
market for identical instruments.
The above fair value of interest rate swaps belongs to level 2,
which entails that valuation is based on input from other prices
than the stated prices, where these other prices can be observed for assets or liabilities. This category includes instruments valued on the basis of listed market prices on active
markets for such instruments; listed prices for identical or similar instruments on markets that are deemed less than active;
or other valuation techniques arising directly or indirectly from
observable market data.
Estimate of fair value
Derivatives
Brokers’ statements are used for interest-rate swaps. The
statements are controlled using valuation models or techniques based on discounted cash flows.
Interest-bearing loans
The fair value is calculated on the basis of the discounted future
redemptions and interest payments.
Financial lease obligations
The fair value is estimated at the present value of future
cash flows, discounted against the interest rate for uniform
lease contracts. The estimated fair value reflects interest-rate
changes.
CAPITAL RISK MANAGEMENT
The purpose of the Group’s capital structure management is to
maintain the debt and equity ratios related to the regulated activities in line with the requirement of the regulatory framework
(one-third equity and two-thirds debt capital). This approach
allows the Group to manage the security of the liquidity at all
times via flexible access to capital markets, so as to be able to
finance strategic projects and to offer an attractive remuneration to shareholders.
150
ELIA GROUP 2011
FINANCIAL REPORT
The company’s dividend policy involves optimising dividend
payments while still bearing in mind that there is a requirement
to reserve a part of the profit resulting from including the surplus, caused by decommissioning property, plant and equipment, in the tariff. Reserving this part of the profit as equity
boosts the company’s self-financing capacity needed to carry
out its legal mission.
OPERATING LEASE COMMITMENTS –
GROUP AS A LESSOR
The Group has entered into commercial property leases on
certain elements of property, plant and equipment, mainly
consisting of optimising use of sites and high-voltage pylons.
These leases have remaining terms of a minimum of nine years.
Future minimum rental receivables are as follows:
The company offers the employees the opportunity to subscribe to capital increases that are exclusively reserved for
them.
(in million €)
7.4. Commitment and contingencies
Telecom
Buildings
Total at 31 December 2010
5.9
0.2
6.1
3.8
0.1
3.9
1.9
0.1
2.0
Telecom
Buildings
4.7
0.3
13.4
0.4
19.5
0.1
Total at 31 December 2011
5.0
13.8
19.6
OPERATING LEASE COMMITMENTS – GROUP AS A LESSEE
The Group entered into commercial leases on motor vehicles,
IT equipment and office buildings. The leases related to leasing
cars and IT equipment have an average life of three years; the
contracts regarding the buildings have a normal term of nine
years, with the possibility of renewing the lease after that.
Future minimum rentals payable under non-cancellable operating leases are as follows:
<1
year
1–5
years
>5
years
Buildings
Cars, IT equipment and others
Total at 31 December 2010
5.2
6.2
11.4
21.1
13.5
34.6
2.8
0.0
2.8
Buildings
Cars, IT equipment and others
5.8
5.9
18.5
9.9
2.1
0.2
11.7
28.4
2.3
(in million €)
Total at 31 December 2011
The following expenses related to these lease contracts were
recognised in the income statement:
(in million €)
Buildings
Cars, IT equipment and others
Total
2011
2010
6.6
8.0
4.7
6.9
14.6
11.6
<1
year
1–5
years
>5
years
The following revenue related to these lease contracts was recognised in the income statement:
2011
2010
Telecom*
Buildings
11.1
0.5
10.3
0.4
Total
11.6
10.7
(in million €)
* The 2010 figures have been adjusted for comparison reasons (German segment - impact +300KEUR).
The lease contingencies include the contingencies of the German segment for an amount of €6.8 million (at 60% stake of
Elia).
CAPITAL COMMITMENT
As at 31 December 2011, the Group has a commitment of
€448.0 million relating to the purchase and installation of property, plant and equipment for further grid extensions. These
capital commitments include the capital commitments of the
German segment for an amount of €333.8 million (at 60% stake
of Elia).
CONTINGENCIES
Settlement mechanism
These lease commitments include the commitments of the
German segment for an amount of €12.4 million (at 60% stake
of Elia).
• A
•
calculation of the amount is given in the ‘Regulatory
framework and tariffs’ chapter.
Application of IFRS
The group operates in a regulated context which states that tariffs must make it possible to realise total revenue consisting of:
1. a reasonable return on invested capital;
2. all reasonable costs which are incurred by the group.
ELIA GROUP 2011
FINANCIAL REPORT
Since the tariffs are based on estimated figures, there is always
a difference between the tariffs that are actually charged and
the tariffs that should have been charged to cover all reasonable costs of the system operator and to provide shareholders
with a reasonable profit margin on their investment.
If the applied tariffs result in a surplus or a deficit at the end of
the year, this means that the tariffs charged to consumers / the
general public could have been respectively lower or higher
(and vice versa). The group is convinced that a surplus or deficit
arising from the settlement mechanism must not be classified
as revenue or an expense, or as an item under equity.
On a cumulative basis, it could be argued that the public has
made an advance payment (=surplus) for its future use of the
network. As such, the surplus (deficit) is not a commission for
a future loss (recovery) of income but instead a liability (receivable) to (with regard to) consumers. On the basis of the Regulatory framework, the group believes that the surplus (deficit)
does not represent an item of revenue (cost). Consequently,
the group booked these amounts under section ‘Accruals and
deferred income’ ‘see Note 6.16).
In addition Elia’s management also assessed whether transactions occurred with entities in which the directors of the Group
exercise a significant influence (e.g. positions as CEO, CFO,
vice-presidents of the Board, etc.). Significant transactions
occurred in 2011, all at arms’ length, with some distribution
system operators. The total amount of realized sales equals to
€102 million. The total amount of expenses equals to €5 million. There are no significant outstanding balances as per 31
December 2011 on any of the above mentioned related parties.
The disclosures relating to the Belgian Corporate Governance
Code are included in the Corporate Governance Statement of
this annual report.
TRANSACTIONS WITH ASSOCIATED COMPANIES
Transactions between the company and its subsidiaries which
are related parties were eliminated during consolidation and
therefore are not recognised in this note.
In the 2011 and 2010 financial years, there were no transactions
between Elia and HGRT. All transactions are at arm’s length.
Details of transactions with other related parties are explained
below.
7.5. Related parties
2011
2010
Sales of goods
Purchases of goods
Interest and similar revenue
4.3
1.5
0.2
3.6
1.6
0.0
Outstanding balances with joint
ventures and associated companies
Trade debtors
Trade debts
1.0
0.1
1.7
1.6
(in million €)
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
The key management includes Elia’s Management Committee.
They are hired as employees and the components of their remuneration are set out below. Directors do not receive stock
options, special loans or other advances from the Group.
(in million €)
2011
2010
Short term employee benefits
- Basic remuneration
- Variable remuneration
Post-employment benefits
Other variable remuneration
1.9
0.7
0.4
0.3
1.6
0.6
0.4
0.9
Total gross remuneration
3.3
3.5
7
0.5
31,484
7
0.5
27,487
Number of persons
Average gross remuneration per person
Number of shares
151
Transactions with joint venture
and associated companies
152
ELIA GROUP 2011
FINANCIAL REPORT
7.6. Subsidiaries, joint ventures and associates
SUBSIDIARIES
Elia System Operator NV/SA has direct and indirect control of the subsidiaries listed below:
All the entities keep their accounts in euro (except E-Offshore A LLC and Atlantic Grid Investment A Inc, whose accounts are held
in USD) and have the same reporting date as Elia System Operator SA (except Eurogrid International CVBA).
Name
Country of
establishment
Headquarters
Stake %
2011
2010
Elia Asset SA
Belgium
Bd de l’Empereur 20
1000 Brussels
99.99
99.99
Elia Engineering SA
Belgium
Bd de l’Empereur 20
1000 Brussels
100.00
100.00
Luxembourg
Rue de Merl 65
2146 Luxembourg
100.00
100.00
Belgium
Bd de l’Empereur 20
1000 Brussels
60.00
60.00
Eurogrid GMBH
Germany
Eichenstraße 3a
12435 Berlin
60.00
60.00
50Hertz Transmission GmbH
Germany
Eichenstraße 3a
12435 Berlin
60.00
60.00
50Hertz Offshore GmbH
Germany
Eichenstraße 3a
12435 Berlin
60.00
60.00
Gridlab GmbH
Germany
Sielowerstraße 5
03044 Cottbus
60,00
60,00
E-Offshore A LLC
U.S.
874, Walker Road, Suite C
19904 Dover, Delaware
60.00
-
Atlantic Grid Investment A Inc
U.S.
1209 Orange Stree
19801 Wilmington, Delaware
60.00
-
France
1 Terrasse Bellini
92919 La Défense Cedex
24.50
24.50
Belgium
Avenue de Cortenbergh 71
1000 Brussels
28.49
28.49
Netherlands
Strawinksylaan 729
1077 XX Amsterdam
20.00
20.00
Luxembourg
2 Rue de Bitbourg
1273 Luxembourg-Hamm
8.33
9.46
EMCC European Market Coupling
Company GmbH
Germany
Hopfenmarkt 31
20457 Hamburg
12.00
12.00
CAO Central Allocation Office GmbH
Germany
Gute Änger 15
85356 Freising
7.50
7.50
U.S.
4445, Willard Av, Suite 1050
20815 Chevy Chase, Maryland
6.00
-
Elia Re SA
JOINT VENTURES
Eurogrid International SCRL/CVBA
ASSOCIATED COMPANIES ACCOUNTED
FOR USING THE EQUITY METHOD
H.G.R.T S.A.S. (Holding de Gestionnaires de
Réseaux de Transport)
Coreso SA
APX-ENDEX Holding BV
OTHER PARTICIPATIONS
CASC-CWE SA
Atlantic Grid A LLC
ELIA GROUP 2011
FINANCIAL REPORT
153
7.7. Subsequent events
7.9. Declaration by responsible persons
On Friday 23 December, the Brussels Court of First Instance
ruled in favour of Elia in its tax dispute 8 with the Belgian tax
authorities. As a result of the ruling, the tax authorities must reimburse Elia €118.4 million, consisting of €80.2 million in taxes
that were paid twice and which therefore must be reimbursed
with 100% certainty, €5.1 million in prepayments, €8.5 million in
administrative tax increase and €24.6 million in interest. However, the tax authorities lodged an appeal on 6 February 2012,
thus suspending the ruling by the Court of First Instance. The
Court of Appeal is not expected to rule on the case until 2014
at the earliest.
The undersigned Chairman of the Executive Committee and
Chief Executive Officer Daniel Dobbeni and Chief Financial Officer Jan Gesquière declare that to the best of their knowledge:
7.8. Relationship with auditors
The General Meeting of Shareholders appointed the joint auditors KPMG Bedrijfsrevisoren Burg. CVBA (represented by Alexis Palm) and Ernst & Young Bedrijfsrevisoren BCVBA (represented by Marnix Van Dooren) for the audit of the consolidated
financial statements of Elia System Operator NV/SA and the
audit of the statutory financial statements of Elia System Operator NV/SA, Elia Asset NV/SA and Elia Engineering NV/SA.
The Elia Group paid to the joint auditors during the year 2011
an amount of €364,000.00 for the annual audit mandates, of
which €197,500 has been paid to the statutory auditor of the
German activities, Ernst & Young.
The fees paid to the joint auditors for other engagements prescribed by the Belgian Company Law and engagements other
than those prescribed by the Belgian Company Law amounted
to respectively €33,225.00 and €163,890.00 for the year ended
31 December 2011. The latter services related mainly to tax
and VAT advice.
In addition an amount of €605,418.00 has been paid in 2011
for non-audit services in Germany. These fees can be detailed
as follows:
(in million €)
Attestation missions
Tax advisory services
IT advisory services
Total
Ernst & Young
KPMG
34,900.00
0.00
0.00
0.00
328,015.00
242,503.00
34,900.00
570,518.00
The services were approved by the Audit Committee.
8Elia’s tariffs are based on estimated income and costs as well as budgeted volumes. At the end of each
tariff period, this results in tariff surpluses or deficits that must be factored into future tariffs. However, in
2008 the tax authorities ruled that tariff surpluses from the past (2003-2004) should be taxed immediately
while Elia, in consultation with the regulator, considered this to be a debt in respect of future tariffs. All such
tariff surpluses have actually been returned to consumers since the end of 2011.
a) the consolidated financial statements for the year ending
31 December 2011 have been prepared in accordance
with the International Financial Reporting Standards (IFRS),
and give a true and fair view of the consolidated financial
position and results of the Elia Group and of its subsidiaries
included in the consolidation;
b) the annual report for the year ending 31 December 2011
gives, in all material aspects, a true and fair view of the evolution of the business, the results and the situation of the
Elia Group and of its subsidiaries included in the consolidation, as well as a description of the most significant risks
and uncertainties with which the Elia Group is confronted.
Brussels, 22 March 2012
Daniel Dobbeni
Chairman and CEO
Jan Gesquière
CFO
154
ELIA GROUP 2011
FINANCIAL REPORT
Joint auditors’ report
on the consolidated financial
statements
ELIA GROUP 2011
FINANCIAL REPORT
155
156
ELIA GROUP 2011
FINANCIAL REPORT
Regulatory framework and tariffs
1. Regulatory framework - Belgium
1.1 Federal legislation
The Electricity Act, as amended from time to time, forms the
overall basis of and contains the main principles applicable to
the regulatory framework, such as the unbundling of the transmission activities, operation of and access to the transmission
system, establishment of the Transmission System Operator’s
legal mission, tariff-setting and creation of a regulatory authority. Several royal decrees provide more detailed information
about the regulatory framework.
1.2 Regional legislation
1.3.2 REGIONAL REGULATORS
Operation of electricity grids with voltages of 70 kv and less
falls within the jurisdiction of the respective regional regulators.
Each of them may require any operator (including the company
when it operates such grids), to abide by any specific provision
of the regional electricity rules under the threat of administrative fines or other sanctions. The regional regulators are not
empowered to set electricity transmission tariffs, as this task
falls under the sole jurisdiction of the CREG.
1.4 Tariff setting
TARIFF REGULATIONS
The three Belgian Regions are responsible for the distribution
and local transmission of electricity through grids with a voltage
equal to or lower than 70 kv in their respective territories. The
Regions are not responsible for the tariff methodology, which
falls under federal jurisdiction. Their impact on the liberalisation
process is similar to the impact of the Electricity Act at the federal level. The regional decrees have been complemented by
several other rules on matters such as public services, renewable energy, system operators and authorisation procedures
for suppliers.
1.3 Regulatory agencies
As required by EU law, the Belgian electricity market is monitored and controlled by independent regulators.
1.3.1 FEDERAL REGULATOR
The Commission for Electricity and Gas Regulation (CREG) is
the federal regulator and its powers with regard to Elia include:
• approval of the standard terms of the three main contracts
used by the company at the federal level: connection, access and ARP;
• approval of the capacity allocation system at the borders
between Belgium and neighbouring countries;
• approval of the appointment of the independent members
of the Board of Directors; and
• approval of the tariffs for connection and access to, and
use of the Elia grid.
As the Belgian transmission system operator, Elia makes most
of its income from the regulated tariffs charged for use of the
transmission system (tariff income), which are approved in
advance by CREG. A tariff regulation mechanism took effect
on 1 January 2008 whereby the approved tariffs apply for a
four-year period, barring exceptional circumstances. CREG
approved the tariffs for the period 2008-2011 in December
2007. The tariff mechanism is based on accounts stated in accordance with Belgian accounting regulations (Be GAAP). The
tariffs are based on budgeted costs, less a number of sources
of non-tariff income, and on the estimated volumes of electricity taken off the grid.
The costs taken into account include the forecast value of the
authorised fair remuneration and the predicted values of various cost categories, including those over which Elia has direct
control (‘controllable costs’) and those over which it has no direct control (‘uncontrollable costs’).
ELIA GROUP 2011
FINANCIAL REPORT
157
FAIR REMUNERATION
UNCONTROLLABLE COSTS
Fair remuneration is the return on capital invested in the grid.
It is based on the average annual value of the regulated asset
base (RAB), which is calculated annually, taking into account
new investments, depreciations and changes in working capital requirements.
In that context, which has not changed since 2008, the following formula is used to calculate the fair remuneration, when
consolidated capital and reserves account for more than 33%
of the average regulated asset base, as is the case at present:
• A: [33% x average RAB x [(OLO n) + (Beta x risk premium)]]
plus
• B: [(S - 33%) x average RAB x (OLO n + 70 base points)]
minus
• C: adjustment of excessive depreciation rates in the past,
where
- OLO n is the interest rate for Belgian 10-year linear bonds
for the year in question;
- S = consolidated capital and reserves/RAB, in accordance with Belgian accounting standards (Be GAAP);
- Beta will eventually be calculated based on Elia share
prices, compared with the Bel20 index, over a seven-year
period. In a transitional phase, the tariff regulations stipulate using Electrabel’s beta for the period preceding Elia’s
flotation on the stock exchange. The value of beta cannot
be lower than 0.3.
The costs over which Elia has no direct control (‘uncontrollable
costs’) are an integral part of the costs used to determine the
tariffs. The tariffs are set based on forecasted values for these
costs. The balances of such uncontrollable costs (whether
positive or negative), i.e. the difference between the actual and
forecast costs, will be established ex-post and their allocation
will be the subject of a royal decree discussed by the Belgian
Federal Council of Ministers.
Part A
The rate of remuneration (in %) as set by CREG for year ‘n’ is
equal to the sum of the risk-free rate, i.e. the average rate of
Belgian 10-year linear bonds and a premium for share market
risk, weighted using the applicable beta factor.
The tariff regulations set the risk premium at 3.5%. For 2009,
the applicable beta factor was calculated based on the historic
beta factor for Electrabel, compared with the Bel20 index, over
a seven-year period. CREG recommends that Elia’s solvency
ratio (average capital and reserves/average regulated assets)
should be as close to 33% as possible. This ratio (33%) is applied to Elia’s average regulated asset base (RAB) to calculate
Elia’s reference capital and reserves.
Part B
If Elia’s actual capital and reserves are higher than the reference capital and reserves, the surplus amount is balanced out
with a reduced rate of remuneration calculated using the following formula: [(OLO n + 70 base points)].
Part C
CREG also decided that the annual fair remuneration margin
should be reduced by €12.4 million (before taxes), due to overly
rapid depreciations before Elia System Operator NV/SA was
appointed transmission system operator, which it considers to
be excessive. The tariff regulations also provide for the possibility of setting higher remuneration rates for capital that is invested to finance projects of national or European importance.
In the absence of a decree implementing this provision of the
Electricity Act, this measure was not carried out in 2011.
CONTROLLABLE COSTS
The costs over which Elia has direct control (‘controllable
costs’) are subject to an incentive regulation mechanism: in
other words, they are subject to application of a productivity
and efficiency improvement factor. This factor indicates the efforts that Elia must make to control such costs: the authorised
costs used to determine the tariffs are established following
application of this factor. The productivity improvement required of Elia over the period 2008-2011 is stipulated in the
Royal Decree of 18 December 2007. The amount for 2011 was
€8 million. The balances of such controllable costs (whether
positive or negative), i.e. the difference — established ex-post
— between the actual and authorised costs, are in principle
either added to or deducted from the fair remuneration.
CHANGES IN TARIFF REGULATIONS
During 2011, amendments were made to a number of regulations. This is likely to have a direct impact on the tariff framework currently in force for transmission tariffs. In particular, the
transposition into Belgian law of the third European Directive on
the organisation of the electricity market called for the revision
of the Electricity Act, which entered into force in early 2012.
Under the amended Act, CREG is in charge of establishing a
methodology for setting transmission tariffs. In late 2011, CREG
provisionally adopted such a methodology, which was used as
a basis to draft the tariff proposal approved on 22 December
by CREG for 2012-2015.
158
ELIA GROUP 2011
FINANCIAL REPORT
2. Regulatory framework in Germany
2.1 Relevant legislation
2.2 Regulatory agencies in Germany
The German legal framework is laid down in various pieces of
legislation. The key law is the German Energy Act 2005 (Energiewirtschaftsgesetz – EnWG), which defines the overall legal
framework for the gas and electricity supply industry in Germany. The EnWG is supported by a number of laws, ordinances
and regulatory decisions, which provide detailed rules on the
current regime of incentive regulation, accounting methods
and network access arrangements, including:
The regulatory agencies for the energy sector in Germany are
the Federal Network Agency (Bundesnetzagentur – BNetzA)
in Bonn for grids to which over 100,000 grid users are directly
or indirectly connected and the specific regulatory authorities
in the respective federal states for grids to which fewer than
100,000 grid users are directly or indirectly connected. The
regulatory agencies are, inter alia, in charge of ensuring nondiscriminatory third-party access to grids and monitoring the
grid-use tariffs levied by the TSOs. 50Hertz and 50Hertz Offshore are subject to the authority of the BNetzA.
•
the Ordinance on Electricity Network Tariffs 2005 (Verordnung über die Entgelte für den Zugang zu Elektrizitätsversorgungsnetzen (Stromnetzentgeltverordnung – StromNEV)), as amended from time to time, which establishes,
inter alia, principles (Grundsätze) and methods for the grid
tariff calculations and further obligations of system operators;
•
the Ordinance on Electricity Network Access 2005 (Verordnung über den Zugang zu Elektrizitätsversorgungsnetzen
(Stromnetzzugangsverordnung – StromNZV), as amended
from time to time, most recently by Article 2(1) of the Ordinance of 17 October 2008, which, inter alia, sets out the
further detail on how to grant access to the transmission
systems (and other types of grids) by way of establishing
the balancing amount system (Bilanzkreissystem), scheduling of electricity deliveries, control energy and further
general obligations, e.g. capacity shortage (Engpaßmanagement), publication obligations, metering, minimum requirements for various types of contracts and the duty of
certain system operators to manage the ‘Bilanzkreissystem’ for renewable energy;
•
the Ordinance on Incentive Regulation 2007 (Verordnung
über die Anreizregulierung der Energieversorungsnetze
(Anreizregulierungsverordnung – ARegV)), as amended
from time to time, which sets out the basic rules for incentive
regulation of TSOs and other system operators (as further
described below). It also describes in general terms how
to benchmark efficiency, which costs enter the efficiency
benchmarking, the method of determining inefficiency and
how this translates into yearly targets for efficiency growth.
2.3 Tariff setting in Germany
A new tariff regulation mechanism was established in Germany
by ARegV. According to ARegV, from 1 January 2009, grid tariffs are defined to generate a pre-defined ‘revenue cap’ as determined by the BNetzA for each TSO and for each regulatory
period. The revenue cap is principally based on the costs of a
base year, and is fixed for the entire regulatory period, except
when it is adjusted to account for specific cases provided for
in the ARegV. The system operators are not allowed to retain
revenue in excess of their individually determined revenue cap.
Each regulatory period lasts five years, and the first regulatory
period started on 1 January 2009 and will end on 31 December 2013. Tariffs are public and are not subject to negotiation
with customers. Only certain customers (under certain fixed
circumstances that are accounted for in the relevant legislation)
are allowed to agree to individual tariffs according to Article 19
of StromNEV (for example, in the case of sole use of a network
asset). The BNetzA has to approve such individual tariffs.
For the purposes of the revenue cap, the costs incurred by a
system operator are classified into two categories as follows:
•
ermanently non-influenceable costs (PNIC): these costs are
P
fully integrated into the ‘revenue cap’ and are fully recovered
by the gridtariffs, albeit with a two-year time-lag. PNIC includes return on equity, imputed trade tax, cost of debt, depreciation and operational costs (currently at a fixed rate of
0.8% of the capitalised investment costs of the respective investments). The cost of debt related to investment budgets is
currently capped at the lower value of the actual cost of debt
or cost of debt as calculated in accordance with a published
BNetzA guideline. In addition, PNIC includes costs relating to
ancillary services, grid losses and re dispatch costs. These
costs are included in the revenue cap based on a procedural
regulation mechanism set by the BNetzA in accordance with
Article 11(2) ARegV (FSV) that provides system operators with
an incentive to outperform the planned costs with a bonus
and penalty mechanism. The grid services costs are based
on planned costs (taking into account changes in both vol-
ELIA GROUP 2011
FINANCIAL REPORT
ume needs and prices) instead of incurred costs in the base
year and, as such, only the productivity factor is applicable to
such costs. While the mechanism for the current regulatory
period is fixed for ancillary services and grid losses, for redispatch costs it is still subject to approval from 2011 onwards.
Furthermore, this model is subject to approval or change in
the second regulatory period starting in 2014.
•
emporary non-influenceable costs (TNIC) and influenceable
T
costs (IC): these costs include return on equity depreciation,
cost of debt and of imputed trade tax and are subject to an
incentive mechanism as set by the BNetzA, which contains
an efficiency factor (only applicable to IC), a productivity factor improvement and an inflation factor (applicable to both
TNIC and IC) over a five-year period. In addition the current
incentive mechanism provides for the use of a quality factor,
but the criteria and implementation mechanism for such a
factor are yet to be described by the BNetzA. The various
defined factors give the TSOs a medium-term objective to
eliminate what are deemed to be inefficient costs. As regards
the cost of debt, the allowed cost of debt related to influenceable costs is capped at the lower value of the actual cost of
debt in the base year or the implied cost of debt based on
the 10-year average of the ‘Umlaufsrenditen festverzinslicher
Wertpapiere inländischer Emittenten’ (10-year average yield
of the domestic fixed income securities as published by the
Bundesbank) in the base year.
•
s for return on equity, the relevant laws and regulations set
A
out the provisions relating to the allowed return on equity,
which is included in the TNIC/IC for assets belonging to the
regulatory asset base and the PNIC for assets approved in
investment budgets. For the first regulatory period (20092013), the return on equity is set at 7.56% for investments
made before 2006 and 9.29% for investments made since
2006, based on 40% of the total asset value regarded as ‘financed by equity’ with the remainder treated as ‘quasi-debt’.
The return on equity is calculated before corporate tax and
after imputed trade tax. For the next regulatory period, the
German regulator has calculated 2011 return at a value equal
to 9.05%, despite the current lowering of capital market indices to foster attractive enough conditions for grid investment, vital for the timely implementation of energy policy. For
the new tariff period, return on investment made before 2006
is set at 7.14%.
•
In addition to the revenue cap, 50Hertz is compensated for
costs incurred related to its renewable energy obligations,
including EEG and CHP/KWKG obligations, subject to specific regulatory mechanisms aimed at a balanced treatment
of costs and income.
159
CHANGES IN TARIFF REGULATIONS
Progress was made in 2011 following discussions with the
regulator to improve the regulatory framework for new investments in grid infrastructure; the coverage of grid management
and development costs; return on capital; and the conditions
under which new offshore farms should be connected. On this
basis, the ARegV is to be amended for the benefit of system
operators in the first half of 2012.
The cap applicable in 2011 was 3% higher than in 2010. The
cap used as a basis for tariffs, applicable since 1 January 2012,
is some 15% higher than in 2011.
As at 31 December 2011, 50Hertz had obtained approval for
44 of the 75 investment budget requests made since 2008.
The approved investment budget accounts for €2.501 billion.
50Hertz was also successful in a case brought before the Higher Regional Court of Düsseldorf regarding the organisation of
investment budget approvals by the BNetzA. In its decision of
23 March 2011, the court ruled as illegal the ‘amount to prevent
double recognition’ and the dismissal of interest charges on
borrowed funds. Discussions on the regulation of this issue are
due to conclude in the first quarter of 2012.
In the context of discussions to enhance the regulatory framework for grid investment, the legislator is also looking into the
possibility of a target-cost (t-0) approach instead of the current
time-frame of two years (t-2), enabling faster depreciation.
160
ELIA GROUP 2011
FINANCIAL REPORT
Information about
the parent company
Extracts from the statutory annual accounts of Elia System
Operator NV/SA, drawn up in accordance with Belgian accounting standards, are given hereafter in abbreviated form.
Pursuant to Belgian company legislation, the full financial statements, the annual report and the joint auditors’ report are filed
with the National Bank of Belgium.
These documents will also be published on the Elia website
www.elia.be and can be obtained on request from Elia System
Operator NV/SA, Boulevard de l’Empereur 20, 1000 Brussels,
Belgium. The joint auditors made an unreserved statement with
an explanatory paragraph in the statutory financial statements.
1. Statement of position after distribution of profits
ASSETS
2011
2010
(in million €)
FIXED ASSETS
3.612,7
3.612,7
Financial fixed asset
Affiliated companies
Participating interests
Other enterprises linked by particpating interests
Participating interests
Other participating interests
3.612,7
3.583,0
3.583,0
29,4
29,4
0,3
3.612,7
3.583,0
3.583,0
29,4
29,4
0,3
859,3
942,3
94,0
94,0
93,8
93,8
5,0
5,0
4,7
4,7
Amounts receivable within one year
Trade debtors
Other amounts receivable
587,1
120,1
467,0
602,1
165,4
436,7
Investments
Other term deposits
130,0
130,0
120,0
120,0
Cash at bank and in hand
24,4
99,3
Deferred charges and accrued income
18,8
22,4
4.472,0
4.555,0
CURRENT ASSETS
Amounts receivable after more than one year
Other amounts receivable
Inventories and contracts in progress
Contracts in progress
TOTAL ASSETS
ELIA GROUP 2011
FINANCIAL REPORT
EQUITY AND LIABILITIES
2011
161
2010
(in million €)
CAPITAL AND RESERVES
1.621,2
1.586,8
Capital
Issued capital
1.505,4
1.505,4
1.505,4
1.505,4
8,5
8,5
Reserves
Legal reserve
83,7
83,7
67,6
67,6
Profit carried forward
23,6
5,3
PROVISIONS, DEFERRED TAXES
3,0
3,0
Provisions for risks and charges
Other risks and charges
3,0
3,0
3,0
3,0
LIABILITIES
2.847,8
2.965,2
Amounts payable after one year
Financial debts
Unsubordinated debentures
Credit institutions
Other loans
2.554,2
2.554,2
1.998,4
60,0
495,8
2.553,8
2.553,8
1.998,0
60,0
495,8
223,6
0,0
0,0
0,0
45,5
45,5
11,6
7,4
0,0
7,4
159,1
309,5
0,0
0,0
0,0
128,4
128,4
8,9
7,3
0,2
7,1
164,9
70,0
101,9
4.472,0
4.555,0
Share premium account
Amounts payable within one year
Current portion of amounts payable after more than one year
Financial debts
Credit institutions
Trade debts
Suppliers
Advances received on contracts in progress
Amounts payable regarding taxes, remuneration and social security costs
Taxes
Remuneration and social security
Other amounts payable
Accrued charges and deferred income
TOTAL EQUITY AND LIABILITIES
162
ELIA GROUP 2011
FINANCIAL REPORT
2. Income statement
(in million €)
2011
2010
OPERATING INCOME
760,0
723,2
Turnover
Increase (+), decrease (-) in inventories of finished goods, works ans contracts in progress
Other operating income
753,9
0,2
5,9
718,7
0,0
4,5
OPERATING CHARGES
(586,9)
(563,6)
Services and other goods
Remuneration, social security costs and pensions
Provisions for liabilities and charges
(551,6)
(35,3)
0,0
(531,1)
(32,8)
0,3
OPERATING INCOME
173,1
159,6
Financial income
Income from financial fixed assets
Income from current assets
105,2
93,4
11,8
53,6
46,7
6,9
Financial charges
Interest and other debt charges
Other financial charges
(129,3)
(128,4)
(0,9)
(133,7)
(132,0)
(1,7)
149,0
79,5
1,5
9,7
0,0
1,5
9,7
0,0
(8,9)
(8,9)
(4,8)
(4,8)
PROFIT FOR THE FINANCIAL PERIOD BEFORE TAXATION
141,6
84,4
Income taxes
Income taxes
Adjustments of income taxes and write-back of provisions
(18,5)
(18,5)
0,0
(10,9)
(10,9)
0,0
PROFIT FOR THE FINANCIAL PERIOD
123,1
73,5
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
Extraordinary income
Proceeds from sale of investments
Other extraordinary income
Extraordinary charges
Other extraordinary charges
ELIA GROUP 2011
FINANCIAL REPORT
163
GRI Index
Profile
Indicator
Description
Page
1. STRATEGY AND ANALYSIS
1.1
Statement from the most senior decision-maker of the organization (e.g., CEO, Chair, or equivalent
senior position) about the relevance of sustainability to the organization and its strategy.
1, 2
2. ORGANIZATIONAL PROFILE
2.1
Name of the organization.
1
2.2
Primary brands, products and/or services.
4
2.3
Operational structure of the organization, including main divisions, operating companies,
subsidiaries and joint ventures.
2.4
Location of organization’s headquarters.
2.5
Number of countries where the organization operates, and names of countries with either major
operations or that are specifically relevant to the sustainability issues covered in the report.
2.6
Nature of ownership and legal form.
2.7
Markets served (including geographic breakdown, sectors served
and types of customers/beneficiaries).
2.8
Scale of the reporting organization, including: number of employees; net sales); total
capitalization broken down in terms of debt and equity and quantity of products or services
provided.
4, 115
165
4, 152, 153
152, 160, 161
4
4,152, 153
2.9
Significant changes during the reporting period regarding size, structure or ownership.
6 to 11, 87 to 89
2.10
Awards received in the reporting period.
7, 11, 17, 52, 65
3. REPORT PARAMETERS
3.1
Reporting period for information provided.
3.2
Date of most recent previous report. April 2011.
3.3
Reporting cycle (annual, biennial, etc).
3.4
Contact point for questions regarding the report or its contents.
3.5
Process for defining report content.
3.6
Boundary of the report.
3.8
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other
entities that can significantly affect comparability from period to period and/or between organizations.
3.12
Table identifying the location of the Standard Disclosure in the report.
165
165
165
1, 4, 12, 13,
77 to 81, 165
165
from 115 to 125
125 to 130
163, 164
164
ELIA GROUP 2011
FINANCIAL REPORT
Indicator
Description
Page
4. GOVERNANCE, COMMITMENTS AND ENGAGEMENT
4.1
4.2
Governance structure of the organization, including committees under the highest governance body
responsible for specific tasks, such as setting strategy or organizational oversight.
84 to 86
Indicate whether the Chair of the highest governance body is also an executive officer (and,
if so, their function within the organization’s management and the reasons for this arrangement).
84
4.3
For organizations that have a unitary board structure, state the number of members
of the highest governance body who are independent and/or non-executive members.
84
4.4
Mechanisms for shareholders and employees to provide recommendations or direction
to the highest governance body. Include reference to processes.
4.14
List of stakeholder groups engaged by the organization.
4.15
Basis for identification and selection of stakeholders with whom to engage.
78, 87, 88
22, 48, 62,
77 to 81
74
Data on performance
Indicator
Description
Page
ECONOMIC
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.
EC2
Financial implications and other risks and opportunities for the organization’s activities due to climate
change.
EC8
Development and impact of infrastructure investments and services provided primarily for public
benefit through commercial, in kind, or pro bono engagement.
128, 129
24, 30 to 33,
44 to 456
34, 35
ENVIRONMENTAL
EN5
Energy saved due to conservation and efficiency improvements.
49, 50
EN6
Initiatives to provide energy-efficient or renewable energy based products and services, and
reductions in energy requirements as a result of these initiatives.
52, 54
EN7
Initiatives to reduce indirect energy consumption and reductions achieved.
EN11
Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of
high biodiversity value outside protected areas.
51
Description of significant impacts of activities, products, and services on biodiversity in protected
areas and areas of high biodiversity value outside protected areas.
56
EN14
Strategies, current actions, and future plans for managing impacts on biodiversity.
51
EN18
Initiatives to reduce greenhouse gas emissions and reductions achieved.
52
EN22
Total weight of waste by type and disposal.
53
EN26
Initiatives to mitigate environmental impacts of products and services, and extent of impact
mitigation.
EN12
52, 56 to 59
56 to 59
LABOR: PRACTICES AND DECENT WORK
LA1
Total workforce by employment type, employment contract, and region.
65, 68
LA7
Rates of injury, occupational diseases, lost days, and absenteeism, and number of workrelated
fatalities by region.
72, 73
LA10
Average hours of training per year per employee by employee category.
LA11
Programs for skills management and lifelong learning that support the continued employability of
employees and assist them in managing career endings.
LA12
Percentage of employees receiving regular performance and career development reviews.
67
66, 67
66
ELIA GROUP 2011
FINANCIAL REPORT
165
Reporting parameters
Head office
Reporting period
This report is limited to Elia System Operator and Elia Asset,
which operate as a unique economic entity under the name
Elia, and 50Hertz Transmission.
This annual report covers the period from 1 January 2011
to 31 December 2011.
The registered office of
Elia System Operator and Elia Asset is located at
Boulevard de l’Empereur, 20
1000 Brussels, Belgium
The registered office of
50Hertz Transmission GmbH is located at
Eichenstraße 3A
12435 Berlin, Germany
The registered office of
Eurogrid International is located at
Avenue de Cortenbergh, 71
1000 Brussels, Belgium
It incorporates the principles from the sustainable development report as required by the GRI.
Contact
Lise Mulpas
Corporate Communication
Boulevard de l’Empereur, 20
1000 Brussels
lise.mulpas@elia.be
Tel. : 02 526 73 75
Fax : 02 546 72 90
166
ELIA GROUP 2011
FINANCIAL REPORT
Notes
ELIA GROUP 2011
FINANCIAL REPORT
167
168
ELIA GROUP 2011
FINANCIAL REPORT
APERe
Association for the promotion of renewable energies
BBEMG
Belgian BioElectroMagnetic Group
BREEAM
BRE Environmental Assessment Method
BRUGEL
Brussels Electricty and Gas Regulation
CREG
Commission for Electricity and Gas Regulation
CWAPE
Commission Wallonne pour l’Energie
IBGE
Brussels Institute for Environmental Management
ICEDD
Institut de Conseil et d’Etudes pour le Développement Durable
ICNIRP
International Commission on Non-Ionizing Radiation Protection
OVAM
Openbare Vlaamse Afvalstoffenmaatschappij
SYNERGRID
Federation of Belgian System Operator for Electricity and Gas
VREG
Vlaamse Reguleringsinstantie voor de Electriciteits- en Gasmarkt
(Flemish Commission for Electricity and Gas Control)
CORESO
Technical Coordination Service Center within the Central Western European region
CWE
Central Western Europe
ENTSO-E
European Network of Transmission System Operators for Electricity
ITVC
Interim Tight Volume Coupling
ARP
Access responsible party
EMF
Electric and Magnetic Fields
GIS
Gas insulated Switchgear
PCB’s
Polychlorinated biphenyls
RUE
Rational Use of Energy
kWh
Kilowatt hour
MW
Megawatt
www.eliagroup.eu
www.elia.be
Table of content
www.50hertz.com
Head office Elia
Boulevard de l’Empereur 20, B-1000 Brussels
T +32 2 546 70 11 - F +32 2 546 70 10
info@elia.be
Contacts
Lise Mulpas, T +32 2 546 73 75
Axelle Pollet, T +32 2 546 75 11
Annual
Report 2011
Concept and editorial staff
Elia, department Communication
Graphic design and coordination
www.witvrouwen.be
Illustrations
Renaud Collin
Photos Elia
Alain Schroeder, Antonio Caliaro,
Benjamin Miesse, Danny Gys, Eric Figon, Eric Herchaft,
Guy Van Hooveld, Michel Vanden Eeckhoudt, Olivier Polet,
Wim Beddegenoodts, Photothèque Elia
A responsible company
serving its customers and the community
in Belgium and Germany
Photos 50Hertz
Jan Pauls, Andreas Teich, EnBW
Editor
Jacques Vandermeiren
MWh
Megawatt hour (=1.000 kWh)
gWh
Gigawatt hour (=1.000 MWh)
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Dieses Dokument ist auch auf Deutsch verfügbar.
kV
Kilovolt (=1.000 Volts)
Avril 2012
ELIA ANNUAL REPORT 2011
List of abbreviations
EXECUTIVE REPORT
Foreword*
Profile and values
Key events 2011*
Prospects and challenges 2012*
The Elia share in 2011
2
4
6
12
14
ECONOMIC REPORT
Grid operation
Infrastructure
Investments
The Elia grid in Belgium
The 50Hertz Transmission grid in Germany
Grid maintenance
Market operation
Preventive management of critical grid situations
Preparing for the future: research and development*
24
28
29
30
33
34
36
40
43
ENVIRONMENTAL REPORT
Environmental objectives and indicators
50
SOCIAL REPORT
Staff policy
Knowledge management
Employee safety and welfare
Corporate social responsibility Stakeholder relations
64
68
70
74
77
CORPORATE GOVERNANCE STATEMENT Composition of management bodies*
Significant events in 2011*
Remuneration of the Board of Directors
and Management Committee*
Features of the internal control and risk management systems*
Description of the risks and uncertainties facing the company*
92
96
101
FINANCIAL REPORT Consolidated financial statements IFRS*
Notes to the consolidated financial statements*
Joint auditors’ report on the consolidated financial statements
Regulatory framework and tariffs*
Information about the parent company*
108
113
154
156
160
GRI Index
Reporting parameters
161
163
*These chapters form the annual report cf. article 119 of the Belgian company code.
84
87
2˚50'
2˚40'
2˚30' E. Greenwich
3˚00'
3˚20'
3˚10'
3˚40'
3˚30'
4˚00'
3˚50'
4˚20'
4˚10'
4˚30'
4˚50'
4˚40'
5˚10'
5˚00'
5˚30'
5˚20'
6˚10'
6˚00'
5˚50'
5˚40'
6˚30'
6˚20'
6˚˚50'
6˚40
7˚00'
NAVAGNE
51˚30'
T HOR NT ONB ANK
B E R NE AU
LIXHE
13
2
Vis é
(S NC B )
S oignies
50˚30'
)
50
70
NOOR DL AND
ZANDVL IE T
P OW E R
E louges
(1 5
AME R C ΠU R
70(15 0)
0)
C E NT R AL E
MAR C INE L L E
P É R ONNE S
C iply HAR MIG NIE S
2
P âturages
B INC HE
15 0
B AS F
DAMP R E MY
Namur
- S NC B
2
Namur
S am bre
J E ME P P E S OL VAY
TERGNEE
L A P R AY E
F OU R
EKEREN
pp
3
4
5
6
e
+ 70
b lè
Y voir
(S NC B )
Dorinne
2
ACHÊNE
ACHÊNE
-SNCB
Hogne
(S NC B )
3d P
S tephans hof
T rois - P onts
Meu s e
e
e
Aarts elaar
Hatrival
- S NC B
P
150 +
70
0+
15
22
pompc entrale
Ou
VIL L E R OU X
windmolenpark
bes taand
in ontwerp
met produc tie injec tie
380kV
MERCATOR
380kV
220- 150kV
MOL E NB E E K
220- 150kV
70kV
Herbaimont
70kV
WATE R LOP E N
R ivieren en kanalen
K ontic h
MAZURES
1-1-2012
B AU L E R
F L E B OU R
Monc eau- en- Ardennes
W AAR L OOS
20
70 (2
F ays - les - Veneurs
)
L onglier (S NC B )
Se
m
49˚50'
Neufc hâteau
Orgeo
P E T R OC HIM
B U IS S E R E T
2
C HAMP - DE C OU R R IE R E
FE LUY
70
(1 5
0)
C has s art
12
S eneffe
L U ME S
G embloux
S ombreffe
V ie rr
VESLE
Marbais
(S NC B )
L iberc hies
o is
MAR C HE - L E Z- E C AU S S INNE S
R OOS T
GOUY
G OS S E L IE S
B AS C OU P
70(150)
Heppignies
(30) s ud
0)
T R IVIE R E S
70+ 3 0 (1
Arlon
AU VE L AIS
50)
FLE UR US
J umet
(1 5
70(150)
70
70(150
(1
50
)
C iply
P âturages
)
Anderlues
HAR MIG NIE S
C S MAR C INE L L E
2
DAMP R E MY
C AR AL
F OC
E s tinnes
0
15
49˚30'
0
+
0
MAL F AL IS E
1 : 150 000
HE IS DOR F
70
B E R T R ANG E
J E ME P P E S OL VAY
bbrere
Sa
S amm
70
(1
50
)
50 )
L A P R AY E
F AR C IE NNE S
1 : 1 000 000
Echelle
Schaal
S t- MAR D
- S NC B
P ONT - DE - L OU P
0
5
10
20
S t- MAR D
AUBANGE
L AT OU R
R OU VR OY
30 km
HE R S E R ANG E
Marc hienne
MOULAINE
F os s es - la- Ville
MONT IG NIE S
E S C H- S U R
- AL ZE T T E
MONT S t.MAR T IN
150 + 70
22
15
+
MONC E AU
L ANDR E S
2˚40' E. Greenwich
Grid Elia
2˚50'
3˚00'
3˚10'
3˚20'
3˚30'
3˚40'
3˚50'
4˚00'
4˚10'
4˚20'
4˚30'
4˚40'
4˚50'
5˚00'
5˚10'
5˚20'
5˚30'
5˚40'
5˚50'
Differd.
Arbed
OXY L U X
B elv. Arbed
B E L VAL
Situation au
S C HIF F L ANG E
stand op
1-1-2012
49˚30'
B INC HE
L A P R AY E
F OU R
F . DE F E R
B L ANC HIS S E R IE
C harleroi
70 (1
+
2
3dP
F ontaine
l’E vêque
0
G illy
C E NT R AL E
MAR C INE L L E
P E R ONNE S
150 + 70
B ous s u
E louges
70(150)
TERGNEE
AME R C ΠU R
70
70
P iéton
(S NC B )
15
lle
(1 5
se
70
Mo
70
0+
70
L a L ouvière
B onnert
Arlon
- S NC B
0)
15
0+
15
HE INS C H
P
)
J E MAP P E S
B OE L
LL
Villers - s /S emois
C hiny
S c hif.
VIGY
Institut Géographique National
6˚00'
6˚10'
6˚20'
6˚30'
6˚40'
Berlin
110
220
380 / 220 kV
HVDC/DC link
400 kV
Grid connection offshore
150 kV
Frankfurt (Oder)
Potsdam
TenneT
110
380+220
Magdeburg
System users :
Our customers include the regional distribution system operators as well as power
plants, pump storage plants, wind farms
and big industry connected to the transmission system.
Cottbus
Halle
Leipzig
110
Saxony
Legend
Dresden
Weimar
Switching Station (in large
part with tranErfurt
sition to distribution system operators)
Pump storage plant
As at : December 2011
planned / under construction
St-AMAND
L A C R OY E R E
B OE L T C C
B OE L HF
VIL L E /HAINE
Mons
COURCELLES
K eumiée
B OE L
F OU R
e
0
3d
0
50
1 5 0 +7
(1
150 + 70
+7
OB OU R G
P E T IT MAR AIS
16
70
B AU DOU R
15 0
150 + 70
49˚40'
AIR
L IQU IDE
C . S t- G HIS L AIN
70(150)
G HL IN
e tt
150 + 30
30(150)
Operating voltage ( kV )
PSE Operator
Poland
SaxonyAnhalt
Eisenach
Hesse
Wind power plant onshore / offshore
Marbehan
(S NC B )
Vierre
A lz
Mais ières
TE R TR E
220 kV
e
T R IE R
CENTRALE
SENEFFE
line
Brandenburg
Lower Saxony
under construction
S ûre
R es pelt
380 kV
Conventional power plant
( lignite- or hard-coal fired, nuclear
or gas turbine power plant )
NIE DE R S TE DE M
R ec ogne
line planned /
under construction
Grid connection offshore 150 kV
planned / under construction
S TATIONS
exis tant
en projet
Situation au
Stand op
r
380 kV
waterkrac htc entrale
(1) E lia déc line toute res pons abilité c onc ernant les données relatives aux ins tallations appartenant
à des tiers .
E lia wijs t alle verantwoordelijkheid af voor wat betreft data i.v.m. ins tallaties van derden.
B AS T OG NE
Hatrival
REVIN
LONNY
49˚50'
thermis c he c entrale in ontwerp
(2) S ont représ entées toutes les unités pour les quelles un c ontrat C IP U a été c onc lu avec E lia.
S taan op de kaart alle produc tie- eenheden waarvoor met E lia een C IP U c ontrac t is afges loten.
(C IP U = C ontrac t for Injec tion of P roduc tion U nits ).
Momignies
LINT
7
thermis c he c entrale
R ivières et c anaux
0 (2
Herbaimont
380 + 220
C himay
L IE R
S C HE L L E
kernc entrale
parc d' éoliennes
VIANDE N
S .E .O.
T ems e
P R ODUC TIE E E NHE DE N (2)
C OUR S D’E AU
P ondrôme
line
kabel eigendom van een derde (1)
3dP
c entrale hydraulique
F orrières
(S NC B )
Other companies
Other companies
parallele kabels
C ierreux
W AL G OE D
S C HE L L E DOR P
70kV
c entrale de pompage
C harneux
3dP
3d
150kV
P OS TE S
C ouvin
B erc hem (NMB S )
F ourmies
220kV
70kV
0)
C HOOZ
3dP
W ilrijk
ss
Hoboken
MERCATOR
rth
VIR E U X
MOR T S E L
220kV
150kV
c entrale nuc léaire
S ankt- Vith
[S aint- Vith]
380 / 220 kV
50˚00'
MHO
0
Amel
[Amblève]
3 x 220
1 x 380 + 2 x 150 (2 x 380 + 2 x 150)
380kV
2
MecklenburgWestern-Pomerania
3 x 150 (4 x 150)
3 x 150 + 1 x 70 (4 x 150)
Neubrandenburg
380 kV planned / under construction
1 x 220 + 2 x 70
ONDE R G R ONDS E K AB E LS
UNITE S DE P R ODUC TION (2)
Ame l
1 x 70 (4 x 150)
380kV
c âble appartenant à un tiers (1)
COO
70
(220)
MONT - L E Z- HOU F F AL IZE
OE L E G E M
P
3d
2 x 150 (4 x 150)
c âbles en parallèle
Holzwarc he
BRUME
Marc he- enF amenne
On
Meus e
2
3
W ilrijk IS VAG
B ütgenbac h
[B utgenbac h]
B uis s onville
R omedenne
NE U VIL L E
W OMME L G E M
2
S t.- P AU W E L S
2 x 150 + 2 x 70 (4 x 150)
13
14
15
16
17
18
50˚10'
2
3
3dP
P E T R OL
3 x 70
10 1 x 150 + 1 x 70 (2 x 150 + 1 x 70)
11 4 x 70
12 3 x 150
1 x 150 + 3 x 70 (4 x 150)
2 x 150 (2 x 380 + 2 x 150)
MAR C OU R T
Has tière
Le
ZU R E NB OR G
1 x 150 + 2 x 70 (3 x 150)
3 x 380 (4 x 380)
avec injec tion de produc tion
P L AT E - T AIL L E
Hoveniers tr.
4 x 150
x3
8
2
T abakves t
7
8
9
2 x 150 + 1 x 70 (3 x 150)
c he
ve
S oy
Ou
2
Moons tr.
S t.- Niklaas
C iney
- S NC B
Dinant
J AMIOL L E
Oever
B U R C HT
S amens tellingtabel van de lijnen
met meer dan 2 draads tellen:
c entrale thermique en projet
C iney
DAMP L E IN
B elliards tr.
B E VE R E N
3dP
C AB LE S S OUTE R R AINS
S pa
W ar
Miéc ret
ME R K S E M
ZW IJ NDR E C HT
3dP
P
3d
P
3d
s
aa
M
3d P
P
ile
lijn eigendom van een derde (1)
ligne appartenant à un tiers (1)
G ileppe
G
B R U ME
- S NC B
S C HE LDE LAAN
C . ZW IJ NDR E C HT
er
B ronrome
B omal
Hanzinelle
220+150
S olre- S t- G éry
B otermelk
uitbatings s panning lager
dan de c ons truc ties panning
0+
22
+ 36
150
NOOR DE R DOK K E N (NMB S )
F INA
ESSO
K AL L O
lijn met 2 draads tellen
van vers c hillende s panningen
70(150)
)
W arnant
C lermont
F roidc hapelle
9
150 + 70
38
36
T hy- le- C hâteau
BRABO
lignes à 2 ternes de
tens ions différentes
tens ion d’exploitation inférieure
à la tens ion de c ons truc tion
1
2
0 (2 x
+ 22
380
G erpinnes
0
T HU IL L IE S
OOR DE R E N
0)
0
38
s
aa
M
50)
7 0 (1
3dP
s
38 0
MASTAING
+1 5
150 +
S OL VAY
Mons anto
Degus s a
L IL L O
e
38 0+
1 : 150 000
in aanbouw of in ontwerp
2 de draads tel in aanbouw of in ontwerp
c entrale thermique
220
L obbes
- S NC B
7 e HAVE NDOK
K E T E NIS S E
150+70
T uron
S art- B ernard
(S NC B )
S ommière
50˚10'
Ve
e
dr
B everc é
F lorée
en c ons truc tion ou en projet
T ableau des c ompos itions des
lignes à plus de 2 ternes :
Heid- deG oreux
C omblain
es
Ves dre
P epins ter
- S NC B
H te S AR T E
W
2
G rands - Malades
B AY E R
50˚00'
70(150)
S tembert
P epins ter
50
+1
Am
B ois - deVillers
E UP E N
L es P lenes s es
S oiron
W ierde
MONT IG NIE S
G AR NS T OC K
P T - R E C HAIN
F loriffoux
F AR C IE NNE S
MONC E AU
Marc he- les - Dames
150+7 0
L obbes
DOEL
HE IMOL E N
3d P
70
+
0
15
)
(7 0
AU VE L AIS
FLE UR US
Andenne
(met referentienummer in
de s amens tellings tabel)
Schwerin
380 kV
50˚20'
50˚20'
G OS S E L IE S
2
2P
3d
5
GOUY
d’H eur
4
B AS C OU P
T R IVIÈ R E S
70
15
70
ZANDVLIET
+
S t- S ervais
L A C R OY È R E
V/HAINE
0
0
+7
0+
7
15 0
P E T IT MAR AIS
(1
)
0
0
50
15
22
0 +
B AU DOU R
(1
+
15 0 70
3dP
G HL IN
B AT T IC E
S tatte GRAMME
(S NC B )
S E IL L E S
CHAMPION
OB OU R G
220
RIMIERE
F IB E R
R OMS É E
W anze
COGNELEE
St-AMAND
COURCELLES
C L E R MONT
TIHANGE
W aret
12
FE LUY
CENTRALE SENEFFE
>2
4
50˚30'
38
Harc hies
70
2
P E T R OC HIM
C HAMP - DE C OU R R IÈ R E
Quevauc amps
1
2
2 e terne en c ons truc tion ou en projet
W elkenraedt (S NC B )
0
L E VAL
(C . S E R AING )
L euze
G embloux
15
Mons in
R OMS É E
- S NC B
L A T R OQU E
Ivoz
AW IR S
C roixC habot
4
HenriC hapelle
3d P
T humaid e
3dP
CHEVALET
NIVE L L E S
3
S E R AING
Ais c he- en- R efail
S auvenière
MAR C HE - L E ZÉ C AU S S INNE S
L ens
AIR L IQ.
TE R TR E
D
C HE R T AL
B R E S S OU X
J U P IL L E
3dP
2
0)
C HIÈ VR E S
VIE U X
G E NAP P E
B aulers
- S NC B
15 (70)
C OR B AIS
y le
(7
1
ANT OING
AVELIN
B aulers
B raine- le- C omte
- S NC B
Montzen
(S NC B )
0
F ooz
3dP
1
2
2
Güstrow
Hamburg
As at : December 2011
B raine- le- C .
G AU R AIN
C arrière
du Milieu
3d
er
nd
De
nd
re
50˚40'
W AT T INE S
T ournai
- S NC B
R onquières
15
3d P
S aives
12
70
C ourt- S t- É t.
B AIS Y - T HY
Ath
(S NC B )
t
0+
au
15
2E s c
WARANDE
Mes lin
L IG NE
T ournai
0)
+
3dP
70 (1 5
80
uitgerus t
1
1
1
2
NAVAGNE
LIXHE
AVE R NAS
G latigny
voorzien
ins tallés
2
2
>2
L anden
- NMB S
Hannut
C eroux
70kV
Aa nta l dra a ds tellen
(avec numéro de référenc e dans
le tableau des c ompos itions )
3
OIS QU E R C Q
150kV
1
B orgloon
3d P
T HIE U L AIN
B landain
MAR QU AIN 70(150)
L anden
J odoigne
Ottignies (S NC B )
B R AINE - L ’AL L E U D
C L AB E C Q
220kV
N ombre de ternes
B E R NE AU
B AS S E - W AVR E
W AT E R L OO
Hoves
380kV
220kV
50˚40'
+ 70
+
E nghien (S N C B )
[E dingen (NMB S )]
380kV
70kV
T ongeren
2
E au
50˚50'
15 0
0
Deux- Ac ren
70
Ors maal
S t.-GENES IUS -R ODE
[R HODE-S t-GENÈS E]
U itbatings s panning
150kV
HE R DE R E N
10
51˚10'
51˚00'
De
B U IZING E N
L anaken
220 kV
B OVE NG R ONDS E LIJ NE N
T ens ion d’exploitation
S AP P I
3dP
1 : 150 000
R ivage
(S NC B )
LIG NE S AE R IE NNE S
3d P
B R US TE M
L AB OR E L E C
MEKINGEN
DOT T IG NIE S
[DOT T E NIJ S ]
70(150)
B ilzen
Alken
S t.- T ruiden
F OR E S T
VOR S T
Herfelingen
R ons e
[R enaix]
MOU S C R ON
[MOE S K R OE N]
15
2
G eraards bergen
P
ld e
he
Sc
R U IE N
MOE N AVELGEM
70
18
F OR D
ZU T E NDAAL
prévus
T IE NE N
IXE L L E S
E L S E NE
DROGENBOS
16
Maas mec helen
AL Z
150(380)
P
Anthis nes
50˚50'
Appelterre
L ANG E R L O
2
G ODS HE IDE
K ers beek
3d
3dP
51˚00'
E IZ E R IN G E N
(NMB S )
P
P ouls eur
Abée- S c ry
P
+
NINOVE
Halen
3d
3d
0
OU DE NAAR DE
rthee
Ou
Ourth
H te S AR T E
Rostock
Switching Station (in large part with transition to distribution system operators)
3d P
GRAMME
MAR C HIN
SchleswigHolstein
E s neux
RIMIERE
B ekaert
S T AL E N
P aals teens tr. C . L ANG E R L O
2
S IK E L
15
Has s elt
Ves
Ve sdre
dre
P
15
B as - W arneton
[Neerwaas ten]
S t.- Denijs - B oekel
HAR E L B E K E
K U U R NE
2
B ekaert
K ortrijk
2 Oos t
70(150)
ZW E VE G E M
1 5 0 +7 0
Magotteaux
Legend
TIHANGE
E IS DE N
Zonhoven
W INK S E L E
W IL S E L E
K es s el- lo
ZAVE NT E M
2
S C HAAR B E E K
P ellenberg
HAR E NHE IDE
L euven
MOL E NB E E K
(NMB S ) 0 )
HE L IP OR T
G a s thuis berg
(1 5
0
DIL B E E K
7
C HAR L E S - QU INT
Heverlee
W IE R T Z
le
Q. DE ME T S K .
D ij
W OL U W E - S t- L AMB E R T
DHANIS
P AC HE C O
S t.- L AMB R E C HT S - W OL U W E
ZU ID/MIDI
14
50)
L es S pagnes
Amps inNeuville
0
W E VE L G E M
Dorenberg
B OIS
L ' IMAG E
15
K ortrijk
- NMB S
BRUEGEL
R OMS É E
- S NC B
R OMS É E
C hênée
+
HE U L E
W OR T E G E M
E s s ene
OBERZIER
C.DILSEN
L ummen
DIE S T
W IJ G MAAL
HOE NDE R VE LD
Maas eik
0
PEKKE
ME NE N
WE S T
Denderleeuw
(NMB S )
Z ottegem
DE S S E L G E M
2
3
G R IMB E R G E N
K OB B E G E M
MAC HE L E N
R E LE GE M
er
70 (1
C L E R MONT
)
38
70
15 0 +
IE P E R
De m
Hermalle
s /Huy
HOU T HAL E N
P
W elle
IZEGEM
IE P E R NOOR D
C . VIL VOOR DE
VERBRANDE BRUG
AAL S T
150 + 70
G avere
11
K R U IS B AAN
WE S P E LAAR
T E R L INDE N
ME R C HT E M
AAL S T NOOR D
Amylum
S t.- B AAF S - VIJ VE
OOS T R OZE B E K E
G rivegnée
C . Angleur
)
E hein
VAN EYCK
50
Opglabbeek
C . T E S S E NDE R L O
M ec helen
- NMB S
Aars c hot
M U IZ E L AAR
W E S T R OZE B E K E
B E R ING E N
2
3d
C . Izegem
R U MB E K E
DE INZE
50
3d
Noords c hote
T IE L T
HE R C ULE S
Dowc hemic al
T IP
TE S S E NDE R LO
Muizen
L eie
0
ME C HE L E N
70(150)
E S S OC HE M
Ne te
L angveld G rote
P UTTE
(1
3dP
1 5 0 +7
1
LE E S T
T is s elt
MAL DE R E N
HE IS T /B E R G
S IDAL Duffel
70
3dP
S T ADE N
AMOC O
l
(1
R amet
C R OIX- C HAB OT
MAASBRACHT
G erdingen
MEERHOUT
LINT
2
F L OR A
er
IJ z
pe
70
B E L L AIR E
16
AW IR S
Hec htel
G eel/Oevel
7
BUGGENHOUT
P IT T E M
1 5 0 +7 0
L IE R
W illebroek
B aas rode
S t.- G IL L IS DE NDE R MONDE
Oudegem
3dP
3d
B ornem
DR ONG E N
NY R S T AR
Nijlen
S C HE L L E
- DOR P
ZE L E
B AL E N
Olen
Herentals
150
P
L OK E R E N
P AP IE R F AB R IE K
38 0 +
HE ZE
Ru
HAM
Overpelt
Infrax
MASSENHOVEN
Herenthout
Hamme
150
+70
J U P IL L E
F erblatil
S c les s in
P rofondval
Ougrée
K uborn
L A T R OQU E
L E VAL
F lémalle (C . S E R AING )
Ivoz
S art- T ilman
P
3d P
2
NIE U W E VAAR T
BEERST
2
70 (150)
MOL
3d
G E NT R E C HT E R OE VE R
OVE R P E L T
P OE DE R L E E
MERCATOR
T ems e
K E NNE DY L AAN
2
L ANG E R B R U G G E
HORTA R IN G V AAR T
P ouplin
51˚10'
BAEKELAND
NEST
AAL T E R
OE L E G E M
2
MOR T S E L
S ADAC E M
ZE DE L G E M
K OK S IJ DE
16
B R E S S OU X
G lain
P
HE IMOL E N
8
T illeur
C HE R AT T E
16
FN
Mons in
S E R AING
J emeppe
17
S t.- Huibrec hts - L ille
3d
RODENHUIZE
3dP
DODEWAARD
MHO
L OMME L
P E T R OL
W AL G OE D
C HE R T AL
Inc in. Hers tal
Hers tal
3
4
Montegnée
3d P
KEERKEN
Vottem
P
S t.- J OB
ZU R E NB OR G
W OMME L G E M
2
B U R C HT
S t.- Niklaas
0)
Ans
Hollogne
2
6
Voroux
(S NC B )
3d
ME R K S E M
DAMP L E IN
ZW IJ NDR E C HT
C . K NIP P E G R OE N
S IDMAR
7
5
0 (1
70(220)
S C HE LDE LAAN
S t.- P AU W E L S
Zelzate T J
E E K LO
B E VE R E N
150 +
36
C . P las s endale
3dP
T urnhout
NOOR DE R DOK K E N
(NMB S )
ESSO
B E VE R E N
EEKLO NOORD
Alleur
2
B R UG G E
2
F INA
K AL L O
2
NOOR DE DE
S L IJ K E NS
7 e HAVE NDOK
BRABO
S aives
BEERS E
MAL L E
EKEREN
0 +3 6
K E T E NIS S E
2
3d P
70 (15
15
+
15
HE R DE R S B R U G
F ooz
2
380 + 150
2
G UUT
L IL L O
DOEL
B AY E R
B L AU W E T OR E N
R a vels
3d
P
3d
51˚20'
ZE E B R U G G E
R ijkevors el
B AS F
Energinet.dk
Denmark
51˚20'
NOOR DL AND
3
K oekhoven
B rec ht
FN
Vottem
3d P
0
K almthout
ZANDVL IE T
P OW E R
ZANDVLIET
STEVIN
EINDHOVEN
ME E R
KREEKRAK
BORSSELE
M eu
euse
se
P
2
3d
49˚40'
Denmark
51˚30'
2
S oc olie
CBR
GEERTRUIDENBERG
B L IG HB ANK
Jena
Gera
220 kV
Chemnitz
Thuringia 380 kV
Zwickau
380 kV planned / under construction
ČEPS
Czech Republic
380 / 220 kV
Other companies
Bavaria
line
380 kV
line planned /
under construction
380 kV
TenneT
Nationaal Geografisch Instituut
6˚50'
Grid 50Hertz
APERe
Association for the promotion of renewable energies
BBEMG
Belgian BioElectroMagnetic Group
BREEAM
BRE Environmental Assessment Method
BRUGEL
Brussels Electricty and Gas Regulation
CREG
Commission for Electricity and Gas Regulation
CWAPE
Commission Wallonne pour l’Energie
IBGE
Brussels Institute for Environmental Management
ICEDD
Institut de Conseil et d’Etudes pour le Développement Durable
ICNIRP
International Commission on Non-Ionizing Radiation Protection
OVAM
Openbare Vlaamse Afvalstoffenmaatschappij
SYNERGRID
Federation of Belgian System Operator for Electricity and Gas
VREG
Vlaamse Reguleringsinstantie voor de Electriciteits- en Gasmarkt
(Flemish Commission for Electricity and Gas Control)
CORESO
Technical Coordination Service Center within the Central Western European region
CWE
Central Western Europe
ENTSO-E
European Network of Transmission System Operators for Electricity
ITVC
Interim Tight Volume Coupling
ARP
Access responsible party
EMF
Electric and Magnetic Fields
GIS
Gas insulated Switchgear
PCB’s
Polychlorinated biphenyls
RUE
Rational Use of Energy
kWh
Kilowatt hour
MW
Megawatt
www.eliagroup.eu
www.elia.be
Table of content
www.50hertz.com
Head office Elia
Boulevard de l’Empereur 20, B-1000 Brussels
T +32 2 546 70 11 - F +32 2 546 70 10
info@elia.be
Contacts
Lise Mulpas, T +32 2 546 73 75
Axelle Pollet, T +32 2 546 75 11
Annual
Report 2011
Concept and editorial staff
Elia, department Communication
Graphic design and coordination
www.witvrouwen.be
Illustrations
Renaud Collin
Photos Elia
Alain Schroeder, Antonio Caliaro,
Benjamin Miesse, Danny Gys, Eric Figon, Eric Herchaft,
Guy Van Hooveld, Michel Vanden Eeckhoudt, Olivier Polet,
Wim Beddegenoodts, Photothèque Elia
A responsible company
serving its customers and the community
in Belgium and Germany
Photos 50Hertz
Jan Pauls, Andreas Teich, EnBW
Editor
Jacques Vandermeiren
MWh
Megawatt hour (=1.000 kWh)
gWh
Gigawatt hour (=1.000 MWh)
Ce document est également disponible en français.
Dit document is ook beschikbaar in het Nederlands.
Dieses Dokument ist auch auf Deutsch verfügbar.
kV
Kilovolt (=1.000 Volts)
April 2012
ELIA ANNUAL REPORT 2011
List of abbreviations
EXECUTIVE REPORT
Foreword*
Profile and values
Key events 2011*
Prospects and challenges 2012*
The Elia share in 2011
2
4
6
12
14
ECONOMIC REPORT
Grid operation
Infrastructure
Investments
The Elia grid in Belgium
The 50Hertz Transmission grid in Germany
Grid maintenance
Market operation
Preventive management of critical grid situations
Preparing for the future: research and development*
24
28
29
30
33
34
36
40
43
ENVIRONMENTAL REPORT
Environmental objectives and indicators
50
SOCIAL REPORT
Staff policy
Knowledge management
Employee safety and welfare
Corporate social responsibility Stakeholder relations
64
68
70
74
77
CORPORATE GOVERNANCE STATEMENT Composition of management bodies*
Significant events in 2011*
Remuneration of the Board of Directors
and Management Committee*
Features of the internal control and risk management systems*
Description of the risks and uncertainties facing the company*
92
96
101
FINANCIAL REPORT Consolidated financial statements IFRS*
Notes to the consolidated financial statements*
Joint auditors’ report on the consolidated financial statements
Regulatory framework and tariffs*
Information about the parent company*
108
113
154
156
160
GRI Index
Reporting parameters
163
165
*These chapters form the annual report cf. article 119 of the Belgian company code.
84
87