Keystone-SDA
This content was published on 05 September 2024 – 14:03
(Keystone-ATS) Romande Energie saw its profitability weighed down by the regulation mid-term. The energy company is therefore adjusting its strategy to respond to regulatory and market developments.
From January to June, the operating result (EBIT) plummeted by 72% over a year to 20 million francs. The net profit was almost halved to 66.4 million, the group based in Morges announced in a press release on Thursday. Turnover contracted by 13% to 425.5 million francs.
“These abnormally low results should also be read in light of an exceptionally high year 2023,” emphasizes Christian Petit, CEO of the group in an interview with AWP.
The period under review was heavily penalized by “regulatory phenomena,” he continues. In this case, the average price method, which will however be abandoned by 2026. And, above all, the resales of excess energy coming in particular from the resumption of solar production by individuals and companies equipped with photovoltaic panels.
Coupled with a normalization of prices after a two-year phase of energy crisis marked by price hikes, these factors weighed on the energy margin, which shrank to 3 million, compared to 36 million in June 2023.
With the strong deployment of solar energy, energy production is happening simultaneously everywhere and generates a surplus of electrons that must be recovered and evacuated, as their storage is not yet possible. For energy companies, these peaks translate into negative flows – in other words, “we pay to dispose of this excess electricity that arrives in our network”.
This is followed by “unparalleled volatility,” observes Nicolas Conne, Chief Financial Officer (CFO). Especially since solar energy currently represents 10% of domestic production. The situation should soon improve thanks to the possibility of being able to adapt the recovery price from next year and therefore being able to pass on part of these costs each quarter in customer rates.
The fact remains that “the regulatory provisions are no longer appropriate,” points out Christian Petit. The CEO hopes that the orders resulting from the electricity law will change the treatment of resales in order to be more in line with the reality of the market.
Investments in storage
In this context, the company has decided to develop its 2021-2026 strategy and adapt its objectives for 2030. The planned investment rate will thus be extended to this deadline, with a first stage of 1.4 billion francs by 2027.
Taking into account the rise of solar energy, the group will focus on flexibility and storage, in particular through the installation of smart meters that can limit the electrons that go back into the network to avoid peaks (with minimal impact on the producer). As well as the installation of network batteries or at the citizen’s premises to store surpluses.
“Creating this type of buffer zone offers more flexibility,” emphasizes Christian Petit.
Improvement in 2025
In terms of outlook, management expects regulatory effects to continue to weigh on the energy margin during the second half of the year. Consequently, operating income should be “abnormally low and down sharply for 2024”. A gradual return to better profitability is expected for 2025, notes management, without formulating any quantified targets.
The group also announced the departure of its president Guy Mustaki who, after 20 years on the board of directors, has chosen not to stand for re-election at the general meeting next year.
