Transcript Experiences of RWE in the Hungarian Energy Sector
Experience of RWE in the Hungarian Energy Sector
10th anniversary of the Hungarian Energy Office Budapest, 16th September 2004
Since 1992 RWE plays an active role in the Hungarian Energy Market (I) 1992 1993 1994 1995 1997 1998 1999 RWE
Hungarian RWE Representative Office founded Co-operation aggreements with Hungarian electricity companies Participation in the first privatization attempt – declared unsuccessful
MEH
Transformation of Hungarian Energy Trusts into corporates Approval of the new Hungarian Energy Policy by the Parliament Privatization of the Hungarian energy market – RWE acquires stakes in ELMŰ, ÉMÁSZ and PP Mátra Parliament passes Electricity and Gas Act
foundation of MEH
Decrees on the execution of Electricity and Gas Acts Price regulation system accomplished RWE becomes minority shareholder of TIGÁZ RWE becomes majority shareholder of ELMŰ, ÉMÁSZ and PP Mátra Foundation of Sinergy, a project company of ELMŰ and ÉMÁSZ Price Cap regulation takes effect District Heating Act approved Business Model of the energy industry
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Since 1992 RWE plays an active role in the Hungarian Energy Market (II) 2000 2001 2002 2003 RWE
Through the merger with VEW, RWE increases its stake in TIGÁZ and becomes shareholder of FŐGÁZ and DDGÁZ Reconstruction of PP Mátra (FDA) Construction of PP BorsodChem, co and trigeneration plants (i.e. MOM Park) and District Heating Plant in Sárospatak „Challange 2001” Project MÁSZ founded, comissioning District Heating Cogeneration Plants in Kazincbarcika, Tiszújváros and Rózsakert PP TVK construction
MEH
Cost revision and preparation of next price regulation contract New Electricity Act approved Preparation for electricity and gas market liberalization
2004
RWE Energy Hungária management company established New Gas Act approved Partial opening of electricity market Partial opening of gas market for non household customers
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RWE came to Hungary with many hopes, with most of them now fulfilled Our expectations in 1994-95
Political stability
Quickly improving economic situation
Fast market growth
Gate towards Eastern Europe
Professional workforce
Stable and fair regulatory environment
Satisfactory political/ economic stability
Improving commercial culture
High level technical standards
Highly motivated and qualified workforce
Reduced overemployment
Decreasing influence of politics on regulation Where we stand ten years later 4
RWE is contributing to Hungary ´s advancement with it ´s investments Generation
Refit and upgraded PP Mátra with flue gas desulphurisation equipment Investments in Industrial cogeneration Plants (Borsodchem, TVK, MOM Park) Modernization of district heating plants in Kazincbarcika, Rózsakert Tiszaújváros, Sárospatak &
Distribution & Retail
Opened modern Call Center for 2 million household customers of ELMÜ/ÉMÁSZ Automated Billing and other back office processes by introducing latest SAP R3 technology Investments in networks over 7 years to increase security and comply with MEH Quality Index requirements
Corporate Citizenship
Reconstructed historical FŐGÁZ Headquater Carried out necessary workforce reduction with social plan and permanently increased real wages of employees Supports of Budapest Autumn Festival, Miskolc Opera Festival, Hungarian Olympic Committee and Hungarian Children’s Safety Service
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Key success factors for energy markets major tasks for Hungarian Energy Office
Synchronize steps towards market liberalisation with other CEE regulators
Create transparent and predictable processes for regulatory decisions
Regulate only markets with natural monopolies
Incentivize long-term investments by offering adequate returns on invested capital 6
We want the Hungarian Energy Office to be a strong, independent partner
We believe, that a good professional relationship between Energy Office and investors will benefit all customers
To succeed on in the long run, investors need a predictable and transparent regulatory framework for natural monopolies Therefore we encourage and support MEH’s independence In this relationsship the Energy Office can be a tough partner, but it needs to be reliable and predictable
Our experiences with the Hungarian and CEE regulators are of great value and importance in our home market Germany 7
We hope to be the one to illuminate Budapest and cooperate with the Hungarian Energy Office even in 100 years time!
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