| Power plants | Grids | Assets under construction | Land and buildings | Other | Total | |
|---|---|---|---|---|---|---|
| Gross values at 1 January 2012 | 825,650 | 733,410 | 90,536 | 112,736 | 52,510 | 1,814,842 |
| Reclassifications | -333 | -14 | -3,164 | 4,709 | 1,423 | 2,621 |
| Own costs capitalised | 442 | 390 | 15,238 | - | - | 16,070 |
| Additions | 51,331 | 516 | 50,239 | 4,105 | 2,705 | 108,896 |
| Disposals | -915 | -7,846 | -90 | -433 | -7,010 | -16,294 |
| Disposals from changes in consolidation | - | - | - | - | -31 | -31 |
| Reclassifications IFRS 5 | - | -21,115 | -19,732 | - | -33 | -40,880 |
| Reclassifications between asset classes | 19,077 | 22,089 | -52,574 | 7,896 | 3,512 | - |
| Translation differences | -2,134 | - | -62 | -248 | -109 | -2,553 |
| Gross values at 31 December 2012 | 893,118 | 727,430 | 80,391 | 128,765 | 52,967 | 1,882,671 |
| Accumulated depreciation and impairments at 1 January 2012 | -318,949 | -381,626 | -20,712 | -34,119 | -18,291 | -773,697 |
| Reclassifications | 309 | -346 | 8,164 | -4,706 | -9,595 | -6,174 |
| Depreciation | -25,012 | -17,717 | - | -2,017 | -4,005 | -48,751 |
| Impairments | -9,150 | -1,000 | -500 | -1,971 | -550 | -13,171 |
| Disposals | 127 | 6,744 | - | 407 | 4,969 | 12,247 |
| Disposals from changes in consolidation | - | - | - | - | 23 | 23 |
| Reclassifications IFRS 5 | - | 5,253 | 10,384 | - | 31 | 15,668 |
| Reclassifications between asset classes | 25 | -1 | - | -5 | -19 | - |
| Translation differences | 414 | - | -23 | 19 | 23 | 433 |
| Accumulated depreciation and impairments at 31 December 2012 | -352,236 | -388,693 | -2,687 | -42,392 | -27,414 | -813,422 |
| Net values at 31 December 2012 | 540,882 | 338,737 | 77,704 | 86,373 | 25,553 | 1,069,249 |
| thereof security pledged for debts | 2,816 | |||||
| Gross values at 1 January 2013 | 893,118 | 727,430 | 80,391 | 128,765 | 52,967 | 1,882,671 |
| Own costs capitalised | - | 332 | 14,480 | - | - | 14,812 |
| Additions | 3,238 | 414 | 43,420 | 185 | 1,723 | 48,980 |
| Disposals | -731 | -14,199 | -2,960 | -478 | -2,324 | -20,692 |
| Reclassifications IFRS 5 | - | - | -2,482 | - | -1 | -2,483 |
| Reclassifications between asset classes | 10,367 | 18,194 | -30,151 | 577 | 1,251 | 238 |
| Translation differences | 6,428 | - | 543 | 703 | 264 | 7,938 |
| Gross values at 31 December 2013 | 912,420 | 732,171 | 103,241 | 129,752 | 53,880 | 1,931,464 |
| Accumulated depreciation and impairments at 1 January 2013 | -352,236 | -388,693 | -2,687 | -42,392 | -27,414 | -813,422 |
| Depreciation | -27,074 | -17,400 | - | -2,125 | -3,906 | -50,505 |
| Impairments | -62,304 | - | -85,225 | -14,630 | -19 | -162,178 |
| Disposals | 616 | 8,847 | 2,331 | 301 | 2,023 | 14,118 |
| Reclassifications IFRS 5 | - | - | 168 | - | 1 | 169 |
| Translation differences | -1,194 | - | -119 | -18 | -65 | -1,396 |
| Accumulated depreciation and impairments at 31 December 2013 | -442,192 | -397,246 | -85,532 | -58,864 | -29,380 | -1,013,214 |
| Net values at 31 December 2013 | 470,228 | 334,925 | 17,709 | 70,888 | 24,500 | 918,250 |
| thereof security pledged for debts | 2,703 |
The pledged fixed assets were put up as collateral for the investment loans and mortgages as listed in Notes 17 and 22. Insured value of tangible assets: CHF 1,769 million (previous year: CHF 1,447 million). In the year under review, TCHF 874 in borrowing costs (previous year: TCHF 558) were capitalised for assets under construction. A financing cost rate of 2.97 per cent was used (previous year: 3.03%).
Impairment of tangible assets
In the reporting year, there were extensive impairments of tangible assets, which are shown broken down by segment. Both existing plants and projects are affected. The intrinsic value was determined by means of the discounted cash flow method (calculation of the value in use). The time period in the business plan is the same as the time periods of the individual plants and projects.
Market Switzerland segment
Existing plants
Impairment losses of CHF 3.5 million were recognised on various small hydroelectric plants. The WACC before tax is between 4.2 and 5.4 per cent. The main reason for the impairment is reduced returns due to lower anticipated market prices.
Projects
The current energy policy environment is not conducive to investments in non-subsidised technologies. As a result, an impairment loss of CHF 77.5 million was recognised relating to the project portfolio. This mainly affects the Lagobianco project (CHF 50 million), the Leverkusen combined-cycle gas turbine power plant (CHF 12.5 million), the Chlus project (CHF 9.5 million), the Taschinas 2 project (CHF 4.9 million) as well as projects for small hydroelectric plants (CHF 0.6 million). The WACC before tax is between 5.3 and 6.9 per cent. The reasons for the larger positions are outlined below:
The Lagobianco project is currently not cost-effective due to the adverse market situation for pumped storage plants (high investment costs coupled with inadequate price differences between pumps and turbines). The recoverable amount of the project is presently smaller than the reported carrying amount. An impairment loss was recognised to meet the requirements of IAS 36.59.
Due to the uncertain market situation for combined-cycle gas turbine power plants in Germany (design of the electricity market does not create incentives to invest in conventional power plants), the Leverkusen combined-cycle gas turbine power plant project is currently not cost-effective. The recoverable amount of the project is presently smaller than the reported carrying amount. An impairment loss was recognised to meet the requirements of IAS 36.59.
Due to the difficult market situation for Swiss hydropower (low stock market prices), the Chlus project is not currently cost-effective. The recoverable amount of the project is presently smaller than the reported carrying amount. An impairment loss was recognised to meet the requirements of IAS 36.59.
The Taschinas 2 project was formerly linked to the Chlus project. After the Chlus project was fundamentally overhauled, the new plan was to carry out Taschinas 2 independently. Whether or not the project will be carried out is currently questionable due to the adverse market situation for Swiss hydropower (low stock market prices). Implementation and thus the cash flows associated with this project are uncertain.
Market Italy segment
Existing plants
An impairment loss of CHF 57.1 million was recognised relating to the Teverola (CHF 51.4 million) and Corleto Perticara (CHF 5.7 million) power plants. The WACC before tax is 8.7 per cent.
Teverola is a combined-cycle gas turbine power plant. Market conditions for the Teverola combined-cycle gas turbine power plant are challenging as a result of the massive expansion of renewable energies in southern Italy (which are given priority over conventional power plants for feed-in to the grid) as well as the decline in electricity consumption in the Italian market. Both developments are leading to a reduction in the spark spread and to less than optimum utilisation of the power plant.
The Corleto Perticara power plant is a wind farm. Due to the massive expansion of renewable energies, the market prices in southern Italy for the current financial year have fallen by more than 30 per cent compared to the 2012 financial year. An increase in prices for certificates of origin were not able to compensate for the drop in prices. In addition, the national grid operator is planning to relocate the current grid connection, which will likely generate considerable extra costs. Repower assumes that the wind farm will be closed at the end of 2016.
Projects
An impairment loss of CHF 21 million was recognised relating to the project portfolio, which is broken down as follows: impairment of a property related to the Saline Joniche project (CHF 13.3 million), Campolattaro pumped storage plant (CHF 4.0 million), Pontremoli wind farm (CHF 2.7 million) and the Pistoia combined-cycle gas turbine power plant (CHF 1.0 million). The reasons for the larger positions are outlined below:
In terms of interests in coal-fired power plants, Repower will be adhering to the overall strategic approach formulated by the government of Canton of Graubünden, its majority shareholder. This owner strategy, combined with overall developments in the environment, has prompted a resolution from Repower's Board of Directors not to consider any more interests in coal-fired generation plants. We no longer anticipate recoverable utilisation of the property planned for the coal-fired power plant. An impairment loss was recognised on the property related to the Saline Joniche project.
As a result of the change in market and regulatory conditions, formerly profitable system services for pumped storage plants in Italy are no longer compensated. This directly impacts the intrinsic value of the Campolattaro project. The WACC before tax is 10.1 per cent.
Now that the new incentive system introduced in July 2012 for renewable energies has been eliminated with the exception of photovoltaics (Decreto Ministeriale FER), there is no incentive to pursue the Pontremoli wind farm project.
Segment “Other segments and activities”
The return flows from the wind farms in Germany subsidised under the German Renewable Energy Act (EEG) are heavily dependent on how much wind there is. The anticipated wind yield is less than expected, which led to an impairment loss being recognised on the Lübbenau wind farm of CHF 3.1 million. The WACC before tax is 7.8 per cent.
Impairments from the previous year
The principal impairment in the previous year concerns a small hydroelectric plant including property amounting to 10.8 million in the “Market Switzerland” segment.
Leased tangible assets
The net carrying amount of the motor vehicles held as part of the finance leasing agreement totalled TCHF 714 (previous year: TCHF 1,100) at the closing date. More information about the finance leasing can be found in Note 30.