Innovation through tradition

Change in the energy industry has to be driven by innovation. But this does not mean traditional hydropower is obsolete. On the contrary: it is the reliable motor that helps make innovation possible in the first place.

Milan is an exciting place to be in 2015, and not just because of the Expo. With many new skyscrapers sprouting up in recent months and the historic quarter of the city experiencing a renaissance, Italy's business capital is buzzing – which could be why the Lonely Planet tourist guide has made Milan one of its top-ten must-see cities of 2015. The sense of hustle and bustle extends to the offices of Repower Italy. As Repower evolves from a pure producer and seller of electricity to a full-service energy services provider in the liberalised Italian market, staff there are playing a lead role in a dramatic process, primarily involving cultural change.

Repower's Market Italy segment spans business activities along the entire value chain, from generating electricity at the Teverola combined-cycle gas turbine (CCGT) plant and Corleto Perticara, Giunchetto and Lucera wind farms to international trading in electricity and gas, selling electricity and gas, providing additional services to small and medium-sized enterprises and the public sector, and developing innovative services designed to improve energy efficiency.

Contribution to EBIT

In 2014 the Market Italy segment contributed CHF 27 million to adjusted operating income (EBIT) – 30 per cent less than the previous year. Despite more intense competition, Sales managed to maintain its adjusted operating income at around 2013 levels. Trading and Generation made significantly lower contributions to earnings than the prior year, despite optimised deployment of the Teverola plant for the balancing energy market.

On the Sales side, thanks to concerted efforts Repower made substantial progress in defining and implementing a range of measures to manage accounts receivable. Sales consultants are now notified even earlier in the process when customers are in arrears, and customers have new options for paying their bills. In 2014 Repower also conducted major factoring transactions, resulting in a year-on-year reduction of almost 13 per cent in outstanding accounts at the end of 2014. To ensure this improvement continues in the long term, during the year under review Repower endeavoured to make sales consultants aware of this issue and enable them to run a quick and easy credit check when acquiring new customers. In addition to these proactive measures, Repower has also optimised its insurance cover for credit risks.