In the first half of 2015 there were impairments on generation assets which break down by segment as follows:
Market Switzerland segment
In the first half of 2015 impairment losses of TCHF 15,649 were recognised on generation assets (hydropower). They applied to the Taschinas (TCHF12,229), Ladral (TCHF 1,458) and Ferrera (TCHF 1,962) plants.
These impairment losses were prompted by a renewed year-on-year decline in prices on the electricity market. Given that trading in electricity takes place in euros all over Europe, this effect was amplified by the Swiss National Bank's decision to abolish the 1.20 floor on the EUR/CHF exchange rate on 15 January 2015.
Individual generation assets are valued on the basis of their value in use calculated on a discounted cash flow basis. Discount rates before taxes vary between 5.5 per cent and 5.8 per cent depending on the generation asset.
Market Italy segment
In the first half of 2015 impairment losses of TCHF 23,184 were recognised on generation assets. They applied to the Teverola combined-cycle gas turbine plant (TCHF 22,986) and the Giunchetto wind farm (TCHF 198).
The impairment on the Teverola combined-cycle gas turbine plant was prompted by a decline in the clean spark spread combined with a drop in revenues from ancillary services. The generation asset is valued on the basis of its value in use calculated on a discounted cash flow basis. The discount rate before taxes is 10.3 per cent.
The impairment on the Giunchetto wind farm (at equity consolidation method) was the result of a decline in expected revenues on wind power due to lower energy prices, and lower night-time output in an effort to reduce noise emissions. The generation asset is valued on the basis of its value in use calculated on a discounted cash flow basis. The discount rate before taxes is 11.2 per cent.