Management of FerroAtlantica’s and Hidronitro’s hydropower plants
Grupo Villar Mir is the largest independent producer of hydroelectric power in Spain, with twelve hydroelectric plants managed by VM Energía, S.L.U.
- Seven on the Jallas and Grande basins (Galicia), owned by Ferroatlántica, S.L.U.
- Five on the Cinca and Esera basins (Aragon), owned by Hidro Nitro Española, S.A.
Furthermore, Grupo Ferroatlántica has two hydroelectric plants in France that are managed directly by FerroPem S.A., the French subsidiary of the Group.
The Energy Division produced 834.9 GWh in 2014, of which 737.0 GWh were produced in Spain and the remaining 97.9 GWh in France. This total figure was the second highest in the last five years, just below that of 2013 in which 865.9 GWh were producwd, as this year had very high hydraulic activity.
Group plants in Spain have continued to receive income in feed-in tariff scheme during the first months of 2014.
In June, with the entry into force of the Royal Decree of renewable energies, a new remuneration scheme for the Group plants was defined, and they began to sell their production at market pool price. This scheme applies retroactively from the entry into force of RDL 9/2013 of 13th July. Plants have concentrated their production on peak-hour prices and ancillary services markets. Novo Pindo plant, which belongs to Ferroatlántica, additionally, receives an additional premium according to that regulation. The retail price of the energy sold was €48.4/MWh in 2014, a figure that is higher than the pool daily average price (€42.1/ MWh), which was lower than in previous years. Revenue from energy sales is lower than in 2013, having reached EUR 35.7 million. The new regulation that is currently under development is expected to allow participating in new adjustment service markets, something that will increase the revenues of plants.
One of the three new hydroelectric plants in the Jallas (Galicia) basin, whose construction began in 2014, is expected to start production at the end of 2015. This will lead to an increase in Ferroatlántica’s production of approximately 42,000 MWh
Commercialization of electricity and natural gas.
VM Energía supplies electricity and natural gas directly and through its subsidiary Enérgya VM.
In 2014, approximately 27,000 points were supplied, meaning a total of 4.0 TWh of electricity, compared to the 4.6 TWh supplied in 2013; furthermore, 2.9 TWh of natural gas were supplied, which has consolidated our presence in this market.
Enérgya VM will continue to cover about half of the natural gas supply needs of Fertiberia during the years 2015, 2016 and part of 2017, representing approximately 3,100 GWh of annual supply.
Representation of special-regime producers
Enérgya VM represented a total power of 2,000MW from special-regime producers in 2014, consolidating its presence in this area of activity. The company Enérgya VM, GmbH was created in Germany to carry out this activity in the German market.
Shares in european electricity and natural gas interconnection systems
During 2014, Enérgya VM continued to increase its presence on the European electricity interconnection systems, consolidating such on the borders of France, Germany, Austria, Italy, Switzerland, Belgium, the Netherlands, Denmark and Slovenia. Moreover, Enérgya VM continues to penetrate further into different European electricity financial markets. Energya has increased its presence in the French gas interconnection system, engaging in conducted capacity auctions.
Wind farm projects
At the start of 2011, VM Energía S.L. was awarded a concession for a 20MW wind farm in the town of Castelflorite (Huesca), as part of the wind power public tender launched by the Government of the Autonomous Region of Aragon.
Throughout 2012 and 2013, we made every endeavour to obtain all the permits necessary to receive authorisation to start construction. The project is expected to begin commercial operations in 2017.
In addition, the Monte Alegre and Pedra Miñón (Galicia) wind farm projects are also being processed, with a total capacity of 112MW, taking advantage of the many opportunities appearing on the market at the present time, on the understanding that they continue to be viable projects even if generation facilities of this nature do not receive any kind of premium.
Income for the year
VME obtained very satisfactory results in 2014 despite the difficult economic environment.
Thus, in 2014, the Energy Division achieved turnover of EUR 614 million, which represents an increase of 2.8% compared to the EUR 597 million reached in 2013, thanks to the positive performance of Enérgya VM.
On the other hand, EBITDA was EUR 30 million, against EUR 45 million achieved in 2013 (-34%) due to the drop in hydroelectric production and energy selling prices.
Finally, net attributable income totalled EUR 19 million, a figure lower than the EUR 25 million made in 2013.
At 31 December 2014, the Energy Division had a solid balance sheet structure, with guarantee ratio (Total Assets/Total Liabilities) of 1.4x and a solvency ratio (Current Assets/Short-term Liabilities) of 1.7x.