General Shareholders' Meeting 2012
Red Eléctrica will maintain its investment geared towards security of supply and a sustainability energy model
- Stability and regulatory certainty are core to achieving these objectives
- The key strategic line shall be to advance with those investments to be encompassed within the new planning
- Interconnections with Europe shall be the priority investments of the Spanish electricity system in the coming years
Red Eléctrica's Chairman, José Folgado, presented today at the Annual General Shareholders' Meeting the Company's strategies for the coming years and took stock of 2011.
José Folgado highlighted that the new regulatory framework and the new planning to be approved by the Government will allow the Company to follow the path laid out in previous years in the execution of its activities. Therefore, "Red Eléctrica will continue with the appropriate levels of investment that will allow a focus on operational excellence to be maintained and will allow a clear orientation towards the quality and security of supply and sustainability of the energy model to also be maintained".
He indicated that the investment in 2011, 819 million euros in transmission grid development, is in line with the investment rate followed in previous years. The investment programme has focused primarily on the structural reinforcement of the grid, improving the meshing of nodes and creating new energy transmission axes, and in strengthening international connections, "actions key to ensuring the continuity of the electricity supply".
For the Chairman of Red Eléctrica, all these investments, "in addition to increasing transmission capacity and improving the security of supply, also help to integrate the renewable energy available, to reduce energy losses in transmission and reduce electricity system costs as a whole".
In reference to international interconnections, Mr. Folgado stressed the importance that the new interconnection line with France has for Red Eléctrica, "because we have a clearly insufficient level of interconnection with Europe". This line, scheduled to be commissioned in 2014, will double the current electricity exchange capacity with the European grid network, reaching 6% of the maximum peak demand, although this still falls far short of the 10% minimum interconnection capacity between countries as established by the European Council in Barcelona 2002.
In addition, Mr. Folgado added that, as was required by the Government in the Royal Decree 13/2012, "Red Eléctrica is participating in the review of the electricity infrastructure plan for Horizon 2020, to respond to the current macroeconomic climate and demand scenario".
For the implementation of this new infrastructure planning, Red Eléctrica will adapt its investment plan so as to ensure security of supply and economic development.
Global leadership in the integration of renewable energies
José Folgado highlighted the work carried out during 2011 to achieve a better integration of the available renewable energies into the electricity system, with the aim of making it possible to cover the demand with the use of these intermittent energies without the security and quality of supply being affected.
The Control Centre of Renewable Energies (Cecre) has helped to establish a new record of demand coverage with clean energies, when this very morning, wind energy covered 61.06% of demand on the Spanish peninsula.
In addition, wind energy production yesterday reached new maximums of instantaneous power, hourly energy and daily energy. The maximum instantaneous power, 16,636 MW, was recorded at 4:41 pm, representing an increase of 11.2% on the previous maximum of 14,962 MW, recorded on 9 November 2010.
Also, yesterday a new maximum of hourly production was set at 16,455 MWh between 5:00 and 6:00 pm, an increase of 11.5% compared to the previous maximum of 14,752 MWh (9 November 2010). Similarly, a maximum of daily wind energy was reached with 334,850 MWh, compared to 315,258 MWh on 9 November 2010. This maximum represents an increase of 6.2%.
These maximums reflect the capacity of the Company to safely integrate renewable energy and it makes them a world leading reference regarding transmission and electricity system operation.
In order to continue safely integrating renewable energies, demand-side management is a key element. A more intelligent management and interactive behaviour of the demand that increases consumption during valley hours and reduces it during peak hours, contributes to offsetting the high variability of renewable generation and to reducing the difficulties in maintaining the balance between generation and consumption.
In this regard, the Chairman of Red Eléctrica declared that "at present we are taking measures to face the new challenges of this decade, with the aim of achieving a more sustainable energy model, which will contribute to the economic recovery, to development and the well-being of society".
Regarding the fall in electricity demand that has occurred since the second half of 2011, José Folgado indicated that the behaviour of electricity consumption has maintained a certain correlation with the evolution in the growth rates of our economy.
2011 ended with a 1.1% drop in consumption, after factoring in seasonal and working patterns.
As a result of the constant efforts of the Company to provide information regarding the electricity system and its operation, in line with the policy of transparency under which the Company works, Red Eléctrica published since February this year an electricity demand index which aims to provide information regarding the evolution of electricity consumption of large and medium businesses as a whole. This index allows the monthly economic situation to be analysed using real data, thus making it an advanced economic indicator.
José Folgado summarised 2011, noting that from an economic point of view, "the past year had been a year of growth for Red Eléctrica, as demonstrated by net profit rising to 460 million euros, 18% up on 2010".
Red Eléctrica continues to maintain a high credit rating 'A+' from Standard & Poor's and 'A2' from Moody's, a fact which has been reflected by the markets. Thus, in the issues debt carried out over recent months, Red Eléctrica has obtained financing at very competitive rates.
Shareholder remuneration through the payment of a dividend grew 18% with respect to the previous fiscal year and reflects the commitment to the market to increase the dividend pay-out to shareholders in line with the increase in earnings per share.
Regarding the stock market performance of the Company's shares, Mr. Folgado stated it had been unable to avoid the negative conditions experienced by the markets and had fallen by 6.1% on the year. However, this decline has been smaller than the Ibex 35 and the main European indexes.
Corporate responsibility: European Award for Business Excellence
The Chairman of Red Eléctrica classified 2011 as highly satisfactory in terms of corporate responsibility, highlighting the business excellence award the Company had received in the category "Taking Responsibility for a Sustainable Future", as part of the awards that the European Foundation for Quality Management (EFQM) presents annually to the best European companies in the adoption of the most advanced management systems and business practices. This is the first time the company presented its candidacy for these awards, considered the greatest exponent of European business excellence.
Finally, José Folgado reiterated his personal commitment as well as that of the rest of the Board of Directors to continue integrating international best practices regarding corporate governance. "Red Eléctrica, due to its shareholder structure is an international company, that is always seeking excellence not only in their management but also in their relationship with shareholders", the Chairman concluded.