Quantitative data
In 2016, electricity production increased 5.5% (17.7 million kWh) compared to 2015, amounting to 338.6 million kWh. This increase was the result of higher electricity production at both power plants.
Electricity intended for the Group's own use, including auxiliary services, losses and imbalances totalled 200.3 million kWh, while electricity for third parties was 138.3 million kWh.
Electricity for the Energy exchange reported an increase of 22.8% (+20.6 million kWh) compared to 2015, reaching 110.6 million kWh, while sales with bilateral contracts decreased (-12.4 million kWh).
In 2016, thermal energy production decreased by 0.7% on 2015 (-2.5 million kWh) to 364.4 million kWh - of which more than 73% serving the needs of Linate and Malpensa airports.
Sales to third party clients increased by over 15.8 million kWh (+19.9% on 2015) reaching 95.4 million kWh. The increase in production principally follows the consolidation of supply to civil users within the vicinity of Linate airport (as from 2015 the station was connected to the “Canavese” station located at Viale Forlanini and owned by A2A in order to supply additional heat to the city of Milan).
Revenue
In 2016, the Energy business (production and sale of electric and thermal energy) reported consolidated net revenues of Euro 15,892 thousand (Euro 15,488 thousand in 2015), a slight increase over 2015 (Euro 404 thousand).
The growth in revenues was mainly due to higher revenues from environmental certificates for Euro 1,439 thousand, partly offset by lower revenues from electricity sales, resulting from the decrease of market prices. Thermal energy revenues were basically stable which, despite an increase in the quantity sold, were affected by the drop in commodity prices to which sales tariffs are indexed.
Operating costs
Operating costs show an increase of Euro 1,789 thousand compared to 2015.
Personnel costs were aligned with the previous year (increase of Euro 107 thousand), while costs for consumable materials increased (Euro 1,316 thousand), in particularly for the higher quantities of natural gas attributable to the production of electricity and heat for third parties, and other operating costs (Euro 366 thousand), mainly due to higher maintenance costs for the TGD turbine of the Malpensa power plant.
Ebitda and Ebit
Due to the changes described above, the Energy business EBITDA reported a decrease compared to the previous year totalling Euro 1,385 thousand, dropping from Euro 2,985 thousand in 2015 to Euro 1,600 thousand in 2016.
The further decrease of EBIT compared to EBITDA is tied to the higher risks and charges provisions for 2016 compared to 2015, due to Energy Services Operator's request to restitution of part of the green certificates recognised for the 2010-2014 period.
Green Certificates
Also in 2016 SEA Energia, at the production site of Linate and thanks to the co-generative production of thermal energy for heating in the locality of Santa Giulia and the airport, again fulfilled the requirements to obtain green certificates. Therefore, 47,000 green certificates will be requested to the Energy Services Operator, of which 34,169 SEA (equivalent of Euro 3,400 thousand) and 12,831 A2A, pursuant to the agreement in place with this company.
White Certificates
The Milan Malpensa station satisfies the requirements introduced by Ministerial Decree 5/9/2011 and subsequent amendments for the recognition by the Electricity Regulator of White Certificates to support high yield co-generative units. These certificates may be requested for a period of 5 years from the entry into force of Ministerial Decree of September 5, 2011, within the limit of 30% of the incentives recognised to newly-constructed high yield co-generation plant and may be requested from the 2012 data.
For the co-generation production in 2016 at the Malpensa station, the Electricity Service Operator recognised 5,516 white certificates, of which 2,757 combined cycle 1 (CC1) and 2,759 combined cycle 2 (CC2). The average unitary price is Euro 203 for white certificates.
Emission trading
In accordance with European Directive 2003/87/EC, from January 1, 2005, plant operators which emit CO2 into the atmosphere must avail of an authorisation issued by the competent national authority. Each plant, in addition, must receive special “rights” permitting the emission of CO2 into the atmosphere without payment.
Where the rights allocated annually concerning the plant are not sufficient to cover emissions, these may be purchased on the market.
Conversely, where the rights allocated are in excess of the emissions produced, the rights not utilised may be sold.
For 2016, the overall production of CO2 by the Group amounted to 181,900 tonnes, of which 120,400 tonnes generated by the Malpensa station and 61,500 tonnes produced by the Linate plant.
At December 31, 2016, SEA Energia had 166,015 tonnes of CO2 on its account. Therefore, to compensate the Ministry of Environment for the 181,900 Tonnes produced, 15,885 CO2 quotas must be purchased on the market.
Application by SEA and SEA Energia to qualify as Existing Equivalent User Efficient Systems (SEESEU)
On September 29, 2015 SEA and SEA Energia applied to the GSE in order to obtain the qualification as Existing Equivalent User Efficient Systems (SEESEU). Obtaining the qualification as SEU or SEESEU involves maintaining favourable tariff conditions on high efficiency self-produced electricity, not withdrawn from the grid, limited to the variable components of the system and grid general costs, as required by Legislative Decree no. 115/08 and Article 25-bis of Law Decree no. 91/14 converted into Law no.116/14.
On February 28, 2017, following a receipt of a notice of rejection, the additional documentation was sent to GSE to satisfy the requests received.
On the basis of these considerations, despite the uncertainties related to the progress of the application and the fact that the SEESEU-C qualification for application of the preferential tariff system charges had not yet been obtained as at the reporting date, the Companies considered it reasonable to estimate the payment of system charges for the year 2015 and 2016 on favourable tariff conditions.