VERBUND AG: Austria's most powerful power plant inaugurated in Mellach

Subject heading: miscellaneous

VERBUND AG: Austria's most powerful power plant inaugurated in Mellach

Mellach, 22 June 2012. Today saw the official opening of the combined cycle gas turbine power plant (CCGT) in Mellach/Styria, Austria's most modern thermal power plant. It replaces no fewer than five old lignite or oil-fired power plants shut down by VERBUND in recent years. When online, the new CCGT will save up to two million tons of CO₂ a year.

With a capacity of 838 megawatts (MW), the Mellach CCGT is the most powerful power plant in Austria. It involved a total investment volume of EUR550 million and has a long-term, oil index-linked gas supply contract. At the heart of the two generators are highly efficient gas turbines manufactured by Siemens. With the downstream steam turbines, the power plant achieves electric efficiency of 59.2% and if steam is recovered for district heating its efficiency can be increased to virtually 80%, thus making the best possible use of natural gas as the fuel.

Uncertain situation for gas power plants
The general conditions for gas-fired power plants continue to remain challenging. Firstly, huge subsidies are available for expanding wind and solar power although it fluctuates considerably. And secondly, the profitability of gas power plants supplementing supply throughout Europe is limited. What is responsible for this are the still weak clean spark spreads. There are relatively low wholesale prices for electricity on the one hand and long-term, oil index-linked and therefore expensive gas supply contracts on the other. In the medium term, we can however expect demand for capacity to rise on the European electricity market, ensuring that gas-fired power plants can be operated economically.

The Mellach CCGT was therefore tested for impairment as at 30 September 2011 due to indications of impairment as a result of the difficult market situation for gas power plants described above. The impairment loss resulting from the impairment test amounted to EUR110.3 million. From today's perspective, VERBUND's half year results, which will be published on 25 July 2012, will also be adversely affected by the Mellach CCGT.

Enquiries:
Andreas Wollein
Head of Group Finance and Investor Relations
Tel: +43(0)50313-52604
Fax: +43(0)50313-52694
investor@verbund.com