Basic information
Východoslovenská energetika a.s.
Supplier of energy and energy services
Mlynská 31
042 91 Košice
Slovakia
Phone: +421 55 6102 001
E-mail: info@vseas.sk
E-mail: komunikacia@vseas.sk
Web: www.vse.sk
ID: 44483767
VAT / Tax ID: SK2022730457
Customer: Východoslovenská energetika a.s.
We bring more benefits to your business
• Favorable prices for electricity and gas
• Wide range of energy services with various financing options
Interview: Customer care is the way in difficult times
We were starting the year 2021 an expectation of recovery…
The year 2020 was the one of economic crisis triggered by the COVID-19 pandemic, when low consumption and low demand for energy reduced energy prices. The prospects for 2021 counted on a market recovery, which had been confirmed in its very first months. I can say that the first half of the year went according to plan. In the summer, prices had already reached record values and it was repeated several times until the end of the year. What happened, has no precedents.
Can you explain why prices of electricity and gas were repeatedly reaching historical maximum values in 2021?
I must emphasize that besides increased demand, commodity prices are affected by a number of factors and events, which also was the case in 2021. I mention a few. Electricity price was growing along with growing emission allowances while we were also witnessing decommissioning of nuclear plants in Germany. In autumn, concerns grew about possible shortage of electricity produced from hydropower plants due to the coming winter, exacerbated by Russia that refused to increase gas supplies to Europe via Ukraine. At the end of 2021, the impact of inflation had already been present. The electricity price also rose due to limited power generation of French nuclear power plants. In addition, cold weather was being expected.
Ing. Mgr. Juraj Bayer, PhD. has been in the function of the Board of Directors Chairman and General Manager of the company Východoslovenská energetika a.s. since 1 February 2022. Since 1 August, he has been the Board of Directors’ member and the CFO of the company VSE Holding a.s. Before joining VSE Holding Group, he worked in the company ZSE, a.s., in which he held several managerial positions in its financial division and gained an overview of the field and valuable practical experience. In 2017, he received the prestigious CFO of the Year award for extraordinary results, active approach, and contribution to modern financial management. He graduated from the Faculty of Economic Informatics of the University of Economics in Bratislava and obtained the ACCA Diploma in IFRS (DipIFR) afterwards. He completed his studies with a PhD. at the Faculty of Commerce of the University of Economics in Bratislava.
In the summer, the gas price was pushed up by a decrease in Russian gas supply to Western Europe through the Yamal gas pipeline. In the first half of September, deliveries of Norwegian gas to Europe also dropped significantly due to maintenance. Of course, the price of gas was influenced by already mentioned more expensive emission allowances, or the rejection of an exception to start the Nord Stream 2 gas pipeline by the German regulator.
How did Slovak electricity and gas market react?
Slovakia reacted vulnerably and the record high commodity prices triggered a literally critical situation on our market.
In the fall of 2021, three suppliers addressed the Regulatory Office for Network Industries with a notice of termination their electricity or natural gas supply activities. The regime of the supplier of last resort came into being, which showed that current legislation and the institute itself do not count with such a large-scale pan-European energy crisis, which subsequently caused unexpected reactions. The suppliers of last resort could apply an actual market price in household customers but were obliged to pay a difference between market and regulated price if a customer decided to stay with the supplier after the termination of his supply in the last-resort supplier regime. These suppliers were suddenly looking for an answer to a question whether to fight for the customer. The unprecedented and difficult situation also manifested itself at the turn of 2021 with an unusually high number of open contracts in mid-December, due to high prices. Corporate customers were postponing their conclusion, anticipating a decrease in price. Given the extremely low liquidity on the wholesale market, suppliers had to make truly extraordinary efforts to ensure electricity for all customers.
Unfortunately, in 2022, more electricity customers have been added in the supplier of last resort regime, energy prices continue reaching new highs, and several small and large companies cannot handle energy costs and are closing their operations. I think that coming months, maybe even years, are going to be very difficult for our market and the entire economy. An important role will be played by the state and its measures against increasing energy prices.
What helped you to get through this period?
In every period, either fortunate or difficult, maintaining priorities is of utmost importance. Our goal has always been a customer care. It was this focus on customers, making decisions in their favor that ultimately helped us as well. It turned out to be the most accurate solution.
I am adding an example to illustrate. To always ensure electricity supply for our customers, we purchase through several electricity traders, buy continuously, and manage our portfolio. With such a strategy of ours, rapid growth of prices did not significantly jeopardize us and we were managing fulfillment of our customer obligations.
It also pays to be prepared. As a supplier of last resort, we managed to smoothly ensure electricity supply for more than 50,000 customers in the eastern Slovak distribution area. For corporate customers, we were buying electricity on the wholesale market at record high prices. It was very difficult to ensure and continue a stable electricity supply for our customers, which we contractually committed to in the given year, and for customers in the SLR regime (Supplier of Last Resort). We managed it by already looking for cost savings reserves in 2020, as well as new sources of income. In 2021, additional extraordinary measures were adopted along with proposals of costs optimization, which are also being applied in 2022. We did not underestimate the situation and got ready.
I believe that every step we take for the benefit of our customers, will be repaid to us with their loyalty and trust. Therefore, other decisions have been implemented – setting of household advance payments in SLR regime in accordance with regulated tariffs in our basic price list. Households thus did not have to worry about a significant price increase. This meant a simplifying of process to us so that we could once again focus on providing the best possible service for these customers.
You also managed it by your size, strong players survived…
I start by saying that the largest alternative trader on Slovak energy market terminated its activity, followed by other suppliers. A few alternative suppliers remained. The question remains how the customers will perceive it, how much they will trust them. I do believe that in turbulent times, it is strong and stable, thus traditional suppliers that can appeal the customers. It makes me happy on one hand, as our company Východoslovenská energetika is that strong and stable supplier. On the other hand, the market, its development and even ourselves need competition.
We were expecting quite the opposite. We were preparing for price deregulation and creation of an environment that brings greater variety of products and customer services, support the use and development of new technologies. We were preparing for an even greater competitive environment, but these plans will slow down.
What is the competition like on the market these days?
The largest alternative supplier that went bankrupt was, at the time, the fourth largest player on both gas and electricity markets. Its customers switched to traditional suppliers under the SLR regime that have a leading position on the Slovak market. Thus, market shares have not changed much.
I assume that your question is about innogy Slovensko. Until June 2022, the company was the second largest gas supplier and, at the same time, the largest alternative gas supplier in the country. On July 1, the company merged with Východoslovenská energetika. After the merger, we are number two on the gas market. In electricity supply, we have long been the third largest company.
I would also like to add that the merger of these two of our subsidiaries was not related to actual market situation, innogy Slovensko was a healthy company. A decision to have all our business activities under one brand – VSE – had been made earlier, while its intention was to support the local brand and introduce a customer benefit of providing energy services by one company, under one roof.
Would you dare to guess what’s coming?
As I have already mentioned, the coming period will also be challenging, and the state and its measures shall play an important role. Of course, each market participant will have to continue to rely on their own solutions and manage the crisis consequences by themselves. On the other hand, we will respond to new challenges triggered by new legislation and implementation of the winter energy package.
We are getting ready for this in our company, while the fulfillment of our strategic goals such as growth, digitization, and sustainability, also leads us to this.
Sustainability, renewables… are customers showing interest in these?
Surely. We had said before that the number of customers would grow that consider sustainability when making purchasing decisions – including when choosing an electricity or gas supplier. Communication on climate change is global and massive.
In the context of current energy prices or their volumes on the market, customers are even more interested in renewable sources. We are observing an increased interest in electricity self-production. That is why our customers are being offered complex photovoltaics solutions, and we also offer electricity from renewable sources and other products and services helping them do business more sustainably or lead a more sustainable household life.
I am glad that we can bring such customer positive solutions in which they themselves are showing interest. We all need new ideas these days, thus sustainable development is not only a good start, but also a necessary commitment for the coming years.
Published: 25. 11. 2022
Wind of change in energy business. innogy is there.
RWE decided to comprehensively restructure the Group. We have bundled the business segments of Renewables, Grid & Infrastructure, and Retail in a new subsidiary called innogy. RWE AG will continue to focus on conventional electricity generation and energy trading; it will also remain the majority shareholder in the new subsidiary in the long term. And in autumn 2016 we are focusing on those changes and are bringing the new innogy brand to the Slovak market.
The name innogy is made up of the terms innovation, energy and technology. It reflects what our new subsidiary will stand for: innovation and technology in the energy sector. We concluded that innogy is also the ideal name for the modern energy company of the future. And this is reflected in the visual language of our new brand: it is colourful, flexible, and full of energy and creative ideas – ideally suited to the green, decentralised and digital energy market of the future
However, the lightness and dynamism that the new brand conveys should not be seen as a signal that we are sending a commercial lightweight into the ring. We are starting as a heavyweight – but we also want to get across that we possess the agility and dynamism that will be a key success factor in the energy market of the future. New players will enter this market. Names such as Tesla, Google or Apple – or maybe they are just being founded at the very moment you are reading these lines. Whoever the competition may be: as innogy we do not merely want to participate, we want to compete at the very top.
RWE is bringing you innogy
Our new subsidiary started operations on 1 April 2016. And it has presented itself under the new innogy brand since autumn 2016. The change of name represents a shift from conventional to innovative, flexible and creative.
Regarding the strong RWE brand that reflects a long and proud tradition of the energy industry, this will remain to be used by the mother company RWE AG in Germany. From now on, innogy will be the answer to the new energy solutions with a clear focus on customer centricity. We can confirm that innogy will work on new business models and innovations, and wants to be even closer to its customers across Europe. It has an ambition to become a symbol of an innovative offer and to shape trends in the energy market.
Innovations and technologies The innogy brand will simultaneously strive for decentralization and customer empowerment in the individual countries. We are talking mainly about those customers who are planning to produce electricity at home on their own, and to manage everything by smart devices and mobile phone applications.
We expect that digitalization will be represented not only by SMART solutions, but will be driven by STARTUP projects as well. The innogy brand is well placed to act as a leader in driving forward these developments.
Current customer
We have been monitoring consumer behaviour, we have been collecting and evaluating data. We know that a simple energy supply in not enough for the customer of today, they are interested in efficient, modern and mainly comprehensive energy packages.
With the support of innogy, we are ready to respond to the changing needs of our customers in an even better and faster way. We want to bring unique and competitive solutions.
innogy in Slovakia
The customers in Slovakia will also enjoy the benefits of innogy. Right from autumn, the VSE Holding Group will start to support ambitious targets of the new brand. The mother company VSE Holding and its subsidiaries Východoslovenská energetika and Východoslovenská distribučná will present themselves as part of innogy. Moreover, the subsidiary RWE Gas Slovensko will change its business name to innogy Slovensko.
innogy Slovensko will continue to bring innovative products and modern customer solutions to its customers. It will continue in the already started trend of its offer thanks to which Slovak households can save more, become safer and more comfortable.
As you can see: a lot of things are changing within RWE. However, one thing certainly will not change: our strong and reliable partnerships in one of our business’ core regions.
Karl Kraus
He became a Board member of RWE East in 2011. Since 2013, he has simultaneously held the position of the CEO of RWE Hrvatska. From 2013 he also held the position of the Chairman of the Board of Directors of RWE Slovensko until September 2016, when the business model was changed, and he became the CEO of innogy South East Europe. With effect from 1 April 2014, he has acted as the Chairman of the Board of Directors of VSE Holding.
Published: 23. 9. 2016
