15.12.2021 | Axpo Austria celebrates its 20th anniversary
In 2001, Austria was one of the first European countries to fully liberalise its power market. Since then, Axpo’s subsidiary has been present in Vienna. In this interview, Managing Director Roman Stütz tells us how his job has evolved over the last 20 years; what customers appreciate most; why his team has expanded business activities into two neighbouring countries; and what role long-term power procurement agreements (PPAs) will play in the future.
The year is 2001. Wolfgang Schüssel resides in the Vienna Ballhausplatz as Federal Chancellor. Hermann Maier speeds down the legendary ‘Streif’ in Kitzbühel to become the fastest downhill skier. FC Tirol Innsbruck defends its championship title in the Austrian Football League. International stars such as Gigi D'Agostino, No Angels and Kylie Minogue dominate the hit parade, from Vorarlberg to Burgenland – and Roman Stütz starts his job at the Axpo predecessor company EGL.
Twenty years have now passed – and Roman Stütz is still there. From the heart of Vienna, he leads Axpo Austria’s six-member team, which can also rely on the expertise of two colleagues at Axpo headquarters in Baden. In his role as Managing Director, Roman is responsible for all Axpo's trading and origination activities in Austria, the Czech Republic and Slovakia.
High time to talk to Roman about Axpo Austria’s 20th anniversary!
Roman, what was the focus of activities at Axpo Austria in the early days, and what does that look like now?
Roman Stütz: A lot has happened over that time and we continue to develop. Originally the idea was to participate on all levels after the Austrian power market was liberalised. However, it soon became apparent that it would not be attractive to enter new markets at any cost. As a result, we began to concentrate on power trading and certificates of origin. From 2006, the Axpo Group started to develop a competence centre for CO2 trading in Vienna. Seven years later, activities shifted towards the origination business and, since 2014, we have also been active in the natural gas business. This includes trading and supply to industrial customers.
Who are your customers and what sectors do they mainly represent?
Our offering includes full supply, as well as the specific procurement of power and gas for major customers, the purchase and marketing of electricity from power plants on behalf of producers, and trading CO2 emissions and proof of origin certificates. The industrial business is the smaller part of the business and amounts to about 30% of the total.
What do Axpo Austria's customers appreciate?
What presumably most differentiates us from other market players is the fact that we are flexible in product and contract design and, as a rule, can provide each customer with a tailored offering – off the shelf solutions are not what Axpo Austria stands for. Our team is also very close to the market and has extensive know-how in the Austrian and European energy markets. Many of us have been at Axpo for a long time and to our customers this represents reliability and constancy. In addition, we know most of our customers personally and can advise them individually. Our customers appreciate having a direct contact, whether negotiating individual energy contracts or discussing potential new business ideas.
Where are you particularly active in Austria?
We are not really focused on one particular region. Many of our customers are located in the west, where there is a lot of industry, but we also work in the eastern regions. The Austrian gas market has two separate markets areas – Vorarlberg and Tyrol on one side, and the rest of the states in the east on the other – and we are equally active everywhere.
How does Austria differ from other countries?
The energy market here is certainly one of the most competitive and transparent ones in Europe. It's a very conservative market shaped by strong domestic players. However, due to its moderate size, it is not very liquid in many areas. This has been exacerbated since the German-Austrian electricity price zone was split up in 2018. Customers often hedge their positions in gas as well as electricity in more liquid markets and then we handle the transport to Austria. This offers interesting business opportunities for companies like Axpo that are familiar with cross-border energy trading.
How is Axpo perceived in the market as an international company?
Since the beginning of market liberalisation in 2001, Axpo has been active in Austria as an alternative and independent provider. In the past, there were many foreign energy traders here, who later withdrew from the market or strongly limited their offering. Axpo has been an independent and constant presence for 20 years and strongly supports competition. We came to stay.
In Austria as well as in many other European markets?
Yes, absolutely. One of Axpo's greatest strengths is our local roots in individual markets and a geographically broad positioning in many European countries and beyond. We also see that in our daily work. Access to all the relevant energy markets in Europe allows us to offer our customers plenty of opportunities. As a result, satisfied customers from other countries also like to come to us. In addition, the international know-how transfer within the Axpo Group definitely gives us an advantage over our competition. We can adapt quickly to changing market conditions. And Axpo's good credit rating is a key factor for many customers and counter-parties in deciding to work with us.
In 2019, you took over the origination business in the Czech Republic and Slovakia. How important are these markets for you today and in the future?
In these two countries, we offer the same products and services as we do here in Austria. The entire range, from wholesale to full supply to industrial customers, through to the marketing of renewable energies. It is important to note that Austria has a population of about 9 million. The Czech Republic with nearly 11 million residents and Slovakia with more than 5 million allows us to serve a market nearly three times larger in comparison to before – that's enormously attractive for us. We are already feeling the economies of scale. Years of experience in the liberalised energy market in Austria is a huge benefit for us here.
How do you see current energy price development, with record highs? How strongly does that impact your customers, and how can you support them under these conditions?
The current European and global market environment is certainly challenging. For our customers and trading partners this means that close market observation and timely procurement measures to optimise energy costs and the implementation of corporate goals are very important. Axpo Austria is well positioned to support customers here and, at the moment, we can definitely not complain about not having enough work.
On a purely topographical level, Austria and Switzerland are comparable. Traditionally Austria also relies strongly on hydropower – what importance do new renewables such as sun and wind have in Austria?
Clearly, hydropower has played a key role for decades. But, similar to Switzerland, the expansion potential is limited. Hydropower will not be sufficient to achieve CO2 neutrality, and so there is a strong focus on the continued expansion of wind power and photovoltaics. The recently adopted Renewable Energy Law will also strengthen the traditionally high importance of renewables in our country.
Are long-term power procurement agreements – PPAs – also an important topic in Austria?
The situation here is comparable to Switzerland. We are ready for PPAs and in concrete negotiations with several potential customers. However, PPAs are a new product in Austria. Up to now, fixed feed-in tariffs were the norm. The market still has to develop here. Since the current high market price levels are well above the feed-in tariffs, this certainly offers new opportunities for us. With PPAs we can make a decisive contribution to the advancement of the energy transition in Austria.
We wish you great success in this undertaking!