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Hungarian PannErgy significantly increases geothermal heat sales in 1H of 2019

Miskolc geothermal heat plant, Hungary (source: MIskolci Geotermia)
Alexander Richter 5 Sep 2019

Hungarian PannErgy Group announces significant increase in heat sales from its geothermal plants at Miskolc, Györ and the smaller projects at Szentlörinc and Berekfurdö in the first 6 months of 2019.

In the first half of 2019, Hungarian PannErgy Group successfully achieved the objectives set out in its strategy on geothermal energy production and utilisation, as the company shared in its 2019 Half-Year Financial Report.

The company’s objectives were aimed at maximising the utilisation of the capacities at the Group’s project locations as afforded by weather conditions, and putting in place and continuously maintaining the operational conditions facilitating this goal.

Thanks to optimal operation and favourable weather conditions in the period, the volume of consolidated heat sales achieved in the operation of PannErgy Group in 2019 H1 – 969,804 GJ – was up 24%, surpassing the volume of 781,021 GJ recorded in the same half-year period of the previous year significantly.

The consistently high quality of operation enabled the Company to take advantage of the operating condition potentials afforded by this year’s more favourable weather conditions. After the 9% year-on-year increase in heat sales volume in the first quarter of the period under review, the volume of heat sold in the second quarter rose by 68% compared to the base period, thanks to the lower daily average temperatures recorded in 2019 Q2 than those observed in the same period of 2018, which had an especially favourable effect on the heat market in May. In both quarters of the first half of 2019, the Company achieved its targeted heat sale figures successfully, the heat sales realised overall exceeded the figures planned for 2019 H1 by 8%.

Examining the contribution of projects to the revenues from sales we found that the Geothermal Project of Györ contributed to PannErgy Group’s business performance by HUF 1,624 million (around EUR 4.9 million) in sales revenues in the first half of 2019 compared to the HUF 1,162 million in the first half of 2018, which represents a 40% increase in sales revenues.

Analysing the details, the sales by Arrabona Geothermal Ltd towards Györ-Szol Ltd. brought about HUF 996 million compared with HUF 557 million in base period, whereas sales to DD Energy Ltd.’s automotive customer amounted to HUF 628 million, compared with HUF 605 million in the base period.

Sales realised in the framework of the Geothermal Project of Miskolc towards heat-receiving partners added up to HUF 1,100 million in the review period, of which HUF 1,068 million was sold to MIHÖ Heat Distribution Ltd. of Miskolc. Owing to the above mentioned weather conditions, these sales figures significantly exceed the 2018 H1 revenue of HUF 902 million from the Miskolc project, and the HUF 872 million revenue from MIHÖ Heat Distribution Ltd. At the level of the Miskolc project, this represents a 22% year-on-year sales revenue increase.

The Company’s two smaller projects in Szentlörinc and Berekfürdö showed nearly the same performance in terms of sales revenues as in the previous period: Szentlörinc realised HUF 40 million sales revenues in the first half of 2019 compared to HUF 41 million in the first half of 2018, whereas in Berekfürdö HUF 17 million turnover came from heat- and electric power sales, slightly exceeding the HUF 16 million base revenue from sales.

Outlook

At the core of PannErgy Group’s strategy is its aspiration to become the dominant business operator for geothermal heat utilization in the region, maintain this position, and at the same deliver environmentally friendly supplies at high operating safety, without geopolitical risks. PannErgy Group is committed to the energy-related exploitation of one of Europe’s largest active geothermal water resource. Geothermal heat can serve households and industrial users in the long run, and with PannErgy’s environmentally sparing investments considerable reduction in energy expenses can be achieved. PannErgy has not just become a company showing the broadest competence and experience in implementing geothermal investments, but at the same time has emerged as one of the largest groups involved in the generation and utilization of geothermal energy in recent times.

Among short-term future goals, the expansion of production capacities in both the Geothermal System of Gy?ör and Geothermal System of Miskolc is handled as a priority alongside the further optimization of the system and the resulting maximization of the volume of sold heat. The Company also wishes to make its still unutilized capacities and the associated saving benefits available to new partners. Industrial utilization calls for such particular expertise and experience in project management that – in the Company’s opinion – in the field of the use of geothermal energy is accessible only to PannErgy Group in Hungary at the highest level.

Source: Company release