Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the VERBUND AG Half Year 2023 Results Conference Call. Throughout today's recorded call, all participants will be in listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star one on your touchtone telephone. Please press star zero for operator assistance. I would now like to turn the conference over to Peter Kollmann, CFO of VERBUND. Please go ahead, sir.
Thank you. I'm here with Andreas Wollein. Ladies and gentlemen, let me welcome you to the presentation of our first half year 2023 results. Let me thank you for joining today's conference call. Before we move into the analysis of our business development, let me make a few general comments. The slight easing on the energy markets already began at the end of 2022, which continued in the first half of 2023. Wholesale prices for gas fell significantly in the first half year compared to the previous year. In addition to the high filling levels of the gas storage facilities, which was due to the weaker demand for gas. This was accompanied by a drop in wholesale prices for electricity. The market environment is still very volatile. Let me highlight one regulatory issue at the beginning.
In Austria, the cap for market revenues of international generators was reduced in the second . The reduction to revenue cap was from EUR 140 to EUR 120 per MWh, and that applies as of the 1st of June. Our crediting of investments in renewable generation technologies in Austria is still permitted. Let's move on to our financial details. At the beginning, I would like to highlight the most important influencing factors for the results development at VERBUND. Following the development of prices at the electricity exchanges and based on our hedging strategy for our own electricity generation from hydropower, the average achieved contract price increased by EUR 69.6 to EUR 182.1.
The hydro coefficient, determining the generation from our run-of-river hydropower plants, was better than last year, but below the long-term average. However, production from our hydro reservoirs was higher by 6.2% compared to last year. Generation from wind and PV was up compared to last year, mainly driven by the new renewable assets in Spain. Other generation contracts strongly decreased due to lower use of our CCGT in Mellach. The contributions from flexibility products slightly decreased, mainly due to a decrease in pumping and intraday trading. Gas Connect Austria stayed positive for the group segment results. The sales segment contributed negatively, among others, due to higher procurement costs for energy. Finally, a negative impact on our results is coming from the levy on excess profits in Austria, Germany, and Romania, totaling EUR 172 million in the first half year.
The impact of these influencing factors on the key figures of VERBUND in the first half year of 2023 is as follows: EBITDA increased by 63.6% to EUR 2.25 billion, and the reported group results increased by 57.5% to EUR 1.287 billion. The adjusted group results increased by 38% to EUR 1.3 billion, and the operating cash flow strongly increased to a level of almost EUR 2.9 billion. The free cash flow after dividends was strongly positive at a level of EUR 927 million, and net debt decreased by 24.5% to a level of slightly above EUR 2.9 billion.
Let me give you our updated guidance for an average hydro, wind and PV generation in the last two quarters of 2023, as well as considering the opportunities and the risk situation of the group. We expect the reported and adjusted EBITDA between approximately EUR 3.8 billion-EUR 4.2 billion, and the reported group results between approximately EUR 2.05 billion and EUR 2.3 billion. The payout ratio will be between 45% and 55% of the adjusted group results, between EUR 2.07 billion and EUR 2.32 billion. The earnings forecast and the information on the expected payout ratio are, as you know, contingent on VERBUND not being impacted further by possible energy policy measures to skim off some of the profits at energy companies in Austria.
On the next page, let me go into more details on the hedging volumes and the hedging prices, which are, of course, highly relevant for our results. I think you all know a 1 EUR megawatt hour plus or minus, higher or lower average achieved price, has a sensitivity of approximately EUR 25 million in our EBITDA line. As of the 13th of June, we reached an average achieved contract price for our hydro generation of EUR 176.8, and we have sold approximately 88%. For 2024, we have sold 34% of our generation volumes at a price of EUR 155.6, and for 2025, we have sold 37% of our generation volume at EUR 140.7.
On a mark-to-market basis, with prices as of the 14th of July, the average achieved contract price for 2023 are at EUR 168.8, for 2024, at EUR 148.8, and for 2025, at EUR 135. Let me comment on some developments in the various business segments, and let me start with the hydro segment. At 0.95, the hydro coefficient, which, as you know, is an index quantifying the hydropower generation of the run-of-river power plant, was 5 percentage points below the long-term average and five points above the level of the first half 2022. Production from annual storage power plants increased by 6.2%.
All production from hydropower, therefore, overall increased by 947 GW hours, or 6.7%, to slightly above 15 TW hours, compared to the first half 2022. Higher average achieved prices are the main reason for our increased EBITDA. Slightly lower contributions from flexibility products and the levies on excess profits had a negative effect on EBITDA. In total, EBITDA in the hydro segment increased by 62.1% to EUR 1.984 billion. Regarding CapEx, our main hydro project, the 480 MW Limberg III pumped storage power plant and the 45 MW Reisseck II pumped storage power plant, both projects are on time. The 11 MW run-of-river project, Graz, is also on time, and our completion is expected in 2024.
In addition to the above, we started the 14.3 MW Stegenwald run-of-river power plant project, where we have an expected completion in 2025. Let me continue with the analysis of our own generation from new renewables. The new renewables coefficient, an index quantifying the generation from wind power and PV, amounted to 1.01 in the first half of 2023, compared to 1.04 in 2022. Generation from wind power increased by 6.3%, plus 33 GW hours, and amounted to 536 GW hours in the first six months of 2023. More favorable wind conditions in Germany and especially new installations in Spain, more than offset less favorable wind conditions in Austria and Romania.
Generation from PV amounted to 161 GW hours in the reporting period, stemming from PV installations in Austria, 2 GW hours, and Spain, 159 GW hours. Now, taking a look at EBITDA development in the new renewables segment, we see that the EBITDA increased to EUR 109.2 million. In addition to the increase in volumes, mainly from our projects in Spain, higher average achieved prices contributed positively to this development. The chart also provides an overview on current developments in the renewables sector. Now, on the next page, you see our sales segment. Taking a look at the EBITDA development here, we see that EBITDA increased to a negative value of minus EUR 143.2.
The change in EBITDA is due, among other things, to a much better result from the valuation of energy derivatives in connection with future energy deliveries, while the sharp increase in electricity and gas procurement prices had a counteracting effect. For them, delivered electricity and gas to approximately 510,000 end customers, that would represent a decrease of approximately 18,000 customers year-on-year. Now, on the all other segments, the generation from thermal power plants was down by 462 GW hours to 332, due to the decreased use of our Mellach CCGT for both electricity and district heating production. This led to a declining electricity and district heating revenue.
Positive effects from the valuation of energy derivatives in connection with future energy deliveries could not compensate for this and led to a drop in EBITDA, despite lower fuel consumption as a result of the reduced generation. The contribution from flexibility products decreased by EUR 5.9 million. The contribution from Kelag, the provincial utility of Carinthia, increased from EUR 5.7 million to EUR 38.3 million as a result of better realized sales prices for their own generation. The heating and trading businesses also contributed positively. Finally, let me remind you that our CCGT Mellach was contracted from Austrian Power Grid for future congestion management. Line 10 is contracted from the 1st of October 2021 to the 30th of September 2023, and line 20 from the 1st of April 2023 to the 30th September 2023.
In Q1 and Q4, we used line 20 on a market-driven basis. The district heating power plant in Mellach is contracted by APG for the period from the 1st of April 2023, again, to the 30th September 2023. On the next page, on our grid segment. As you know, the grid segment consists of our regulated business, Austrian Power Grid, as well as Gas Connect Austria. EBITDA for the first half from the electricity grid business, according to IFRS, was approximately EUR 184 million, roughly the same as last year. As a reminder, let me also highlight that as of January 1st, 2023, a new regulatory period started. The regulatory system has been changed. E-Control, the Austrian regulator, has set a new WACC for 2023, has split the WACC into a WACC for existing assets and a WACC for new assets.
The WACC for in 2023, for existing assets, has been set at 3.72%. The WACC for new assets has been set at 4.88%. Therefore, the overall WACC for 2023 will be 3.9%. On top of the WACC, APG can receive an incentive-based bonus of maximum EUR 12 million a year. The WACC for existing and for new assets for 2024 will be set again at the end of 2023 and will definitely reflect the higher interest rate environment, which we're currently in. APG has appealed against the level of the WACC, mainly because it reflects the historic development of interest rates and does not reflect the strong increase in rates since last year.
The new EBITDA guidance for the electricity grid for 2023, based on the new regulatory parameters and the increase in regulatory asset base, is approximately EUR 360 million. The main reason for the increased guidance are higher revenues from options. The planned amount of the regulatory income at the end of 2023 will be approximately EUR 490 million. With regard to the results contribution of Gas Connect Austria, we report an EBITDA of approximately EUR 112 million for the half year. The main reason for the strong increase were higher revenues from the quantitative tariffs and lower energy costs. The guidance for 2023, with regard to Gas Connect Austria, is approximately EUR 114 million. On the next page, I will give you the non-recurring effects.
We encountered impairments amounting to EUR 15.4 million, stemming from an impairment of the CCGT Mellach. The valuation of the Trans Austria Gas Pipeline, TAG, profit participation-wide, amounted to -EUR 0.8 million and had a negative effect on the other financial results. We also had impairments related to the Hales-Bursa participation of -EUR 16.8 million and TAG with -EUR 2.8 million. In total amounting to -EUR 18.7 million. There was a reversal of impairment related to our hydropower plant, Ashta in Albania, amounting to EUR 6.3 million. In total, the effects on the financial results were EUR 13.2 million, -EUR 13.2 million. After considering the effects on taxes and minorities, the non-recurring effects on the group results level amounted to -EUR 20 million.
We also show the non-recurring effects in the first half year of 2022 in comparison. Now, going through the key financial figures. First of all, the aforementioned developments on the EBITDA, where we had an increase by 63.6%, to EUR 2.25 billion. Depreciation increased by 15% to EUR 250 billion, mainly due to the acquisition of Spanish assets and increased investments into the High Voltage Group. The financial result increased from EUR -15.7 million to EUR -7.1 million.
This was attributable to the higher earnings contributions from interest accounted for using the equity method, mainly Teldoc and higher interest income, while higher interest expenses, mainly caused by the issuance of the ESG-linked Schuldschein and EUR 500 million in November, and the interest expense from the loans taken over from the Spanish companies acquired in the previous year, had a counterbalancing effect. The group results increased by 57.5% to EUR 1.287 billion. The group results, after adjustment for non-recurring effects, was up 78%. Finally, I would like to mention the decrease in addition to tangible assets, in total from EUR 588.1 million in the first half 2022, to EUR 311 million in the first half 2023.
The decrease is a result of the fact that in 2022, VERBUND did an acquisition of a 70% share in one PV, and for wind power projects, companies in Spain, with a total capacity of 171 MW. On the bottom left, you will find the additions into tangible assets of Gas Connect Austria and Austrian Power Grid. On the next page, we're looking at cash flows and net debt. For VERBUND, operating cash flow strongly increased to EUR 2.89 billion, mainly due to a significantly higher average price achieved for electricity, as well as inflows from margining payments for hedging transactions in our electricity business. Those were deposited with the clearing house as the exchange as a collateral for open positions, they basically come back with the prices coming down.
These positive effects were partly offset by higher income tax and higher interest payments. The free cash flow after dividends showed a positive development from -EUR 111 million to a level of +EUR 927 million. The significantly higher operating cash flow and low investments in property, plant, and equipment were the reasons for this positive development. Dividend payments, on the other hand, increased significantly compared to the previous year. Our decrease in net debt is due to lower financial liabilities because of the repayment of short-term money market liabilities, the gearing correspondingly decreased to a level of 31.3, compared with 46.8 at year-end 2022. Now, I'm coming to the end of our results presentation, and we'd like to give you our earnings outlook.
As always, at this point, I would like to highlight the sensitivities, as of the 30th of June. A deviation of ±1% in the generation from hydropower has an impact of ±EUR 10 million in the group results. A deviation of ±1% in the generation for wind power and PV has an impact of ±EUR 0.8 million. A deviation of ±EUR 1 on the wholesale price has an impact of ±EUR 2 million in our group results for 2023.
Now, our updated guidance for 2023 is as follows: VERBUND expects to report an adjusted EBITDA of approximately between EUR 3.8 billion-EUR 4.2 billion, and a group result of approximately between EUR 2.05 billion-EUR 2.3 billion, under the assumption of average hydro, average wind and PV generation in the third and fourth quarter. For the financial year 2023, for those banks to pay out between 45%-55% of our good results after the adjustments for non-recurring effects, that would be approximately between EUR 2.07 billion-EUR 2.32 billion. The earnings forecast and the information on the expected payout ratio, as I mentioned before, are contingent on us not being impacted further by possible energy policy measures to skim off some of the profits of energy companies.
With that, I would like to move on to our Q&A.
Ladies and gentlemen, at this time, we'll begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on the touchtone telephone. If you wish to remove yourself from the questioning queue, either press star followed by two. In the interest of time, please limit yourself to two questions only. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question, may press star followed by 1 at this time. Please 1 moment for the first question, please. Our first question comes from the line of Wanda Serwinowska with Credit Suisse. Please go ahead.
Hi, good morning. Wanda Serwinowska, Credit Suisse. Two questions from me, plus one request. The first question is on the 2023 guidance. I mean, the midpoint unit and change, despite a lower revenue coverage, we would expect would have a negative impact. I know there will be upgrades to your green EBITDA. Activity is clearly stronger than we expected, but was there anything else that basically surprised you on the positive on the 2023 numbers? Second question is on the recent acquisition in Spain. I remember back in March, I mean, you guys, you incurred some assets in saying that the acquisition. I mean, can you give us some financial or operational data which basically help us to believe that this time it will be a different story, if you can basically put some value creation there.
A little request, as always, Peter, if you could share the latest heading in the hydro, that would be really appreciated. If you could repeat the H1 achieve power price, I didn't catch that. Thanks a lot.
Yeah, sure, Wanda. I will start with the hydro. Our current Hydro Coefficient is 0.93. When we basically take the Hydro Coefficient, we assume one for the rest of the year, it would be 0.98. On the power prices, I can give you sort of like the latest hedging levels. As of the 21st of July, there we are hedged for 23, 88% at a level of EUR 176. When we basically assume the Mark-to-Market for the open position, we end up with EUR 169.
When we look into 2024, we are hedged approximately 53%, and there we are hedged at 154. The open position currently is 154 as well, for 2024, the forward. The mark-to-market would be, and for 2037, 37%, and there again, we are hedged at 141, and the open positions are approximately at the same level. We see a mark-to-market level there of around 140. We see a lowering of the power curve, and that is a result of the lower gas prices.
That is certain, a certainty that the gas prices need to be carefully watched over the next few months, particularly in the wintertime, to see what impact the gas prices are going to have on the power prices. On our recent Spanish acquisition, in terms of the value creation, there were a number of comments on the price per megawatt hours which we paid. The value creation for that asset, for this wind asset in Spain, needs to be seen particularly in the form of hybridization and in the form of repowering. We have, in our due diligence, we have looked at the assets very carefully, and we have come to the conclusion that we have a significant potential for a repowering and also for hybridization.
The repowering has more value effect, more value creation potential than the hybridization. At this point, we're not going to give more details than what I've just mentioned. On the 23 guidance? The reason for the guidance has been mainly the power prices. As you know, the power prices always have the biggest impact on our results and our EBITDA. With power prices coming down, with 12% still unhedged and with volatility, which we expect for the remainder of the year, that has flown into our discussions when we determine the guidance.
Obviously, we took into consideration the fact that we have, as you have mentioned, Wanda, a new level of EUR 120 for the second half of the year, which has come down from the EUR 140 in terms of profit skimming. We are also taking into consideration the slightly better results from our grid.
Just a quick follow-up on the H1 achieved power price. If you could just repeat it, I didn't catch it. On the Spanish M&A, can you give us some financials of the existing assets? I mean, EBITDA, D&A, generation, something that we can basically work with. On the 2023 guidance, is there anything which is hard to see from the outside, like a revaluation of hedges, something that we cannot really see from the outside that also impacted your guidance?
No. On the 2023 guidance, it's, you know, it's very transparent what we have said. There is nothing hidden. There are no surprises which we, at this point, expect. Wanda, you asked me about which power price, the 2024?
H1 2023, actually, I think it was 180 something. The power price that you guys captured in H1 this year. I think you mentioned it at the very beginning of your speech.
Okay. Let me just go back to the slide.
I can follow up with the IR team later. That's fine.
I can even go back to the slide and give it to you right now. 176.
Okay, brilliant.
Yeah. You're welcome. good. Thank you, Vanda.
Thank you very much.
The next question comes from line of Louis Boujard with Oddo. Please go ahead.
Yes, good morning. Thank you for taking my question. I will limit it to two. Maybe the first one to come back on the sales segment, which is still significantly negative. You have only 510,000 end customers and -EUR 140 million here in terms of performance. My question would be, if you suppose you get rid of your final customers, would it have any impact into your sales segment performance, or do you have other commitments with external suppliers that would make it being non-min impacted to the number of customers that you have to serve in the end? More precisely, if you have any commitment, what shall we expect for 2024 in terms of performance for this sales division?
Do you have room to go back to more normal level by 2024 with the current contractual situation that you can have in this division? The second question was with regards to Gas Connect Austria. I think that you touched it in the presentation, but I'm not sure that I got everything. In particular, it seems that it's clearly front-end loaded in terms of performance for the year 2023, compared to your updated guidance. Can you elaborate a little bit more on the reason why is it that much front-end loaded and why are you that much cautious for the remaining of the year on this division in terms of contract performance?
Okay. Now, let me start with the with our sales segment. We have no linkage to external suppliers, so it's basically our own generation. The procurement is in a basis that similar to our hedging, the procurement of the sales side is done through our generation. Therefore, if we decided to have more customers, because customers at the moment reduce losses, then that would not have an impact vis-a-vis any external supply relationships, if I understood your question correctly. On Gas Connect Austria, the key influencing factor on the results there were the high energy costs for our for our stations, which compress the gas.
Those compressive stations require a lot of energy. With the energy prices coming down, the cost for the compression obviously comes down as well, and that has given a boost to our results, and that is the reason why the results in Gas Connect Austria have come up. Your third question was, what was it again? Sorry.
I actually did not have a third question.
Okay.
Well, that maybe you didn't remember.
Okay. Okay. Thank you.
Thank you for your answer.
The next question comes from the line of Gabriel Gifoli with Citi. Please go ahead. Go ahead.
Hi. It's good morning to you everybody, thanks for taking the question today. I just wanted to check on Spain. Can you tell us how much money you spent on all of these acquisitions and from then cut so far? What is the contribution we could expect from the Spanish renewable assets in let's say, 2024 and 2025? Just trying to put these two acquisitions together and coming up with a multiple on it. Beyond the repowering and hybridization of the team Spanish assets, are there any synergies that we could quantify between these assets and your existing operations? That's what I wanted these two questions to you.
Could you repeat the second question again?
Sure. Are there any synergies between the assets you bought, you announced yesterday, versus the assets and then the assets that you own already? Whether this is team combinations or any extra synergies on the, you know, EPA providing to external customers. Are there any other synergies we could think about how this fits into that different portfolio?
Yes. Yeah, that's an important question. We, there are two aspects which I would like to to put some light on. The first one is synergies in operations. As you've rightly said, we have accumulated assets in Spain, both on the solar side and on the wind side. We believe that the combination of the production of solar energy and the production of wind can be combined into packages for power purchase agreement. We think that is a very important feature in the future. You have seen the discussion around the duck curve. As a result of that, we also believe that a lot of the future PPAs will take that into account.
The result is that market players will be forced to combine different production technologies in order to structure those PPAs. That is the one side on the in terms of selling the generation in the most effective way. The other aspect is to try and develop operational synergies as much as possible between the various parts in terms of maintenance, et cetera, et cetera.
Okay. The third question, like, can you provide your expectations towards the top power contribution from Spain, and how much money you spent on all of this M&A, if you combine it all together?
Coming back, you were at the beginning, if I understood you correctly, you were asking about the EBITDA contribution for the assets which we just bought, which was announced yesterday, correct?
Well, for all of the Spanish assets. I just wanted to understand. You've been doing it for more than for the last two years, you've been buying a number of Spanish assets, and I just wanted to understand the end outcome of it in 2025, which is how much money you spent in total, and what is the expected contribution to your P&L?
I can give you an approximate number in terms of the EBITDA contribution in Spain, which is around EUR 130 million-EUR 140 million. What I would like to mention, which is really important, is the following. When we made our acquisitions, yes, part of it were operating assets, the focus has been on the pipelines. What we have acquired, for example, in our project Spain, was a relatively small amount of operating assets, a very large pipeline of around 2,000 MW, which have a high probability, very high probability, and around 2,400 MW of medium probability pipeline.
As a result of that, the acquisitions which we have made were focused on development and future generation and future build out of PV and wind, and less on operating assets. When you look at the volume differences. The EBITDA overall, coming from Spain, and that's, you know, that's an estimate because it depends on power prices and other factors, would be between around EUR 250 million and EUR 300 million in 2026.
Okay, how much capacity do you need to spend to achieve these numbers?
Well, the CapEx, that's why I mentioned before, the CapEx might be misleading because the CapEx is not.
I was just trying to understand, like, you're going to move your expansion EBITDA from EUR 130 million-EUR 140 million to EUR 250 million-EUR 300 million, so roughly more than doubling it. You spend the money so far on acquisitions, and in order to get to the 2026 numbers, you need to spend. What is the roughly CapEx you're going to spend in Spain, but not clear yet? I think I could also offline with that. It would be interesting.
Yeah. I think it would be better to take it offline, because obviously I could give you a number now, but that number could be confusing, because our acquisition numbers always include the obviously the operating assets, and then separate amounts for the pipelines, which we value in a different way, i.e., high probability pipelines, we obviously value higher than more probability pipelines. As a result of that, when I give you the overall amount, it might be confusing. As a result of that, we'd be more than happy outside this conference call to go with you through the numbers in more detail.
Yes. Thank you. Thanks for the answer.
The next question comes from the line of Ingo Becker with Kepler. Please go ahead.
Thank you. Good morning. Good morning, Peter. I got two questions. First, on the generation price. I think the prices that you have achieved of EUR 176, and also the EUR 168 mark-to-market, currently are above the cap. You've mentioned the cap was lowered currently from EUR 140 to EUR 120, but I understand that's only the lower end of the range, pre-applicable, or, you know, renewable investment set that can methodological. Could you just confirm what your final realizable prices are for 2023 and for 2024, the hedge price of EUR 165.6 or EUR 156? I understand that's pretty sharp, exactly the clear people cap for the VERBUND group under the new cap.
just in case the cap would get extended, and that will be my second question, or actually, the first one. Do you see a risk that the caps, which are meant to expire at the end of the year, will get extended? What is the political thinking here? The second question would be on your retail business, which has made EUR 140 million net loss in the first half. How should we think about that? I mean, first, did you expect that to be profitable again next year? Is the retail loss actually indicating that, I mean, seemingly you're not recovering the full generation cost, at least in the half year now?
Does that mean that the generation profit by that amount, that you should have actually recovered, looks too good this year in 2023, and that will go down next year?
Okay. Now, let me start with the expansion question, because that obviously is one we don't know, but at this point, I would like to give you a judgment. We don't think that the EUR 120 cap would be extended into next year. The reason for our assumption is that the rest of the European Union has already stopped the caps, you know, by the 30th of June. As a result of that, I think Austria now is the only country in Europe that has extended the cap, has lowered the cap and extended the cap. Therefore, I don't think there will be, that it will be even lower, more extended into 2024. You never know.
You know, it's a political decision, but at this point of time, we don't think so. In terms of the retail business, and we are working very hard on bringing the retail business back to zero, or even sort of like, you know, getting a positive EBITDA contribution from the retail business. The challenge is that there is a lot of political pressure on the entire utility market in Austria, so not just on VERBUND, but on all the others as well, to lower retail prices. That has something to do with the inflation discussion, with the media very much focusing on the retail prices. There has been a huge political discussion around energy prices.
As a result of that, we need to observe the lay of the land. At this point in time, we need to show, like all the others, prices that are not making for us. With the procurement costs coming down, with power prices coming down and, you know, keeping the level where we are, we should basically earn ourselves back into positive territory. Will that be in 2024? At this point in time, I don't think so. It will be better in 2024, but it will not be a plus. In 2025, I actually think that we're going to see a positive contribution again for the retail business. Ingo, did I miss anything in between?
Yes. Thanks. Just to your guidance on EUR 3.8 billion-EUR 4.2 billion, what net achievable generation price after all CapEx for the first and second half are you assuming there? For retail, just quickly, when you say maybe 2025, even here, that might be fully back in shape only in 2026. When we look at the power forward curve, would you say that the prices we are seeing for those years are deemed acceptable in the political arena? Meanwhile, what prices are higher feeding through to customer bills, I, and I'm talking about the energy component of the total tariff. You, you're accepting those losses. When you look at power forwards with 2025, 2026, they're getting, they say, about EUR 100, but getting closer to EUR 100, baseload, at least.
Would you say that is an acceptable level for the political world?
Yeah, that's a good point and an interesting discussion. There is a lot of uncertainty around that. The political discussion sometimes gets very emotional. It's very often driven by regular opposition, which has found a topic which a lot of people are interested in, which obviously concerns every single citizen. Therefore, it is a key topic. It is also highly interesting for the media. I'm not sure where the exact level is.
I mean, the only, the only points, the only data points which we have, and I'm not just talking retail now, I'm talking industry as well, is the discussion which we had in Germany, which I also mentioned in our last conference call, where the discussion was around EUR 60-70. Basically the, you know, the German industry said, in order for Germany to be competitive, power prices there need to be somewhere around EUR 60-70. Now, you know, if that is a reference point, of sort of like general acceptance, the EUR 100 would still be too high. However, people also get used to a new environment where energy prices are higher.
We are coming from a very low energy environment before the invasion. Because of the war, unbelievable numbers in terms of electricity prices, gas prices, and then, of course, also retail prices. Now it's coming down, and it will continue to come down, but will it still lead to political discussions? Because the levels are still higher than what people are used to before the war. It remains to be seen and very much depends on, in my view, on opposition, and very much depends on how much the media focus on it as well. In Austria, don't forget, we have elections in fall of 2024.
Okay, great. The net price?
The price is around EUR 164.
Thank you.
The next question comes from the line of Olly Jeffery with Deutsche Bank. Please go ahead.
Thanks very much. A few questions, please. The first one, looking at your balances, your balances are obviously very strong, and we know you're looking to deploy that opportunity in the energy space. In order to really deploy it, I presume that you're still looking for that kind of multi-billion opportunity to buy within the platform, or do you think we'll continue to see piecemeal acquisitions? If you carry on with piecemeal acquisitions, I wonder if you actually might need to consider potentially changing your dividend policy to a higher payout in order to utilize the balances more effectively. Your thoughts on that would be good. The second question is just, the initial guidance is based on the negative EUR 200 million derivative valuation effect.
My understanding is that perhaps there's like less of an impact from that in price and business to the start of the year. Can you confirm if the current balance still based in EUR 200 million for the valuation effect? Also comment that actually, if you were to recut that today, what that number would be, you know, if that closer to EUR 100 million in reality. Lastly, could you just explain a bit, you know, in the first half flexibility products are going very well, you know, and at the start of the year, at full year results, you commented that they'd be down quite material year-on-year. Why are flex products holding up much better than you envisaged in terms of those questions would be great. Thanks very much.
Yeah, sure. We're going to split your questions. I'm going to talk about sort of the the strategy in terms of our acquisitions in Spain and the flexibility products. And Andreas will give you sort of like the detail on the on the derivatives numbers which have an impact. Now, I will start with flexibility products. The flexibility products are now slightly better than we had anticipated when we had our last conference call. The reason for that is mainly the pumping and the turbining. The pumping and the turbining has been better than we had expected. We also have slightly better results on the intraday trading, given the volatility.
We have not seen any changes for the control energy and concession management. Usually, you might remember sort of like previous years where we had big swings on the concession management. Concession management has been relatively stable within the last sort of like three months, both in terms of our view of the full year. The pumping and the turbining has, as I mentioned before, slightly better. The flexibility products, we think that it is going to be obviously much lower than in 2022, where we had around EUR 480 million contribution in flexibility products. It's going to be much less. It's going to be around EUR 250 million, so much less than 2022.
That is still a very high number when we remember the normalized contribution for our flexibility products, which were anything between EUR 100 million and EUR 150 million before we had the very sharp increase in power prices. In terms of our strategy for acquisitions, it is really a combined strategy of looking at large platforms. To give you an example, we have recently looked at a very large platform, which would have covered Spain, Italy, Germany, and a few other countries, but mainly Spain, Portugal, Italy, and Germany. We have come to the conclusion that we would not buy a platform because we thought that, to put it clearly, it was too expensive.
The pipeline was viewed by the seller as too generous in terms of the probability of implementation. When we look at Spain, we look at both. We look at small bolt-on acquisitions, which we think fit into our portfolio, both on the solar side and on the wind side. Sometimes those can be relatively small acquisitions, when we feel that they fit very well. We continue to look at large platforms. There on the large platforms, we look particularly not too much on the operating assets, but there we look very much onto the pipelines and how attractive the pipeline is.
I would not exclude that, you know, within the next 24 months, if an opportunity arises. Currently, we're not working on any deals, on any large deals, but if an opportunity arises, it's certainly something we are going to look at. We feel that the diversification into wind and solar is an important one for the group. At the same time, as I mentioned before, we feel that the combination of hydro, solar, and wind in order to be able to package interesting PPAs also is very attractive to us. With that, we hand over to Andreas, who is going to give you other details on the derivatives valuations.
Yeah, I think, quick answer from my side. You know, we have the impact coming from the derivatives valuations, basically zero.
... what we have currently reflected in the guidance for the full year, based on our current, let's say, trading positions and the long short positions we have, is a minus of around EUR 85 million for the full year guidance.
I think we have adjusted that and then we try it full year.
Sorry, say again.
Just to confirm, you have adjusted therefore-
Yes.
Thank you very much for confirming that.
Yeah.
Thank you.
The next question comes from Anastasia from Commerzbank. Please go ahead.
Hello. Thank you for taking my questions. I have one more for bookkeeping and a very general question. Can you remind us also of the figure, what the tax and revenue cap impact is included in the guidance? Maybe I've missed that amount in the call. The second question is, what's your experience with many years, hydro conditions? Given that your access to long-term time lines, I'm sure you did the math already. Can you give us some insight on that?
Sure. I will start with the hydro conditions. We have over the years worked very closely with science institutes and with universities to look at the long-term hydrological conditions in Central Europe. Most studies have come to the conclusion that Central Europe is lucky in a way to have very stable hydrological conditions. However, they have come to the conclusion that there will be shifts. When there was more snowfall during the wintertime, and then snow melting, that will change to more rainfall during other periods. As a result of that, there will be almost like an equalization of water conditions in Austria throughout the year. The overall level, according to the studies, will not come down.
What we have recently seen, not through our studies, but basically by observing what's happening in the world, is that obviously we break one record after another, particularly now. What I've heard from scientists on that phenomenon is that they're still working on, is it, you know, is it part of El Niño, is it part of CO2 emissions? What is the greater influencing factor? Most have come to the conclusion that El Niño is the higher influencing factor. There again, and this is important, the Central European region, i.e., particularly the mountainous region, Austria, Switzerland, and the southern part of Bavaria, seems to be less influenced.
As a result of that, we think that over the next 50 to 100 years, hydro conditions in Austria are going to be similar to what we are currently seeing. In terms of the first question that you have had, for the full year, we have approximately EUR 410 million in Austria, as a result also of the lowering from the 140 to the 120. We have EUR zero from Germany, and we have approximately EUR 12 million from Romania. Overall, we have slightly above EUR 420 for the full year. There is one important point. There is a possibility, and this is something the government has already said.
They have not finally decided, but they have already said that future investments, i.e., investments starting 2025, 2026 in Austria, can be used to balance out that figure. If that were the case, those investments, the investments that can be used, will amount to around EUR 180 million. That would obviously reduce the amount which I have just given you. That is an opportunity. That's an upside. We think there's a good chance for this upside, but it's still being negotiated with the ministries.
Thank you very much.
Today's last question comes from the line Thibault Jeannin with Société Générale. Please go ahead.
Hello, good morning. Thank Thank you very much for taking my question. I had a question on the info tax and the offsetting amounts. Just to be sure if you could indicate the amounts consumed or remaining for our 2022, of the offsetting amount for our investment in renewables and potentially for 2023. A second point concerning the grid returns, if you could give us some insight on the calendar for the E-Control updates on the return and on the legal challenge calendars, too.
Okay, I will ask Andreas to give you the details on the questions which you have.
With regard to the CapEx, which we can also in 2023, so basically that's historic CapEx for this current for this current regulation. I think it's EUR 360 million we can deduct, yeah. So we can balance from the from the from the info tax system. So that's the number for 2023. And with regard to, I think the second question, as far as I understood it, with regard to the grid returns. So as you know, the regulator has has changed the system. So we had since the beginning of the year, we have a regulatory return in the electricity group of of about 3.72 for older assets and 4.88 for new assets.
In the mix for this year, it's close to 4%. The regulator will set up or will define the new WACC for old assets and for new assets at the end of this year. There is no update yet, if we would follow this way of calculating the weighted average cost of capital, the CapEx for new investments will be more than 6%, so around 6.3%. For the older assets, directly increased to a level around 4.2%. As I said, it's not fixed, it's likely that the regulator will set the new tariff, I think, in Q3 between Q4.
Yes, to add is there are. This goes back to some of your questions, which you have had before. There are a number of uncertainties in the political discussions. There are obviously uncertainties around the skimming of profits in some in the U.S. in terms of the extension. Of course, there is uncertainty and an open discussion in terms of how much of future investments we can use. That is something where obviously, as I mentioned before, we are negotiating, but where we don't know what the outcome is going to be. Of course, on the Austrian Power Grid, there is the open question around what the regulated return from new investments will be.
That is something where we are working extremely hard on making sure that E-Control, the regulator, takes into consideration, number one, the huge CapEx, which we have in the regulated system. Number two, the fact that interest costs have come up quite dramatically. There's a point which where we have a very clear stance, and where we have a very clear position, and we need to convince the regulator to act accordingly.
That was the last question. I'll hand back to Peter Kollmann for closing comments. Mr. Kollmann?
Yes. Thank you very much for a very interesting discussion, as always. Well, first of all, I wish you a great summer and nice holidays. I look forward to our next conference call in about three months. Thank you very much. Goodbye.
Ladies and gentlemen, the conference is now concluded. You may disconnect your telephones. Thank you for joining, and have a pleasant day. Goodbye.