Dear ladies and gentlemen, welcome to the conference call of VERBUND AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Peter Kollmann, who will lead you through this conference. Please go ahead, sir.
Thank you. Ladies and gentlemen, let me welcome you to our presentation for the first three quarters, and let me thank you for joining today's conference call. I hope you are all well and healthy. Before we move into the analysis of the business development, let me make a few general comments about the first three quarters 2020. Despite the challenges and consequences of the COVID-19 crisis, including the reduction in electricity demand, VERBUND is able to present a good set of results for the first three quarters, improved profitability and lower level of debt. The strong commitment of the E.U. member states towards rapid decarbonization of the energy system supports our solid business model and our focus on electricity production from renewable energy sources.
Our expansion of the high voltage grid in Austria, optimizing our downstream activities and investments into innovative new business areas related to green hydrogen and e-mobility, is an addition to our strong business model. In the third quarter, we were able to take an important step to improve our business profile when we signed a contract for the acquisition of a 51% stake in Gas Connect Austria. As owner and operator of critical infrastructure, this transaction will enlarge the share of our regulated business in our group EBITDA. It will ensure an optimum positioning with regard to sector coupling, while offering the optionality for a future hydrogen economy. We are convinced that gas will be an important bridge technology towards the transformation to a renewable energy system. Against this background, let me now present the figures for the first three quarters in detail.
At the beginning, and now on the second page, let me highlight the most important influencing factors. First and foremost, the consequences of the coronavirus crisis, mainly lower demand for electricity and as a consequence, lower spot market prices. Following the development of long-term futures prices and based on our hedging strategy, the average achieved contract price was higher compared to the first three quarters 2019, despite much lower spot market prices for electricity. The hydro coefficient determining the generation from our run-of-river hydropower plants was lower than the long-term average and also lower than in the first three quarters of 2019. Production from our storage power plants increased. Contributions from flexibility products, especially from congestion management, also decreased slightly compared to last year. The financial results contributed positively.
The impact of these influencing factors on the key figures of VERBUND in the first three quarters is as follows. EBITDA increased by 4.6% to EUR 990 million. The group result increased by 6% to EUR 478 million. The margin increased from 33.5%- 39%. The operating cash flow was lower at a level of EUR 852 million. The free cash flow after dividends was positive at a level of EUR 135.8 million and allowed us to reduce the debt level further. Net debt decreased by almost 11% to a level of slightly above EUR 2 billion.
We also improved the outlook for 2020. VERBUND now expects for 2020 an EBITDA between approximately EUR 1.24 billion and EUR 1.3 billion, and a group result between approximately EUR 570 million- EUR 610 million. The payout ratio will be between 40% and 50% of the adjusted group results between approximately EUR 560 million and EUR 600 million.
In the following charts, I will explain the influencing factors on the results in more detail. Let me start with the analysis of the generation volumes. At 0.98, the hydro coefficient was 2 percentage points below the long-term average and 4 percentage points below the level of the first three quarters 2019. We saw better levels in all three months of the third quarter compared to last year. However, the production from annual storage power plants increased by close to 17% due to increased lowering of water levels and more traveling. All production from hydropower therefore remained roughly stable at 24.3 TWh compared to the first three quarters 2019. Generation from thermal power plants was down by 24.4% or - 261 GWh , stemming mainly from the decreased use of our Mellach CCGT.
Generation from wind power increased by 2.6% or 17 GWh to 680 GWh due to better wind conditions in Germany and Romania. That counterbalanced less favorable ones in Austria. A second important influencing factor on our results, as you know, the average achieved contract prices at the end of the first three quarters 2020, again, based on our hedging strategy, we achieved an average achieved contract price for our hydro generation of EUR 44.9. For the full year 2019, we achieved EUR 39. Please note that we have already hedged approximately 96% of the volumes for 2020. On a mark-to-market basis, as of the end of October, we calculated with a price of EUR 44.7 per MWh. As you know, EUR 1 ± has a sensitivity of approximately EUR 25 million in EBITDA line for the entire year.
On the next page, we talk about the flexibility products. You know that one of the major trends in the new energy world is increasing volatility in our European grid system. That is a result of the massive development of renewables. We have very flexible assets, consisting of CO2-free, low-cost pump storage power plants and the most modern CCGT in Austria. As a result of that, we are very well positioned to benefit from this trend through the sale of our flexibility products. As a result of EUR 90 million in the first three quarters 2019 from flexibility products, we registered a slightly lower value of EUR 87 million in 2020. The decrease results mainly from lower contributions from congestion management.
Please note that since October 2018, our Mellach CCGT has been put into a strategic reserve mechanism, under which we receive a fixed capacity payment and a payment for the generation. As a consequence, we have changed what used to be an unpredictable, volatile cash flow into a secure, stable cash flow for a period of three years. Now, our guidance for the full year 2020 for our flexibility products remains at approximately EUR 110 million. On the next page, again, a short summary on our high voltage grid. As you know, we have a system length of approximately 7,000 km, interconnected capacities with seven neighboring countries. As we have discussed many times on this conference call, strategically very important to us, not just because it is a regulated business, but also because the grid within the European energy transformation plays a very important strategic role.
As we have discussed on many conference calls, there is a difference between IFRS and local GAAP. As a result of that, we have volatility in the results contribution. That is something we cannot avoid, because IFRS does not accept what we have in local GAAP, which is a regulatory account. The EBITDA from the grid business according to IFRS, was almost unchanged in the first three quarters of 2020, but we increased the guidance for the grid segment for the full year 2020 from EUR 200 million- EUR 240 million. This is a strong increase. This strong increase results from lower expenses for congestion management due to the better-than-expected weather situation during the summertime. I'm sure that this is something we will discuss in the Q&A in more detail.
Please also note that the current regulatory period started on the 1st of January 2018, with a WACC of 4.88% for existing assets and 5.2% for new assets, an average of approximately 5%. The regulatory period lasts from 2018 to 2022. The current regulatory asset base is EUR 1.7 billion and steadily increasing. On the next slide, you see the non-recurring effects are in the first three quarters. We encountered impairments amounting to EUR 14.6 million in total, stemming from an impairment in our Mellach CCGT, then our hydropower plant in Graz and our hydropower plant in Gries. The reason is higher cost of capital. There is a measurement of an obligation to returns on investment, which is our hydropower plant in Jochenstein, that amounts to EUR 26.1 million and had a positive effect on the other financial results. We had a small impairment in Ashta in Albania.
Overall, the financial results showed non-recurring effects amounting to EUR 25.3 million in total. After considering the impacts from the non-recurring effects above from taxes and minorities, the non-recurring effects on the group results level amounted to EUR 9.5 million. Also the approximately EUR 10 million difference in our guidance, which I've mentioned before. We also show the non-recurring effects in the first half year of 2019 to give you a comparison. On the next slide, we show the effects described before, what has been the influence on our key financial figures. As I mentioned, EBITDA increased by EUR 43.3 million, or 4.6% to EUR 989.5 million. This increase is a result of mainly of our Hydro segment, which was EUR 58.7 million higher than in 2019. I also mentioned higher average achieved contract prices and higher production from storage power plants, more than compensated the below-average hydro coefficients.
The sales segment also shows a positive contribution with an increase of EUR 11 million compared to last year. The increase in the sales segment is a result of higher transfer price margins, recalculation of electricity deliveries, and absence of negative valuation effects compared to last year. EBITDA contributions from the grid segment decreased by EUR 2.4 million from the new renewable segment by EUR 5.4 million and from all other segments by EUR 15 million, mainly due to lower thermal generation. The financial results strongly improved to EUR 16.8 million. This was caused by lower interest expenses because of high repayments in 2019 and 2020. That, of course, is a logical consequence of our repayment of debt. The EBITDA margin increased to a level of 39.2%. The EBIT margin also increased from a level of 23.9%- 27.5%.
Finally, I would like to mention the additions to tangible assets, which were based on our CapEx plan far above the previous year's level, now at EUR 362 million. The additions concerned mainly hydropower plant Töging in Bavaria, as well as investments into the high voltage grid. On the next page, our net debt and cash flow numbers for VERBUND's operating cash flow decreased compared to 2019. It decreased by 4.6% to EUR 852.3 million due to lower revenues from the grid usage and additional margining payments for our electricity hedging transactions. Higher revenues from hydro production had an opposite effect. The free cash flow after dividends showed a decrease to a level of EUR 135.8 million, mainly due to higher CapEx and an increase in dividends.
Net debt decreased further to around EUR 2 billion from previously EUR 2.3 billion, as a result of the positive free cash flow and the repayment of a fixed interest bond in the amount of EUR 200 million in June of this year. Our gearing decreased from 34.4% at the end of 2019 to just below 30% at the end of the first three quarters of 2020. Now, on the next page, we talk about our financial liabilities. The debt maturity profile shows a remaining repayment of only EUR 11 million in 2020. I mentioned our large repayment in June of EUR 200 million. The debt maturity profile for the following years shows another peak in 2024, where we have repayments of EUR 525 million, mainly consisting of our green bonds in the amount of EUR 500 million, which we had issued in 2014.
As a liquidity backup, we have access to EUR 500 million syndicated loan facility, which is undrawn, has no MAC clause, and is available until 2023 with two extension options. We also have access to uncommitted lines with a large number of banks up to an amount of EUR 610 million. We utilized EUR 190 million of those as of end of October 2020. The total amount of our financial liabilities is just above EUR 1 billion. The average interest rate on our debt is approximately 2.3%. 80% of our debt is subject to fixed interest. 100% of our financial liabilities are denominated in euros. Now, on our external ratings, these remain unchanged compared to the second quarter. The S&P rating is still a single A stable at S&P. The Moody's rating is still at A3 stable outlook.
The rating clearly reflects the sound financial figures and our strong liquidity situation, and obviously, a large number of measures which we have taken in the past and a very stable business model. On the next page, I would like to take you through our CapEx plan 2020 to 2022. The overall figures are unchanged. The total CapEx for the three-year period between 2020 and 2022 is still around EUR 2 billion, split into growth CapEx of EUR 1.3 billion and maintenance CapEx of approximately EUR 790 million. The main part of the growth CapEx, approximately EUR 719 million, will be invested into the regulated grid business, particularly our 380 kV Salzburg line, in order to increase the capacity to integrate new renewables and better address the volatility and the congestions in the grid system.
Our biggest project in the Hydro segment is the construction of the run-of-river power plants in Töging, a project which we acquired in 2009 when we bought the hydropower plants on the River Inn. In addition to the growth CapEx, we are planning to invest around EUR 790 million into maintenance between 2020 and 2022, approximately EUR 265 million per annum. Please note that we stick to our CapEx plan despite the fact that we saw some temporary delays caused by the COVID-19, something we discussed on our last conference call. Now, at the end of the results presentation are the outlook. As you know, the key parameters for the development of the operations business are mainly prices and hydro volumes.
At the end of the third quarter, we've hedged approximately 53% of our hydro generation at an average price of EUR 44.3 for 2021, which is slightly below the average achieved contract price for 2020, where we had a level of EUR 44.9. On a mark-to-market basis as of October 27, the average achieved price would be at a level of EUR 43 per megawatt hour. We've also hedged approximately 11% of our hydro generation for 2022. This at an average price of EUR 44.4. The mark-to-market valuation shows a level of EUR 44.1 for 2022. With regard to the year-to-date hydro situation, we have currently a hydro coefficient of 1.01. As I mentioned before, we increased our guidance for the full year 2020.
We're now guiding EBITDA between EUR 1.24 billion and EUR 1.3 billion, and the group result of approximately between EUR 570 million and EUR 610 million under the assumption of average hydro and wind generation for the last quarter 2020. For the entire financial year 2020, VERBUND plans to pay out between 40% and 50% of the group result after adjustment for non-recurring effects. That would be approximately EUR 560 million-EUR 600 million before we went through the impairments of around EUR 9.5 million. As always at this point, I would like to highlight what the sensitivities are. A deviation of ±1% in the generation from hydropower would have an impact of ±EUR 1.5 million in the group results because we have hedged already a very high percentage.
A deviation of ±1% in the generation from wind power has an impact of ±EUR 0.2 million, and a deviation of ±EUR 1 in the wholesale price has an impact of ±EUR 0.7 million in the group result. Now, with that, I would like to open our Q&A session. Please go ahead.
Ladies and gentlemen, we will now begin our question-and-answer session. if you have a question for our speaker please dial zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask your question. If you find the question wanted before your turn to speak you can dial zero two to cancel the question. If you're using speaker equipment today please lift the handset before making a selection. One moment please for the first question. The first question received is from Tanja Markloff of Commerzbank AG. Your line is now open, madam. Please go ahead.
Yeah, good morning. I would be interested whether you could give us some guidance on the impact of the Gas Connect Austria acquisition on your CapEx plan. I think so far you have not included any impact in your guidance.
Yeah, sure. Maybe a general comment on Gas Connect Austria. Gas Connect Austria, as you know, we have signed. At the moment, we are working towards the closing. We think that the closing will happen most likely towards the beginning of the second quarter 2021. As a result of that, we will show with the half year numbers 2021, the full consolidation of Gas Connect Austria. As a result of that, please note that the full consolidation will only happen for the last six months of 2021. Now, as far as CapEx is concerned, we have not given any guidance on that. Generally speaking, we have decided that we are going to give full detail on Gas Connect Austria only after the closing of the transaction. Something you will certainly understand, this year, obviously there is no impact.
Generally speaking, the CapEx numbers of Gas Connect Austria are relatively low. You probably have APG in mind, where we have increasing CapEx numbers as a result of the Salzburg line, as a result of many investments into the electricity grid. With Gas Connect Austria, it is a different situation. There we have mainly maintenance CapEx. The only big investments, large investments, will occur when we're going to invest for hydrogen. For the hydrogen economy, that is something that will obviously occur in the future.
Thank you.
The next question received is from Mikel Zabala of Bank of America. Your line is now open, sir. Please go ahead.
Hi, good morning, everyone. Two questions from me, please. The first one, I would be interested in hearing your views about the Austrian draft law on renewable support. Particularly if you see CapEx upside to your guidance to 2022. The second one is maybe a bit more thematic. Just thinking about the next decade when the share of renewables in Austria approaches 100%. Obviously you have right now a marginal pricing system, that's likely to result in lower power prices and more zero price hours from renewables. Potential areas to any merchant renewable assets. Is it the introduction of batteries, storage in the form of hydrogen? Is it maybe a reform of the power pricing system? How do you think about this issue over the next decade? Thank you.
Yeah. I will start with your second question, you know it is a very complex one. What you're basically asking is our views on the energy transformation, and that energy transformation is not only a topic in Austria, it is a European topic. In your question, you have mentioned a number of very important issues. Let me try to summarize, because that is something we could discuss for hours. The key points is, the way I see it, is the following. We have a massive build-out of renewables. The renewables, the production cost of energy are getting cheaper. Technology is increasing. As a result of that, you would assume that the power price goes down. At the same time, we have a situation that we don't have a price-effective storage system. We just don't have it.
We have a storage system, where short term, we can with lithium-ion batteries store. What we don't have is a seasonal storage system, which is exactly what you would need when PV and wind produces less at a time when the energy consumption is at the highest, which would be the entire winter period. For that entire period, what you need is a backup system. If you don't have a backup system, you have a blackout. That backup system, by definition, cannot consist of renewables only. You need base load, and the base load is coming out of the market. A lot of people basically assume, well, coal is coming out of the market, nuclear is coming out of the market, the power price needs to increase. Yes, no.
The one thing which we need to be aware of in terms of the energy transformation, this is not just over the next one, two, three years. It is something that is going to stay with us over the next 10 years. We need to understand the pricing of the backup system. Our assumption at VERBUND is that we need, as a bridge technology, gas. Why? We don't think that we are going to have cheap storage in large quantities, which we can use as seasonal storage. Hydrogen is a possibility, but it's not cheap, and it needs development. This is something where we need to look way into the future. What is going to happen in the meantime? In the meantime, we are going to have massive build of renewables.
When the wind blows and the sun shines, we're going to have very cheap power prices. At a point in time when we don't have the renewables, we need the backup system, and the backup system is going to be relatively expensive. You can basically see, and that is a theoretical assumption, which you really need to make hour by hour, where you think the power prices could be. I'm sure that you have follow-up questions, and we can certainly go into those follow-up questions, but now I would like to come back to your first question. We, like many other countries in Europe, we have a new renewable legislation. The objective of the legislation is very logical and is similar to many countries. The measures that are going to be taken, they're different from country to country. Austria's current framework is very ambitious.
Austria wants to be CO2 free in 2030. In order to achieve that, we would have to build more than 10 terawatt hours in PV, something like 10 terawatt hours in wind, and something like five terawatt hours in water. What that basically means is you need to have another VERBUND being built over the next 10 years. You all know that we have massive hydropower stations along the Danube. We have more than 130 hydropower stations. We have pump storage, et cetera. All that, what we have built over the last 50 years, we have to build over the next 10 years. That is a huge challenge. The other challenge is land. You need a lot of land to build all that. You need to take agricultural land, and you need to transfer it to land which can be used for PV. That takes time.
That is going to be a challenge. To summarize, yes, the regulatory framework, which by the way, has not been decided yet, it still has to go through parliament, and that will probably take until the beginning of next year, is a very important guideline, is a very important framework, but at the same time, it is very challenging.
Okay, thanks.
Ladies and gentlemen, before we take the next question, just a reminder, if you would like to ask a question, please press 01 on your telephone keypad. The next question received is from Wanda Serwinowska of Credit Suisse. Your line is now open, madam. Please go ahead.
Hi, good morning. Wanda Serwinowska, Credit Suisse. Two questions from me. The first one is on GCA. You disclosed revenue and EBITDA of the asset. Could you also disclose net income after minorities and free cash flow, if possible? My second question is about your view on the power price and carbon. What do you see over the next one, two years? Thanks a lot.
Yeah, I will start with the second one, power price and carbon. Wanda, you know that when you ask 10 people, you get 10 different opinions. I've never been shy to give my opinion, so I will do it again. I think that we're not going to see a dramatic movement in power prices over the next two years. I think that we're going to trade within a range, in my view, between 35 and 45. I don't see major catalysts either for the power price to go down or for the power price to go up. As far as CO2 prices are concerned, there are really two schools. The school that is basically talking about very high CO2 prices is gaining momentum, and the one that believes in low CO2 prices is getting smaller. However, the input factors into CO2 pricing are very complex. I just mention one thing.
You know that the European Commission and several national legislators would like to have CO2 being extended to various sectors, like traffic for example, and households and industries. As a result of that, you would have a major influencing factor. I don't want to go into any details, but just to give you food for thought, the German industry is going through a pretty tough time as we know, in terms of economic growth. The one thing they don't need is a very high power price. As a result of that, I am absolutely convinced that the German industry will have a very forceful discussion with the legislators in Germany in terms of power price and all the input factors into the power price.
What I'm hearing from major representatives of the industry, they're already talking about the fact that the German industry has a tough time to remain competitive in comparison to the U.S. and to Asia because of higher power prices. As a result of that, I think that key economies will try to find the balance between CO2 pricing, high power prices, and the competitiveness of their industry. On Gas Connect Austria, we don't give any details in terms of minorities and cash flow. We will in the future after the closing. At this point in time, what I can tell you is, for your model, that we will have a revenue addition of approximately EUR 200 million. The EBITDA contribution will be approximately EUR 100 million. The EBIT, around EUR 50 million-EUR 60 million. Yeah. Those are numbers I would like to share.
In terms of detailed numbers of Gas Connect Austria, I would kindly ask you to be patient and to wait until we have our closing down.
Thank you very much. Can I ask one quick follow-up?
Sure.
Have you seen any impact on the demand and power prices given the second round of lockdowns?
Yeah. No, that's a good question. We are following the supply-demand situation, not just on the VERBUND side, but also on the grid side, because it's important in terms of the congestion management and a few other aspects. Those are the latest figures which I have in Austria, 5% below last year's monthly figures. Wanda, you might remember that, when we discussed on the last conference call the impact of the last lockdown, there we have seen in Austria around - 15%. That was relatively close to what we have seen in Germany. In Spain and Italy, we have seen even higher numbers. It's going to be interesting to see if the new lockdown is going to have an impact of the 5% to maximum 10%, which we currently predict, or if it's going to be higher.
The reason why I don't think that it is going to be as high as the last lockdown is because the governments have decided that industries, like the car industry in Germany, for example, should not be impacted by the lockdown. Yeah. If, however, the COVID numbers increase dramatically and if countries came to the conclusion that there needs to be a wider lockdown, i.e., the similar lockdown which we have seen in spring, then we would probably see demand decreases similar to numbers which we have seen before, like up to 15%.
Thank you very much. Super helpful.
The next question received is from Lueder Schumacher of SocGen. Your line is now open, sir. Please go ahead.
Good morning. Peter, let me just come back to the renewable expansion law. As you mentioned, it is a very ambitious law, adding 27 TW of renewable output over, well, 10 years. The load factors that are being mentioned in the law, you get to about 16 GW of new installed renewable capacity. That should be a huge growth opportunity for you, yet there is not a single slide in your presentation. You did not mention it in the main presentation. What are the details of the law? Is it just not attractive enough, the kind of incentives that are being offered there in terms of feed-in tariffs or construction cost subsidies? I am pretty sure you have gone through the law in detail, what is the reason why we are not hearing more about it?
Is it just not attractive enough, or just too early days, or you're too busy with Gas Connect Austria?
Yes, we are busy with Gas Connect Austria, but we are also busy with a lot of other things, as you can imagine. You are asking the right question, I'm more than happy to discuss it with this group. It is too early, at the same time, I think it is important for us as business people to be realistic. You have mentioned load factors. That is something I haven't even mentioned before. I was just talking about terawatt hours that need to be built. Obviously, the load factors are completely different from a hydropower station. As a result of that, indeed, you need huge numbers of installed capacity just in order to get to the required terawatt hours. We all know Austria, or at least some of you know Austria pretty well, from skiing and from summer vacation, or just from cultural events.
Austria is not a flat country like the Netherlands or Spain or other areas of Europe. It's a mountainous area. It is an area where it is simply very difficult to build huge amounts of PV. Wind has been challenging all over Europe, where like in Bavaria, for example, the wind has been very slow in terms of build-out because municipalities have decided against wind, because people don't want to have wind in their backyard. As a result of that, it's going to be, at the beginning, a relatively slow development, and we are trying to be realistic. On paper, literally, you're right, it is a huge growth opportunity on paper. In practice, we need to see the distribution of the investments.
What I mean by that is that obviously the operators which are owned by the regional governments, like EVN, for example, and others, they are going to be very much focused on the build-out of renewables as well. We are going to be very focused, as always, on the build-out of hydro, hydropower capacity. That is not changing with the renewable law, and we need to observe the space very carefully. To sum up, early days, we're totally focused on it. We have a large team working on it. We're looking at opportunities every day. At the same time, we want to keep the balance, which you know as well, we want to keep the balance between growth opportunity and creating value, i.e., making an investment that makes us money.
Can I just follow up on this?
Sure.
Even if you say, PV and wind, leave it to others, just focus on hydro. Under the law, the 5 terawatt-hours was the load factor from the law. You're talking about 1,100 MW to be built.
Yeah.
The point is, if it would be economically feasible to build new hydro in Austria, I'm pretty sure you would have done this a long time ago, hence all the investments in grids and elsewhere, because everywhere where it's sensible to build new hydro, it has been done. Are the incentives in the law big enough for you to consider new hydro?
Yeah. The incentives for large hydro are not huge. The incentives for small hydro are very interesting. The key parameter to build large hydro, it cannot solely be the investment subsidies which you get. Some of the investment subsidies are very interesting, like we have faster depreciation. There's investment subsidies as a result of COVID-19, of significant numbers. All that we are going to use, and as a result of that, yes, we have some projects which are now more interesting than they were before, and those projects we will build. At the same time, we have also seen an increase in the power price. Obviously, in a recalculation of a power project, which we're doing today, in comparison to a power project which we calculated in 2016 or 2017, it is more interesting today.
We have also seen a decrease in our weighted cost of capital. We have seen a decrease in our funding. As a result of that, some of the larger hydro projects are simply more interesting than they were two, three years ago. As a result of that is something we are going to consider. What you should expect, and I don't want to go into details, because it is something which we always tell you when we do our full year results presentation in spring of next year. You can expect an increase in our CapEx. We have currently EUR 2 billion, which there was a three-year CapEx plan, 2020 to 2022. You can expect that we are going to increase our CapEx plan.
That increase, and I'm not going to go into details, but this increase will be shared between the grid, hydro, and new renewables. That CapEx plan does obviously not include potential anorganic situations, M&A situations, which is something we're always looking at.
Very interesting. Just the last one. When do you think you'd be in a position to give specific numbers on interesting and very interesting in terms of feed-in tariffs and construction cost subsidies? Is that something that we can expect also with full year results?
Actually, that is something where we have only just seen the end of the observation period, where all the stakeholders can familiarize themselves with the new draft legislation. They have been able to comment until a week ago. Those comments are going to be discussed and analyzed with the ministry. The ministry will come up, either with the same draft or with a changed draft. That will go into parliament. Parliament always has the possibility to discuss. We're going to have the new law with the details by the end, well, I shouldn't say by the end of this year, but at the beginning of next year would be my estimate. Probably, my feeling is end of January. Obviously, our investor relations department will be in discussions with you. We don't have a conference call, but we'll be in discussions with you.
The details are going to be public, and you will be able then to look into the mechanism, into the methodology of the new legislation.
That's great. Thank you very much.
The next question received is from Teresa Schinwald of Raiffeisen Centrobank. Your line is now open, madam. Please go ahead.
Thank you. Good morning, late good morning, everyone. Also my question is on the new law, but on a different angle, actually. One thing that wasn't really mentioned was the grid. When can we expect a new grid development plan that's sufficient to keep all the new renewables running? That's the first part of the question. Second one is actually also the tariff system in Austria doesn't seem to be perfectly fit for the new volatile system. What's your expectations for changes? Also considering that I believe you're still in negotiations with the regulator on the regulatory account.
Thank you, Teresa. You mentioned an important point, and I'm glad you're mentioning it because the grid is indeed very important. I can give you the current grid development plan, the number for the next 10 years, which is close to EUR 3 billion. That includes a lot of projects that are actually important for the system stability, also in line with the seven neighbors. We cannot just look at our own system. The entire European grid system is an interconnected system. As a result of that, we need to be closely coordinated with all the neighbors around us. The Salzburg Line is the most immediate big investment of anything between EUR 800 million-EUR 900 million. That is a huge project. It is a very important project.
We're very happy that only a short while ago, we have received the very final confirmation from the courts that the Salzburg line can be built. We have already started, and this is something that is going to be completed within the next three years. That is only one component. There will be many other components within the Austrian grid, which are going to be built. You were insinuating that the new grid development plan could be even higher than EUR 3 billion. Yes, it is possible. It's a stakeholder process where everybody has an impact or has an input on the 10-year grid development plan. It is possible that we're going to see an increase of around 10%, but that is something that is a pure estimate, and I don't know what the new plan is going to look like, but it will probably be slightly higher.
On the tariff system, again, that is an important point. That is something that is also being discussed in Germany with a lot of intensity. When you have the demand by the system to make huge investments, as a result of that, you obviously want to have a proper return for those investments. That is something where we are very focused. We have a team that is already working on the tariff argumentation and the tariff discussions for the tariff starting in 2023. We're trying to be ahead of the curve. We're trying to anticipate what the new tariffs could be, and we're obviously trying to make the regulator be more understanding in terms of the tremendous responsibility grid operators have nowadays across Europe. They are system integrators.
They're not just, like in the old days, building a line from A to B, and making sure that we don't have a blackout. They have really turned into very important system integrators within an energy transformation. I think that should be respected in the new tariff system.
Just to get it right, it's nothing we can expect to be cleared within the next, let's say, nine months or so.
No.
Late 2021 at the earliest.
Yeah. Starting new regulatory systems starting in beginning of 2023. I would be very surprised if we had a number before 2022. The discussions take a long time. They're very complex. It involves not just the high voltage grid, but it also has an impact on the distribution. Quite frankly, all that also has an implication in terms of the regulation of our new asset, which is Gas Connect Austria. It's all interlinked. It's the same regulator.
Sure. Thank you. Thank you very much.
As there are no further questions, I hand back to Mr. Kollmann for closing remarks.
I would like to thank you for, I should always say, it was a very interesting discussion, very important questions. I would like to thank you for your interest, and I'm sure that with the lockdown, which we're currently seeing, which is also impacting all of you, it's going to be a challenging period between now and the end of the year, probably going into spring. Our team is always available in terms of video conferencing. You have seen that we have not been able to go on the regular road shows to see you personally, to have personal meetings. However, so far, and I would like to thank you for that, so far communication has worked extremely well. We have been in touch with both the research analysts, the rating agencies, and of course, our institutional investors across the world on a very regular basis.
We hope that we don't have to continue with that for too long. In the meantime, we can say that it has worked extremely well. We will continue over the next few months during lockdown to communicate with you according to the way we have done it before. I wish you all the best. Stay healthy. Thank you.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.