Committed to the future: Annual and Sustainability Report 2015

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Up to 158 animal species become extinct each day worldwide. ewz invests CHF 2 to 4 million a year in enhancing the habitats The Albigna cable of species and landscapes car route reconstructed under threat through in 2016 connects the the naturemade star fund. Zurich Public Transport bottom of Val Bregaglia (VBZ) travels 30 million with Lake Albigna. km a year using ewz’s renewable energy. That’s the equivalent of going 750 times round the world.

The rst ever woman to complete her training as a car mechanic The City of at ewz qualied Zurich has0 pledged w a 0 t in 2004. ewz Zurich homes to become0 a t A , increased the were provided 2,000-Watt-Society, power 2 female share with electric which means only blackout in of its workforce lighting for using as much Switzerland to 18 % in 2015. the rst time energy as in 1970. would cost around in 1892 from CHF 3.7 billion a day, the Letten the equivalent of the power station. annual federal ewz ensures expenditure security on agriculture of supply. and food.

15 % of ewz’s cars are electric, which means that ewz operates Europe’s biggest wind farm, the largest †eet of electric % the “London Array”, provides vehicles in1 the5 city of Zurich. 500,000 households10 with electricity. Its output is 10 times greater than ewz’s largest wind farm. ewz supported a times photovoltaic plant for the rst time in 1992 via the power conservation fund. 70,000 barrel of heating oil are saved every year through our innovative energy solutions. Committed to the future: ewz at a glance. Key figures 225,944 1,202 5,473 GWh Sites1 and grids Customers Employees Power generation

Income statement 25,009 commercial and business customers 216 women 2014 2015 Hydroelectric power: 50 % Wind power Overall performance CHF million 791.5 813.4 Nuclear power: 41% Wind/solar: 7 % 3,859 GWh Hydroelectric power Earnings before interest and taxes (EBIT) CHF million 347.2 67.8 Other: 2 % Net result CHF million 300.5 68.3 supplied to Nuclear power Employees Number 1,188 1,202 493 GWh Supply subsidy Waste incineration systems and PPAs Switzerland Electricity 1794 GWh Biomass 2014 2015 Purchase trading Addition of new renewable energies MW 12 45 naturemade star-certi ed Photovoltaic and solar energy naturemade basic-certi ed Power production GWh 5,585 5,473 From renewable resources Heat contracting Sales of electrical energy in Switzerland GWh 3,747 3,859

Power production from renewable energies GWh 3,198 3,129 Supply Switzerland Energy contracting Sales of green electricity GWh 369 382 Other Fiber-optic telecom network Customers Number 224,545 225,944 Distribution grid Heating and cooling 2014 2015 Heating and cooling sales GWh 238 289 Earnings from energy services CHF million 47.8 49.8 171 GWh 2745 GWh Pumped storage Supply trading 200,935 residential customers 986 men Distribution grids Europe 2014 2015 Overhead lines km 414 412 Cable km 4,957 4,963 Substations Number 30 30 Transformer stations Number 859 881 47,565 176,000 289 GWh 5-year average for SAIDI ¹ of Zurich Minutes 7.7 10.1 Public lighting Broadband connections Heating and cooling sales Telecom 2014 2015 64,000 households and companies 300 Buildings with broadband connections Number 19,000 22,600 4,615 LED lights to be connected in Zurich Available broadband connections Number 145,900 176,000 275 Switzerland Development grants 250

2014 2015 225 ewz.effizienzbonus in the supply areas CHF million 14.4 15.5 Power conservation fund CHF million 7.9 6.5 200 naturemade star fund CHF million 2.0 2.8 175 ¹ SAIDI is an indicator of reliability defined in the IEEE international standard. Customers can 150 300 expect total interruptions of 10.1 minutes per year based on a five-year average.

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0 0 2011 2012 2013 2014 2015 1 Power generation2011 from the company2012 ’s own plants,2013 2014 2015 42,950 conventional and special lights 176,000 households and companies procurement rights, partner plants and third-party plants connected in Zurich 2 3 Table of Contents. Foreword by the Director.

“ewz committed to the future.” Committed to Sustainability in the future: ewz’s everyday Climate change, shrinking glaciers, the fluctuating availability of operations water, increasing CO₂ emissions and the still unresolved issue ewz at a glance 2 43 of storing radioactive waste from nuclear power stations are the Foreword by the Director 5 Environmental management 46 major, global challenges facing our generation and industry. We ewz perspectives 6 Opportunity and risk management 49 are well advised to reflect upon solutions even though we are Department statement 8 Sustainable procurement 50 hardly in a position to rid the world quickly of all the problems we Events in 2015 9 have created. The resolutions adopted at the global climate sum­- Global developments 10 mit in Paris held in December 2015 are a first significant step to- Sustainability at ewz 12 wards a sustainable future even though it remains to be seen Attractive working how rigorously the challenging targets – which mean moving away from fossil energies – will really be implemented by all countries. environment 51 Contribution to Talent search and development It is important to me that ewz assumes special responsibility and makes an active contribution to overcoming these global challen­ energy transition 13 of employees 54 ges in its capacity as a producer and supplier of energy. ewz is com- Occupational health and safety 55 mitted to a society where energy is only generated from water, Investments in renewable energies 16 Diversity 56 Environmental protection 17 wind, sun, biomass, geothermal and waste heat.

We are nevertheless faced with a situation where the energy markets are fundamentally changing, electricity market prices are Innovations Financial report sometimes falling below power generation costs and new pro­ 19 viders are entering the market. With a view to the future and the 2015 Innovation management 22 57 new technologies, innovation and the development of new busi- Modern network and ness models are therefore vital to success. We wish to become Annual and management report 60 communications infrastructure 23 the leading company in terms of pioneering energy and communi- Income statement 62 cations solutions. We will only succeed if we can produce solu­- Products and services 24 Balance sheet 63 tions in cooperation with our stakeholders and successfully Cash flow account 64 launch these on the market. Notes 65 Stakeholders and Each change is like a new door opening and therefore a new op- portunity presented to us. Let us open the doors to alternative so­ society 27 lutions and seize these opportunities. A sustainability-oriented About this report approach has to be adopted to achieve long-term success. Over ewz is more than electricity 30 67 a thousand highly motivated employees who perceive these Customers 31 GRI G4-Content-Index 68 challenges as opportunities will ensure this goal is attained. To- Stakeholder engagement 32 Publishing details 70 gether we are setting ourselves ambitious objectives to be able Social commitment 33 to make our contribution to a sustainable energy future.

A reliable partner 35 Marcel Frei, Director Security of supply 38 Electricity balance sheet 40 Organization 41

4 5 “We have written world history “Digitization opens up major ewz with our new, eco-friendly opportunities for society. We will “Falling electricity prices constitute a major challenge but switching equipment at the use this in a targeted way to also an opportunity to rethink the real value and quality Oerlikon substation.” develop our products and range of perspectives. of energy. We are creating the electricity products of the services and therefore for the Visionary benefit of our customers.” future with renewable energy.” “ewz provides its Benedikt Loepfe workers with Renewable an environment Digitization “The remodeling and modernization of our power generation represent Corinne Pellerin Cédric Aubert where they can an investment in the future with environmental value added.” “Children are our future. actively demonstrate 134 school buildings commitment to Environmental value added in Zurich were connected “The energy future offers exciting challenges. a sustainable energy Martin Roth “Open dialogue with to state-of-the-art We will seize this opportunity and demonstrate future.” our stakeholders infrastructure this year commitment in developing pioneering energy fosters innovation and thanks to ewz’s new and communications solutions.” “New innovative products are intended to deliver supports our future fiber-optic network.” Sustainable value added but must also be financially viable.” development.” Arno Stark Committed Cost-effective The future Harry Graf Stakeholders Peter Messmann Hanspeter Rahm Stéphanie Engels

“With the proposed change of legal form, ewz will remain competitive in the changing and newly Environment representative: emerging markets.” Martin Roth Occupational Safety and Health Electricity market Management representative: Marcel Frei Benedikt Loepfe Process and Quality Management representative: Arno Stark Risk Management and Internal Control System representative: Hanspeter Rahm Equal Opportunities representative: Regula Bel Kadhi Data Protection representative: Arno Stark

Department of Public Utilities and Transport of the City of Zurich

City Councillor Andres Türler Director ewz Executive Board ewz Marcel Frei

Hanspeter Rahm Martin Roth Stéphanie Engels Cédric Aubert Benedikt Loepfe Peter Messmann Arno Stark Corinne Pellerin Harry Graf

Energy Services Finance and Power Generation Corporate and Energy Economics Distribution Grids Telecom Services Market and Sales Corporate Energy contracting and Controlling Power generation Business Development Management of power Operation and Construction and Support and service Development of innova- Communications facility management. Support and service from the company’s Internal corporate production and maintenance of operation of the functions including tive energy solutions, Competence center provider for all own hydropower services relating to guarantees of origin, distribution networks urban fiber-optic procurement, property, product development for public relations, financial and business plants, wind and solar business development, electricity and in Zurich, central network and provision human resources, and management and media relations, public matters and processes power plants and innovation, strategy certificate trading, Grisons and Bregaglia of innovative legal affairs, project consulting on energy affairs, issue and also responsible investments in power and sustainability. use of power plants, as well as the pro­- communications management and IT. efficiency and management, crisis for financial and plants in Switzerland Strategic cross- balance group, vision of network solutions for environmental issues. communication management reporting. and abroad. divisional projects. re­search and risk services throughout companies and and human relations. management. Switzerland. Operation municipal and maintenance organizations. of public lighting and clocks in the city of Zurich. Sustainability Board members As at: April 2016 6 7 Department statement. Events in 2015. Global developments.

“ewz stands for sustainability – 5 January 9 June 24 August The 1970s was the last time when the world’s Transfer: New product: A world first: population used exactly the same amount of 2050 80 Gt CO thanks to its 1,200 dedicated ewz’s high-voltage plants were transferred ewz.meinsolar. ewz assumed the role of The new ewz substation in Zurich Oerlikon renewable resources as the Earth actually to Swissgrid. general contractor, installing roof-mounted was officially inaugurated. SF₆-free switching produces. According to the WWF, since then employees.” photovoltaic systems for home owners. equipment was installed for the first time. more fish have been caught, more forests 20 January felled and more drinking water consumed 268 EJ Wind energy: 20 June 8 September than grow back in the world and can be re- Acquisition of the Atlantic wind farm Renaturation: Wind energy: generated. By 2050 the world population A comparison of 62 energy providers conducted this year by portfolio containing the Alered, Mungseröd, The “Chly Rhy” meadow in Rietheim was The Butendiek wind farm was officially would require three planets Earth to meet the Swiss Federal Office of Energy indicates that ewz is one of the Ramsnäs and Skalleberg wind farms in officially inaugurated: 1.5 km of flowing opened. It is ewz’s first offshore investment current levels of consumption, provided the leading Swiss companies in terms of sustainability. This outcome southern Sweden. Total output amounts to water and 7.5 hectares of land were cleaned and has total output of 288 MW. ewz’s individual systems have not collapsed by 18 EJ cannot be taken for granted, as ewz has to hold its ground in some- 60 MW (ewz share: 51 %). up. ewz contributed CHF 1.5 million from investment is 4.9 %. then. times open markets with electricity market prices that lie below the naturemade star fund. CO₂ presents the greatest problem today. generation costs. This pleasing result is the gathering of many 6 February 5 October Far more of it is produced than can be ab- steps aimed specifically at achieving sustainability. For example, Innovation: 23 June Energy-neutral: sorbed by the eco-systems. It consequently ewz acquired a wind farm in Sweden for the first time and all Installation of Switzerland’s largest battery E-mobility: The Swiss Green Economy Symposium took collects in the atmosphere and forecasts indi- 438 EJ 80 wind turbines have been producing electricity at the German storage system. This brings the timing of The first ewz fast-charging station for place on an energy-neutral basis for the cate that CO₂ emissions will double by 2050 Butendiek wind farm in the North Sea since August. fluctuating solar power production into line electric vehicles was built in Zurich. first time. The energy used by the symposium compared to 2015. The increase in CO₂ and ewz’s Castasegna power plant received naturemade star certifi- with power requirements in the Zurich Vehicles are charged in just 30 minutes. was made up by energy savings of the other greenhouse gas concentrations in the district of Affoltern. same amount by another company. ewz atmosphere are resulting in global climate cation and 100 % of its output is now green electricity. Further 24 June acted as a mediator. change. plants have been added to the successful investment model 25 Februar Green electricity: A selection of reports from the media demon- ewz.solarzüri and home owners can now produce and obtain solar Grid network: The Castasegna hydropower plant in 20 October strates the consequences that are already 35.6 Gt CO power on their own roofs thanks to ewz.meinsolar. ewz, in co­­- The three distribution network operators Bregaglia received naturemade star Positioning: evident today. Extreme weather phenomena 2015 op­eration with ABB, has installed switching equipment at the new Axpo, ewz and Repower founded a certification. It is Switzerland’s largest ewz committed itself to sustainability. This are increasing and climatic conditions are 55 EJ Oerlikon substation where an environmentally friendly insulating network alliance and interconnected their green electricity power plant with an was also communicated externally with changing. gas has been deployed for the first time in the world. All of these high-voltage networks in northern output of 100 MW. its new brand promise “committed to the The requirements made on energy providers steps by ewz to increase sustainability are down to the efforts and central Grisons on 1 March 2015. future”. are growing at the same time. Fluctuating of around 1200 employees and support the city of Zurich’s focus on 25 June energy production, climate policy and chang- ensuring greater awareness when using resources. 25 February Partnership: 17 November es in the regulatory environment are just Wood-fired combined heat and ewz and Gas&Com started to provide Leading position: some of the issues that ewz and others are power (CHP) plant: national, fiber-optic-based services jointly. ewz was the leading energy company in ad­dressing. Solutions have to be found to Andres Türler, Commissioning of a wood-fired CHP plant German-speaking Switzerland in a return us to a situation where one planet is 28 EJ City Councilor and head of the Department of in Ilanz/Glion. It supplies a large part 27 June benchmark study of energy efficiency and enough for everyone. ewz’s contribution in- Public Utilities and Transport of the City of Zurich of the town, which has been awarded the Open day: renewable energies conducted by the cludes promoting renewable forms of energy, energy efficiency label, with heat and The doors were opened to the public at the Swiss Federal Office of Energy. increasing efficiency and driving forward in- 470 EJ also produces green electricity. Tinizong power plant to mark the completion novation. ewz outlines approaches which of renovation work. 23 December may produce answers in this annual and 9 June Hydroelectric power: sustainability report. Dialogue: 1 July The municipalities of Riom-Parsonz, Salouf ewz held its first stakeholder forum with Local power: and Cunter granted ewz a license to use 1970 14.9 Gt CO leading representatives from environmental Lettenstrom (ewz.letten), a new electricity the hydropower on the Adont. organizations, scientific institutions product, was launched that provides local Fossil heating and and companies. Exchange of views on energy from the town’s own hydropower motor fuel sustainability issues. plant. 11 EJ

Nuclear power 1 EJ

193 EJ Source: “2052: A global forecast for Renewable the next forty years”, Professor Jorgen resources Randers, University of Cambridge 8 9 The impact on the … is already evident … … and this is ewz’s energy sector … Zurich contribution. 2,000-Watt-Society in implementation Zurich is seeking to reduce energy consumption to 2,000 w att and CO₂ emissions to one tonne per person a year by 2050, to promote renew able energies Norway and energy e‰ciency and not renew Oshore wind production its investments in nuclear power stations. The European Wind Energy Geneva Association estimates that Greenland Consecutive global the o‹shore wind production The ice is melting temperature records capacity installed Europe- Global warming is taking Global average temperatures reached wide will be able to cover place in the Arctic twice record levels again in 2015 after 14 % of European electricity as fast as elsewhere in the the 2014 high, according to the World requirements by 2030. Contribution to the world. Meteorological Organization. The Fluctuating energy temperature reached one degree Celsius energy transition Page 13 production owing to above the pre-industrial situation for the ›rst time. The global community of environmental factors nations wishes to restrict global warming Germany to a maximum of +2 degrees Celsius. California Substantial additions in Lower electricity production renewable energies from hydropower 30 % of gross electricity Europe Rising temperatures led to consumption was met Attaining the 20-20-20 target the worst drought in a century by renewable energies at The European Unionʼs goal is to in California. The negative the end of 2015. reduce greenhouse gas emissions Innovations Page 19 consequences for the economy by 20 % compared to 1990, Growing demand for include not only a decline in increase the share of renewable China agricultural production, but also energies to 20 % and achieve Major expansion of holistic energy solutions a reduction in electricity pro- a 20 % rise in energy eŸciency. photovolatics production duction from hydropower. It now (PV) production accounts for 8 % of total China has devised electricity production compared Spain ambitious PV expansion to 18 % before the drought. Barcelona aims to become plans in response to the ­rst smart city growing environmental pollution and smog. It An increasing number of people will live Stakeholders and society Page in urban areas in future. Smart cities – connected solar plants 27 which are self-sustaining – provide possible with a total capacity in answers to these challenges. The global excess of 5,000 megawatt market for smart city technologies will to its grids in the rst Tighter political and Mexico climb to around USD 1,250 billion by 2019. quarter of 2015. That is Climate change poses equal to France s total regulatory frameworks threat to food security Middle East output. As the expansion Climate change is having a Rising demand for desali- of transmission networks dramatic impact on food nation facilities is unable to keep pace security in Mexico. Several Kuwait will have to devote its with the rapid development of PV production, PV severe droughts, serious total current crude oil production A reliable partner Page ­ooding, frost and an atypical for desalination plants used plants had to be repeatedly 35 lack of rain mean that, to treat drinking water by 2035. disconnected from the grid. according to experts, over 50 % of food has to be imported today. Indonesia Dry periods lead to forest ­res Increase in renewable energy Brazil Tanzania and Rwanda Unusually long dry periods are systems and decreasing Drinking water supply Alternative power supply increasingly causing extensive importance of nuclear energy jeopardized by drought People in remote parts of these forest ›res. The smoke A period of drought saw the two countries are obtaining clouds are threatening a third Sustainability in ewzʼs drinking water reservoirs of the clean and a‹ordable electricity of the 60,000 orangutans everyday operations Page 43 two cities of Sao Paolo and thanks to an innovative, o‹-grid and are making people ill as Rio de Janeiro fall to 5 % of their power supply. 1.45 kg of soot far away as the neighboring volume in 2015. Drinking and 140 kg of CO₂ per year are states of Malaysia and water was rationed by the avoided with each newly Singapore, resulting in in- authorities and was therefore connected household, improving creasing diplomatic tensions. sometimes only available South Africa health and the climate. for six hours a day. The reasons Electricity from solar power plants Impairment of the energy for the drought are regional The 75 MW Dreuenberg photovoltaic climate change because of the power plant near Lesotho covers infrastructure by continued clearance of the 225 hectares and supplies just under environmental factors Source: Selection of news reports from all over the world rain forest in the Amazon Basin. 40,000 households with electricity, Attractive working environment Page thus reducing the dependence on fossil 51 resources.

10 11 Sustainability at ewz. Contribution to the energy

A sustainable approach is part of ewz’s cor- In terms of organization, sustainability ma­ In 2015, ewz asked various stakeholder transition. porate culture and is put into practice by nagement is controlled by the Sustainability groups – including its workforce – to evaluate employees in their day-to-day work. ewz re- Board, made up of eight members of the Ex- the sustainability priorities at the ewz Stake- gards sustainability as a guiding principle ecutive Board. The Sustainability Board de- holder Forum and other round tables. The which takes account of economic, ecological, termines strategy and the substantive direc- graphic below shows that the stakeholders political and social criteria. It helps in taking tion of thrust. Specialists in strategic and approved the seven key priorities and judged In light of the energy transition and opportunities, detecting risks more quickly operational sustainability further develop the the relevance of nine other topics slightly and minimizing these risks. topics and work with all other ewz employees differently from the year before. climate change, renewable energies are on operational implementation. The compa- environmentally friendly and – with the ny’s sustainability goals are incorporated into its corporate targets and are monitored by right technology at the right place – also the Executive Board each quarter. economically viable. The use of renewable energies can impact upon fauna and flora. ewz is therefore committed to protecting and promoting biodiversity and applies the most exacting environmental standards.

ewz materiality matrix Social dimension Economic dimension Ecological dimension

1 2 Sustainability priorities: Increasing 3 1 Security of supply 4 2 Investment in renewable energies 5 3 Innovation management 4 Sustainable products and services 6 5 Energy efficiency at customers 7 6 Energy efficiency at ewz 9 7 Environmental protection/environmental management 8 Stakeholder engagement 8 9 Customers 12 10 Opportunity and risk management 13 11 Occupational health and safety 14 10 ewz is also focusing on the sustainable development of 11 the following topics within the company: 12 Sustainable procurement 15 13 Corporate governance 16 14 Talent search and development of employees 15 Diversity management 17 16 Social commitment

Relevance from the perspective of ewz stakeholders 17 Modern network and communications infrastructure G4-19 Relevance from the perspective of ewz Increasing

12 13 Recovering what has disappeared.

Rhy “I love creating and looking after landscapes and entire habitats.”

I’m proud of the “Chly Rhy” development. The story of the renatur- ated “Chly Rhy” meadowland begins with its disappearance before the Second World War. Earth deposition and the drainage of the Rhein-Alt-Arm for farming purposes changed its appearance. Hy- brid poplars were planted at the time to produce wood for matches and wooden crates. That is no longer viable, as plastic is cheaper. Renaturation nevertheless took 20 years from idea to implemen­ tation. After a year of construction work we officially opened the area in the summer of 2015 and have now handed it over to nature. I am excited to see what the landscape will look like a few years from now.

The “Chly Rhy” is part of canton Aargau’s meadowland conserva- tion park. The animals in one of the last meadowlands are con- nected via rivers. Together with ewz, we were able to support this rich fauna and conserve it for the future. Philipp Merkli, Pro Natura Aargau

14 15 Investment in Environmental protection. renewable energies.

Production from wind power wind farm portfolio in Sweden. Power produc- Residual water remediation in ewz promotes biodiversity not just in relation tion from renewable energies amounted to to water but also on the land. ewz owns just increased by 118 % Bregaglia completed 2,885 GWh in 2015, which signifies a 2 % de- ewz invested in Sweden for the first under three million m2 of land, a significant ewz is continually increasing energy In order to meet the demand for electricity in cline compared with 2014. After a very good Almost half of the species of animals, plants pro­portion of which is found within the city of time in 2015. The Atlantic wind production from environmentally future, ageing power stations will have to be year hydrologically in 2014, 2015 was an aver- and fungi living in Switzerland are in more Zurich and its urban agglomeration. Green refurbished or renewed in Europe, including age year for hydroelectric production despite farm portfolio with 29 wind turbines and or less acute danger of extinction according space management takes account of the en- sustainable plants. With naturemade in Switzerland. The choice of technology for a fairly dry second half. Power production an output of around 60 megawatt to the Swiss Federal Office for the Environ- vironmental value of the area. A set of mea- star-certification of ewz’s power new developments in European countries is therefore also met the renewable energies comprises the four wind farms of Alered, ment. The main reasons for the continual de- sures to eliminate neophytes – invasive alien plant in Castasegna, more residual also heavily influenced by climate policy, se- expansion plan in 2015 which was derived cline in biodiversity are intensive farming, plants – was drawn up in 2015 in order to en- Mungseröd, Ramsnäs and Skalleberg curity of supply and therefore also the avail- from the growth target set in 2012 and en­ water control structures and the expansion of hance biodiversity. This plan will be imple- water than stipulated by law is flowing ability of resources. Many countries have visaged an output of 2,876 GWh in 2015. in southern Sweden. The wind power is urban areas. Power generation with run-of- mented in 2016. into the river Maira. The ecology therefore decided to directly or indirectly pro- The 2020 expansion plan will be reviewed in supplied to Google’s Finnish IT center. river and reservoir power plants also have a of the river Maira is being enhanced mote renewable energies. 2016 and brought into line with the market detrimental impact on water eco-systems enormously thanks to water discharge ewz is taking the path of a renewable energy situation. The low prices on the electricity downstream of the plants, for example be- future by preserving hydropower and invest- market are restricting the funds available for cause of an insufficient residual water output, throughout the year. In terms of ing in wind and solar power plants. investment in renewable energies and are obstacles or fluctuations in the water level. output, Castasegna is the largest Swiss In 2008, ewz acquired the Crussow wind having a negative impact on the cost-effec- ewz is aware of its environmental responsibil- hydroelectric plant certified according farm in Germany, which was its first venture tiveness of the plants, reducing the opportu- ity. Projects fostering biodiversity are there- to the exacting environmental require- abroad. ewz has since invested, sometimes nity for new investment. fore supported in a targeted way in rivers together with partners, in additional wind whose water is used to produce electricity ments of naturemade star. farms in Germany, Norway, France and Swe- and in neighboring bodies of water. den as well as in a solar thermal power plant The residual water obligation in Bregaglia de- in Spain. creed by the canton of Grisons in 2014 has Production of renewable energies ewz is fully dedicated to expanding new re- in GWh been met since June 2015 following the reno- newable energies and will continue to pursue vation of the weir system in Löbbia. A canton- the objective of the sustainable use of hydro- 3,000 al decree for a residual water obligation cov- power and the development of new, highly ering the licensed stretches in the central promising technologies in future. ewz is con- 2,400 Grisons region is expected in 2016. stantly assessing opportunities on the market 1,800 with the aim of compensating for expiring procurement rights in nuclear energy. It is fo- 1,200 cusing on cost-effective investments in wind and solar plants. 600

Goal review for 2015 and 0 outlook for 2016 2011 2012 2013 2014 2015 Annual production from wind power plants in- Production from the companyʼs own and partner plants creased by 118 % compared with the previous year. This is due to the official opening of the Investment in environmental improvement measures Butendiek wind farm off the island of Sylt – Investment in the energy future by ewz’s naturemade star fund the first offshore wind farm in which ewz has in CHF million in CHF million invested – and the acquisition of the Atlantic Investment in the production of renewable energies 3.0 and in energy services 2.5 100

2.0 80

1.5 60

40 1.0

0.5 20

0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015

16 17 Innovations. ewz’s naturemade star fund

Investment in the naturemade The “Chly Rhy” meadow in Rietheim was offi- Climate change, the increasing digitalization star fund doubled. cially opened and handed over to the public in the summer of 2015. The largest meadow re- of society and growing urbanization ewz has set up a fund for environmental com- naturation initiative on the Upper Rhine be- pensation measures in the form of nature- tween Lake Constance and Basel was com- require new solutions. ewz is making a made star. ewz contributes 1 cent per kilowatt pleted after construction work lasting more hour of green electricity sold from the certified than a year. The “Chly Rhy” is part of the net- contribution towards a successful power plants to its naturemade star fund. In work of connected eco-systems. A unique the year under review around CHF 3.4 million meadowland of national importance, which is energy future with pioneering energy and was paid into the fund for environmental im- home to a number of rare animal species, was provement measures from all ewz power created here thanks to constructive coopera- communications solutions which are plants, CHF 2.8 million of which was used for tion with many different partners. innovative and sustainable. A regular ex­- renaturation and projects aimed at fostering 13 % of production from ewz’s hydropower biodiversity. plants are naturemade star-certified. Detailed change of views with ewz stakeholders All ewz hydroelectric plants are naturemade information on the naturemade star fund can basic- or naturemade star-certified by the be found in the 2015 annual report of ewz’s allows as many different perspectives as “Association for Environmentally Sound Ener- naturemade star fund. gy" (VUE). The label is the Swiss quality seal possible to be taken into account in the for environmentally friendly power produc- tion. It ensures that all plants only produce development process and customer needs limited environmental pollution and that oper- ational environmental performance is contin- to be met. ually improved. The naturemade star-certified plants met the highest environmental require- Key data of ewz’s naturemade star fund ments, such as fish passes or increased re- sidual water volumes. By buying naturemade 2015 star power pro­ducts (ewz.wassertop and Power generation from naturemade in GWh 349 star-certified hydropower plants ewz.ökopower) customers are contributing to Sales from naturemade star hydro in GWh 316 ewz’s naturemade star fund. It enables envi- products and product components ronmental improvements and the connection Cash inflows in CHF million 3.4 of rivers, streams and their eco-systems to Cash outflows in environmental in CHF million 2.8 be funded. The fund is the largest of its kind in improvement measures Switzerland. Various steering committees, on which nature conservation organizations and environmen- tal authorities collaborate, are set up regional- ly to select the renaturation projects. The steering committees choose the projects to be supported by the resources available from the naturemade star fund. They are used to support sustainable projects, such as renatur- ation.

18 19 Part of a modern society.

89 “Our family is scattered all over Europe.”

We received a letter from ewz last year. This informed us about a new opportunity to take a stake in a solar energy plant in Zurich. We decided to invest in the photovoltaic plant in Schulhaus Alt- stetten. It is an exciting idea and it feels really different to own part of the facility where our electricity is generated from solar energy, rather than just buying solar power from the grid.

The concept reflects our lifestyle. We are individualistic, are very aware and seize opportunities with both hands. We live on a co­ operative in Zurich and grow our own vegetables on an allotment in the ’Vulkanareal’. It may sound like a stereotypical eco-friendly lifestyle, but it actually isn’t. We drive our much-loved 1989 VW van and also buy non-organic products sometimes. We have con- nections worldwide, our families are scattered all over Europe and we take holidays in far-away places which involves a fair amount of flying. We just enjoy being part of a modern society. Sonja Santi and Joachim Sieber, tenants in the city of Zurich

20 21 Innovation management. Modern network and communications infrastructure.

Stepping up cooperative ven- Goal review for 2015 and Laying the foundation for intel- duction facilities, such as solar power plants outlook for 2016 which feed unused power into the public grid, tures and successfully launching ligent energy and communica- The Organization and IT department Seven internal training courses and three the requirements on flexible energy manage- the first pilot projects ewz launched a regional product in 2015: tions solutions events were carried out on the topic of in­ ment are growing. The power grid must recog- of the City of Zurich and ewz are “Lettenstrom”. Electricity is produced in ewz actively promotes a culture of innovation novation in 2015. The training courses fo- New, digital telecommunications and multi- nize who is producing electricity, where it is modernizing the city’s own telecom­ and innovativeness. The Executive Board is cused on conveying the “design thinking” an eco-friendly way at ewz’s oldest media services are vital for a modern city with being consumed or where it can be stored. munications infrastructure with responsible for the innovation portfolio and method to employees and management. The power station in the heart of Zurich. a strong economy. That’s why ewz is con- The fiber-optic network links the intelligent decides on the company’s strategic direction. events aimed to engage as many employees structing the fiber-optic network ewz.zürinet, smart meters required, electricity storage fa- the “ZüriNetz 2018” project. 100 locations The product is primarily aimed at Innovation management ensures the efficient as possible in the idea process and to pro­- covering the entire city of Zurich. 176,000 cilities and power generation plants and pro- are directly connected – redundantly customers from the city of Zurich and implementation of the best ideas. The employ- vide them with a platform for submitting and private households and companies already vides a fault-free and secure communications and without intersections – to the city’s ees put forward ideas at innovation work- developing ideas on particular topics. The those who have an association with have access to modern high-speed internet, infrastructure. two IT centers in order to guarantee shops and develop them with internal and ex- innovation culture will be further established the Letten district, its history or its digital television and digital telephone ser­ ternal support. in 2016. Internal training and events are vices. In addition to ewz.zürinet, ewz also pro- Goal review for 2015 and maximum capacity and security, river swimming facility. “Lettenstrom” Successful innovations are driven forward in planned as in 2015. On “Sustainable Innova- vides secure, high-availability and reliable outlook for 2016 for hospitals for example. A further 300 was declared the winning project at collaboration with universities or the Impact tion Day” employees have the opportunity to fiber-optic connections for companies such In 2015, the company focused on providing sites, including schools, are also directly Hub Zurich, for example. The Impact Hub work with other people from the company on the annual ewz Sustainable Innovation as banks and insurance companies as well as ewz.zürinet access to more districts on connected to the IT centers. The Zurich provides access to innovative start- a pilot project for a new product or service. Day. There was only a year between public organizations. schedule. A campaign conducted in autumn ups in the energy and communications sector Cooperation with business partners, major The fiber-optic network is ideal for innovative 2015 and increased marketing activities led “ZüriNetz 2018” project increases trans­ project submission and implementation. with whom joint approaches for new, innova- Swiss companies, start-ups as well as educa- applications. Special home applications in to pleasing customer growth. The market mission capacity, improves security tive business models can be created. tional and research institutions was further the field of security with access control or shares in the individual districts already ex- and reduces dependence upon external ewz also has partnerships with other large enhanced thanks to membership of Action- smoke alarms will be possible in future, for ceed the business plan targets. Comprehen- companies outside of the energy industry Jam and will be further extended in 2016. example. However, the fiber-optic network sive fiber-optic provision to the city of Zurich parties. The city will also save 25 % of and conducts active, Europe-wide start-up Action Jam is an association where special- also provides the basic infrastructure for de- will be completed by 2019. the current “ZüriNetz” costs of around screening. This is designed to find innovative, ists and managers from innovation manage- veloping intelligent integral solutions in the The project business was also expanded with CHF 4.5 million a year from 2019 onwards. expert and agile cooperation partners in ment network and exchange views on innova- urban area as part of future smart city appli- private companies and municipal organiza- areas which are new to ewz but offer great tion management methods. ewz focusses on cations. tions. ewz provides nation-wide solutions potential. a shared design approach with regard to in- The fiber-optic network also represents a with selected partners and is developing the novation. step towards the 2,000-Watt-Society. In view project business by this means. of the rising number of de-central power pro-

ewz.zürinet

Provision already exists, ewz.zürinet is available 11 Provision within the next 12 months Provision in the next 13 to 36 months 10 Provision at a later date but by 2019 at the latest

12

5 6 9 4 1 7

3 8

2

22 23 Products and services.

Power from renewable energies Energy contracting and energy efficiency

100 % renewable electricity for Goal review for 2015 and Business customers save Goal review for 2015 and private customers. outlook for 2016 the equivalent of 40,000 tonnes outlook for 2016 Following the success of the ewz.solarzüri Sales of naturemade star-certified power of CO₂1 In 2015, ewz increased its heating alliances’ ewz introduced the efficiency market The development of the energy mix supplied products increased by 3.8 % in 2015 com- investment model for private individuals, sales of thermal energy by 21 %. The district model in 2015. The efficiency market is a to private households and companies in Swit- pared to the previous year. ewz implemented The course was set for the promotion of en- heating projects in Bergün and Ilanz acquired ewz is expanding the existing range zerland shows a clear trend: Electricity sales an upgrade campaign as part of the tariff ergy efficiency in 1989. The citizens of Zurich in 2015 now reliably supply customers with joint project by ewz, the Energy Agency of solar power solutions and is now are constantly moving towards renewable review. Many customers took up the offer and decided by referendum to set up a power heating and warm water. The goal is to Swiss Private Sector and the Association energies, which already amounted to 55 % of consciously opted to purchase green elec- offering a product specifically tailored to conservation fund for investment and opera- achieve average growth of 10 % a year in this for Environmentally Sound Energy and is the power supplied to these end customers in tricity. tional contributions relating to the promotion area. This target was clearly exceeded in proper­ty owners in ewz.meinsolar. supported by EnergieSchweiz. The efficien- Switzerland in 2013. Eight years previously, The fundamental objective is to increase sales of the efficient use of electricity and utilization 2015. With ewz.meinsolar,­ ewz coordinates the the share of renewable energies in the energy of naturemade star-certified power products of renewable sources of energy. An innova- The power conservation fund of the city of Zu- cy market put in place a voluntary and mix only stood at 34 %1. ewz has supplied its by 2.5 % per year on average. Sales have risen entire implementation of a photovoltaic tive instrument for promoting energy efficien- rich and ProKilowatt funded the EcoCool pro- market-based incentive for energy residential customers using 100 % renewable by 5 % a year on average over the past five system on the party’s own roof from cy, which is thus far unique in Switzerland, gram, which supports the replacement efficiency. Business customers are thus energies since 2015 and is thus driving this years. has existed since 2006 in the efficiency bo- of inefficient commercial refrigeration and planning and installation to commissioning. given the opportunity to partly or fully development forward. nus. Companies receive an efficiency bonus freezer appliances, in 2015. A second pro- ewz is seeking to harness potential ewz is a leading provider of green electricity 1 Supplier mix, from: Gesamterhebung Strom­- for their efforts to increase energy efficiency. gram called EcoGastro, which will also be neutralize their energy consumption. This products awarded the naturemade star quali- kennzeichnung 2013, the Swiss Federal Office of and drive forward the penetration of this In order to receive the efficiency bonus, a tar- available in 2016, promotes the switch from instrument also enables energy providers Energy (BFE) June 2015 and other sources ty label. The latest figures from the Swiss technology. get agreement has to be concluded with the steel to induction hobs. ewz is launching a to launch new products and services. The Federal Office of Energy for 2014 indicate canton, federal government or a business or- third program in 2016 – Eco-Lingerie – encour- that ewz is responsible for supplying 39 % of ganization commissioned by federal govern- aging the use of heat-pump-operated tumble efficiency market means that energy Switzerland’s green electricity sales volume. ment. dryers in businesses. This initiative is funded savings are now tradeable in Switzerland ewz’s energy contracting supports compa- by ProKilowatt. for the first time. The “Swiss Green nies in achieving their target agreements and Economy Symposium 2015” in Winterthur is takes care of the planning, construction and operation of energy generation plants to sup- the first public event to be held on an ply properties with heating. ewz is improving energy-neutral basis. energy efficiency through innovative con- cepts in 27 energy alliances at present by this 1 CO₂-equivalent (CO₂-eq) is a unit of measurement means. For example, treated waste water, for greenhouse gas emissions. Gases, such as geothermal heat and waste heat from wood sulphur hexafluoride (SF₆) or methane, are processing are being used for heating and standardized to the greenhouse gas potential of cooling in municipal and private properties. CO₂. This allows the total emissions of greenhouse gases to be calculated. The additional CO₂ savings achieved through this business stood at the equivalent of 6,211 ² Directly supplied customer in the area of Zurich tonnes of CO₂ in 2015 (see graphic below). and Grisons.

naturemade star product sales in Switzerland in 2014 Sales of sustainable products ewz.effizienzbonus CO₂-savings by customers in % in GWh in t CO₂-eq 2014 2015 ewz Sales of naturemade star products to end Cumulative CO₂-eq saving through Other customers (electricity) Development grants in CHF 14 .4 15.5 energy contracting Sales of environmentally friendly heating and cooling ewz.effizienzbonus ² million Annual additional CO₂-eq saving through Electricity consumption to which in MWh 978,764 1,180,272 energy contracting 400 ewz.effizienzbonus was granted 40,000

320 39 % 32,000

240 24,000 61% 160 16,000

80 8,000 0 2011 2012 2013 2014 2015 0 2011 2012 2013 2014 2015

24 25 Stakeholders and society. ewz conducts an ongoing dialogue with its stakeholders. This exchange helps to better understand the stakeholders’ requirements, especially those of customers. On this basis, ewz can present solutions that are well received in the market. ewz also sees itself as having a responsibility towards society and exercises it through various projects and activities.

27 ewz has close ties with Bregaglia.

1954 “Employment opportunities in the valley allow families to stay together.”

I’ve spent most of my life in Bregaglia and have enjoyed working for ewz for 42 years. Just imagine, during my childhood we had a voltage of 110 volts. We certainly couldn’t have plugged in a wash- ing machine. The arrival of ewz in 1954 had a major influence on Bregaglia’s development. Until then Castasegna was primarily a place for people selling coffee, cigarettes and Maggi to pass through. The importance of ewz to the people of Bregaglia has not changed to the present day. ewz is the region’s largest employer after the municipal authority. I am delighted that some of my great- grandchildren have been able to stay in the region thanks to the employment opportunities for local people. This holds our family together. Edi Spreiter, former ewz employee who worked there for over 40 years

28 29 ewz is more than power. Customers.

Power

New look for customer service Goal review for 2015 and center in Zurich outlook for 2016 The 19 staff at the customer service center in A representative survey of ewz’s Considering customer needs is vitally impor- Zurich dealt with around 120,000 customer tant to the long-term success of the products enquiries in 2015. Most enquiries still concern image and profile conducted at the end and services provided by ewz. changes of address and invoices. In view of of 2015 indicated a high rate of The customer service center in Zurich, the the expansion, enquiries about the fiber-optic recommendations. The brand is perceived point of contact for all matters concerning en- network increased significantly. Around 4,500 positively by the public in the main ergy and communications solutions, was re- customer enquiries in total were recorded vamped in autumn 2015. The premises on on this topic. ewz is available around the clock supply areas of the city of Zurich and Beatenplatz in Zurich were brought into line seven days a week in the event of power fail- Grisons. The organization’s sponsorship with customer needs and given a lighter and ure. initiatives are also well known in all more appealing design. ewz regions. The survey is to be conduc- For residential customers and businesses with a maximum consumption of 100 MWh a ted regularly in future to reveal the year, the customer service center is the first success of activities and measures and point of contact for questions relating to any changes needed. energy and communications solutions. It fo- cuses on individual advice that is responsive to customers’ concerns. Depending upon their preference and situation, customers can choose between various communication channels, such as telephone, e-mail, internet or direct personal advice in Zurich, Sils or Savognin. Business customers with an annu- al consumption exceeding 100 MWh receive Customer structure in Switzerland electricity Most people associate ewz with power provi- support from ewz key account managers. sion. In addition to supplying power reliably, 2014 2015 Particular emphasis is placed on identifying Number Number however, ewz also provides a wide range customer needs and providing solutions Residential customers 199,489 200,935 of pioneering energy and communications geared towards these needs. Customer con- Commercial customers 23,060 22,897 services. ewz has specialized, for example, in cerns are systematically recorded, enabling Business customers 1,996 2,112 the supply of heating and cooling with re­ ewz to respond quickly and in a customer- Total customers 224,545 225,944 newable energies, provides energy storage oriented way. in Switzerland solutions and offers communication services with its own fiber-optic network. ewz covers much of the value chain itself from generating power to supplying energy. Customer service center – key figures There’s therefore much more of ewz in a house- Telecom 2014 2015 hold than you realize. Everything shown in Heating/cooling Number Number green in the graphic opposite is brought to life Customer enquiries 86,027 121,614 by ewz. Invoices 1,620,948 1,637,724

30 31 Stakeholder engagement. Social commitment.

Involving stakeholder ewz supports culture, science con­sulting companies – in cooperation with groups as part of the first and sport universities and research institutes – are ex­ ploring new solutions to greater energy effi- The ewz.danceaward promotes sport for ewz stakeholder forum The direct involvement of stakeholder ewz holds strategic memberships of various ciency and renewable energies. The aim girls. Girls are significantly under- The stakeholder groups play a major role in groups has already proven successful in associations and organizations and invests is to support households in saving energy represented in clubs and competitions in ewz’s business success. A wide range of various projects, such as the Bondea significant financial resources in research and to construct or redevelop buildings more other sports. Past experience has stakeholders is involved in ongoing projects power plant project in Grisons: the original programs. For example, ewz contributes efficiently. and the views and opinions of stakeholders CHF 1 million a year to the 10-year “Energie­ Through local and regional sponsorship, shown that sports dance events for school- intention was to construct a new are taken into account and incorporated into forschung Stadt Zürich” (Energy research financial assistance is provided for associa- children meet a major need, in particular corporate decisions as far as possible. power station here. Representatives from in the City of Zurich) program. The emphasis tions, events and projects that seek to sup- for girls, who make up the majority of The local public, environmental associations the municipal and cantonal authorities, here is placed on buildings and households. port young people and women or that tackle the participants. This activity also appeals and other stakeholder groups are involved environmental protection organizations It focuses substantively on social science social issues. ewz generally seeks partner- in the planning of new plants and redevelop- research issues. On behalf of “Energiefor­ ships with a long-term impact for its sponsor- to young people from immigrant back - ment work at an early stage. When develop- and ewz were represented at the round schung Stadt Zürich”, private research and ship activities. grounds. In addition to athletic abilities, ing new power plant projects, for example, table. After the end of the discussions, ewz.danceaward participants also develop ewz takes steps to provide local people with ewz not only addressed the residual a clear overview of how the project will performance skills and self-confidence. water situation at the new plant but progress and gives them the opportunity to enter into dialogue with ewz. This can be also that at all plants in Bregaglia. As a done via information events, round tables or result, the Castasegna power plant personal contact. Potential noise emissions successfully obtained new certification in and the casting of shadows are evaluated as , 2015 on the basis of naturemade star part of environmental impact assessments and made available to the municipal authori- in other words with more residual water ties at all power production sites where ewz than prescribed by law. This win-win has a majority holding. situation created environmental value A stakeholder forum was carried out for the first time in the year under review, at which added for all parties concerned. stakeholders had the chance to declare their interests and to express their views on sus- tainability issues at ewz. A small group, con- sisting of 14 selected persons from public authorities, environmental and industry asso- ciations, educational and research institu- tions, business partners, suppliers and start- ups, discussed and critically scrutinized the sustainability strategy and put forward sug- gestions. The exchange of views with external and in- ternal stakeholder groups on the purpose of further developing sustainability issues will take place again in future in various forms. This will ideally result in new opportunities for cooperation, strategic partnerships and new business models.

32 33 A reliable partner.

Energy and IT system requirements are constantly changing. More electricity will be produced decentrally and irregularly in the future. This means more smart energy grids and storage solutions are required. Electricity will increasingly replace fossil heating and motor fuels. The production of heating and cooling will be based more and more on renewable energies.

35 Sustainable heat production.

CO₂ “We are setting a good example.”

The Waid City Hospital has to renew its energy systems for ser- vice water and heating. Renovations are also due in the Käferberg nursing home, the Käferberg thermal baths and another municipal property in the neighborhood. This provided us with an ideal opportunity to reassess our individual heat generation. Last year all of the parties signed an agreement to create the Käferberg District Heating System – a trailblazing sustainability project that will help us contribute to the 2,000-Watt-Society in Zurich from the autumn of 2017 onwards. The planned power generation con- cept will take currently unused waste heat from Waid City Hospital, pass it through additional heat pumps and feed it back into to the energy network. Together with the wood-chip heating, we will therefore be able to produce heating energy that is up to 90 % CO₂-neutral. ewz will take on the planning, construction and operation of future heat generation in this project. In the event of a major failure, e.g. a blackout, Waid City Hospital could operate autonomously for several weeks under this operating model.

As Deputy Director and Head of Technology at Waid City Hospital, I attach great personal importance to ensuring that our heat gen- eration is as environmentally friendly as possible. At home my family and I also use a geothermal probe for our heating supply. Why shouldn’t we also set a good example as a city hospital? Hanspeter Gerber, Deputy Director and Head of Technology at Waid City Hospital

36 37 Security of supply.

Security of the power supply are attributable to damage caused by third a second, redundant network connection is Security of supply for heating The goal is to keep the number of interruptions parties (see the graphic on page 39). Down- recommended for critical systems. ewz also under 0.2 per month for each heating and and cooling The power supply in Zurich was interrupted time for the central Grisons distribution grid provides proven and tailored solutions in this cooling plant. At 0.15 interruptions per month, ewz is already testing the smart grid for an average of 10.1 minutes per customer has a five-year average of 30.4 minutes 1. This area. As needed, sustainable heating and cooling this goal was met in 2015. Generally all older and year over the past five years. ewz there- figure includes both planned and unplanned systems are installed in buildings redundantly facilities are overhauled after 15 years to pre- of the future at the Smart Grid fore fell slightly short of its goal of limiting in- shut-downs. The municipal distribution grid in so that a second system can take over in the vent age-related interruptions and keep indi- Real Lab in Zurich-Affoltern. This pilot 1 The requirements of the Electricity Commission terruptions to less than 10 minutes on a five- Zurich, however, has no need of such shut- event of an outage of the first one. Given that cators within the target figures. only take outages into account that last for more project uses the gridbox system year average for the first time in 2015. This downs since the power supply can be di­ a small number of these installations do not than 3 minutes. which was co-developed by ewz. It enables indicator rose to 15.0 minutes for the year verted. Supplying power through rural distri- feature this kind of safety margin, they are continuous, real-time grid monitoring (see graphic below): an exceptional power bution grids, like that in central Grisons, 2 Reliability figures based on the IEEE international pushed to their limits in regular operation dur- outage occurred in down-town Zurich on requires many more kilometers of lines per standard. A customer must expect, on a five-year ing once-in-a-century events. In such cases, and permits the active management average, that there will be an interruption every December 9. Thanks to the careful, swift and consumer than in urban areas. Generally trou- eight years (SAIFI). The interruption lasts a total of temporary heating plants ensure that the of installations such as PV plants, battery step-by-step restoration of power to the city’s bleshooting work takes longer in the country- building can offer a warm climate at all times. 10.1 minutes (SAIDI). A single outage in the storage facilities and electric boilers. districts, it was possible to keep the outage side, too, which translates to a higher SAIDI 2 service area lasts on average 67 minutes (CAIDI). ewz designs all heating and cooling plants relatively brief. A short circuit had been score. so as to guarantee coverage during peaks in Grid overload is thus prevented. Smart caused by defective insulation in the medium- In spite of the extremely high security of sup- demand for heating and cooling while always grid solutions are designed to permit new voltage switchgear at the Letten substation. ply, interruptions to the power grid can still ensuring that the plants have capacity re- elements, such as heat pumps, PV plants, More than half of all power outages in Zurich occur. To increase security, the installation of serves. electric vehicles and battery storage plants, to be integrated into the distribu- tion grid as inexpensively as possible.

Indicator of reliability for heating and cooling 2014 2015 Target Number of interruptions 0.13 0.15 < 0.2 per heating and cooling plant and month

SAIDI ² for the city of Zurich Indicators of reliability for the distribution grid of the city of Zurich Causes of power interruptions Power outages in minutes per customer and year Average Target Number of interruptions 5-year average 2011 to 2015 Average 2011 to 2015 5-year target: <10 years Average interruption duration, SAIDI 2 in minutes per customer 10.1 < 10 Figure per year and year 50 Average interruption-free time, SAIFI 2 in years per capita 7.8 > 3 15 40 Average interruption duration, CAIDI 2 in minutes per interruption 89 < 100 Unplanned power not delivered on time in kWh per capita 0.33 < 0.15 10 30 and undelivered power Ageing materials 5 20 Elements (weather, Nature, Cause 0 water, 10 animals unknown 2011 2012 2013 2014 2015 re, dirt)

0 Third-party Control, Material fault Miscellaneous damage overload 15

10

5

0 2011 2012 2013 2014 2015

38 39 Electricity balance sheet. Organization.

Electricity generating capacity ewz is a service department of the City of cil or voters will then no longer be required 2015 Zurich which means that it is a dependent in- when making investment decisions. The Hydroelectric power MW 931.0 stitution under public law. Dependent refers Board of Directors will take legal require- to the fact that it operates on its own behalf ments, the ownership strategy, the corporate Nuclear power plants MW 296.0 yet does not possess its own legal personal- strategy, profitability and the company’s li- Wind power plants MW 126.5 ity. All transactions conducted by ewz are quidity into account, thus shortening en­ Photovoltaic and solar energy MW 3.0 subject to the usual responsibilities as de- trepreneurial decision-making paths and en- Fuel cells MW 0.2 fined in the municipal code. The management suring the confidentiality of decision-making Total capacity from own plants and partner plants MW 1,356.8 of ewz consists of the director and depart- documents. Oversight over the company ment managers. Some 1,200 employees, will also be strengthened in light of increased around 100 of whom are in Grisons, are on market risks. This change will also simplify duty every day to help position ewz as a lead- ewz’s ability to enter into cooperative ven- ing company with pioneering energy and tures, something that will become an impor- communications solutions. tant factor, particularly with regard to the During the year under review, the Zurich City reconcessioning of hydropower plants in the Council proposed to the Municipal Council Canton of Grisons. While ewz will still belong Electricity generation that ewz should be converted into a public- to the city of Zurich, it will be organized as sector institution. The new legal form should an independent public-sector institution and 2014 2015 grant ewz the necessary and sufficient inde- more competitive as a result. The draft legis- Hydroelectric power GWh 2,988.6 2,750.8 pendence to successfully navigate the mar- lation is currently in the political discussion Nuclear power plants GWh 2,260.2 2,248.3 ket. The City Council and Municipal Council phase. A final decision on the change of legal Wind power plants GWh 173.2 338.5 will focus on the political and strategic as- form will be reached by the voters of the city Waste incineration plants GWh 125.0 94.4 pects of management while a new expertise- of Zurich. Biomass GWh 15.1 16.5 and experience-based Board of Directors will Photovoltaic and solar energy GWh 21.0 22.7 be in charge of corporate management. Res- Fuel cells GWh 1.3 1.3 olutions by the City Council, Municipal Coun- Gas/diesel GWh 0.8 0.8 Total electricity generation 1 GWh 5,585.2 5,473.4

Electricity procurement 2014 2015 Procurement from own plants GWh 1,671.7 1,401.4 Procurement from partner plants GWh 3,183.8 3,239.0 Procurement from third parties GWh 394.0 340.1 Trading GWh 876.2 1,793.9 Total electricity procurement GWh 6,125.7 6,774.4

Electricity supply 2014 2015 Switzerland GWh 3,746.9 3,858.5 Trading GWh 2,226.9 2,745.1 Pumped storage GWh 151.8 170.7 Total electricity supply GWh 6,125.7 6,774.4

Subsidy systems and PPAs 2014 2015 Procurement to feed into subsidy systems and PPAs GWh 335.8 492.8 Subsidy system and PPA supply GWh 335.8 492.8

1 Production from the company’s own plants, procurement rights, partner plants and third-party plants

40 41 Sustainability in ewz’s everyday operations.

Sustainability in ewz’s everyday operations covers the full range of internal sustain­ability-related issues pertaining to the company’s ongoing activities. The following therefore describes the content of environmental management, opportunity and risk management and sustainable procurement management. These areas share the common goals of optimizing work flows and boosting the company’s economic, ecological and social efficiency.

43 A world first, “made in Switzerland”.

700 “Realizing a climate protection project that is unique in the world – that really motivated us.”

Nowadays, everything can be done in a much more compact form. We know about that from our computers, and it now applies to switchgear and transformers, as well. It has allowed us to install greater capacity at the new Zurich Oerlikon substation in a much smaller space. Back in 1967, we installed the world’s first gas- insulated switchgear from ABB, which was still operating under the name of BBC at the time. We have now had the opportunity to resume this pioneering work which is why we are twice as proud to announce that, in the summer of 2015, we completed the world’s very first facility at the Oerlikon substation to use the new, much more eco-friendly insulating gas. It was a complex project involving around 700 people and specialists from more than 30 countries and hailing from a wide range of different industries. Together we worked toward several common goals: ensuring that construction was sustainable and remained on schedule as well as safely putting these pilot facilities into operation. Reliability and straightforwardness as well as candor, honesty, constructive criticism and trust are pivotal to the teamwork in a project this complex. The viewing window revealing an art installation by Yves Netzhammer as well as the substation’s exceptional architecture gave us a chance to address a variety of stakeholder groups and give people an insight into this complex technology. It has attracted an enormous amount of interest from both the general population and professional circles. We are currently setting out on an exciting journey, one that will see the widespread, worldwide deployment of eco-friendly switchgear which ultimately make a contribution to climate protection. Pascal Müller, Overall Project Manager at ewz Stefan Morf, Project Manager at ABB

44 45 Environmental management.

Energy efficiency at ewz Greenhouse gas emissions

Energy efficiency An electric car running on green power is up distribution losses. These relate to power to three times as efficient as a comparable purchased by ewz. 79 % of ewz’s direct and boosted by expansion of For years now, ewz has been using natural gasoline-powered car. ewz is making an on- indirect greenhouse gas emissions are gen- the electric car fleet In August 2015 the Oerlikon grid base (carbon dioxide) going effort to replace its fleet of cars and de- erated in connection with heating, cooling refrigerants like CO2 building above the substation was % of its ewz took key measures to boost energy effi- livery vans with electric vehicles. In 2015, for and power production. 19 % of the emissions and NH3 (ammonia) for over 50 certified with the MINERGIE-ECO label ciency at its headquarters early on. The tar- instance, the number of electric vehicles rose Low greenhouse gas emissions come from energy purchases. installed heating and cooling capacity. get agreement reached with the Office for from 41 to 45, with electric vehicles currently for its extremely sustainable const­ in power production Calculated across the entire company, direct, Waste, Water, Energy and Air of the Canton accounting for 14.8 % of the fleet. This figure relative CO₂ emissions add up to 5.5 g of In doing so, it has anticipated legislative ruction. Industrial buildings are rarely of Zurich (AWEL) calls for a one-percent in- does not include special vehicles or trucks 10 years ago, ewz calculated its first green- CO₂-eq per kWh of energy produced. Broken changes that will gradually phase out certified to this standard. Waste crease per year. Overall, ewz has exceeded weighing over 3.5 tonnes that are either un- house gas footprint incorporating both direct down between the company’s two most the use of refrigerants that affect our the target agreement by 14 % despite a 10 % available on the market or for which the heat generated by transformers in the and indirect emissions. emission-intense business areas, energy con- climate for all large heating and cooling loss of energy efficiency. The controls for the choices are limited. basement is used to heat the entire Direct “Scope 1” greenhouse gas emissions tracting and power, it becomes evident that building automation system at the company’s When gasoline-powered vehicles are re- as defined in the “Greenhouse Gas Protocol” the heating and cooling business is responsi- plants. When planning smaller plants, too, building. This building’s architecture headquarters had to be operated manually placed by electric cars, optimized vehicle de- standard amount to 31,504 tonnes of CO₂-eq. ble for the lion’s share of those emissions, ewz successfully offers alternative, factors in urban development aspects as during the year under review which led to en- ployment is also needed. An electric vehicle The majority of CO₂ emissions are produced namely 103.5g CO₂-eq/kWh. Coming in at 100 % natural refrigerants. ewz contributes ergy losses. This was necessary, however, to deployed on service calls needs to be put to well, while the art project by Yves in the energy contracting business to gener- 0.3g CO₂-eq/kWh for the power segment, the to the reduction of greenhouse gases replace parts of the automation system, optimal use during the day and recharged Netzhammer and a viewing window reveal ate heating or cooling capacity during peri- figure for ewz’s production mix is extremely which will make the building more efficient in at night. Modern fleet management steers the ods of peak consumption. These are still cov- low. by this gradual substitution. the future. Additional energy efficiency poten- utilization of electric cars because the routes the substation’s inner workings. ered by fossil fuels. tial also exists in ewz’s other buildings, which driven need to be planned in detail every day. Indirect “Scope 2” greenhouse gas emissions ¹ Preliminary figure. In Switzerland, final calculations mainly consist of office buildings, substations That enables staff to be deployed as efficient- amount to 8,185 tonnes of CO₂-eq ¹, 90 % of for indirect emissions are only possible after the and power plants. To identify this potential, ly as possible, too. which are attributable to transmission and national closing date for guarantees of origin. ewz will work out a systematic energy mea- surement concept for the sites in Zurich and Grisons in 2016. The company’s goal is to roll out an energy management program in ac- Share of electric vehicles in Direct and indirect greenhouse gas emissions cordance with ISO 50001 by 2019. the car and delivery van eet in % in % Direct emissions Electric vehicles Indirect emissions from distribution losses Other vehicles Other indirect emissions from energy purchases

2 % 14.8% 19 %

85.2 %

79 %

Energy eciency at headquarters Including motorcycles in % Current energy eciency at headquarters Target energy eciency at headquarters

150 Significant greenhouse gas emissions 125 2014 2015 in t CO₂-eq in t CO₂-eq 100 From heating fuels 13,153.1 17,201.3 From motor fuels 694.8 676.7 75 From refrigerant losses 628.2 254.9 From SF6 insulating gas leaks 429.6 97.8 50

25

0 2011 2012 2013 2014 2015 46 47 Opportunity and risk management.

2015 environmental program

30 % reduction of legacy issues The goal of resource management is to close ewz seizes opportunities Opportunity management ensures that a material life cycle loops wherever waste can- systematically and creates reasonable balance is struck in the divisions ewz was overhauling a scour, an opening Cooperative ventures prove successful. A broad-based environmental program focus- not be prevented or reduced (indirect emis- value added between opportunities taken and risks man- es primarily on issues such as achieving on- sions), monitor material efficiency and envi- at the lowest point of the dam wall, aged. The aims are to improve risk manage- A novel type of gas-insulated switch­- going improvements in biodiversity, reducing ronmentally friendly disposal and prevent Conditions on the energy market are chang- ment and be able to tap opportunities more at Albigna Lake in 2015. As part of this gear was installed in cooperation with ABB

emissions, enhancing resource management noise emissions. ing significantly. Examples include the tech- effectively. at ewz’s new substation in Oerlikon. and eliminating legacy issues. To tackle those ewz has set itself the goal of completely elimi- project, ewz removed the mineral oil nological achievements and low electricity challenges, the company employs an exter- nating all legacy issues at the various plant from the hydraulic pumps and replaced it prices that are putting energy utilities’ com- Goal review for 2015 and For the very first time anywhere in the ­ world sulphur hexafluoride (SF nally-audited, ISO 14001-certified environmen- sites by 2025. This has already happened at with biodegradable products. Biode petitiveness to the test. ewz employs a sys- outlook for 2016 6), tal management system. 23 locations and action or remediation plans tematic opportunity and risk management The risk policy and related regulations which gradable oils would do considerably less the insulating gas normally used in these already exist for the remaining five plant sites. system to meet the challenges arising from make up the risk guidelines were revised in facilities, was completely replaced by Thanks to the new building constructed for harm to the environment in the unlikely such changes. 2015. The risk management database was the Oerlikon substation, the volume of con- event of a leak. ewz gears its risk management approach to- further developed. One new feature is that an eco-friendly gas. Experience from the This system is designed to minimize the risks taminated soil was reduced 30 % by 2015. ward the ONR 49000 and ISO 31000 stan- opportunities and risks will be assessed in Oerlikon substation will provide valuable to people and the environment involved in dards and meets the requirements of the terms of their impact on the company’s repu- insights into the operation of such handling hazardous substances as well as city of Zurich in full. Risk managers within the tation. facilities and, in the future, open the doors electric and magnetic field emissions. divisions and on the Executive Board perform As shown in the charts below, the situation a recurring, company-wide risk management concerning electricity sales has been as- to a multitude of new applications. process once per year. sessed as riskier than in the previous year. This process identifies and analyzes both Reasons include the growing competition opportunities and risks. During the evalua- mentioned earlier and low electricity prices. tion, these are then assessed in terms of their The risks associated with power production, probability of occurrence along with their on the other hand, will be lower over the long positive and negative consequences. Mea- term due to decreasing competition on the Environmental Management sures are defined and taken, and implemen- production side. 2014 2015 tation measures is monitored on an ongoing Employees with environmental functions Number 61 77 basis by the risk managers. Days of audits conducted by internal auditors in days 7 7 Days of audits conducted by external auditors in days 12 11 Significant fines and monetary penalties in CHF 0 0

Energy consumption 2014 2015 Energy consumption in the administrative buildings in MWh 2,531 2,642 Heat consumption in the administrative buildings in MWh 1,352 1,806 Power production for own requirements in MWh 7,612 7,018 Grid losses incl. substations’ own use in MWh 97,263 98,822 Fuel consumption: gasoline and diesel in l 270,518 262,477 Fuel consumption: biogas in kg 5,669 4,578 Distribution of risks in 2014 Distribution of risks in 2015 Electromagnetic fields in % in % 2014 2015 Electricity sales Electricity sales Total facilities with electric and magnetic fields Number 814 812 Power production Power production Power distribution Power distribution Total number of facilities with approval pursuant to ONIR ¹ Number 456 485 Across ewz Across ewz 34 % 31 % Recycling and disposal of reusable materials and waste 14 % 23 % 2014 2015 Recycling of reusable materials in t 1,374 989 Waste disposal in t 711 695 26 % 21 % Disposal of inert substances in t 2 1 Total reusable materials and waste in t 2,087 1,684 26 % 26 % ¹ Ordinance relating to Protection against Non-ionizing Radiation 48 49 Sustainable procurement. Attractive working

ewz strengthens sustainable environment. procurement ewz purchases over 90 % of its goods and To strengthen sustainable practices services from Swiss companies. These range in the supply chain, ewz has been in size from small and medium-sized enter- For ewz it is important to have a working working on an industry solution together prises (SME) right up to international corpo- with five other Swiss energy pro­ environment that is free from discrimination rate groups. ewz has more than 1,900 active viders suppliers, with the top 100 suppliers covering since mid-2015. This allows suppliers and which promotes diversity and con­- more than half the awarded contract volume. to present transparent and comparable The order volume awarded every year varies reports on their management and siders employees’ health. In addition, diverse between CHF 250 million and CHF 350 mil- lion, depending on the size of current projects track record in critical areas. It enables and flexible working models create attractive and excluding electricity procurement from the energy providers to reduce partner plants. risks such as reputational damage and job opportunities for different skills. ewz scrutinized its sustainable procurement also to work together with suppliers approach closely in 2015, evaluating all groups These goals and measures should make of goods purchased for potential sustainabili- on solutions. ty deficiencies in their life cycles. Best-prac- it possible to recruit more managers from tice examples enabled ewz to show whether the existing measures were in line with our within the company. aspirations. The analysis shows areas where we are performing very well in some seg- ments. Sustainability in terms of the use and disposal of products is largely integrated, e.g. through life cycle assessments of systems on the distribution networks. However, it also reveals optimization potential. To realize this potential, a centralized department will be created in 2016 that specializes in sustainable procurement.

50 51 100 % career in job sharing.

50:50 “Reconciling work and family life.”

We share a management position and both work part time. This lets us find the ideal balance between our professional ambitions and the family at home. ewz offers us the flexibility needed for us to commit to our work and still have the time we want with our families.

Naturally, this still requires flexibility and trust from us, and from our partners as well. Another decisive factor is a large measure of autonomy in the team. After more than a year with this new work model, we can happily say that it’s working perfectly. We’re also receiving positive feedback across the board from our team members – they find working for several bosses interesting, varied and enriching. The results with our team also speak for them­- selves – and for this work model. Gaby Grab Hartmann and Noemi Rom, managers at ewz

52 53 Talent search and Occupational development of employees. health and safety.

Development-oriented employees can make full use of their poten- High level of occupational safety the main cause of accidents outside work. accidents for every 1,000 FTEs. Continuing performance management tial. At the same time, strategic development In cooperation with the career center maintained in 2015 This is why ewz sets up bicycle workshops at the campaign against trip accidents is one of of employees ensures that the requirements three locations every spring. Anyone who the measures for reaching this goal. introduced of the city of Zurich, ewz is the first of the various job profiles are optimally met. Satisfied and healthy employees are a solid wants to can bring his or her bicycle in for a The non-occupational accident rate of 148.5 Due to demographic changes, ewz is increas- Since 2012, a special Young Talents program company to develop a development foundation for ewz as an employer. Ensuring safety check and have minor defects repaired incidents for every 1,000 FTE (previous year: ingly having to compete for the best talent. To has been offering young, committed and planning program for trainees. This helps this is a challenge for a company with danger- free of charge. 158.7) was 6 % lower in 2015. For 2016 the continue to attract qualified and committed well-qualified employees a year in which they in giving trainees targeted support ous jobs. For example, work on high and low As part of health promotion ewz also offers goal is to reduce the number of non-occupa- employees in the future, ewz must ensure can advance their personal development, voltage systems, construction sites and pow- various information events, exercise facilities tional accidents per 1,000 FTEs to below 133 for their personal professional develop- that it is perceived as an attractive employer. strengthen their self-competence and meth- er stations is in the nature of the industry and advisory services for employees. A broad incidents. At the same time, ewz wants to safeguard the odological skills, and build a network to opti- ment right from the start of their Successful recertification to OHSAS 18001 of range of offerings is aimed at preventing company’s internal know-how and offer em- mize the basis for their career within ewz. training. Currently, ewz employs some the occupational health and safety manage- potential health problems due to stress and ployees attractive opportunities for continu- 40 trainees in 13 occupations who ment system in June 2015 shows the high pri- mental or physical pressure. Admission to ing professional development and career Goal review for 2015 and ority attached to the issue. ewz also performs municipal indoor swimming pools and activi- are following the program in parallel with openings. outlook for 2016 well in comparison with the industry average: ties in the Academic Sports Association In 2015, ewz adopted new corporate values. In the 2015 fiscal year, ewz focused on creat- their training. Clear prospects help the rate of occupational accidents at ewz is Zurich (ASVZ) are supported. ewz also car- Simple, committed, sustainable and visionary ing a suitable job architecture. This makes around 23 % lower than the long-term aver- ries out awareness-raising measures during A safety culture includes recognizing minimize the risk of being unemployed – these are the cornerstones of the new cor- job profiles more comparable, and in 2016 age for Swiss energy utilities. the flu season, and ewz employees can get after training is completed. There is weaknesses and discussing possible porate culture. These values are promoted will serve as a basis for developing a career Trip hazards are still the biggest cause of free flu vaccinations. improvements. ewz wants to learn from by ewz as an employer and put into practise model which will show employees their indi- a serious shortage of skilled workers in accidents at ewz, and to reduce the number by the employees. To support this value trans- vidual development possibilities in a trans- the electricity industry. The development of accidents two company-wide campaigns Goal review for 2015 and near misses and avoid occupational formation, ewz held a second team challenge. parent form. were launched in 2015 to make employees outlook for 2016 accidents. The reporting of unsafe situa- program will therefore also help ewz in The ewz team challenge is an entertaining aware of safe behavior and sharpen their abil- ewz reported an occupational accident rate bringing on young talents in order to have tions and actions and near misses is way of presenting sustainable aspects of the ity to spot trip hazards. in 2015 of 48.0 incidents for every 1,000 FTE kept as simple as possible, employees can profession to employees. easy access to well-qualified skilled A striking feature is that ewz employees show (previous year: 47.0). The gravity of the acci- submit reports by email, or even The corporate values also lay the foundations workers. a rate of non-occupational accidents which is dents increased slightly, as shown by the for a new development-centered performance 3 % higher than the industry average. One ex- fact that the length of absence per accident anonymously. Employee awareness of management system, which was introduced Level of employment planation for this phenomenon is the high increased from 4.5 to 4.7 days. The goal for this topic was raised in 2015. in the year under review. Managers review in % level of sporting activity among employees, 2016 is to reduce the occupational accident their staff’s needs even more closely and Employees with workload less than 100 % as sports accidents during leisure time are rate below the long-term ewz average of 44 identify prospects for development so that Employees with 100 % workload

13.8 %

86.2 % Occupational accident rate Seriousness of occupational accidents Non-occupational accident rate Number of occupational accidents per 1,000 FTEs Days of absence per occupational accident Number of non-occupational accidents per 1,000 FTEs ewz ewz ewz Employees Average for Swiss energy utilities 2004 – 2013 Average for Swiss energy utilities 2004 – 2013 Number ewz goal: < 44 ewz goal: < 133 Employees, Zurich Employees, central Grisons and Bregaglia 175 8 175

1,200 150 7 150

1,000 125 6 125

800 100 5 100

600 75 4 75

400 50 3 50

200 25 2 25

0 0 1 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 54 55 Diversity. Financial report 2015.

Share of women at ewz Goal review for 2015 and increased to 18 % outlook for 2016 Efforts will continue in the future to make ewz Due to demographic changes and the in- an attractive employer, especially for women. creased mobility of job seekers, ewz is in- The proportion of female employees was in- creasingly having to compete for the best tal- creased by 1 percentage point to 18 % in the ent. At the same time, our employees’ needs year under review. This is partly attributable are changing and they increasingly have to the fact that women could increasingly be higher expectations of flexibility in terms of attracted to fill management positions in the their work location, working hours and corpo- course of organizational changes. rate culture. The coming generation of em- ewz maintains its objective of increasing the Share of women in ployees (“Generation Y”) in particular – but share of women to 25 % of the total workforce management positions increasingly others as well – demand from by 2025. It is also planned to increase the in % employers the opportunity to bring their share of women in management from 12 % at Share of women work into a better balance with their leisure, present to 25 %. hobbies and family time. 12 % For a company to attract a range of talent and also retain committed employees, the work- ing environment and conditions must be at- tractive to people with different kinds of life models. At the same time, the diversity prac- tised at ewz reflects our customer base, so that we can incorporate their needs optimally and align our product range with their de- Share of women working in the company sires. in % This is why ewz offers its employees a range Share of women of flexible work formats and part-time models, to ensure an individual work-life balance. For 18 % example, ewz employees can benefit from various models which offer more vacation time or a reduced weekly workload. And all employees have the option of working part time. Part time working is also encouraged at management level, supplemented by the op- tion of job sharing. Working from home is possible ewz-wide. ewz supports extended parental leave for mothers and fathers. Level of employment: women Level of employment: men in % in % With these and other measures and programs, ewz seeks to attract a diverse portfolio of well- Part-time Part-time Full-time Full-time qualified and highly committed employees which will be maintained in the future. 7 %

44 %

93 % 56 %

56 57 Google and ewz join forces on renewable energy. 37 % “We are the largest business customer for renewable energy in the world.”

At Google we are deeply committed to sustainability. We have been carbon-neutral since 2007 – through a combination of energy effi- ciency, use of renewable energy, and high-quality carbon offsets.

We’re strongly involved in renewable energy both as a consumer and investor. In 2014 37 % of our operations were powered by re­ newables and our target is to get to 100 %.

Besides the positive impact on the environment we see a clear busi- ness case in renewable energy. Google therefore continuously searches for investments in renewable energy and partnership opportunities to help us promote sustainable energy worldwide. We have now contracted of long term offtake agreements totaling more than 2 GW worlwide, and are the largest corporate renewable buyer worldwide now.

One of these investments is represented by the Power Purchase Agreement with ewz. The 10 year power supply contract supplies our Google datacentre in Finland with energy from the Atlantic wind farm portfolio in Sweden. Thus Google fosters sustainable energy production and has permanent access to renewable energy re- quired for the datacentres at predictable prices.

In the short time of our cooperation we established a promising partnership with ewz and we are looking forward to strengthening our relationship in the future. François Stérin, Director Global Infrastructure at Google Inc.

58 59 Annual and management report.

Business environment Income statement Balance sheet Cash flow statement Outlook Accounting principles The European energy industry is in turmoil Total revenues in the year under review were ewz again invested over CHF 139.2 million in Cash flow from business activities decreased The energy market environment will remain Elektrizitätswerk der Stadt Zürich (ewz) is a and is posing new challenges to energy around CHF 813.4 million, some CHF 21.9 or plants and equity investments in the 2015 fis- by CHF 16.3 million year on year. The change extremely challenging over the coming years. service division of the Department of Public companies’ current business model. Electric- 2.8 % above the previous year. Operating ex- cal year. In addition to investing in our net- of valuation method for the decommissioning There is no sign of a recovery in market Utilities and Transport of the City of Zurich. ity prices on the European market have fallen penses increased by CHF 81.4 million over work facilities and conventional energy pro- and disposal fund resulted in a liability to- prices, which will continue to have a negative The company manages its own accounts sharply in recent years, and for most energy the previous year due to higher costs of ener- duction plants, ewz also spent significant wards the Gösgen-Däniken AG nuclear pow- impact on margins. Cost and optimization and its own accounting entity within the ac- production technologies now lie below the gy procurement, upstream grids and system amounts on expanding the fiber-optic net- er station of around CHF 40 million. The pay- pressure will grow. Energy, grid and telecom- counts of the city of Zurich. The closing of generation costs. The reasons for this are the services. However, the higher energy pro- work in the city of Zurich, on renewable ener- ment is not expected until March 2016, so munications services will continue to be ex- accounts and the budget are approved by reduced demand for electricity due to the curement costs were also matched by higher gies and equipment in the energy services that this matter has not yet influenced the panded over the coming years which should the Municipal Council together with the ac- state of the economy, an oversupply of CO₂ amounts of energy. Earnings before interest, business area. The amounts in the provisions cash flow from business activities. All finan- partially offset the dwindling revenues and counts of the City of Zurich on a yearly basis. certificates and the subsidies for renewable taxes, depreciation and amortization fell by for market risks and US leasing include the cial activities are transacted via the City of margins in the energy sector in the medium The accounting principles are based on the energy, which have distorted competition. CHF 59.5 million or 27.6 % compared with possible expenses for procurement contracts Zurich. ewz has a current account with the term. Secure, long-term supply and stable, cantonal decrees of the Municipality Act The economy and electricity prices in Swit- the previous year. This negative development and the uncertainty about the value of prop- city accounts department for this purpose. plannable income are the objectives for the (LS 131.1), the Ordinance on the Municipal zerland were also depressed by the aban­ is primarily due to persistently falling energy erty, plant and equipment unprotected by The balance of the current account rose by forthcoming years for the grids operated by Budget (LS 133.1) and the circular letter of donment of the euro minimum exchange rate market prices and a simultaneous rise in monopolies. CHF 68.5 million compared to the previous ewz in the city of Zurich and central Grisons. the Department of Justice and Home Affairs by the Swiss National Bank at the start of the cost of nuclear energy. Depreciation and The nuclear power holding companies year. This is principally attributable to Swiss- The Municipal Council will probably decide concerning the municipal budget. ewz depre- the year. In response to the change in market amortization rose by CHF 32.6 million com- changed their method of accounting for the grid AG’s loan repayments of CHF 78 million. on the change of legal form of ewz to an in- ciates property, plant and equipment based conditions, energy companies are diversify- pared with the previous year. The main rea- decommissioning and disposal fund their ac- dependent public-sector institution in the on the Ordinance of the Department of Jus- ing with service offerings in a variety of areas. son for this were impairment losses relating counts in 2015. ewz’s provisions for this pur- course of 2016. The change of legal form will tice and Home Affairs concerning deprecia- Income from grid operation has been regu- to the changed construction method in the pose are therefore superfluous. Performance of a risk assessment then require the approval of voting public of tion according to economic aspects. The lated since 2009. Telecom division and the valuation of invest- As a service division, ewz is part of the City the city of Zurich. numbers used in the financial report are tak- ments in euros. ewz is exempt from taxes of Zurich risk assessment. The Executive en without change from the ewz accounting in canton Zurich and at federal level as a Board has defined its own risk management entity of the city of Zurich and are presented service department of the City of Zurich. The principles and risk policy based on those of in a way that is typical of the industry and tax expenses shown are for intercantonal the city of Zurich. The systematically record- market. operating facilities primarily located in the ed, analyzed and prioritized risks were sum- canton of Grisons. The net result declined by marized in a risk report for the attention of the CHF 232.2 million to CHF 68.3 million. The re- city of Zurich. Specific measures for dealing versal of reserves had a highly positive effect with the identified risks were assessed and on the result in the previous year. then discussed and adopted by the Executive Board on 27 October 2015.

Extraordinary events No extraordinary events requiring inclusion in the annual financial statements occurred in the year under review.

60 61 Income statement 2015. Balance sheet 2015.

Notes Dec. 31, 2014 Dec. 31, 2015 Assets (from page 65) in CHF in CHF Notes Dec. 31, 2014 Dec. 31, 2015 Net revenues from goods and services 1) 760,395,879 783,013,694 (from page 65) in CHF in CHF Capitalized own services 26,300,081 25,455,702 Cash and cash equivalents 6,142,682 5,316,116 Other operating revenue 4,803,530 4,924,817 Current account city statement 255,655,304 324,196,480 Total operating income (overall performance) 791,499,490 813,394,213 Trade accounts receivable 114,026,957 117,149,208 Energy procurement 2) – 247,441,020 – 302,638,272 Inventories 11,255,402 12,890,579 Costs of upstream grids, system services and surcharges 3) – 62,513,490 – 82,090,907 Prepaid expenses and deferred charges 21,004,077 18,196,430 Material and third-party services – 59,397,496 – 63,532,096 Current assets 408,084,422 477,748,813 Personnel – 146,350,014 – 150,580,560 Financial assets 6) 473,006,382 391,813,977 Levies 4) – 26,492,998 – 26,335,988 Property, plant and equipment 7) 1,199,470,418 1,246,495,826 Other operating expenses – 33,915,949 – 32,340,866 Non-current assets 1,672,476,800 1,638,309,803 Total operating expenses – 576,110,967 – 657,518,689 Total assets 2,080,561,222 2,116,058,616 Earnings before interest, taxes, depreciation and 215,388,523 155,875,524 amortization (EBITDA) Equity and liabilities Notes Dec. 31, 2014 Dec. 31, 2015 Total depreciation and amortization – 62,138,273 – 94,717,792 (from page 65) in CHF in CHF Total changes in provisions 5) 193,963,196 6,656,810 Trade accounts payable 68,378,752 68,681,071 Earnings before interest and taxes (EBIT) 347,213,446 67,814,542 Down payments and installments from customers 19,568,049 22,518,466 Accrued expenses and deferred income 66,156,187 102,027,032 Customer bonus – 43,119,914 414,849 Short-term liabilities 154,102,988 193,226,569 Financial result 11,828,755 9,923,276 Provisions 5) 734,902,897 728,246,087 Earnings before taxes (EBT) 315,922,287 78,152,667 Long-term liabilities 734,902,897 728,246,087 Special reserve 1,126,270,582 1,134,585,960 Taxes – 15,427,240 – 9,820,724 Net profit 65,284,755 60,000,000 Net result 300,495,047 68,331,943 Equity capital 1,191,555,337 1,194,585,960 Total equity and liabilities 2,080,561,222 2,116,058,616

Withdrawal/contribution to special reserve – 235,210,292 – 8,331,943 Annual profit 65,284,755 60,000,000

62 63 Cash flow statement 2015. Notes.

Dec. 31, 2014 Dec. 31, 2015 1) Net revenues from the sale of goods and services in CHF in CHF Dec. 31, 2014 Dec. 31, 2015 Annual profit 65,284,755 60,000,000 in CHF in CHF Depreciation and amortization 62,138,273 94,717,792 Net revenues from sale of energy 389,961,235 375,998,451 Change in provisions and reserves 41,232,459 1,658,568 Net revenues from grid usage 224,698,894 240,574,068 Change in inventories 1,168,284 – 1,635,176 Net revenues from goods and services sold to communities 40,414,951 40,473,718 Change in accounts receivable 7,780,802 – 3,122,251 Net revenues from surcharge for transmission grid 17,277,127 32,129,328 Change in prepaid expenses and deferred charges 25,458,768 2,807,647 Net revenues from Telecom 15,817,069 18,961,925 Change in liabilities – 11,882,026 302,319 Net revenues from energy services 41,724,670 46,483,968 Change in down payments and installments from customers – 8,424,070 2,950,416 Net revenues from operating supplies and services 30,501,933 28,392,236 Change in accrued expenses and deferred income 27,091,729 35,870,845 Total 760,395,879 783,013,694 Cash flow from business activities 209,848,974 193,550,160 Investments in property, plant and equipment – 199,421,899 – 130,134,624 2) Energy procurement Investments in financial assets – 29,035,050 – 9,030,222 Divestment of property, plant and equipment and financial assets 8,956,747 0 Dec. 31, 2014 Dec. 31, 2015 in CHF in CHF Cash flow from investment activities – 219,500,202 – 139,164,846 Energy procurement from partner plants – 149,917,047 – 177,446,938 Repayment of financial assets 40,122,508 78,614,051 Energy procurement from the market – 88,977,877 – 115,081,667 Change in liabilities due to city’s accounts 34,840,075 – 68,541,176 Fuels, energy for energy service facilities – 8,546,096 – 10,109,667 Profit transfer to the city of Zurich – 66,271,830 – 65,284,755 Total – 247,441,020 – 302,638,272 Cash flow from financial activities 8,690,753 – 55,211,880 Net change in cash and cash equivalent at end of accounting period – 960,475 – 826,566 Cash and cash equivalent at beginning of accounting period 7,103,157 6,142,682 3) Costs of upstream grids, system services and surcharges Cash and cash equivalent at end of accounting period 6,142,682 5,316,116 Dec. 31, 2014 Dec. 31, 2015 in CHF in CHF Costs of upstream grids – 23,916,184 – 30,955,762 Costs of system services – 21,093,238 – 18,902,868 Costs of surcharges for transmission grid (feed-in remuneration at cost) – 17,504,068 – 32,232,277 Total – 62,513,490 – 82,090,907

4) Levies Dec. 31, 2014 Dec. 31, 2015 in CHF in CHF Hydropower plant taxes – 11,222,777 – 10,363,061 Water rates – 10,041,465 – 10,725,170 Concession fees and services – 4,321,132 – 4,449,659 Other levies – 907,624 – 798,098 Total – 26,492,998 – 26,335,988

5) Provisions Dec. 31, 2014 Dec. 31, 2015 in CHF in CHF Provisions for market risks 266,951,837 254,904,837 Provisions for US leasing 123,906,264 123,906,265 Provisions for investments and subsidiaries 29,160,399 32,393,448 Provision for naturemade star fund 7,050,869 7,668,841 Provision for alternative risk insurance 307,833,528 309,372,696 Total 734,902,897 728,246,087

64 65 About this report.

6) Financial assets ewz share Share capital ewz share Carrying amount in % of company of share capital in CHF Investments ewz (Deutschland) GmbH D-Constance 100.0 EUR 84,938,412 EUR 84,938,412 100,952,489 ewzert AG Zurich 100.0 CHF 300,000 CHF 300,000 300,000 The annual and sustainability report covers The photographs show representatives of sev- Energie Naturelle Mollendruz SA La Praz 86.2 CHF 6,300,000 CHF 5,430,000 5,430,000 the 2015 calendar year. It is published in May eral ewz stakeholder groups, companies, resi- AG Kraftwerk Wägital Siebnen 50.0 CHF 15,000,000 CHF 7,500,000 7,500,000 2016. The sustainability report covers all ewz dential customers, local communities, NGOs AKEB Aktiengesellschaft für Lucerne 20.5 CHF 90,000,000 CHF 18,450,000 18,450,000 Kernenergie-Beteiligungen investments in excess of 50 % and is based and employees. These stakeholders represent Kraftwerke Hinterrhein AG Thusis 19.5 CHF 100,000,000 CHF 19,500,000 19,500,000 on the G4 guidelines of the Global Reporting all those with whom ewz is moving forward in Blenio Kraftwerke AG Blenio 17.0 CHF 60,000,000 CHF 10,200,000 10,200,000 Initiative (GRI). GRI is the leading standard shared commitment. Kraftwerke Oberhasli AG Innertkirchen 16.6 CHF 120,000,000 CHF 20,000,000 20,000,000 for sustainability reporting. The comprehen- We thank the stakeholders for sharing their sive GRI Report can be seen at www.ewz.ch/ personal stories. A big vote of thanks is due Kernkraftwerk Gösgen-Däniken AG Däniken 15.0 CHF 350,000,000 CHF 43,500,000 43,500,000 nachhaltig. to the photographer Philipp Rohner for the Swissgrid AG Laufenburg 8.8 CHF 316,327,063 CHF 27,789,722 52,847,958 The report reflects the key issues which in­ visual realization. Etrans AG Laufenburg 12.9 CHF 7,500,000 CHF 963,000 963,000 fluence the development of ewz and its Maggia Kraftwerke AG Locarno 10.0 CHF 100,000,000 CHF 10,000,000 10,000,000 management. ewz attaches great importance Eoliennes de Provence SA Provence 40.0 CHF 6,000,000 CHF 2,400,000 2,400,000 to including the points of view of employees, Energiepark Sisslerfeld AG Eiken 40.0 CHF 100,000 CHF 40,000 40,000 management and outside stakeholders in Total investments 292,083,447 ewz’s sustainability management, and it regu- Nominal value Carrying amount larly invites representatives of selected stake- in CHF holder groups to contribute their suggestions. Loans ewz will publish the achievements annually in ewz (Deutschland) GmbH D-Constance EUR 15,800,000 17,180,920 the annual and sustainability report. Swissgrid AG Laufenburg CHF 82,209,610 82,209,610 Energiepark Sisslerfeld AG Eiken CHF 240,000 240,000 Other loans 100,000 Total loans 99,730,530 Total financial assets 391,813,977

7) Property, plant and equipment Status as of Status as of Jan. 1, 2015 Additions Disposals Reclassification Dec. 31, 2015 in CHF in CHF in CHF in CHF in CHF Acquisition values Power plants 632,272,164 7,866,980 – 12,341,372 34,686,710 662,484,482 Energy distribution facilities 1,361,433,003 3,852,445 – 14,395,385 100,901,064 1,451,791,127 Public lighting 56,978,024 – – 2,467,047 6,024,046 60,535,023 Transmission facilities 2,489,009 – – – 2,489,009 Energy and grid services 222,818,513 3,079,693 – 757,796 12,113,172 237,253,582 Telecom systems 116,957,487 20,149,271 – 20,306,046 26,843,231 143,643,943 General facilities, properties, grounds 234,327,808 2,582,483 – 3,635,281 8,046,166 241,321,176 Facilities under construction 276,061,616 92,709,709 – – 188,614,389 180,156,936 Total 2,903,337,624 130,240,581 – 53,902,927 2,979,675,278 Status as of Depreciation Status as of Jan. 1, 2015 and amortization Disposals Reclassification Dec. 31, 2015 in CHF in CHF in CHF in CHF in CHF Cumulative depreciation Power plants – 465,149,116 – 10,757,657 12,341,372 – – 463,565,401 Energy distribution facilities – 955,327,875 – 25,162,012 14,340,695 414 – 966,148,778 Public lighting – 27,930,961 – 1,915,581 2,467,048 – – 27,379,494 Transmission facilities – 606,526 – 125,342 – – – 731,868 Energy and grid services – 68,933,890 – 15,268,686 706,529 – – 83,496,047 Telecom systems – 26,216,956 – 26,543,507 20,306,046 – 414 – 32,454,831 General facilities, properties, grounds – 159,701,882 – 3,336,432 3,635,281 – – 159,403,033 Facilities under construction – – – – – Total – 1,703,867,206 – 83,109,217 53,796,971 – 1,733,179,452 Total property, plant and equipment 1,199,470,418 1,246,495,826

66 67 GRI G4-Content-Index1.

General Standard Disclosures Specific Standard Disclosures Document Page External audits Material topics Management approach and indicators Document Page External Strategy and analysis Security of supply GRI aspect: Access ASR 2015 Page 38, 39 – G4-1 Sustainability statement by most senior decision-maker ASR 2015 ² Page 5 – 8 – GRI indicator: EU29 G4-2 Opportunities and risks ASR 2015 Page 49 – Investment in renewable energies GRI aspect: – ASR 2015 Page 16 – GRI indicator: – GRI report 2015 Page 8 Organizational profile Innovation management GRI aspect: – ASR 2015 Page 22 – G4-3 Name of the organization ASR 2015 Page 2, 41 – GRI indicator: – GRI report 2015 Page 8 G4-4 Primary brands, products and services ASR 2015 Page 2, 3, 30 – Sustainable products and services GRI aspect: Products and services ASR 2015 Page 23 – 25 – G4-5 Headquarters GRI report 2015 ³ Page 1 – GRI indicator: – GRI report 2015 Page 8 G4-6 Countries where the organization operates ASR 2015 Page 3 – Energy efficiency at customers GRI aspect: Products and services ASR 2015 Page 25 G4-7 Ownership and legal form ASR 2015 Page 41 – GRI indicator: EN27 G4-8 Markets ASR 2015 Page 3 – Energy efficiency at ewz GRI aspect: Energy ASR 2015 Page 46 – GRI indicator: – GRI report 2015 Page 8 G4-9 Scale of the organization ASR 2015 Page 2, 3 – Environmental protection/ GRI aspect: Biodiversity ASR 2015 Page 17, 46 – 48 – G4-10 Total number of employees GRI report 2015 Page 1 – environmental management GRI indicator: EN12 G4-11 Collective bargaining agreements GRI report 2015 Page 2 – Stakeholder engagement GRI aspect: Local communities ASR 2015 Page 32 – G4-12 Supply chain ASR 2015 Page 50 – GRI indicator: SO1 G4-13 Changes in the organization GRI report 2015 Page 2 – Customers GRI-aspect: Product and service labeling ASR 2015 Page 31 – G4-14 Precautionary principle ASR 2015 Page 5, 9 – 11 – GRI indikator: PR5 G4-15 Endorsed charters, principles GRI report 2015 Page 2 – Opportunity and risk management GRI aspect: – ASR 2015 Page 49 – GRI indikator: – GRI report 2015 Page 8 G4-16 Memberships GRI report 2015 Page 2 – Occupational health and safety GRI aspect: Occupational health and safety ASR 2015 Page 55 – EU1 Installed generating capacity, electricity ASR 2015 Page 40 – GRI indicator: LA6 GRI report 2015 Page 8, 9 EU2 Net energy output, electricity ASR 2015 Page 40 – EU3 Customers ASR 2015 Page 31 – ¹ In compliance with the Guidelines in accordance with the Core option of the Global Reporting Initiative (GRI) EU4 Length of transmission and distributor grid ASR 2015 Page 2 – ² ASR 2015: ewz Annual and Sustainability Report 2015 ³ ASR report 2015 includes additional annual figures in accordance with the GRI Guidelines, EU5 CO₂ emission rights GRI report 2015 Page 2 – read more at www.ewz.ch/nachhaltig. Identified material aspects and boundaries G4-17 Consolidated companies GRI report 2015 Page 3 – G4-18 Defining the report content and aspect boundaries GRI report 2015 Page 3 – G4-19 Material aspects ASR 2015 Page 12 – GRI report 2015 Page 3 – G4-20 Aspect boundaries within the organization GRI report 2015 Page 4 – G4-21 Aspect boundaries outside the organization GRI report 2015 Page 5 – G4-22 Restatements of information GRI report 2015 Page 6 – G4-23 Changes in scope and aspect boundaries GRI report 2015 Page 6 – Stakeholder engagement G4-24 Stakeholder groups engaged GRI report 2015 Page 6 – G4-25 Identification and selection of stakeholders GRI report 2015 Page 6 – G4-26 Approach to stakeholder engagement GRI report 2015 Page 7 – G4-27 Stakeholder concerns GRI report 2015 Page 7 – Report profile G4-28 Reporting period ASR 2015 Page 67 – G4-29 Date of most recent previous report GRI report 2015 Page 7 – G4-30 Reporting cycle ASR 2015 Page 67 – G4-31 Contact point ASR 2015 Page 70 – G4-32 GRI Content Index chosen option ASR 2015 Page 68, 69 – G4-33 External assurance GRI report 2015 Page 7 – Governance G4-34 Governance structure ASR 2015 Page 6, 7, 12, 41 – Ethics and integrity G4-56 Values, norms of behaviour ASR 2015 Page 56 – GRI report 2015 Page 7

68 69 Publication details.

Publisher ewz Tramstrasse 35 8050 Zurich Phone +41 58 319 41 11 [email protected]

May 2016 Duplication permitted with indication of source.

Copies German: 750 copies and e-paper English: 250 copies and e-paper French: e-paper Climate neutral printing using green electricity on 100 % recycling paper, “The Blue Angel” certification.

Editing and coordination ewz Corporate Communications and Sustainability Management

Questions about the content [email protected]

Design, production Atelier Leuthold, Zurich

Illustrations Evelyn Huber, Zurich

Photography Philip Rohner, Zurich

Print Abächerli Media AG, Sarnen

Further information www.ewz.ch

Physical units and abbreviations kW Kilowatt (1,000 watt) SAIDI System Average Interruption Duration Index MW Megawatt (1 million watt) SAIFI System Average Interruption Frequency Index GW Gigawatt (1 billion watt) CAIDI Customer Average Interruption Duration Index Wh Watt hour GRI Global Reporting Initiative kW Kilowatt hour (1,000 watt hours) PPA Power Purchase Agreement MW Megawatt hour (1 million watt hours) ONR 49000 Austrian Standards Institute GWh Gigawatt hour (1 billion watt hours) “Risk management for organizations and systems” Gt Gigatonne ISO 31000 International Organization for Standardization CO₂-eq CO₂-equivalent “Risk Management – Principles and Guidelines” EJ Exajoule OHSAS 18001 Occupational Health and Safety Assessment Series

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