Group history
Vattenfall has come a long way since its beginnings in Sweden more than a century ago.
Deregulation has resulted in substantial changes in the constitution and operation of the energy industry, and the free market has encouraged and driven the development of new products and services.
1899-1909 The birth of Vattenfall
1992-1996 Competition introduced
1997-2005 International expansion
1899 - 1909 The birth of Vattenfall
The Swedish Parliament appointed the Waterfall Committee, and after extensive negotiations, the state was given majority rights to the water in the Trollhättan waterfall (1899). Local industry used power derived from the streaming water, as well as from aged water locks and constructions that were part of canal operation. When the canal was due to be renovated, proposals regarding electricity production were presented. Electric power technology was still in its infancy, but many people wanted to make use of Sweden's waterfalls. Parliament's decision to establish Kungliga Vattenfallstyrelsen (the Royal Waterfall Board) indicated the state's wish to engage actively in electricity production. Trollhättan Canal and Waterworks Administration became the Royal Waterfall Board, marking the birth of Vattenfall. Vattenfall delivered electricity primarily to industry. Major clients included the rail, metal and forestry industries. Household customers were few because of the relatively high price of household electricity.
1992 - 1996 Competition introduced
Following EU directives on open trade in electricity markets, Vattenfall gained increased international business opportunities. Expansion, which had earlier been forged on technical innovations and rising electricity demand within geographically defined markets, could now take place through new markets in competition with international players. Competition was introduced in 1996. In response to deregulation, Vattenfall moved outside the Nordic area, acquiring the Finnish network company Hämeen Sähkö. An office was opened in Hamburg and efforts to consolidate Vattenfall’s brand intensified, raising awareness of Vattenfall among stakeholders and the general public. Important business roles and structures – such as canal operations, and contingency planning for the entire power industry – could not be part of a company subject to competition. Instead, individual solutions were sought, such as Svenska Kraftnät.
1997-2005 International expansion
In 1997, Vattenfall’s growth strategy was initiated with the vision to be a leading European energy company. Deregulation of the German electricity market occurred in 1998, with the country’s largest power conglomerates, RWE and Eon, forced to give up their assets in the former East Germany to prevent them dominating the German power market. Vattenfall acquired a majority of these company holdings, in part via Hamburgische Electricitäts- Werke AG (HEW), which Vattenfall already partly owned. Vattenfall Europe was formed from the German companies in 2002. At about the same time, Vattenfall also became a major player in Poland by acquiring Warsaw's electricity and district heating company, Electrocieplownie Warszawiskie (EW), and Poland's largest electricity supplier, Górnośląski Zakład Elektroenergetyczny (GZE). At the end of 2001, HEW took over the majority of shares in Bewag, a company with a long tradition in Berlin; its first plant was opened in the city in 1885. In 2005 Vattenfall became an important player on the Danish market by taking over approximately 24 per cent of the total generation capacity of the Danish companies Elsam and Energi E2, in exchange for the 35.3 per cent holding in Elsam that was acquired. Today Vattenfall is a fully international company, with more than 20 000 employees outside the Nordic countries, mainly in Germany and Poland.
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