facts & figures 2010
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FACTS & FIGURES 2010(Updated August 2010)
RWE Facts & Figures | Updated August 2010 2
* Footnotes are to be inserted manually (using “copy” and “paste“).
RWE Facts&Figures 2010 contains certain forward-looking statements as defined by US federal securities laws. This predominantly relates to the following statements:
Projections of revenue, income, earnings per share, capital expenditure, dividends, the capital structure and other financials;Statements of plans or objectives for future operations or concerning the company’s future competitive position;Expectations of future economic performance; andStatements of assumptions underlying several of the foregoing types of statements, all of which are forward-looking statements.
Also words such as “anticipate”, “believe”, “estimate”, “intend”, “may”, “will”, “expect”, “plan”, “project”, “should” and similar expressions are intended to identify forward-looking statements. The forward-looking statements reflect the judgement of RWE’s management based on factors currently known to it. No assurances can be given that these forward-looking statements will prove accurate and correct, or that anticipated, projected future results will be achieved. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Such risks and uncertainties include, but are not limited to, changes in the general economic and social environment, business, political and legal conditions, fluctuating currency exchange rates and interest rates, price and sales risks associated with a market environment in the throes of deregulation and subject to intense competition, changes in the price and availability of raw materials, risks associated with energy trading (e.g. risks of loss in the case of unexpected, extreme market price fluctuations and credit risks resulting in the event that trading partners do not meet their contractual obligations), actions by competitors, application of new or changed accounting standards or other government agency regulations, changes in, or the failure to comply with, laws or regulations, particularly those affecting the environment and water quality (e.g. introduction of a price regulation system for the use of power grids, creating a regulation agency for electricity and gas or the introduction of trading in greenhouse gas emissions), changing governmental policies and regulatory actions with respect to the acquisition, disposal, depreciation and amortisation of assets and facilities, operation and construction of plant facilities, production disruption or interruption due to accidents or other unforeseen events, delays in the construction of facilities, the inability to obtain, or to obtain on acceptable terms, necessary regulatory approvals regarding future transactions, the inability to successfully integrate new companies within the RWE Group to realise synergies from such integration and the potential liability for remedial actions under existing or future environmental regulations and the potential liability resulting from pending or future litigation. Any forward-looking statement is valid only as of the date on which it is made. RWE neither intends to, nor assumes any, obligation to update these forward-looking statements. For additional information regarding risks, investors are urged to consult RWE’s latest annual report, other reports recently filed with the Frankfurt Stock Exchange or the SWX Swiss Exchange and the material furnished to the US Securities and Exchange Commission by RWE.
Forward-Looking Statement
RWE Facts & Figures | Updated August 2010 3
133 RWEElectricity
GenerationFuelsTradingNetworkSupply
GasUpstreamLNGTradingTransportDownstream
AccountingNuclear Provisions
Investor Relations
137137166169171173179179189192195198205205207
74
55
4
7777939799
103115115122
575864666971
71111303236364051
Market DataElectricity
GenerationFuelsTradingGrid Supply
GasLNGDownstream
Political EnvironmentCombined Heat and Power (CHP) ActRenewable Energy ActEmissions TradingNational Allocation Plan II (NAP)Large Combustion Plant Directive (LCPD)Network
At a GlanceStructureStrategy
CornerstonesAcquisitions and DivestmentsSustainability
Financial InformationRWE ShareFixed Income Financing
Risk Management
At a
Gla
nce
Polit
ical
Envi
ronm
ent
Mar
ket D
ata
RW
E
Table of Contents
RWE Facts & Figures | Updated August 2010 4
RWEMarket Data
At a Glance
Political EnvironmentAt a Glance
RWE Facts & Figures | Updated August 2010 4
7 Structure11 Strategy36 Financial Information51 Risk Management
RWE Facts & Figures | Updated August 2010 5
Our Corporate Responsibility Strategy: Ten Fields of Action (II)33Our Corporate Responsibility Strategy: Ten Fields of Action (I)32
In 2009, RWE Spent €2,229 Million on Environmental Protection 35The Technology of the Future: RWE to Gain Leadership in Europe in Virtually CO2-free Power Plant Technology 34
Sustainability [32 – 35]
RWE's Mid-term Financial Targets through to 2012 29
Status of RWE's New Build Projects (as of May 2010)26RWE Acquisition Criteria27Efficiency Enhancement Programme is on Track to Deliver €1.2 Billion by 201228
RWE Today: One of the Leading Integrated European Utilities8
Major Divestments since FY 2008 31Major Acquisitions since FY 2008 30
Cornerstones [11 – 29]
Structure [7 – 10]At a Glance [7– 54]
Acquisitions and Divestments [30 – 31]
Investment Programme of €28 Billion 2010 – 201325Stable Portfolio: 28% of Operating Result Derived from Regulated Businesses (2009)24Managing CO2: We Complement Physical Measures by Comprehensive Financial Optimisation23Our Strategy to Reduce the Impact of CO2 on Our P&L in 201322Prepared for Post-Kyoto: Our Generation Portfolio is Set to Be 75% "Zero or Low Carbon" by 202521Nabucco Will Link Caspian & Middle East's Supply to Cover Europe's Increasing Demand20Excelerate Energy: Innovative LNG Solutions19Excelerate Technology Increases Flexibility in Gas Supply18Fossil Fired Generation Strategy: Growth, Higher Flexibility, Less CO2 Emissions17Our Renewable Energy Strategy: Growing Generation Capacity and Profit − in Existing and New Markets16Nuclear Strategy: Preservation of Nuclear Expertise, Growth in New and Existing Markets, Zero CO215RWE's Simple Strategy – Where to and Why?14Our Focus Remains Europe – but with a Far Wider Scope13More Growth, Less CO2 – Our Strategic Roadmap for 2012/201312RWE's Strategy – Stability and Growth: The Right Mix for Adding Value11
Strategy [11 – 35]RWE's Customers (2009)10RWE Group Structure: A Mirror of the Value Chain9
RWE Group Structure 2010: More Market-driven, Leaner and Faster7
Table of Contents
RWE Facts & Figures | Updated August 2010 6
Asset Management: Investment Strategy (excl. Plan Assets) 41
Credit Risk Management at the RWE Group 54
Fixed Income Financing [40 − 50]
Financial Information [36 − 50]RWE Share [36 − 39]
Risk Management [51 – 54]
At a Glance [7– 54]
RWE Supply & Trading Commodity Risk Limit System 53RWE's Commodity Risk Management Infrastructure 52Organisation of Risk Management in the RWE Group 51
RWE Securities 50RWE Bond Programme49RWE AG: Financial Risks and Managing Interest Rate Risk – Asset/Liability Management 48Credit Rating 2010 – RWE AG 47Major Goal Remains to Secure Sound Credit Standing as Expressed by A-flat/A2 Rating46Gross Financial Debt – Currency and Interest Exposure 45RWE AG: Strong Sources of Financing 44RWE's Corporate Treasury – Basis for Groupwide Financial Risk Management 43Asset Management: Investment Strategy (Domestic Plan Assets; Smaller Plans Deviate Slightly) 42
Management of Financial Assets: Centralised Structure 40
RWE's Dividend Policy (II) 39RWE's Dividend Policy (I) 38RWE Share Profile 37RWE AG Shareholder Structure 36
Table of Contents
RWE Facts & Figures | Updated August 2010 7
RWE Group Structure 2010: More Market-driven, Leaner and Faster
RWE AG(Group Centre)
> Amprion (formerly RWE Transportnetz Strom, Germany)> Thyssengas (formerly RWE Transportnetz Gas, Germany)> RWE Technology > Internal Services
Region Function
StructureMarket DataPolitical EnvironmentAt a Glance RWE
Germany
RWE Vertriebincl. RWE Aqua, eprimo,RWE EffizienzRWE Rheinland Westfalen NetzenviaM/MITGASKEVAG LEWSüwagVSEKELAG
Essent RWE npower RWE HungáriaRWE Polska(Poland)VSE (Slovakia)RWE Transgas(Czech Republic)NET4GAS (Czech Republic)RWE Holding (Turkey)
RWE Innogy RWE Dea RWE Supply & Trading
RWE Power
Central Eastern and South
Eastern Europe
UnitedKingdom
Netherlands/Belgium
Trading/Gas Midstream
UpstreamGas & OilRenewablesPower
GenerationSales and
Distribution Networks
RWE Facts & Figures | Updated August 2010 8
We have leading positions in two of Europe’s largest markets as well as in fast growing CEE markets and own a large upstream position in both Europe and North Africa.
RWE Core Markets
United Kingdom
Netherlands
Luxembourg
Austria
Hungary
Poland
Slovakia
CzechRepublic
Germany
RWE Today: One of the Leading Integrated European Utilities
Electricity Gas Water
*) Market positions of the RWE Group in terms of sales.
StructureMarket DataPolitical EnvironmentAt a Glance RWE
Leading Positions in Core Markets
GasElectricityMarket*)
Product
Germany No. 2 No. 3
UK No. 3 No. 4
> No. 2 in Hungary
> No. 3 in Slovakia
> Presence in the Czech Republic
> No. 6 in Poland
> Leading position in Hungary
> No. 2 in Slovakia
> No. 1 in the Czech Republic
Eastern Europe
Total Europe No. 3 No. 6
Netherlands No. 2 No. 1
RWE Facts & Figures | Updated August 2010 9
1) Not included: Amprion, Thyssengas, RWE Effizienz, RWE Technology and internal services.2) Including lignite production.
Conventionalpower generation
Renewableenergy
Energy trading/ gas midstream
Electricity and gas grids
Electricity and gas supply
RWE Dea
RWE Power2)
RWE npower
RWE Supply & Trading
RWE Innogy
Essent
RWE Rheinland Westfalen Netz
German regional companies
Central Eastern and South Eastern European regional companies
RWE Vertrieb
RWE npower
Essent
Power generation
Gas and oilproduction
RWE Group Structure: A Mirror of the Value Chain1)
StructureMarket DataPolitical EnvironmentAt a Glance RWE
> Integrated business model: strong presence in all parts of the energy value chain> Stability and growth: well balanced portfolio of leading market positions in mature and growing markets in Europe
RWE Supply & Trading
RWE Facts & Figures | Updated August 2010 10
RWE's Customers (2009)
15
8
16
0 5 10 15 20
Water
Gas
Electricity
Millions
StructureMarket DataPolitical EnvironmentAt a Glance RWE
*)
*) Figure relates to drinking water and sewage water. Population served in Continental Europe.
RWE Facts & Figures | Updated August 2010 11
RWE's Strategy – Stability and Growth: The Right Mix for Adding Value
> Regional focus> Cost leadership> Focus on high-value customers and regulated business> Vertical integration> Synergies
Electricity
Gas
Focus on European key regions
Focus primarily on energy
Germany
UK
Netherlands/Belgium
Central Eastern and South Eastern Europe incl. Turkey
> Focus on high-quality markets> Strong presence with critical mass > Regional synergies> No "problem zones"
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 12
What we aim to do Target
Safeguard and increase existing margins in RWE key markets, i.e. Germany and UK
Increase level of regional diversification
Boost proportion of renewables in our generation portfolio while creating value
Reduce carbon exposure
Strengthen gas midstream activities
Grow equity gas business organically
GER: safeguard/increase margins on current volumesUK: safeguard/increase volumes and profitability
Grow share of non-German operating result from 34% (2009) to 40 - 50% by 2012
More than triple the installed base to 4,500 MW by 2012; operating result of at least €0.5 billion p.a. by 2013
Reduction of 20% (compared to 2008 emissions) by 2012
Profitably increase contracted European gas supply purchase volume from 40 to 60 bcm p.a. by 2012
Operating result of at least €0.9 billion p.a. by 2013
More Growth, Less CO2 – Our Strategic Roadmap for 2012/2013 (As of February 2010. Mid-term targets are under review; announced in August 2010)
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 13
x.y
RWE core markets with established market positions
Additional markets especially for renewables business
Growth markets under observation
Expected electricity/gas consumptiongrowth in % p.a. (2010 − 2020)
0.25/1.25
0.25/2.25
3.75/4.50
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
3.00/2.00
Our Focus Remains Europe – but with a Far Wider Scope
RWE Facts & Figures | Updated August 2010 14
RWE's Simple Strategy – Where to and Why?
> Strengthening RWE‘s business along the entire value chain (from upstream to the end customer)
> Reducing risks from different markets and regulators by geographic diversification> Reducing selected commodity positions (CO2)> Stable regulated business
> Modernisation of power plant portfolio> Strong expansion of renewable energies
… moresustainable
> High share of investments outside of Germany> Growth in regions new to RWE
… moreinternational
…and in the end more valuable despite all challenges!
… more robust
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 15
Nuclear Strategy: Preservation of Nuclear Expertise,Growth in New and Existing Markets, Zero CO2
NDA sites
Cernavoda
Investment criteria
> Security: Focus on countries with an existing nuclear framework (legal, infrastructure, waste)> Nuclear framework: Highest standards (plant security, technology, quality), focus on new builds> Strategic fit: Attractive market, compatible with RWE‘s portfolio and strategy> Financial criteria: the same standard criteria as for other generation new build projects
Romania
> Construction of two new CANDU units (2 x 720 MW) in Cernavoda
> Commissioning planned for 2015/16
> RWE with 9% stake in consortium of GDF Suez, Iberdrola, CEZ, Enel, Accelor-Mittal and the Romanian utility Nuclearelectrica
UK
> New nuclear pro-gramme since 2006
> Horizon Nuclear Power JV with E.ON to build up to 6 GW
NPP units being planned/considered
National framework for new builds until 2015
National framework for new builds between 2016 and 2025
RWE activities
National frameworks
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 16
Our Renewable Energy Strategy: Growing Generation Capacity and Profit − in Existing and New Markets(Accounting view + PPA*), as of December 31, 2009)(As of February 2010. Mid-term targets are under review; announced in August 2010)
0
2
4
6
8
10
12
14
16
18
20
22
RWE Innogy: Generation assets and project pipeline
Inoperation
Underconstruction
Pipelinestatus 1
Pipelinestatus 2
Totalpipeline
Pipelinestatus 3
2.2 0.41.2
8.1
7.3 16.7
GW
RWE Innogy: Organic capacity ramp-up translating into profits
> We maintain our capacity target of 4.5 GW in operation or under construction by 2012, which translates into a minimum generation of 15 TWh/a from 2013 onwards
> On this basis, the company aims to have hit the €500 million operating result mark by 2013
> Organic growth (incl. development of acquired pipeline) and select strategic acquisitions
> Value creation remains priority over additional MW
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
Pipeline status 1 – Permitted projects: all permits (including grid) in place, but not yet under constructionPipeline status 2 – Unconsented projects: RWE Innogy has rights to the project, e.g. land agreementsPipeline status 3 – Prospects: identified sites with a known MW capacity, initial discussion on agreements
*) PPA = Power Purchase Agreement.
RWE Innogy: Breakdown of assets in operation
2.2 GW
Biomass5%
Germany41%
Other 4%
Onshorewind 64%
Offshorewind 7%
Hydro24%
UK 23%
Spain 19%
Netherlands10%
France3%
2.2 GW
Biomass
Hydro
Offshore windOnshore wind
RWE Facts & Figures | Updated August 2010 17
Fossil Fired Generation Strategy: Growth, Higher Flexibility, Less CO2 Emissions
Comparison of ramp capacities between new CCGT unit and new coal vs. old coal unit
0
200
400
600
800
1.000
0 5 10 15 20 25 30
MW
min
Max cap. ~ 875 MWMin cap. ~ 260 MW*)
Max gradient +/- 38 MW/min
New CCGT
Max cap. ~ 600 MWMin cap. ~ 420 MWMax gradient +/- 8 MW/min
*) One turbine gets turned off.
Old coal
Max cap. ~ 800 MWMin cap. ~ 320 MWMax gradient +/- 26 MW/min
New coal
,
New gas-fired 875 MW plant: > 58% efficiency for peak time, or all load regimes
New hard coal-fired 1,600 MW plant in Hamm –two flexible 800 MW units for mid-merit regime
Small and flexible units can be dispatched more quickly to capture extra margin potential along the merit order
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 18
> Gulf Gateway (USA)> Northeast Gateway (USA)
Excelerate Deepwater Ports Excelerate GasPorts Ship-to-ship transfer (STS)
> Teesside GasPort (UK)> Third party GasPorts in Bahia Blanca
(Argentina) and Mina Al-Ahmadi(Kuwait)
> German GasPort in Wilhelmshaven(development underway)
> Transfer between conventional and Excelerate ships is possible
> Proves for additional flexibility and 3rd party cargos/transport
> Main assets: two US offshore Deepwater Ports (capacity of approx. 10 bcm/a); GasPort in the UK (capacity of approx. 4 bcm/a), a fleet of currently nine LNG vessels with transport capacity of approx. 4.8 bcm/a, third-party GasPorts
> Other import projects under development utilising these technologies> Discharge of LNG at conventional import terminals also possible
Excelerate Technology Increases Flexibility in Gas Supply
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 19
Under Development
Gulf Gateway
WilhelmshavenGasPort
Northeast Gateway
Teesside GasPort
Bahia Blanca GasPort
Mina al-AhmadiGasPort
Excelerate Energy: Innovative LNG Solutions
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
Operational
> Main Excelerate operations include:– 2 US offshore Deepwater Ports – 3 GasPorts: Argentina,
Kuwait and UK– 9 LNG vessels in operation
(1 traditional carrier and 8 Energy Bridge regasification vessels)
> Excelerate Energy has a proven technology, ideally tailored to the needs of flexible and peak-load demand
> Excelerate offers cost-effective solutions: a Gateway incurs typically one tenth the costs of a conventional LNG receiving terminal
> Excelerate vessels can also be used as “floating storage”
Focusing on delivering LNG to downstream markets, Excelerate acquires LNG shipping capacity through flexible time charters and ownership positions to import it and develop unique market access points around the world
RWE Facts & Figures | Updated August 2010 20
Nabucco Will Link Caspian & Middle East's Supply to Cover Europe's Increasing Demand
x.x
Nabucco pipeline
RWE pipelines
RWE customer markets
Number of RWE customers
Potential gas sources for Nabucco
UK 2.6 m
Germany1.1 m
Czech Rep.2.3 m
Hungary*2.1 m
Netherlands1.9 m
> The Nabucco pipeline project links RWE's downstream positions with the Caspian region and other potential gas resources
> 3,300 km pipeline link to large gas resources in the Caspian and Middle East
> Key next target: “open season” process to market transport capacity to shareholders and third-party shippers expected to start during the course of 2010
> Final investment decision expected at the end of 2010 with gas scheduled to start flowing by 2014
> Final construction phase completed by 2019/20 with a max. capacity of 31 bcm/a
> Partners: BOTAS (Turkey), Bulgarian Energy Holding (Bulgaria), Transgaz (Romania), OMV (Austria), MOL (Hungary) and RWE, each holding 16.7%
> Investment: up to approx. € 8 billion> Intensive talks with potential supply countries like
Azerbaijan, Turkmenistan, and Northern Iraq> RWE received invitation to concrete negotiations from
Azerbaijan
Egypt
Iraq
Iran
Kazakhstan
Turkmenistan
Saudi Arabia
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
Azer-baijan
Russia
*) Including minority holdings ≥ 20%.
RWE Facts & Figures | Updated August 2010 21
Prepared for Post-Kyoto: Our Generation Portfolio is Set to Be 75% "Zero or Low Carbon" by 2025
Output 2025
RW
E ge
nera
tion
mix
(c
apac
ity in
%)
Capacity 2009 Capacity 2025: ~65 GW
RW
E ge
nera
tion
mix
(o
utpu
t in
%)
Output 2009
Lignite & hard coal
Renewables
Gas
Pumped storage, other
Nuclear
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
75%
Lignite & hard coal
Renewables
Gas
Pumped storage, other
Nuclear
Lignite & hard coal
Renewables
Gas
Pumped storage, other
Nuclear
Lignite & hard coal
Renewables
Gas
Pumped storage, other
Nuclear
RWE Facts & Figures | Updated August 2010 22
2008-2012 2013-2020 2013
Our Strategy to Reduce the Impact of CO2 on Our P&L in 2013
Certificates to be purchased*) Operating result 2009–2013 Offsetting factors
> Expected higher level of powerand gas wholesale prices
> New build to be commissioned> Substantial increase in profit from
renewables and upstream gas & oil> Stable contribution from retail and
network business> Increased efficiency enhancement
programme
2009 2010 2011 2012 2013
60 – 70
160 – 170 +100
Organic growth/High earnings visibility
Small M&As
Essent
CO2 reduction, CDM/JI
Million mt p.a.
2013 above 2009
*) Excluding Essent; Essent produces CO2 emissions of approx. 8 to 10 million metric tons p.a.
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
(As of February 2010. Mid-term targets are under review; announced in August 2010)
RWE Facts & Figures | Updated August 2010 23
Managing CO2: We Complement Physical Measures by Comprehensive Financial Optimisation
> Our large low carbon new-build programme as well as our investments in renewables will lead to substantial improvement of our CO2 intensity by 2013
> For phase 3 (2013 – 2020) we aim to reach a “market average” position in terms of our exposure to changes in CO2 prices
0.80
0.45
0.67
Today 2013 2020
Specific CO2 emissions exposure (mt/MWh)
New builds and
shutdowns2)
Renewables CDM/JI Portfoliooptimisation New
builds RenewablesShut-
downs/lower
load factor
Portfoliooptimisation
Market average
1)
1) Assumes standardised load factors for RWE portfolio including Essent based on commodity price levels and power demand in 2007 – 2009.2) Conventional new builds currently under construction and agreed plant shutdown; assumes nuclear lifetime extension.
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 24
Stable Portfolio: 28% of Operating Result Derived from Regulated Businesses (2009)External revenue (€47,742 million) Operating result (€7,090 million)
Unregulated business 72%
Regulated business 28%
Regulated business particularly includes:> German electricity and gas networks> Czech gas networks and storage> Electricity supply in Hungary> Continental European water business> Renewables
Unregulated business 72%
Regulated business 28%
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
Unregulated business 70%
Regulated business 30%
EBITDA (€9,165 million)
RWE Facts & Figures | Updated August 2010 25
Investment Programme of €28 billion 2010 – 2013
Committed capex
GermanForeign
German vs foreign capex
2010 2011 2012 2013
95%80%
55% 50%
2010 – 201360% of capex will be spent outside of Germany.
Up to half of annual capex is still flexible in later years.
Strategy – CornerstonesMarket DataPolitical Framework ConditionsAt a Glance RWE
€2,100 m p.a.~50% Generation~50% Sales & Distribution
€500 m p.a.
€1,000 m p.a.
€900 m p.a.
€1,400 m p.a.
€1,000 m p.a.
€100 m p.a.
Germany
UK
Netherlands/Belgium
CEE
Renewables
Upstream
Other
€7.0 bn p.a.+/- 10%
2010 – 2013
As of February 2010.
(As of February 2010. Mid-term targets are under review; announced in August 2010)
RWE Facts & Figures | Updated August 2010 26
0.5Denizli(CCGT, 776 MW)
2.6Eemshaven(Hard coal/biomass, 1,560 MW)
2.2Hamm (Hard coal, 1,528 MW)
1.2Pembroke (CCGT, 2,188 MW)
1.1Claus C (CCGT, 1,304 MW)
0.4Moerdijk 2 (CCGT, 426 MW)
2.5BoA Neurath(Lignite, 2,100 MW)
0.8Staythorpe(CCGT, 1,650 MW)
0.5Lingen(CCGT, 887 MW)
2014201320122011201020092008200720062005Capex (€ bn)
Status of RWE's New Build Projects (as of May 2010)
F*)
B
Units 1 – 5
Units 1 – 4
Unit G
Unit A
Unit D E
*) Data on start of full commercial operation is preliminary and cannot be finally determined yet due to an accident in 2007.
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 27
RWE Acquisition Criteria(As of February 2010. Mid-term targets are under review; announced in August 2010)
> IRR > hurdle rate after tax; hurdle rate = project specific WACC(5.5 - 6.5%, upstream 8.5%) plus value contribution and risk premium dependent on risk of the business and region
> ROCE has to match WACC in the 3rd year of full inclusion of acquired assets (including goodwill)> New leverage factor target: from 2010 onwards, we want to orientate ourselves towards an upper limit of 3.0 net debt/EBITDA.
Our major goal remains to secure an A flat/A2 rating.
Financial criteria
> Business complementarity– Products– Regions– Synergies
> Provide growth potential> Improvement of CO2 profile
Strategic criteria
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 28
> Fully accretive to operating result (i.e. post-cost inflation and one-off cost of programme)> Underpinned by a significant portfolio of projects across the Group, e.g.:
– Cost savings by RWE’s German sales & distribution businesses(e.g. merging of callcentres, standardisation of back-office processes, IT pool purchasing and grid maintenance)
– Key performance-improvement projects at RWE Power and RWE npower to increase thermal efficiency, availability and capacity of existing power stations as well as cost-cutting measures
€ million
Cumulative operating result contribution of the programme compared to 2006
0
300
600
900
1200
2007 2008 2009 2010 2011 2012
€1,200 millionannual contributionin total as of 2012vs. 2006
1,200
900700
450
200100
Efficiency Enhancement Programme is on Track to Deliver €1.2 Billion by 2012
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 29
RWE's Mid-term Financial Targets through to 2012
Targets
Recurrent net income Dividend Efficiency
Approx. 5% CAGR*) through to 2012 based on an average realised price for German electricity forwards of at least €60/MWh, US$80 per barrel of Brent crudeand carbon costs of€20/mt CO2
Payout ratio of 50% –60% of recurrent net income with the goal to at least match the previous year’s dividend for each fiscal year from 2010 to 2013
Compliant with at least an A flat/A2 rating category
Approx. 5% CAGR*)
through to 2012 based on an average realised price for German electricity forwards of at least €60/MWh, US$80 per barrel of Brent crude and carbon costs of €20/mt CO2
€1.2 billion improvement in annual operating result by the end of 2012 vs. 2006
Operating result
Capital structureCapital structure
*) Based on 2008 (excluding Essent).As of February 2010.
Strategy – CornerstonesMarket DataPolitical EnvironmentAt a Glance RWE
(As of February 2010. Mid-term targets are under review; announced in August 2010)
RWE Facts & Figures | Updated August 2010 30
Major Acquisitions since FY 2008
702009Breagh gas field and surrounding exploration licenses, UK
502008Excelerate Energy, USA
1002009Favorit GmbH, Germany49 to 1002009Luxempart Energie S.A. (holds stake in SOTEG S.A.), Luxembourg
502008Greater Gabbard Offshore Windparks Ltd., UK1002008Powerhouse Holding B.V., Netherlands
1002009Essent N.V., Netherlands
502008Fri-El S.p.A., Italy1002008Urvasco Energía S.A., Spain
Percentage of participation
Year of acquisition
Company
Strategy – Acquisitions and DivestmentsMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 31
Major Divestments since FY 2008
51% less one share2009swb, Germany*)
from 100 to 60.5%from 60.5 to 0 %
20082009
American Water, USA502008Tarragona Power, Spain
8.232008Rhenag, Germany
Percentage stakeYear of divestmentCompany
Strategy – Acquisitions and DivestmentsMarket DataPolitical EnvironmentAt a Glance RWE
*) Divestment by Essent in order to obtain approval for acquisition of Essent N.V. by RWE.
RWE Facts & Figures | Updated August 2010 32
Our Corporate Responsibility Strategy: Ten Fields of Action (I)
Best reputation of all comparable companies in the industry
Reputation Index5)…to strengthening our regional reputation by making efficient use of resources.
Community engagement
Customer Loyalty Index of > 771)Customer Loyalty Index4)
(CLI)…to having satisfied and hence loyal customers.
Pricing
- Compliance with the (n-1) criterion, 1, 3)
- SAIDI < 25 minutes1)
- (n-1) criterion- System Availability
Interruption Duration Indicator (SAIDI) in minutes per year and customer
…to ensuring system security across our transmission networks at all times.…to supplying our customers with the energy they need at all times.
Security of supply
- RWE real estate: 5%1)
- RWE vehicle fleet: 20%1)
- RWE power plants: 11%2)
- RWE customer projects: 8%2)
Increase in energy efficiency in %
…to increasing both our own energy efficiency and that of our customers.
Energy efficiency
0.45 mt CO2/MWh by 2020Average CO2 emissions in metric tons per MWh of electricity generated (mt CO2/MWh)
…to significantly reducing our power plant portfolio‘s CO2 intensity. Our goal is to take physical and financial measures to lower our CO2 exposure to the level of an average competitor in our markets no later than 2020.
Climate protection
TargetKPIsWe are committed…Field of action
1) Applies only to companies based in Germany. 2) Applies only to companies based in Germany and the UK. RWE organises contests for customers (residential, commercial and industrial), municipalities and the public and provides them with advice and assistance with a view to improving energy efficiency. Some of these activities are evaluated to determine how beneficial they are in terms of saving money and the climate. Energy savings are calculated on the basis of a before-and-after comparison. 3) Meeting the n-1 criterion ensures that the fault-induced outage of a major network component (such as a line, transformer or generator) does not cause the entire network to fail. 4) The Customer Loyalty Index is based on an annual customer survey covering all Geman sales companies. Standardised questions and answers on issues such as value for money, customer satisfaction and customer loyalty are used as a basis for determining approval ratings on a scale of 1 to 100.5) The Reputation Index builds on an annual poll of opinion leaders and the public. Journalists, politicians, industry, NGO, trade association and research institute representatives as well asa representative cross-section of the population are canvassed using standardised questions and answers on their perception of RWE for this purpose.
Our objectives are based on both what society expects of us as an responsible energy supplier and on those issues which in our view are crucial to our sustainability as a business.
Strategy – SustainabilityMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 33
Our Corporate Responsibility Strategy: Ten Fields of Action (II)
Average position among comparable companies
Demographic Index1)…to ensuring the long-term availability of sufficient numbers of appropriately skilled personnel.
Demographic change
- LTIF: 3/1,000,000 h- Most employees of
companies based in Germany have access to some means of measuring their personal WAI
- Number of accidents per million working hours (LTIF: X/1,000,000 h)2)
- Introduction of the Work Ability Index3) (WAI) in %
…to ensuring that all our own and sub-contractors’employees return home at the end of the day just as healthy as they were when they arrived at their workplace.…to maintaining our employees’ productivity.
Occupational health and safety
- 100% compliance
- 100% coverage
- Compliance with licensing requirements in %
- Group-wide environmental management coverage in %
…to operating our plants safely at all times and in compliance with licensing regulations.…to implementing our environmental management system permanently at 100 % in order to supervise the safe operation of our plants and networks in compliance with statutory regulations
Environmental protection
95% coverageGroup wide innovation management coverage in %
…to ensuring the availability of the best technical solutions for our purposes in our core processes through innovations.
Innovations
95% of the procurement volume
Supplier management coverage in all procurement areas in %
…to avoiding reputational risks by making compliance with internationally recognised social and environmental standards an integral part of our supply contracts.
Supply chain
TargetKPIWe are committed…Field of action
1) The RWE Demography Index is made up of five workforce age structure indicators. The index is determined based on a comparison to targets. This results in the Demography Index, with rankings between 0 (high demographic risk) and 100 (low demographic risk). 2) Workplace and business travel accidents per million working hours.3) The Work Ability Index is a standardised yardstick that reveals the degree to which an employee is capable of doing his or her work, determined on the basis of individual skills and work conditions.
Strategy – SustainabilityMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 34
In parallel, CO2 scrubbing for lignite and hard coal will be developed further for advanced conventional power planttechnology:> RWE npower is going to build a 3 MW carbon dioxide capture pilot plant at its Aberthaw coal power station in South Wales.
When commissioned, it will be the UK’s biggest carbon capture pilot plant.> RWE Power, BASF and Linde have joined forces to develop new processes for CO2 capture from combustion gases
in coal-fired power plants. A pilot scrubbing plant for power station flue gases in Niederaussem was put into operation in August 2009.
> American Electric Power (AEP), RWE and Alstom are collaborating in a similar project, which has been implemented in the AEP hard coal-fired Mountaineer plant (1,300 MW) in New Haven, West Virginia, USA.
1) IGCC: Integrated Gasification Combined Cycle.
2) CCS: Carbon Capture and Storage.
2
RWE Power is considering developing and building a virtually CO2-free 450 MW coal-fired IGCC1) plant including CO2transport and storage to demonstrate the whole CCS2)-chain. The new power plant would be fuelled by Rhenish lignite resources. But we are facing serious problems: > Lacking acceptance at intended storage site in Schleswig-Holstein (northern Germany) > No funding for the project as a whole within the scope of the European Energy Programme for Recovery (EEPR)> No viable regulatory framework for CCS in Germany at present
1
The Technology of the Future: RWE to Gain Leadership in Europe in Virtually CO2-free Power Plant Technology
Strategy – SustainabilityMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 35
In 2009, RWE Spent €2,229 Million1) on Environmental Protection
1) Including capital expenditure.2) E.g. operation of flue gas desulphurisation systems.3) Mainly wastewater treatment.4) E.g. recultivation projects at Rhenish opencast mines.
Climate protection €1,482 million 66%
Clean air2) €345 million 15%
Waste disposal €172 million 8%
Water protection3) €127million 6%
Landscape conservation4) €87million 4%
Noise abatement €10 million 1%
Restoration ofcontaminated sites €6 million 0%
Strategy – SustainabilityMarket DataPolitical EnvironmentAt a Glance RWE
Total: €2,229 million(2008: 2,115 million)
RWE Facts & Figures | Updated August 2010 36
RWE AG Shareholder Structure*)
> 260,000 shareholders own 562.4 million shares.> 80% of all RWE shares are held by institutional investors. > The regional breakdown is as follows:
> Free float 80%(excluding RW Energie-Beteiligungsgesellschaft and own shares)
80%All institutional shareholders:
16%RW Energie-Beteiligungsgesellschaft
4%BlackRock
60%Other institutional shareholders
*) As of December 2009.
Financial Information – RWE ShareMarket DataPolitical EnvironmentAt a Glance RWE
1%Employee shareholders
Shares of subscribed capital
5%Own shares
14%Private shareholders
2%Rest of the world13%Continental Europe (excl. Germany)12%UK/Ireland17%USA/Canada36%Germany
RWE Facts & Figures | Updated August 2010 37
RWE Share Profile*)
39,000,000 preference shares39,000,000 preference shares
523.4 million common shares494.6 million common shares28.8 million common shares
Total number of sharesTotal number of shares outstandingTotal number of treasury shares
Non-par-value sharesCommon shares Preference sharesShare information
Germany – official –Frankfurt/Main DüsseldorfXetraAbroadSIX Swiss Exchange (secondary listing)New York, OTC trading(Sponsored level-one ADR programme for common shares)
Listings–74975E303US CUSIP No. (ADR)1158 8901158 883Swiss Security ID Code703714703712German Security Identification No.DE 000703 7145DE 000703 7129ISINRWE3 GYRWE GYBloomberg
RWEGpr.F (Frankfurt)RWEGpr.DE (Xetra)
RWEG.F (Frankfurt)RWEG.DE (Xetra)
Reuters
*) As of April 6, 2010.
Financial Information – RWE ShareMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 38
2001 2002 2003 2004 2005 2006 2007 2008 2009
RWE's Dividend Policy (I)
Dividend yield based on year-end price of RWE common shares%
2001 2002 2003 2004 2005 2006 2007 2008 2009
Dividend per share€
Bonus€0.10
4.2%
€3.50
*) Truncated fiscal year of RWE AG from July 1 to December 31, 2001.
*)
3.2% 4.5% 4.0% 3.7% 2.8%
€1.00 €1.00 €1.25 €1.50 €1.75
3.3%
€3.15 €4.50
7.1%
Financial Information – RWE ShareMarket DataPolitical EnvironmentAt a Glance RWE
5.2%
€3.50
RWE Facts & Figures | Updated August 2010 39
RWE's Dividend Policy (II)
Payout trendDividend payout (€ million)
1,867
2,401
1,689
1,968
984
619703
844
0
500
1000
1500
2000
2500
3000
2002 2003 2004 2005 2006 2007 2008 2009 2010e - 2013e
One-off payoutratio increase
(sale of Thames Water)
One-off payoutratio increase
(sale of 39.5% of American Water)
3,000
2,500
2,000
1,500
1,000
500
0
Regular payoutratio of
50% – 60%*)
Financial Information – RWE ShareMarket DataPolitical EnvironmentAt a Glance RWE
*) Based on recurrent net income.
RWE Facts & Figures | Updated August 2010 40
> Defines investment strategy> Sets guidelines for the implementation
> Members: CFOs of RWE AG, RWE Power, RWE npower, RWE Dea, enviaM, Lechwerke, Süwag, Head of Finance of RWE AG
As of December 31, 2009.
RWE AG Group Finance
Investment guidelines
Master “KAGs”: RWE AG Group
> "Spezialfonds": 11> Subfunds: 44
> RWE AG subsidiaries: €2.4 bn> RWE Pensionstreuhand e.V. (PTV): €3.3 bn> RWE Pensionsfonds AG (PF): €5.8 bn
> UK Pension Trust - RWE npower: £3.5 bn
Assetmanagement
contract
Asset Management Committee (AMC)
Recommendations &reporting
Investment strategy,guidelines & restrictions
> Centralised asset management by RWE AG
Internal management External management
Master “KAGs”: PTV + PF
> "Spezialfonds": 4> Subfunds: 59
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
Management of Financial Assets: Centralised Structure
RWE Facts & Figures | Updated August 2010 41
0%
5%
10%
15%
20%
25%
30%
Min15%
Strategic Asset Allocation (SAA) Target Portfolio
> SAA is defined for each subsidiary by weight per asset class; not single securities
> Each asset class is defined by a specific benchmark index> SAA is reviewed once a year
Equity Range
0%
15%
30%
45%
60%
75%
90%
Europe
USAPacific
Totalequity
Max25%
Max85%
Min75%
Bond Range
Total bonds
US high yield
European bonds
Asset Management: Investment Strategy (excl. Plan Assets)
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
Equities 20%
Bonds 80%
Max. Min. Strategic asset allocationMax. Min. Strategic asset allocation
RWE Facts & Figures | Updated August 2010 42
Strategic Asset Allocation (SAA) Target portfolio
> SAA is defined by weight per asset class; not single securities > Each asset class is defined by a specific benchmark > Evolution of the SAA is based on an asset liability study
Equities 29%
Bonds 58%
Alternative investments 10%
Real estate 3%
0%5%
10%
15%
20%
25%
30%
Min24%
0%15%
30%
45%
60%
75%
90%Totalequity
Max34%
Max76%
Total bonds
Min53%
Bond range
Europe
USAPacific
Emergingmarkets
EasternEurope
Equity range
Bonds 10+
Corporates US high yield
Asset Management: Investment Strategy (Domestic Plan Assets; Smaller Plans Deviate Slightly)
Max. Min. Strategic Asset AllocationMax. Min. Strategic asset allocation
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
35%
RWE Facts & Figures | Updated August 2010 43
RWE's Corporate Treasury – Basis for Groupwide Financial Risk Management
RWE AG
Liquidity transfer via cashpool Hedging (fx, interest rates) Intercompany loans
RWE subsidiaries
> RWE AG acts solely as external counterparty for financial transactions (excluding regulatory requirements)> Corporate Group Treasury has the overall responsibility for treasury operations> Central database for groupwide financial risk management
External market
Capital market
Ratings
FX deals (incl. derivatives)
Interest deals (incl. derivatives )
CP programme
Money market
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 44
RWE AG: Strong Sources of Financing
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
0,0
0,5
1,0
1,5
2,0
2,5
2010
2015
2020
2025
2030
2035
2040
0
4
8
12
16
20
Capital market debt maturities*)
> Balanced profile with limited maturities2010 - 2013 (~€4.0 billion)
€ billion
Maturities of debt issued
— Accumulated outstanding debt
Fully committedsyndicated loan(€4.0 bn up to Oct. 2011)
Commercial paper(up to 1 year)
$0.3 bn ($5.0 bn)
€0.0 bn
€0.3 bn (June 30, 2010)
for liquidityback-up
Strong sources of financing
MTN programme(up to 30 years)
€30 bn
€17.2 bn (June 30, 2010)
*) RWE AG and RWE Finance B.V., as June 30, 2010.
2.5
2.0
1.5
1.0
0.5
0.0
RWE Facts & Figures | Updated August 2010 45
Gross Financial Debt – Currency and Interest Exposure*)
Gross financial debt - currency
£ 36%
€ 61%
*) Including cross-currency swaps; as of June 30, 2010.
We hedge the translation risk of our international activitieswith debt in foreign currencies.
Gross financial debt - interest exposure
Fixed 81%
Floating 19%
$ 1%
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
Others 2%
RWE Facts & Figures | Updated August 2010 46
Securing A-flat rating remains a major goal Leverage factor as an operational tool
> RWE is well positioned with an A-flat / A2 rating compared to peers
> Rating category has proven right during financial market crisis
> Target is to keep leverage factor below or equal to 3.0
> Target can be exceeded in single years but has to be brought back to < 3.0 thereafter
> Leverage factor remains the main internal tool for managing our rating category
2.8
2.12.12.5
Major Goal Remains to Secure Sound Credit Standing as Expressed by A-flat/A2 Rating
≤ 3.0
2006 2007 2008 2009 2010onwards
Net Debt/EBITDA
Target
RWE
Centrica CEZEdF EdP Ene
lEON
GdF S
uez
Iberdrol
a
AAA Aaa
AA
A
BBB
Aa2
A2
Baa2
Moody‘s
S&P
Source: Bloomberg.July 27, 2010.
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 47
Credit Rating 2010 – RWE AG
> On January 13, 2009, Standard & Poor's revised its outlook on RWE’s rating to negative from stable, following RWE'sdebt-funded bid for the unregulated generation and supply businesses of Essent N.V.
> The ratings for RWE AG are underpinned by its leading domestic position in power generation and supply in Germany, its focus abroad on northwestern European countries with power markets increasingly linked to the German power market, and its significant share of regulated earnings (about 30% of total earnings). These strengths are partly offset by the high carbon intensity of RWE's generation fleet and resulting exposure to the tightening of carbon constraints in the EU, especially from 2013; its exposure to wholesale power prices, although this is mitigated by the group's prudent strategy of selling forward the bulk of its output; heightened regulatory pressures in Germany; and the weakening of its financial profilefollowing the €7.3 billion debt-financed acquisition of Dutch utility Essent N.V. (A/Negative/A-1), which was completed in September 2009.
> The negative outlook reflects the view that RWE's financial profile is below S&P’s expectations for the ratings following the Essent acquisition and the uncertainty as to its recovery to levels in line with the ratings. It also reflects S&P’s opinion that RWE could opportunistically consider midsize debt-funded acquisitions in Eastern Europe.
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
Standard & Poor's (A, "Outlook Negative") Moody's (A2, "Outlook Negative")
> On November 4, 2009, Moody’s downgraded the long-term senior unsecured debt ratings of RWE AG to A2 from A1. The outlook on all ratings is negative.
> The rating actions follow the completion by RWE of its acquisition of 100% of Essent N.V. in a transaction valued at approx. €7.3 billion. While acknowledging the positive impact which the combination with Essent has on certain aspects of RWE’s business risk profile, these are offset, in Moody’s view, by the weaker financial flexibility implied by the enlarged Group’s debt burden.
> The negative outlook reflects the risk in Moody’s view that, in the current challenging operating environment and given its substantial capital investment programme the Group’s earnings might not grow sufficiently to compensate for higher debt levelsand that credit metrics therefore remain weaker than appropriate for the A2 rating category.
RWE Facts & Figures | Updated August 2010 48
RWE AG: Financial Risks and Managing Interest Rate Risk –Asset/Liability Management
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
Main financial risk factors are:> RWE Group companies are
subject to strict risk management
> Financial derivatives are not to be used for speculative purposes and serve only to hedge risks arising from operations
Interest rate riskForeign exchange (FX) risk Counterparty risk
Interest-bearing debt
Assets under management
Investments
Other financial positions, e.g. derivatives, collateral
FX hedges for commodities
*) Average Value at Risk (95/1) in Q1 – Q4 2009.
Assets
Liabilities
> Measurement of portfolio life vs. benchmark life> Analysis of value at risk of bond portfolio (Value at Risk €21.3 m*)
> Measurement of market values and value at risk of financial debtand derivatives (portfolio view; Value at Risk €167.8 m*)
> Sensitivity analysis of interest rate curve movements for net interest and the underlying market values
> Target/actual comparison of net interest
RWE Facts & Figures | Updated August 2010 49
RWE Bond Programme
Major bonds issued by the RWE Group*)
*) As of February 15, 2010.
Issuer Currency PlacementCurrency Issuance
Volume (m)
Volumein € (m)
Termin Years
Issuance Date
Maturity Date
Coupon (%)
German Securities
CodeISIN
RWE AG NOK Private 250.0 31.0 7 18.06.2003 18.06.2010 4,890 748538 XS0170287238RWE AG SGD Private 50.0 26.0 7 08.07.2003 08.07.2010 2,300 748539 XS0171753600RWE Finance BV GBP Public 500.0 576.3 7 03.07.2003 17.08.2010 4,625 878796 XS0170731847Redemptions - 2010 633.4RWE Finance BV EUR Public 1,500.0 1,500.0 2 16.06.2009 16.09.2011 2,500 A1AH10 XS0434069497RWE Finance BV EUR Public 1,808.0 1,808.0 11 26.04.2002 26.10.2012 6,125 855327 XS0147030554RWE Finance BV USD Public 250.0 183.7 3 11.02.2010 11.02.2013 2.000 A1ATAH XS0485309156RWE Finance BV GBP Public 630.0 726.1 11 26.04.2002 03.06.2013 6,375 855329 XS0147048259RWE Finance BV EUR Public 1,000.0 1,000.0 5 20.11.2008 20.11.2013 5,750 A0T3SN XS0399648301RWE Finance BV EUR Public 530.0 530.0 10 23.07.2004 23.07.2014 4,625 A0DAN1 XS0196302425RWE Finance BV EUR Public 2,000.0 2,000.0 6 09.02.2009 10.02.2015 5,000 A0T6L5 XS0412842428Redemptions 2011 - 2015 7,747.9RWE Finance BV EUR Public 850.0 850.0 15 20.04.2001 20.04.2016 6,250 648661 XS0127984747RWE AG EUR Private 100.0 100.0 15 15.11.2002 15.11.2017 floating 748536 XS0158243013RWE Finance BV EUR Public 980.0 980.0 15 23.07.2003 23.07.2018 5,125 957955 XS0172851650RWE Finance BV EUR Public 1,000.0 1,000.0 10 20.11.2008 31.01.2019 6,625 A0T3SP XS0399647675Redemptions 2016 - 2020 2,930.00RWE Finance BV GBP Public 570.0 657.0 20 20.04.2001 20.04.2021 6,500 648663 XS0127992336RWE Finance BV EUR Public 1,000.0 1,000.0 13 09.02.2009 10.08.2021 6,500 A0T6L6 XS0412842857RWE Finance BV GBP Public 500.0 576.3 13 06.07.2009 06.07.2022 5,500 A1AJN3 XS0437307464RWE Finance BV GBP Public 487.5 561.9 20 03.07.2003 06.12.2023 5,625 878761 XS0170732738RWE Finance BV GBP Public 760.0 876.0 28 26.04.2002 03.06.2030 6,250 855328 XS0147048762RWE AG EUR Private 600.0 600.0 30 14.02.2003 14.02.2033 5,750 748537 XS0162513211RWE Finance BV GBP Public 1,000.0 1,152,6 30 06.07.2009 06.07.2039 6,125 A0AJN2 XS0437306904RWE AG JPY Private 20,000.0 163.4 30 17.02.2010 17.02.2040Redemptions - 2021 onwards 5,587.1Total 16,898.4Currency exchange rates: CHF GBP NOK USD SGD YPY(€1 =) 1.4661 0.8676 8.0530 1.3607 1.903 122.420
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 50
RWE Securities
Securities in RWE's Group accounts as of March 31, 2010
Securities held as non-current assets: € 220mSecurities held as current assets: € 3,451mTotal securities: € 3,671m
Fixed income 82%
Equities/other 18%
Financial Information – Fixed Income FinancingMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 51
Organisation of Risk Management in the RWE Group
RWE Group Center
Risk CommitteeRisk Management Committee Asset Management Committee
> Supervises commodity price and credit risk management in operating companies
> Members: CFO of RWE AG, heads of the Group Risk Management, Group Finance and Value Chain Management Departments of RWE AG, CFOs of RWE Power, Essent, RWE Dea, RWE Vertrieb, RWE npower, RWE Transgas, RWE Supply & Trading and RWE Innogy
Group Risk Management
> Responsible for implementing, monitoring and refining the groupwiderisk management system
> Members: heads of RWE AG’s Compliance, Corporate Controlling, Finance, Risk Management, Legal/Corporate Matters, Accounting, Strategy, Audit and Insurance Departments
> Manages risks associated with investments in securities
> Members: CFO of RWE AG, Head of Corporate Finance, CFOs of RWE Group companies with security investments or pension assets
RWE AG Executive Board
Risk ManagementMarket DataPolitical EnvironmentAt a Glance RWE
Operating companies
RWE Facts & Figures | Updated August 2010 52
RWE's Commodity Risk Management Infrastructure
> Overall responsibility for risk management system> Defines the Group's commodity risk appetite and establishes principles of the Group‘s commodity risk
strategy> Defines global limit structures and hedge policies for operating companies
> Monitors commodity risks and commodity risk management in operating companies with regard to both the market and the credit side
Risk Committee (headed by CFO of RWE AG)
RWE AG Executive Board
> Develops market and credit risk strategies, guidelines and frameworks for commodity risk management> Is responsible for the approval of methods and models for the valuation of commodity risks > Details the global limit structure and risk policies of operating companies in cooperation with Value Chain
Management> Analyses and approves credit limits for large commodity counterparties, large suppliers and banks
Group risk management
> Handles operative commodity and credit risk management> Controls and monitors commodity risk positions
Operating companies
Value chain management
> Establishes the infrastructure for implementing risk strategies of operating companies in internal commodity markets
> Defines and dynamically adjusts hedging strategies for liquid commodity positions and approves large commodity transactions in co-operation with Group Risk Management
Risk ManagementMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 53
RWE Supply & Trading Commodity Risk Limit System
> RWE Supply & Trading is the RWE Group’s interface to the wholesale markets for energy and energy commodities, while serving as an internal transaction partner for hedging commodity risks
> The global risk limits in the energy trading business are set and constantly monitored by the Executive Board of RWE AG and the Risk Committee
> Risk limits are then further detailed:
Risk ManagementMarket DataPolitical EnvironmentAt a Glance RWE
Global limits for market and credit risks/singlecounterparty limits
granted by
granted by
granted by
RWE AG Executive Board
Group Risk Management (to be agreed with Value Chain Management)
RWE Supply & Trading Board
Detailed commodity and credit limits
Limits for single desks/books/traders/individual counterparties
restrict
restrict
RWE Facts & Figures | Updated August 2010 54
Credit Risk Management at the RWE Group
Risk ManagementMarket DataPolitical EnvironmentAt a Glance RWE
> Bundling of know-how in a central credit risk management unit> RWE Supply & Trading was a key driver of the EFET*) standards for power and gas with more than 130
EFET agreements having been signed so far> RWE Supply & Trading plays a leading role in the development of exchanges/OTC clearing
Driver of credit risk mitigation
> Counterparties are assessed using internal rating tools. The results are mapped to the results of an external rating, if available
> All counterparties are monitored frequently and reviewed on a regular basis
Robust counterparty risk assessment and monitoring
> Credit capital costs are based on the rating of a counterparty > Performance determination includes credit risk charges
Clear credit incentives
> Potential future credit exposure (= potential replacement value) is calculated with a Value-at-Risk-like methodology
> In addition, both current and future settlement exposure is measured> Counterparty credit exposures are reviewed on a near-real-time basis
State of the art measurement and monitoring of exposures
> Groupwide credit policy has been established. Above all, it is based on overall limitation and maximum individual counterparty limits and tenors (based on the creditworthiness of a counterparty) for upper-size business
High-level credit policy
*) EFET: European Federation of Energy Traders.
RWE Facts & Figures | Updated August 2010 55
Political Environment
RWE Facts & Figures | Updated August 2010 55
RWEMarket DataAt a Glance Political Environment
57 Combined Heat and Power Generation (CHP) Act
58 Renewable Energy Act64 Emissions Trading66 National Allocation Plan II69 Large Combustion Plant Directive
(LCPD)71 Network
RWE Facts & Figures | Updated August 2010 56
The German Energy Industry Act: Key Elements of Network Fee Calculation 73The German Energy Industry Act: Unbundling in the German Energy Grids 72The German Energy Industry Act: Regulating Network Access and Network Usage Fees in the Electricity and Gas Markets 71
Network [71 – 73]
CDM/JI Projects Give RWE Access to Cost-effective Reduction of Greenhouse Gas Emissions (I) 66
Renewable Energy's Share of Total Electricity Generation in Germany 61German Renewable Energy Act Compensation and Forecast through 2015 62
Renewable Energy Act [58 – 63]
German Renewable Energy Act (II) 59Renewable Energy Surcharges Expected to Increase further 60
Subsidy Efficiency: Contribution of German Renewable Energy Act – Subsidised Power Generation in 2008 63
The EU Large Combustion Plant Directive (LCPD) 69
CDM/JI Projects Give RWE Access to Cost-effective Reduction of Greenhouse Gas Emissions (II) 67
German Combined Heat and Power Generation (CHP) Act 57
Large Combustion Plant Directive (LCPD) [69 – 70]
NAP II [66 – 68]
Emissions Trading [64 – 65]
Political Environment [57 – 73]
Due to the LCPD a Shut-down of 11–12 GW by the End of 2015 (or Earlier) is Expected in the UK 70
RWE's Current Kyoto Credit Portfolio for 2008 – 2012 68
Emissions in Germany, UK and EU-27 (2009) 65Allocated CO2 Allowances in Germany, UK and EU-27 (2009) 64
German Renewable Energy Act (I) 58
Combined Heat and Power Generation (CHP) Act [57]
Table of Contents
RWE Facts & Figures | Updated August 2010 57
German Combined Heat and Power Generation (CHP) Act*)
Network operators have the right to pass on all feed-in paymentsPassing-on clause
Max. 0.05 ct/kWh for large consumers with a yearly consumption of more than 100,000 kWh Max. 0.025 ct/kWh for energy-intensive industry (> 4% of energy costs of gross production value)
Limitation of the burden on industry
Allocation to total supplies to end customers from the public supply gridFunding
Annual cap of €750 million including € 150 million for heat pipes.€524 million in 2008; €4,899 million since April 2002
Volume
Specific subsidisation of CHP plants dependent on– Commissioned since January 1, 1990– Modernised plants– Small plants– Block-type central cogeneration and fuel cell plants
Levels of subsidy
Electricity actually generated in CHP plants (back pressure) including internal consumption of industry Support is no longer connected to the feed into supply grids
Object of subsidy
Modernisation and new build of high efficient CHP plants for energy conservation and CO2 reduction 25% share of CHP electricity generation by 2020
Aim
Effective since April 2002 with amendment which came into effect as of January 1, 2009 Term
CHP legislationIssue
*) Figures and scheme taken from the amendment in 2008 effective January 1, 2009.
CHPMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 58
German Renewable Energy Act*) (I)
Grid operators have the right to pass on all surcharge payments to the suppliersPassing-on clause
Hardship clause came into effect as of January 1, 2006; reduced amount of 0.05 ct/kWh if a company consumes more than 10 GWh and electricity costs are at least 15% of gross production value
Limitation of the burden for industry
Amount allocated to total supplies to end customers from the public supply grid was about 1 ct/kWh in 2008
Funding
Approx. €9.9 billion feed-in tariffs in 2009 without system costs (grid, balancing power); projection for 2010: €12.4 billion, projection for 2012: €16.8 billion
Volume
Different price schemes for existing and new renewable plants (wind, water, biomass, solar)Levels of subsidy
Electricity actually generated in renewable plants which feed into the supply gridObject of subsidy
Supports introduction of renewables-based electricity generation plants and helps to meet the emissions reduction target set by the federal government: min. 30% electricity production from renewables by 2020
Aim
Effective since April 2000 and amended on August 1, 2004 and January 1, 2009 Different support of plants with service lives of up to 20 years
Term
Renewable energy legislationIssue
*) Figures and scheme taken from the German Renewable Energy Act effective as of January 1, 2009.
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 59
German Renewable Energy Act1) (II)
31.94 – 43.01as of July 1, 2010: 25.02 – 34.05 as of Oct. 1, 2010: 24.26 – 33.03
Photovoltaics3)
5.02 – 9.20 (onshore)3.50 – 15.00 (offshore)
Wind power
10.50 – 23.00Geothermal energy
7.79 – 23.09Biomass
4.16 – 9.00Landfill gas, sewage gas, pit gas
3.50 – 12.67 Hydropower
1) Figures and scheme taken from the German Renewable Energy Act effective as of January 1, 2009.2) Depend on size of plant, year of commissioning operation and technology.3) Reduction of subsidy rate approved by the German Upper and Lower House Mediation Committee;
revised law still pending (July 13, 2010).
Sources: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit(German Ministry for the Environment, Nature Conservation and Nuclear Safety).
Renewable Energy Act subsidy rates2)
ct/kWh
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 60
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Power generated Power generated (forecast) Feed-in fees Feed-in fees (forecast)
€ billion
TWh1401201101009080706050403020100
Renewable Energy Surcharges Expected to Increase further
Development of power generated in accordance with the German Renewable Energy Act(REA) and REA surcharges for 2000 – 2012 (forecast)
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), July 2009.German transmission system operators (www.eeg-kwk.net), May 2009.
0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 10.0 16.09.0 12.0
130
11.0 14.013.0 15.0
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 61
39%
57%
32%
30% 4%
7%25%
6%
639 TWh
Renewable Energy's Share of Total Electricity Generation in Germany
1) REA = German Renewable Energy Act.2) After netting out avoided network fees.
Source: German Energy Balances Task Force, German Energy and Water Association (BDEW), February 2009; transmission system operators.
Gross generation in Germany (2008)
71 TWh
REA1) generation
€8.7 bn2)
REA compensation
Lignite
Nuclear
Hard coal
Other (including 4% hydro that is not REA-compensated)
Gas
PhotovoltaicHydro
Biomass
Wind13%
20%
23%
10%
23%
11%
Renewable energy (REA-compensated)
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
Photovoltaic
Hydro
Biomass
Wind
RWE Facts & Figures | Updated August 2010 62
0
5
10
15
20
25
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Hydro Biomass Onshore wind Offshore wind Photovoltaic Other
1.61.22.2 2.6
3.6 4.5
5.8
7.9
20.4
22.0
9.0 10.0
12.3
14.6
16.8
18.85.4
5.8
5.3
4.9
0.5
0.1
2.2
3.6
2.60.4
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
€ billion (gross)
Source: REA medium-term forecast of electricity transmission system operators.
German Renewable Energy Act Compensation and Forecast through 2015
0.2
RWE Facts & Figures | Updated August 2010 63
Subsidy Efficiency: Contribution of German Renewable Energy Act – Subsidised Power Generation in 2008Installed capacity MW
Power generatedTWh
Extra cost in millions of euros, based on an average electricity price of €60/MWh
80 23 1,562 1.6 1,127 0 1,953
Renewable Energy ActMarket DataPolitical EnvironmentAt a Glance RWE
25,000
20,000
15,000
10,000
5,000
0
60
50
40
30
20
10
0
Hydro Bio and pit gas
Biomass Geothermal Onshorewind
Offshorewind
Photovoltaic
RWE Facts & Figures | Updated August 2010 64
Allocated CO2 Allowances*) in Germany, UK and EU-27 (2009)A
lloca
ted
allo
wan
ces
in G
erm
any
2009
Allo
cate
d al
low
ance
s in
Uni
ted
Kin
gdom
200
9
Electricity 55%
Other industries 3%
Metals 15%
Cement & lime 8%
Combustion 12%
Allo
cate
d al
low
ance
s EU
27 2
009
Emissions TradingMarket DataPolitical EnvironmentAt a Glance RWE
Refineries 7%
Electricity 51%
Other industries 3%
Metals 11%
Cement & lime 7%
Combustion 19%
Refineries 9%
Total : 392 million mt CO2
Total : 216 million mt CO2
Electricity 50%
Other industries 4%
Metals 12%
Cement & lime 11%
Combustion 15%
Refineries 8%
Total : 1,959 million mt CO2
*) Excluding auctioned certificates and new entrant reserves. Source: Bloomberg.
RWE Facts & Figures | Updated August 2010 65
Emissions in Germany, UK and EU-27 (2009)Em
issi
ons
in
Ger
man
y 20
09Em
issi
ons
in
Uni
ted
Kin
gdom
200
9
Electricity 69%
Metals 6%
Cement & lime 7%
Combustion 10%
Emis
sion
s EU
-27
2009
Emissions TradingMarket DataPolitical EnvironmentAt a Glance RWE
Refineries 6%
Electricity 67%
Other industries 2%
Metals 7%
Cement & lime 3%
Combustion 14%
Refineries 7%
Total : 435 million mt CO2
Total : 230 million mt CO2
Electricity 61%
Other industries 3%
Metals 7%
Cement & lime 8%
Combustion 13%
Refineries 8%
Total : 1,869 million mt CO2
*) Excluding auctioned certificates and new entrant reserves. Source: Bloomberg.
Other industries 2%
RWE Facts & Figures | Updated August 2010 66
CDM/JI Projects Give RWE Access to Cost-effective Reduction of GreenhouseGas Emissions (I)
Source: UNFCCC; http://cdm.unfccc.int.
Clean Development Mechanism (CDM)
Emission reductions through investment by an industrialised country in a country without reduction commitments are credited to the emission account of the investor country
Joint Implementation (JI)
Emission reductions through investment by one industrialised country in a second industrialised country are credited to the emission account of the investor country
Germany/UK
Germany/UK E.g. Russia
Emission rights E.g. China
Emission rights
Investment
Investment
National Allocation Plan (NAP) IIMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 67
CDM/JI Projects Give RWE Access to Cost-effective Reduction of GreenhouseGas Emissions (II) Expected average annual certificates from registered CDM projects by host country in May 2010%
> By May 2010, the UN had approved nearly 2,213 CDM projects that are expected to supply more than 1.8 billion certificates by the end of 2012
> A substantial portion of the certificate volumes contracted are accounted for by Chinese projects
Source: UNFCCC; http://cdm.unfccc.int.
China 60.3
India 11.6
Brazil 5.8
Republic of Korea 4.1Mexico 2.6Malaysia 1.4Chile 1.3Argentina 1.2Nigeria 1.1Indonesia 1.1
Others 9.5
National Allocation Plan (NAP) IIMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 68
RWE's Current Kyoto Credit Portfolio for 2008 – 2012
Projects by March 2010 Contract volume by technology
0
20
40
60
80
100
120
Contract volume Risk adjusted volume RWE's RedemptionCapacity (2008 - 2020)
~ 100
Contract volume by region
Energy efficiency 13.09N2O 12.27HFC23 10.48 Other 7.40Biomass 4.78 Wind 2.96Coal mine methane 1.85 Solar 1.54Methane 1.33Biogas 0.98Hydro 14.41
China 44.15South Korea 8.01 South-East Asia 7.56 India 3.76 Egypt 3.64 Ukraine 1.44Eastern Europe 0.40LDCs 0.35South America 0.18
Risk-adjustedvolume
National Allocation Plan (NAP) IIMarket DataPolitical EnvironmentAt a Glance RWE
In validation phase
Inoperation2)
ERPA1)
Inoperation2)
In validation phase
ERPA1)
1) ERPA = Emissions Reduction Purchase Agreement.2) In operation: All projects which have already issued certificates.3) Latest EU directive for certificates implies that RWE Power will not have additional redemption capacity for 2013 to 2020, but certificates
can still be used after 2012. Figure including RWE Power, RWE npower, Essent.
RWE's redemptioncapacity (2008 – 2020)3)
Contractvolume
Million certificates
RWE Facts & Figures | Updated August 2010 69
The EU Large Combustion Plant Directive (LCPD)
Step 1
> Power plants had to choose whether to comply with the LCPD or request a limited life derogation (opt out)> Power stations which opted out are allowed to run for 20,000 hours, or until the end of 2015, whichever comes sooner
Step 2
Those power stations which comply with the LCPD are governed in one of two ways*):> Emission Limit Value (ELV)
The power station must adhere to specific limits to the amounts of pollutants produced on a "milligramme per cubic metre of waste gas" basis
> National Emission Reduction Plan (NERP) A company is given an overall allowance (amount of a pollutant that can be emitted per year) of emissions it may produce. The emission allowances issued under NERP are tradable within a member state
Step 3
> In addition to the above, existing oil and coal-fired power plants must reduce nitrogen oxide emissions from 500 mg/Nm3 to 200 mg/Nm3
by January 1, 2016. This will entail fitting selective catalytic reduction (SCR) equipment
*) While most the EU member states, including Germany, chose to implement Emission Limit Values (ELV), a number have opted for National Emission Reduction Plans (NERPs), while in the UK individual power plants could choose between being regulated on the ELV, or under a NERP.
Since 2008, coal and oil-fired power stations have been governed by the Large Combustion Plant Directive (LCPD). This imposes new limits on the amounts of sulphur dioxide (SO2), nitrogen oxides (NOx) and dust power stations can emit.
LCPDMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 70
Due to the LCPD a Shut-down of 11–12 GW by the End of 2015 (or Earlier) is Expected in the UK
LCPDMarket DataPolitical EnvironmentAt a Glance RWE
11,84221,997257133,839TotalFitted039313393CoalUskmouth PowerUskmouthNo FGD1,1520241,152CoalScottish PowerCockenzie1 unit fitted02,304142,304CoalScottish PowerLongannetN/A01,320121,320CCGTScottish & Southern EnergyPeterheadFitted02,000142,000CoalScottish & Southern EnergyFiddlers FerryFitted1,0001,000242,000CoalScottish & Southern EnergyFerrybridgeNo FGD1,0200241,020CoalRWE npowerTilburyNo FGD1,0000121,000OilRWE npowerFawleyNo FGD1,3700131,370OilRWE npowerLittlebrookFitted01,500131,500CoalRWE npowerAberthawNo FGD2,0000142,000CoalRWE npowerDidcot AFitted01,000121,000CoalInternational PowerRugeleyFitted02,000242,000CoalEDF EnergyWest BurtonFitted02,000142,000CoalEDF EnergyCottamNo FGD1,3000121,300OilE.ON UKGrainNo FGD1,0000121,000CoalE.ON UKIronbridgeFitted02,000142,000CoalE.ON UKRatcliffeNo FGD2,0000142,000CoalE.ON UKKingsnorthFitted03,960163,960CoalDrax PowerDrax2 units fitted02,000142,000CoalBritish EnergyEggboroughfitted052012520Coal/OilAESKilroot
FGD3) statusCapacity opted out2)
(MW)
Capacity opted in1)
(MW)
Number of plants
Numberof boilers
Installed capacity
(MW)
FuelOperatorInstallation
1) Compliant with LCPD emission limits (Drax, Eggborough, Peterhead and Longannet in NERP). 2) Limitation of operating hours to 20,000 between Jan. 1, 2008 and Dec. 31, 2015. No requirement to fit FGD.3) FGD: flue gas desulphurisation. Source: company information.
RWE Facts & Figures | Updated August 2010 71
The German Energy Industry Act: Regulating Network Access and NetworkUsage Fees in the Electricity and Gas Markets
Unbundling of networks from generation, wholesale and retail
(number of operators)
Exploration/ generation
Regulation of network access and network usage fees
Retail
Competition
CustomersExchange
tradingOTC
CompetitionCompetition
Transport Bundesnetz-
agentur*)
(electricity: 4, gas: 14) Distribution
federal states(ca. 1,200)
DistributionBundesnetzagentur*)
(ca. 300)
NetworkMarket DataPolitical EnvironmentAt a Glance RWE
*) German Network Agency.
RWE Facts & Figures | Updated August 2010 72
The German Energy Industry Act: Unbundling in the German Energy Grids
TSO1)
1) TSO = Transport System Operator.
2) DSO = Distribution System Operator.
DSO2)
>100,000 customers
DSO2)
<100,000 customers
Legalunbundling
Obligatory
Obligatory
Functionalunbundling
Obligatory
Detailed rules to unbundlestaff, equal treatmentprogramme
Accountingunbundling
Obligatory
Auditor's certificate
Separate balance sheets and profit and loss accounts mustbe disclosed and sentimmediately to the regulator
NetworkMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 73
The German Energy Industry Act: Key Elements of Network Fee Calculation
> All network usage fees must be approved ex-ante. All ex-ante approvals can be revoked by the German Network Agency at any time
> The permitted proportion of equity-financed assets is restricted to 40%
> Current cost accounting for rate of return and imputed depreciation will continue to apply for all investments until December 31, 2005
> All investments as from January 1, 2006, will yield interest based on inflation-adjusted historic cost accounting and be subjected to imputed depreciation
> Tax treatment:– No recognition of corporation taxes (incl. taxes on
fictitious profit) until the incentive-based regulation has entered into force but recognition of „Gewerbe-steuer” (trade tax)
– Recognition of the taxes on fictitious profit as from the introduction of incentive-based regulation. At the same time, adjustment of the required rates of return
Improved conditions for upcoming incentive-based regulation as of 2009: > Improved returns on equity
7.56% for existing electricity and gas assets and 9.29% for new investments> Special treatment of investment in growth and restructuring
Fast-track treatment of large budgeted growth investment projects by the regulator to ensure adequate and timely remuneration for utilities> Increase of expected average efficiency> Average efficiency of German electricity distribution companies estimated at 94% indicating average company-specific efficiency targets of only
1.0% p.a. ("individual X factor")
6.5
7.91 7.56
6.37
7.8
9.29
7.82
9.21
0
1
2
3
4
5
6
7
8
9
10
Current allowed RoE First proposal Final decisionFirst proposal Final decision
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
GasElectricity
Investments before 2006 Investments since 2006
%
NetworkMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 74
Market Data
RWE Facts & Figures | Updated August 2010 74
RWEPolitical EnvironmentAt a Glance Market Data
77 Electricity115 Gas
RWE Facts & Figures | Updated August 2010 75
Transfer Capacity in Europe from and to Germany (Winter 2009/2010) 102Germany: Import and Export of Electricity (2009) 101Germany's Transmission System Operators (2009) 100The European ENTSO-E Power Transmission Grid 99
Grid [99 – 102]
Major European Electricity Exchanges 97Trading [97 – 98]
Power Trading Volumes in Continental Europe 2001 – 2009 98
Fuels [93 – 96]
Reach of Uranium Reserves (II) Reach of Uranium Reserves (I)
Balancing Power: How Does it Work?
Wind Generation Works More or Less Like Negative Demand
Growing Number of Cancellations Increases Efficiency Gap and Value of RWE's New-build Projects
German Energy and Power Mix (2009)
9695
92
89
82
80
CO2 Reduction Potential of Coal-fired Power Plants by Increased Efficiency
Electricity [77 – 115]Market Data [77 – 133]
Main Sea Freight Trading Routes for Hard Coal (II) 94Main Sea Freight Trading Routes for Hard Coal in 2009 (I) 93
Power Generation Capacity Remaining in Europe and Germany 91
The CO2 Cap-and-trade System has Reduced the Gap in the Merit Order between Upper Base-load and Lower Peak-load Electricity
90
The Merit Order and Aspects Influencing its Structure Provide a Better Tool for Looking at the Dynamics of Power Plant Portfolios 88Nuclear Power Plants in Germany: Remaining Capacities after Shut-Down 87Residual Electricity Volumes of Nuclear Power Plants 86
85Power Generation in Germany: CO2 Emissions per Plant Type 84Attractiveness of Coal and Gas Differs in Germany and the UK 83
UCTE Methodology for Evaluating the Generation Capacity Remaining in Europe 81
Capacity Trends in 50 Years of Thermal Power Generation in Europe: Gas on the Rise since 1993 79Europe's Total Generation Capacity: 922 GW Gross, 859 GW Adjusted Net 78Shares of Primary Energy Sources in Total Electricity Generation in Europe (2009) 77
Generation [77 – 92]
Table of Contents
RWE Facts & Figures | Updated August 2010 76
Czech Gas Market: Basics of the Regulatory Framework 132Czech Gas Market: Gas-Price Setting Mechanism 131Status of Czech Gas Market Liberalisation and Regulation 130Relevant Institutions and Their Role in Regulating the Czech Gas Market 129European Gas Trading Points 128Natural Gas Supplies in Germany (2009) 127Grid Access in the German Gas Market 126Government Charges Included in the German Gas Price 125German Residential Gas Prices from 1999 to 2009 Compared with Other European Countries 124German Residential Gas Prices Compared with Other European Countries 123Europe's Largest Gas Companies (2009) 122
Downstream [122 – 132]Present Liquefied Natural Gas (LNG) Production Capacity (2009) (II) 121Present Liquefied Natural Gas (LNG) Production Capacity (2009) (I) 120
Blackouts in Europe in Minutes (2008) 113
Shipments of Liquefied Natural Gas (LNG) to Europe in 2009 119How the Liquefied Natural Gas (LNG) Value Chain Works 118
Gas [115 – 132]LNG [115 – 121
Supply [103 – 114]
Government Charges Account for 41% of German Household Electricity Bills
Industrial Customers Pay Higher Governmental Charges, but Net Electricity Prices are 6% below the Level of 1998
German Households Rank Second in Terms of State-Caused Charges on the Electricity Bills
112
110
107
The Largest Electricity Companies in Europe (2009)
Electricity [77 – 114]Market Data [77 – 132]
LNG is Becoming an Increasingly Important Component of Global Gas Supply 117The New Global Gas “Gearbox” – Mainly Driven by LNG 116Gas Markets Develop and are Getting Global – Flexibility Becomes Key Success Factor 115
The Largest Electricity Companies in Germany in Terms of Sales to End Customers (2008) 114
Government Inflates German Electricity Bills 111
German Electricity Consumption Fees 109Competition Has Been a Reality since 1999: Freedom of Choice for German Residential Electricity Customers 108
Pan-European Comparison of the Household Electricity Prices 106Electricity Prices in Europe (for Industrial Customers) 105Development of Energy Consumption in Germany 104
103
Table of Contents
RWE Facts & Figures | Updated August 2010 77
66.5
90.4
83.5
36.3
71.0
541.8
593.0
59.4
40.0
29.7
289.9
3.6
111.6
154.6
46.0
29.5
297.7
137.0
374.4
0 100 200 300 400 500 600 700
Shares of Primary Energy Sources in Total Electricity Generation in Europe (2009)
0% 20% 40% 60% 80% 100%
UK
Sweden
Spain
Slovak Republic*
Portugal*
Poland*
Netherlands
Luxembourg*
Italy
Ireland*
Hungary*
Greece*
Germany
France
Finland
Denmark*
Czech Republic*
Belgium
Austria* Nuclear
Hydro
Wind
Gas
Oil
Coal/Lignite
Other
Total power generation
Source: Enerdata, 2010.
% TWh
0 20 40 60 80 100
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
*) 2008 data.
RWE Facts & Figures | Updated August 2010 78
*) Assumptions: Net capacity is 93% of gross capacity for conventional power plants; recognition of plants > 10 MW for conventional power plants in Eastern Europe,of plants > 20 MW for the rest of Europe.
Sources: Platts Database, CERA, RWE.
Countries
AustriaBalkan (5)Baltic (3)BelgiumBulgariaCzech RepublicDenmarkFinlandFranceGermanyGreeceHungaryIrelandItalyLuxembourgNetherlands
Generation structure in 2008
NorwayPolandPortugalRomaniaSlovakiaSloveniaSpain
SwedenSwitzerlandUK
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
Europe's Total Generation Capacity: 922 GW Gross, 859 GW Adjusted Net
OCGTOld gasblock
CCGT
Other renewables
Pumpedstorage
Other
Wind
Oil
GasLignite
Hard Coal
Nuclear
Hydro
143
146
199
65
190
70
83
26
150
174109
65
190
40
133
134
65
72100
26
37
Grossinstalledcapacity
Adjusted netgenerationcapacity*)
922 GW859 GW
> In 2010, more than 13 GW of CCGTs are scheduled to go online.
RWE Facts & Figures | Updated August 2010 79
Capacity Trends in 50 Years of Thermal Power Generation in Europe: Gas on the Rise since 1993
Annual commissionings of thermal power generation capacities in the EU-27 in GW*)
*) Adjusted net generation capacity. Sources: Platts Database, Worldwatch Institute, RWE, 2010.
GW
>
GW
> >
GW
>
GW
>
Oil (46 GW) Gas (159 GW)
Year of commissioning Year of commissioning
Lignite (51 GW)
Year of commissioning
Hard coal (118 GW)
Year of commissioning
Nuclear (133 GW)
Year of commissioning
GW
Electricity – GenerationMarket DataPolitical Framework ConditionsAt a Glance RWE
0 5 10 152010
2000
1990
1980
1970
1960
0 5 10 152010
2000
1990
1980
1970
1960
0 5 10 152010
2000
1990
1980
1970
1960
0 5 10 152010
2000
1990
1980
1970
1960
0 5 10 152010
2000
1990
1980
1970
1960
RWE Facts & Figures | Updated August 2010 80
German Energy and Power Mix (2009)
Primary energy consumption:455 million tons of coal equivalent
Gross power generation: 597 TWh (preliminary)
Natural gas 22%
Other 36%
Renewables 9%
Lignite 11%
Nuclear 11%
Hard coal 11%
Natural gas 13%
Nuclear 23%
Renewables 16%
Lignite 24%
Hard coal 18%
Other (incl.pumped storage 6%
Source: Arbeitsgemeinschaft Energiebilanzen (Energy Balance Working Group), BDEW, February/March 2010.
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 81
UCTE Methodology for Evaluating the Generation Capacity Remaining in EuropeInstalled national generating capacity+ Hydro power stations+ Nuclear power stations+ Fossil power stations+ Renewable energy sources (other than hydro)+ Not clearly identifiable energy sources
= National generating capacity- Unusable capacity
– Of which mothballed capacity- Outages and overhauls (fossil fuel power stations)
= Reliable available capacity- Load
= Remaining capacity
5% to 10%
Source: UCTE.
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
Minimum criteria: The capacity remaining in any given country should be at least 5% or 10% of the national generating capacity.
RWE Facts & Figures | Updated August 2010 82
010203040506070
0 1 2 3 4 5 6 7 8 9 10 11 12
0
10
20
30
40
50
Current status of new build projects (Germany)
Source: RWE, February 2010.
Ramp-up capability of power plant portfolio in GW per hour
Max. load swing in GW within 12 hours
base load
+
+
+
+
+
+
Flexibility of generation system (Germany)
Load swing from
demand and
renewables
Source: RWE, December 2009.
GW
> Rising share of renewables generation will lead to:– Increase of load swings in the system– Price spikes and negative prices due to lack of flexibility in
current power plant portfolio– Shut downs of old inefficient and inflexible power plants
> The efficiency gap is amplified by increasing number of cancellations and delays of new-build projects– Eight large power plant projects with a combined capacity of
8.6 GW cancelled in the last 12 months– Local public opposition and quality problems cause delays in
projects under construction
+
Cap
acity
(GW
)
Most likelyUnder construction
Cancelled/stopped
QuestionableUnlikely
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
Growing Number of Cancellations Increases Efficiency Gap and Value of RWE’s New-build Projects
RWE Facts & Figures | Updated August 2010 83
Attractiveness of Coal and Gas Differs in Germany and the UK
1) Including renewables and CHP.2) Oil, OCGT, hydro, etc.
German power price UK power price
> Large proportion of low marginal cost plant from nuclear, lignite, CHP and wind.
> Load factor for new coal plant somewhat higher in Germany than in the UK.
> Higher share of high marginal cost plant.> New gas plant in UK has significantly higher load factor than in
Germany.
0 10 20 30 40 50 60 70 80 90 100
Proportion of installed capacity (in %)
Mustrun1)
Hard coal
OC
GT
+C
CG
T
LigniteNuclear
Peak
ing2)
Newlignite
Newhard coal
NewCCGT
Hourly DemandMin. Max.
Pow
er p
rice
0 10 20 30 40 50 60 70 80 90 100
Proportion of installed capacity (in %)
Inter-connector
+Must run1)
Hardcoal
CCGTNuclear
Peak
ing2)
Newhard coal
NewCCGT
Hourly demandMin. Max.
Pow
er p
rice
Summergas prices
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 84
0
0,5
1
1,5
Lignite Hard coal Natural gas
Power Generation in Germany: CO2 Emissions per Plant Type1)
Kg/kWh
CO2 emissions from new plant technology (BoA)2):0.95 kg CO2/kWh
1) Unweighted factor per fuel-specific installed capacity.2) Lignite-optimised plant.
1.14
0.92
0.44
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
1.50
1.00
0.50
0
RWE Facts & Figures | Updated August 2010 85
World average
EU average
State of the art technology
Steam power plant700°C technology
But:Efficiencylosses of
7- 12% points
2010 2020
About 50%
669 g CO2/kWh
288 g coal/kWh
30%
1,116 g CO2/kWh
480 g coal/kWh 38%
881 g CO2/kWh
379 g coal/kWh 45%
743 g CO2/kWh
320 g coal/kWh
… %
… g CO2/kWh
… g coal/kWh
CCStechnology2)
CO2 Reduction Potential of Coal-fired Power Plants1)
by Increased Efficiency
CO2 emissions per kWh
1) Average data for hard coal-fired power plants.2) CCS: Carbon Capture and Storage.
Source: VGB Tech, Electricity Generation Facts & Figures 2009/10, September 2009.
Efficiency1)
CO2 emission
Use of fuel
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
CO2 reduction
- 21%
- 90%
- 40%
- 33%
Time
RWE Facts & Figures | Updated August 2010 86
0.00.0
125.1114.9
110.3100.2
88.287.4
86.663.3
54.247.3
18.514.013.4
11.07.8
6.31.0
0 25 50 75 100 125 150
Neckarwestheim 2Emsland
Isar 2Brokdorf
KrümmelGrohnde
Philippsburg 2Gundremmingen CGundremmingen B
GrafenrheinfeldUnterweser
Biblis B Philippsburg 1
BrunsbüttelBiblis A
Isar 1Neckarwestheim 1
ObrigheimStade
Residual Electricity Volumes of Nuclear Power Plants
Electricity – GenerationMarket DataPolitical Framework ConditionsAt a Glance RWE
Note: RWE has a total allotment of 107.25 TWh from Mülheim-Kärlich. Source: www.bfs.de/en/kerntechnik/strommengen.html.
1) Expected remaining lifetime at least until September 2010 and until June 18, 2011 with the additional 4.8 TWh generation quota from EON’s Stade nuclear plant.2) Transfer of 21.45 TWh from Mülheim-Kärlich to Biblis B (possible without governmental permission; possible lifetime extension until Jan. 2014).
On June 28, 2010, RWE Power transferred 8.1 TWh out of this quota to Biblis B. Including the 8.1 TWh the lifetime could last until January 2012.
Residual electricity volumes as of June 30, 2010 in TWh net
2)
1)
RWE Facts & Figures | Updated August 2010 87
Nuclear Power Plants in Germany: Remaining Capacities after Shut-Down
5,44404/18/20191,34615Vattenfall: 50% / E.ON: 50%Krümmel
17,62206/19/20118785E.ONIsar 1
005/11/20231,30519EnBW: 99.8% / Deutsche Bahn: 0.2%Neckarwestheim 21,30502/07/20221,32918RWE: 87.5% / E.ON: 12.5% Emsland2)
2,63401/26/20211,40017E.ON: 75% / SW München: 25% Isar 24,03401/12/20201,41016E.ON: 80% / Vattenfall: 20% Brokdorf
6,79002/13/20191,36014E.ON: 83.3% / SW Bielefeld: 16.7% Grohnde8,15011/04/20181,39213EnBW: 99.8% / Deutsche Bahn: 0.2%Philippsburg 29,54202/04/20171,28812RWE: 75% / E.ON: 25% Gundremmingen C2)
10,83002/27/20161,28411RWE: 75% / E.ON: 25% Gundremmingen B2)
12,11406/24/20151,27510E.ONGrafenrheinfeld 13,38907/07/20128909EnBW: 99.8% / Deutsche Bahn: 0.2%Philippsburg 114,27905/30/20127718Vattenfall: 66.7% / E.ON: 33.3%Brunsbüttel15,05005/04/20121,3457E.OnUnterweser16,39501/10/20121)1,2276RWEBiblis B2)
18,55006/18/20111)1,1674RWEBiblis A19,66709/04/20107853EnBW: 99.8% / Deutsche Bahn: 0.2%Neckarwestheim 120,45705/11/20053402EnBW: 99.8% / Deutsche Bahn: 0.2%Obrigheim20,75711/14/20036401E.ON: 66.7% / Vattenfall 33.3%Stade21,397
RemainingGerman capacity
after shutdown
Date of shutdown
(load factor: 85%)
Capacity per power plant
MW
Phase-outsequence
OwnerPower plant
1) Separate estimation for Biblis A and B according to actual schedule. Regarding Biblis A, the generation quota (4.8 TWh) from E.ON‘s Stade nuclear plant isincluded.
2) Lifetime of these RWE plants can be further extended by transferring parts of the Mülheim-Kärlich contingent of 107.25 TWh in total. For Biblis B, thisallocation is capped at 21.45 TWh. On June 28, 2010, RWE Power has transferred 8.1 TWh of this quota to Biblis B. Including the 8.1 TWh the lifetime of Biblis B could last until January 2012.
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
As of June 30, 2010.
RWE Facts & Figures | Updated August 2010 88
The Merit Order and Aspects Influencing its Structure Provide aBetter Tool for Looking at the Dynamics of Power Plant Portfolios
The German merit order –the marginal power plant principle
> Due to low price elasticity of demand, prices in electricity markets are driven by the merit order structure
> The operation of power plants follows the sequence of short-run marginal costs: the merit order
> Margins depend primarily on the cost efficiency of the availablesupply, not on adequacy (marginal plant mechanism)
Nuclear LigniteHardcoal Gas Oil
Varia
ble
cost
s in
€/M
Wh
Supplied capacityin MW
Market price
Capacity in demand (marginal plant)
Min. Max.
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
Due to the significant time requirement for planning, permitting and constructing new generation capacity, as long as there are no systematic shifts in commodity price relations (e.g. hard coal vs. gas), merit order forecasts are valid for several years.
RWE Facts & Figures | Updated August 2010 89
Change in German merit order dueto wind generation
Nuclear LigniteHardcoal Gas Oil
Wind Generation Works More or Less Like Negative Demand
> Being treated as “negative demand”, must-run capacity (e.g. power generation from wind) changes the demand which has to be covered by conventional power plants
> This means, although must-run changes the resulting market price indirectly, it does not change the structure of the merit order
> In times of high must-run feed-in and low domestic demand the overall effect is partially compensated by exports
Varia
ble
cost
s in
€/M
Wh
Supplied capacityin MW
DemandDemand- wind
Demand- wind+ exports
Market price
Offer price
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 90
Change in German merit order due to CO2
The CO2 Cap-and-trade System has Reduced the Gap in the Merit Order between Upper Base-load and Lower Peak-load Electricity
> Marginal costs for old lignite-fired power stations increased more than marginal costs for efficient hard coal plants
> Marginal costs for old hard coal-fired power stations rose more compared to those of efficient gas-fired power stations
> As this is a dynamic system with changing fuel price relations (e.g. gas vs. hard coal), it is difficult nevertheless to predict at which CO2 price level a switch between the fuel types in the merit order would happen
With CO2 Without CO2
Nuclear LigniteHardcoal Gas Oil
Offer price
Varia
ble
cost
s in
€/M
Wh
Supplied capacityin MW
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 91
Power Generation Capacity Remaining in Europe and Germany
Europe Germany
Total power plant capacity
- Unusable capacity
- Reserve capacity- Outages and overhauls*)
Reliable available capacity
- Load
*) Thermal power plants only.
Source: Union for the Coordination of Transmission of Electricity (UCTE).
660.5 134.7
= 466.3 = 93.5
Remaining capacity 104.9 25.3
Import balance 2.8 2.2
Electricity – GenerationMarket DataPolitical Framework ConditionsAt a Glance RWE
131.1
28.135.0
361.4
27.9 6.86.5
68.2
Status: December 2008GW
RWE Facts & Figures | Updated August 2010 92
Balancing Power: How Does it Work?
Primary> Automatic control at the generator/turbine > E.g. thermal power plants
Secondary reserve> Automatic control by the TSO,
load frequency control> E.g. pumped storage
Frequency
5 s 30 s 15 min 1 h
5 s 30 s 15 min 1 h
Primary Secondary
Minute reserve Hour reserve
TSO1) BRP2)
Starting point – e.g. power station breakdownf
...
Minute reserve> Manual activation by TSO> Manual, e.g. thermal power plants
1) TSO: Transmission system operator.2) BRP: Balance-responsible party.
Electricity – GenerationMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 93
Main Sea Freight Trading Routes for Hard Coal in 2009 (I)
Seaborne hard coal trade in 2009: 859 million mt
API = All Publications Index
27
70
63
90
23
230
273
To theFar East
Canada/USA
INDONESIA
SOUTH AFRICA
CHINA
CANADA
USA
COLOMBIA/VENEZUELA
AUSTRALIA
API#2
API#4
API#3
RUSSIA
Source: Verein der Kohlenimporteure e.V. (German Coal Importers‘ Association), Annual Report 2008/2009, published in July 2010.
44
Electricity – FuelsMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 94
Main Sea Freight Trading Routes for Hard Coal (II)
API = All Publications IndexCIF = Cost, Insurance, FreightCIS = Commonwealth of Independant StatesFOB = Free On BoardThe TFS API was a registered trade mark of the Tradition Financial Services Company (TFS). The TFS ascertains different API prices by a price survey from Argus Media and McCloskey.
API Index was renamed from July 2005 on to AM API#... (A for Argus Media and M for McCloskey).Source: Verein der Kohlenimporteure e.V. (German Coal Importers‘ Association), Annual Report 2008/2009, published in July 2009.
Electricity – FuelsMarket DataPolitical EnvironmentAt a Glance RWE
The TFS API#3® is a weekly (every Friday) basket index price with a basis of 6,700 Kcal/kg, GAD (gross air dryed) FOB Newcastle (Australia) and published on a weekly and a monthly average basis. Calculation: (FOB Newcastle price + Barlow Jonker Index (BJI)) divided by 2
API#3
The TFS API#4® is a weekly (every Friday) basket index price with a basis of 6,000 Kcal/kg, NAR FOB Richards Bay (South Africa) and published on a weekly and a monthly average basis. Calculation: (FOB Richards Bay price ascertained by McCloskey + SACR Spot Coal Price Index + FOB Richards Bay price ascertained by Argus Media) divided by 3
API#4
The TFS API#2 is a monthly basket index for the ARA (harbours of Amsterdam, Rotterdam, Antwerp) coal price with a basis of 6,000 Kcal/kg, CIF, ARA, NAR (net as received) calculated on the last business day of the month. Calculation: (MCIS NWE steam coal marker price + international index) divided by 2
API#2
Major products traded on worldwide coal markets
RWE Facts & Figures | Updated August 2010 95
Source: Nuclear Energy Outlook 2008 (OECD Nuclear Energy Agency).
Based on a constant annual consumption of about 70,000 metric tons (capacity currently installed in nuclear power plants)
50 100 150 200 250 300 700 > 1,000 years
Provenreserves
50210 400
Definitively probable reserves
50
Probable conventional resources
200
Uranium from phosphates & sea water
Conventional uranium production Non-conventional uranium production
Improved uranium use through fast neutron
systems
Result of exploration activity from 1950 to 1970. Significant new uranium
exploration only since 2005
> 21,000
Electricity – FuelsMarket DataPolitical EnvironmentAt a Glance RWE
Reach of Uranium Reserves (I)
RWE Facts & Figures | Updated August 2010 96
Reach of Uranium Reserves (II)
> The amount of uranium that can be produced and the reach of the reserves depend on the effort required, especially in terms of production techniques and production costs
> Most of the deposits are in regions that are politically stable such as Australia (22.5%), Canada (8.4%) and America. Major reserves have also been developed and are being mined in Kazakhstan (13.7%), South Africa (8.2%), Niger (5.8%), Namibia (5.1%), Ukraine (3.8%) and Uzbekistan (2.1%)
> Today’s known and probable reserves are the result of exploration activity conducted from 1950 to 1970. Given the sufficient levels ofsupply and low uranium prices, major uranium exploration was not carried out until 2005
> Similar to other raw materials such as oil, gas and coal, the level of known uranium reserves depends on the phases the exploration cycles are going through
> Uranium exploration is currently going through the beginning of the second exploration cycle. Other raw materials already have more than five cycles behind them
> Since uranium only accounts for a small portion of total electricity generation costs, rises in the price of uranium only have a minor effect on them
Electricity – FuelsMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 97
Major European Electricity Exchanges
NordPool Oslo
European Energy Exchange (EEX), Leipzig
APX Power NL, Amsterdam
APX Power UK, London
Powernext, Paris
Belpex, Brussels
Omel, Madrid
Energy Exchange Austria (EXAA), Graz
UK
SPAIN
FRANCE
NORWAY
AUSTRIA
NETHER-LANDS
GERMANY
SWEDEN
FINLAND
DENMARK
BELGIUM
Electricity – TradingMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 98
0
1000
2000
3000
4000
5000
6000
7000
8000
2001 2002 2003 2004 2005 2006 2007 2008 2009
Power Trading Volumes in Continental Europe 2001 – 2009
TWh*)
ScandinaviaNetherlands OTCNetherlandsFrance OTCFranceGermany OTCGermany
*) Measurable power trading volumes at exchanges and brokering platforms (OTC).
Electricity – TradingMarket DataPolitical EnvironmentAt a Glance RWE
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
RWE Facts & Figures | Updated August 2010 99
ES
FR
PT IT
BE
NL
CHAT
PL
CZ
SK
SIHR
RS
MK
BA
AL
GR
UA
BG
RO
DE
L
GB
IE
DZ TNMA
TR
LT
BY
MD
LV
RU
UA
DK
SENO EE RU
DK
UCTE North, synchronous grid
HU
FI
DC link
Baltic
Nordel
UCTE South, synchronous grid
GB
Ireland
Non-participating countries
UCTE, asynchronous
Electricity – GridMarket DataPolitical EnvironmentAt a Glance RWE
The European ENTSO-E*) Power Transmission Grid
*) ENTSO = European Network of Transmission System Operators for Electricity.
RWE Facts & Figures | Updated August 2010 100
Germany's Transmission System Operators (2009)
Electricity – GridMarket DataPolitical EnvironmentAt a Glance RWE
13193038Load share [%]
1,9366,7005,4005,200System size [km] (380 kV)
1,7212,8655,3006,100System size [km] (220 kV)
7685138175Annual transmission [TWh]
34,600 109,000139,40073,100Area covered [km²]*)
EnBW50 HertzTranspowerAmprion
Amprion
50HertzTransmission
EnBW
Transpower
*) In Germany.
RWE Facts & Figures | Updated August 2010 101
Germany: Import and Export of Electricity (2009)
Source: Amprion.
TWh SWEDEN0.97
DENMARK6.05
3.65 1.19
POLAND
1.930.39
7.94
CZECHREPUBLIC
6.06
AUSTRIA
2.99SWITZERLAND
0.14
8.454.82
FRANCE1.69
13.67LUXEMBOURG
BELGIUM
2.986.34
GERMANY
∑ Import 30.61∑ Export 38.65
NETHERLANDS
Electricity – GridMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 102
Transfer Capacity1) in Europe from and to Germany (Winter 2009/2010)
MW> Transmission capacity between Germany and
its neighbouring countries is small comparedto capacity installed in Germany.
> Wholesale markets in Germany, Austria and Switzerland are gradually converging; due to its size, Germany is the dominant sub-market.
1) Transfer capacities should be consideredseparately and are not cumulative.
2) Depending on wind situation in Germany.
Source: www.entsoe.euNTC-Matrix Winter 2009-2010.
DENMARK EAST550
SWEDEN610WEST2)
1,500
NETHERLANDS
3,000 3,850
GERMANY
POLAND2)950 550 600
1,1001,200
2,300
CZECHREPUBLIC2)
2,200
AUSTRIA
2,200
3,200
1,500
3,050
2,800
FRANCE
800
SWITZERLAND
Electricity – GridMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 103
The Largest Electricity Companies in Europe (2009)
Consolidated electricity sales volumeBn kWh1)
1) Last completed fiscal year in each case. Net figures, excluding proprietary trading.
2) Electricity production.
Source: RWE, May 2010.
119,7
194,6
204,8
253,1
282,8
287,7
618,5
815,9
0 100 200 300 400 500 600 700 800
EnBW (GER)
Vattenfall (SWE)
Iberdrola
GDF (FRA)
RWE (GER)
ENEL (ITA)
EdF (FRA)
E.ON (GER)
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
2 )
RWE Facts & Figures | Updated August 2010 104
Development of Energy Consumption in Germany
Development by segment
8.78.78.58.38.38.3
228.1252.4255.3253.7249.7248.5
16.016.516.416.316.216.2
118.5 118.7 119.8 120.8 121.3119.8
139.2139.5140,2141.5141.3140.4
0
100
200
300
400
500
600
2004 2005 2006 2007 2008 2009
ElectricityTWh
Residential customers TransportServices Industry
Agriculture
Gas TWh
Residential and commercial customers*Industry Power plants
Source: Bundesverband der Energie- und Wasserwirtschaft e.V.(German Energy and Water Association), 2010.
83 104 104 126 112
400 408 410 386 369 328
479 468 459 438 437448
1150
200
400
600
800
1000
1200
2004 2005 2006 2007 2008 2009
531.9 534.2 539.6
962 980 973
Source: Bundesverband der Energie- und Wasserwirtschaft e.V.(German Energy and Water Association), 2010.
1,200
1,000
541.2
*) Also includes transport and district heating.
538.4
888
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
511.8940 932
RWE Facts & Figures | Updated August 2010 105
6.396.456.56
6.836.89
7.908.28
8.939.04
9.339.44
9.6210.1210.26
11.1010.72
11.1111.2011.2211.34
11.5811.75
12.9112.97
13.7314.03
0 2 4 6 8 10 12 14 16
BulgariaEstoniaFranceFinland
SwedenLithuaniaRomania
LatviaCroatiaPoland
PortugalSlovenia
Great BritainEU-27
AustriaNetherlands
BelgiumSpain
Czech RepublicGermany
LuxembourgIrelandMalta
HungaryItaly
Slovakia
Electricity Prices in Europe (for Industrial Customers)
Average electricity prices for industrial customers*) in the second half of 2009 in selected European countries €ct/kWh
*) Basis: industrial customers with a consumption of 500 – 2,000 MWh; prices excluding value-added tax and all other recoverable taxes and levies. Source: Eurostat, April 2010.
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 106
8.18
10.32
12.25
12.89
14.07
15.94
16.45
16.46
16.84
18.50
18.55
18.82
19.09
19.97
22.94
25.53
0 5 10 15 20 25 30
Bulgaria
Greece
France
Finland
UK
Portugal
EU-27
Sweden
Spain
Netherlands
Ireland
Luxembourg
Austria
Italy
Germany
Denmark
Pan-European Comparison of the Household Electricity Prices
Ct/kWh
Source: Eurostat, May 2010, rounding differences may occur.
Ø EU-27
Electricity prices including all taxes and levies; second half of 2009.
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 107
4.8
8.7
11.9
12.2
13.2
16.3
18.0
24.9
24.7
24.9
27.7
35.7
40.8
56.1
0 5 10 15 20 25 30 35 40 45 50 55 60
UK
Greece
Ireland
Luxembourg
Portugal
Bulgaria
Spain
The Netherlands
France
Finland
Austria
Sweden
Germany
Denmark
German Households Rank Second in Terms of State-Caused Charges on theElectricity Bills
Source: Eurostat, 2nd half of 2009 (average); prices incl. taxes, levies and fees, annual consumption of 2,500 – 5,000 kWh, Bundesverband der Energie- und Wasserwirtschaft e.V., (German Energy and Water Association), June 2010.
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
%
RWE Facts & Figures | Updated August 2010 108
Competition Has Been a Reality since 1999: Freedom of Choice for German Residential Electricity Customers; Increasing Churn Rates
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), June 2010.
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
Churn rate of electricity customers (accumulated)
2.73.1
4.3
7.4
8.3 8.5
1
2
3
4
5
6
7
8
9
Nov. 2005 Nov. 2006 Nov. 2007 Dec. 2008 Oct. 2009 June 2010
Million
7% 8%11%
18.9%20.7%
21.4%
RWE Facts & Figures | Updated August 2010 109
6.356.356.266.356.276.466.53 6.605.104.323.36
1.82
2.002.05
2.042.08
2.15 2.22 2.07 2.09 2.14 2.17 2.16 2.11
8.204.804.884.303.732.922.301.91
1.631.15
0.90
0.26
0.990.67
0.76 0.77 0.85 0.79 0.70 0.52 0.63
0.45
0.61
0
2
4
6
8
10
12
14
16
18
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
German Electricity Consumption Fees
State-caused charges for all electricity customers€ billion (excluding value-added tax)
Concession fees (estimated)
Electricity tax3)
Kraft-Wärme-Kopplungsgesetz (German Combined Heat and Power Act)1)
Erneuerbare-Energien-Gesetz (German Renewable Energy Act)2)
1) Old Combined Heat and Power Act of May 2000 replaced by new Combined Heat and Power Act in April 2002.2) Previously Stromeinspeisegesetz (German Electricity Feed-In Act), since April 2000: German Renewable Energy Act.3) According to estimates of the German Tax Estimation Task Force.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), January 2010.
12.8812.3011.8911.35
9.488.50
6.92
2)
13.49 13.83 13.94
Electricity – SupplyMarket DataPolitical Framework ConditionsAt a Glance RWE
17.11
+ 319%
4.08
RWE Facts & Figures | Updated August 2010 110
92%98%121%
99%102%85%
74%61%69%
57%57%
92%98%
31%24%
20%
22%20%
22%22%
24%13%13%10%
4%2%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Industrial Customers Pay Higher Governmental Charges, but Net Electricity Prices are 6% below the Level of 1998
Taxes, levies & fees Renewable Energy Act, Combined Heat and Power Act, electricity tax.Net electricity pricesGeneration, transmission and sales.
1) Medium voltage, purchase of 500 kW/3,150 h.2) Until April 2010.Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), April 2010.
Development of average industrial1) electricity prices (including electricity tax)1998 = 100%
+ 23%
+ 1,450%
- 6%
67
123
7073 85
96107
122 121
Change (1998 = 100%)141
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
122
2)
10096
In 2000, industry benefited from liberalisation in the tune of some €5.6 billion.In 2010, net industrial electricity prices are 6% below the level of 1998.
RWE Facts & Figures | Updated August 2010 111
40,53
28,57
41.5337.9535.5534.2732.7331.5629.8428.3225.0825.1533.8037.60
26.1725.20
24.6522.4921.7020.8220.3018.6716.6815.51
14.4012.35
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Government Inflates German Electricity Bills
Average monthly electricity bill of a three-person household (3,500 kWh/a)€/month
Taxes, levies & feesRenewable Energy Act, Combined Heat and Power Act, concession fees, electricity tax and value-added tax.
Net electricity pricesGeneration, transmission, distribution, metering, sales and marketing.
49.95 48.20
40.66 41.7646.99 50.14
52.38 54.43 56.7660.20
Change (1998 = 100%)
+ 38%
+ 131%
+ 8%
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), April 2010.
63.15
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
67.70
Gains resulting from deregulation are being eroded by additional burdens imposed by policymakers.
69.10
RWE Facts & Figures | Updated August 2010 112
Government Charges Account for 41% of German Household Electricity Bills1)
23.69 ct/kWh break down as follows (as of April 2010):
Wholesale price/network usage fees/sales:13.89 ct/kWh
Network usagefee/metering/
energy data 5.80 24.5 % management
Wholesale7.19 30.4% price
Sales and0.90 3.8% marketing
1) 3,500 kWh/a.2) VAT at 19%.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), April 2010.Rounding differences may occur.
State:9.80 ct/kWh
Value-added tax2) 3.78 16.0%
Electricity tax 2.05 8.7%
Concession fee 1.79 7.6%
RenewableEnergy Act 2.05 8.7%
Combined Heatand Power Act 0.13 0.5%
41%
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 113
Blackouts in Europe in Minutes (2008)
103.8102.5
89.4
57.752.5
43.7
18.3
0
20
40
60
80
100
120
Germany Austria Hungary France UK Portugal Spain
Source: Verband der Elektro- und Informationstechnik (German Electrical Engineering and Information Technology Association), February 2010.
Minutes
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 114
The Largest Electricity Companies in Germany in Terms of Sales to End Customers (2008) Billion kWh*)
*) Including consolidated participations.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), March 2010.
4.4
6.9
7.9
8.1
10.9
11.6
24.2
78.1
81.6
85.9
0 10 20 30 40 50 60 70 80 90 100
Stadtwerke Hannover AG, Hanover
N-ERGIE AG, Nuremberg
Stadtwerke München GmbH, Munich
RheinEnergie AG, Cologne
EWE AG, Oldenburg
MVV Energie AG, Mannheim
Vattenfall Europe AG, Berlin
E.ON AG, Düsseldorf
EnBW AG, Karlsruhe
RWE AG, Essen
Electricity – SupplyMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 115
Gas Markets Develop and are Getting Global –Flexibility Becomes Key Success Factor
> Gas supply and pricing structures change> International LNG further growing: Linking
European, American and Asian gas markets> Liquidity of European gas markets rising with
gas prices increasingly volatile> Shift of key success factor: From "volume
creates value" to "flexibility creates value“
Source: BG Group; RWE
Gas – LNG Market DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 116
The New Global Gas “Gearbox” – Mainly Driven by LNG
Crystallisation of pre-FID LNG projectsCrystallisation of pre-FID LNG projects
China & India demand elasticityChina & India demand elasticity
Qatar's sales strategy & tacticsQatar's sales strategy & tactics
Major pipe exporters sales strategy & tacticsMajor pipe exporters sales strategy & tactics
Pace of global economic recoveryPace of global economic recovery
Pricing support from coal displacementPricing support from coal displacement
Global LNG outagesGlobal LNG outages
Pace of production curtailmentPace of production curtailment
Gas – LNG Market DataPolitical EnvironmentAt a Glance RWE
Source: Wood Mackenzie Global Gas Service.
RWE Facts & Figures | Updated August 2010 117
LNG is Becoming an Increasingly Important Component of Global Gas Supply
Global natural gas demand and LNG's share Bcm
Source: CERA.
7%13% 15% 17%
2003 2010 2015 2020
2,000
3,000
4,000
1,000
Asia PacificAfricaMiddle East
South and Central AmericaNorth AmericaGlobal LNG
Europe and Eurasia
Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 118
How the Liquefied Natural Gas (LNG) Value Chain Works
Gasfield
Pipeline
Liquefaction
Storage
Shipping
Storage
Regasification
Pipeline
Vessel transport volume (standard range):135 – 155 thousand m3 LNG ≈ 81 – 93 million m3 regasified volume≈ 495 – 565 thousand boe≈ 0.9 – 1.0 TWh
Transport system
Liquefaction plantGas: ∼ 600 m3 at 15 °C
LNG: 1 m3 at -162 °C
Power generation
Regasification terminalGas: ∼ 600 m3 at 15 °C
LNG: 1 m3 at -162 °C
Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 119
Shipments of Liquefied Natural Gas (LNG) to Europe in 2009
Billion cubic metres/year
Europe's import of LNG is on an upward trend because> indigenous gas production is dropping> a more diversified portfolio of gas supply is desired> new regasification infrastructure is being built
0.08United Arababian Emirates
1.970.040.720.164.180.08Trinidad & Tobago
0.09Yemen
0.08Australia
0.090.08Equatorial Guinea
0.08Belgium
0.440.171.38Norway
9.992.422.990.7413.076.5327.015.70Total
5.751.550.176.034.980.32Qatar
1.300.08Oman
2.142.350.084.990.94Nigeria
0.72Libya
0.510.171.630.094.100.08Egypt
1.680.111.270.537.685.194.20Algeria
UKPortugalItalyGreeceFranceBelgiumSpainTurkeyToFrom
Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE
Source: BP Statistical review, June 2010.
RWE Facts & Figures | Updated August 2010 120
Present Liquefied Natural Gas (LNG) Production Capacity (2009) (I)
Million metric tons/year
4.00Gassi Touil12.30Arzew
23.8Algeria
29.7Nigeria8.4021.30NLNG
4.003.50Skikda
9.60Sakhalin9.6Russia
5.00PLNG5.0Peru
1.50Kenai1.5USA
23.20MLNG23.2Malaysia
9.70Tangguh16.70Bontang1.40Arun LNG
27.8Indonesia7.20Brunei LNG
7.2Brunei4.30Pluto LNG
3.50Darwin LNG15.90North West Shelf
23.7Australia
TotalCapacity underconstruction
Existing capacity
Source: Pira, 2009.
Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 121
Present Liquefied Natural Gas (LNG) Production Capacity (2009) (II)
Million metric tons/year
5.00Luanda5.0Angola
6.00Adgas
7.8028.50RasGas
6.0Abu Dhabi
23.4017.80QatarGas77.5Qatar
3.60Qalhat7.10Oman LNG
10.7Oman7.00Yemen LNG
7.0Yemen4.20Snøhvit
4.2Norway3.70EGLNG
3.7Equatorial Guinea14.90Atlantic LNG
14.9Trinidad and Tobago2.200.60Marsa el-Brega
2.8Libya5.005.00SEGAS
7.20ELNG17.2Egypt
TotalCapacity underconstruction
Existing capacity
Gas – LNGMarket DataPolitical EnvironmentAt a Glance RWE
Source: Pira, 2009.
RWE Facts & Figures | Updated August 2010 122
Europe's Largest Gas Companies1) (2009)
Gas sales volume2)
Billion m3
1) No information available on Centrica.2) Standard factor: 1 TWh = 0.093 billion m3.
Source: RWE market analysis based on annual reports.
26.6
30.9
36.1
82.4
103.7
111.28
113.2
0 20 40 60 80 100 120
Gas Natural (ESP)
RWE (GER)
Wintershall (GER)
Gasterra (NED)
ENI (ITA)
GdF (FRA)
E.ON (GER)
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 123
01
23
45
67
89
1011
1213
14
DEN SWE AUT NED CZE ESP POL GER ITA BEL FRA UK
German Residential Gas Prices Compared with Other European Countries
All-gas household: annual consumption: 5,560 – 55,560 kWh*)
€ct/kWh (incl. taxes)
*) Cooking, hot water and heating.
Source: Eurostat 2010; average prices for 2009; based on 2008 purchasing power standards.
Average gas price
6.10
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
5.96.7
7.9
5.8 6.3 6.37.1
6.2
4.2
5.15.0
6.9
RWE Facts & Figures | Updated August 2010 124
0
1
2
3
4
5
6
7
8
9
10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
German Residential Gas Prices from 1999 to 2009 Compared with OtherEuropean CountriesAll-gas household: annual consumption: 23,500 kWh*)
€ct/kWh (incl. taxes)
Belgium
Austria
Germany
Italy
*) Cooking, hot water and heating; 5,560 – 55,560 kWh after second half of 2007.
Source: Eurostat, 2010.
Spain
France
Netherlands
United Kingdom
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 125
Government Charges Included in the German Gas Price
*) Example based on the average price per kWh for an all-gas household (as of beginning of 2010) with a consumption of 20,000 kWh.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), 2010.
Import/production,transportation, storage and distribution 70%
Prorated production levy 3%
Value-added tax 16%
Gas tax 9%
Concession fee 2%
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
30% of the gas price*) payable by an all-gas household is allocable to taxes and levies(gas tax, concession fee, production levy and value added tax)
RWE Facts & Figures | Updated August 2010 126
Grid Access in the German Gas Market
> Grid access was modified and simplifiedas of October 1, 2008.
> Cooperation agreement signed by RWE to activelypromote competition.
> There are 6 market areas in Germany, each of whichhas a virtual trading point (VTP).
> This enables unlimited access within each market area.
Source: RWE.
Source of gas/Point of import
Two-
cont
ract
mod
el
Entry contract
Exit contract
Long-distance gridoperator
VTP
End consumer
MARKET SECTOR
MARKET SECTOR
Grid connection point
Grid connection point
Regional gridoperator
Local grid operator
VTP = Virtual trading point, where trading activities can be transactedVTP
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 127
Natural Gas Supplies in Germany (2009)
Total volume: 1,058 TWh*)
Russia 339 TWh 32%
Norway 307 TWh 29%
Netherlands 212 TWh 20%
National 138 TWh 13%
Denmark/United Kingdom, others 63 TWh 6%
*) Preliminary figure.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), March 2010.
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 128
Gas trading pointTransport route
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
Bacton
DENMARK
Zelsate
Oude
Frankfurt an der Oder
CZECHREPUBLIC
Balgzand
Vesterled
Lang
eled
Fran
pipe
Zeep
ipe
Norpipe
Eur
opip
e 1+
2
Ellund
DE
UD
AN
BBL NETRA
IUK
Blaregnies
Dunkirk
GERMANY(EGT/BEB/WG/RWE/ONTRAS)WEDALRTR
TENP
FRANCE(PEG)
Obergailbach
St. Katherina
WAGOberkappel
TAG
AUSTRIATarvisio
Wallbach
Griesspass
Baumgarten(CEGH)
UNITED KINGDOM
(NBP)
MEGAL
Waldhaus
BocholtzS‘Gravenvoeren
LUXEMBOURG
BELGIUMAachen
Emden
NETHERLANDS(TTF)Zeebrugge
SWITZERLAND
European Gas Trading Points
RWE Facts & Figures | Updated August 2010 129
Relevant Institutions and Their Role in Regulating the Czech Gas Market
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
The State Energy Inspection Authority is authorised to assess buyer and seller behaviour and recommend sanctions to ERO.
Market regulation is monitored by 4 institutions: > Energy Regulatory Office (ERO)> Office for the Protection of Competition (UOHS)> State Energy Inspection Authority> Ministry of Industry and Trade
ERO is an autonomous authority, which is responsible for the regulation of the Czech energy marketMost importantly, ERO handles the granting of licenses and the regulation of TPA tariffs for networks and is responsiblefor the control of gas supply prices
UOHS is the central state administration authority responsible for establishing conditions that promote and safeguard competition, supervising public procurement as well as acting as advisor and monitor for the provision of state aid
The Ministry of Industry and Trade is responsible for approving new investment projects; it also refines energy policies and passes basic legislation (Energy Act and related explanatory decrees)
1
2
3
4
5
RWE Facts & Figures | Updated August 2010 130
Status of Czech Gas Market Liberalisation and Regulation
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
At the same time, a new market model was introduced. It consists of a virtual trading point, an entry-exit system and the possibility of gas sales beyond the distribution system operators’ (DSOs) balancing zones. In order to control the constitution of the market, legal restrictions are set as a framework in which, for example, the principal of non-discriminatory supply conditions for non-consolidated regional gas companies (RGCs), including other market participants, is monitored.
> The opening of the Czech market began in 2005 > Since January 1, 2006, all end customers have been eligible, with the exception of residential customers > On January 1, 2007, all customers including residential customers became eligible and the process of market opening was
completed
Full market liberalisation and complete market opening was achieved and competitors started to enter the market
The transmission system operator RWE Transgas Net, s.r.o. (renamed Net4Gas in March 2010) was set up as an entity that is legally independent from RWE Transgas, a.s. which holds the gas trading license. However, ownership however was retained by RWE. On January 1, 2007, regional gas companies (RGCs) were separated from the regional gas distribution system operators (DSOs).
Net4Gas is subject to the following restrictions due to its dominant position in the Czech gas market: > The commodity price (i.e. gas price): This price is being monitored by ERO.
RWE Transgas has to offer non-discriminatory prices to the same customer segment.> Transportation and distribution price: This price is regulated and has to be approved by the ERO.
The calculation is made on a “cost plus” basis and the costs have to be justified in detail.> Storage prices: Storage prices are not regulated, but are set in multi-round online auctions organised by SSOs.
1
2
3
4
5
RWE Facts & Figures | Updated August 2010 131
Czech Gas Market: Gas-Price Setting Mechanism
> External factors influence approx. 70 – 80% of the final price of natural gas
*) Negotiated third-party access.
RWE Transgasregional gascompanies
4 – 8%
Supervisedby ERO
Gross trademargin
Entity
Portion of final price
Price composition
The ”value chain” Commodity Storage Distribution Transmission
Typical pricestructure
linked to otherfuels (oil, coal)
NTPA*), prices are set in auctions
Regulated Regulated
70 – 80% 4 – 8% 15 – 20% 3 – 5%
Foreignproducers(Russia, Norway)
RWE Gas storage
Distribution system
operators
RWE Transgas Net
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
RWE Facts & Figures | Updated August 2010 132
Costs: ”Inflation - X” escalation (inflation is composed of the Consumer Price Index (CPI) with 1% premium and indexof selected B2B services). Incentives stem from outperfomance potential over the X-factor set by ERO.
Depreciation: Planned book values with ex-post correction to actual values.
Regulated asset base: The ERO defines the value, which forms the initial basis. Annual planned net investments are added to the basis. Ex-post corrections reflect actual net investments (DSO).
Unbundling: There are some residual allowed costs from previous regulatory periods related to the unbundling of system operators from vertically integrated companies.
Revaluation: For regulatory purposes, the ERO currently acknowledges the restated depreciation of revalued assets (according to Czech accounting standards). However, the revaluation effected assets only to a minor extent.
Escalation of Costs, Depreciation and Regulated Asset Base
Gas – DownstreamMarket DataPolitical EnvironmentAt a Glance RWE
Czech Gas Market: Basics of the Regulatory Framework
RWE Facts & Figures | Updated August 2010 133
RWE
RWE Facts & Figures | Updated August 2010 133
Market DataPolitical EnvironmentAt a Glance RWE
137 Electricity179 Gas205 Accounting207 Investor Relations
RWE Facts & Figures | Updated August 2010 134
RWE's Emissions Profile in 2009 164RWE's Rhenish Lignite Mining Region 163RWE Lignite Production in the Rhenish Mining Region 162Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (II) 161Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (I) 160
RWE Shares of the European Power Generation Market by Region (2009) 138RWE Generation: No. 5 in Europe 137
RWE's Share of the German Power Generation Market Relative to Peers (2009) 139
RWE Group Generation Output and Capacity by Load Factor (2009) 143RWE's Germany Division's Power Plant Portfolio 2009 (I) 144RWE's Germany Division's Power Plant Portfolio 2009 (II) 145
RWE's Netherlands/Belgium Division's Power Plant Portfolio 2009 (II) 149RWE's Netherlands/Belgium Division's Power Plant Portfolio 2009 (I) 148
Fuels [166 – 168]
Age Structure of RWE's Power Plants in Germany in 2009 in MW RWE npower's Major Power Plants in the UK
RWE's Germany Division's Power Plant Portfolio 2009 (IV)
157158
147
RWE's Renewables Division's Power Plant Portfolio 2009 (IV)
RWE Group Electricity Production by Geographic Region (2009)
155
141
RWE's Use of Fuels in Proprietary Power Plants (II)
RWE's Hard Coal Purchases by Country of Origin in 2009
RWE's Renewables Division's Power Plant Portfolio 2009 (I)
RWE's UK Division's Power Plant Portfolio 2009
168
166
152
150
RWE Power's Major Power Plants in Germany
Electricity [137 – 178]RWE [137 – 207]
RWE's Use of Fuels in Proprietary Power Plants (I) 167
RWE Power's Nuclear Power Plant Decommissioning Concept165
Thermal Efficiency of RWE's German New Build Power Plants159
156
RWE's Renewables Division's Power Plant Portfolio 2009 (III) 154RWE's Renewables Division's Power Plant Portfolio 2009 (II) 153
RWE's Central and Eastern Europe Division's Plant Portfolio 2009 151
RWE's Germany Division's Power Plant Portfolio 2009 (III) 146
The Role of Electricity Purchase Agreements at RWE Power in Germany (2009) 142
RWE Group Electricity Production by Primary Fuel and Electricity Purchases (2009) 140
Generation [137 – 165]
Table of Contents
RWE Facts & Figures | Updated August 2010 135
RWE Dea's Key Performance Indicators 186RWE Dea – Gas and Oil Production Target: Doubling of Annual Volume by 2015 185
RWE Electricity Sales by Customer Group (2009) (II) 177
Trading/Gas Midstream Division: Trading Volumes in 2009 170Centralised Pan-European Asset Management: Moving Assets Closer to the Market to Widen Margins 169
Trading [169 – 170]
RWE Supply & Trading: Full Integration of RWE Group's Midstream and Trading Activities 192RWE’s Gas Procurement Portfolio is Only Partly Exposed to the Gas-to-Oil Spread 193
Liquefied Natural Gas (LNG) will be of Growing Importance for RWE 189
Trading [192 – 194]
RWE: Making Use of Options is Key for our Gas Portfolio Management 194
RWE Dea – Reserves/Resources 2009 (P50) 182
Gas [179 − 204]
RWE's German Transmission Business (2009) 172
Network [171 – 172]RWE's German Electricity Network (2009) 171
LNG [189 – 191]
Upstream [179 – 188]
Supply [173 – 178]
RWE Dea: Defined Development Projects Secure Future Earnings Growth 179
RWE npower: Competing in the UK Retail Market 178
The Distinctive Features of Excelerate Vessels
RWE Dea's Asset Reserve Contribution (2009) (II)
RWE Electricity Customers by Region (2009)
190
184
174
Electricity [137 – 178]RWE [137 – 207]
RWE's LNG Value Chain with Excelerate191
Upstream Oil & Gas – Overview of RWE Dea's Activities 188Investment in International & Organic Growth: RWE Dea's Capex Plan per Region 187
RWE Dea's Asset Resource Contribution (2009) (I) 183
Classification of Reserves & Resources 181The Upstream Business Value Chain 180
RWE Electricity Sales by Customer Group (2009) (I) 176RWE Group Electricity Sales Volume by Geographic Region (2009) 175
RWE Shares in European Electricity Supply Markets (2009) 173
Table of Contents
RWE Facts & Figures | Updated August 2010 136
RWE's German Gas Market Areas RWE Transgas Located in Strategically Important Part of European Transit Network RWE's Position in the European Gas Transit Business
Downstream [198 – 204]197196195
RWE AG Investor Relations – Contacts 207Investor Relations [207]
How the Size of the Provision is Determined 206Nuclear Provisions 205
Nuclear Provisions [205 – 206]Accounting [205 – 206]
Transport [195 – 197]
RWE Shares of the European Gas Downstream Market (2009) 198RWE Gas Customers by Region (2009) 199
Gas [179 − 204]RWE [137 – 207]
RWE's Regional Gas Companies: Nationwide Coverage in the Czech Republic 204Transmission and Storage System in the Czech Republic at a Glance 203RWE Group Gas Sales Volume by Geographic Region (2009) 202RWE Gas Sales by Customer Group (2009) (II) 201RWE Gas Sales by Customer Group (2009) (I) 200
Table of Contents
RWE Facts & Figures | Updated August 2010 137
RWE Generation: No. 5 in Europe
EU-27 (2009): 3,200 TWh*)
Source: 2009 annual reports, RWE
EdF (incl. EnBW) 19%
Others*) 36%
Enel 8%
Vattenfall 5%
E.ON 9%
RWE 6%
GdF/Suez 9%
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
CEZ 2%
Iberdrola 4%
*) Estimated
RWE Facts & Figures | Updated August 2010 138
RWE Shares of the European Power Generation Marketby Region (2009) % of inhouse-generation (excluding electricity purchased from third parties)
*) Including contracted generation.
Source: UCTE, National Grid, RWE.
25
7
15
2
0
10
20
30
40
Germany UK Central and EasternEurope
Netherlands/Belgium*)
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 139
RWE's Share of the German Power Generation Market1) Relative to Peers (2009)
*) Including contracted generation.
Source: H.-W. Schiffer, Energiemarkt Deutschland (German Energy Market), Cologne, 2010, (based on company information and on Geman Energy and Water Federation; RWE calculations).
RWE 147.5 TWh 26%*)
E.ON 111.4 TWh 20%
Vattenfall Europe 65.0 TWh 12%
EnBW 67.0 TWh 12%
Others 169.6 TWh 30%
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
Total net electricity production (including self generators): 560.5 TWh
RWE Facts & Figures | Updated August 2010 140
RWE Group Electricity Production by Primary Fuel and Electricity Purchases(2009)
0
20
40
60
80
100
120
Lignite Hard coal Nuclear Gas Renewableenergies
Pumpedstorage, oil,
other
Electricitypurchases
Bn kWhTotal: 300.0*) bn kWh
RWE power plantsElectricity procured from power plants that are not owned by RWE that we can deploy at our discretion on the basis of long-term agreements
*) The difference between 300.0 bn kWh of power generation output and 282.8 bn kWh of electricity sales is due to grid losses and own use.
Lignite Hard coal Nuclear Gas Renewable energies
Pumped storage, oil,
other
Electricitypurchases
33.9 29.7
2.1
112.8
16.2
70.9
44.1
6.5
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 141
RWE Group Electricity Production by Geographic Region (2009)
Bn kWh
*) Net, excluding trading. Purchases for physical deliveries to customers only.
27.7
20.2
7.5
––
1.1–
0.1
0.7–
–
5.6
Other
6.51.5
0.8–
1.00.8
3.60.7
Renewable energiesthereof contracts
44.116.2
1.6–
10.7–
31.116.2
Hard coalthereof contracts
300.06.553.6212.2Total
112.82.025.964.7Electricity purchases*)
187.24.527.7147.5Subtotal
2.11.4
––
0.2–
1.91.4
Pumped storage, oil, otherthereof contracts
29.72.115.811.7Gas
33.9––33.9Nuclear
70.9––65.3Lignite
Total NL UK Germany
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 142
The Role of Electricity Purchase Agreements at RWE Power in Germany (2009)
Total capacity*): 32.4 GW Total generation: 143.6 TWh
Evonik (STEAG) 12%
RWE 73%
Others 8%
E.ON 7%
Others 4%
RWE 87%
Evonik (STEAG) 8%
E.ON 1%
*) As of December 31, 2009.
> RWE has full entrepreneurial control over power plants> Long-term contracts relating to fossil-fired and hydro power plants> RWE can use most outside purchases until the end of the power plant's useful life> Pricing is largely dependent on generation costs (fuel, CO2)
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 143
RWE Group Generation Output and Capacity by Load Factor (2009)
Output Capacity
Base load1) 86%
Peak load2) 14%
Base load3) 65%
Peak load4) 35%
1) Base in Germany: lignite, nuclear, coal (75%), gas (cogeneration), renewables (5%); base in the Netherlands/Belgium: coal (100%), renewables, gas (80%); base in the UK: coal (33%), gas base in CEE: lignite, renewables.
2) Peak in Germany: coal (25%), gas (condensation), renewables (95%), oil, pump storage;peak in the Netherlands/Belgium: gas (20%); peak in the UK: coal (67%), oil.
3) Base in Germany: lignite, nuclear, coal (50%), renewables, gas (cogeneration);base in the Netherlands/Belgium: coal (100%), renewables, gas (25%); base in the UK: coal (50%), gas;base in CEE: lignite, renewables.
4) Peak in Germany: coal (50%), gas (condensation), oil, pumped storage; base in the Netherlands/Belgium: gas (75%);peak in the UK: coal (50%), oil; peak in CEE: gas.
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 144
RWE's Germany Division's Power Plant Portfolio*) 2009 (I)
95100.09569.01061963VSEVSE Unit 1
Hard coal270100.0270100.02701971RWE PowerEnsdorf C600100.0600100.06001984RWE PowerGersteinwerk Werne Kv2
49.0Steag36651.0717100.07171981RWE PowerGW Bergkamen A765100.0765100.07651985RWE PowerIbbenbüren
75.4Vattenfall, E.ON12524.612524.65081991RWE PowerRostock588100.0588100.05881963, 1969RWE PowerWestfalen A-C
30.44Various shareholders54.369.67869.6781975enviaMPolandBedzin2,8633,2383,632Total hard coal
5,4866,2956,295Total nuclear25.0E.ON96675.01,288100.01,2881985RWE PowerGundremmingen C25.0E.ON96375.01,284100.01,2841984RWE PowerGundremmingen B12.5E.ON1,16387.51,329100.01,3291988RWE PowerKKW Emsland
1,227100.01,227100.01,2271976RWE PowerBiblis B1,167100.01,167100.01,1671975RWE PowerBiblis A
Nuclear
10,16210,16210,162Total lignite
118100.0118100.01181901, 1987, 1988
RWE PowerWachtberg54100.054100.054RWE PowerFortuna Nord52100.052100.0521939, 1993RWE PowerBerrenrath
2,047100.02,047100.02,0471955-1975RWE PowerWeisweiler151100.0151100.01511993, 1994RWE PowerGoldenberg941100.0941100.09412003RWE PowerNiederaussem (BoA1)
2,716100.02,716100.02,7161963-1974RWE PowerNiederaussem2,059100.02,059100.02,0591972-1976RWE PowerNeurath2,020100.02,020100.02,0201957-1970RWE PowerFrimmersdorf
Lignite%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Germany unless stated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
*) Rounding differences may occur on the power plant list.
RWE Facts & Figures | Updated August 2010 145
RWE's Germany Division's Power Plant Portfolio*) 2009 (II)
Oil119100.0119100.01191994enviaMGroßkayna 17100.017100.0171995enviaMSermuth
50.0E.ON650.01150.0111987, 1990LEWPeissenberg (gas, oil)141147147Total oil
3,6924,1694,306Total gas3100.03Various3RWE RWNRWN (various)
VariousVarious shareholders216Various216Various353enviaMenviaM (various)21.0Municipal shareholders579.0779.07SüwagSüwag Gas10.1989.91090.0102000LEWLEW Aviko
100.0Krupp-Mannesmann00.0214100.02141975, 1976RWE PowerHuckingen379100.0379100.03791975, 1976RWE PowerHuckingen
100.0Bayer AG00.0260100.02602000RWE PowerGuD Dormagen326100.0326100.03262000RWE PowerGuD Dormagen12100.012100.0122004RWE PowerDortmund20100.020100.0202004RWE PowerBochum
506100.0506100.05062006RWE PowerWeisweiler VGT G, H112100.0112100.01121984RWE PowerGersteinwerk Werne Kv1
1,285100.01,285100.01,2851973RWE PowerGersteinwerk F - I820100.0820100.08201973, 1974RWE PowerEmsland B, C
Gas%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Germany unless stated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 146
RWE's Germany Division's Power Plant Portfolio*) 2009 (III)
5100.05100.051928RWE RWNRWW GmbH
1Various2Various2VariousVegetable oil (various sites)25.05City of Düren1100.0175.012005RWE RWNBHKW Schöllershamer (biogas)
172425Total renewables other
11100.011100.0112003enviaMMalchin (biomass oil)1Various1Various3VariousLandfill gas (various sites2100.02100.022007/2009enviaMBiogas (various sites)0100.07100.072003RWE RWNBiomas-fired thermal power
station Neubrücke
Renewables other
195203215Total renewables hydro run-of-river10100.010100.010enviaMenviaM Water
22.4Municipal shareholders1378.81778.817SüwagSÜWAG WaterVarious shareholders153Various155Various167LEWLEW Water
50.0State contract with Luxemb.250.0550.05RWE PowerLuxembourgPalzem12100.012100.012RWE PowerKW Laufwasser (various sites)
Renewables hydro run-of-river
324040Total renewables wind68.7Various shareholders131.3331.33KEVAGWindpark Westerwald (GmbH)42.5957.51557.515KEVAGWindpark Westerwald (KEVAG)
22100.022100.022enviaMenviaM (various sites)Renewables wind (onshore)
%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Germany unless stated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 147
RWE's Germany Division's Power Plant Portfolio*) 2009 (IV)
1,096*)100.01,0960.01,096RWE PowerSEO Vianden (pumped stor.)
153100.0153100.0153 1989RWE PowerKöpchenwerk (pumped storage)
31,51633,20633,750Total capacity of theGermany Division
8,7128,7128,712Total contractually secured plants1*)100.010.011997SüwagBHKW Bioenergie Bottwartal
870*)100.08700.0870RWE PowerSchluchsee (pumped storage)160*)100.01600.0160RWE PowerAustriaKaunertal (pumped storage)
10*)100.0100.010RWE PowerRhein-Main-Donau (hydro run-of-river)
29*)100.0290.029RWE PowerNeckar (hydro run-of-river)557*)100.05570.0557RWE PowerOther hard coal811*)100.08110.0811RWE PowerSaarEnergie (hard coal)
2,111*)100.02,1110.02,111RWE PowerRuhrEnergie (hard coal)3,068*)100.03,0680.03,068RWE PowerSTEAG (hard coal)
Contractually secured plants
216216216Total other1100.01100.012003RWE PowerSRS Ecotherm
24100.024100.0241996RWE PowerMVA Weisweiler38100.038100.0381987RWE PowerMHKW Karnap
Other%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Germany unless stated)
Power plant
*) Capacities of power plants not owned by RWE, but that RWE can deploy at its discretion on the basis of long-term agreements.
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 148
RWE's Netherlands/Belgium Division's Power Plant Portfolio 2009 (I)
3,6343,6343,634Total capacity of the Netherlands/Belgium Division
25100.025100.0251999EssentCuijk
233100.0233100.02331999EssentSwentibold CC33100.033100.0331994Essents‘Hertogenbosch (Den Bosch)
610100.0610100.06101977EssentClauscentrale A
33100.033100.0331995EssentPhilip Morris 1 (Bergen op Zoom)
339100.0339100.03391996EssentMoerdijk63100.063100.0631996EssentKlazienaveen CC 1&2
133100.0133100.01332007EssentBelgiumInesco (Antwerp)
63100.063100.0631996EssentErica CC 1&225100.025100.0251982EssentHelmond GT 1
52100.052100.0521995EssentEindhoven Philipps GT58100.058100.0581985EssentEnschede Cogen
25100.025100.0251988EssentHelmond GT2
363636Total renewables other11100.011100.0111989EssentLinne HH 1-4 (hydro run-of-river)
Renewables other
616616616Total renewables wind415100.0415100.0415EssentVarious sites (Germany)201100.0201100.0201EssentVarious sites (NL)
Renewables wind (onshore)
1,8021,8021,802Total gas
121100.0121100.01211976EssentDonge CC15100.015100.0151972EssentAmercentrale AC21
Gas
1,1801,1801,180Total hard coal600100.0600100.06001983EssentAmercentrale ST 9580100.0580100.05801980EssentAmercentrale ST 8
Hard coal%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Netherlandsunless stated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 149
RWE's Netherlands/Belgium Division's Power Plant Portfolio 2009 (II)
AveBe1150.000.0231976EssentHunzestroomAES, Delta10125.000.04051998EssentElsta CCDupont1333.000.0391997EssentDesco
Akzo Nobel9050.000.01801987EssentDelesto 1
40900.01,034Total cogeneration(dispatch rights)*)
AveBe1950.000.0371972EssentDobbestroom
Akzo Nobel17550.000.03501998EssentDelesto 2
Cogeneration (gas)%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(Netherlandsunless stated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
*) Dispatch rights are not included in the total capacity of the Netherlands/Belgium Division.
RWE Facts & Figures | Updated August 2010 150
RWE's UK Division's Power Plant Portfolio 2009
10,25810,25810,258Total capacity of theUK Division
15100.015100.0152003RWE npowerHuntsman Tioxide
2,6572,6572,657Total oil549100.0549100.0549RWE npowerOCGTs (gas oil, various sites)968100.0968100.09681969-70RWE npowerFawley
1,140100.01,140100.01,1401982-84RWE npowerLittlebrook DOil
561561561Total cogeneration (gas)53100.053100.0532005RWE npowerHythe
27100.027100.0271998RWE npowerDow Coming6100.06100.061998RWE npowerIrelandWhitegate9100.09100.091995RWE npowerFort James7100.07100.071999RWE npowerSCA Hygiene Products
99100.099100.0991994RWE npowerAylesford Newsprint81100.081100.0811997RWE npowerBASF58100.058100.0582000RWE npowerBridgewater Paper55100.055100.0551999RWE npowerPhillips Petroleum
135100.0135100.01351999RWE npowerEsso Fawley16100.016100.0161995RWE npowerMillenium Inorganic Chemicals
Cogeneration (gas)
2,4652,4652,465Total gas1,450100.01,450100.01,4501996-1997RWE npowerDidcot B
635100.0635100.06351994RWE npowerLittle Barford380100.0380100.03802001RWE npowerGreat Yarmouth
Gas
4,5754,5754,575Total hard coal1,063100.01,063100.01,0631968-1975RWE npowerTilbury B1,958100.01,958100.01,9581972-1975RWE npowerDidcot A1,554100.01,554100.01,5541971-1979RWE npowerAberthaw B
Hard coal%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
Country(UK unlessstated)
Power plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 151
RWE's Central and Eastern Europe Division's Plant Portfolio 2009
HungaryRenewables hydro run-of-river
1100.01100.012007ÉMÁSZ111Total renew. hydro run-of-river
49.0EnBW, MVM3151.06051.0602007MátraHungaryMátra96Various87Various1272000-2005SinergyHungarySinergy (various sites)
517911951Total CEE Division
Lignite49.0EnBW, MVM38951.076351.07631967MátraHungaryMátra
389763763Total lignite
Gas
127147187Total gas
%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
CountryPower plant
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 152
RWE's Renewables Division's Power Plant Portfolio 2009 (I)
67.7132,3032.342005RWE InnogyPortugalSirigo60.6139.4039.422003RWE InnogyPortugalBulgueira
4100.04100.042008RWE InnogyUKBilbster16100.016100.0162008RWE InnogyUKKnabs Ridge
90100.090100.0902009RWE InnogyUKRhyl Flats
60.6139.4039.422009RWE InnogyPortugalGuilhado
12100.012100.012RWE InnogyUKRWE Innogy wind (various sites)
60100.060100.0602009RWE InnogyUKLittle Cheyne Court
3100.03100.032008RWE InnogyUKThe Hollies
Renewables wind (onshore unless stated)
66.72)51)100.0033.351993RWE InnogyUKKirkby Moor66.72)91)100.0033.391993RWE InnogyUKTaff Ely66.72)101)100.0033.3101994RWE InnogyUKBryn Titli66.72)1133.3033.3341996RWE InnogyUKCarno66.72)233.3033.361996RWE InnogyUKTrysglwyn66.72)733.3033.3221996RWE InnogyUKWindy Standard66.72)733.3033.3201997RWE InnogyUKLlyn Alaw66.72)633.3033.3171997RWE InnogyUKNovar66.72)333.3033.3101998RWE InnogyUKMynydd Gorddu66.72)333.3033.381999RWE InnogyUKBeinn Ghlas66.72)233.3033.372000RWE InnogyUKLambrigg66.72)333.3033.3102001RWE InnogyUKBears Down66.72)133.3033.322001RWE InnogyUKTow Law66.72)481)100.0033.3482003RWE InnogyUKCauseymire66.72)921)100.0033.3922004RWE InnogyUKFarr66.72)321)100.0033.3322006RWE InnogyUKFfynnon Oer66.72)601)100.0033.3602003RWE InnogyUKNorth Hoyle (offshore)
6100.06100.062007RWE InnogyUKHameldon Hill5100.05100.052007RWE InnogyUKBurgar Hill
%MW%MW%MW
Stake in
PartnerRWE'seconomic
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
CountryPower Plant
1) Capacities of power plants not owned by RWE, but that RWE can deploy at its discretion on the basis of long-term agreements.2) M&G Investment Management Limited, JPMorgan Investment Management Inc.
Market DataPolitical Framework ConditionsAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 153
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE's Renewables Division's Power Plant Portfolio 2009 (II)
8100.08100.082009RWE InnogyFranceEnergies des Forières S.A.S.
73.3826.7026.7302009RWE InnogyBelgiumThornton Bank10100.010100.0102007RWE InnogyFranceEnergies Hauts Traits10100.010100.0102007RWE InnogyFranceEnergies du Petit Caux
Renewables wind
191919Total lignite2100.02100.022006RWE InnogyCzech Rep.HKW Albrechtice
17100.017100.0171970/1950RWE InnogyCzech Rep.HKW NachodLignite
9269191,140Total renewables wind
18100.018100.0182002RWE InnogySpainAcampo Amijo22.31377.71677.7161998RWE InnogySpainEE de Muel
14100.014100.0142001RWE InnogySpainGrisel I3100.03100.032005RWE InnogySpainGrisel II
191981.02481.0242002RWE InnogySpainLos Labrados191981.02481.0242002RWE InnogySpainPlana de la Balsa191981.02481.0242002RWE InnogySpainPlana de Zaragoza
6.28312193.712993.71292004RWE InnogySpainDanta54.92145.1045.1472005RWE InnogySpainAldehuelas
22100.022100.0222002RWE InnogySpainBosque Alto24100.024100.0242002RWE InnogySpainPlana Maria39100.039100.0392003RWE InnogySpainRio Gallego24100.0 24100.0242005RWE InnogySpainLanternoso21100.021100.0212007RWE InnogySpainBancal18100.018100.0182007RWE InnogySpainSiglos41100.041100.0412009RWE InnogyPolandSuwalki
%MW%MW%MW
Stake in
PartnerRWE'scommercial
stake
RWE's legal consolidation
stake
Net capacity
Commis-sioned
Operatingcompany
CountryPower plant
RWE Facts & Figures | Updated August 2010 154
Hard coal10100.010100.0101992RWE InnogyGermanyKHW Schöneweide101010Total hard coal
Gas14100.014100.0141970/1950RWE InnogyGermany.Heidelberg22100.022100.022RWE InnogyVarious1100.01100.012001RWE InnogyCzech Rep.HKW Breclav
363636Total gas
Renewables hydro run-of-river
PortugalPortugal Portugal
SpainSpainFrance
7100.07100.071998-2000RWE InnogyAERSA (various sites)40.0Gruforsa, Sauces Treinta,
Rŭssula360.0660.061998RWE InnogyVillalgordo (AERSO)
1382.41682.4161996-2004RWE InnogyINVESTERG (various sites)67.67132.3032.331993RWE innogyRibadouro (INVESTERG)
45100.045100.0451958-1989RWE InnogyEnergies France (various sites)
22.0RADAG7878.010078.0100RWE InnogyRADAG (various)244100.0244100.0244RWE InnogyRWE Innogy run-of-river
(various sites)69100.069100.069RWE Innogynpower Renewables
(various sites)
32100.032100.032RWE InnogySaarwasser
60.572139.4039.432008RWE InnogyVales (INVESTERG)493518524Total renewables hydro run-of-river
%MW%MW%MW
stake in
PartnerRWE'seconomic
stake
RWE's legal consolidation
stake
Net Capacity
Commis-sioned
OperatingCompany
CountryPower Plant
RWE's Renewables Division's Power Plant Portfolio 2009 (III)
Market DataPolitical Framework ConditionsAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 155
Renewables other
47.48949.58250.409Total RWE Group
1.5651.5741.817Totally renewable energies
232337Totally contractually secured plants
*)2362.523.00.037RWE InnogySwitzerlandVarious other hydrorun-of-river sites
Contractually secured plants
585051Total renewables other
1100.01100.01RWE InnogySolar (various sites)25.0675.0975.092003RWE InnogyKehl (biomass wood)
20100.020100.0202006RWE InnogyBergkamen (biomass wood)20100.020100.0202005RWE InnogyBerlin-Neukölln (biomass wood)
0.010100.00.5100.01RWE InnogyRWE Innogy (landfill gas)66.7033.30.033.311994RWE InnogySpainAERSA (solar, various sites)
*) Capacities of power plants not owned by RWE, but that RWE can deploy at its discretion on the basis of long-term agreements..
%MW%MW%MW
stake in
PartnerRWE'seconomic
stake
RWE's legal consolidation
stake
Net Capacity
Commis-sioned
OperatingCompany
CountryPower Plant
RWE's Renewables Division's Power Plant Portfolio 2009 (IV)
Market DataPolitical Framework ConditionsAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 156
RWE Power's Major Power Plants in Germany
Natural GasPower plantThermal power plantGas and steamWaste gas recycling
Lignite:Opencast pitPower plantFactory
Hard Coal:Power plant
Nuclear Power:Nuclear power plants
Other:HydropowerRefuse incineration
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 157
RWE npower's Major Power Plants in the UK
Didcot A 1,958 MW
Aberthaw B 1,554 MW
Didcot B 1,390 MW
Fawley 968 MW
Great Yarmouth 380 MW
Little Barford 635 MW
Littlebrook D 1,140 MW
Tilbury B 1,063 MW
*) CCGT: Combined-Cycle Gas Turbine.
GasCoalCCGT*)
Oil/Gas
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 158
0 400 800 1200 1600 2000
>50
45
40
35
30
25
20
15
10
5
1
0 400 800 1200 1600 2000
>50
45
40
35
30
25
20
15
10
5
1
0 400 800 1200 1600 2000
>50
45
40
35
30
25
20
15
10
5
1
0 400 800 1200 1600 2000
>50
45
40
35
30
25
20
15
10
5
1
~48% older than average ~52% older than average ~70% older than average ~38% older than average
Hard coal (9.4 GW) Lignite (10.1 GW) Gas/oil (3.8 GW) Nuclear (5.5 GW)
1) Westfalen2) BoA 1
Age (years)Age (years) Age (years)
2)
3)
Age (years)
5)
Age Structure of RWE's Power Plants in Germany in 2009 in MW
Average age of existing power plantsAverage age incl. new build projects
3) BoA 2&34) IGCC Hürth5) CCGT Lingen
Existing RWE power plantsNew builds
Source: RWE.
MW MWMWMW 4)1)
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 159
Thermal Efficiency of RWE's German New Build Power Plants
Lignite Coal Gas
German average2)
Highest thermal efficiency of RWE's power plant projects
1) Lignite-fired power plant with optimised technology.2) Including capacitiy of power plants owned by RWE.
Weighted degree of efficiency%
36 38
444346
59
0
10
20
30
40
50
60
70
BoA
2&31
)
Ham
m a
ndEe
msh
aven
(NL)
CC
GT
in L
inge
n(a
lread
y in
ope
ratio
n)
>
>
>
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 160
Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (I)
Thermal efficiency%
60
50
40
30
20
10
01957 1972 1987 2003 2010 2020
1957Frimmersdorf:150 MWη = 30.8
1966Frimmersdorf:300 MWη = 31.4
1975Weisweiler:600 MWη = 36.6
1970Niederaußem:300 MWη = 35.8
2003Niederaußem:BoA 11,000 MWη > 43
2010Neurath:BoA 2&31,100 MWη > 43
2020700 °C-TBK1,100 MWη ≈ 50
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 161
Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (II)
Drop in CO2 emissions in million mt/a
due to new 1,000 MW power plant
5.86.89.7
1957 2003 2020η = 30.8% η > 43% η ≈ 50%
- 30% - 40%
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 162
RWE Lignite Production in the Rhenish Mining Region
0
20
40
60
80
100
120
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Million mt lignite
Frimmersdorf-Süd
Frimmersdorf-West
Fortuna-Garsdorf
IndenSüdrevier
Zukunft-West
Frechen Bergheim
Garzweiler IGarzweiler II
Hambach I
Inden I + II
Number of mines10 11 9 9 5 3 3 3 3 34
Actual values Mining capacityPosition: May 2010.
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 163
Weisweiler
GoldenbergVille/Berrenrath
Wachtberg
Fortuna-Nord
Niederaußem
NeurathFrimmersdorf
Mönchengladbach
Aachen
≈ 10 km
Mine premises
Former mine premises being restored
Restored mine premises
Approved mining border
Lignite-fired power plant
Coal processing plant
Cologne
RWE's Rhenish Lignite Mining Region
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 164
RWE's Emissions Profile in 2009
43.9
105.2
149.1
0
20
40
60
80
100
120
140
160
CO2 emissions Free allocation Shortage
RWE Group in-house electricity generation in 2009 in billion kWh1) RWE Group emissions in 2009 in million metric tons of CO21)
Lignite 70.92)
Hard coal 44.1
Nuclear 33.9
Gas 29.7
Renewables 6.5Pumped storage,oil, other 2.1
1) Including electricity procured from power plants not owned by RWE that we can deploy at our discretion on the basis of long-term agreements, amounting to 18.3 billion kWh, of which 16.2 billion kWh are from hard coal.
2) Includes power stations not owned by RWE that we can deploy at our discretion on the basis of long-term agreements. In 2009, they produced 15.4 million metric tons of CO2 and were allocated certificates for 19.8 million metric tons.
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
CO2emissions
Free allocation of CO2
certificates
Shortageof CO2
certificatesTotal: 187.2
RWE Facts & Figures | Updated August 2010 165
RWE Power's Nuclear Power Plant Decommissioning Concept
35 – 40%share of costs
5 – 7 years 10 – 15 years 2 – 3 years
Decommissioning
Post operational phase Nuclear dismantling(immediate, deferred)
Conventional dismantling/demolition Final disposal
Power production has ceased
In some cases, technical infrastructure needs to be operated for an additional period
For the time being, fuel elements are being cooled in pond storage facilities until they are suitable for dry-cask (CASTOR) storage on site
Systems no longer need to be shut down
Treatment of operating materials and waste
Dismantling of contaminated and activated systems, structures and components
Materials and waste management (treatment, conditioning, packaging)
Conventional demolishing of buildings/components which fall no longer under the German Nuclear Energy Act (AtG).
10 – 15%share of costs
About 50%share of costs
Final disposal of decommissioning waste
Market DataPolitical EnvironmentAt a GlanceElectricity – GenerationRWE
RWE Facts & Figures | Updated August 2010 166
RWE's Hard Coal Purchases by Country of Origin in 2009*)
*) All figures refer to proprietary power plants only.
Source: RWE.
%
Russia 37.55
Germany 21.81
Colombia 15.10
UK 9.69
South Africa 8.84USA 2.58Indonesia 2.23Australia 1.43Others 0.77
Total: 13,170,832 metric tons
Market DataPolitical EnvironmentAt a GlanceElectricity – FuelsRWE
RWE Facts & Figures | Updated August 2010 167
RWE's Use of Fuels in Proprietary Power Plants (I)
1) Adjusted figure.2) Without Essent.
Source: RWE.
Use of hard coal
12.7
15.2
12.9 12.1
9.0
0
4
8
12
16
2005 2006 2007 2008 2009
Million metric tons
Use of lignite
97.6 96.3 100.195.4 92.3
0
25
50
75
100
125
2005 2006 2007 2008 2009
Million metric tons
Use of natural gas
6.3
4.6
6.6 6.8
5.6
0
1,5
3
4,5
6
7,5
2005 2006 2007 2008 2009
Billion cubic metres
7.5
6.0
4.5
3.0
1.5
0
Market DataPolitical EnvironmentAt a GlanceElectricity – FuelsRWE
1)
2)
2)
RWE Facts & Figures | Updated August 2010 168
RWE's Use of Fuels in Proprietary Power Plants (II)
Use of nuclear fuel
71
128
90
136129
0
30
60
90
120
150
2005 2006 2007 2008 2009
Metric tons
Use of biomass
616682
882
1,132 1,388
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009
Thousand metric tons
Market DataPolitical EnvironmentAt a GlanceElectricity – FuelsRWE
1,200
1,000
*)
*) Without Essent.
Source: RWE.
RWE Facts & Figures | Updated August 2010 169
RWE Supply & Trading
Centralised Pan-European Asset Management: Moving Assets Closer to the Market to Widen Margins
> Business plan and investment decisions
> Technical optimisation to increase asset value
> Operation andmaintenance ofgeneration assets
Generating companies(RWE Power,
RWE npower, Essent)
> Sell to customers> Buy back-to-back> Lock in sales margin> Bear volume
and credit risk
Sales companies(RWE Vertrieb,
RWE npower, Essent)
Generation capability
Emissions trading
World coal market
Wholesalepower market
Long-term gassupply contractsand gas markets
Sells power
Sells power to end customers
Industrial, small and medium-sized enterprises, municipalities, residential
Short-term spot
Balancing and reserve markets
> Proprietary trading activities> Face to the wholesale market
Proprietary Trading
Commercial optimisation of assets on behalf of generating companies
Asset-Backed Trading
Sells power
Buys fuelsand carbon
Market DataPolitical EnvironmentAt a GlanceElectricity – TradingRWE
RWE Facts & Figures | Updated August 2010 170
Trading/Gas Midstream Division: Trading Volumes in 2009
> Power: 1,135 TWh> Gas: 415 bcm> Coal: 418,594,000
metric tons> Oil: 662 million bbl> CO2: 235 million certificates
Market DataPolitical EnvironmentAt a GlanceElectricity – TradingRWE
The company headquartered in Essen (Germany) with additional branches and trading floors in London and Swindon (UK) and Prague (Czech Republic). Essent trading offices are located in Geneva (Switzerland) and Den Bosh (Netherlands). Furthermore we
have offices in Houston (USA), Monterrey (Mexico), Ashgabat (Turmenistan), Dubai and Singapore.
million certificatesmillion bbl
million metric tonsbcmTWh
235CO2
662Oil418Coal415Gas
1,135Power
million certificatesmillion bbl
million metric tonsbcmTWh
242CO2
35Oil77Coal
160Gas710Power
Essent
RWE Supply & Trading
RWE Facts & Figures | Updated August 2010 171
RWE's German Electricity Network (2009)
Circuit length of 340,850 km, with– 93,480 substations and transformers– approx. 5,500,000 low-voltage connection points
(house connections)
19331,0001,784,000Total18201,7001,150,000Low voltage (≤ 1 kV)1994,800505,000Medium voltage (≤ 60 kV)2523,50093,000High voltage (110 kV)
Distribution3111,00036,000
Transmission(ultra-high voltage (380/220 kV))
RWE in %
RWEGerman market*
Length in km
RWE network regions in Germany
Essen
Ludwigsburg
Frankfurt am Main
Stuttgart
Munich
Saarbruecken
Osnabrueck
Koblenz
GelsenkirchenDortmund
Chemnitz
DresdenLeipzig
Halle
Market DataPolitical EnvironmentAt a GlanceElectricity – NetworkRWE
*) 2008 figures.
Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), 2010.
RWE Facts & Figures | Updated August 2010 172
RWE's German Transmission Business (2009)
850Employees
700Balancing zones within the control area
395Input and output points
350Active traders in the control area
194 TWhAnnual transmission capacity
45 GWInstalled capacity in the control area
11,000 kmNetwork length (380/220 kV)
380 kV-network
220 kV-network
Essen
Frankfurt am Main
Stuttgart
Osnabrueck
Dortmund
Bonn
Karlsruhe
FRANCE
AUSTRIA
POLAND
CZECH REPUBLIC
BELGIUM
NETHERLANDS
LUXEM-BOURG
GERMANY
Bavaria
Baden-Wuerttemberg
North Rhine-Westphalia
Lower Saxony
RhinelandPalatinate
Market DataPolitical EnvironmentAt a GlanceElectricity – NetworkRWE
RWE Facts & Figures | Updated August 2010 173
%
14
28
17
34
96
12
0
10
20
30
40
Germany Netherlands UK Hungary Slovakia Austria Poland*)
RWE Shares in European Electricity Supply Markets (2009)
*)
*) Including minority interests ≥ 20%.
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
RWE Facts & Figures | Updated August 2010 174
Thousand (in total: 16,456 thousand)
6,237
172
901
2,231
4,147
2,144
626
0
1000
2000
3000
4000
5000
6000
7000
8000
Germany Netherlands Belgium UK Hungary Poland
RWE Electricity Customers by Region (2009)
*)
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
*) Including Austria.
6,8638,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
thereof eprimo
RWE Facts & Figures | Updated August 2010 175
RWE Group Electricity Sales Volume by Geographic Region (2009)
*) Difference between electricity production and electricity sales volume due to grid losses, own consumption of lignite production and pumped-storage powerplants.
8.1
1.3
–
2.7
4.1
NL
282.8*)1.117.37.549.9198.9Total
33.9––––32.6Electricity trading (net of electricitypurchased from third parties)
93.91.15.30.9–86.6Distributors
95.7–5.84.229.853.2Industrial and corporate customers
59.3–6.22.420.126.5Residential and commercial customers
TotalOthersHungaryPolandUKGermany
January – December TWh
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
RWE Facts & Figures | Updated August 2010 176
Division: Germany
Industrial and corporate customers 25%
Total: 108.0 billion kWh
Residential and commercial customers 24%
Distributors 51%
Industrial and corporate customers 29%
Total: 6.8 billion kWh
Division: Netherlands/Belgium*)
Residential and commercial customers 52%
Electricity trading 19%
RWE Electricity Sales by Customer Group (2009) (I)
*) Figures only relate to the fourth quarter of 2009 due to the first-time consolidation of Essent as of September 30, 2009.
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
RWE Facts & Figures | Updated August 2010 177
RWE Electricity Sales by Customer Group (2009) (II)
Division: Central and Eastern Europe
Distributors 29%
Total: 24.8 billion kWh
Industrial and corporate customers 36%
Residential and commercial customers 35%
Industrial and corporate customers 60%
Residential and commercial customers 40%
Total: 49.9 billion kWh
Division: UK
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
RWE Facts & Figures | Updated August 2010 178
RWE npower: Competing in the UK Retail Market
Development of customer numbersMillion accounts
Gas
Electricity
Dec 31
(of which dual fuel)
Retail strategy based on creating value
> The UK retail energy market has been through a period of recession and wholesale market volatility; there have been unprecedented falls in electricity and gas consumption in recent years
> Competition has remained intense, leading to pressure on tariffs
> RWE npower’s business retail segment has recovered strongly, with increased product focus and improved account management; RWE npower has the second largest share in the UK electricity market and improved customer satisfaction rankings
> To deliver value, RWE npower co-ordinates its efforts to address the opportunities offered by disruptive technologies and market events
Market DataPolitical EnvironmentAt a GlanceElectricity – SupplyRWE
3.8
2.5
4.14.54.4 4.3 4.2 4.2
2.5 2.62.7
2.01.9 2.6
2004 2005 2006 2007 2008 2009 2010 F
6.1(1.4)
6.3(1.6)
6.9(2.1)
7.1(2.2)
6.8(2.2)
6.7(2.3)
6.3(2.3)
RWE npower is continuing to build a value-oriented customer portfolio
RWE Facts & Figures | Updated August 2010 179
RWE Dea: Defined Development Projects Secure Future Earnings Growth
2008 2009 2010 2011 2012 2013 2014 2015
Largest field developments
2011 2012
5.1 mm boeLuno (Norway)
20162010 2013 20152014Production start1)
Gjøa (Norway)
Reggane (Algeria)
Breagh (UK)
West Nile Delta (Egypt)
2.1 mm boe
n/a3)
7.1 mm boe
n/a2)
2016 Production target
Ramp-up of gas/oil production> Doubling of gas and oil
production by 2015 at the latest
> Organic growth through designated development projects
> Increasing production volumes leading to economies of scale
AlgeriaLibyaEgyptPolandNorwayUKDenmarkGermany
1) As of May 2010. 2) Under negotiation. 3) Confidential.
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 180
The Upstream Business Value Chain
€ million
213
€ million
855
ActualLicenses
RWE Dea
Thousandkm2
140
Expenses2009
RWE Dea
Capex2009
RWE Dea
Production2009
RWE Dea
Millionboe
33
Exploration
Participationin bid roundsFarm in
SeismicData processingDrilling (dry wells)
Drilling*)
EngineeringConstruction(field and infrastructure)
OperationTransportSale
Development ProductionLicensing
*) Including capitalised exploration and appraisal wells.
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 181
Classification of Reserves & Resources
Range of uncertainty
1PProved
2PProved
+ Probable
3P Proved
+ Probable + Possible
Low estimate Best estimate High estimate
Low estimate Best estimate High estimate
P9090% chance of exceeding
the estimate
P5050% chance of exceeding
the estimate
P1010% chance of exceeding
the estimate
Res
erve
sR
esou
rces
C1
C2
C3
E1
E2
S1
S2
Com
mer
cial
Sub-
com
mer
cial
Onproduction
Underdevelopment
Planned fordevelopment
Discovered (contingent)
Undiscovered(prospective)
C-Reserves
S-Resources
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 182
RWE Dea – Reserves/Resources 2009 (P50)
Reserves = proved + probable.
Resources = S1 + S2.
360
701 664
147265 235
245122 127
653
347 380
0
200
400
600
800
1000
12001,200
1,000
800
600
400
200
02009 2011e 2013e
392
1,048
387
1,044
362
Natural gas resources
Natural gas reserves
Crude oil resources
Crude oil reserves
Million bbl oil equivalent – end-of-year status
1,013
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 183
RWE Dea's Asset Resource Contribution (2009) (I)
1Poland
12Norway
1Denmark10UK
17Germany6Algeria8Libya
45Egyptin %Discovered reserves + resources (C+S)
Discovered reserves + resources (C+S) (RWE Dea share/working interest)
North Africa/Middle East 59%
Total: 1,405 million boe 2)
1) CIS = Commonwealth of Independent States.2) Barrel of oil equivalent.
1Turkmenistan
10Norway4Germany
2Ireland2Poland3UK
1Mauritania3Morocco1Libya
73Egyptin %Undiscovered (risked) resources (E)
Total: 1,945 million boe 2)
North Africa/Middle East 78%
Undiscovered (risked) resources (E) (RWE Dea share/working interest)
Germany 17%
Europe/CIS 1) 24%
Germany 4%
Europe/CIS 1) 18%
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 184
RWE Dea's Asset Reserve Contribution (2009) (II)
2Denmark19UK19Norway35Germany12Algeria13Egypt%Reserves (C)
Reserves (C) (RWE Dea share/working interest)
North Africa/Middle East 25%
Total: 506 million boe2)
1) CIS = Commonwealth of Independent States.2) Barrel of oil equivalent.
Germany 35%
Europe/CIS1) 40%
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 185
RWE Dea – Gas and Oil Production Target:Doubling of Annual Volume by 2015Annual gas/oil production (million boe)
> Organic growth through defined development projects> Growth of reserves through conversion of existing resources> Number of exploration/appraisal wells has almost tripled since 2006 (11 32 wells in 2009)> High exploration/appraisal success ratio of above 50% maintained in previous years (approx. 63% in 2009)
2008 2015
Gas
Oil
2716
20
50
0
20
40
60
80
CAGR ~ 12%
36
77
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 186
RWE Dea's Key Performance Indicators
1) Source: Herold Global Upstream Performance Review – 2009 Final Report.
2) 5-year average.
10.36.4$/bblProduction costs2)
147.0179.0%Reserve/resource replacement rate (P50 C+S)2)
13.69.4yearsReserve life (P90)
2004 – 20082004 – 2008
Worldwide industry average1)
RWE DeaIndicators
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
RWE Facts & Figures | Updated August 2010 187
Investment in International & Organic Growth: RWE Dea's Capex Plan per Region
Approx. 1,030855RWE Dea
Egypt: Disouq onshore development, offshore Nile Delta
Libya, Algeria
Approx. 330175North Africa
UK: Southern North Sea (e.g. Breagh)Denmark: Danish North SeaNorway: Barents Sea; Norwegian SeaCEE/Russia: new ventures
Approx. 560604Europe/CIS*)
Gas: further production wells and compression facilitiesOil: further production wells in Mittelplate offshore fieldStorage: extension of storage capacity
Approx. 14076Germany
Average p.a. 2010 – 2014
2009
Additionally approx. €200 – 300 million p.a. exploration cost in 2010 – 2014 (€252 million in 2009)
€ million
Capex
Explorationcost (P&L relevant)
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
*) CIS = Commonwealth of Independent States (Soviet union succession states).
RWE Facts & Figures | Updated August 2010 188
Upstream Oil & Gas – Overview of RWE Dea's Activities
North Sea/Barents Sea> Mature region> RWE Dea holds position in Norwegian oil production and
is increasing gas production in UK> Objectives:
– Bring on stream new gas fields in UK– Commence liquefaction of natural gas export from
Norwegian Snøhvit field
Germany> Mature region> RWE Dea holds strong position in oil and gas > production and gas storage> Objective: Stabilise production
North Africa> High-potential region> RWE Dea holds outstanding position in gas reserves
in Egypt and owns licenses in Libya and Algeria> Objectives:
– Boost gas production and liquefaction of natural gas export in Egypt through intensive drilling and field development
– Intensify exploration in Libya and Algeria
CEE1)/Eastern NV2)
> High-potential region> RWE Dea holds licenses in Poland> Objective:
– Identify and assess projects in Russia, Ukraine and Caspian Region to establish an upstream position
Production & ExplorationExploration
1) Central and Eastern Europe.2) Eastern new ventures (Russia and Caspian Region).
NORWAY
DENMARK
POLANDUK
ALGERIA LIBYA EGYPT
GERMANY
MAURITANIA
IRELAND
Market DataPolitical EnvironmentAt a GlanceGas − UpstreamRWE
MOROCCO
TURKMENISTAN
RWE Facts & Figures | Updated August 2010 189
Liquefied Natural Gas (LNG) will be of Growing Importance for RWE
> LNG offers customers flexibility and alternative supply sources> LNG offers producers the opportunity to capture the best market price on a global basis (something that
pipeline gas does not always do) > LNG markets continue to be clustered regionally around the Americas, Europe and North East Asia,
but growing interaction offers increased opportunities to those that control LNG production, shippingand regasification
Market DataPolitical EnvironmentAt a GlanceGas − LNGRWE
RWE Facts & Figures | Updated August 2010 190
The Distinctive Features of Excelerate Vessels
Energy Bridge Regasification Vessels can discharge cargo in three distinct ways
GasPortAs vaporous natural gas through the high-pressure gas manifold
The advantage: Excelerate vessels offer more flexibility at lower costs while increasing safety by keeping the LNG vessels away from heavily populated harbor areas.
Market DataPolitical EnvironmentAt a GlanceGas − LNGRWE
ConventionalAs LNG through standard liquid loading arms
Deepwater PortAs vaporous natural gas through an STL buoy
RWE Facts & Figures | Updated August 2010 191
RWE's LNG Value Chain with Excelerate
LNG Upstream Liquefaction Shipping Regasification Markets
Existing position (where in operation today)
Excelerate position
Possible future position
Excelerate attribute
> RWE European gas business, trading & optimisation
> LNG sales via Excelerate facilities
> Optimisation of LNG deliveries
> Spot sales to other LNG markets (e.g. Asia, Spain)
> Northeast Gateway and Gulf Gateway (US)
> Teesside GasPort(UK)
> Other Gateways/ GasPorts
> GATE
> Norway charter contracts (traditional vessels)
> Exceleratetraditional and EBRV*) capacity
> Equity stakes in some EBRVs
> Shipping portfolio optimisation
> Technical skill set
> Norway
> Egypt
> Libya
> Algeria
> Third-party long-term LNG
> Third-party short-term (spot) LNG
> Norway
> Third-party gas
Market DataPolitical EnvironmentAt a GlanceGas − LNGRWE
*) EBVR = Energy Bridge Regasification Vessel.
RWE Facts & Figures | Updated August 2010 192
RWE Supply & Trading: Full Integration of RWE Group's Midstream and Trading Activities
> Gas procurement for RWE Vertrieb's supply operations
> Gas procurement for RWE Power's power plants
> Management of gas sales for RWE Dea
> Commercial responsibility for all liquefied natural gas (LNG) activities
> Non-regulated gas transport, transit and storage
> Functional responsibility for gas trading
Com
mer
cial
tran
sfer
of s
uppl
y ar
rang
emen
tsRWE Power
Supp
lyin
g
RWE Vertrieb
RWE npower
RWE Dea
Power generation
UK, Germany
Downstream business
UK, Germany, Netherlands,
Czech Republic, Slovenia
Consolidation, optimisation and growth platform for RWE's unregulated gas midstream and trading business
Market DataPolitical EnvironmentAt a GlanceGas − TradingRWE
RWE Facts & Figures | Updated August 2010 193
RWE’s Gas Procurement Portfolio is Only Partly Exposed toGas-to-Oil Spread
> Our gas procurement portfolio is solely managed by RWE Supply & Trading
> ~54% or 27 bcm of total gas procurement based on long-term oil-indexed purchase contracts
– thereof ~16 bcm carry a gas-to-oil spread exposure in 2010 which is expected to increase to ~20 bcm in the coming years
Long-term oil-indexed purchase contracts (take-or-pay)
TTF
31% Russia
31% Norway
22% The Netherlands
16% Germany
NBP
Own production
Market DataPolitical EnvironmentAt a GlanceGas - Trading RWE
approx.50 bcm p.a.
RWE Facts & Figures | Updated August 2010 194
> Perform contract optimisation(maximise the value against the market)
> Trade around positions
> Sales to RWE Vertrieb, RWE Power/STPM, Essent:serve as their sole or main supplier
> Manage gas operations:handle nominations
> Trade underlying commodities:oil, coal etc.
RWE: Making Use of Options is Key for our Gas Portfolio Management
Gas salescontracts
Gas purchasecontracts
Gas storagecontracts
Gas transport contracts
Market DataPolitical EnvironmentAt a GlanceGas − TradingRWE
Where:Germany (all 6 market areas),Czech RepublicThe Netherlands
but also:Austria
Slovakia
Activities
RWE Facts & Figures | Updated August 2010 195
RWE's Position in the European Gas Transit Business
Transgas
Production fieldPipeline operational
Significant position in transit of Russian natural gas to EuropeDirect long-term contractualrelations with Gazexport
MEG
AL WAG
TAG
SOL
HAG
Stegal
Bulgaria
Mac
edo n
i aSoyuz
Yam
alEu
rope
NothernLights
Ureng
oy
Prog
ress
Market DataPolitical EnvironmentAt a GlanceGas − TransportRWE
RWE Facts & Figures | Updated August 2010 196
7.6
9.0
5.4
19.1
7.6
33.5
10.0
1.1
5.4
0.5
Source: Gazprom 2009 quarterly reports.
MEGAL
AUSTRIA
POLAND
CZECHREPUBLIC
GERMANY SLOVAKIA
HUNGARY
CROATIASLOVENIA
FRANCE
ITALY
DEU
DAN
RHG
NEL
NEGP
OPAL
NETRA
JAGAL
YAMALBBL
WEDAL
MEGAL
MIDAL
STEGAL
SELWAG
TAG
HAG
TEN
P
Nabucco
Hora Svate Kateriny
Beregdaroc
Steinitz
RWE Transgas
SWITZERLAND ROMANIA
UKRAINE
Imports of Russian gas (bcm/y)
Gazprom gas sales volumes (2009)
RWE transport capacity
BELGIUM
LUXEMBOURG
NETHERLANDSUKBELARUS
DENMARK
RWE Transgas Located in Strategically Important Part of European Transit Network
Market DataPolitical Framework ConditionsAt a GlanceGas − TransportRWE
RWE Facts & Figures | Updated August 2010 197
RWE's German Gas Market Areas
Thyssengas’s transmission network has a total length of 4,100 km and includes two market areas
Market area Calorific valuecomprimising subgrids of natural gas
Thyssengas H-gas 10.6 – 12.8 kWh/mN3Thyssengas L-gas 9.5 – 10.7 kWh/mN3
GMA gas blending facilitiesHydraulic separationEntry points
UGS Underground gas storage facilitiesFEA Liquefied natural gas facility
Market DataPolitical EnvironmentAt a GlanceGas − TransportRWE
RWE Facts & Figures | Updated August 2010 198
RWE Shares of the European Gas Downstream Market (2009)
7
29
9
64
19
4
0
20
40
60
80
100
Germany Netherlands UK CZ HUN Slovakia
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
*) Including minority interests ≥ 20%; supply to end customers.
%
Germany Czech Republic*)
UK*) Slovakia*)Hungary*)Netherlands
RWE Facts & Figures | Updated August 2010 199
RWE Gas Customers by Region (2009)
59
2,281
2,641
1,920
1,072
0
500
1000
1500
2000
2500
3000
Germany Netherlands Belgium UK Czech Republic
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
Thousands
Total: 7,973,000
RWE Facts & Figures | Updated August 2010 200
RWE Gas Sales by Customer Group (2009) (I)
Division: Germany
Industrial and corporate customers 17%
Total: 94.9 billion kWh
Residential and commercial customers 24%
Distributors 59%
Industrial and corporate customers 45%
Total: 36.1 billion kWh
Division: Netherlands/Belgium
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
Residential and commercial customers 50%
Distributors 5%
RWE Facts & Figures | Updated August 2010 201
RWE Gas Sales by Customer Group (2009) (II)
Division: Central and Eastern Europe
Distributors 20%
Total: 75.9 billion kWh
Industrial and corporate customers 36%
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
Residential and commercial customers 44%
Industrial and corporate customers 13%
Residential and commercial customers 87%
Total: 51.9 billion kWh
Division: UK
RWE Facts & Figures | Updated August 2010 202
RWE Group Gas Sales Volume by Geographic Region (2009)
January to DecemberTWh
56.5
2.0
30.5
24.0
NL
332.04.452.575.4143.2Total
103.4––17.084.4Distributors
102.93.87.325.336.0Industrial and corporatecustomers
125.70.645.233.122.8Residential and commercialcustomers
TotalOthersUKCzech RepublicGermany
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
RWE Facts & Figures | Updated August 2010 203
Transmission and Storage System in the Czech Republic at a Glance
AUSTRIA
POLAND
CZECHREPUBLIC
SLOVAKIA
Hradec Králové
Praha
České Budĕjovice
Brno
HPS Olbernhau
HPS Waidhaus
CS Veselí n. L.
CS Kralice
CS Hostim
SF Háje
SF D. Dunajovice SF Tvrdonice
SF ŠtramberkSB Lobodice
Ostrava
RWE Transgas headquartersGas transmission systemVery-high pressure systemCompressor stationBorder transfer stationInland transfer stationTransfer and metering stationUnderground storage facilityHeadquarters of regional distribution companies
> In the Czech Republic, RWE holds the exclusive license for transmission and licenses for the storage and supply of natural gas
> RWE has a 100% stake in RWE Transgas
GERMANY
SF Třanovice
Ústí n. Labem
Plzeň
MTS Hora Sv. Kateřiny
CS Kouřim
CS BřeclavHPS Lanžhot
CS Strážovice
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
RWE Facts & Figures | Updated August 2010 204
RWE's Regional Gas Companies: Nationwide Coverage in the Czech Republic
AUSTRIA
POLAND
CZECHREPUBLIC
GERMANY
SLOVAKIA
SMP
JMP
PP
Majority owned by RWE
> Total number of customers: approx. 2.3 million
> Gas consumption in 2009 by segment: key account: 31%; corporate: 30%; retail: 39%
VČP
JČP
ZČP
Market DataPolitical EnvironmentAt a GlanceGas − DownstreamRWE
RWE ENERGIE
RWE Facts & Figures | Updated August 2010 205
Nuclear Provisions
Market DataPolitical EnvironmentAt a GlanceAccounting – Nuclear ProvisionsRWE
Inflation of current cost to the assumed disposal date by a set inflation rate; then discounting of the result back to today (discount rate 5.0%)
Provisions are made for
> Disposal of spent nuclear fuel assembliesFlasks, transport, conditioning, intermediate and final storage
> Decommissioning of nuclear power plantsPost-operation phase, dismantling, removal, final storage
> Disposal of radioactive operating waste (e.g. cleaning cloths, oils, resins) Conditioning, flasks, intermediate and final storage
Public-law liabilities under Sec. 9a of the Germany Nuclear Energy Act
Provisions for uncertain liabilities as per IAS 371
2
3
4
RWE Facts & Figures | Updated August 2010 206
How the Size of the Provision is Determined
Material is earmarkedfor disposal
Step 1:Determine disposal costs at
current price level
Step 2:Inflation by priceincrease rate k Future cost
(as per IAS 37):market value of costs
in n years, when disposal takes place
Step 3:Discount by rate i
(i = 5.0% p.a. before taxes)
Present value offuture cost
Transfer to provisions
t0 tn
Market DataPolitical EnvironmentAt a GlanceAccounting – Nuclear ProvisionsRWE
RWE Facts & Figures | Updated August 2010 207
RWE AG Investor Relations – Contacts
Gunhild GrieveTel.: +44 207 015 5459E-mail: gunhild.grieve@rwe.com
Oliver van der MondTel.: +49 201 12-15141E-mail: olivervander.mond@rwe.com
Lars KorinthTel.: +49 201 12-15043E-mail: lars.korinth@rwe.com
Dr. Stephan LowisHead of Investor RelationsTel.: +49 201 12-15031E-mail: stephan.lowis@rwe.com
Martin VahlbrockTel.: +49 201 12-15055E-mail: martin.vahlbrock@rwe.com
Dr. Burkhard PahnkeTel.: +49 201 12-15182E-mail: burkhard.pahnke@rwe.com
RWE AGOpernplatz 145128 EssenGermany
Cornelia RathTel.: +49 201 12-15039E-mail: cornelia.rath@rwe.com
Contacts for Institutional Investors & Analysts
Contacts for Private Investors
Market DataPolitical EnvironmentAt a GlanceInvestor RelationsRWE
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