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FACTS & FIGURES

September 2012

RWE Facts & Figures | Updated September 2012

Forward-looking statement
RWE Facts&Figures 2012 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 companys future competitive position; > Expectations of future economic performance; and > Statements 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 RWEs 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. * Footnotes are to be inserted manually (using copy and paste). For additional information regarding risks, investors are urged to consult RWEs latest annual report, other reports recently filed with the Frankfurt Stock Exchange and the material furnished to the US Securities and Exchange Commission by RWE.

RWE Facts & Figures | Updated September 2012

Organisation
RWE in a nutshell Board Structure Germany: Power Generation Germany: Sales/Distribution Networks Netherlands/Belgium United Kingdom Central Eastern and South Eastern Europe Renewables Upstream Gas & Oil Trading/Gas Midstream 5 7 8 10 12 14 17 20 22 24 26

91

Market data
Electricity > Generation > Fuels > Trading > Grid > Supply Gas > Trading > LNG > Storage > Downstream > Supply > Turkish market > Czech market 92 93 113 115 118 121 133 134 136 138 140 141 145 146

28

Strategy & financing


Strategy RWE share Fixed income financing Risk management 29 47 50 58

151

RWE
Electricity > Generation > Fuels > Trading > Grid > Supply Gas > Upstream > Storage > Trading > Downstream Investor Relations 152 153 184 187 189 190 197 198 207 209 212 219

62

Political environment
Overview Combined Heat and Power (CHP) Act Renewable Energy Act Climate policy Emissions trading Large Combustion Plant Directive (LCPD) Grid 63 64 65 72 75 80 82

RWE Facts & Figures | Updated September 2012

Organisation

Strategy & financing

Political environment

Market data

RWE

Organisation
5 7 8 10 12 14 17 20 22 24 26 RWE in a nutshell Board Structure Germany: Power Generation Germany: Sales/Distribution Networks Netherlands/Belgium United Kingdom Central Eastern and South Eastern Europe Renewables Upstream Gas & Oil Trading/Gas Midstream

RWE Facts & Figures | Updated September 2012

ORGANISATION RWE in a nutshell

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE today: One of the leading integrated European utilities


RWE markets Leading positions in core markets
Product Market1 Germany UK Netherlands Central Eastern and South Eastern Europe Electricity No. 1 No. 4 No. 2 > No. 2 in Hungary > No. 3 in Slovakia > No. 5 in Poland > Presence in the Czech Republic > Presence in Turkey No. 3 Gas No. 3 No. 4 No. 1 > No. 1 in the Czech Republic > No. 2 in Slovakia > Leading position in Hungary

RWE markets with established market positions Growth markets under observation (initial activities in some cases)

Additional markets especially for renewables Additional markets especially for upstream gas & oil

x/y of electricity/gas

Forecast average growth consumption in % p.a. (2011 2020)

Total Europe

No. 6

We have leading positions in two of Europes largest markets as well as in fast growing SEE/CEE markets and own a large upstream position in both Europe and North Africa.
1 Market positions of the RWE Group in terms of sales.
RWE Facts & Figures | Updated September 2012

ORGANISATION RWE in a nutshell

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWEs customers as of 31 December 2011


Million

Electricity

17

Gas

Water

151

10

15

20

1 Figure relates to drinking water and sewage water. Population served in Continental Europe.

RWE Facts & Figures | Updated September 2012

ORGANISATION Board

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

The Executive Board of RWE AG

Peter Terium
Chief Executive Officer of the Executive Board (appointed until 31 August 2016)

Dr. Rolf Martin Schmitz


Deputy Chairman of the Executive Board Chief Operating Officer (appointed until 30 April 2014)

Dr. Leonhard Birnbaum


Chief Commercial Officer (appointed until 30 September 2013)

Alwin Fitting
Chief Human Resource Officer (appointed until 31 March 2013)

Dr. Bernhard Gnther


Member of the Executive Board (appointed until 30 June 2017)

Dr. Rolf Pohlig


Chief Financial Officer (appointed until 31 December 2012)

RWE Facts & Figures | Updated September 2012

ORGANISATION Structure

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

The RWE Group


RWE AG (Group Centre)

Germany Power Generation Sales/ Distribution Networks RWE Deutschland

Netherlands/ Belgium

United Kingdom

Central Eastern and South Eastern Europe

Renewables

Upstream Gas & Oil

Trading/Gas Midstream

RWE Power

Essent

RWE npower

RWE East

RWE Innogy

RWE Dea

RWE Supply & Trading

NET4GAS Gas transmission system operator in the Czech Republic (unbundled)

Internal services RWE Consulting RWE IT RWE Service RWE Technology

RWE Facts & Figures | Updated September 2012

ORGANISATION Structure

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE Group structure: a mirror of the value chain


Raw material production Power generation Energy trading/ gas midstream Electricity and gas networks Electricity and gas sales

Gas and oil

Lignite

Wood pellets

Conventional

Renewables

RWE Dea

RWE Power

RWE Innogy

RWE Power

RWE Innogy

RWE Supply & Trading

RWE Deutschland

RWE East

RWE npower

RWE npower

RWE East

Essent

Essent

1 NET4GAS1

RWE npower

RWE East

RWE Power

Essent

1 Gas transmission system operator in the Czech Republic (unbundled).

> 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 Facts & Figures | Updated September 2012

ORGANISATION Germany

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Germany: Power Generation (I)


Who we are
> RWE Power, with two registered offices in Essen and Cologne, is Germanys biggest electricity producer. > The company banks on a broad energy mix and to a large extent is able to draw on its own raw material base (e.g. lignite). > Our power plants have an installed capacity of more than 31 GW. > Enhancing flexibility in the power plant fleet and in the opencast mines is one of the main challenges. Increasing electricity price volatility requires the development of market-oriented power plant dispatch and an increase in the flexibility parameters of the power stations. > With a 43 percent efficiency rate, our twin-unit plant BoA 2&3 was commissioned in August 2012. It is the worlds most advanced lignite-fired power station.

Key figures
EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
3,252 2,700 15,371

2010
4,510 4,000 15,409

RWE Facts & Figures | Updated September 2012

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ORGANISATION Germany

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Germany: Power Generation (II)


Generation capacity1 as of 31 Dec 2011 (MW)
Lignite Renewables Pumped storage, oil, other Gas Nuclear Hard coal 9,799 313 2,489 5,228 3,901 9,555 Nuclear 34.3

Power generation1 2011 (billion kWh)


Lignite Renewables Pumped storage, oil, other Gas Hard coal 68.3 1.4 2.2 11.8 34.0

31,285

152.0

Power plant new build project


Westfalen D+E, Hamm
Two new hard coal-fired units will replace two 160-megawatt units commissioned in 1962/63 and expand the capacity of the site. Owing to the high efficiency of about 46%, the specific carbon emissions of the two new units will be about 20% lower than the current average of hard coalfired power plants in Germany. > > > > Fuel: hard coal Capacity: 1,528 MW Efficiency: 46% Start of operation: End of 2013

Major power plants in Germany


Natural gas Power plant Thermal power plant Gas and steam Waste gas recycling Lignite Opencast pit Power plant Factory Hard coal Power plant Nuclear Nuclear power plant Other Hydro power Refuse incineration

1 Including minor capacities of the Sales/Distribution Networks business area.


RWE Facts & Figures | Updated September 2012

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ORGANISATION Germany

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Germany: Sales/Distribution Networks (I)


Who we are
> The RWE Groups German distribution network, sales and energy efficiency operations are pooled in RWE Deutschland AG since January 2011. > It is the RWE Groups largest affiliate, encompassing the German regional companies enviaM, KEVAG, LEW, Swag and VSE. > Furthermore, the company holds direct stakes in some 70 regional and municipal utilities. > Significant importance is accorded to partnerships with municipalities. Via its subsidiaries, RWE Deutschland ensures the reliable and efficient operation of electricity, gas and water distribution networks in more than 3,500 cities and communities and in several regions is responsible for street lighting.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
20,354 2,167 1,505 20,398

2010
18,456 2,218 1,575 18,775

RWE Facts & Figures | Updated September 2012

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ORGANISATION Germany

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Germany: Sales/Distribution Networks (II)


Electricity customers1 (thousand)
8,000 6,000 4,000 2,000 0
2009 2010 2011

External electricity sales 2011 (billion kWh)


6,959 Distributors Industrial and corporate customers Residential and commercial customers 60.4

6,823

6,674

31.4

117.3

25.5

1 Households and small commercial enterprises.

Gas customers1 (thousand)


1,500 1,064 1,000 500 0
2009 2010 2011

External gas sales 2011 (billion kWh)


1,295

1,091

Distributors Industrial and corporate customers

31.8

24.0

83.3

Residential and commercial customers

27.5

1 Households and small commercial enterprises.


RWE Facts & Figures | Updated September 2012

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ORGANISATION Netherlands/Belgium

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Netherlands/Belgium (I)
Who we are
> Essent is the largest energy company in the Netherlands. The company has a well-balanced and flexible generation portfolio (consisting primarily of gas and hard coal power stations). In total, Essent had 3.1 GW in generation capacity at the end of 2011 and produced some 11.5 billion kWh of electricity in 2011. > By investing into processes to co-fire biomass at our Amer and Eemshaven power stations we intend to further increase the proportion of renewables in our energy mix. > In 2011, 2.2 million and 1.9 million households and small commercial enterprises were supplied with electricity and gas in the Netherlands, respectively. > Two new gas power stations went online at the beginning of 2012. A state-of-the-art hard coal-fired power plant is currently being built.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
5,818 462 245 3,794

2010
6,510 660 391 3,899
14

RWE Facts & Figures | Updated September 2012

ORGANISATION Netherlands/Belgium

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Netherlands/Belgium (II)
Generation capacity as of 31 Dec 2011 (MW)
Gas 1,897

Essents major power plants (2012)


Energiecentrale Eemshaven Coal/Biomass, 1,560 MW (under construction)

Hard coal Renewables (Biomass co-firing)

916

3,144

331 Bio-energiecentrale Cuijk Biomass, 25 MW

Power generation 2011 (billion kWh)


Gas 5.1

Moerdijk I, Moerdijk Gas, 339 MW Moerdijk II, Moerdijk Gas, 426 MW

Hard coal

5.1

11.5

Amercentrale, Geertruidenberg Coal, gas, biomass, 1,226 MW Swentibold, Geleen Gas, 245 MW

Claus C, Maasbracht Gas, 1,304 MW Claus A, Maasbracht Gas, 610 MW

Renewables

1.3

+ various midsize cogeneration power plants

RWE Facts & Figures | Updated September 2012

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ORGANISATION Netherlands/Belgium

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Netherlands/Belgium (III)
External electricity sales 2011 (billion kWh)
Residential and commercial customers

External gas sales 2011 (billion kWh)


Residential and commercial customers

10.7

36.9

21.0
Industrial and corporate customers 10.3 Industrial and corporate customers 50.8

87.7

Power plant new build project


Eemshaven The 50 hectare site in Eemshaven which can be partially fuelled by biomass is being built to generate electricity primarily for the Dutch market. With an efficiency of more than 46% it will be one of the worlds most modern hard coal-fired power stations. > > > > Fuel: hard coal/biomass Capacity: 2x780 MW Efficiency: ~46% Start of operation: 2014

Electricity and gas customers1 (thousand)


3000 2,339 2,329 2,346 2000 1000 0 Electricity Gas 2,019 2,016 2,024 2009 2010 2011

1 Households and small commercial enterprises.


RWE Facts & Figures | Updated September 2012

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ORGANISATION United Kingdom

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

United Kingdom (I)


Who we are
> RWE npower is domiciled in Swindon near London and operates and manages a flexible power plant portfolio with an installed capacity of about 11.5 GW as of end 2011. > Around 4 million and 2.5 million households and small commercial enterprises are supplied with electricity and gas, respectively. In 2011, RWE npower generated almost 30 billion kWh of electricity about 10% of the electricity consumed in the UK. > In May 2012 RWE npower started to commission a new state-of-the-art 2,188 MW combined cycle gas turbine (CCGT) power station at its Pembroke site. The power station comprises five generating units and is able to generate power for around 3.5 million homes.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
7,696 606 357 12,053

2010
7,759 504 272 11,711
17

RWE Facts & Figures | Updated September 2012

ORGANISATION United Kingdom

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

United Kingdom (II)


Major power plants in the United Kingdom
Gas Coal CCGT Oil/Gas Biomass Gas 4,557

Generation capacity as of 31 Dec 2011 (MW)


Renewables Hard coal 742 3,512

11,468

Pumped storage, oil, other

2,657

Pembroke 2,188 MW

Staythorpe 1,728 MW

Aberthaw B 1,554 MW

Didcot A+B 1,420/ 1,958 MW

Little Barford 635 MW

Great Yarmouth 380 MW

Power generation 2011 (billion kWh)


Gas 21.3

Littlebrook D 1,140 MW Tilbury 750 MW Fawley 968 MW

Hard coal

8.6

29.9

RWE Facts & Figures | Updated September 2012

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ORGANISATION United Kingdom

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

United Kingdom (III)


External electricity sales 2011 (billion kWh)
Industrial and corporate customers

External gas sales 2011 (billion kWh)


Residential and commercial customers

32.9

38.0

50.3
Residential and commercial customers 17.4 Industrial and corporate customers 2.2

40.2

Electricity and gas customers (households and small commercial enterprises, thousand)
8,000 6,000 3,877 4,000 2,000 0
Electricity Gas Total
RWE Facts & Figures | Updated September 2012

6,438 3,935 2,561 2,636

6,571

2010 2011

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ORGANISATION CEE and SEE

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Central Eastern and South Eastern Europe (I)


Who we are
> RWE East, based in Prague, is a subsidiary wholly owned by RWE AG. It began overseeing RWEs affiliates in Central Eastern and South Eastern Europe as well as Turkey as of 1 January 2011. > These affiliates include RWE Transgas in the Czech Republic, RWE Hungria in Hungary, RWE Polska in Poland, VSE in Slovakia and RWE Holding in Turkey. RWE East also heads up projects, e.g. in Croatia and Romania. > In 2011, the company sold just under 24 billion kWh of electricity as well as 59 billion kWh of gas.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
4,990 1,364 1,109 11,328

2010
5,297 1,440 1,173 11,163
20

RWE Facts & Figures | Updated September 2012

ORGANISATION CEE and SEE

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Central Eastern and South Eastern Europe (II)


Markets and market positions in terms of sales External electricity sales 2011 (billion kWh)
Industrial and corporate customers 9.2

Residential and commercial customers RWE Polska: Electricity: No. 5 VSE Electricity: No. 3 Gas: No. 2 RWE Turkey Electricity: presence

8.7

RWE Transgas Electricity: presence Gas: No. 1 RWE Hungria Electricity: No. 2 Gas: leading position

External gas sales 2011 (billion kWh)


Industrial and corporate customers 27.4

RWE East core markets Growth markets under observation Other RWE Group core markets

Residential and commercial customers 27.0

RWE Facts & Figures | Updated September 2012

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ORGANISATION Renewables

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Renewables (I)
Who we are
> RWE Innogy was established in February 2008; it pools the RWE Groups renewables expertise and power stations, focussing regionally on Europe. > Onshore and offshore wind power projects are a focus of the company's activities. RWE Innogy will also expand its biomass and hydroelectric activities. We also support the development of new technologies for the future. > RWE Innogy was launched with 1,100 MW in 2008. At present, we already operate a power plant capacity of around 2.4 GW. > We are especially strong in our home market in Germany, followed by the United Kingdom, Spain, the Netherlands, Poland and Italy.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
443 338 181 1,493

2010
366 211 72 1,232
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RWE Facts & Figures | Updated September 2012

ORGANISATION Renewables

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Renewables (II)
RWE Innogys asset base by region (MW) Generation capacity as of March 2012 (MW)
Onshore wind Hydro NL UK BE DE France Switzerland Czech Republic Poland Biomass Offshore wind 110 150 1,607 542

2,4111

1 Including minor capacities in solar and biogas.

Offshore wind projects


In operation North Hoyle1, UK, 60 MW:
Completely commissioned 2004

Italy Portugal Spain

Rhyl Flats, UK, 90 MW:


Completely commissioned 2009

Thornton Bank I2, BE, 30 MW:


Completely commissioned 2009
1 2 3 4 RWE Innogy (33%), RWE Innogy (27%), RWE Innogy (60%), RWE Innogy (50%),

Under construction Nordsee Ost, GER, 295 MW Gwynt y Mr3, UK, 576 MW Greater Gabbard4, UK, 504 MW Thornton Bank II+III2, BE, 295 MW

Onshore wind Offshore wind

Biomass Hydro

New technologies

owned by Zephyr Investments Ltd. owned by C-Power consortium. Stadtwerke Munich (30%) and Siemens (10%). Scottish and Southern Energy (50%).

RWE Facts & Figures | Updated September 2012

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ORGANISATION Upstream Gas & Oil

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Upstream Gas & Oil (I)


Who we are
> Headquartered in Hamburg, RWE Dea is active in the international exploration and production of gas and oil, benefiting from its extensive experience over a corporate history spanning more than 100 years. > RWE Dea has production facilities in Germany, the United Kingdom, Norway, Denmark and Egypt and holds licenses in Algeria, Ireland, Libya, Mauritania, Poland, Turkmenistan and Trinidad and Tobago. In Germany, RWE Dea also operates large-scale underground storage facilities for natural gas. > RWE Dea produced 2,664 million cubic metres of gas and 2,478 thousand cubic metres of oil during fiscal 2011, resulting in a total output of 31.8 million barrels of oil equivalent. > In 2014, a production level of 40 million barrel of oil equivalent and an operating result of about 800 million after planned disposals is expected.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
1,766 923 558 1,362

2010
1,353 619 305 1,363
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RWE Facts & Figures | Updated September 2012

ORGANISATION Upstream Gas & Oil

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Upstream Gas & Oil (II)


Gas production 2011 (million m3 OE)
Germany 1.8

Oil production 2011 (million m3)


Germany 0.9

United Kingdom

0.5

2.6

Norway

0.9

2.5
Egypt Denmark 0.5 0.2

Norway

0.3

Development of reserves and resources (million m3 OE)


250 200 150 100 50 0 111
20 10

Capital expenditure ( million)


1,000

228 162
51 91

237 158
56 104

855 477 505 606 701 507

Proven resources Reserves

800 600 400

66
40 26 2010
2 01 0

79
48 31
20 11

137
G e s a mt

102
2 01 1

133
G e s a mt

200 0

Gas

Oil

2011 Total

2006

2007

2008

2009

2010

2011

RWE Facts & Figures | Updated September 2012

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ORGANISATION Trading/Gas Midstream

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Trading/Gas Midstream (I)


Who we are
> RWE Supply & Trading is a leading European energy trading company, acting as the Groups hub for all tradable commodities (such as power, gas, coal, oil, and emission certificates). The division thus functions as an interface between the RWE Group and the global wholesale markets for energy and energy-related raw materials. > The headquarters in Essen boast Europes largest and most sophisticated energy trading floor. Additional trading floors or subsidiary and affiliate offices are located in London, Swindon, Den Bosch, Geneva, Singapore and New York. > With an annual gas procurement of approx. 45 billion cubic metres RWE Supply & Trading is one of the strongest competitors in the European gas industry.

Key figures
External revenue ( million) EBITDA ( million) Operating result ( million) Workforce1
1 Converted to full-time positions.

2011
5,750 -784 -800 1,562

2010
7,517 -7 -21 1,512
26

RWE Facts & Figures | Updated September 2012

ORGANISATION Trading/Gas Midstream

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Trading/Gas Midstream (II)


Energy sales to industrial customers 2011 (billion kWh) Electricity
25% 23% 47% 22%

Trading volumes 2011


> 1,435 billion kWh of power > 753 billion cubic meters of gas > 618 million barrels of oil > 644 million CO2 certificates

Gas

Aluminium, steel & mining Fine chemicals & pharmaceuticals Transport, automotive & other Glass, paper & cement Primary industry/ petrochemistry

23.2
12% 32% 8% 4%

15.9
7% 21%

Trading floors and subsidiary/affiliate offices

RWE Facts & Figures | Updated September 2012

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Organisation

Strategy & financing

Political environment

Market data

RWE

Strategy & financing


29 47 50 58 Strategy RWE share Fixed income financing Risk management

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWEs journey over the next five years

> Cornerstones of strategy remain > Adjust execution of strategy to changing framework conditions No further nuclear ambitions with existing operations phasing out Continued expansion of renewables including position in photovoltaic > Increasing partnerships to reduce risks and leverage capital base > Disciplined investment approach: operating cash flow to cover dividends and capex by 2014/15 at the latest

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

More international, while maintaining a regionally focused strategy


Core markets in Northwest and Central Europe Regional growth markets mainly CEE/SEE, especially Turkey Renewables business in and around our traditional core markets Upstream gas & oil position/projects mainly in Europe, Caspian region, Africa and Trinidad & Tobago
RWE markets with established market positions Growth markets under observation/first activities Additional markets especially for renewables business Additional markets for upstream gas & oil

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

More sustainable: Three levers to execute our strategy


Lower CO2 emissions
> Reduce specific CO2 emissions by more than 20% by 2020 compared to 2005 Specific CO2 emissions exposure t/MWh
0.90 0,90 0.85 0,85 0.80 0,80 0.75 0,75
0,70 0.70 0,65 0.65 0,60 0.60 0,55 0.55 0,50 0.50 2005 2008 2011 2014 2017 2020

More renewables
> Increase renewable generation capacity to at least 20% by 2020 Estimated generation portfolio 2020 ~ 20% ~ 5%

Efficient use of energy


> Increase efficiency of fossil fuelled power plants > Offer efficiency enhancing energy products to end costumers

Actual Target path

~ 40%

~46 GW ~ 35%

Nuclear Coal (partly highly efficient)

Gas/other Renewables

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

More robust, with a well balanced portfolio approach


Active along the whole value chain Broad geographic diversification in known territory to minimise regulatory and political risks Balanced generation portfolio across all technologies Continuous contribution from stable regulated business Invest in most economic renewable technologies Exposure via RWE Dea to global unregulated commodity prices
Unregulated ~70% International ~1/3

Operating result 2011

5.8bn

Germany ~2/3

5.8bn

Regulated ~30%

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Key priorities 2012/2013


Disposal programme
> Divestments of up to 7 billion by the end of 2013 > Majority of sales processes underway > Disposal of 19% in VSE (GER) closed > Agreement for sale of Berliner Wasserbetriebe signed

Gas supply contracts


> Completion of gas price reviews envisaged for 2013 at the latest > Structural solutions to eliminate gas-to-oil spread > Renegotiations continue for remaining contracts with a combined volume of 11 bcm

Efficiency enhancement
> 2012 programme on track to be completed > Measures of new programme fully identified > RWE 2015 is laying the foundation for further efficiencies post 2014

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE 2015 four action fields to align RWE with changing market environment
> Identify opportunities of energy market transformation Strategy > Align execution of strategy to changing market environment > Eliminate structural and operational duplications and clarify interfaces > Establish European generation company > Drive efficiency enhancements and operational excellence > Realise efficiencies of 1 bn by 2014 compared to 2012

Structures/ Roles

Functional excellence

Cultural change

> Align management and employees across all parts of RWE > Foster high performance culture

RWE Facts & Figures | Updated September 2012

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ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Streamlined and disciplined investment programme


billion
~6.5 Day-to-day ~1.9 Replacement, of which ~20% efficiency enhancement ~7.6 Growth Renewables, Upstream, CEE/SEE (~6.0)

> Peak of investment programme in 2010/2011 > Finalising conventional power generation programme mainly in 2012 and 2013

~16

> More than 60% of our capex will be spent in our international businesses > Sustainable long-term capex level of up to 5 bn p.a. of which day-to-day capex up to 2.5 bn p.a.

5.9

6.4

6.4

~6

~4 5 p.a.

> Approx. 16 bn capex programme for 2012 2014 of which c. 8 bn for growth/efficiency enhancement, thereof c. 6 bn in our growth areas Renewables, CEE/SEE and Upstream Gas & Oil > Committed capex (including day-to-day, approx.): 2012 2013 2014 95% 85% 65%

2009

2010

2011

2012e

2013e

2014e

1 After planned divestments.


RWE Facts & Figures | Updated September 2012

35

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

6 billion earmarked for growth areas until 2014


CEE/SEE2
> Growth opportunities mainly in generation > Regional focus on Turkey and Poland

Renewables (RWE Innogy)2


> Target capacity of 4.5 GW (in operation or under construction) by 2014 > Operating result of 500 million by 2014 > Balanced generation portfolio across countries and technologies:

~ 10%
Upstream Gas & Oil2
> 2014 targets post planned disposals: Gas and oil production of ~ 40 mm boe Operating result of ~ 800m > Development focus on UK, Norwegian and North African gas fields > Longer term growth secured through continued successful exploration effort

~ 30%

~6

bn1

~ 60%

Regional diversification across core markets Focus on most cost competitive technologies to minimise regulatory risk

> Large project pipeline of c. 14 GW > 1.1 GW currently under construction

1 Growth and replacement capex, excluding day-to-day capex. 2 Divisional split; regional overlap due to potential upstream and renewable investments in Central Eastern/South Eastern Europe.
RWE Facts & Figures | Updated September 2012

36

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

By 2014 we will have renewed more than 25% of our electricity generation fleet

Gas
BoA Neurath 2.1 GW lignite

12.5 GW out of (2011) 49.2 GW

Lignite Hard coal

Staythorpe 1.7 GW CCGT

Moerdijk 2 0.4 GW CCGT

Lingen 0.9 GW CCGT

Claus C 1.3 GW CCGT

Pembroke 2.2 GW CCGT

Denizli 0.8 GW CCGT

Hamm 1.5 GW Hard coal

Eemshaven 1.6 GW Hard coal

2010

H1 2012

H2 2012

Q1 2013

2013/2014

2014

RWE Facts & Figures | Updated September 2012

37

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Conventional power plant new build programme


bn1 2005 2006 2007 2008 2009 2010 2011 2012 2013 Lingen (Gas, 876 MW, 100%) BoA 2&3, Neurath (Lignite, 2,100 MW, 100%) Hamm (Hard coal, 1,528 MW, 77%) Staythorpe (Gas, 1,650 MW, 100%) Pembroke (Gas, 2,188 MW, 100%) Moerdijk 2 (Gas, 426 MW, 100%) Claus C (Gas, 1,304 MW, 100%) Eemshaven (Hard coal/biomass, 1,560 MW, 100%) Denizli (Gas, 775 MW, 70%)
1 Capex at 100% share.

2014

0.5 2.6 2.4 0.8 1.2 0.4 1.1 2.9 0.5


Units A B Units 1 -4 Units 1 -5 Units G F Units D E

RWE Facts & Figures | Updated September 2012

38

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE Innogy major project portfolio


bn1 2008 2009 2010 2011 2012 2013 2014 2015 2016 Gwynt y Mr (Wind offshore, 576 MW, 60%) Greater Gabbard (Wind offshore, 504 MW, 50%) Markinch (Biomass CHP, 45 MW el, 88 MW th, 100%) Nordsee Ost2 (Wind offshore, 295 MW, 100%) 2.4 1.9 0.3 0.9 2017

Capacity and earnings targets for RWE Innogy until 2014 are mainly driven by 4 major projects Large scale projects, especially in offshore wind, play a vital role in achieving European renewable targets as growth potential in other areas is limited Utilities like RWE have a competitive advantage in these large-scale projects
1 Capex at 100% share; UK offshore includes investment for grid connection. 2 The construction schedule had to be revised in 2012 due to the delay in the offshore grid connection. In light of latest statements by grid operator TenneT there is a risk of even further delays.
RWE Facts & Figures | Updated September 2012

39

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

In 2020 approx. 20% of RWEs generation capacity will be in renewables


Renewables Nuclear

~ 20% ~ 5%

~ 46 GW
~ 40% ~ 35%

Gas/other1
1 Including approx. 8% of others, mainly pumped storage.

Coal (partly highly efficient)

RWE Facts & Figures | Updated September 2012

40

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Stable portfolio: 30% of operating result derived from regulated businesses (2011)
External revenue
Unregulated business 80%

EBITDA
Unregulated business ~70%

Operating result
Unregulated business ~70%

Regulated business

51,686 million
20%

Regulated business ~30%

8,460 million

Regulated business ~30%

5,814 million

Regulated business particularly includes: > German electricity and gas networks > Electricity supply in Hungary > Eastern European electricity and gas networks and storage > Continental European water business > Renewables

RWE Facts & Figures | Updated September 2012

41

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Strict investment discipline provides platform for sustainable dividends


Mid-term target to cover investments and dividends by cash flows from operating activities billion 9.4 > Capex level will normalise beyond 2013 5.5 > Pay-out ratio of 50% - 60% of recurrent net income > Flexibility to adjust investments to meet cash flow, if necessary

8.8

5.5

2010

2011

2014/2015e
Cash flows from operating activities

Capex in property, plant & equipment and financial assets Dividends (incl. minority payments; year of payment)

RWE Facts & Figures | Updated September 2012

42

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Further efficiency enhancements of 1 bn initiated


In million 1 bn programme now backed bottom-up by operational measures
1,000 250 750

~250 Reduced IT-spending ~300 Staff reduction

Several hundred individual measures across the whole RWE group Programme includes c. 300 m from workforce reduction in 2013/14 Fully accretive to operating result (i.e. post cost inflation and one-off cost of programme)

~450 Other cost reductions and efficiency improvements


2013 2014 Total

RWE Facts & Figures | Updated September 2012

43

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Outlook for 2012 / 2013


million 8,460

EBITDA

in the order of 2011

~9,000

Operating result

5,814

in the order of 2011

in the order of 2011

Recurrent net income

2,479 2011

in the order of 2011 2012e


after further disposals1

in the order of 2011 2013e


after further disposals1

Dividend

2.00/share

Pay out ratio of 50% 60% of recurrent net income

1 Expected earnings dilution from the remaining up to 7 bn divestment programme: in bn 2012 Full year effect (after 2013) EBITDA ~0.5 Operating result no major dilution effect expected ~0.4 Recurrent net income ~0.3

The 2013 outlook is based on commodity prices as of January 2012.


RWE Facts & Figures | Updated September 2012

44

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Major M&A transactions since FY 2008


Acquisitions Urvasco Energa S.A., Spain Fri-El S.p.A., Italy Powerhouse Holding B.V., Netherlands Greater Gabbard Offshore Windparks Ltd., UK Excelerate Energy, USA Luxempart Energie S.A. (holds stake in SOTEG S.A.), Luxembourg Favorit GmbH, Germany Essent N.V., Netherlands Breagh gas field and surrounding exploration licenses, UK Energy Resources Holding B.V. (ERH, 30% in EPZ) Divestments Rhenag, Germany Tarragona Power, Spain American Water, USA swb, Germany1 Thyssengas, Germany Amprion, Germany Year of acquisition 2008 2008 2008 2008 2008 2009 2009 2009 2009 2011 Year of divestment Percentage of participation 100% 50% 100% 50% 50% 49 to 100% 100% 100% 70% 100% Percentage stake

2008 8.23% 2008 50% 2008 from 100 to 60.5% 2009 from 60.5 to 0% 2009 51% less one share 2011 from 100 to 0% 2011 from 100 to 25,1%

1 Divestment by Essent in order to obtain approval for acquisition of Essent N.V. by RWE.

RWE Facts & Figures | Updated September 2012

45

ORGANISATION

STRATEGY & FINANCING Strategy

POLITICAL ENVIRONMENT

MARKET DATA

RWE

In 2011, RWE spent 2,875 million on environmental protection


million Climate protection 1,845 % 64

Clean air2

407

14

Waste disposal Water protection3 Nature and landscape protection Noise abatement Brownfield sites, soil contamination

208 298 93 20 4

7 10 3 1 0

Total: 2,875 million1

1 Including capital expenditure. 2 E.g. operation of flue gas desulphurisation units.

(2010: 2,863 million)


Rounding differences may occur.

3 Mainly purification of wastewater.

RWE Facts & Figures | Updated September 2012

46

ORGANISATION

STRATEGY & FINANCING RWE Share

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE AG shareholder structure


as of December 2011
Shares of subscribed capital BlackRock Private shareholders Employee shareholders 13% 1% RW Energie-Beteiligungsgesellschaft 5% 15%

Mondrian Investment

3%

Other institutional shareholders

63%

> 260,000 shareholders own 614.7 million shares > Free float: 85% (excluding RW Energie-Beteiligungsgesellschaft)

> 86% of all RWE shares are held by institutional investors > The regional breakdown is as follows: Germany USA/Canada UK/Ireland Continental Europe (excl. Germany) Rest of the world 34% 12% 19% 19% 2%
47

RWE Facts & Figures | Updated September 2012

ORGANISATION

STRATEGY & FINANCING RWE Share

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE share profile


as of August 2012 Share information Common shares
Total number of shares Total number of shares outstanding Total number of treasury shares Reuters 575.7 million common shares 575.4 million common shares 0.3 million common shares RWEG.DE (Xetra) RWEG.F (Frankfurt/Main) Bloomberg RWE GY (Xetra) RWE GR (Frankfurt/Main) German Security Identification No. ISIN US CUSIP No. (ADR) Listings 703712 DE 000703 7129 74975E303 Germany official Frankfurt/Main Dsseldorf Xetra Abroad New York, OTC trading (Sponsored level-one ADR programme for common shares) RWEG_p.DE (Xetra) RWEG_p.F (Frankfurt/Main) RWE3 GY (Xetra) RWE3 GR (Frankfurt/Main) 703714 DE 000703 7145 Germany official Frankfurt/Main Dsseldorf Xetra

Non-par-value shares Preference shares


39.0 million preference shares 39.0 million preference shares

RWE Facts & Figures | Updated September 2012

48

ORGANISATION

STRATEGY & FINANCING RWE Share

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE's dividend history


Dividend per share

3.50 Bonus 0.10 1.00 1.75 3.15 4.50 3.50 3.50 2.00

1.00

1.25

1.50

2001 1

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Dividend yield based on year-end price of RWE common shares


%
4.5% 3.2% 7.1% 5.2% 4.0% 3.7% 2.8% 4.2% 3.3% 7.0% 7.4%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1 Truncated fiscal year of RWE AG from 1 July to 31 December 2001.


RWE Facts & Figures | Updated September 2012

49

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Management of financial assets: centralised structure


Asset Management Committee (AMC)
> Defines investment strategy > Sets guidelines for the implementation > Members: CFOs of RWE AG, RWE Power, RWE npower, RWE Dea, enviaM, Lechwerke, Swag, Head of Finance of RWE AG

Investment strategy, guidelines & restrictions

Recommendations & reporting > RWE AG subsidiaries: > RWE Pensionstreuhand e.V. (PTV): > RWE Pensionsfonds AG (PF): > UK Pension Trust - RWE npower: 2.2 bn 3.1 bn 6.6 bn 4.1 bn

RWE AG Group Finance


> Centralised asset management by RWE AG Asset management contract

Investment guidelines

Internal management

External management

Master KAGs: RWE AG Group


> Spezialfonds: > Subfunds: 6 36

Master KAGs: PTV + PF


As of 30 June 2012. > Spezialfonds: > Subfunds:
RWE Facts & Figures | Updated September 2012

4 66
50

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE's corporate treasury basis for groupwide financial risk management


External market

Capital market Ratings

FX deals (incl. derivatives) Interest deals (incl. derivatives )

CP programme Money market

RWE AG: Corporate Treasury

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 group-wide financial risk management
RWE Facts & Figures | Updated September 2012

51

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Capital market debt maturities and sources of financing


as of 30 June 2012 Capital market debt maturities1
in bn
2.5 2.0 1.5 1.0 0.5 0.0 20 16 12 8 4 0

Strong sources of financing


Fully committed syndicated loan (4.0bn up to Nov. 2015) 0.0bn for liquidity back-up

Commercial paper (up to 1 year)

$1.4bn ($5.0bn) 1.1bn (30 June 2012)

2012

2016

2020

2024

2028

2032

2036

2040

MTN programme (up to 30 years)

30bn 15.9bn (30 June 2012)2

Maturities of debt issued

Hybrid (first call date)

Accumulated outstanding debt (incl. hybrid)

Balanced profile with limited maturities up to end of 2014 (~4.3 billion)


1 RWE AG and RWE Finance B.V., as of 30 June 2012 (incl. USD and CHF hybrid, issued 21 and 28 of June) 2 Bonds outstanding under the MTN-programme, i.e. excluding hybrids. Including hybrids: 19.7bn
RWE Facts & Figures | Updated September 2012

52

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Capital market debt currency and interest exposure


as of 30 June 2012 Bonds, hybrids and other interest rate related positions (e.g. commercial paper and cash) Bonds ( 15.9 bn) and hybrids ( 3.8 bn)

18%

33%

19.7 bn

20.5 bn1
67%
82%

Interest rate fixing expiry > 1 year Interest rate fixing expiry < 1 year

1 Includes interest and cross-currency swaps.


RWE Facts & Figures | Updated September 2012

53

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Credit rating 2012 RWE AG


Standard & Poor's (BBB+, stable outlook)
> On 27 July 2012, S&P downgraded the rating for RWE from A-, negative outlook, to BBB+, stable outlook. > The downgrade reflects S&Ps view of a sustained deterioration of RWE's business risk profile, as well as the Groups weakened cash generation capacity and credit protection ratios in the medium term. Additionally, S&P says that RWE has not made significant headway in executing the announced 7 bn disposal programme. > S&P positively recognizes the capital measures taken and believes that these measurers will help stabilize the Groups financial risk profile at the current level. > RWEs business risk profile is currently seen as strong. > The stable outlook reflects S&Ps assumption that RWE will be able to maintain cash flow credit metrics commensurate with the ratings over the medium term.

Moody's (A3, negative Outlook)


> On 6 July 2012, Moodys confirmed the rating for RWE with A3 negative outlook. > In Moodys view, positive aspects like strong business positions across the energy value chain and the track record of financial discipline and transparency with RWEs leverage tolerance are to an extent offset by a difficult operating environment with negative pressure on cash flows and profitability over 2012-13 from lower achieved power prices, the negative gas/oil spread, the nuclear fuel tax and the phase-out of nuclear power generation in Germany. > The negative outlook reflects both the execution risk around its disposal programme as well as the challenges it faces in dealing with pressures on earnings, both of which increase the uncertainty around RWE's ability to maintain its financial strength at levels consistent with its rating.

RWE Facts & Figures | Updated September 2012

54

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE AG: Financial risk management


RWE Group companies are subject to strict risk management which is regulated by group-wide directives Financial derivatives are not to be used for speculative purposes and serve only to hedge risks arising from operations Main financial risk factors are: Foreign Exchange (FX) Risk
> RWE Group companies have to hedge any FX risk with RWE AG > RWE AG measures the net position for each currency and hedges itself with external counterparties (banks) > Measurement and limitation of FX risks is mainly based on an FX value at risk concept [VaR (95/1d)1 < 1m] RWE has two different risk categories: > > Bonds which are held as fixed income assets: Rising interest rates may lead to lower bond prices Average Value at Risk (95/1d)1 in 2011: 7m

Interest Rate Risk

Financing costs: Rising interest rates may lead to higher financing cost Interest rate exposure from financing activities is measured with Cash Flow at Risk Average Cash Flow at Risk (95/1y)2 in 2011: 19m

Counterparty Risk (banks)

> Measurement of exposure (caused by cash, term deposits, FX/IR derivatives etc.) for each bank > RWE allocates for each bank a limit which is usually derived from the banks equity, rating and CDS > Shares are part of RWEs asset portfolio > Average Value at Risk (95/1d)1 of share price changes in 2011: 12m

Equity Risk

1 Confidence level: 95%; holding period: 1 day. 2 Confidence level: 95%; holding period: 1 year.
RWE Facts & Figures | Updated September 2012

55

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE bond programme


Major bonds issued by the RWE Group1
Issuer Currency1 Placement Volume Issue Currency in mn 1,808.0 250.0 630.0 1,000.0 530.0 Volume in mn Term in Years Issuance Date Maturity Date Coupon (%) German Securities Code 855327 A1ATAH 855329 A0T3SN A0DAN1 ISIN Code

RWE Finance BV EUR RWE Finance BV USD RWE Finance BV GBP RWE Finance BV EUR RWE Finance BV EUR Redemptions 2012 - 2014 RWE Finance BV EUR RWE Finance BV EUR RWE AG EUR RWE Finance BV EUR Redemptions 2015 - 2018 RWE Finance BV EUR RWE Finance BV GBP RWE Finance BV EUR RWE Finance BV GBP RWE Finance BV GBP Redemptions 2019 - 2023 RWE Finance BV GBP RWE AG EUR RWE Finance BV GBP RWE Finance BV GBP RWE AG JPY Redemptions from 2030 onwards Total

Public Private Public Public Public

1,808.0 203.5 803.6 1,000.0 530.0 4,345.1 2,000.0 850.0 100.0 980.0 3,930.0 1,000.0 727.1 1,000.0 637.8 621.9 3,986.7 969.4 600.0 765.4 1,275.6 208.3 3,818.7 16,080.5

11 3 11 5 10 27% 6 15 15 15 24% 10 20 12,5 13 20 25% 28 30 22 30 30 24%

26.04.2002 11.02.2010 26.04.2002 20.11.2008 23.07.2004

26.10.2012 11.02.2013 03.06.2013 20.11.2013 23.07.2014

6.125 2.000 6.375 5.750 4.625

XS0147030554 XS0485309156 XS0147048259 XS0399648301 XS0196302425

Public Public Private Public Public Public Public Public Public

2,000.0 850.0 100.0 980.0 1,000.0 570.0 1,000.0 500.0 487.5

09.02.2009 20.04.2001 15.11.2002 23.07.2003 20.11.2008 20.04.2001 09.02.2009 06.07.2009 03.07.2003

10.02.2015 20.04.2016 15.11.2017 23.07.2018 31.01.2019 20.04.2021 10.08.2021 06.07.2022 06.12.2023

5.000 6.250 floating 5.125 6.625 6.500 6.500 5.500 5.625

A0T6L5 648661 748536 957955 A0T3SP 648663 A0T6L6 A1AJN3 878761

XS0412842428 XS0127984747 XS0158243013 XS0172851650 XS0399647675 XS0127992336 XS0412842857 XS0437307464 XS0170732738

Public Private Public Public Private

760.0 600.0 600.0 1,000.0 20,000.0

26.04.2002 14.02.2003 17.01.2012 06.07.2009 17.02.2010

03.06.2030 14.02.2033 31.01.2034 06.07.2039 17.02.2040

6.250 5.750 4.750 6.125

855328 748537 A1GZLK A0AJN2

XS0147048762 XS0162513211 XS0735770637 XS0437306904

Hybrid bonds
RWE AG RWE AG RWE AG RWE AG RWE AG Total hybrid capital EUR CHF CHF GBP USD Public Public Public Public Public 1,750.0 250.0 150.0 750.0 1,000.0 1,750.0 208.1 124.9 956.7 814.1 3,853.7 perpetual Limited Limited perpetual limited 28.09.2010 21.10.2011 28.06.2012 20.03.2012 29.03.2012 28.09.20152 04.04.20172 26.07.20172 20.03.20192 12.10.20172 4.625 5.250 5.000 7.000 7.000 A1EWR0 A1MAVP A1PGUU A1ML0G A1ML2E XS0542298012 CH0136594352 CH0185843049 XS0652913988 XS0767140022

1 As of 31 July 2012. 2 First occasion for RWE to redeem the hybrid bond. RWE Facts & Figures | Updated September 2012

56

ORGANISATION

STRATEGY & FINANCING Fixed income financing

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Financial liabilities and assets


excluding hybrid capital as of 30 June 2012 Financial liabilities in billion euros
25
21.3

Financial assets in billion euros


10

Split of securities

17.4 %

20
15.8

2.8 1 1.1 1.4 0.6

8 6 4
6.6 0.7
2.2

7.3
1.0 2.2 0.8

15 10
5.5

13.7

16.5

0.8

5 0.3
0.6

1.8 2.8

2 0

2.9

0.3 0.7 0.4

3.3
82.6 %

Short term Long term Total ( 12 months) (> 12 months)


Bonds, incl. other notes payable Loans with banks Collateral, margin payments1 Other: including CP of 1.1 bn, finance leasing, financial liabilities with non consolidated companies, other financial liabilities

Short term Long term Total ( 12 months) (> 12 months)


Securities Cash/cash equivalents Collateral, margin payments1 Other: other financial receivables, financial receivables with non consolidated companies, other loans receivable Interest bearing instruments Real estate (0%) Equity

Alternative investments (0%)

1 Excluding variation margins which are netted against the fair values of the respective derivatives.

RWE Facts & Figures | Updated September 2012

57

ORGANISATION

STRATEGY & FINANCING Risk management

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Organisation of risk management in the RWE Group


Group Wide Risk Management System
RWE AG Executive Board
Overall responsibility for group wide risk management system Risk Management Committee Responsible for implementing, monitoring and refining group wide risk management system Group Controlling Controlling and coordination of group wide risk management system

Group Controlling Risk Controlling Unit


Controlling of commodity risks

Group Controlling Credit Risk Controlling Unit


Controlling of credit risks

Accounting Department

Finance Department Financial Controlling Unit


Operating management of financial risks

Controlling of risks in financial reporting

Commodity Management
Management of commodity risks

Asset Management Committee


Management of risks associated with investments in securities

Operating Companies
RWE Facts & Figures | Updated September 2012

58

ORGANISATION

STRATEGY & FINANCING Risk management

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE's commodity risk management infrastructure


RWE AG Executive Board
> > > > > Overall responsibility for risk management system Establishes the rules and minimum standards Defines limits for aggregated market and credit risks Takes decisions on transactions that can result in substantial risks Defines the overall hedging strategy

CFO of RWE AG

> Responsible for tracking and monitoring commodity risks with regard to both the market and the credit side

Group Controlling

> Is responsible for the approval of methods and models for the valuation of commodity risks > Sets standards for risk measurement, monitors commodity risks and reports on these to the Executive Board > Analyses and approves credit limits for large commodity counterparties, large suppliers and banks > Manages strategic commodity positions > Grants approvals for detailed hedging strategies and large commodity transactions within the framework determined by the Executive Board > Derives detailed limits for the commodity risks of the operating companies from the risk caps established by the Executive Board

Commodity Management

Operating companies

> Handle operative commodity and credit risk management > Control and monitor commodity risk positions

RWE Facts & Figures | Updated September 2012

59

ORGANISATION

STRATEGY & FINANCING Risk management

POLITICAL ENVIRONMENT

MARKET DATA

RWE

RWE Supply & Trading commodity risk limit system


> RWE Supply & Trading is the RWE Groups interface to the wholesale markets for power 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 > Risk limits are then further detailed:

RWE AG Executive Board

grants

Global limits for market risks

restrict

Organisational Unit Commodity Management

grants

Detailed market risk limits

Comments on adequacy of limit requests to be granted by executive board and monitors limit utilization

Group Controlling

restrict

RWE Supply & Trading Board

grants Limits for single desks/books/traders

RWE Facts & Figures | Updated September 2012

60

ORGANISATION

STRATEGY & FINANCING Risk management

POLITICAL ENVIRONMENT

MARKET DATA

RWE

Credit risk management at the RWE Group


High-level credit policy
> 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

Robust counterparty risk assessment and monitoring

> Counterparties are assessed using internal rating tools, where available external rating information are also taken into account > All counterparties are monitored on an ongoing basis and reviewed on a regular basis

State of the art measurement and monitoring of exposures

> 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-time basis

Clear credit incentives

> Credit capital costs are based on the rating/probability of default (PD) of a counterparty > Performance determination includes credit risk charges

Driver of credit risk mitigation

> Bundling of know-how in a central credit risk management unit > RWE Supply & Trading was a key driver of the EFET1 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

1 EFET: European Federation of Energy Traders.


RWE Facts & Figures | Updated September 2012

61

Organisation

Strategy & financing Political environment

Market data

RWE

Political environment
63 64 65 72 75 80 82 Overview Combined Heat and Power (CHP) Act Renewable Energy Act Climate policy Emissions trading Large Combustion Plant Directive (LCPD) Grid

RWE Facts & Figures | Updated September 2012

62

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Overview

MARKET DATA

RWE

Major regulatory measures in the European utility markets


Major regulatory measures in RWEs core markets
Core issue EU Market design/ unbundling 3rd Single Market Package Energy efficiency CO2 reduction Renewables Renewable Energy Directive Conventional generation Large Combustion Plant Directive Industrial Emissions Directive 2012 Amendment to the REA2 Nuclear Phase-out

Energy Efficiency Directive1 ETS Directive

National 2012 Amendment to the Energy Act

Climate Protection Act1 in North Rhine-Westphalia Energy Market Reform1 Carbon Tax ECO/ Green Deal Retail Market Reform1 1 2 3 4 ROC3

More with Less

Coal tax1

SDE+4

Announced or going through the legislative procedure. Renewable Energy Act. Renewable Obligation Certificate. Sustainable Energy Incentive Scheme (Subsidieregeling duurzame energieproductie).
RWE Facts & Figures | Updated September 2012

63

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT CHP

MARKET DATA

RWE

German Combined Heat and Power Generation Act1


Issue
Term Aim Object of subsidy

Combined heat and power (CHP) legislation


Effective since April 2002, amended on January 1, 2009 and in July 2012. The provisions of this Act apply to all CHP plants commissioned after July 19, 2012. >Modernisation and new build of high efficient CHP plants for energy conservation and CO2 reduction > 25% share of CHP electricity generation by 2020 >Electricity actually generated in CHP plants (back pressure) including internal consumption of industry >Support is no longer connected to the feed into supply grids >2009: Scope of the law extended to heating grids; 2012: scope extended to cooling grids as well as to heating and cooling storage >The amount and duration of compensation varies depending on the year of operation as well as the size of the plant, whereby modernized plants and fuel cells are assigned a separate compensation category >Plants with commissioning date between January 1, 2009 and December 31, 2020 are eligible for the subsidy >Annual cap of 750 million including 150 million for heating and cooling grids and heating and cooling storage > 396 million in 2010; 5,776 million since April 2002 Allocation to total supplies to end customers from the public supply grid

Levels of subsidy

Volume

Funding

Limitation of the burden on industry >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) Passing-on clause Network operators have the right to pass on all feed-in payments

1 Figures and scheme taken from the amendment in 2012 effective July 19, 2012.

RWE Facts & Figures | Updated September 2012

64

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

German Renewable Energy Act1 (I)


Issue
Term

Renewable energy legislation


>Effective since April 2000 and mainly amended on August 1, 2004, January 1, 2009 and January 2012 >Different support of plants with service lives of up to 20 years Supports introduction of renewables-based electricity generation plants and helps to meet the emissions reduction target set by the federal government: min. 35% electricity production from renewables by 2020 Electricity actually generated in renewable plants which feed into the supply grid Different price schemes for existing and new renewable plants (wind, water, biomass, solar, biogas, geothermal energy) Approx. 16 billion feed-in tariffs in 2011 without system costs (grid, balancing power); projection for 2012: 18 billion, projection for 2013: 19.3 billion Amount allocated to total supplies to end customers from the public supply grid was about 3.53 ct/kWh in 2011 and is about 3.592 ct/kWh in 2012 Hardship clause came into effect as of January 1, 2006 and was extended on January 1, 2012; reduced amount if a company consumes more than 1 GWh (originally: 10 GWh) and electricity costs are at least 14% (originally: 15%) of gross production value. Reduction of the EEG surcharge to 10% for a share of electricity between 1 and 10 GWh, to 1% for a share of electricity between 10 and 100 GWh. Amount is limited to 0.05 ct/kWh for the share of electricity exceeding 100 GWh. Grid operators have the right to pass on all surcharge payments to the suppliers

Aim Object of subsidy Levels of subsidy Volume

Funding Limitation of the burden for industry

Passing-on clause

1 Figures and scheme taken from the German Renewable Energy Act effective as of January 1, 2012.

RWE Facts & Figures | Updated September 2012

65

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

German Renewable Energy Act1 (II)


Renewable Energy Act - Feed-in tariff rates2
ct/kWh Hydropower Landfill gas, sewage gas, pit gas Biogas from biological waste or liquid manure Biomass Geothermal energy Photovoltaics Wind power onshore offshore 3.40 12.70 3.98 8.60 14.00 25.00 6.0 25.30 25.00 30.00 13.5 19.5 4.87 9.91 3.50 19.00

1 Figures and scheme taken from the German Renewable Energy Act effective as of January 1, 2012 (PV: as of April 1, 2012). 2 Depending on size of plant, year of commissioning operation and technology. Source: German Ministry for the Environment, Nature Conservation and Nuclear Safety.

RWE Facts & Figures | Updated September 2012

66

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

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 2016 (forecast)
bn 0 kWh
2016 2014 2012 2010 2008 2006 2004 2002 2000

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

170

Power generated (bn kWh) Power generated (bn kWh, forecast) Feed-in fees ( bn) Feed-in fees ( bn, forecast)

bn 0

1.0

2.0

3.0

4.0

5.0

6.0 7.0

8.0

9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 19.0 20.0 21.0 22.0 23.0 24.0

Sources: German Energy and Water Association (BDEW), December 2011. German transmission system operators (www.eeg-kwk.net), data until 2010 as of May 2009, data from 2011 as of November 2010, data from 2012 on as of November 2011 (from 2012 on: fees for market premium, direct marketing and PV self consumption included).
RWE Facts & Figures | Updated September 2012

67

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

Renewable energys share of total electricity generation in Germany


Gross generation in Germany (2011) Generation subsidized by REA1
92 billion kWh2
20% Lignite 24.9% 2% Photovoltaic Hydro 46% Photovoltaic

REA1 compensation
16 bn3

Nuclear

17.6%

614.5 billion kWh


Hard coal Gas Other 18.6%

27%

Biomass 1% 27% Hydro Biomass

13.7% 51% 5.3% Wind 26% Wind

Renewable energy 19.9% 1 REA = German Renewable Energy Act. 2 Next to the power generation subsidised by the German REA of 92,266 GWh in 2011, another 12,332 GWh of power from renewable sources (REA electricity) was sold on the free market (direct marketing in accordance with 17 REA). 3 Including avoided network fees. Sources: Gross generation: BDEW, BMWI; REA generation + REA compensation: German transmission system operators (www.eeg-kwk.net) as of November 2010 (provisional data).
RWE Facts & Figures | Updated September 2012

68

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

German Renewable Energy Act compensation and forecast through 2016


billion (gross)
25

22.1 20.7
20

23.7 0.1

19.3 18.0 16.0 11.1

15

12.3
10

10.0 7.9 5.8 4.5 1.6 2.2 2.6 3.6 9.0

7.3 0.2 4.0

3.1

3.8

1.2
0

4.3 0.2

5.2 0.3
2012 2013 2014 2015 2016

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Hydro

Biomass

Onshore wind

Offshore wind

Photovoltaic

Other

Source: Renewable Energy Act medium-term forecast of electricity transmission system operators. Data until 2010 as of May 2009, data for 2011 as of November 2010, data for 2012 onwards as of November 2011 (from 2012 onwards fees for market premium, direct marketing and photovoltaic self consumption included).
RWE Facts & Figures | Updated September 2012

69

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

Subsidy efficiency: contribution of German Renewable Energy Act subsidised power generation in 2011
Installed capacity MW Power generated bn kWh1

Power generation Power generation (including generation from direct marketing according to 17 EEG)

39

2,791

1,298

103

6,194

Extra cost in millions of Euros, based on an average electricity price of 60/MWh


1 Next to the power generation subsidised by the German Renewable Energy Act of 92,266 GWh in 2011, another 12,332 GWh of power from renewable sources (REA electricity) was sold on the free market (direct marketing in accordance with 17 EEG). Source: Renewable Energy Act medium-term forecast of electricity transmission system operators, November 2010 (provisional data).
RWE Facts & Figures | Updated September 2012

70

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Renewable Energy Act

MARKET DATA

RWE

Installed capacity in Germany compensated according to the Renewable Energy Act


Development of capacity (MW) in 2006 - 2010
51,364

50.000 50,000

40.000 40,000

30.000 30,000
27,071 20,000 20.000

17,554

Total Wind Photovoltaic

10.000 10,000

4,685 1,417 638


2006 2007 2008 2009 2010

Biomass Hydro Others

Source: Federal Network Agency, EEG-Statistikbericht, August 2012.


RWE Facts & Figures | Updated September 2012

71

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Climate policy

MARKET DATA

RWE

The EU has set three 20% targets for 2020. Achievement of some is challenging
Greenhouse gas (GHG) emissions
5,750 5,500 5,250 5,000 4,750 4,500 5% 4,250 1990 1995 2000 2010 2015 2015 1990 1995 2000 2005 2010 2020 2005 2020 4,000 0% 1,500 1,400 15% 10%

Renewable energy sources (RES)


25% 20% 20% target RES share of final energy consumption

Energy efficiency
Mtoe Primary energy consumption (Mt OE)
1,900 1,800 1,700 1,600 EU 27 EU 25 20% target - EU25

Mt CO2e
Actual GHG emissions 20% target

1995

2000

2005

2010

2015

> 2020 just interim step to even tighter targets in 2050 > Nuclear moratorium in Germany has shifted balances by 45Mt per year

> EU RES target translates into country-specific RES targets of member states > Attractive RES subsidy schemes implemented across Europe

> Appears most challenging > Addressed by European Commission now > Country specific concerns: when is a house properly insulated? How fast should we move?

Source: EuroStat, UNFCCC. GHG=Greenhouse Gas Emissions, CO2e=CO2 equivalent, OE=Oil equivalent. Latest available official data from 2009.
RWE Facts & Figures | Updated September 2012

1990

2020 72

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Climate policy

MARKET DATA

RWE

EU 27 is on track towards achieving its 2020 emission reduction target (-20%)


Mt CO2 equivalents 6,500 6,000 > 2009 emissions stand 17% below the 1990 level and therefore very close to the target of -20% by 2020 > Economic crisis accelerated the decline in EU GHGs emissions

baseline
5,500 5,000 4,500

> Return to economic growth may temporarily level off or reverse the decline in emissions > Impact of German nuclear moratorium is assessed at around 45 mt additional emissions per year > Thats 1% of total EU emissions

-20% target
1995 2000 1970 1975 1980 1985 1990 2005 4,000

> CO2 balances for the EU ETS have turned negative and system is now slightly short

Official 2010 GHG inventory

Scaled trend

Mean estimate (2009)

Absolute greenhouse gas emissions in the EU 27, 1970 2009, million ton CO2 equivalents. Source: EEA.
RWE Facts & Figures | Updated September 2012

73

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Climate policy

MARKET DATA

RWE

Renewable energy sources: currently it is far from certain that EU target and utility sector sub-target will be achieved
Share of RES in final energy demand
% 25
20 15 10 5 0 2001 2005 2010 2020

20% EU target +5% p.a.

> According to national renewable energy action plans the targets for 2020 will be met > To achieve these targets renewable energy production needs to increase at an annual growth rate of 5% > To achieve the sub-target for the utility sector, growth in the order of 9% per year is required > This requires close to double the growth seen between 2005-2010 > According to EU estimates, annual capital investments need to double to 70bn

Share of RES in the utility sector


% 40
30 20 10 0 2001 2005 2010 2020

+9% p.a.

RWE Facts & Figures | Updated September 2012

74

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Emissions trading

MARKET DATA

RWE

Allocated CO2 allowances1 in Germany, UK and EU-27 (2011)


Allocated allowances in Germany 2011
Electricity Metals 54% 15%

Allocated allowances EU 27 2011


Electricity Metals Combustion 55% 12% 10% 11% 8% 5%

Combustion Cement & lime Refineries Other industries

12% 8% 7% 4%

401 mt CO2

Cement & lime Refineries Other industries

1,993 mt CO2

Allocated allowances in United Kingdom 2011


Electricity Metals Combustion 52% 11% 20%

Cement & lime Refineries Other industries

6% 8% 3%

223 mt CO2
1 Excluding auctioned certificates and new entrant reserves. Source: EEA.
RWE Facts & Figures | Updated September 2012

75

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Emissions trading

MARKET DATA

RWE

EU ETS Emissions in Germany, UK and EU-27 (2011)


Emissions in Germany 2011
Electricity Metals Combustion Cement & lime Refineries Other industries 68% 8% 10% 6% 6% 3% Other industries 4%

Emissions EU 27 2011
Electricity Metals 60% 8% 12% 8% 7%

450 mt CO2

Combustion Cement & lime Refineries

1,879 mt CO2

Emissions in United Kingdom 2011


Electricity Metals Combustion Cement & lime Refineries Other industries 66% 6% 13% 4% 8% 2% Source: EEA.
RWE Facts & Figures | Updated September 2012

221 mt CO2

76

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Emissions trading

MARKET DATA

RWE

CDM/JI projects give RWE access to cost-effective reduction of greenhouse gas emissions (I)
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
Germany/UK

Investment

Emission rights

E.g. China

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
Source: UNFCCC; http://cdm.unfccc.int.

Investment

Emission rights

E.g. Russia

RWE Facts & Figures | Updated September 2012

77

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Emissions trading

MARKET DATA

RWE

CDM/JI projects give RWE access to cost-effective reduction of greenhouse gas emissions (II)
Expected average annual certificates from registered CDM projects by host country in September 2012
China India Brazil Republic of Korea Mexico Indonesia Vietnam Uzbekistan 64.2% 10.9% 3.9% 3.1% 2.0% 1.3% 1.4% 1.0%

> By September 2012, a total of 4,547 registered CDM projects is expected to supply more than 2.2 billion certificates by the end of 2012 > A substantial portion of the certificate volumes contracted are accounted for by Chinese projects

Others

12.2%

Source: UNFCCC; http://cdm.unfccc.int.

RWE Facts & Figures | Updated September 2012

78

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Emissions trading

MARKET DATA

RWE

RWEs current Kyoto credit portfolio for 2008-2012


Projects by December 2011
million certificates
100 90 80 70 60 50 40 30 20 10 0
3

Contract volume by technology


Hydro N2 O N2O HFC23 Energy Efficiency Wind Biogas CMM Biomass Methane avoidance Solar Fugitive others

ERPA1 in validation

ERPA1 in validation

~100

Contract volume by region


China South Korea Egypt India South-East-Asia East-Europe Ukraine Russia Least developed countries South America

in operation2

in operation2

Contract volume

Risk adjusted volume

RWE's redemption capacity (2008 - 2020)3

1 ERPA = Emission reduction purchase agreement. 2 In Operation: Projects that have already issued certificates. 3 Latest EU-directive for certificates implies no additional redemption capacity for RWE Power concerning the years 2013 till 2020, but usage of certificates is still enabled post 2012. RWEs redemption capacity consists of the redemption capacity of RWE Power, RWE npower and Essent.
RWE Facts & Figures | Updated September 2012

79

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT LCPD

MARKET DATA

RWE

The EU Large Combustion Plant Directive (LCPD)


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.

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 ways1: > Emission Limit Value (ELV) The power station must adhere to specific limits to the amounts of pollutants produced on a milligram 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 1 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.

RWE Facts & Figures | Updated September 2012

80

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT LCPD

MARKET DATA

RWE

Due to the LCPD a shut-down of 1112 GW by the end of 2015 (or earlier) is expected in the UK market
Installation Operator Fuel Installed capacity (MW) 1,960 3,870 1,940 1,960 940 1,300 2,000 1,970 1,000 1,940 1,530 1,370 1,000 1,020 1,960 1,960 2,304 1,152 363 31,539 Capacity opted in1 (MW) 1,960 3,870 1,960 2,000 970 1,000 1,530 980 1,960 2,304 363 18,897 Capacity FGD3 status opted out2 (MW) 1,940 940 1,300 1,940 1,370 1,000 1,020 980 1,152 0 11,642 2 out of 4 units fitted Fitted No FGD Fitted No FGD No FGD Fitted Fitted Fitted No FGD Fitted No FGD No FGD No FGD Fitted Fitted 3 out of 4units fitted No FGD Fitted Eggborough Drax Kingsnorth Ratcliffe Ironbridge Grain Cottam West Burton Rugeley Didcot A Aberthaw Littlebrook Fawley Tilbury Ferrybridge Fiddlers Ferry Longannet Cockenzie Uskmouth Total British Energy Drax Power E.ON UK E.ON UK E.ON UK E.ON UK EDF Energy EDF Energy International Power RWE npower RWE npower RWE npower RWE npower RWE npower Scottish & Southern Energy Scottish & Southern Energy Scottish Power Scottish Power Scottish & Southern Energy Coal Coal Coal/Oil Coal Coal Oil Coal Coal Coal Coal/Gas Coal Oil Oil Coal Coal Coal Coal Coal Coal

1 Compliant with LCPD emission limits (Drax, Eggboroughand 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: DECC (DUKES).
RWE Facts & Figures | Updated September 2012

81

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

The German Energy Industry Act: regulating grid access and grid fees in the electricity and gas markets

Unbundling of grids from generation, wholesale and retail

(number of grid operators)

Exploration/ generation
Competition

Exchange trading OTC


Competition

Transport Bundesnetzagentur1 (electricity: 4, gas: 14)

Distribution Bundesnetzagentur1 (electricity and gas: ca. 300)

Retail
Distribution federal states (electricity and gas: ca. 1,200) Competition

Customers

Regulation of grid access and grid fees

1 Federal Network Agency.

RWE Facts & Figures | Updated September 2012

82

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

The German Energy Industry Act: unbundling in the German energy grids (3rd Energy Package)
OU3 or ISO4/ ITO5 Obligatory TSO1 Legal unbundling Obligatory Functional unbundling Obligatory
Detailed rules to unbundle staff (ITO: more restrictive), equal treatment programme, distinctive branding

Accounting unbundling Obligatory


Auditor's certificate Separate balance sheets and profit and loss accounts must be disclosed and sent immediately to the regulator

Information unbundling Obligatory


Rules to protect sensitive and important economic information

Obligatory DSO2 >100,000 customers

Obligatory
Detailed rules to unbundle staff, equal treatment programme, distinctive branding

DSO2 <100,000 customers


1 2 3 4 5 TSO = Transport System Operator, to be certified by the national regulator. DSO = Distribution System Operator. OU = Ownership Unbundling, transmission system is directly completely unbundled. ISO = Independent System Operator, only if transmission system was part of a vertically integrated company on 3 September 2009. ITO = Independent Transmission Operator, only if transmission system was part of a vertically integrated company on 3 September 2009.
RWE Facts & Figures | Updated September 2012

83

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

The German Energy Industry Act: key elements of grid fee calculation (I)
Investments before / since 2006
in % Electricity Gas Electricity & Gas Electricity & Gas

Framework conditions
> There is an ex ante approval of the revenue caps, but no ex ante approval of the grid fees which can be checked ex post by the Federal Network Agency. RoE 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 before December 31, 2005 All investments as from January 1, 2006, will yield interest based on the method of inflationadjusted historic cost accounting and be subjected to imputed depreciation Tax treatment: Recognition of corporation taxes since incentive regulation has become effective (2009). Reflected in higher RoE Full recognition of trade tax (pass-through)

>

>
Allowed RoE 2005-2008 Allowed RoE 1st period1 Allowed RoE 2nd period2

Investments before 2006


1 Electricity 2009-2013, Gas 2009-2012 2 Electricity 2014-2018, Gas 2013-2017

Investments since 2006

RWE Facts & Figures | Updated September 2012

84

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

The German Energy Industry Act: key elements of grid fee calculation (II)
Conditions for incentive-based regulation > Returns on equity: 7.14% for existing electricity and gas assets and 9.05% for new investments in the second regulatory period. > 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. But mostly applicable only for transmission system operators. Distribution system operators can adjust the revenue cap by an expansion factor which covers the sustainable expansion of the networks within the regulatory period. > Average efficiency of German electricity distribution companies estimated at 94% indicating average company-specific efficiency targets of only 0.6% p.a. ("individual x factor") in the first regulatory period (in the second regulatory period the individual inefficiency has to be eliminated by the end of the period). > Quality component has been established during the first period: electricity distribution companies with a comparable high quality level get a bonus, companies with a low quality get a penalty. Opportunities and risks are limited by a cap.

RWE Facts & Figures | Updated September 2012

85

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

Efficient cost and revenue management is key to determining the profit earned by grid operations
Revenue cap Revenue cap

Permissible costs costs in in 2008 2008 based based on on 2006 2006 Permissible

Cannot be influenced lastingly Can be influenced

Annual percentage revenue adjustment

4
Annual percentage revenue adjustment

3
Cannot be influenced for the time being Deduction resulting from the cost audit Inefficient costs in 2006 determined via benchmarking reduced after second regulatory period

2011 costs

1 2

Electricity baseline years

2006
1st

2011
electricity regulation period 2009 2013 2nd

2016
electricity regulation period 2014 2018
RWE Facts & Figures | Updated September 2012

86

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

Regulated grid revenue is determined in four steps

1 2

Cost reviews: elimination of elements unique to the reference year. Determination of the efficiency figure: based on total cost benchmarking (TOTEX) against other grid operators. Annual percent adjustment of costs that can be influenced (inefficient costs): Consumer Price Index minus x factor (CPI-X) and the expansion factor for the integration of renewables, among other things. Annual adjustment of costs that can never be influenced (non-influenceable costs): upstream grid/avoided grid fees, investment measures, incidental staff costs, etc.

Revenue may rise and fall: incentive-based regulation is not a one-way street.

RWE Facts & Figures | Updated September 2012

87

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

Power grid expansion act (EnLAG): project status


Status of the EnLAG projects Power grid expansion act > With the introduction of the EnLAG in August 2009, the German government responded to the necessity of expanding the transmission networks. The expansion was made necessary in particular by the increasing transportation distance and the increased use of renewable energy sources (e.g. offshore wind farms) The EnLAG requirement plan includes 24 expansion projects which are to be realised as soon as possible
not yet in authority approval phase regional impact assessment phase plan approval process
As of August 2012. Source: Federal Network Agency.
RWE Facts & Figures | Updated September 2012

>

>

approved or under construction completed

behind schedule on schedule

88

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

National electricity network development plan


Lead scenario B 2022 Network development plan 2012 In addition to EnLAG projects: > New build of 3,800 km extra-high voltage lines > of which: 2,100 km high-voltage direct current transmission > Restructuring of 4,000 km extra-high voltage lines

Source: Network development plan Electricity 2012, 2nd draft, Federal Network Agency.
RWE Facts & Figures | Updated September 2012

89

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT Grid

MARKET DATA

RWE

Number of sensitive network situations and redispatchvolume ( 13.1 EnWG)1 in winter 2011/2012
Grid element Number of hours 2,000 326 308 212 177 102 57 50 MWh Change vs. winter 2010/2011 148% 78% 30,800% 523% 17,700% 10,200% 5,700% -35%

Krajnik Conneforde Lehrte Mehrum Vierraden Wolmirstedt Helmstedt Rhrsdorf

Redwitz Remptemdorf Helmstedt Wolmirsted UW Kriegenbrunn Lehrte Mehrum

2,140,997 24,021 50,051 17,877 18,528 25,935 15,495 2,470

Vieselbach Mecklar Redwitz Kriegenbrunn

Remptendorf Hradec

Vierradem Krajnik UW Conneforde Rhrsdorf Hradec Viselb./Eisen.-Mecklar

Number of hours in which measures according to 13.1 no. 2 EnWG (Energy Industry Act) were taken

200

< 400

1 According to 13.1 of the German Energy Industry Act, network or market-related measures (e.g. redispatch) are employed if uninterrupted supply is threatened. Source: Federal Network Agency.
RWE Facts & Figures | Updated September 2012

90

Organisation

Strategy & financing Political environment

Market data

RWE

Market data
92 133 Electricity Gas

RWE Facts & Figures | Updated September 2012

91

Organisation

Strategy & financing Political environment

Market data

RWE

Electricity
93 113 115 118 121 Generation Fuels Trading Grid Supply

RWE Facts & Figures | Updated September 2012

92

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Shares of primary energy sources in total electricity generation in Europe (2010)


Austria Belgium Bulgaria Cyprus Czech Rep. Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden Turkey United Kingdom

bn kWh
Nuclear Hydro Wind Gas Oil Coal/lignite Other Total net power generation
6 5 5 2 113 144 52 57 25 15 292 145 228 364 12 77 549 583 57 35 27 287 5 79 37 68 93 42

0 0%

20 20%

40 40%

60 60%

80 80%

100 100%

100

200

300

400

500

600
93

Source: Enerdata, 2012.

RWE Facts & Figures | Updated September 2012

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

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*)
Oil (43 GW) Year of commissioning >
1962

Gas (172 GW) Year of commissioning >


1962

Lignite (51 GW) Year of commissioning >


1962

Hard coal (115 GW) Year of commissioning >


1962

Nuclear (125 GW) Year of commissioning >


1962

1972 1982

1972 1982

1972 1982

1972 1982

1972 1982

1992 2002
GW

1992 2002
GW

1992 2002
GW

1992 2002
GW

1992 2002
GW

2012 0 5 10 15

2012 0 5 10 15

2012 0 5 10 15

2012 0 5 10 15

2012 0 5 10 15

1 Adjusted net generation capacity. Sources: Platts Database, Worldwatch Institute, RWE, 2012.

RWE Facts & Figures | Updated September 2012

94

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Germanys generation portfolio is overaged: >15 GW already online longer than originally scheduled
Age structure of Germanys fossil-fuelled power plants
GW 12
Originally planned service life

10 8 6 4 2 0 >50 >45 >40 >35 >30 >25 >20 >15 >10 >5 0-5 Age (in years)

gas / oil

hard coal

lignite

RWE Facts & Figures | Updated September 2012

95

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

German energy and power mix (2011)


Primary energy consumption
456 million tons of coal equivalent
Mineral oil Natural gas 34% 20% Lignite Hard coal 13% 25%

Gross power generation


614.5 billion kWh (preliminary)
Nuclear 18%

Hard coal Nuclear 9%

19%

Lignite

12% Natural gas 14% 20%

Renewables Other

11% 2%

Renewables

Other Rounding differences may occur. Source: Energy Balance Working Group, German Energy and Water Association, February 2012.

4%

RWE Facts & Figures | Updated September 2012

96

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

RWE: most diversified generation mix in Europe (I)


Share in power plant capacity of own generation by fuel type 2011 (installed capacity)
100% 80% 60% 40% 20% 0% Centrica CEZ EDF Enel E.ON Fortum GDF Iberdrola RWE SSE
Hydro/ other Gas Hard Coal Lignite Nuclear

Source: Annual reports, company presentations, RWE.

RWE Facts & Figures | Updated September 2012

97

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

RWE: most diversified generation mix in Europe (II)


Share in electricity generation of own generation by fuel type 2011 (generation output)
100% 80% 60% 40% 20% 0% Centrica CEZ EDF Enel E.ON Fortum GDF Iberdrola RWE
Hydro/ other Gas Hard Coal Lignite Nuclear

Source: Annual reports, company presentations, RWE

RWE Facts & Figures | Updated September 2012

98

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

RWE: No. 2 in European power generation


Share in EU 27 power generation (2011)
EdF RWE E.ON 17.1 % 6.6 % 6.0 %

GDF SUEZ Enel Vattenfall Iberdrola CEZ EnBW Others*)

5.9 % 5.8 % 4.9 % 2.8 % 2.2 % 1.9 % 44.3%

3,112 bn kWh1

1 2011 Forecast. Source: 2011 annual reports, RWE.

RWE Facts & Figures | Updated September 2012

99

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Development of number of wind turbines and installed wind capacity in Germany (1990-2011)
30000 30,000
Installed wind capacity (MW) Number of wind turbines 25,000 25000
29,071 MW

20,000 20000

15,000 15000

10,000 10000

5,000 5000
22,297

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011.

RWE Facts & Figures | Updated September 2012

2011
100

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Regional distribution of installed wind capacity in Germany (2011)


MW 7,038 8,000 8000 7,000 7000 6,000 6000
5000 5,000

4,601

3,642

3,000 3000 1,663


2000 2,000 1000 1,000 0 SchleswigHolstein North RhineWestphalia Thuringia Hesse RhinelandPalatinate Brandenburg Saxony Saxony-Anhalt Baden Wrttemberg Bremen Bavaria Lower Saxony MecklenburgWest Pomerania Saarland

3,067

4,000 4000

3,276

1,627

976

801

684

684

486

141

127

53

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011.
RWE Facts & Figures | Updated September 2012

Hamburg

Berlin
101

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Development of installed PV capacity and electricity generation in Germany (1990-2011)


30000 30,000
Installed PV capacity (MWp) Electricity generation (GWh) 25,039 MWp

25000 25,000

20,000 20000

15,000 15000

10,000 10000

5,000 5000 19,340

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2011.

RWE Facts & Figures | Updated September 2012

2011
102

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Attractiveness of coal and gas differs in Germany and the UK


German power price
Min. Hourly Demand New lignite New hard coal New CCGT New CCGT Merit order swaps in winter due to higher gas prices Peaking2 Max.

UK power price
Min. Hourly demand Max.

Power price

OCGT + CCGT

Hard coal Must run1 Nuclear Lignite

Peaking2

Interconnector & Must run1 Nuclear

Power price

CCGT

Hard coal

10

20

30

40

50

60

70

80

90

100

10

20

30

40

50

60

70

80

90

100

Proportion of installed capacity (in %)

Proportion of installed capacity (in %)

> 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
1 Including renewables and CHP. 2 Oil, OCGT, hydro, etc.

> Higher share of high marginal cost plant > New gas plant in UK has significantly higher load factor than in Germany > New coal not economic as must be CCS-ready

RWE Facts & Figures | Updated September 2012

103

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

CO2 reduction potential of coal-fired power plants1 by increased efficiency


CO2 emissions per kWh
World average 30% 1,116 g CO2/kWh 480 g coal/kWh EU average 38% 881 g CO2/kWh 379 g coal/kWh % Efficiency1 g CO2/kWh CO2 emission

CO2 reduction

g coal/kWh Use of fuel - 21% State of the art technology - 33% 45% 743 g CO2/kWh 320 g coal/kWh Steam power plant 700C technology About 50% 669 g CO2/kWh 288 g coal/kWh CCS technology2 But: Efficiency losses of 7 - 12% points - 40%

- 90%

2010
1 Average data for hard coal-fired power plants. 2 CCS: Carbon Capture and Storage. Source: VGB Tech, Electricity Generation Facts and Figures 2011/12.

2020

time

RWE Facts & Figures | Updated September 2012

104

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Overview of German nuclear power plants


Power plant Net capacity MW 1,167 785 1,227 771 878 1,345 890 1,346 Commercial commissioning 1975 1976 1977 1977 1979 1979 1980 1984 Closure

German nuclear power plants


Brunsbttel Brokdorf Krmmel Unterweser Grohnde

Biblis A Neckarwestheim I Biblis B Brunsbttel Isar 1 Unterweser Philippsburg 1

March/August 2011 8,409 MW

Emsland

Krmmel

Grafenrheinfeld Gundremmingen B

1,275 1,284 1,392 1,360 1,288 1,410 1,400 1,329 1,310

1982 1984 1985 1985 1985 1986 1988 1988 1989

31 Dec 2015 31 Dec 2017 31 Dec 2019 31 Dec 2021 4,058 MW 31 Dec 2022 4,039 MW

Biblis Grafenrheinfeld Philippsburg Isar Neckarwestheim Gundremmingen

Philippsburg 2 Grohnde Gundremmingen C Brokdorf Isar 2 Emsland Neckarwestheim II

20,457 RWE power plants

RWE Facts & Figures | Updated September 2012

105

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

The merit order and aspects influencing its structure provide a better tool for looking at the dynamics of power plant portfolios
Illustrative The German merit order the marginal power plant principle
Min. Max.

> The operation of power plants follows the sequence of short-run marginal costs: the merit order > Due to low price elasticity of demand, prices in electricity markets are driven by the merit order structure > Margins depend primarily on the cost efficiency of the available supply, not on adequacy (marginal plant mechanism)

Variable costs in /MWh

Market price

Capacity in demand (marginal plant)

Nuclear

Lignite

Hard coal

Gas

Oil

Supplied capacity in MW

RWE Facts & Figures | Updated September 2012

106

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Wind generation works more or less like negative demand


Change in German merit order due to wind generation Illustrative > Being treated as negative demand, mustrun 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

Demand - wind

Demand

Offer price Variable costs in /MWh

Market price

Nuclear

Lignite

Hard coal

Gas

Oil

Supplied capacity in MW

Demand - wind + exports

RWE Facts & Figures | Updated September 2012

107

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

The CO2 cap-and-trade system has reduced the gap in the merit order between upper base-load and lower peak-load electricity
Change in German merit order due to CO2 Illustrative
Offer price

> 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 levels a switch between the fuel types in the merit order would happen

Variable costs in /MWh

Nuclear

Lignite

Hard coal

Gas

Oil

Supplied capacity in MW With CO2 Without CO2

RWE Facts & Figures | Updated September 2012

108

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Balancing power: how does it work?


f

Starting point e.g. power station breakdown

Frequency

5s

30 s

15 min

1h

Primary

Secondary

...
Minute reserve 5s 30 s 15 min TSO1 Primary > Automatic control at the generator/turbine > E.g. thermal power plants 1 TSO: Transmission system operator. 2 BRP: Balance-responsible party.
RWE Facts & Figures | Updated September 2012

Hour reserve

1h BRP2 Secondary reserve > Automatic control by the TSO, load frequency control > E.g. pumped storage Minute reserve > Manual activation by TSO > Manual, e.g. thermal power plants

109

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Development of electricity load values in Germany in 2008 2012


Peak load values (3rd Wednesday)
GW
5000 85

80 0000 75 70
0000

5000

65
5000

60
0000 Feb Aug May Sep Mar Nov Jan Jun Apr Jul Dec
110

2012

2011

2010

2009

2008

Source: ENTSO-E.
RWE Facts & Figures | Updated September 2012

Oct

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

German electricity system at its limit


Capacity situation on 8 February 2012

Sufficient electricity supply was only guaranteed on the basis of hardly any outages in the thermal generation fleet
GW 12

150 100 50 0

8 4 0

Solar Wind Hydro Thermal capacity Installed capacity Capacity not available Required balancing power1 German domestic consumption Net export balance Remaining spare capacity (<2 GW)

No relief through electricity imports during peak hours due to likewise high electricity demand in neighbouring countries: demand for electricity exports were higher than available imports
GW 6 5 Export (from Germany) Import (into Germany)

4 3 2 1 0

France

Austria

Swiss

Netherlands

Denmark

Poland

CZ

Net export (~2 GW)

1 German TSOs have contracted approx. 5 GW of balancing power to cover short-term grid imbalances. Source: ENTSO-E, EEX, German Energy and Water Association; German electricity import/export on 8 February 2012, 6:00 7:00 p.m.
RWE Facts & Figures | Updated September 2012

111

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Generation

RWE

Scenarios for German capacity reserve margins


Reliable available spare capacity for peak demand
GW
10 8 6 4 2 0 -2 -4 -6 -8 -10
System required spare capacity (ENTSO-E) Scenario 1 Scenario 2 Scenario 3

Scenarios
Starting point: ENTSO-Es Scenario B (January 19:00 pm)1 Development of capacity reserve margin considering... Scenario 1: ... only announced new build and most likely shut down of power plants

2012

2013

2014

2015

2016

2017

2018

2019

2020

Scenario 2: ... additionally to scenario 1: plus shut down of plants >50 years of lifetime Scenario 3: ... additionally to scenario 2: plus shut down of plants which are uneconomically according to RWE market model

1 Peak demand increased by 9 GW while reliable available capacity only by ~3 GW compared to System Adequacy Report 2011. Source: ENTSO-E (2012), RWE estimates (May 2012)
RWE Facts & Figures | Updated September 2012

112

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Fuels

RWE

Main sea freight trading routes for hard coal in 2011 (I)
Seaborne hard coal trade in 2011: 978 million mt
32 101 91 To the Far East USA 80 CHINA 270 COLOMBIA/ VENEZUELA 67 API#4 SOUTH AFRICA API#3 AUSTRALIA INDONESIA
281

CANADA

API#2 RUSSIA 14 Canada/USA

API = All Publications Index. Source: German Coal Importers Association, Annual Report 2012, published in July 2012.
RWE Facts & Figures | Updated September 2012

113

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Fuels

RWE

Main sea freight trading routes for hard coal (II)


Major products traded on worldwide coal markets 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 The TFS API#3 is a weekly (every Friday) basket index price with a basis of 6,700 Kcal/kg, GAD (gross air dried) FOB Newcastle (Australia) and published on a weekly and a monthly average basis. Calculation: (FOB Newcastle price + Barlow Jonker Index (BJI)) divided by 2 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#2

API#3

API#4

API = All Publications Index. CIF = Cost, Insurance, Freight. CIS = Commonwealth of Independent States. FOB = Free On Board. The 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: German Coal Importers Association, Annual Report 2012, published in July 2012.
RWE Facts & Figures | Updated September 2012

114

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Trading

RWE

Major European electricity exchanges

FINLAND

Nord Pool Oslo

NORWAY

SWEDEN

European Energy Exchange (EEX), Leipzig APX Power NL, Amsterdam


UK

DENMARK NETHERLANDS

APX Power UK, London EPEX SPOT, Paris

GERMANY BELGIUM

FRANCE

AUSTRIA

Belpex, Brussels Omel, Madrid


SPAIN

Energy Exchange Austria (EXAA), Vienna

RWE Facts & Figures | Updated September 2012

115

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Trading

RWE

Turkey as a future energy hub


Physical power demand of neighbouring countries 340.7 billion kWh Natural gas demand of neighbouring countries 157.1 billion cubic meters (bcm)
Gas demand [bcm] Russia: Azerbaijan: Armenia: Georgia: Ukraine: Romania: Bulgaria: Greece: Turkey: Syria: Iraq: Turkmenistan: Qatar: 389.6 7.8 2.1 1.7 47.0 11.7 2.3 3.4 43.0 7.1 1.3 19.9 20.0 Power demand [billion kWh] 686.2 12.4 4.5 5.9 121.6 50.6 32.6 53.5 229.3 27.2 33.2 9.3 20.9

All data represents year 2009; Electricity consumption for Romania, Serbia, Bulgaria and Greece derived from ENTSO-E; Other electricity consumption figures are derived from IEA and CIA; Natural gas consumption figures are derived from IEA and IHS.
RWE Facts & Figures | Updated September 2012

116

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Trading

RWE

Power trading volumes in continental Europe 2001 2011


Billion kWh1
10,000 10,000 9,000 9,000 8,000 8,000 7,000 7,000 6,000 6,000 5,000 5,000 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000

2001 2001
Germany

2002 2002

2003 2003
France France OTC

2004 2004

2005 2005

2006 2006

2007 2007
Spain

2008 2008

2009 2009

2010 2010

2011 2011

Netherlands Netherlands OTC

Scandinavia

Germany OTC

1 Measurable power trading volumes at exchanges and brokering platforms (OTC).


RWE Facts & Figures | Updated September 2012

117

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Grid

RWE

The European ENTSO-E1 power transmission grid


FI Continental European synchronous area Baltic synchronous area Nordic synchronous area British synchronous area Irish synchronous area Isolated systems of Cyprus and Iceland
1 synchronous 2

IS

NO

SE

EE LV

RU2

IE GB NL BE L

DK DK RU2

LT BY2 PL

with the continental European system

DE CZ SK UA-W2

synchronous with the Baltic system from September 2010 in trial synchronous operation with the continental European system
3

UA2

FR

CH

AT HU SI RO HR BA RS BG MK AL1 GR

MD2

PT ES

IT

TR3

MA1

DZ1

TN1

CY
RWE Facts & Figures | Updated September 2012

1 ENTSO-E = European Network of Transmission System Operators for Electricity.


118

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Grid

RWE

Germany's transmission system operators (2011)


Amprion System size [km] (380 kV) System size [km] (220 kV)
50 Hertz

TenneT 5,800 4,900 140,000

50 Hertz TransnetBW 6,830 2,862 109,360 1,993 1,655 34,600

5,300 5,700 73,100

Area covered [km]

Amprion

TenneT

TransnetBW

RWE Facts & Figures | Updated September 2012

119

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Grid

RWE

Germany: import and export of electricity in 2011


bn kWh
DENMARK

2.95

SWEDEN

2.09

2.05

1.68 0.63
NETHERLANDS

1.24
POLAND

2.55

8.06

0.11

2.59

GERMANY 0.15 Export 38.63 Import 38.35

5.20
FRANCE

9.51 17.02

CZECH REPUBLIC

7.59
Export from Germany Import into Germany 1 2010 Figure. Source: www.netzentwicklungsplan.de, Amprion.

4.54

AUSTRIA

7.99 1
SWITZERLAND
RWE Facts & Figures | Updated September 2012

120

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

The largest electricity companies in Europe 20111


Consolidated electricity sales volume
billion kWh

E.ON (GER) EdF (FRA) GDF SUEZ (FRA) RWE (GER) Iberdrola (ESP) Vattenfall (SWE) EnBW (GER) ENEL (ITA) 0
104 157 156 210 320 294 508

1,145

100

200

300

400

500

600

700

800

900

1000

1100

1200

1 Last completed fiscal year. Sales are excluding proprietary trading. Source: RWE analysis, August 2012.

RWE Facts & Figures | Updated September 2012

121

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Development of energy consumption in Germany


Development by segment: Electricity
bn kWh
600

Development by segment: Gas


bn kWh
1200 1,200

532
500 400 120 300 16 200 254 100 0 8 2006 142

534
140

540 538
140 139

518
142

518
140

1000 1,000 800

962

980

973

939

958 837

459

121 16

121 17

438

453

120 16 227 9 2009

124 17 227 9 2010

124 17 229 9 2011

447

484

600 400 410 200 0 104 2006 115 2007 126 2008 118 2009 126 2010 386 360 330 348

365

255

252

352

9 2007

9 2008

120 2011

Residential customers Services1

Transport Industry Agriculture

Residential and commercial customers2 Industry Power plants 2 Also includes transport and district heating.

1 Also includes public consumption. Source: German Energy and Water Association, 2012.

RWE Facts & Figures | Updated September 2012

122

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Electricity prices in Europe (for industrial customers)


Average electricity prices for industrial customers1 in the second half of 2011 in selected European countries
ct/kWh
Malta Ireland Slovakia Italy Latvia Spain Czech Republic Lithuania Belgium United Luxembourg EU 27 Hungary Germ any Portugal Poland Slovenia Croatia Netherlands Sweden Denmark Romania Turkey Finland France Bulgaria Austria 12.60 12.18 11.95 18.00

7.30 6.80 6.67 6.57 6.44

11.01 11.00 10.71 10.34 10.14 9.98 9.57 9.35 9.34 8.99 8.95 8.95 8.89 8.86 8.29 8.23 8.10 8.03 2

10

12

14

16

18

20

1 Basis: industrial customers with a consumption of 500 2,000 MWh; prices excluding value-added tax and all other recoverable taxes and levies. 2 Provisional data. Source: Eurostat, July 2012.
RWE Facts & Figures | Updated September 2012

123

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Pan-European comparison of the household electricity prices


Electricity prices excluding all taxes and levies; second half of 2011
ct/kWh
Ireland Spain United Kingdom Austria Luxembourg Italy Germany Norway Netherlands Sweden Denmark EU 27 Czech Republic Hungary Finland Portugal Poland France Turkey Romania Bulgaria 0 2 4 6

EU 27
17.55 16.84 15.09 14.44 14.36 14.12 13.95 13.51 13.43 13.40 13.15 13.10 12.08 11.92 11.08 10.68 10.52 10.17 9.19 8.23 7.27

10

12

14

16

18

20

Source: Eurostat, July 2012; rounding differences may occur.


RWE Facts & Figures | Updated September 2012

124

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

German households rank second in terms of state-caused charges on the electricity bills
%
Denmark Germany Portugal Sweden France Austria The Netherlands Finland Greece Spain Bulgaria Luxembourg Ireland UK 4.7 13.5 11.9 18 16.7 19.9 28.2 27.4 25.4 24.7 34.2 38.6 44.4 56.6

10

20

30

40

50

60

Source: Eurostat, 1st half of 2011 (average); prices incl. taxes, levies and fees, annual consumption of 2,500 5,000 kWh, German Energy and Water Association, November 2011.
RWE Facts & Figures | Updated September 2012

125

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

German industrial customers face highest state-caused charges on the electricity bills
%
Germany The Netherlands France Denmark Finland Portugal Greece Spain UK Luxembourg Bulgaria Sweden Ireland 0.7 0.4 1.5 4.8 4.4 4.3 6.7 9.3 8.9 11.8 15.0 18.0 27.9

10

15

20

25

30

Source: Eurostat, 1st half of 2011 (average); prices incl. taxes, levies and fees, annual consumption of 500 MWh 2,000 MWh, German Energy and Water Association, November 2011.
RWE Facts & Figures | Updated September 2012

126

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Competition has been a reality since 1999: freedom of choice for German residential electricity customers; increasing churn rates
Churn rate of electricity customers (accumulated)
Million customers 12
10 8.3 8 6 4.3 4 2 3.1
18.9% 8% 11% 20.7% 21.7%

11.00 9.8 8.8 10.3

11.20

7.4
27.7% 25.8% 24.6%

28.2%

Nov 2006

Nov 2007

Dec 2008

Oct 2009

Oct 2010

Apr 2011

Oct 2011

Mar 2012

Jun 12

Source: German Energy and Water Association, June 2012.


RWE Facts & Figures | Updated September 2012

127

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

German state-caused charges in electricity prices


State-caused charges for all electricity customers
billion (excluding value-added tax)
25 20 15 10

+ 578% 23.1
0.15

23.7
0.13

17.1 11.9
0.77 2.30 2.22

6.9 4.1
0.26 2.00 1.82 0.61 0.90 2.05 3.36

8.5
0.99 1.15 2.04 4.32

9.5
0.67 1.63 2.08 5.10

11.4
0.76 1.91 2.15 6.53

12.3
0.85 2.92 2.07 6.46

12.9
0.79 3.73 2.09 6.27

13.5
0.70 4.30 2.14 6.35

13.8
0.52 4.88 2.17 6.26

14.3
0.63 5.27 2.16 6.28

0.45 8.33

13.53

14.11

0.44 2.11 6.17 2.15 2.15

5 0

6.60

7.15

6.82

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011 1

2012

Concession fees (estimated) Electricity tax2

German Combined Heat and Power Act German Renewable Energy Act2

Levy acc. to 19 Electricity Network Charges Ordinance (StromNEV)

1 Estimated figures. 2 Various sources. Source: German Energy and Water Association, April 2012.

RWE Facts & Figures | Updated September 2012

128

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Industrial customers pay higher governmental charges


Development of average industrial1 electricity prices (including electricity tax)
1998 = 100%
142 123 100
2

150 122
24

149

122
21

129
38 29 39

95
4

90 65
10

96
21

104
21

20

19

69
13

74
13

23

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Taxes, levies & fees Renewable Energy Act, Combined Heat and Power Act, electricity tax Net electricity prices Generation, transmission and sales 1 Medium voltage, purchase of 500 kW/3,150h. Source: German Energy and Water Association, April 2011.

RWE Facts & Figures | Updated September 2012

129

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Government inflates German electricity bills


Average monthly electricity bill of a three-person household (3,500 kWh/a)
/month
63.15 67.70 69.10 73.59 Change (1998 = 100%) 75.08 + 50%

49.95
12.35

48.20 40.66
14.40 15.51 16.68

46.99 41.76
18.67

50.14
20.30

56.76 52.38 54.43


20.82 21.70 22.49

60.20

24.65

25.20

26.53

28.57

33.19

34.10

+ 176%

37.60

33.80

25.15

25.08

28.32

29.84

31.56

32.73

34.27

35.55

37.95

41.17

40.53

39.59

40.98

+ 9%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

n Taxes, levies & fees


Renewable Energy Act, Combined Heat and Power Act, concession fees, electricity tax and value-added tax

n Net electricity prices


Generation, transmission, distribution, metering, sales and marketing

Gains resulting from deregulation are being eroded by additional burdens imposed by policymakers
Source: German Energy and Water Association, April 2012.
RWE Facts & Figures | Updated September 2012

130

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Government charges account for 45% of German household electricity bills1


25.74 ct/kWh break down as follows (as of April 2012):
State: 11.69 ct/kWh Value-added tax2 Renewable Energy Act 4.11 16.0% Generation, transmission and supply: 14.05 ct/kWh

3.59

13.9%

45.4%
Electricity tax Concession fee Combined Heat and Power Act 1 3,500 kWh/a. 2 VAT at 19%. Source: German Energy and Water Association, April 2012. Rounding differences may occur. 2.05 1.79 0.15 8.0% 6.9% 0.6%

RWE Facts & Figures | Updated September 2012

131

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Electricity Supply

RWE

Blackouts in Europe in minutes (2010)


Minutes
200
173.0 193.0

150

100
62.9

50
31.8 14.9 17.0

47.8 33.7

0
Germany Denmark Austria Netherlands Italy France Portugal Finland

Source: German Energy and Water Association, July 2012.

RWE Facts & Figures | Updated September 2012

132

Organisation

Strategy & financing Political environment

Market data

RWE

Gas
134 136 138 140 141 145 146 Trading LNG Storage Downstream Supply Turkish market Czech market

RWE Facts & Figures | Updated September 2012

133

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Trading

RWE

Gas markets develop and are becoming global flexibility becomes key success factor
Gas trade flows 2011 billion m3
> 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: BP (2012).

RWE Facts & Figures | Updated September 2012

134

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Trading

RWE

European gas trading hubs


V es ed terl

Lan g ele

Europipe 1+2

ipe

Franp

Zeepip e

UNITED KINGDOM (NBP)


Bacton Dunkirk

DEUD AN

Ellund

BB

Balgzand Oude

Emden

Greifswald
NET RA

Zeebrugge (TTF) IUK Zelzate


SGravenvoeren RT R

NETHERLANDS BELGIUM

GERMANY NCG/GPL

Blaregnies

Bocholtz Aachen WEDAL St. Katherina


AL ME G
NP TE

LUXEMBOURG

FRANCE (PEG)

Obergailbach

Waidhaus Oberkappel Wallbach


G TA

CZECH REPUBLIC
WAG

No rd

Mallnow

SWITZERLAND

Tarvisio

AUSTRIA

Griesspass

St re am

ip Norp e

DENMARK

Baumgarten (CEGH)

Gas trading point Transport route


RWE Facts & Figures | Updated September 2012

135

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas LNG

RWE

LNG is becoming an increasingly important component of global gas supply


Global natural gas demand and LNG's share
billion m3

5000 5,000 4000 4,000 3000 3,000 2000 2,000 1000 1,000
7% 10%
Asia Pacific Africa Middle East Europe and Eurasia South and Central America North America LNG

12%

0 2005
Source: PIRA, IEA.

2010

2020

RWE Facts & Figures | Updated September 2012

136

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas LNG

RWE

How the liquefied natural gas (LNG) value chain works


Gas field Pipeline Liquefaction Liquefaction plant
Gas: 600 m3 at 15 C

LNG: 1 m3 at -162 C

Storage Shipping Storage


LNG: 1 m3 at -162 C

Vessel transport volume (standard range): 135 155 thousand m3 LNG 81 93 million m3 regasified volume 495 565 thousand boe 0.9 1.0 bn kWh

Gas: 600 m3 at 15 C

Regasification Pipeline

Regasification terminal

Transport system

Power generation

RWE Facts & Figures | Updated September 2012

137

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Storage

RWE

Gas storage facilities in Europe Germany is leading


Number of natural gas storage facilities
Germ any Italy France Austria UK Hungary Czech Rep. Romania Slovakia NL Latvia

Their maximum working gas capacity million m3


46
Germ any Italy

Their maximum withdrawal capacity million m3/day


Germany Italy France Austria UK Hungary Czech Rep. Romania Slovakia NL Latvia

21,297
14,747 11,900 4,744 4,350 6,330 3,127 2,760 2,785 5,000 2,325 0 5000 10,000 10000 15,000 15000 20,000 20000 5,000

515
153 200 55 86 72 52 28 39 145 24 0 100 200 300 400 500

10 15 5 6 5 8 8 1 3 1 0 10 20 30 40 50

France Austria UK Hungary Czech Rep. Romania Slovakia NL Latvia

EU 27: 124

EU 27: 85,990 million m3

EU 27: 1,453 million m3 per day

Source: Eurogas Statistical Report, January 2011.

RWE Facts & Figures | Updated September 2012

138

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Storage

RWE

Gas storage facilities in Germany


Locations of German subterranean gas storage facilities
Rostock Hamburg Bremen Hanover Berlin

POLAND

> Germanys underground gas storage facilities at 40 locations have a capacity of roughly 21 billion m3 of process gas. This represents roughly a quarter of the amount of gas used in Germany in 2011. Germanys gas industry thus has the largest storage capacity within the European Union. > A further 23 underground gas storage facilities with a working gas capacity of more than 11 billion m3 are either under construction or in the planning stage. This will cause the share of German annual gas consumption covered by available gas storage capacity to rise to about 40%.

NETHERLANDS
Dortmund

GERMANY
Cologne Erfurt Frankfurt

Leipzig Dresden

BELGIUM LUXEMBOURG
Saarbrcken

CZECH REPUBLIC
Nuremberg

Stuttgart

FRANCE
Freiburg Munich

AUSTRIA

Source: German Energy and Water Association (BDEW), March 2012.


RWE Facts & Figures | Updated September 2012

139

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Downstream

RWE

The largest gas companies in Europe 20111


Consolidated gas sales volume billion kWh

E.ON (GER) ENI (ITA) Gasterra (NED) GDF SUEZ (FRA) Wintershall (GER) Gas Natural (ESP) RWE (GER) 0 200
322 396 462 572 954 1,064

1,342

400

600

800

1000

1200

1400

1 Last completed fiscal year. Sales are excluding proprietary trading. Source: RWE analysis, August 2012.

RWE Facts & Figures | Updated September 2012

140

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Supply

RWE

German residential gas prices compared with other European countries


All-gas household: annual consumption: 5,560 55,560 kWh1
ct/kWh (incl. taxes)
14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 DEN SWE AUT NED CZE ESP POL GER ITA BEL FRA UK
7.08 7.29 5.70 6.14 5.38 4.82 7.85 6.83 6.13 7.08 4.74 11.23 11.76

Average gas price 1 Cooking, hot water and heating. Source: Eurostat 2012; average prices for 2011; based on purchasing power standards.
RWE Facts & Figures | Updated September 2012

141

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Supply

RWE

German residential gas prices from 2000 to 2011 compared with other European countries
All-gas household: annual consumption: 23,500 kWh1
ct/kWh (incl. taxes)
10 9 8 7 6 5
Belgium

4 3 2 1 0 2000

Austria Germany Italy Spain France Netherlands United Kingdom

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1 Cooking, hot water and heating; 5,560 55,560 kWh after second half of 2007. Source: Eurostat, 2011.
RWE Facts & Figures | Updated September 2012

142

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Supply

RWE

Government charges included in the German gas price


Import/production, transportation, storage and distribution

70%

Value-added tax

16%

Gas tax Prorated production levy Concession fee

8% 2% 4%

30% of the gas price1 payable by an all-gas household is allocable to taxes and levies

1 Example based on the average price per kWh for an all-gas household (as of 1.4.2011) with a basic supply contract. Source: Federal Network Agency (2012).

RWE Facts & Figures | Updated September 2012

143

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Supply

RWE

Natural gas supplies in Germany (2011)


Russia Norway 329 bn kWh 297 bn kWh 31% 28%

Netherlands

223 bn kWh

21%

Total: 1,062 bn kWh1

National Denmark, UK, Others

118 bn kWh 96 bn kWh

11% 9%

1 Preliminary figure, National includes bio gas. Source: German Energy and Water Association (BDEW), February 2012.

RWE Facts & Figures | Updated September 2012

144

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Turkish market

RWE

Turkey as a gateway to the worlds natural gas reserves

Proven natural gas reserves million bcm Top ten countries Russia Iran Qatar Saudi Arabia USA Turkmenistan UAE Nigeria Venezuela Algeria
8 8 8 7 5 5 5
Azerbaijan 0.85 Iraq 3.2 Iran 29.6 Kuwait 1.8 Turkmenistan 7.5 Russia 44.8

45 30 25

QATAR 25.4

Caspian and Gulf total 70% of the world natural gas reserves
Bubble size is indicative of the size of reserves

Saudi Arabia 7.8

United Arab Emirates 6.5

RWE Facts & Figures | Updated September 2012

145

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Czech market

RWE

Relevant institutions and their role in the Czech gas market (I)
According to the Energy Law, the following three institutions are responsible for the execution of state control in the energy market: (1) Energy Regulatory Office (ERO) (2) State Energy Inspection Authority (3) Ministry of Industry and Trade There are also additional institutions that have a significant impact on the domestic energy market and its participants, including: (4) Market Operator (5) Office for the Protection of Competition (UOHS) ERO is an autonomous authority, which is responsible for the regulation of the Czech energy market. Among others, ERO > supports market competition, development of secondary and renewable energy sources, and the protection of energy consumers > grants and cancels licenses for activities related to the energy business > makes regulatory decisions regarding prices > resolves disputes between license holders or between customers and license holders > drafts and approves rules pertaining to the domestic energy market model

(1)

(2)

State Energy Inspection Authority is authorised to assess buyer and seller behaviour and recommend sanctions to ERO.
146

RWE Facts & Figures | Updated September 2012

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Czech market

RWE

Relevant institutions and their role in the Czech gas market (II)
(3)
Among others, the Ministry of Industry and Trade: > Issues state consent for the construction of selected gas infrastructure projects > Prepares the State Energy Concept, a document establishing the countrys long-term energy goals > Informs the European Commission of the countrys developments within the energy sector Market Operator provides comprehensive services to the energy sector, including: > Organisation of short-term gas and electricity markets in cooperation with the TSOs > Administration of the registry of greenhouse gas emissions trading > Financial settlement of imbalances in the gas and electricity systems > Provision of technical support for customer switching

(4)

(5)

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 supervisor for the provision of state aid.

RWE Facts & Figures | Updated September 2012

147

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Czech market

RWE

Status of Czech gas market liberalisation and regulation


> 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. Full market liberalisation and complete market opening was achieved and competitors started to enter the market. The transmission system operator Net4Gas was set up as an entity that is legally independent from RWE Transgas, a.s. which holds the gas trading license. The ownership however was retained by RWE. On January 1, 2007, regional gas companies (RGCs) were separated from the regional gas distribution system operators (DSOs). 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. RWE in CZ 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 prices are regulated and have to be approved by ERO. The calculation is made on a cost plus basis and the costs have to be justified in detail. > Storage prices are not regulated, but are set in multi-round online auctions organised by SSOs.
RWE Facts & Figures | Updated September 2012

148

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Czech market

RWE

Czech gas market: gas-price setting mechanism


The value chain Price composition Gross trade margin Supervised by ERO Commodity Storage NTPA2, prices are set in auctions Distribution Transmission

Nonregulated1

Regulated

Regulated

Portion of final price

4 8%

70 80%

4 8%

15 20%

3 5%

Entity

RWE Transgas regional gas companies

Foreign producers (Russia, Norway)

RWE Gas storage

Distribution system operators

Net4Gas

> External factors influence approx. 70 80% of the final price of natural gas

1 Prices are linked to other fuels (oil, fuel) or based on spot market. 2 Negotiated third-party access.

RWE Facts & Figures | Updated September 2012

149

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA Gas Czech market

RWE

Czech gas market: basics of the regulatory framework


Escalation of costs, depreciation and regulated asset base

Costs

Inflation - X escalation (inflation is composed of the Consumer Price Index (CPI) with 1% premium and index of selected B2B services). Incentives stem from outperformance 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 (applied only in 2010).

Revaluation

For regulatory purposes, ERO currently acknowledges the restated depreciation of revalued assets (according to Czech accounting standards). However, the revaluation effected regulatory asset base only to a minor extent.

RWE Facts & Figures | Updated September 2012

150

Organisation

Strategy & financing Political environment

Market data

RWE

RWE
152 Electricity 197 Gas 219 Investor Relations

RWE Facts & Figures | Updated September 2012

151

Organisation

Strategy & financing Political environment

Market data

RWE

Electricity
153 184 187 189 190 Generation Fuels Trading Grid Supply

RWE Facts & Figures | Updated September 2012

152

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWE share of the European power generation market by region (2011)


Share of in-house generation (excluding electricity purchased from third parties)
%
40

30

27

20

10

8 2

0 Germany

Netherlands/ Netherlands/Belgium Belgium

UK

Central Eastern and 2 South Eastern Europe

1 Including contracted generation. 2 Countries included: CZ, HU, PL, SK. Source: Eurostat, ENTSO-E, RWE.
RWE Facts & Figures | Updated September 2012

153

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWE's share of the German power generation market relative to peers (2011)
Total net electricity production (including self generators)
RWE E.ON 154.4 billion kWh 89.6 billion kWh 29% 17%

Vattenfall Europe

62.3 billion kWh

12%

EnBW Others (incl. Industry)

59.5 billion kWh 164.4 billion kWh

11% 31%

Total: 530.2 billion kWh

Source: German Energy and Water Association (BDEW), RWE.

RWE Facts & Figures | Updated September 2012

154

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWE Group electricity production by primary fuel and electricity purchases (2011)
Billion kWh
120

Total: 312.8 billion kWh1


100 80 60 40 20

107.1

74.1

68.6

34.3

38.5

8.8 20.8 2.2


Nuclear Nuclear Gas Gas Renewable Renewable energies energies Pumped Pumped storage, storage,oil, oil, other other Electricity Electricity purchases purchases

0 Lignite Lignite Hard Hard coal coal

RWE power plants Electricity procured from power plants that are not owned by RWE that we can deploy at our discretion on the basis of long-term agreements 1 The difference between 312.8 billion kWh of power generation output and 294.6 billion kWh of electricity sales is due to grid losses and own use.

RWE Facts & Figures | Updated September 2012

155

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWE Group electricity production by geographic region (2011)


Billion kWh Germany Lignite Nuclear Hard coal thereof contracts Gas Renewable energies thereof contracts Pumped storage, oil, other thereof contracts Subtotal Electricity purchases1 Total 68.3 34.3 33.6 20.8 12.0 4.0 0.5 2.2 1.7 154.4 55.4 209.8 UK 8.6 21.3 1.6 0.9 31.5 22.3 53.8 NL/BE 5.1 5.1 1.8 12.0 10.2 22.2 Other 5.8 0.5 0.1 1.4 7.8 19.2 27.0 Total 74.1 34.3 47.8 20.8 38.5 8.8 1.4 2.2 1.7 205.7 107.1 312.8

1 Net, excluding trading. Purchases for physical deliveries to customers only.

RWE Facts & Figures | Updated September 2012

156

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

The role of electricity purchase agreements in RWEs German generation business


Generation capacity of RWEs Germany Division as of 31 December 2011
RWE-owned STEAG E.ON Others 72% 13% STEAG 6% E.ON 9% 5% 2% 8%

Electricity generation of RWEs Germany Division in 2011


RWE-owned 85%

Total: 31.3 GW

Others

Total: 152.0 billion kWh

> Long-term contracts relating to fossil-fired and hydro power plants > RWE has full entrepreneurial control over 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)
RWE Facts & Figures | Updated September 2012

157

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWEs Germany Divisions power plant portfolio1 (I)


Power plant Country (Germany unless stated) Operating company Commissioned Net capacity MW Lignite Frimmersdorf Neurath Niederaussem Niederaussem (BoA1) Goldenberg Weisweiler Berrenrath Fortuna Nord Wachtberg Total lignite Nuclear KKW Emsland Gundremmingen B Gundremmingen C Total nuclear Hard coal Gersteinwerk Werne Kv2 GW Bergkamen A Ibbenbren Westfalen A-C VSE Unit 1 VSE Unit 3 Bedzin Total hard coal RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power 1959-1970 1972-1976 1963-1974 2002 1992, 1993 1955-1975 1939, 1993 1959 1,625 2,065 2,736 944 151 2,054 52 54 118 9,799 RWE's legal consolidation stake % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 MW 1,625 2,065 2,736 944 151 2,054 52 54 118 9,799 RWE's Partner economic stake % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 MW 1,625 2,065 2,736 944 151 2,054 52 54 118 9,799 Stake in %

RWE Power RWE Power RWE Power

1988 1984 1984

1,329 1,284 1,288 3,901

100.0 100.0 100.0

1,329 1,284 1,288 3,901

87.5 75.0 75.0

1,163 E.ON 963 E.ON 966 E.ON 3,092

12.5 25.0 25.0

Poland

RWE Power RWE Power RWE Power RWE Power VSE VSE EnviaM

1984 1981 1985 1963, 1969 1963 1972 1975

608 717 794 588 106 283 78 3.174

100.0 100.0 100.0 100.0 100.0 100.0 100.0

608 717 794 588 106 283 78 3.174

100.0 100.0 100.0 100.0 69.0 0 100.0

608 717 794 588 73 0 54 2.834

Steag

49.0

Various shareholders Various shareholders Various shareholders

31.0 31.0 30.4

1 As of 31 December 2011; rounding differences may occur on the power plant list.

RWE Facts & Figures | Updated September 2012

158

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWEs Germany Divisions power plant portfolio1 (II)


Power plant Country (Germany unless stated) Operating company Commissioned Net capacity RWE's legal consolidation stake % MW 1,826 1,285 112 544 21 12 326 260 314 292 10 8 215 2 2 0 5,228 RWE's Partner economic stake % 100.0 100.0 100.0 100.0 100.0 100.0 100.0 0.0 100.0 0.0 89.9 79.0 various 100.0 100.0 58.0 MW 1,826 1,285 112 544 21 12 326 0 314 0 9 6 229 2 2 0 4,687 Stake in

MW Gas Emsland B, C, D Gersteinwerk F - I Gersteinwerk Werne Kv1 Weisweiler VGT G, H Bochum Dortmund GuD Dormagen GuD Dormagen Huckingen Huckingen LEW Aviko Swag Gas enviaM (various) RWN (various) RWE Vertrieb (various) Kevag (various) Total gas Oil Grokayna Sermuth Peissenberg (gas, oil) Total oil RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power LEW Swag enviaM RWE RWN RWE Vertrieb Kevag 1973, 1974, 2010 1973 1984 2006 2004 2004 2000 2000 1975, 1976 1975, 1976 2000 1992-2001 1986-2009 1999-2011 2002-2011

1,826 100.0 1,285 100.0 112 100.0 544 100.0 21 100.0 12 100.0 326 100.0 260 100.0 314 100.0 292 100.0 10 100.0 8 100.0 352 various 2 100.0 2 100.0 0 100.0 5,365

Bayer AG Krupp-Mannesmann Municipal shareholders Various shareholders

100.0 100.0 10.01 21.0 Various

43.0

enviaM enviaM LEW

1994 1995 1987, 1990

119 100.0 17 100.0 11 100.0 147

119 100.0 17 100.0 11 50.0 147

119 17 6 E.ON 141

50.0

1 As of 31 December 2011; rounding differences may occur on the power plant list.

RWE Facts & Figures | Updated September 2012

159

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWEs Germany Divisions power plant portfolio1 (III)


Power plant Country (Germany unless stated) Operating company Commissioned Net capacity MW Renewables wind (onshore) enviaM (various sites) Windpark Westerwald (KEVAG) Windpark Westerwald (GmbH) Total renewables wind Renewables run-of-river KW Laufwasser (various sites) Palzem LEW Water SWAG Water RWW GmbH enviaM Water Kevag Water Pleumhle Total renewables run-of-river enviaM KEVAG KEVAG 22 15 3 40 RWE's legal consolidation stake % 100.0 100.0 100.0 MW 22 15 3 40 RWE's Partner economic stake % 100.0 100.0 100.0 MW 22 15 Various shareholders 3 Various shareholders 40 Stake in %

42.5 68.7

Luxembourg

RWE Power RWE Power LEW Swag RWE RWN enviaM Kevag RWE RWN

1928

1992

12 5 169 17 5 10 0 0 218

100.0 100.0 Various 100.0 100.0 100.0 100.0 100.0

12 100.0 5 50.0 157 Various 17 78.8 5 100.0 10 100.0 0 58.0 0 100.0 206

12 2 104 12 5 10 0 0 145

State contract with Luxemb. Various shareholders Municipal shareholders

50.0 22.4

Stadt Dren

42.5 25.1

Renewables other Malchin (biomass oil) enviaM Bernkastel (Solar) RWE Power Landfill gas (various sites Various Biogas (various sites) enviaM Biomass-fired thermal power RWE RWN station Neubrcke Various Vegetable oil (various sites) Various Solar (various sites) RWE De. Biomethane RWE RWN BHKW Schllershamer (biogas) Total renewables other 1 Rounding differences may occur on the power plant list.

2003

2007-2011 2003

11 0 1 4 7 1 6 2 1 33

100.0 100.0 Various 100.0 100.0 Various Various 100.0 100.0

11 100.0 0 100.0 1 Various 4 100.0 7 100.0

11 0 1 Various 4 7 0 Various 2 0 1 City of Dren 26

2005

1 Various 1 Various 2 100.0 1 100.0 28

25.05

1 As of 31 December 2011; rounding differences may occur on the power plant list.

RWE Facts & Figures | Updated September 2012

160

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Generation

RWEs Germany divisions power plant portfolio1 (IV)


Power plant Country Operating (Germany company unless stated) Commissioned Net capacity MW Other MHKW Karnap MVA Weisweiler Kpchenwerk (pumped storage) SRS Ecotherm Total other Contractually secured plants STEAG (hard coal) RuhrEnergie (hard coal) SaarEnergie (hard coal) Other hard coal Neckar (run-of-river) Rhein-Main-Donau (run-of-river) Kaunertal (pumped storage) Schluchsee (pumped storage) SEO Vianden (pumped storage) BHKW Bioenergie Bottwartal Total contractually secured plants Total capacity of the Germany Division 1 As of 31 December 2011; rounding differences may occur on the power plant list. RWE Power RWE Power RWE Power RWE Power 1987 1996 1989 2003 38 24 153 1 216 RWE's legal consolidation stake % 100.0 100.0 100.0 100.0 MW 38 24 153 1 216 % 100.0 100.0 100.0 100.0 RWE's Partner economic stake MW 38 24 153 1 216 Stake in %

Austria

RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power RWE Power Swag

2009

3,028 1,986 811 557 29 10 160 870 1,096 1 8,547 31,440

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

3,028 1,986 811 557 29 10 160 870 1,096 1 8,547 31,286

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

3,0282 1,9862 8112 557 2 292 102 1602 8702 1,0962 12 Bioenergie Bottwartal 8,547 29,528

100.0

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RWEs Netherlands/Belgium divisions power plant portfolio1 (I)


Power plant Country (Netherlands unless stated) Operating company Commissioned Net capacity MW Hard coal Amercentrale ST 8 Amercentrale ST 9 Total hard coal Gas Amercentrale AC21 Donge CC ELES Eindhoven Philipps GT Enschede Cogen Erica CC 1&2 Helmond GT 1 Helmond GT2 Inesco (Antwerp) Klazienaveen CC 1&2 Moerdijk Philip Morris 1 (Bergen op Zoom) sHertogenbosch (Den Bosch) Swentibold CC Clauscentrale A Total gas Renewables run-of-river Linne HH 1-4 (hydro run-of-river) Total run-of-river Essent Essent 1980 1993 515 401 916 RWE's legal consolidation stake % 100.0 100.0 MW 515 401 916 % 100.0 100.0 RWE's Partner economic stake MW 515 401 916 Stake in %

Belgium

Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent Essent

1972 1976 1995 1985 1996 1982 1988 2007 1996 1996 1995 1994 1999 1977

15 121 83 52 58 63 25 25 133 63 339 33 33 245 610 1,897

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

15 121 83 52 58 63 25 25 133 63 339 33 33 245 610 1,897

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

15 121 83 52 58 63 25 25 133 63 339 33 33 245 610 1,897

Essent

1989

11 11

100.0

11 11

100.0

11 11

1 As of 31 December 2011; rounding differences may occur on the power plant list.

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RWEs Netherlands/Belgium divisions power plant portfolio1 (II)


Power plant Country (Netherlands unless stated) Operating company Commissioned Net capacity MW Renewables other Cuijk Amercentrale ST8 Amercentrale ST9 Total renewables other Cogeneration (gas) Delesto 1 Delesto 2 Desco (Dupont) Elsta CC Hunzestroom Dobbestroom Total cogeneration (dispatch rights)2 Contracted plants EPZ (nuclear) EPZ (hard coal) EPZ (wind) Total contracted plants Total capacity of the Netherlands/Belgium Division 1 As of 31 December 2011; rounding differences may occur on the power plant list. Essent Essent Essent 1999 1980 1993 25 96 199 320 RWE's legal consolidation stake % 100.0 100.0 100.0 MW 25 96 199 320 % 100.0 100.0 100.0 RWE's Partner economic stake MW 25 96 199 320 Stake in %

Essent Essent Essent Essent Essent Essent

1987 1998 1997 1998 1996 1996

180 350 39 469 25 35 1,098

0.0 0.0 0.0 0.0 0.0 0.0

0 0 0 0 0 0 0

50.0 50.0 33.0 25.0 50.0 50.0

90 175 13 117 13 18 425

Akzo Nobel Akzo Nobel Dupont AES, Delta AveBe AveBe

Essent Essent Essent

1973 1986 2004

485 404 12 901 4,045

0.0 0.0 0.0

0 0 0 0 3,144

30.0 30.0 30.0

146 Delta 121 Delta 4 Delta 270 3,414

70.0 70.0 70.0

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RWEs UK divisions power plant portfolio1


Power plant Country (UK unless stated) Operating company Commissioned Net capacity MW Hard coal Aberthaw B Didcot A Total hard coal Gas Great Yarmouth Little Barford Didcot B Staythorpe Total gas Cogeneration (gas) Phillips Petroleum Bridgewater Paper BASF Aylesford Newsprint Whitegate Dow Coming Huntsman Tioxide Hythe Total cogeneration (gas) Oil Littlebrook D Fawley OCGTs (gas oil, various sites) Total oil Renewables other Tilbury B (biomass) Total renewables other Total capacity of the UK Division RWE npower RWE npower 1971-1979 1972-1975 1,554 1,958 3,512 RWE's legal consolidation stake % 100.0 100.0 MW 1,554 1,958 3,512 % 100.0 100.0 RWE's Partner economic stake MW 1,554 1,958 3,512 Stake in %

RWE npower RWE npower RWE npower RWE npower

2001 1994 1996-1997 2010

380 635 1,420 1,728 4,163

100.0 100.0 100.0 100.0

380 635 1,420 1,728 4,163

100.0 100.0 100.0 100.0

380 635 1,420 1,728 4,163

Ireland

RWE npower RWE npower RWE npower RWE npower RWE npower RWE npower RWE npower RWE npower

1999 2000 1997 1994 1998 1998 2003 2005

55 58 81 99 6 27 15 53 394

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

55 58 81 99 6 27 15 53 394

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

55 58 81 99 6 27 15 53 394

RWE npower RWE npower RWE npower

1982-84 1969-70

1,140 968 549 2,657

100.0 100.0 100.0

1,140 968 549 2,657

100.0 100.0 100.0

1,140 968 549 2,657

RWE npower

2011

742 742 11,468

100.0

742 742 11,468

100.0 100.0

742 742 11,468

1 As of 31 December 2011; rounding differences may occur on the power plant list.

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RWEs Central Eastern and South Eastern Europe division's plant portfolio1
Power plant Country Operating company Commissioned Net capacity MW Hard coal TE Plomin 2 Total hard coal Lignite Mtra Total lignite Gas Mtra Sinergy (various sites) Total gas Renewables run-of-river MSZ Total renewables run-of-river Total CEE Division 1 As of 31 December 2011; rounding differences may occur on the power plant list. Croatia TE Plomin d.o.o. 2000 192 192 RWE's legal consolidation stake % 0.0 MW 0 0 % 0.0 RWE's Partner economic stake MW 0 HEP d.d. 0 Stake in % 50.0

Hungary

Mtra

1967

763 763

100.0

763 763

51.0

389 EnBW, MVM 389

49.0

Hungary Hungary

Mtra Sinergy

2007 2000-2005

60 127 187

100.0 Various

60 87 147

51.0 Various

31 EnBW, MVM 96 127

49.0

Hungary

2007

1 1 1,143

100.0

1 1 911

100.0

1 1 517

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RWEs Renewables divisions generation portfolio1 (I)


Power plant Country Operating company Commissioned Net capacity MW Renewables wind (onshore unless stated) RWE Innogy wind (various sites) Germany RWE Innogy (various sites) Netherlands Kirkby Moor UK Taff Ely UK Bryn Titli UK Carno UK Trysglwyn UK Windy Standard UK Llyn Alaw UK Novar UK Mynydd Gorddu UK Beinn Ghlas UK Lambrigg UK Bears Down UK Tow Law UK Causeymire UK Farr UK Ffynnon Oer UK North Hoyle (offshore) UK Hameldon Hill UK Burgar Hill UK Knabs Ridge UK Bilbster UK The Hollies UK Rhyl Flats (offshore) UK Little Cheyne Court UK An Suidhe UK Lindhurst UK Lochelbank UK RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy Various 1987-2009 1993 1993 1994 1996 1996 1996 1997 1997 1998 1999 2000 2001 2001 2004 2006 2006 2003 2007 2007 2008 2008 2008 2009 2009 2010 2010 2011 RWE's legal consolidation stake % MW 450 201 5 9 10 0 0 0 0 0 0 0 0 0 0 48 92 32 60 5 5 16 4 3 90 60 19 9 10 % Various 100.0 100.0 100.0 100.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 RWE's Partner economic stake MW 448 201 52 92 102 0 0 0 0 0 0 0 0 0 0 482 922 322 602 5 5 16 4 3 90 60 19 9 10 Stake in %

455 Various 201 100.0 5 0.0 9 0.0 10 0.0 34 0.0 6 0.0 22 0.0 20 0.0 17 0.0 10 0.0 8 0.0 7 0.0 10 0.0 2 0.0 48 0.0 92 0.0 32 0.0 60 0.0 5 100.0 5 100.0 16 100.0 4 100.0 3 100.0 90 100.0 60 100.0 19 100.0 9 100.0 10 100.0

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7 66.7

49

1 As of 31 December 2011; rounding differences may occur on the power plant list. 2 Capacities of power plants not owned by RWE, but that RWE can deploy at its discretion on the basis of long-term agreements. 3 M&G Investment Management Limited, JPMorgan Investment Management Inc. RWE Facts & Figures | Updated September 2012

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RWEs Renewables divisions generation portfolio1 (II)


Power plant Country Operating company Commissioned Net capacity MW Renewables wind (onshore unless stated) Hellrigg Sirigo Bulgueira Guilhado Thornton Bank (offshore) Acampo Amijo EE de Muel Grisel I Grisel II Los Labrados Plana de la Balsa Plana de Zaragoza Danta Aldehuelas Bosque Alto Plana Maria Rio Gallego Lanternoso Bancal Siglos Suwalki Piecki Tychowo San Basilio Uriri Anzi Total renewables wind 1 As of 31 December 2011; rounding differences may occur on the power plant list. RWE Facts & Figures | Updated September 2012 UK Portugal Portugal Portugal Belgium Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Spain Poland Poland Poland Italy Italy Italy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy 2011 2005 2003 2009 2009 2002 1998 2001 2005 2002 2002 2002 2004 2005 2002 2002 2003 2005 2007 2007 2009 2010 2010 2010 2010 2011 9 4 2 2 31 18 16 14 3 24 24 24 129 47 22 24 39 24 21 18 41 32 35 25 26 16 1,931 100.0 0.0 0.0 0.0 0.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 9 0 0 0 0 18 16 14 3 24 24 24 129 47 22 24 39 24 21 18 41 32 35 25 26 16 1,758 100.0 32,3 39.4 39.4 26.7 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 45.1 100.0 100.0 100.0 100.0 100.0 100.0 100.0 51.0 100.0 51.0 51.0 51.0 9 1 1 1 8 18 16 14 3 24 24 24 128 45 22 24 39 24 21 18 41 16 35 13 13 8 1,714 49 49 49 49 1.3 5 67.7 60.6 60.6 73.3 5 RWE's legal consolidation stake % MW % RWE's Partner economic stake MW Stake in %

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RWEs Renewables divisions power plant portfolio1 (III)


Power plant Country Operating company Commissioned Net capacity MW Lignite HKW Nachod HKW Albrechtice Total lignite Hard coal HKW Schneweide Total hard coal Gas Heidelberg Various BHKW Pribor HKW Breclav Total gas Renewables hydro run-of-river Saarwasser RADAG (various) RWE Innogy run-of-river (various sites) npower Renewables (various sites) Energies France (various sites) AERSA (various sites) Villalgordo (AERSO) Czech Rep. Czech Rep. RWE Innogy RWE Innogy 1970/1950 2006 17 2 19 RWE's legal consolidation stake % 100.0 100.0 MW 17 2 19 % 100.0 100.0 RWE's Partner economic stake MW 17 2 19 Stake in %

Germany

RWE Innogy

1992

10 10

100.0

10 10

100.0

10 10

Germany Czech Rep. Czech Rep.

RWE Innogy RWE Innogy RWE Innogy RWE Innogy

2002 1992-2002 1999 2001

14 30 0 1 44

100.0 100.0 100.0 100.0

14 30 0 1 44

100.0 100.0 100.0 100.0

14 30 0 1 44

RWE Innogy RWE Innogy RWE Innogy RWE Innogy France Spain Spain RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE innogy RWE Innogy 1958-1989 1998-2000 1998 1996-2004 1993 2008

32 100 244 69 45 7 6 16 3 3 525

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 0.0 0.0

32 100 244 69 45 7 6 16 0 0 519

100.0 78.0 100.0 100.0 100.0 100.0 60.0 82.4 32.3 39.4

32 78 RADAG 244 69 45 7 3 13 1 1 494 Gruforsa, Sauces Treinta, Rssula

22.0

40.0 18.6 67.7 60.6

INVESTERG (various sites) Portugal Ribadouro (INVESTERG) Portugal Vales (INVESTERG) Portugal Total renewables hydro run-of-river

1 As of 31 December 2011; rounding differences may occur on the power plant list. RWE Facts & Figures | Updated September 2012

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RWEs Renewables divisions power plant portfolio1 (IV)


Power plant Country Operating company Commissioned Net capacity MW Renewables other Solar (various sites) Kehl (biomass wood) Kehl II (biomass wood) Bergkamen (biomass wood) Berlin-Neuklln (biomass wood) RWE Innogy (landfill gas) BMHKW Wittgenstein Total renewables other RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy RWE Innogy 52 9 3 20 20 1 5 109 RWE's legal consolidation stake % Various 100.0 100.0 100.0 100.0 100.0 100.0 MW 1 9 3 20 20 0.5 5 58 % Various 51.0 51.0 100.0 100.0 100.0 100.0 RWE's Partner economic stake MW 1 4 August Koehler AG 1 20 August Koehler AG 20 1 5 53 Stake in %

Germany Germany Germany Germany Germany Germany

2003 2011 2006 2005 2010

49.0 49.0

66.7

Contractually secured plants AEW, Klingnau Switzerland Totally contractually secured plants Totally renewable energies Total RWE Group

RWE Innogy

37 37 2,681 50,777

0.0

23 23 2,430 49,239

62.5

23 23 2,356 47,283

1 As of 31 December 2011; rounding differences may occur. 2 Capacities of power plants not owned by RWE, but that RWE can deploy at its discretion on the basis of long-term agreements.

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RWEs major power plants in Germany


Natural Gas Power plant Thermal power plant Gas and steam Waste gas recycling Lignite Opencast pit Power plant Factory Hard Coal Power plant Nuclear Power Nuclear power plants Other Hydropower Refuse incineration

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RWE npowers major power plants in the UK


Gas Coal CCGT1 Oil/Gas Biomass

Staythorpe Pembroke Didcot A Aberthaw B Didcot B Fawley 2,188 MW 1,958 MW 1,554 MW 1,420 MW 968 MW Great Yarmouth Little Barford Littlebrook D Tilbury B

1,728 MW 380 MW 635 MW 1,140 MW 742 MW

1 CCGT: Combined-Cycle Gas Turbine.

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Essents major power plants in the Netherlands


Existing power plants and new builds of Essent
Name: Moerdijk I Place: Moerdijk Fuel: Gas Capacity: 339 MW Year of commission: 1996 Name: Eemshaven Place: Eemshaven Fuel: Coal/Biomass Capacity: 1,600 MW Year of commission: 2014 Name: Mid-sized units Place: Enschede, Helmond, etc. Fuel: Gas Capacity: various Year of commission: 1982-2007 Name: Bio-centrale Cuijk Place: Cuijk Fuel: Biomass Capacity: 25 MW Year of commission: 1999 Name: Claus C Place: Maasbracht Fuel: Gas Capacity: 1,304 MW Year of commission: 2012 Name: Claus A Place: Maasbracht Fuel: Gas Capacity: 610 MW Year of commission: 1977

Name: Moerdijk II Place: Moerdijk Fuel: Gas Capacity: 426 MW Year of commission: 2012

Name: Amercentrale Place: Geertruidenberg Fuel: Coal, gas, biomass Capacity: 1,226 MW Year of commission: 1972-1993

Name: Swentibold Place: Geleen Fuel: Gas Capacity: 245 MW Year of commission: 1999

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Age structure of RWEs German power plants in 2012


Hard coal (8 GW)1
Age (years) 0 1.000 >50 45 40 35 30 25 20 15 10 5 1
2

Lignite (9.6 GW)


Age (years) 0 1.000 >50 45 40 35 30 25 20 15 10 5 1
3 4

Gas/Oil (5.5 GW)


MW Age (years) 3.000 0 1.000 >50 45 40 35 30 25 20 15 10 5 1
5

Nuclear (3.1 GW)


MW Age (years) 3.000 0 1.000 >50 45 40 35 30 25 20 15 10 5 1 2.000 MW 3.000

2.000

MW 3.000

2.000

2.000

~40% older than current average Existing RWE power plants New build projects Source: RWE.

~62% older than ~56% older than ~63% older than current average current average current average Average age excl. new build projects 1 Incl. capacities contracted in long-term agreements. Average age incl. new build projects 2 Westfalen D&E (COD 2013) 3 BoA 2&3 4 BoA 1 5 CCGT Lingen
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Overview of technologies in RWE Innogys main focus


Wind offshore
Criteria

Wind onshore

Biomass

Hydro

Maturity of technology

> Pioneer phase > Industry is making substantial progress > UK: growing > Germany, Netherlands, Belgium: emerging

> Mature

> Mature

> Very mature

Markets

> CE/SE: stable > EE: growing > SEE: emerging

> Germany, UK, Italy > Benelux: emerging > USA: growing (upstream pellets) > Market for fuel supply > Sustainability

> CE/SE: mature > SEE: growing, significant potential

Specialities

> Partnerships share risk and expertise

> Partly fragmented markets

> Large scale hydro limited to few countries in Europe > Long run times > Average size >1 MW and all types

Size of projects (capacity) Approx. load factor

> Large (500 1,000 MW)

> Small to medium (20 200 MW)

> Small to medium (5 80 MW) > 100k 750k ton/a pellet plant

35 40%

25 30%

80%

50%

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New applications on their path to commercialisation


New Applications Solar thermal
Criteria
> Solar Thermal: maturing > Core technology: developing > Feed-into the gas grid: maturing > Small assets: demonstration phase > Large assets: commercial operation (similar to offshore wind) > UK and France: emerging > Locations for Tidal Stream are available > Tidal: predictable power generation > Small: < 30 MW > Large: >> 100 MW > Core technology: mature > Need to develop smart PV and grid integration

Biogas

Marine energy

Photovoltaic

Maturity of technology
> Spain, Italy, Greece, Turkey: growing > North Africa: potential

Markets

> Germany: growing, strong targets by government

> Germany: growing in customer related smart PV plants > Mediterranean countries: growing > Capacity freely scalable

Specialities Size of projects (capacity) Approx. load factor

> Storage systems

> Feedstock dependency > Feed-in into the grid > Small: 5 50 MW

> Small to medium: 20 150 MW

> Small to large: 1 kW >> 100 MW

57%

90%

25 35%

Germany: 8 12%, Spain and Southern Italy: 20 25%

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Lignite-fired power generation: Higher efficiency, less CO2, more flexibility


Thermal efficiency
%
60
1957 Frimmersdorf: 150 MW = 30.8 1970 Niederauem: 300 MW = 35.8 2010 Neurath: BoA 2&3 1,100 MW > 43

Flexibility
MW
1.100

BoA plus
Max. capacity Min. capacity Max. change rate of load ~ 2x550 MW ~ 3501/1752 MW +/- 30 MW/min

1.000

50

BoA 1 to 3
800
Max. capacity ~ 1,000 MW Min. capacity ~ 500 MW Max. change rate of load +/- 30 MW/min

40 600 30
1975 Weisweiler: 600 MW = 1966 Frimmers- 36.6 dorf: 300 MW = 31.4 2003 Niederauem: BoA 1 1,000 MW > 43 far after 2020 700 CBoAplus 1,100 MW 50

BoA plus 1,100 MW > 45

400

Combined-Cycle Power Plant Lingen


Max. capacity ~ 2x440 MW Min. capacity ~ 5201/2602 MW Max. change rate of load +/- 32 MW/min

20

200

Min.capacity2 Min.capacity2

10

0 0 1957 1972 1987 2003 2010 2020 2030

10

15

20

25

1 Two boilers in operation. 2 One boiler in operation.

30 Minutes

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RWEs lignite production in the Rhenish mining region


Million mt lignite
120

100

Frimmersdorf-Sd Frimmersdorf-West

80

Garzweiler I

Garzweiler II

60

Fortuna-Garsdorf Hambach I Frechen Bergheim

40

20

Inden
0 1970

Sdrevier Zukunft-West
1980 1985 1990 1995 2000 2005

Inden I + II
2010 2015 2020

1975

10

11

3 Actual values

Number of mines

Position: May 2011.

Mining capacity

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RWEs Rhenish lignite mining region


A 46

Mine premises Former mine premises being restored Restored mine premises Water Lignite-fired power plants Coal processing plant Approved mining area

A 46 Grevenbroich A 540
Erf t

Tagebau Garzweiler Garzweiler II

Frimmersdorf Neurath A 61

Nord - Sd - Bahn

A 44 Bedburg

Niederauem Fortuna-Nord

A 61
Bergheim

Kln Cologne
Rhein

Sophienhhe A 44 Jlich

Tagebau Hambach
Ru r

Frechen A1 Wachtberg A4
47 7n

Tagebau Inden

Ha

hn ba ach mb

Hrth

E rft

Ville/Berrenrath Goldenbergwerk A 61

A 555

A4 Weisweiler

Brhl

As of January 2012.

Eschweiler

DB K ln -

Ind e

Aac hen

Dren

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RWEs emissions profile


RWEs in-house power generation in 2011
Billion kWh1
Lignite Hard coal 74.1 47.8

RWEs CO2 emissions in 2011


Million metric tons of CO22
180 160 140 161.9

Nuclear

34.3

120

116.6

Total: 205.7
Gas 38.5

100 80 60 40 20 45.3

Renewables Pumped storage, oil, other

8.8 2.2

CO2 CO2 emissions emissions

Free allocation allocation Shortage of CO2 Free Shortage of CO2 certificates certificates

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 22.9 billion kWh, of which 20.8 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 2011, they produced 20.4 million metric tons of CO2 and were allocated certificates for 18.9 million metric tons.
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RWE Powers nuclear power plant decommissioning concept (I)


35 40% share of costs About 50% share of costs Decommissioning 10 15% share of costs

Post operational phase 5 7 years


> Power production has ceased

Nuclear dismantling (immediate, deferred) 10 15 years


> Dismantling of contaminated and activated systems, structures and components

Conventional dismantling/ demolition 2 3 years

Final disposal

> In some cases, technical infrastructure needs to be > Materials and waste management (treatment, operated for an additional period conditioning, packaging) > 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

> Conventional > Final disposal of demolishing of decommissioning waste buildings/components which fall no longer under the German Nuclear Energy Act (AtG).

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RWE Powers nuclear power plant decommissioning concept (II)


35 40% share of costs About 50% share of costs Decommissioning 10 15% share of costs

Post operational phase 5 7 years

Nuclear dismantling (immediate, deferred) 10 15 years

Conventional dismantling/ demolition 2 3 years

Final disposal

Explanation of the post operational phase:


> To roughly estimate the expenses of an NPP post-closure, there are several phases that need to be taken into account. The first phase, called post-operational period, encompasses 5-7 years after closure. Directly after closure, the fuel rods are moved from the reactor to the spent-fuel pool for further cooling. During approx. five years fuel rods will be transferred to steel casks (CASTOR) and moved from containment to an interim storage facility. > As soon as the NPP is fuel-free, fixed costs can be reduced further. Hence, there is an ongoing need for inspection and (external) review (TV). > Please note that this refers only to the service operating cost in the post operational phase and doesnt include any dismantling/demolition costs. > Costs are booked against provisions; they do not have an effect on the profit and loss statement.

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Nuclear provisions

Provisions for uncertain liabilities as per IAS 37

Public-law liabilities under Sec. 9a of the Germany Nuclear Energy Act

Provisions are made for > Disposal of spent nuclear fuel assemblies Flasks, transport, conditioning, intermediate and final storage

RWE fiscal year 2011: 10,366 million 4,658 million 4,964 million 744 million

> Decommissioning of nuclear power plants Post-operation phase, dismantling, removal, final storage > Disposal of radioactive operating waste (e.g. cleaning cloths, oils, resins) Conditioning, flasks, intermediate and final storage

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%)

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MARKET DATA

RWE Electricity Generation

How the size of the provision is determined


Schematic description
million 2 Escalation rate (specific cost increase)

1 Annual interest accretion 4

3 Discount rate (discount to net present value) Amount payable

Total cost at the cut-off date

Provisions IFRS

2010

2010

2011

2012

20..

RWE Facts & Figures | Updated September 2012

183

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Fuels

RWEs hard coal purchases by country of origin in 20111


Russia 19.2%

Colombia

42.6%

Total: 9.6 million metric tons

UK

15.6%

Poland USA South Africa Germany

2.9% 4.9% 3.9% 10.9%

1 Data of RWE npower refer to purchase of hard coal, the rest refer to hard coal usage. Source: RWE.

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184

ORGANISATION

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RWE Electricity Fuels

RWEs use of fuels in proprietary power plants (I)


Use of hard coal
Million metric tons
16 15.2 12.9 12 9.6 8 50 3 3.0 4 25 1,5 1.5

Use of lignite
Million metric tons
125 100.1

Use of natural gas


Billion cubic metres
9 9.0 7,5 7.5 6 6.0 8.9

8.2
6.6 6.8 6.1 4.6

12.1

11.5 9,6 9.6

100

96.3

95.4

92.3

90.5

95.0

75

4.5 4,5

0 2006 2007 2008 2009 2010 2011

0 2006 2007 2008 2009 2010 2011

0 0
2006 2007 2008 2009 2010 2011

Source: RWE.

RWE Facts & Figures | Updated September 2012

185

ORGANISATION

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MARKET DATA

RWE Electricity Fuels

RWEs use of fuels in proprietary power plants (II)


Use of nuclear fuel1
Metric tons
150 119 109
2

Use of biomass
Metric tons
3 3.0

120

114

2.3

90

74

74

77
1.1 1 0.9 0.7

1.6

60

30

0 2006 2007 2008 2009 2010 2011

0 2006 2007 2008 2009 2010 2011

1 Prior-year figures adjusted due to new definition. Source: RWE.

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186

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MARKET DATA

RWE Electricity Trading

RWE Supply & Trading acts as the interface between the RWE Group and global wholesale energy markets
Embedded lignite supply Power Gas Oil Coal Freight Weather Emission certificates Biomass Retail, small/medium sized industrials, municipals Sale of power and gas to end customers RWEs sales companies

RWE Supply & Trading


RWEs generating companies 1. Trading > Face to the wholesale market > Proprietary trading activities Sale of fuels and emission certificates Transfer of commercial responsibility Sale of power

> Investment decisions > Technical optimisation


to increase value of assets

> Sale to customers


(power, gas)

> Back-to-back
procurement

> Operation and


maintenance of generation assets

2. Commercial Asset Optimisation > Commercial optimisation of assets, fuel supply and asset hedging on behalf of generating companies > Asset-backed trading activities > Reserve & balancing, ancillary services, face to TSOs1 Sale of power and gas

> Lock-in sales margin Sale of power > Bear volume and and gas credit risk

Options and emission certificates Industrial customers Sale of power, gas, emission certificates
187

3. Sales & Origination > Physical and financial customer business, principal investments, complex illiquid transactions and services > Internal/external back-to-back procurement 1 TSO = Transmission system operator.

RWE Facts & Figures | Updated September 2012

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Trading

RWE Supply & Trading: trading volumes in 2011

Electricity

billion kWh

1,435

Gas

billion m3

753

Oil

million bbl

618

CO2

million certificates

644

RWE Supply & Trading (Essen, Germany), is a leading European energy trading house for all commodities, in both their physical and/or derivative forms. As one of Europes strongest competitors in the gas industry, we optimise RWEs entire non-regulated gas business. Our headquarters boast Europes largest energy trading floor, complementing additional sites in Europe, the Middle East, Asia and the Americas.
RWE Facts & Figures | Updated September 2012

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RWE Electricity Grid

RWEs German electricity network (2011)


RWE network regions in Germany

Circuit length of 342,000 km, with 89,900 substations/transformers


Length in km Transport (extra high voltage (380/220 kV)) Distribution high voltage (110 kV) medium voltage ( 60 kV)
Halle Leipzig Dresden Chemnitz

German market1 34,750 78,250 512,000 1,200,000 1,790,250

RWE2

0 25,000 96,000 221,000 342,000

Osnabrueck

Dortmund Gelsenkirchen Essen

low voltage ( 1 kV) Total

1 Preliminary figures. Source: BDEW. 2 12/2011 figures. Source: RWE Deutschland AG.

Koblenz

Frankfurt am Main

Saarbruecken

Ludwigsburg

Stuttgart Munich

RWE Facts & Figures | Updated September 2012

189

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWEs share in European electricity supply markets (2011)


%
40 31 30 24 20

15 12

14 8 5 3 2 Czech Rep.

10

0 Germany Netherlands UK Hungary

Slovakia

Austria

Poland

Belgium

1 Including minority interests 20%.

RWE Facts & Figures | Updated September 2012

190

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWEs electricity customers1 by country


as of 31 December 2011
Thousand 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Germany Netherlands Belgium UK Hungary Poland 177 2,169 3,935 6,959

2,178 897

1 Households and small commercial enterprises.

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191

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POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWEs electricity sales volume by country in 2011


Billion kWh Germany Residential and commercial customers Industrial and corporate customers Distributors Electricity trading1 Total 25.8 55.1 91.0 20.8 192.7 NL/BE 10.7 15.9 26.6 UK 17.4 32.9 50.3 Poland 3.0 3.4 6.4 Hungary 5.5 5.2 5.8 16.5 Others 0.2 0.6 1.3 2.1 Total 62.6 113.1 98.1 20.8 294.62

1 Net of electricity purchased from third parties 2 Difference between electricity production and electricity sales volume due to grid losses, own consumption of lignite production and pumped-storage power plants.

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192

ORGANISATION

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MARKET DATA

RWE Electricity Supply

RWEs electricity sales by customer group in 2011 (I)


Division: Germany Division: Netherlands/Belgium

Distributors

51%

Residential and commercial customers 51%

Industrial and corporate customers 27%

Total: 117.3 billion kWh

Industrial and corporate customers 49%

Total: 21.0 billion kWh

Residential and commercial customers 22%

RWE Facts & Figures | Updated September 2012

193

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWEs electricity sales by customer group in 2011 (II)


Division: UK Division: Central Eastern and South Eastern Europe

Industrial and corporate customers 65%

Distributors

24%

Industrial and corporate customers 39%

Total: 50.3 bn kWh

Total: 23.7 bn kWh

Residential and commercial customers 35%

Residential and commercial customers 37%

RWE Facts & Figures | Updated September 2012

194

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWE SmartHome: Energy control for homes


Control while not at home PC RWE Backend Central control unit
SmartHome HQ

Control within the house


PC

Transmitter1 Smartphone Encryption


Wall transmitter Remote control

Receiver1
Radiator thermostat Adapter plug

Configuration

Authentication Further details Internet, Certificates


Smoke detector Motion detector Door/window sensor Mobile access Virtual resident

Sensors1 Database

Apps/ Services

... allow energy savings, convenience & safety


Information/control 1 Further devices to follow.

RWE Facts & Figures | Updated September 2012

195

ORGANISATION

STRATEGY & FINANCING

POLITICAL ENVIRONMENT

MARKET DATA

RWE Electricity Supply

RWE SmartHome: The link between different devices


Micro wind turbine Photovoltaic Energy efficiency Heating Health Heating

Entertainment

Security

Home automation

SmartHome controller Micro-CHP Smart meter White goods

Electromobility

Intelligent linking possible


RWE Facts & Figures | Updated September 2012

196

Organisation

Strategy & financing Political environment

Market data

RWE

Gas
198 207 209 212 Upstream Storage Trading Downstream

RWE Facts & Figures | Updated September 2012

197

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RWE Gas Upstream

The upstream business value chain

Licensing

> Participation in bid rounds > Farm in

Actual licenses RWE Dea

96 thousand km2

> Seismic Exploration > Data processing > Drilling (dry wells) Expenses 2011 RWE Dea 123 million

> Drilling1 Development > Engineering > Construction (field and infrastructure) Capex 2011 RWE Dea 687 million

> Operation Production > Transport > Sale


1 Including capitalised exploration and appraisal wells.

Production 2011 RWE Dea

32 million boe

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RWE Gas Upstream

Classification of reserves & resources


Range of uncertainty
P90 90% chance of exceeding the estimate P50 50% chance of exceeding the estimate P10 10% chance of exceeding the estimate

Commercial

Reserves

C1 C2 C3 S1

1P Proved

2P Proved + Probable

3P Proved + Probable + Possible

On production Under development Planned for development

Subcommercial

Low estimate S2

Best estimate

High estimate

Discovered (contingent)

Resources

E1 Low estimate E2 Best estimate High estimate


Undiscovered (prospective)

C-Reserves

S-Resources
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RWE Gas Upstream

RWE Dea reserves/resources 2011 (P50)


Million barrel of oil equivalent end-of-year status
1,200
1200

1,000

993

1,018

1,046

1000

800

800

354

355

431

600 600 400 400


639

497

477

473
182 615 291

301

663

298

200 200
196 179

0 0

2011

2013e Crude oil resources Crude oil reserves

2015e

Natural gas resources Natural gas reserves Reserves = proved + probable. Resources = S1 + S2.

RWE Facts & Figures | Updated September 2012

200

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RWE Gas Upstream

RWE Deas asset resource contribution in 2011 (I)


Discovered reserves + resources (C+S) (RWE Dea share/working interest) North Africa/ Middle East 60%

Europe/CIS

25%

Total: 1,490 million boe2

Germany

15%

1 CIS = Commonwealth of Independent States. 2 boe = barrel of oil equivalent.

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RWE Gas Upstream

RWE Deas asset reserve contribution in 2011 (II)


Reserves (C) (RWE Dea share/working interest)

North Africa/ Middle East

57%

Germany

16%

Total: 843 million boe1

Europe/CIS2

27%

1 boe = barrel of oil equivalent. 2 CIS = Commonwealth of Independent States.


202

RWE Facts & Figures | Updated September 2012

ORGANISATION

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RWE Gas Upstream

RWE Dea gas and oil production target: increase of annual volume to 40 million boe1 by 2014
Annual gas/oil production (million boe1)

CAGR ~ 9%
40

20

Gas
0

2011

2014

Oil

> The focus is organic growth by exploration and development of discovered resources, i.e. conversion of resources into reserves > RWE Dea is targeting to increase production to 40 million boe1 by 2014 through defined development projects > RWE Dea aims to double the production within this decade
1 boe = barrel of oil equivalent.
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RWE Gas Upstream

Investment in international & organic growth: RWE Deas capex plan per region
million 2011 Germany 82 Average p.a. 2012 2016 Approx. 100 Gas: further production wells and compression facilities Oil: further production wells in Mittelplate offshore field UK: Southern North Sea (e.g. Breagh) Norway: Barents Sea; Norwegian Sea Caspian Region: Exploration / New ventures

Capex Europe/CIS1 437 Approx. 400

North Africa

168

Approx. 400 Egypt: Disouq onshore development, offshore Nile Delta Libya, Algeria Approx. 900

RWE Dea Exploration expenses (P&L relevant)

687

Additionally approx. 150 million p.a. exploration expenses (G&G, dry holes) in 201216 (not including successful exploration wells being capitalized)

1 CIS = Commonwealth of Independent States (Soviet union succession states).

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RWE Gas Upstream

Upstream Oil & Gas overview of RWE Deas activities


North Sea / Barents Sea > RWE Dea holds position in Norwegian gas and oil production and is increasing gas production in UK > Objectives: Bring on stream new gas fields in UK Mature and further develop discoveries in Norway Further exploration
Poland Germany

Norway UK Denmark Ireland

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 position in reserves in Egypt, Algeria and Libya > Objective: Boost gas field development in Egypt and Algeria CEE1 / Eastern NV2 > High potential region > RWE Dea holds licenses in Poland and Turkmenistan > Objective: Identify and assess projects in the Caspian Region to further establish an upstream position Exploration and production Exploration Trinidad / NV > High potential region > RWE Dea holds license in Trinidad > Objective: Carry on exploration work and build up further license positions 1 Central and Eastern Europe. 2 Eastern new ventures (e.g. Caspian Region).
RWE Facts & Figures | Updated September 2012

Turkmenistan

Algeria Mauretania

Libya

Egypt

Trinidad & Tobago

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RWE Gas Upstream

RWE Deas largest field developments


RWE share West Nile Delta (Egypt) Disouq (Egypt)2 Breagh Phase 1 (GB) Reggane (Algeria) Edvard Grieg3 (Norway) Knarr4 (Norway) NC 193 / 195 (Libya) NA 40% WMDW 20% 100% (Operator) 70% (Operator) 19,5% 20% 10% 100% (Operator) Capex1 billion 2.9 0.2 0.4 0.4 0.6 0.2 0.5

Production start
2012 2013 2014 2015 2016 2017 2018

1 2 3 4

RWEs share in capex. Budget doubling mainly due to rounding. Formerly Luno. Formerly Jordbr.

RWE Facts & Figures | Updated September 2012

206

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MARKET DATA

RWE Gas Storage

RWEs gas storage facilities: 14 facilities are in place or being expanded


Kalle Epe Epe (formerly Essent)
NETHERLANDS

Hje Xanten
GERMANY

Lobodice Tanovice

Stafurt

tramberk
CZECH REPUBLIC

Tvrdonice Doln Dunajovice

DEA SSO D SSO CZ

Wolfersberg Breitbrunn/ Eggsttt Inzenham


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207

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RWE Gas Storage

RWEs existing gas storage capacity: A total of some 6.4 billion cubic meters
Working gas volume (bcm) Doln Dunajovice SSO Czech Republic Hje Lobodice tramberk Tanovice Tvrdonice Epe H-gas SSO Germany Epe L-gas Kalle Stafurt Xanten Breitbrunn/ Eggsttt RWE Dea Inzenham Wolfersberg Total 0.459 0.533 0.215 0.353 0.185 1.080 0.500 0.365 6.366 870,000 400,000 450,000 550,000 280,000 520,000 300,000 240,000 5,285,000
+ to up 0.6 +u 0.5 o t p

Maximum withdrawal rate (m3/h)

Planned increase (bcm)

2.676

1,675,000

RWE Facts & Figures | Updated September 2012

208

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RWE Gas Trading

RWE Supply & Trading: Full integration of RWE Groups gas midstream and trading activities
Consolidation, optimization and growth platform for RWE's unregulated gas midstream and trading business > Gas procurement for RWEs Pan European sales operations
External & internal purchasing contracts and arrangements

Traded markets

Traded markets Sales contracts and arrangements

> Gas procurement for RWE Power's power plants > Gas Portfolio Optimization > Commercial responsibility for all liquefied natural gas (LNG) activities > Gas transport, transit and storage optimization > Functional responsibility for gas trading > Optimization of RWE OPCOs positions (e.g. management of gas sales for RWE Dea)

Upstream producers

Downstream business in NW Europe (incl. RWE Vertrieb and Essent) & Central Eastern European markets

RWE OPCOs (e.g. RWE Power, RWE npower)

RWE OPCOs (e.g. RWE Power, RWE npower)

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RWE Gas Trading

RWEs long-term oil-indexed gas purchase portfolio


bcm p.a.
30 25 20 15 10 5 0 2009

RWEs long-term oil-indexed gas purchase portfolio at the end of the relevant year Already achieved reduction of the oil-indexed share of RWEs gas purchase portfolio

contract reviews initiated 2011 contract reviews initiated 2010


2012 2015 2018 2021 2024 2027 2030 2033 2036

> RWE and Statoil have reached an agreement on the outstanding gas contracts including a gradual adjustment of the contract price towards the prevailing market conditions and compensation for the historic period since the start of the renegotiations > Including the settlement with Statoil in June 2012 we have renegotiated more than 50% of our oil-indexed contract volumes since 2009. We are still in the price review process with two gas suppliers with a total volume of approx. 11 bcm p.a.

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RWE Gas Trading

RWEs gas trading points


Exchanges
ICE (UK/NL) EEX (GER) APX/Endex (B/NL) Powernext (F) CEGH Exchange (A) Nordpool P-Gas/GME (I) OTE (CZ)

OTC
NBP (UK) TTF (NL) NCG/Gaspool (GER) PEG (F) CEGH (A) PSV (I) AOC (E) GTF (DK) Area D (N)

active target markets not active

Source: Supply & Trading.


RWE Facts & Figures | Updated September 2012

211

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RWE Gas Downstream

RWEs share of European gas downstream markets in 2011


%

100 80 60 40 20 0
Germany Belgium / Netherlands Belgium/ Netherlands UK CZ Hungary Slovakia

46

14 4

15

17

Germany

UK

Czech Republic1

Hungary1

Slovakia1

1 Including minority interests 20%.

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212

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RWE Gas Downstream

RWE gas customers by country1


as of 31 December 2011
Thousand 3,000 2,500 2,000 1,500 1,000 500 0
Germany Netherlands Belgium UK Czech Republic 82 1,295 1,942 1,836 2,636

1 Households and small commercial enterprises.

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RWE Gas Downstream

RWE gas sales in 2011 by customer group (I)


Division: Germany Industrial and corporate customers Division: Netherlands/Belgium Industrial and corporate customers

29%

58%

Distributors

38%

83.3 billion kWh


Residential and commercial customers

87.7 billion kWh

Residential and commercial customers

33%

42%

RWE Facts & Figures | Updated September 2012

214

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RWE Gas Downstream

RWE gas sales in 2011 by customer group (II)


Division: UK Industrial and corporate customers Division: Central Eastern and South Eastern Europe Industrial and corporate customers

5%

47%

40.2 billion kWh


Residential and commercial customers

Distributors

8%

58.9 billion kWh

95%

Residential and commercial customers

46%

RWE Facts & Figures | Updated September 2012

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RWE Gas Downstream

RWE Group gas sales volume by country in 2011


Billion kWh Czech Republic 26.9 16.5 4.7 48.1

Germany Residential and commercial customers Industrial and corporate customers Distributors Total 27.5 40.8 56.6 124.9

Netherlands 35.9 56.5 0.0 92.4

UK 38.0 2.3 0.1 40.4

Others 1.1 13.1 2.2 16.4

Total 129.4 129.2 63.6 322.2

RWE Facts & Figures | Updated September 2012

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RWE Gas Downstream

Transmission and storage system in the Czech Republic at a glance


RWE Transgas headquarter
GERMANY POLAND

Gas transmission system Very-high pressure system Compressor station Border transfer station Inland transfer station

HPS Olbernhau

st n. Labem MTS Hora Sv. Kateiny

Hradec Krlov

Praha SF Hje HPS Waidhaus Plze CS Kouim

CZECH REPUBLIC
SB Lobodice

Ostrava SF Tanovice SF tramberk

Transfer and metering station Underground storage facility Headquarters of regional distribution companies

Brno CS Kralice CS Strovice CS Vesel n. L. CS Hostim esk Bud jovice SF D. Dunajovice CS Beclav SF Tvrdonice HPS Lanhot

SLOVAKIA

AUSTRIA

> In the Czech Republic, RWE holds the exclusive license for transmission and licenses for the storage and distribution of natural gas

RWE Facts & Figures | Updated September 2012

217

ORGANISATION

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MARKET DATA

RWE Gas Downstream

RWEs regional gas companies: Nationwide coverage in the Czech Republic


Majority owned by RWE
GERMANY POLAND

RWE ENERGIE PP ZP

VP
CZECH REPUBLIC

SMP

JMP JP

SLOVAKIA

AUSTRIA

> Total number of gas customers in 2011: approx. 2.0 million > Gas consumption in 2011 by segment: key account: 27%; business: 26%; retail: 47% > In 2010, RWE CZ entered the electricity market. Total number of electricity customers amounted to 130,000 in 2011
RWE Facts & Figures | Updated September 2012

218

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MARKET DATA

RWE Investor Relations

RWE AG Investor Relations contacts


RWE AG Opernplatz 1 45128 Essen Germany Contacts for Institutional Investors & Analysts
Dr. Stephan Lowis Head of Investor Relations Tel.: +49 201 12-15031 E-mail: stephan.lowis@rwe.com Martin Vahlbrock Tel.: +49 201 12-15055 E-mail: martin.vahlbrock@rwe.com Dr. Burkhard Pahnke Tel.: +49 201 12-15182 E-mail: burkhard.pahnke@rwe.com Jens-Philipp Briemle Tel.: +49 201 12-15106 E-mail: jens-philipp.briemle@rwe.com Gunhild Grieve Tel.: +44 207 015 5459 E-mail: gunhild.grieve@rwe.com Judith Heise Tel.: +49 201 12-15141 E-mail: judith.heise@rwe.com Vera Bcker Tel.: +49 201 12 15043 E-mail: vera.buecker@rwe.com

Contact for Private Investors


Cosima Bockelmann Tel.: +49 201 1215032 E-Mail: cosima.bockelmann@rwe.com

RWE Facts & Figures | Updated September 2012

219