2009 11 27 ECR Overview of Business Activities 11 2009(1)

7/31/2019 2009 11 27 ECR Overview of Business Activities 11 2009(1)

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E.ON Climate & RenewablesAn overview of our business activitiesNovember, 2009


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2

The Renewables Business Our Core Beliefs

E.ON Climate & Renewables Strategy & Track Record

Business Spotlight Offshore Wind

Conclusion

Back-Up


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Globalwindcapacity(GW)

600

400

200

1.000

800

02020201520101980 20052000

Renewable Energies from Boutique to Industrial

Sources: GWEC; EER

Growth 1980-2000+18 GW

Expected growth 2010-2020

+700 GW

Growth 2000-2010+138 GW

< 1 GW p.a., regional

True believer and niche

supplier

Kilowatt scale 10 GW p.a., worldwide

International suppliers and

industrial players (e.g. utilities)

Gigawatt scale~160 bn (2008); ~400 bn (2020e), p.a.

1980 to 2000 Since 2000Growth:

Players:

Project Size:Turnover:

3

Wind energy as a perfect example for the industry development


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A snapshot of the Renewables landscape:Some similarities, many differences

Sources: E.ON; IEA; BTM; CIT; WEC; WEA

Wind Biomass Solar Marine energy

Globalcapacity[GW]

Long-termfeasiblepotentialworldwide[GW]

Currenttechnologymaturity

AdvancedStep changes in

technologypossible

Proof-of-concept & technology tracking

4

900120 11050 15713 1,20,3

20082020

~5.000 ~2.000 ~50.000 ~5.000


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Renewable energy at E.ON

EC&R key theme: FromBoutique toIndustrial

Industrialization of the whole value chain andcommercial discipline

Leverage on E.ON core competencies, market position

and reputation

High portfolio discipline: focus on growth marketsand growth technologies

Strategic partnerships

Safety as top priority

Our strategy: One key theme with clearly defined cornerstones

5


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6

Set-up of E.ON Climate & Renewables (EC&R) to achieveambitious Renewables targets

Renewables capacity 1

1

2010

~10

2007

~4

2015

E.ON is investing about 8 bn in Renewables from 2007-2011 and will decrease own CO2

emissions by 50% until 2030

Managing all existing and future

Renewables operationsCarbon sourcing (JI/CDM) for theentire E.ON Group

Driving E.ON's key growthaspirations

Spearheading E.ON's activities inemerging markets

EC&R remit

~ 30%

~ 11%

~ 12%

34%

18%

Setting strategy, portfolio and theinvestment plan for Renewables

E.ONs generation portfolio

2008 2015 203020152008 2030

13%

15%

34%

38%

~18%

~12%

~30%

~40%

~36%

~11%

~22%

~31%

Renewables (incl. large hydro)Nuclear

CoalGas

< 5 0 % l o w C a r b o n 2

> 5 0 % z e r o C a r b o n 3

1 Excluding large hydro 2 Low carbon: natural gas/oil; coal without CCS3 Zero carbon: Renewables (incl. hydro); nuclear; coal (with CCS)


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7

The Renewables Business Our Core Beliefs

E.ON Climate & Renewables Strategy & Track Record


Conclusion

Back-Up


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Disciplined management of technologies and markets

8

Coreactivities for

2009 andbeyond

EC&R technologyselection criteria

ScalabilityGrowth

potentialFinancialattractivenessWider E.ONGroup interestCloseness toE.ONcapabilities

First commercialplants

Industrial scaleapplication

Biogas / Biomethane,Inland biomass

WindOnshore

Solar PV / Thin-Film Applications

CoastalBiomass

Wave /Tidal

Proof-of-concept &technology tracking

WindOffshore Solar / CSP

EC&R focus is set onmost attractive

technologies

and markets .


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Despite challenging market conditions we have continued togrow at pace

We saw a 50% increase of productioncapacity to 2,903 MW (11/2009)

EC&R erected two wind turbines onaverage per day

YE capacity will grow beyond 3,000 MW

Commissioning of Roscoe wind farm (782MW, 09/2009, US), worlds largest windfarm

Completion of Alpha Ventus1 (60 MW,

11/2009), Germanys first offshore windfarm

Commissioning of 1st Solar PV farm LeLauzet (1 MW, 07/2009, France)

Acquisition of solar project developer Societ Conilhac (06/2009, France)

EC&R Capacity Development (MW)

1 JV of EC&R (26.25%), EWE (47,5%) and Vattenfall Europe (26,25%) 9

2009 Key Facts


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10

Focus on the most attractive markets: current footprint

NorthAmerica

UK

90

2,813

1,721

245

208

Other Renewables

Wind

278

Italy

Nordic

351

Iberia

Europe(others)

43

57

Germany

1 E.ON Equity MW (Figures rounded), excluding large hydro

2,903

Source: E.ON

Installed Renewables capacity as of November 2009 (MW 1)


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Key projects build the basis of a robust portfolio

111 Indicative please see Back-Up for complete project overview2 Joint Venture of E.ON (26.25%), EWE (47.5%) and Vattenfall (26.25%)3 Joint Venture of E.ON (30%), DONG (50%) and Masdar (20%)

Technology Installed Capacity (MW) Major Operational Projects 1 Key Projects under Construction 1

Wind onshore 2,700 Roscoe (782 MW), US Panther Creek (458 MW), US Wielkopolska (48 MW, 2009), PL Barao Sao Joao (50 MW, 2009), ES

Wind offshore 113 Scroby Sands (60 MW), UK Alpha Ventus2 (60 MW), GER

London Array3 (630 MW, 2012), UK Robin Rigg (180 MW, 2010), UK Rdsand II (207 MW, 2010/11) , DK

Biomass 44 Stevens Croft (44 MW), UK -

Biogas/Biomethane 20 Stevens Croft (44 MW), UK -

Solar PV/CSP 1 Le Lauzet I (1MW), F (2009) Thin film JV Malibu with Schco

Helioenergy I (50 MW, 2011/12), ES Helioenergy II (50 MW, 2011/12), ES Le Lauzet II (2.5 MW, 2009), F

Marine n/a - Venture with Pelamis (2010), UK


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EC&R Development PipelineFigures as of 11/2009 (MW)

12

MW MW Share

North America 9.496 55%

Onshore Wind 9.496 100%

Europe 7.617 45%Onshore Wind 3.369 44%

Offshore Wind 3.482 46%Others 766 10%

Geographically balanceddevelopment pipeline

Wind energy as core activity

Increased focus onEuropean offshore sector

1 E.ON Equity MW (Figures rounded)Source: E.ON


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Our Boutique to Industrial approach is starting to pay off

13

Clear steps towards

industrialization both inoperations andprocurement start creatingvalue to our business

Onshore Wind

Wind farm size (MW)

New Build2008/2009

Status Quo YE 2007

Wind turbine size (MW)

# Wind turbine types

# Wind turbine OEM

Wind turbine availability

20092007

7515

1.91.4

89

1353

94%91%

Boutique to Industrial results

Trend


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14

Continuous cost improvements are critical to success

% = NPV cost item / NPV total cost

Procurement and O&M make up for more

than 80% of total costProcurement as major performance driver

10% cost reduction yields 100bp higher IRR

Key Facts

Focus on procurement and O&M drives return improvementsthrough both costs (efficiency) and revenues (e. g. availability)

Excellence in operations and procurement are key to profitability

Onshore Wind

O&M Costs

Development Costs

Turbine Costs

Electrical System Costs

Construction Costs


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15

Boutique to Industrial will stay our fundamental driver

SCADA1 2011 targetavailability

98%

2011 targetO&M costreduction

-10%

Optimized spare partconcept

CMS3 and predictivemaintenance

Access to criticalequipment and tools

Proper and completedocumentation

Spare part pooling

Widen O&M contracts

Optimized share of 3 rdparty O&M

O&M framework agreement

Scale of projects andharmonized WTG2 use

1 Supervisory Control And Data Acquisition2 Wind Turbine Generator 3 Condition Monitoring System

Onshore Wind

We will stay at the forefront of industry development both in wind and other

Renewables technologies


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Solar will be the next wind and we want to stand on twolegs: PV 1 and CSP2

1991 1993 1995 19991997 20072001 2003 2005

2000 2002 2004 2006 2008E 2010E 2012EPV Time Scale

Wind Time Scale

Installed capacity [GW]

2008 2020

13 ~140

Global FeasiblePotential [GW]50,000 - 80,000

PV

>1 ~20CSP

Wind and Solar installed capacity per year

Global Capacity Solar PV in MWp3Global Capacity Wind in MW

1 PV = Photovoltaic2 CSP = Concentrated Solar Power 3 Megawatt peak: maximum electric power output of a solar cell 16

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

I n s t a l l e d C a p a c i t y W o r l d w i d e

( M W

)

Solar

Sources: EPIA; GWEA; EWEA


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17

EC&R footprint in the solar business

Solar Photovoltaics (PV)

1Joint Venture of EC&R (50%) and Schco (50%)

Solar

Concentrated Solar Power (CSP)

Market entry achieved 50/50 partnership with Abengoa Solar

for the development of two 50 MW CSP Plants

in Southern Spain ~550m partnership investment COD planned for 2011/12 Abengoa Solar and E.ON aiming to

extend partnership to further developsolar power

Acquisition of Socit Conilhac, adeveloper of photovoltaic projects inFrance

Recent opening of first E.ON solar PV farm, Le Lauzet I, France

Start of Construction of Le Lauzet II,France (COD 2009)

Malibu1 production of thin-film modules(40 MW/yr)

EC&R will continue to expand its solar activities to build a strong 2nd leg besidesour wind business


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18

Selective engagement in technologies besides wind & solar

B i o m e t h a n e

p o r t f o l i o German market leader for industrial scale Biomethane plants

Europes largest Biomethane plant Schwandorf (95 GWh, p.a.) Total portfolio of 400 GWh (p.a.) by end of 2009

UK s largest dedicated wood burning plant (Stevens Croft, 44 MW) Further projects (~450 MW) in development

B i o m a s s

p o r t f o l i o

M a r i n e

p o r t f o l i o

Extensive evaluation of technology readiness since 2005

Purchase of second generation Pelamis device (750 kW)

Commissioning of 1st application planned for 2010

Emerging Technologies


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Strategic Partnership with Bionersis

EC&R pre-finances agreed upon projects andreceives 25% of the generated CERs for free1st project: KPS landfill, Thailand, 190.000 CERs p.a.

Portfolio will reach 20 Mton CO 2e by end 2009

19

EC&R has a clear Carbon Sourcing strategy

RussiaMake with OGK4 in Russia

Southeast Asia/ChinaLocal office in KLMENA

Strong local partners

EC&R is positioned to be one of the leading market players worldwide

EC&R takes a global opportunisitic

approach on the Buy 2

side

Focus areas on the Make 1 side

1Make: EC&R as project developer and minority shareholder in offset projects 2 Buy:EC&R buys offset certificates from existing projects

EC&R Carbon Sourcing Current Footprint

Carbon Sourcing


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20

Market Unit EC&R Key Data

In million Q3/2008 Q3/2009 Change

Installed Capacity (MW) 1,792 2,652 +48%

Generation (GWh) 2,100 3,600 +71%

Revenues 270 315 +17%

Adjusted EBITDA 79 207 +162%

Adjusted EBIT 23 104 +352%

Operat. Cashflow -42 222 -

Investments 907 753 -17%

Employees 499 652 +31%


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21

The Renewables business Our core beliefs

E.ON Climate & Renewables Strategy & track record


Conclusion

Back-Up


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Offshore is more than onshore in the water

22

Onshore Offshore

Resources 2,000 full load hours per year Limited space available

4,000 full load hours per year Large space available

Dimensions Wind farms of 20 -50 MW Capex of 30 70 mn per wind farm

Wind farms of 100 1,000 MW Capex of 1 3 bn per wind farm

Environment Smooth conditions Unrestricted access at all times (24/7)

Rough marine conditions Limited access of 0% - 70%

Offshore wind energy requires substantially different technologies and processescompared to onshore wind energy


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23

EC&R a market leader in offshore wind energy

E.ON is the only player amongst the global Top-10Renewables companies with a strong position inoffshore wind energy

More than 1,000 MW of offshore wind farms inoperation and under construction in UK, Denmark and Germany

First deep water, far-shore wind farm Alpha Ventus 1in operation (60 MW, Germany)

Phase 1 of worlds largest offshore wind farmLondon Array2 (1,000 MW) under construction

Unique, diversified project pipeline of 3.1 GW

E.ON has so far invested about 1 bn into itsoffshore activitiesE.ON s experience from its various projects sumsup to a strong offshore wind expertise

1JV of EC&R (26.25%), EWE (47,5%) and Vattenfall Europe (26,25%)2 JV of EC&R (30%), DONG (50%) and Masdar (20%)


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24

Offshore plays a key role in EC&R strategy

25

30

35

40

0 5 10 15 20 25 30 35 40

Beta Baltic

Alpha Ventus3

DeltaNorth Sea

Amrumbank West

Arkona-Becken

Water depth [m]

Distance to shore [km]

In operation Under construction Under developmentIn operationIn operation Under constructionUnder construction Under developmentUnder development

Bubble size= 200 MW

20:20 Envelope

20

0

5

10

15

Blyth

Sands

Robin RiggRoedsand II

Nysted1

ScrobyHumber Gateway

Scarweather Sands

LondonArray2

Our strategy is based on a stepwiseapproach:

Develop offshore wind energy across arange of projects and locations

Build capability in least challengingconditions first

Continuous learning and improvementfrom real projects out in the sea

Develop improvements and solutionsacross the whole value chain

Translate all learnings into development of the next level of challenge

EC&R

s offshore wind energy portfolio

1Joint Venture (JV) of EC&R (20%) and DONG (80%),2 JV of EC&R (30%), DONG (50%) and Masdar (20%),3 JV of EC&R (26.25%), EWE (47,5%) and Vattenfall Europe (26,25%)

EC&R s strategy20:20 Envelope


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25

Nordic

UK

Germany

Past Today Future options

Nysted (DK)1160 MW

Alpha Ventus360 MW

Rdsand 2 (DK)210 MW Swedish Offshore

Scroby Sands, 60 MWBlyth, 4 MW

Robin Rigg180 MW

London Array2630 + 370 MW UK Offshore

German far-shore ProjectsCuxhaven5 MW (test)

A clear commitment to realize a range of options

1 Joint Venture (JV) of EC&R (20%) and DONG (80%),2 JV of EC&R (30%), DONG (50%) and Masdar (20%),3 JV of EC&R (26.25%), EWE (47,5%) and Vattenfall Europe (26,25%)

EC&R Offshore Road Map


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26




Conclusion

Back-Up


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27

EC&R has continued its strong delivery and will stay thecourse for industry leadership

The strong expansion of EC&R s activities is supported by major investments of 8 bn by 2011

A quarter of E.ON s generation investments 2010/2011 goes into renewable

energy

EC&R will further extend its renewable generation from 2.9 GW today to about10 GW in 2015

Portfolio discipline and operational excellence as key success factors

Renewables have become a core activity of the E.ON group


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28




Conclusion

Back-Up


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29

Assets in operation: Germany (Wind)

Potsdam1

3

4

5

7

6

131415

16

21

20

191718

2

Essen

Dsseldorf

Munich

8

12

1110

9

* E.ON Equity MW (Figures rounded). Source E.ON** Biomethane production is not included in the overall MW portfolio.

(Project/Location: Schwandorf; Net capacity: 95 GWh/a ; Status: in operation; Year: 2008)

Onshore windBiogasBiomethane** Office

Project(Location)

Net capacityMW*

Year

1 Brandenburg 50.8 20012 Mecklenburg

Vorpommem36.7 2001

3 Sachsen Anhalt 19.9 2002

4 Sachsen 23.6 2004

5 Kessin 0.4 2002

6 Schnerlinde 0.8 20027 Riethnordhausen 7.4 2007

8 Rheiner Windpark 2.5 2002

9 Dargeltz 22.0 2006

10 Helmstedt-Treue 8.0 2005

11 Treue-Ost 8.0 2007

12 Cuxhaven 2.5 2006

13 Alpha Ventus 16.0 2009

Total (MW) 198.6

13


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Assets in operation: Germany (Biogas)

* E.ON Equity MW (Figures rounded). Source E.ON** Biomethane production is not included in the overall MW portfolio.

(Project/Location: Schwandorf; Net capacity: 95 GWh/a ; Status: in operation; Year: 2008)

Onshore windBiogasBiomethane** Office

Project(Location)

Net capacityMW*

Year

13 Ducherow 0.9 200814 Malchin 3.7 2007

15 Roggenhagen 0.1 2005

16 Frstenwalde 0.5 1999

17 Hasenwinkel 0.4 2007

18 Ketzin 0.7 2007

19 Sauen 0.4 2007

20 Kaakstedt 0.8 2006

21 Sembten 1.6 2008

22 Havelberg 0.4 2009

Total (MW) 9.5

Potsdam1

3

4

5

7

6

131415

16

21

20

191718

2

Essen

Dsseldorf

Munich

8

12

1110

9

22


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32

Assets in operation: Iberia (Spain)

Madrid

10 11 6

9

71/2

8

5

3 4

Onshore windBiogasSmall hydroOffice

Project(Location)

Net capacityMW*

Year

1 Juneda (Lerida) 4.3 2001

2 VAG (Lerida) 6.0 2004

3 Giribaile (Jan) 20.0 2007

4 E2I project (Murcia) 5.3 1959

5 Ascoy 1.5 1998

6 Bodenaya 18.0 20057 Zaragossa 125.6

8 Carceln 11.4 2004

9 Pramo de Poza 15.0 2002

10 Pax 19.2 1997

11 Pico Gallo 24.4 2001

12 Mingorrubio 26.0 2009

13 Sierra de Tineo 44.0 2009

Total (MW) 320.7

12

13

* E.ON Equity MW (Figures rounded). Source E.ON


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Assets in operation: Iberia (Portugal)

Onshore windOffice

Lisbon

1

2

3

Project(Location)

Net capacityMW*

Year

1 Joguinho

(Torres Vedras)

11.7 2006

2 Alto Folgorosa 8.1 2008

3 Espinhao de Co 10.0 2008

Total (MW) 29.8



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Assets in operation: Italy

Rome

5

4

7

68/9

32

1

Milan

Onshore windOffice

Project(Location)

Net capacityMW*

Year

1 Florinas 20.0 2004

2 Vizzini 24.0 2006

3 Trapani 32.0 2007

4 Montecute 44.0 2006

5 Poggi Alti 20.0 2006

6 Marco A. Severino 44.0 2007

7 Iardino 14.0 2005

8 Serra Pelata 42.0 2007

9 Piano di Corda 38.0 2007

Total (MW) 278.0



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Austin

Chicago

3

62

1

45

78

36

Assets in operation: North America

Onshore windOffice

Project(Location)

Net capacityMW*

Year

1 Forest Creek (Texas)

124.2 2007

2 Sand Bluff (Texas) 90.0 2008

3 Munnsville(New York)

34.5 2007

4 Roscoe (Texas) 209.0 2008

5 Champion (Texas) 126.5 2008

6 Panther Creek (Texas)

458.0 2008

7 Inadale Ph 1/2(Texas)

197.0 2008/2009

8 Pyron (Texas) 249.0 2009

9 Papalote (Texas) 180.0 2009

10 Stony Creek (Pennsylvania)

52.5 2009

Total (MW) 1,720.7

9

10



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Assets in operation: Poland1 2

Szczecin

Onshore windOffice

Project(Location)

Net capacityMW*

Year

1 Lebcz 1 (Danzig) 5.9 2007

2 Lebcz 2 (Danzig) 7.4 2008

Total (MW) 13.3



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Assets in operation: UK (Part 1)

Onshore windOffshore windBiomassOffice

Project(Location)

Net capacityMW*

Year

1 Askam (Cumbria) 4.6 1999

2 Bessy Bell(Northern Ireland)

5.0 1995

3 Blood Hill (Norfolk) 2.3 1992

4 Bowbeat (Scotland) 31.2 2002

5 Deucheran Hill

(Kintyre Peninsular)

15.8 2001

6 Great Eppleton(Northumberland)

repower

7 Holmside(County Durham)

5.1 2004

8 High Volts(County Durham)

7.8 2004

9 Hare Hill(County Durham)

5.1 2004

10 Lowca (Cumbria) 4.6 2000

Total (MW) 81.5Coventry

20

21

18

5

2 1117

6

987

15

14

12

13 16

3

19

4

22

101



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39

Assets in operation: UK (Part 2)

Coventry

20

21

18

5

2 1117

6

987

15

14

12

13 16

3

19

4

22

101

Onshore windOffshore windBiomassOffice

Project(Location)

Net capacityMW*

Year

11 Oldside (Cumbria) 5.4 1996

12 Out Newton(Northumberland)

9.1 2002

13 Ovenden Moor (Yorkshire)

4.6 1993

14 Rheidol (Wales) 2.4 1997

15 Rhyd-y-Groes (Wales) 3.6 1992

16 Royd Moor (Yorkshire) 3.3 1993

17 Siddick (Cumbria) 4.2 1996

18 St. Breock (Cornwall) 5.0 1994

19 Stags Holt

(Cambridgeshire)

18.0 2007

20 Blyth (Northumberland) 4.0 2000

21 Scroby Sands(Great Yarmouth)

60.0 2004

22 Stevens Croft (Lockerbie) 44.0 2008

Total (MW) 163.6



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2009 11 27 ECR Overview of Business Activities 11 2009(1)

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