Rwe Ag · XETR:RWE
Rwe — Debt Investor Presentation (October 2012)
23 slides from Rwe's debt investor presentation, Oct 9, 2012
Slide 1: Perspectives for the energy system of the future
Perspectives for the energy system of the future Frank-Detlef Drake Head of Group Research & Development, RWE AG RWE Credit Day London, 9 October 2012
Slide 2: Energy for the future
Energy for the future Overview of Perspectives Implications for R&D at RWE for the energy markets and system of the market design future 1 2 3 RWE Credit Day I 9 October 2012 30 30
Slide 3: RWE currently ranked as "most innovative utility in Europe"
RWE currently ranked as “most innovative utility in Europe” Innovative R&D has been a tradition at RWE that we want to continue R&D budget: more than €100 million (excl. investments of suppliers and other co-operation partners into demonstration plants and R&D) R&D along the entire value chain with
Slide 4: RWE R&D projects cover the entire value chain
EXAMPLES RWE R&D projects cover the entire value chain Upstream Power generation Transport/storage Application Gas/oil Coal-based Electricity grids Residential households > Reservoir characterisation > CCS/CCU* > Smart grids > Smart metering > Sedimentation and > Lignite drying > High Voltage DC > S
Slide 5: Energy for the future
Energy for the future Overview of Perspectives Implications for R&D at RWE for the energy markets and system of the market design future 1 2 3 RWE Credit Day I 9 October 2012 33 33
Slide 6: Two tons of CO2 per capita per year are quickly used up
Two tons of CO2 per capita per year are quickly used up with today's energy supply Annual CO2 emissions Heating of a single- of a medium-sized family home with passenger four people car Auto- mobiles Heat or Return flight Production Frankfurt – Air travel Products of goods worth Los Angeles approx.
Slide 7: A common view on how CO2-targets can be met is emerging
A common view on how CO2-targets can be met in a cost-efficient way is emerging Generation Infrastructure Demand 1 High efficiency 2 More electricity 3 Low-CO2 electricity mix Key guidelines for the design of the energy world of tomorrow RWE Credit Day I 9 October 2012 35
Slide 8: Two theoretical paths towards a low-CO2 electricity system by 2050
Two theoretical paths towards a low-CO2 electricity system to be achieved by 2050 Main elements Indicated preference > Quick and massive expansion 1 “Short bridge” of renewables > No construction of conventional or nuclear power plants > Massive development of grid infrastructure and, if necessary,
Slide 9: Germany pursues the short bridge
Germany pursues the short bridge assuming a reduction of domestic power generation by 45% German energy concept for electricity (“short bridge”) 17% Demand reduction 25% -45% Import 20% 58% Renewables 45%* 25% Nuclear Conventional Generation 10% 2010 2020 2010 2020 2050 Source: EWI/Prognos/GWS study
Slide 10: The "short bridge" builds on expected further cost reduction of RES
The “short bridge” builds on the expected further cost reduction of RES Levelized costs of electricity for Renewables in Europe [€2011/MWhel] 240 200 CSP Europe Large PV North Europe 160 120 Biomass (average) 80 Offshore Wind (3,200h) Onshore Wind (2,000h) 40 Large PV South Europe 0 2010 2020 2010 2
Slide 11: Coping with increasing shares of volatile Renewables
For both “bridges” we need to cope with increasing shares of volatile Renewables 230 V 50 Hz Power generation Power consumption Potential solutions/measures 1 Flexible power generation Grid expansion 2 Energy storage 4 3 “Smart” Technologies Combination of 1 and 2 is most cost-effective, 3 and 4 as
Slide 12: Flexible generation and grid expansion most cost-effective
Combination of flexible generation and grid expansion is the most cost-effective way Times of surplus energy Times w/o sun and wind > 10 GW Demand in GW 5 – 10 GW 1 – 5 GW < 1 GW With Supergrid EU 150 W/o Supergrid 400 Capacity today 400 Requirement Doubling of grid capacity until 2030 needed Advant
Slide 13: Hydrogen based long-term storage is far too expensive
For long-term storage, hydrogen based solutions are an option, but far too expensive “Wind-methane” concept η≈65% CO2 η≈90% η≈60% + - G el. H2 CH4 CH4 el. Volatile Methane generation Electrolysis production Gas grid CCGT €/MWh: 80 – 200 300 – 500 400 – 700 420 – 750 800 – 1,500 Considering System ef
Slide 14: A pan-European approach has significant cost advantages
A pan-European approach has significant cost advantages Average Levelized Cost of Electricity per scenario, 2050 [€/MWh, real terms] Storage facilities 235 Distribution grid 38 Ultra high voltage grid 180 Generation 22 45 133 10 115 39 97 36 10 33 12 30 10 8 +19% +37% +86% +142% 142 85 109 59 72 Bas
Slide 15: RWE is shaping the future of energy (1/2)
RWE is shaping the future of energy (1/2) RWE activity „Lange“ Brücke Clear commitment to achieving carbon-neutral electricity generation by 2050 Continuous expansion of renewables Founding member of Desertec Industrial Initiative (DII) () New-built and operation of modern, highly efficie
Slide 16: RWE is shaping the future of energy (2/2)
RWE is shaping the future of energy (2/2) RWE activity Leading expertise in grid planning and operation at all voltage levels Development/testing of smart grid concepts Leading role in driving forward electric mobility Foundation of RWE Effizienz GmbH to commercialise efficiency Syst
Slide 17: Energy for the future
Energy for the future Overview of Perspectives Implications for R&D at RWE for the energy markets and system of the market design future 1 2 3 RWE Credit Day I 9 October 2012 45 45
Slide 18: Forecast is difficult, but RES on the rise
Forecast is difficult, but RES on the rise and conv. power plants with reduced full load hours Influencing factors % of load today Load Load 100 > Success of energy efficiency > Degree of electrification Residual load (conventional) > Volatile > Shrinking RES share 50 > Persistence of subsidies/ince
Slide 19: Subsidized RES depresses CO2-price and distorts wholesale markets
Supply of subsidized RES depresses CO2-price and distorts wholesale markets RES impact on EU-ETS CO2-price [EUA, €/t CO2] Fixed mitigation target Mitigation costs 30 [€/t CO2eq] Thus, CO2-price is and remains Without depressed subsidised Mitigated emissions RES [t CO2eq/a] 20 Mitigation costs [€/t C
Slide 20: Regulators all over Europe discuss capacity markets
Regulators all over Europe discuss capacity markets as a “cure” Capacity payments basically Mothball market in order to agreed on, but no decision on secure supply in years with Not selection of mothball market low hydro availability. exhaustive or fully fledged capacity market. Capacity obligations
Slide 21: A new European market design is needed
A new European market design is needed A single Euro- E.g. a European A restrengthe- An efficient pean electricity hybrid quota ning of the EU- mechanism to market needs system with ETS to achieve ensure system a harmonized suppliers’ obliga- cost-efficient stability (e.g. single European tion for R
Slide 22: Who will fund the transformation?
And finally: Who will fund the transformation? EU energy invest and sources of finance [€ bn/a, real 2010] > Energy world of the future offers manifold investment opportunities Institutional Investors Private Investors 78 > However, ambitious political targets Public Utilities/EU Funds can only be m
Slide 23: RWE Credit Day
RWE Credit Day London, 9 October 2012