E.on Se · XETR:EOAN
E.on — Investor Day (September 2008)
52 slides from E.on's investor day presentation, Sep 1, 2008
Slide 1: Market Unit Climate & Renewables - From Boutique to Industrial
Market Unit Climate & Renewables - From Boutique to Industrial Frank Mastiaux CEO E.ON Climate & Renewables Capital Market Day ‘Climate & Renewables, and New Markets‘ Madrid, September 1st, 2008
Slide 2: The renewables business – our core beliefs
The renewables business – our core beliefs E.ON Climate & Renewables – our strategic principles and aspiration - Where we play - How we compete - How we are organized Summary 2
Slide 3: Renewables: 'all signs on green' for sustainable material growth of the sector
Renewables: ‘all signs on green’ for sustainable material growth of the sector In 2007, 25% of global energy capacity added was renewables y From rising awareness to By 2020, global renewables global consensus installed capacity will have quadrupled Climate concerns Renewables y $100 a barrel: y A c
Slide 4: Horses for courses: need to understand technology evolution for optimum portfolio management
Horses for courses: need to understand technology evolution for optimum portfolio management Global generation capacity (GW) Examples Wind Solar Marine energy 2007 242 GW ∑ 4,100 GW 2008 2020 2008 2020 2008 2020 Global capacity 93 600 8.5 157 0.3 1.2 [GW] +60% Long-term feasible x~4 potential worldw
Slide 5: This growth is shifting shape and size of the renewables industry
This growth is shifting shape and size of the renewables industry Utilities now set the pace Consolidation drives Larger and more intense M&A activities sophisticated projects Europe Top 10 – 90% of utilities purchased at Average wind farm size: Installed wind capacity 2007 [MW] least one renewables
Slide 6: Still a lot of headroom in industrializing the renewables value chain
Still a lot of headroom in industrializing the renewables value chain Origination, development Construction Operations & & procurement maintenance e.g. e.g. e. g. Contractual risk allocation Process integration Monitoring y Suppliers provide full y Suppliers meet all grid y Full monitoring and contr
Slide 7: The tight supply conditions for wind turbines will not prevail – demand forecasts less clear
The tight supply conditions for wind turbines will not prevail – demand forecasts less clear Deep analysis of the market and continuous Market Consensus EC&R View dialogue with key suppliers… 40 to 43 GW y Extensive workshops 35 to 38 GW y Established ? partnerships y Due diligence … led to the foll
Slide 8: E.ON is well positioned to succeed in the renewables market…
E.ON is well positioned to succeed in the renewables market… Our market beliefs What is needed to succeed E.ON positioning Sustainable and Capacity and capability y E.ON is in top position in a dozen countries material growth for large-scale projects, political engagement, y Strong financial capacit
Slide 9: ...and has set up E.ON Climate & Renewables (EC&R) to achieve its ambitious targets
...and has set up E.ON Climate & Renewables (EC&R) to achieve its ambitious targets EC&R remit E.ON’s generation Renewables capacity Setting strategy, portfolio and portfolio (GW)1 the investment plan for ~ 90 GW renewables 50% Managing all existing and 61 GW ~ 40% future renewables operations 35% C
Slide 10: The renewables business – our core beliefs
The renewables business – our core beliefs E.ON Climate & Renewables – our strategic principles and aspiration - Where we play - How we compete - How we are organized Summary 10
Slide 11: Pace and delivery: capacity grew four-fold in less than 15 months
Pace and delivery: whilst setting up the unit, we grew capacity four-fold in less than 15 months 1,600 EC&R installed capacity 1,400 (MW) Portugal Alto de 1,200 US Roscoe and France & Folgorosa Champion wind Italy and SEE farms Endesa asset wind farms 1,000 integration US Sand Germany US Panther Blu
Slide 12: Strategic principles and aspiration
Strategic principles and aspiration E.ON Climate & Renewables Shaping the next phase of the industry as a leading global player 1. Where we play 2. How we compete 3. How we are organized • In principle a global • Superior value chain • Flexible and agile footprint management organization • Highly se
Slide 13: Focus on the most attractive markets: current footprint
Focus on the most attractive markets: current footprint 1 Installed renewables capacity as of September 2008 (MW) 245 29 731 Nordic Other Rene- 116 wables UK 280 1,658 1,774 Wind 233 US Iberia 217 Italy Large hydro 6,019 EC&R with a very balanced portfolio in 2008 Germany EC&R portfolio (%) E&Y Inde
Slide 14: Focus on the most attractive markets: project pipeline
Focus on the most attractive markets: project pipeline 1 2,460 13,600 6,000 960 Development Probability of success 20% • No absolute showstoppers are known • Reasonable chance that key steps 1,000 UK 5,645 concerning permits and grid connection Nordic will be successfully taken Iberia Probability of
Slide 15: Portfolio management: focus on promising technologies
Portfolio management: focus on promising technologies 1 Technology First commercial Proof-of-concept & roll out plants technology tracking EC&R technology selection criteria y Scalability y Growth potential y Financial attractiveness Wind on- y Wider E.ON Group interest shore y Closeness to E.ON cap
Slide 16: Portfolio management: focus on the most attractive markets
Portfolio management: focus on the most attractive markets 1 Constant monitoring of the most attractive market/technology combinations Emerging y Technology/ technologies EC&R portfolio criteria country y Ensure value creation combinations Wind onshore/offshore y Be robust to market changes ~ 90% 20
Slide 17: A view on the offshore wind business: mastering high waters
A view on the offshore wind business: mastering high waters 1 Current offshore portfolio Challenges Opportunities Water depth [m] y Soil conditions/ y Load factors 40 foundations (up to 50%) Alpha Ventus 35 y O&M access y Nearly constant 30 Arkona- Delta y Availability of energy production Becken No
Slide 18: Cutting edge technology in solar - early engagement in marine energy
Cutting edge technology in solar - 1 early engagement in marine energy Solar portfolio Solar Wave and tidal portfolio • Thin film JV with Schüco (Malibu), • Active in Marine Energy €100m investment since 2005 • New R&D center and production Lunar Tidal Turbines • Ventures with Lunar site with an ini
Slide 19: Selective engagement in biomass and biogas/-methane
Selective engagement in biomass and biogas/-methane 1 Biomass portfolio Biogas/-methane portfolio • Operating UK's • 10 years experience in pace- largest dedicated setting biomethane R&D wood burning power • A dozen biogas/biomethane station (Steven's plants across EU Croft – 44 MWel) • World's larg
Slide 20: JI/CDM: dedicated unit to capture carbon market potential
JI/CDM: dedicated unit to capture carbon market potential 1 Our market beliefs What is needed to succeed Our activity set y Government relationships y Carbon regulation will grow more pervasively y Established regional Origination presence y Offset mechanisms will remain important until y Business d
Slide 21: JI activities will concentrate on Russia and Ukraine – CDM initiated in China, South Africa and Southeast Asia
JI activities will concentrate on Russia and Ukraine – 1 CDM initiated in China, South Africa and Southeast Asia Target countries for JI/CDM business and examples of projects in 2008 China biomass plant 400 ktCO2/year SE Asia Waste-to-energy South Africa projects gas-fired CHP 230 ktCO2/year South A
Slide 22: Value chain management: procurement and O&M are the most significant value levers
Value chain management: procurement and operations and 2 maintenance (O&M) are the most significant value levers Development cost 10% Equipment capex Procurement (incl. construction) 65% and O&M Land lease take 5% about 85% O&M 20% of the total lifecycle cost Total lifecycle cost 100% Focus on procu
Slide 23: 'From Boutique to Industrial': move procurement to new levels
‘From Boutique to Industrial’: 2 move procurement to new levels Past Today EC&R way forward Transaction approach Framework approach Collaborative approach Procurement on a project by Long-term agreements on several Long-term agreement with commitment project basis projects to joint value chain impro
Slide 24: 'From Boutique to Industrial': step change in O&M
‘From Boutique to Industrial’: step change in O&M 2 SCADA1 Scale of projects and 2011 target harmonized WTG2 use availability Optimized spare part 98% Spare part pooling concept CMS3 and predictive Widen O&M contracts maintenance Access to critical 2011 target Optimized share of 3rd equipment and to
Slide 25: Our organization is set up to drive functional excellence whilst preserving local presence
Our organization is set up to drive functional excellence 3 whilst preserving local presence and flexibility Ways of working Business Unit North America Business Units in Europe Business Units New Markets • Single point of HQ Nordic Chicago Toronto Düsseldorf Malmö y New Technologies and accountabil
Slide 26: We see more growth potential on top of our current business plan
We see more growth potential on top of our current business plan Current business plan Growth potential • At least €6 bn committed for EC&R performance investments in 2007-2010 Renewables contract capacity (GW) focused on wind onshore • Solid top 5 position • Focal countries - US (50%) • Scale effec
Slide 27: Summary
Summary • Performance with purpose Managing the fundamental energy challenges with a strong commercial drive • Pace and consistency Expanding our current footprint significantly over the coming years, selectively in technologies and markets at a global scale • Boutique to industrial Uniquely positio
Slide 28: Our vision: 'E.ON - the world's leading power and gas company'
Our vision: ‘E.ON - the world´s leading power and gas company’
Slide 29: Backup
— Mth $253 a DE BASILE Vy,
Slide 30: Onshore wind parks in Germany
Onshore wind parks in Germany 5 Onshore Net capacity Commissioning Project location Project status wind (MW1) year 9 2 12 1 Brandenburg In operation 50 2001 2 Mecklenburg In operation 37 2001 Potsdam Vorpommern 1 6 8 10 3 Sachsen Anhalt In operation 20 2002 11 3 4 Sachsen In operation 24 2004 Essen
Slide 31: Biomass, biogas and biomethane plants in Germany
Biomass, biogas and biomethane plants in Germany Net capacity Commissioning Biomass Project location Project status 5 (MW1) year 4 1 Landsbergen In operation 10 2003 10 2 Zolling In operation 15 2003 7 Potsdam 9 1 8 6 Biomethane 3 Schwandorf In operation 3 2008 Essen Biogas Düsseldorf 4 Malchin In o
Slide 32: Onshore wind parks in Poland
Onshore wind parks in Poland Onshore Net capacity Commissioning Project location Project status wind (MW1) year 1 Danzig (WP Lebcz 1) In operation 7 2007 2 Danzig (WP Lebcz 2) In operation 7 2008 Total (MW) 14 2 1 Szczecin Operating sites Offices 1. E.ON Equity MW 32
Slide 33: Onshore wind parks in Spain
Onshore wind parks in Spain 12 10 11 13 1-9 Madrid 14 Onshore Net capacity Commissioning Project location Project status 15 wind (MW1) year 1-9 Zaragoza In operation 125 1998-2006 10 Asturias (Pico Gallo) In operation 24 2003 11 Asturias (Bodenaya) In operation 18 2005 12 La Coruna (Pax) In operatio
Slide 34: Biomass and small hydro sites in Spain
Biomass and small hydro sites in Spain 1 2 Madrid Net capacity Commissioning Biomass Project location Project status 4 (MW1) year 3 1 Lerida (Juneda) In operation 4 2001 2 Lerida (VAG) In operation 6 2004 Small hydro 3 Jaén (Giribaile) In operation 20 2006 4 Murcia (E2I project) In operation 5 1959-
Slide 35: Onshore wind parks in Portugal
Onshore wind parks in Portugal 3 Onshore Net capacity Commissioning 1 Project location Project status wind (MW1) year 2 1 Torres Vedras (Joguinho) In operation 12 2006 2 Espinhaço de Cao (SEE) In operation 10 2008 3 Alto Folgorosa In operation 9 2008 Lisbon Total (MW) 31 Operating sites Offices 1. E
Slide 36: Onshore and offshore wind parks in Nordic countries
Onshore and offshore wind parks in Nordic countries Onshore Net capacity Commissioning Project location Project status wind (MW1) year 1 Southern Sweden In operation 9 1992 2 Skane (Axeltofta) In operation 3 2008 Offshore wind 3 Gedser (Nysted 1) In operation 17 2003 Total (MW) 29 1 2 Malmö 3 Operat
Slide 37: Onshore wind parks in US
Onshore wind parks in US Toronto Chicago 3 Onshore Net capacity Commissioning Project location Project status wind (MW1) year 1-2 1 Texas (Forest Creek) In operation 125 2007 4 5 6 2 Texas (Sand Bluff) In operation 90 2007 Austin 3 New York (Munnsville) In operation 34 2007 4 Texas (Roscoe) In opera
Slide 38: Onshore wind parks in UK
Onshore wind parks in UK Onshore Project Net capacity Commis- Project location wind status (MW1) sioning year 1 Cumbria (Askam) In operation 5 1999 2 N. Ireland (Bessy Bell) In operation 5 1995 3 Norfolk (Blood Hill) In operation 2 1992 4 Midlothian (Scotland) In operation 31 2002 5 Kintyre Peninsul
Slide 39: Offshore wind parks and biomass plants in UK
Offshore wind parks and biomass plants in UK Net capacity Commissioning Biomass Project location Project status (MW1) year 1 Lockerbie In operation 44 2008 (Steven’s Croft) Offshore wind 1 2 North Sea (Blyth) In operation 4 2000 2 3 Scroby Sands In operation 60 2004 Total (MW) 108 3 Coventry Operati
Slide 40: Onshore wind parks in Italy
Onshore wind parks in Italy Onshore Net capacity Commissioning Project location Project status wind (MW1) year 1 Florinas In operation 20 2004 2 Vizzini In operation 24 - 3 Trapani In operation 32 2007 4 Montecute In operation 44 - 5 Poggi Alti In operation 20 2007 5 6 Ma Severino I e II In operatio
Slide 41: Onshore wind parks in France
Onshore wind parks in France Onshore Net capacity Commissioning Project location Project status 1 wind (MW1) year 1 Lehaucourt In operation 6.5 2007 Paris 2 Ambon In operation 6.5 2008 3 Cernon In operation 12 2008 2 Total (MW) 25 3 Operating sites Offices 1. E.ON Equity MW 41
Slide 42: A snapshot of the renewables landscape: Some similarities, many differences
A snapshot of the renewables landscape: Some similarities, many differences Solar (PV/ Marine Biogas/ Geo- Wind Thermal) energy -methane Biomass thermal 2007 2020 2007 2020 2007 2020 2007 2020 2007 2020 2007 2020 Global capacity [GW] 93 600 8.5 157 0.3 1.2 5.2 24 48 85 9.6 18 Solar PV Solar Thermal
Slide 43: 5 manufacturers carry large share in EC&R wind turbine portfolio
5 manufacturers carry large share in EC&R wind turbine portfolio Installed today Under construction 2008 Number of turbines (1544) Number of turbines (609) 16% 9% 84% 91% Gamesa, Siemens, Vestas, Mitsubushi, GE Others 43
Slide 44: Turbine sizes share in EC&R portfolio
Turbine sizes share in EC&R portfolio Installed today Under construction 2008 Number of turbines (in total 1544) Number of turbines (in total 609) 13% 12% 15% 32% 7% 65% 56% Type < 1.0 MW; 1001 Type < 1.0 MW; 197 Type 1.0-1.5 MW; 102 Type 1.0-1.5 MW; 338 Type 1.5-2.0 MW; 233 Type 1.5-2.0 MW; 74 Type
Slide 45: Regional distribution of current asset base in different regulatory regimes
Regional distribution of current asset base in different regulatory regimes Support Scheme EC&R Capacity (MW) 15% Feed-in tariffs 271 Green certificates 502 Premium 269 42% 15% Tax credits 732 Total 1774 Tax Credits Feed-in Tariffs 28% Green Certificates Premium 45
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Slide 52: This presentation may contain forward-looking statements based on current assumptions and forecasts made by
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual