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With the exception of raw materials sourcing, our Group Purchasing Department at RWE Service coordinates the procurement of goods and services. We have uniform processes and a comprehensive supplier management system and apply best practise principles. In 2002, we launched a savings programme aiming to improve the conditions we receive from our suppliers over the long term. We have already reduced our procurement costs substantially. This was achieved in part through groupwide pool purchasing, the improvement of procurement processes, the use of electronic invitations to tender and auctions as well as advanced training programmes for our purchasing staff.
Raw materials purchasing is handled by RWE Power, RWE Dea and RWE Supply & Trading. In 2008, the amount of hard coal procured to generate electricity totalled 19.0 million metric tons of hard coal units (HCU) (previous year: 23.3 million metric tons). This includes coal for power plants not owned by RWE that we can deploy at our discretion on the basis of long-term agreements. In the financial year that just came to a close, RWE Power sourced 13.9 million metric tons of HCU (previous year: 18.1 million metric tons), and RWE npower purchased 5.1 million metric tons (previous year: 5.2 million metric tons). The considerable decline in Germany is due to the reduced utilization of our hard coal power stations (see chapter electricity generation). Purchases in the UK were also down, despite the fact that RWE npower produced more electricity from hard coal; there, we reduced inventories. We cover over 60 % of coal demand from our own German hard coal-fired power plants from domestic production sources. Russia is RWE npower’s major supplier country. Over 80 % of the hard coal used in our UK power plants is imported from there.
RWE sources lignite from proprietary opencast mines. In the Rhineland, our main mining region, we produced 96 million metric tons of lignite in 2008 (previous year: 100 million metric tons). Our power plants used 85 million metric tons to generate electricity, and we used 11 million metric tons to manufacture refined products. Our gas purchasing is pooled in RWE Supply & Trading. Production companies in Russia, Norway and the Netherlands are among the RWE Group’s major gas suppliers.
