The IPO of American Water nearly completed our shift in focus to energy–our core business–in the year under review. Fiscal 2008 was characterized by the implementation of our growth strategy. We passed major milestones en route to expanding and modernizing our power plants. We also made rapid progress in the expansion of our renewable electricity generation base. We initiated our biggest growth step at the beginning of 2009: By making a takeover offer for Dutch-based energy utility Essent, we aim to achieve a leading position in the Benelux market.
2008 in brief
FEBRUARY
Renewable energy subsidiary established
The new RWE Innogy starts operations on February 1, 2008. Our activities in the field of renewable energies are pooled in this company. We aim to more than triple RWE Innogy’s generation base to 4.5 gigawatts by 2012. Wind power is the focal point.
FEBRUARY
RWE becomes partner in Nabucco consortium
We are the sixth contractual partner to join the international consortium for the planning and construction of the Nabucco gas pipeline, one of Europe’s most important infrastructure projects for securing gas supplies. The first section of the pipeline is scheduled to be commissioned in 2014.
MARCH
Construction of a hard coal power plant in Hamm underway
With a combined installed capacity of 1,530 megawatts, the two units are scheduled to go online in 2011. Thanks to their 46 % efficiency, they meet the highest technical standards. We estimate that capex will total €2.1 billion. Twenty-three municipal utilities from four German states are partners in the new power plant. They will have access to a total of 350 megawatts.
APRIL
First tranche of American Water shares placed on the New York Stock Exchange
As part of the IPO, we sell a 39.5 % stake in the US water utility, which does not belong to our core business. Proceeds from the sale amount to about US$1.3 billion. Due to the unexpected intensification of the financial crisis we did not implement our plan to divest the majority of the shares in the company by the end of 2008. But we still want to sell our investment in American Water in full.
APRIL
RWE Supply & Trading kicks off
We combine RWE Trading andRWE Gas Midstream in this new division. Gas purchasing and energy trading are now a one-stop shop.
MAY
RWE declares commitment to sell its German gas transmission grid
We agree with the EU on a solution to the antitrust proceedings against RWE Transportnetz Gas GmbH underway since April 2007. We remain convinced that we did not infringe competition law. We agree to settle to avoid protracted litigation.
MAY
Share buyback programme completed
We purchase 31.7 million RWE common shares on the stock exchange from February to May. This corresponds to a share of 5.6 % of the company’s subscribed capital and 6.1 % of RWE AG’s voting rights. €2.5 billion are spent on the share buyback programme.
MAY
Expansion of renewable energy activities
RWE Innogy and Fri-El Green Power establish a joint venture to develop wind power and biomass plants in Italy. The company acquires Spanish-based wind power operator Urvasco Energía soon thereafter.
MAY
Entry into LNG market
RWE Supply & Trading acquires a 50 % stake in Excelerate Energy. Excelerate specializes in the transportation of liquefied natural gas (LNG). The US-based company operates LNG tankers which can regasify liquefied natural gas on board. Furthermore, Excelerate owns special import facilities in the UK and the USA.
AUGUST
Site for climate-friendly coal power plant chosen
The plant will have a gross installed capacity of 450 megawatts, will be built in Hürth near Cologne (Germany) and will be fuelled by lignite. Thanks to a special technique, we can capture about 90 % of the carbon dioxide generated by the power station and store it in geological rock formations to protect the environment. We are investigating potential storage locations in Schleswig-Holstein.
SEPTEMBER
RWE chosen as strategic investor for nuclear power plant in Bulgaria
The Bulgarian national electricity company NEK intends to build and operate two nuclear power plant units, each with an installed capacity of 1,000 megawatts, at the Belene site in cooperation with RWE. We intend to share our 49 % stake with a partner. But we will only invest in the project if the highest safety and transparency standards are complied with.
NOVEMBER
Participation in UK offshore wind farm project
RWE Innogy acquires a 50 % interest in the construction and operation of the Greater Gabbard UK offshore wind farm. Scottish and Southern Energy is its partner in the project. On completion in 2011, the wind farm will have a total installed capacity of 509 megawatts.
NOVEMBER
Successful return to the bond market
RWE issues bonds again for the first time since 2004: In a difficult market environment, we place two eurobonds totalling €2 billion at favourable conditions. They have terms of five and ten years. The high demand shows that we are considered a solidly financed company.
DECEMBER
Entry into German offshore wind business
Our first large-scale wind power project in Germany is now taking shape: We acquire the rights to build about 960 megawatts in generation capacity off the coast of Germany. The wind farm, “Innogy Nordsee 1,” will be built on an area of 150 square kilometres north of the Island of Juist and is scheduled for completion by 2015. The project’s capex budget totals €2.8 billion.