Operating result RWE npower

RWE npower’s operating result declined by 61 % to € 147 million. Net of currency effects, the decrease amounted to 56 %. Our electricity generation activities recorded a substantial drop because power plant margins achievable in the UK market were lower than last year. A year ago, owing to the outages of competitors power stations, the division had made an unusually high contribution to earnings through the short-term position management of its generation capacity. Expenses incurred to purchase CO2 emission allowances in the period under review amounted to € 24 million (first nine months of 2008: € 156 million). In the UK supply business, earnings deteriorated considerably. As explained earlier, due to competitive pressure, we lowered electricity tariffs at the end of March 2009, although our electricity procurement costs had risen. Measures to promote energy savings in households also led to additional expenses. UK energy companies are obliged to do so within the scope of government programmes. RWE npower has initiated comprehensive cost-cutting measures over the course of the year, which are expected to have a positive impact on the operating result in the order of € 120 million. For the most part, this relief will not be felt until the fourth quarter.