Outlook RWE npower

RWE npower’s operating result is expected to be significantly down year on year. As mentioned earlier, margins in the generation business have deteriorated considerably. This also applies to the short-term position management of our power plants, which made an unusually high earnings contribution in 2008. Costs arising from the shortage of CO2 certificates are anticipated to be lower than last year. RWE npower will probably have to purchase less than 10 % of the CO2 certificates it requires on the market. The market environment for our electricity and gas supply businesses remains very difficult. Fierce competition harbours substantial risks. As mentioned earlier, RWE npower cut electricity prices in the residential customer segment as of March 31, 2009, despite the rise in procurement costs. This will lead to a considerable drop in earnings. In addition, government programmes that oblige UK utilities to promote energy savings for homes and provide assistance to low-income customers will probably result in further burdens. The additional expense compared with 2008 could total up to € 100 million. RWE npower is working on extensive cost-cutting measures which should have a positive effect of € 120 million on 2009 earnings. The beneficial impact is expected to be felt largely in the fourth quarter.