We welcome the fact that since 2012, security of supply and value for money have been accorded a similar status within the debate in the public domain as climate protection. It has become obvious that climate protection cannot be viewed in isolation from the two other aspects that make up the triangle of energy policy – security of supply and value for money.

Since the 1990s, we have been continuously renewing our power station portfolio with modern, highly efficient power stations and this has also enabled us to reduce the specific CO₂ emissions in our conventional portfolio. Since 2008, we have also been driving forward our investments in renewable energies with RWE Innogy.

We are therefore pursuing the target of reducing our specific CO₂ emissions from the current level of 0.79 metric t/MWh to 0.62 metric t/MWh in 2020. The financial risks of our CO₂ emissions are reflected in our risk management. The hard-coal and gas-fired power-stations currently under construction are expected to be completed in 2014. During the years 2010 to 2014, we will therefore be bringing on stream advanced plants with a total capacity of some 12,500 MW. Overall, we are therefore investing around €12 billion in renewal of our power station portfolio and we are replacing some 25 % of our generating capacity.
In order to continue our programme of power station renewal, we are currently working towards obtaining approval for the 1,100 MW project ‘Optimised Unit Plus’ (BoAplus) of the power station in the Rhineland lignite mining area and for a Combined-Cycle Gas Turbine (CCGT) plant at the Gersteinwerk power station in Werne with a capacity of 1,300 MW. Both processes should open up new-build options for the future. We are also investing in the further expansion of renewable energies over the long term.

The field of tension between climate protection, security of supply and value for money defined the public debate in 2012 – this was evident in the talks and discussions with our stakeholders. Above all, environmental organisations and large sections of the political system expect us to pursue ambitious targets for reduction of our greenhouse gas emissions. Some of our stakeholders are also concerned that current challenges like rising prices or security of supply could reduce the importance of climate protection. Conversely, retail customers often harbour considerable concerns about the development of electricity prices. Contrary to the situation in previous years, the consequences of an increase in the price of electricity for low-income households are emerging as the focus of debate. The increase in electricity prices is driven by a number of factors including the levy for promotion of renewable energies, in particular photovoltaics, imposed on retail consumers, and the expansion of transmission grids. Apart from value for money, industrial customers are even more emphatic in calling for grid stability and security of supply. Even short power outages can cause significant loss and damage in industry under certain circumstances. RWE is engaging fully with this multifaceted debate. Our concern in this discussion is to highlight the fact that we are striving to create a well-balanced overall solution which takes account of all the different aspects.

The first phase of the pioneering international Kyoto Protocol on climate protection expired at the end of 2012. A second commitment period of the Kyoto Protocol (Kyoto II) was agreed at the international conference in Doha at the end of 2012. However, the countries involved in this process only represent some 10% of global greenhouse gas emissions. Binding worldwide regulations on climate protection should also be negotiated by 2015 and will apply from 2020.

The EU Emission Trading System has become established in the European Union as a tool for climate protection. It allows the European reduction targets defined at the political level to be achieved with minimum costs in macroeconomic terms. Prices for emission certificates are currently at a low level – compared with our original expectations. This is being criticised by a number of representatives from the political and corporate spheres, and a large number of non-government organisations. They are demanding a reduction in the emissions certificates available in order to create stronger incentives for investments in low-carbon technologies.

Despite the unexpectedly low prices for emissions certificates, the upper thresholds in reduction targets in the emissions trading sector defined by the European Union are being achieved. The economic crisis and the expansion of renewable energies have both contributed to achieving this. As a result of comprehensive efforts directed towards climate protection and due to the weak economic development, CO₂ emissions in the European Union which are not covered by emissions trading have undergone more significant decline than expected.

At European level, the framework conditions for the future structure of emissions trading continue to remain unclear. However, as a result of the relatively low prices for CO₂ emission rights, interventions in the market are not excluded.

The German Renewable Energies Act (Erneuerbare-Energien-Gesetz, EEG) has been widely praised by environmental organisations in particular for its effect in acting as a role model for other countries. However, it is increasingly being criticised by stakeholders from the political and business arenas, as well as by consumer associations due to its effects on the price of electricity. The promotion of photovoltaic generation with feed-in priority and remuneration fostered by statutory regulations has led to a surprisingly robust expansion and has therefore resulted in rising levies under the legislation that have been passed onto consumers. The federal government is currently also planning a further amendment to the promotional instruments. In view of the elections to the German parliament (Bundestag) due for 2013, it is very difficult to assess how the promotional instruments for expanding renewable energies will be structured in the future.

The government debt crisis and the weak economy in many EU countries mean that the systems for financial subsidy of renewable energies are also being placed under increasing scrutiny and some adjustments are being made – not infrequently with a trend towards reducing the level of subsidies for the relevant technologies. There is no harmonised European system of subsidies, rather the promotion of renewable energies is organised by individual countries. Particularly in the southern countries like Spain, Portugal and Italy, where the debt crisis has exerted major impacts, it is much more difficult to predict the development of energy markets. As a company operating in these target markets we are very carefully monitoring developments at the individual national level and at the European level so that we are equipped to meet the challenges of the future.

We took significant strides in our power-station renewal programme during the course of 2012. Three new combined-cycle gas turbine (CCGT) power stations came on stream simultaneously at Pembroke (United Kingdom), Claus C and Moerdijk 2 (both in the Netherlands) with a total of more than 3,900 MW of power output. During the second half of 2012, we also started up operations in Germany at the lignite-fired power station with optimised plant technology ‘Optimised Unit’ (BoA 2&3) generating 2,100 MW and in exchange shut down a total of 16 existing lignite-fired power-station units with significantly higher CO₂ emissions by the end of 2012. In the area of renewable energies, we brought on stream a total of around 390 MW of new renewables in 2012. This new capacity was divided into 252 MW generated by offshore wind, 130 MW by onshore wind, 8 MW by biomass power stations and 4 MW by hydropower plants. The proportion of renewable energies in the total generating capacity amounted to 8.0 % at the end of 2012 while the proportion of electricity generation was 5.5 %. Our specific emission factor amounted to 0.79 metric t of CO₂ / MWh and is therefore at the level of the previous year.