Overview of the most important facts:

Customer Loyalty Index fallen by 1 point to

72

Rising prices caused by taxes and charges in the consumer markets

Green electricity for electric cars in the United Kingdom

Award for good product and customer services in Hungary

Special tariffs for people with disabilities in the Czech Republic

Pricing and Marketplace

RWE sells electricity and gas in several European countries. Each of these countries has its own market conditions. The marketplace in Germany is undergoing major changes as a result of the energy transition. Even when times are changing, we want to offer our customers electricity, gas and services at fair and affordable prices.

The energy transition in Germany is influencing electricity markets throughout Europe – wholesale and retail business alike. In 2012, Germany exported an estimated 23 million MWh of electricity to other European countries and this was more than ever before – despite the shutdown of almost 8,422 MW of nuclear power-plant capacity. The rapid expansion of photovoltaic power has accelerated this development and the framework conditions of the energy industry are changing.

At the close of 2012, we were supplying around 16.4 million residential households and small commercial businesses in Europe with electricity and nearly 7.2 million households with gas. Compared with the previous year, this means we have a total of some 200,000 fewer residential and commercial customers, while the number of our gas customers in this segment has remained virtually unchanged.

Energy markets


Challenges in the markets
  • In Germany, the prices for wholesale and consumer markets have been uncoupled and they now operate independently of each other. The prices on wholesale markets for electricity fell in 2012, whereas electricity is becoming more and more expensive for most consumers. The wholesale market reflects the economic crisis in Europe and the fast increasing feed-in of electricity from subsidised renewable energies. After a short-term interim high at €50/MWh in mid-August 2012, the prices of forward contracts for the calendar years 2013 and 2014 eased consistently. The forward contract for a base load in the calendar year 2013 was negotiated below the level of €45.50/MWh in mid-December 2012.

    In contrast to this situation, electricity prices for consumers in Germany rose markedly in 2012. The rather lower procurement costs of the sales organisations have largely over-compensated for the additional financial burdens in the form of increased taxes and deductions – including costs for the expansion of renewable energies and the electricity grids. Last year, the rise in electricity prices for domestic households led to a wide-ranging public debate about the equitable distribution of the additional financial burdens and the social compatibility of the energy transition.

    Contrary to the situation in Germany, wholesale prices in the United Kingdom rose by around 5 % in the year 2012. The costs to deliver the energy efficiency programmes launched by the government (CERT / CESP) virtually doubled. Energy suppliers in the United Kingdom have been obliged to provide support for residential households on low incomes in paying their energy bills for some time now.

    Statutory regulations in Poland have also resulted in additional costs. The energy utilities have to purchase ‘White Certificates’ which are intended to promote energy savings. They also have to purchase additional certificates for electricity generated from renewable energies and from highly efficient gas-fired cogeneration plants.

    A development is emerging in the Czech Republic similar to that in Germany. Wholesale and consumer prices are also drifting apart there. Wholesale prices fell by around 5 %, while prices for consumers increased by around 4 % compared with the previous year. This increase was fuelled by a number of factors including increased grid fees which also cover the costs for subsidising photovoltaics.

Objectives
  •  

    We are committedKPITarget
    … to having satisfied and hence loyal customers.Customer Loyalty Index*Customer Loyalty Index of at least 73 in the year 2013
    * The Customer Loyalty Index is based on surveys conducted among residential and commercial customers. They are asked to score RWE on a scale of 0 to 100 points. Satisfaction is rated low for scores of 70 or less, moderate for scores of 70 to 79, and high for scores of 80 and over.
Target Attainment
  • Our target is for our customers to remain loyal over the long term. The loyalty of our customers is the benchmark of our area for action ‘Pricing and Marketplace’. We measure success by their willingness to remain customers of RWE over the long term, their interest in additional products and services, and their readiness to recommend RWE to other people. We have been producing the Customer Loyalty Index uniformly for all sales companies in Germany since 2009. Our status with our electricity customers in Germany has deteriorated by one point at 72 points compared with 2011, but we are in the upper field of our comparable competitors. We are planning to reach a value of 73 in 2013.