Foundation of the company and setting the course
After more than ten years of deliberation, the city of Essen signs a contract with electrical engineering company 'Elektrizitäts-Actien-Gesellschaft vorm. W. Lahmeyer & Co' (EAG) to build a power plant in Essen.
EAG and other companies with ties of friendship found Rheinisch-Westfälisches Elektrizitätswerk Aktiengesellschaft (Rhenish-Westphalian Electric power company) (RWE), Essen, on 25 April 1898 with capital stock of 2.5 million marks. Although they hold no shares, Essen's Lord Mayor, Erich Zweigert, and industrialist Hugo Stinnes are on the first supervisory board.
In April, the original RWE plant goes on line with an output of 1.2 megawatt on the site of the Victoria Mathias Mine in Essen. Avoiding the stipulations of the coal syndicate, the Stinnes mine supplies steam to the neighbouring powerhouse. This is the first time RWE supplies electricity for its own account.
Due to the 'electricity crisis', EAG sells its RWE shares to a consortium formed by Ruhr industrialists Hugo Stinnes and August Thyssen. In 1903 Bernhard Goldenberg, a confidant of Stinnes, is appointed to the board of management to take care of the engineering portfolio.
There is also close commercial cooperation with industry in the Ruhr, including the first contracts for reciprocal power supply with neighbouring mines and foundries. The first concession contracts are obtained for supplying the surrounding communities.
RWE acquires its first shareholdings in tramway companies (in 1906, for example, in 'Bochum-Gelsenkirchener Straßenbahn AG' and in 'Rheinische Bahngesellschaft AG'), which are of particular interest to the electrical utility due to their rights to supply power to certain municipalities. In 1909, RWE acquires a stake in 'Süddeutsche Eisenbahngesellschaft AG', Darmstadt, one of whose businesses is operation of Essen's trams.
With the acquisition of the utilities 'Elektrizitätswerk Berggeist', Brühl, and 'Bergische Elektrizitätswerke', Solingen, RWE extends its market for the first time into the Cologne and Bergisches Land regions. In 1909, RWE starts up the Reisholz Power Plant (15 MW) near Düsseldorf for the Bergisches Land region.
Three years of dispute with local authorities in the Westphalian half of the Ruhr Area and with the electrical engineering company AEG (‘Allgemeine Electricitäts-Gesellschaft’) come to an end. A demarcation line between the supply areas is finally agreed upon by the utilities concerned, the ‘Städtische Elektrizitätswerk Dortmund’ and ‘Elektrizitätswerk Westfalen AG’, Bochum. Together with RWE they set up the ‘Westfälische Verbands-Elektrizitätswerk AG’, Dortmund, into which RWE puts its power station in (Dortmund-) Kruckel and the supply grid in the region Witten/Dortmund. All these local companies are forerunners of VEW (‘Vereinigte Elektrizitätswerke Westfalen AG’).
After a uniform coke-oven gas supply network proposed by Hugo Stinnes fails to materialize in the Ruhr, RWE builds its own gas supply network in competition with Thyssen and others. This enables RWE to supply wide areas of the Bergisches Land region with coke-oven gas beginning in 1912.
RWE begins electrification of the Lower Rhine counties and builds the 'Niederrhein Power Plant' (10 megawatts) near Wesel in order to supply them. In the years that follow, RWE's market is extended by buying up small utilities and connecting rural areas in the Rhineland to the power grid.
Beginning in 1912, largely autonomous operational boards take over management of supply at the local level. A new headquarters building is constructed in Essen.
The inauguration of RWE’s power station ‘Vorgebirgszentrale’ (45 megawatts) in Hürth near Cologne represents a decisive step towards lignite-powered electricity generation. It is supplied by the neighbouring open cast lignite mine of the ‘Roddergrube’. The construction of large, cost-effective power stations in the immediate vicinity of cheap lignite secures the basis for a further reduction in the cost of power generation. In the following years company growth will decisively benefit from this factor. The power station, known as the ‘Goldenberg Works’ after 1917 in recognition of the technical director’s achievements, undergoes rapid expansion. By 1920, with 190 megawatts, it is the biggest of its kind in Europe.
Successor as board member for the engineering portfolio to the unexpectedly deceased Bernhard Goldenberg is engineer Arthur Koepchen; over the next three decades he will make a lasting impression on the technical and commercial development of the corporation.
The commissioning of the first 110 kV high-tension power line between the Reisholz and Goldenberg Power Stations marks the beginning of interconnection, thus affording a cost-effective division of supply between Rhenish lignite and Ruhr valley hard coal.
When the share capital is increased to 108 million marks, the municipalities become the majority shareholders in RWE for the first time. Also, registered shares are distributed (principally to the municipalities), in addition to the bearer shares. Cities such as Bonn, Cologne, Krefeld, Duisburg and Düsseldorf are now also shareholders. Beginning in 1924, influence of the municipalities is assured by the multiple voting rights of the registered shares (the balance sheet being based on the stable value of the 'gold mark'). The acquisition of Nike, 'Niedersächsische Kraftwerke AG' in Osnabrück allows RWE to supply electricity to municipalities in Lower Saxony for the first time.