From multi-utility to a focused energy utility
RWE streamlines the structures in the Industrial Services division (previously: Mechanical and Plant Engineering): In February 2000, LAHMEYER AG is amalgamated with RWE AG. The interests of the tradition-steeped Frankfurt-based company in ‘Heidelberger Druckmaschinen AG’ and various electricity utilities are now held by RWE AG and RWE Energie. The remaining energy-related business areas of the Industrial Services division are managed by ‘TESSAG Technische Anlagen und Services AG’, Frankfurt/Main, founded in the autumn of 1999.
In June, the German nuclear power operators reach agreement with the federal government on the outline conditions for the continued operation and the waste management of German nuclear power plants. Their lifetime is limited by defining residual electricity volumes which can be generated in the individual plants. RWE abandons the recommissioning of the Mülheim-Kärlich nuclear power plant shut down since 1988 due to licensing-law problems and waives the claims for compensation brought in this connection against the state of Rhineland-Palatinate. In return, the company receives a power volume quota of 107.25 TWh which can be transferred to other nuclear plants.
After about twelve months of preparation, the neighbouring energy and waste management groups RWE and VEW merge with effect from 1 October 2000 to create the ‘new’ RWE. The RWE Group is restructured as part of the process: Below the holding company RWE AG, several subsidiaries are created from RWE Energie AG, VEW Energie AG and Westfälische Ferngas AG (WFG) along the value chain: RWE Power (power plants) with the exception of lignite, RWE Net (power grids), RWE Trading (power trading), RWE Plus (power sales) and RWE Gas (gas).
Corporate functions like IT and procurement are pooled in the new company RWE Systems. Alongside this structure, the ‘new’ RWE Umwelt, created from the merger of the ‘old’ RWE Umwelt and the VEW subsidiary ‘Edelhoff’, RWE Dea and the former Rheinbraun AG, now incorporated as RWE Rheinbraun, form part of the core business of the Group. At the same time, RWE has adopted a consistent single-brand identity with the first composite trademark in the Company's history. The subsidiaries ‘Hochtief’, ‘Heidelberger Druckmaschinen’ and ‘Harpen’, which operate outside the core business, are held as financial investments.
The merger of RWE and VEW is connected with regulatory requirements imposed by the Federal Cartel Office. The ‘new’ RWE has to sell numerous investments, including the majority interest in the Eastern German lignite mining company ‘Laubag’ and the considerable stakes in the Eastern German interconnected utility ‘VEAG’ and the large water utility Gelsenwasser.
After the shareholders' acceptance of the tender offer in November, RWE can acquire the British water utility Thames Water plc, London, making it the world's third-largest water utility. Apart from the regulated traditional business providing water and sanitation services in Greater London, the company has wide-ranging international operations, inter alia, in the United States, Australia and Asia. Thames Water becomes operating company and manages the German water business of RWE.
As part of RWE's concentration on its four core business segments of electricity, gas, water and waste management, RWE and Shell agree in March to amalgamate the processing and sales of petroleum in Germany in a new company, ‘Shell & DEA Oil GmbH’, Hamburg. With its refineries and sales structure, ‘RWE-DEA Aktiengesellschaft für Mineralöl und Chemie’ contributes approx. 3,700 employees to the joint-venture company. For the time being, both partners each hold 50 per cent of Shell & DEA Oil. Shortly before, RWE-DEA had already sold its chemicals activities incorporated as ‘Condea’. This leaves only the oil and gas exploration and production activities as well as the gas storage operations with RWE, which have since been incorporated as RWE Dea AG. In July 2002, the RWE Group eventually sells its 50 per cent share of Shell & DEA Oil to Shell.
The new RWE umbrella brand campaign under the slogan ‘imagine’ with various advertisements and widely acclaimed TV spots is launched in May. Surveys demonstrate that the campaign has given the Group a likeable and distinctive profile.
RWE Plus is expanding its market position in Germany's southwest: in June, its subsidiaries ‘Main-Kraftwerke AG’, Frankfurt/Main, ‘Kraftversorgung Rhein-Wied AG’, Neuwied, ‘Aktiengesellschaft für Energiewirtschaft’, Bad Homburg, and ‘Kraftwerk Altwürttemberg AG’, Ludwigsburg, are merged to create ‘Süwag Energie AG’, Frankfurt/Main. The company's 1,800 employees supply approx. 850,000 customers with electricity and gas. In December, RWE Plus increases its share of the utility VSE in Saarland to a majority position. The company with approx. 1,600 employees supplies large areas of the Saarland region with electricity and gas.
Several functions within the Group are reassigned. RWE Plus focuses on the electricity business with residential and commercial customers, looking after municipal utilities and managing the regional sales companies. The electricity business with industrial accounts and customers at special rates is transferred to TESSAG. This enables the company to provide complete end-to-end solutions specifically tailored to this customer segment across the entire range of energy and energy-related services. The company's name is changed to ‘RWE Solutions AG’ shortly afterwards.
In January, the shareholders of ‘American Water Works Company’, Vorhees/New Jersey, the largest listed water utility of the US, accept the takeover bid of RWE. The company has almost 16 million customers in the US and Canada, served by approx. 6,600 employees. Since the authorities of all the federal states served by the company in the US have to approve the takeover, the acquisition cannot be completed until January 2003. American Water becomes a subsidiary of Thames Water.
RWE wins the bid for the privatisation of the Czech gas industry. Apart from almost all the shares of the gas shipper Transgas A.S., Prague, RWE gains the majority of six regional gas utilities and minority interests in two other gas utilities. With a total of more than four million end customers, RWE advances to the fourth position among the European gas utilities.
RWE and RAG swap stakes in the energy business: While RWE sells its share of almost 15 per cent in the RAG power plant company Steag, it acquires in return almost 24 per cent of the shares in Harpen AG. As a result, RWE owns some 95 per cent of the tradition-steeped company based in Dortmund, which is now integrated more closely into the Group as specialist for renewable and decentralised energy generation. In 2005, RWE eventually also takes over the remaining Harpen shares as part of a so-called squeeze-out process.
In February, the Cartel Office and Supervisory Boards give the go-ahead for the amalgamation of the municipal energy utility GEW Köln and the electricity, gas and water activities of RWE in the Cologne/Bonn region to create ‘GEW RheinEnergie AG’, Cologne (since 2005 RheinEnergie). Altogether, RWE owns 20 per cent of the shares in the new company serving about 1,7 million customers.
At the end of March, RWE submits a bid to take over the British energy utility ‘Innogy plc’, Swindon. The company operates a power plant portfolio with a total capacity of 9,600 MW and supplies almost 5 million customers under the npower brand with electricity in Northern and Central England as well as some 2 million customers with gas. Almost all shareholders have accepted the RWE offer by the end of May. The company is integrated into the RWE Group and has been renamed as RWE npower in May 2004.
In April, RWE increases its stake held since 1912 in ‘Rheinisch-Westfälische Wasserwerksgesellschaft RWW’ in Mülheim/Ruhr to a majority interest. The company supplies about 1 million people in the western Ruhr area, in the Münsterland and the Bergisches Land region with water.
As a result of the corruption scandal over the construction of the refuse incineration facility at Cologne, RWE in June takes over the shares of the Trienekens family in ‘Trienekens AG’, Viersen, which was jointly held before. The company is merged with RWE Umwelt AG and the domicile of the ‘new’ RWE Umwelt is moved from Essen to Viersen.
In September 2002, RWE commissions the first lignite-fired power plant with optimised technology (BoA) at Niederaußem in the presence of German Chancellor Gerhard Schröder. The plant with a capacity of approx. 1,000 MW built within four years has a particularly high efficiency of 43 per cent.
In June, RWE amalgamates its Eastern German regional utilities ‘envia Energie Sachsen Brandenburg‘ and ‘MEAG Mitteldeutsche Energie‘ to create ‘envia Mitteldeutsche Energie Ag’ (enviaM) based in Chemnitz.With its 4,600 employees, the company serves some 1.6 million customers in Saxony, Saxony-Anhalt, Thuringia and Brandenburg.
In December, RWE acquires the majority of the Polish energy utility STOEN S.A. which supplies the capital of Warsaw with electricity. The company has been renamed as RWE Stoen since May 2007.
RWE Dea acquires the British gas producer ‘Highland Energy’ providing access for the first time to gas reserves in the British North Sea. The company whose name is changed to RWE Dea UK Ltd. moves its domicile to London.
In January, RWE acquires 49 per cent of the shares and gains management control of the Slovakian energy utility ‘VSE a.s.’, Kosice. The contracts had been signed in July 2002.
After taking over another 25 per cent of the shares of Thyssengas GmbH, Duisburg, from Esso in mid-2000, RWE acquires the remaining 25 per cent of Thyssengas from Shell in March and integrates the gas shipper.
As part of focussing on the European energy business, RWE decides to opt out of hard coal mining in the US and floats Consol Energy Inc., Wilmington/Delaware, on the stock exchange. The last shares in the company, in which the Group held an interest for over two decades are sold in 2004.
RWE acquires the remaining shares in ‘RWE Gas AG’ from Westphalian municipalities and local authorities. This paves the way for a restructuring of the Group in October to make RWE more powerful and move it closer to the customers: The number of operating companies is reduced from 13 to seven. Being a lean Group Center, RWE AG concentrates on control functions. The Continental European power plant portfolio (fossil, nuclear, renewable) and the mining of lignite are pooled in the ‘new’ RWE Power AG, Essen/Cologne. The company also manages the business units ‘Renewable Energies’ (Harpen) as well as ‘Exploration and Production of Oil and Gas ‘ (RWE Dea).
The sales and grid operations for electricity and gas (i.e. the activities of RWE Plus, RWE Gas and RWE Net) and the water business previously managed by Thames Water in Germany and the Continental European countries are merged in the new operating company RWE Energy AG, Dortmund. 12 sales and grid regions for electricity and gas are formed under its umbrella, each managed by a regional company.
In Germany, these are, apart from ‘Lechwerke’, ‘enviaM’, ‘Süwag’ and ‘VSE’, the newly created companies ‘RWE Rhein-Ruhr AG’, Essen, and ‘RWE Westfalen-Weser-Ems AG’, Dortmund. RWE Transportnetz Strom, Dortmund, and RWE Transportnetz Gas, Essen, are created for the transmission grids in Germany. RWE Solutions reports to RWE Energy AG.
This goes hand in hand with RWE Trading taking over the power trading business of RWE Innogy in Great Britain. The operating companies RWE Thames Water, RWE Umwelt and RWE Systems are not affected by the restructuring.
RWE Innogy commissions the first British off-shore wind farm off the Welsh coast. The North Hoyle plant with its 30 windmills has a total capacity of 60 MW to produce enough electricity to supply 50,000 homes.
RWE continues to move forward in its process of focussing on the core business: In February, the Group sells its controlling stake of Germany's largest construction group ‘Hochtief’ and in May its majority interest in the world's largest printing press manufacturer ‘Heidelberger Druckmaschinen’ to institutional investors.
RWE starts the divestiture of its environmental operations. After obtaining approval from the Cartel Office, RWE completes the sale of RWE Umwelt with about 70 per cent of business volume to Rethmann AG & CO KG at the end of February. The remaining 30 per cent of RWE's former environmental activities are sold to strategic investors in the autumn.
The RWE Solutions group is realigned as part of focussing on the core businesses. In this context, RWE divests ‘Piller GmbH’ (uninterruptible power supply), ‘Starkstrom-Gerätebau GmbH’ (transformer construction), ‘RWE Mechatronics’ (component production) and ‘RWE Schott Solar’ (photovoltaics). The gas, electricity and steam supply of industrial customers which was previously assigned to RWE Solutions is hived off to the newly created ‘RWE Key Account GmbH’, Essen, which directly reports to RWE Energy. In May 2006, RWE eventually sells the RWE Solutions group (SAG, Nukem, RWE Industrie-Lösungen, Lahmeyer International and RWE Space Solar Power) to the investment company Advent International.
RWE Powercontinues the renewal of its power plant portfolio: In September, the decision is made to build a second high-efficiency lignite-fired power plant with optimised technology (BoA) at Neurath. The twin unit will have a capacity of 2 x 1,050 MW. The construction starts early in 2006, and the plant is due to come on stream in 2010.
In November, the company announces the construction of a high-efficiency twin-unit hard coal-fired power plant with a capacity of 2x800 MW at Hamm. The plant is due to come on stream in 2011/12. Both power plants are to replace existing facilities with lower efficiencies to significantly reduce CO2 emissions.
RWE npower acquires Great Yarmouth Power Ltd, operating the CCGT power plant of the same name in Norfolk/UK. The plant commissioned in 2002 has a capacity of 420 MW and ranks among the most modern power plants in Great Britain.
In November, RWE Dea commissions the pipeline connection of its Mittelplate oil drilling and production platform. The pipeline between the island in Schleswig-Holstein's Wattenmeer National Park and the Dieksand land station obviates the need for around 2,000 barge movements per year required before to transport the crude oil from Mittelplate Island. Another ecological benefit: the pipeline link increases the production capacity of the Mittelplate field to a total of 2.5 million tons of crude so that oil production in the ecologically sensitive area can be phased out ten years earlier than planned.
In November, RWE decides to divest the British and North-American water business to sharpen the focus on Europe's electricity and gas markets. In December 2006, Thames Water is sold to a consortium lead-managed by the Australian bank Macquarie. American Water, however, is to be floated on the stock exchange.
The reorganisation of Harpen AG is completed in May. The business with renewable energies is integrated into RWE Power. The business area of distributed energy supply goes to RWE Energy. The last business remaining with Harpen AG, the real estate segment, is sold by RWE to two British real estate funds in October.
RWE charts new territory in climate protection: RWE Power announces the construction of the world's first large-scale carbon-neutral coal-fired power plant. The facility with integrated coal gasification and CO2 capture is designed for a gross capacity of about 450 MW and could come on stream in 2014. Part of the project is the safe storage of the captured CO2 in suitable geological formations.
RWE is growing its gas business. In June, the company enters the market for liquefied natural gas by acquiring a stake in a planned facility for regasifying Liquefied Natural Gas (LNG) in the Port of Rotterdam/Netherlands. The Group is involved in a similar LNG project on the Croatian island of Krk. Together with the partner ‘Excelerate Energy Terminals’, RWE also plans and builds terminals in Teeside/UK and Wilhelmshaven/Germany where LNG is regasified and fed into the pipeline grid for the British and German gas markets.
The expansion of RWE Dea's exploration activities in North Africa is bearing first fruit: for the first time, the company finds natural gas in Algeria and oil in Libya. In neighbouring Egypt, RWE Dea has been actively prospecting for and producing oil and natural gas since 1974.
RWE continues its investment offensive launched the year before. In April, RWE Power announces plans to erect a twin-unit hard coal-fired power plant at the Ems estuary in Eemshaven / Netherlands. The plant with a capacity of about 1,600 MW is due to come on stream in 2012. In November, the company announces the construction of a CCGT power plant with a capacity of 876 MW at the existing site in Lingen/Lower Saxony. Construction of the plant due to come on stream as early as 2009 begins in July 2007.
RWE also invests in power generation from renewable energies. In Great Britain, RWE npower starts the construction of three wind farms with a total capacity of 100 MW. They are due to supply first electricity in 2008.
In June, RWE Power starts production in its ‘Garzweiler II’ opencast lignite mine. It directly adjoins the ‘Garzweiler’ opencast mine and contains lignite reserves of 1.3 billion tons across an area of 48 km². The start of production completes a planning and preparation phase of over 20 years. In the next four decades, the new mining field is to account for approx. 40 per cent of production in the Rhenish lignite mining area and, among other things, to supply the twin-unit plant with optimised technology at Neurath, which is being built.
RWE is charting new paths in selling electricity and gas. From its subsidiary Überlandwerk Groß-Gerau, the Group acquires ‘eprimo GmbH’, Neu-Isenburg, selling electricity to residential and business customers across the Internet all over Germany. The company has about 150,000 customers and is also about to start selling gas.
RWE and the Dutch transmission system operator Tennet plan to significantly expand the cross-border transmission capacities between the German and Dutch electricity systems. The companies intend to build a 60 kilometre long 380 kV interconnection between Doentichem/Netherlands and Wesel. Owing to the drawn out consenting process, the link will not come on stream until 2013 at the earliest.
The newly created company ‘RWE Gas Midstream GmbH’, Essen, is launched. RWE pools its non-regulated activities in the so-called Gas Midstream business in the company. This is intended to significantly strengthen the competitive position of the Group in the growing gas business. Inter alia, RWE Gas Midstream is responsible for the business with liquefied natural gas (LNG). In April 2008, the company is merged with RWE Trading to create ‘RWE Supply & Trading GmbH’, Essen.
With the construction of a gas pipeline between the Czech Republic and Belgium, RWE intends to provide a fresh impetus to the European gas market. The pipeline with a length of 760 kilometres between Sayda and Eynatten would create a direct link between the Czech and the German gas transmission system of RWE Energy. The planned pipeline enables additional gas volumes to be shipped from Russia as well as the Near and Middle East to Germany, Great Britain and the Benelux countries. The pipeline is due to come on stream in the autumn of 2011 and to transport 5 billion cubic metres of gas per year.
RWE intends to continue its investment offensive to renew the power plant portfolio in Germany: In July, RWE Power decides to build a third high-efficiency twin-unit hard coal-fired power station at the existing Ensdorf power plant site in Saarland. The design of the power plant with a capacity of 2 x 800 MW is identical with the station planned at Hamm and is due to supply electricity in 2012 at the latest. Since the project is not accepted by a majority of the population in a local referendum, RWE abandons the project in December.
RWE invests in new power plants also in the UK: In May, RWE npower decides to build a CCGT power plant with a capacity of 1,650 MW at Staythorpe/Nottinghamshire. The plant is due to come on stream in 2010. A few weeks later, the company announces the construction of an identical CCGT power plant at Pembroke on the Welsh coast, due to be commissioned in 2011. Moreover, RWE npower is exploring the construction of two high-efficiency hard coal-fired power plants at the existing Tilbury power station site at the Thames estuary in Southern England (1,600 MW) and the former Blyth power plant site, directly on the North Sea coast, near Newcastle (2,400 MW). Both plants would be designed for the co-combustion of biomass and be prepared for CO2-capture.
RWE also continues to expand its capacities for power generation from renewable energies: In Great Britain, RWE npower starts the construction of its second large off-shore wind farm Rhyl Flats off the Welsh coast (90 MW). In France, RWE Power commissions two wind farms with a combined capacity of 20 MW in July and in Poland it plans to build two wind farms with a combined capacity of 70 MW. And in the Rhenish lignite mining area, RWE Power furthermore takes its first biogas power plant with a capacity of 716 kilowatt into service. At Albbruck-Dogern on the Upper Rhine, the RWE company ‘RADAG’ begins to build a new run-of-river power station which will raise the total capacity of the existing facility to over 100 MW by the end of 2009.
RWE participates in one of the most important infrastructure projects to safeguard Europe's gas supply. The Group becomes the sixth strategic partner in the consortium for the planning and construction of the Nabucco pipeline designed to connect natural gas reserves in the Caspian region and in the Near and Middle East via Turkey with Southeastern and Central Europe.
RWE is stepping up its commitment to power generation from renewable energies. The skill resources and activities including those in Germany, France, Spain and Great Britain, which were previously pooled in various Group companies, are merged in the newly created company ‘RWE Innogy GmbH’, Essen. The company is launched with 600 employees and a generation capacity of 1,500 MW. The company's creation is soon followed by first projects for the construction of new wind farms in Hungary and off the Dutch coast and by a stake in the development of a tidal stream power plant.