how to promote the necessary investment in the european …. symposium... · 2014-06-24 · rwe...

RWE Innogy 6/12/2014 PAGE 1

How to promote the necessary

investment in the European energy

transition?Gerd Schräder Regulatory Affairs, RWE Innogy GmbH

Energy transition: A multifaceted challenge for Europe – 2nd symposium

11th June 2014

RWE Innogy GmbH | Gerd Schräder | 11.06.2014 | Brussels

£200bn - level of investment required over current decade for UK to meet its 2020 energy policy and environmental objectives

The sums required to upgrade the grid are huge, as much as €1 trillion in Europe by 2020

According to the Green Investment Bank Commission, decarbonising the UK economy will require up to £550 bn of investment by 2020

Transformation of European energy sector will require unprecedented investment


Renewable growth is changing the shape of the electricity

system in Europe

1 EEX, RWE Supply & Trading

Germany

France

CH

Netherlands

0

10

20

30

40

50

60

70

00:0

0

12:0

0

23:0

0

0

3

6

9

12

15

18

21German PV

power

production

8 May 20121: Electricity prices and German photovoltaic electricity generation

Electricity prices(hourly contracts of European energy exchanges; in €/MWh)

German PV power generation(in GW)


Source: Investor Relations / Fraunhofer ISE (2012) – indicative costs

Indicative full costs by type €/MWh

0

20

40

60

80

100

120

140

160

180

Onshore Wind

CCGT Offshore Wind

Coal

Fix costs

CO2-Costs

Fuel costs

Other variable costs

Market prices are far away from full costs of any

generation type


It is clear that the traditional utility balance sheet financing

approach will not suffice

Combined 2008 Market Cap: € 590 bn

Combined 2013 Market Cap: € 260 bn

-56%

Market capitalisation of listed top utilities1 [€ bn]

91

68

89

125

5147

28

25

1817

27

Feb 2008

16

GDF Suez

38

Iberdrola

41

25

E.ON EDF

24

Centrica

23

SSE

17 13

FortumRWE CEZ

10

Enel

25

National Grid

33

Nov 2013

3,750

Euro Stoxx 50

3,069

-18%

1 Source: Reuters


RWE Innogy: We develop our future on the basis of our core

values – trust, passion and performance

We are a trusted partner for competitive

renewable energyOffshore Wind

Onshore Wind

Hydro & New Technologies

Services

Partnering Green products

Operational excellence

Our future business models

Focus on partnering

Growing in core markets, increasing profit along the value chain

Business models

Technologies


RWE Innogy is already becoming a trusted partner for the

European energy transition

Greater Gabbard > 504 MW

> 50% shareholder

> SSE lead operator

Rhyl Flats > 90MW

> 50.1% shareholder

> RWE lead operator

Gwynt y Môr > 576 MW

> 60% shareholder

> RWE lead operator

Dogger Bank Forewind

> Up to 9000 MW

> 25% shareholder

Thornton BankC-Power

> 325 MW

> RWE Innogy is largest

shareholder at 26.7%

North HoyleZephyr

> 60 MW

> 33% shareholder

> UKs first project financed

offshore wind farm

(+ other Belgian investment

& industrial companies)

Su

cc

es

sfu

lP

art

ne

rsh

ips

Offshore wind Onshore wind

Jüchen > 7 MW

> Different stakeholders, e.g.employees

RWE Innogy, cooperative Bürger-

Energie, interested municipal utilities

> RWE lead operator

Green Gecco > 5 wind farms in Germany and the UK with

around 80 MW

> 51% Shareholder

> RWE lead operator

Zephyr > 331 MW

> 33% Shareholder

> RWE lead operator

Little Cheyne Court > 60 MW

> 59% Shareholder

> RWE lead operator

Middlemoor& Lindhurst> 54 and 9 MW

> 51% Shareholder

> RWE lead operator


Case Study: Equity strategic partnership – Gwynt y Môr

Gwynt y Môr Offshore Wind Farm

10% 30% 60%

• £2.2 billion investment

• 576 MW

• Completion 2014


Case Study: Equity financial partnership – Greencoat UK Wind

plc

Green Investment Bank Greencoat UK Wind plc

RWE Innogy

Novusmodus LLC (investment company)

Rhyl Flats Offshore Wind Farm

Little Cheyne Court Onshore Wind Farm

24.95%

24.95%

41%

£165.2m total investment

UK Government

59%50.01%

• 90 MW

• Constructed 2009 • 60 MW

• Constructed 2009


Case Study: Non recourse debt partnership – Thornton Bank

Financing

Eq

uit

yC

red

it f

ina

nc

ing

Suppliers

Output

Turbine:

Electrical Engineering:

Installation:

Foundations:

Cre

dit

in

su

ran

ce

Supplier:

Utilities:

Investment funds:

Public:

Private:

Turbines:

Rotor blades:

PPAs:

Green Certificate off take:

Thornton Bank Phase 1-3:

325 MW27% RWEI share

1.3 bn € project financing


Recent changes in regulatory regimes, legislative processes

and political discussion increasingly lead to less reliable

support conditions for RES, delay projects and endanger

investments …

2007 2008 20132009 2011 20122010

Green certificates*Feed-in*Premium* Pool price + ; eligibility for specific incentives*

Significant change

* Status as of

01/10/2013

2014

EU is pushing for competition in RES legislation


Investors expectations

> Long-term stable investment climate

> No retroactive changes in legislation

> Necessity to earn back the invested capital to generate new investments

> Investors can manage project and market risks but no regulatory risk

> Avoid regulatory-driven boom and bust cycles

RWE Innogy 6/12/2014 PAGE 13

Gerd Schräder

Regulatory Affairs

RWE Innogy GmbH

Gildehofstr. 1

45127 Essen

+49 (0) 201 12 14075

[email protected]

how to promote the necessary investment in the european …. symposium... · 2014-06-24 · rwe...

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