E.on strategy & key figures 2010

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Strategy & Key Figures 2010

E.ON Russia PowerMoscow

E.ON ItaliaMilan

E.ON U.S.Louisville

E.ON UKCoventry

E.ON SverigeMalmö

E.ON EnergieMunich

E.ON Climate & RenewablesDüsseldorf

E.ON Energy TradingDüsseldorf

E.ON RuhrgasEssen

E.ON AGDüsseldorf

E.ON EspañaMadrid

Content

E.ON Group

Strategy & Investment Plan

Key Figures

Central Europe Market Unit

Pan-European Gas Market Unit

U.K. Market Unit

Nordic Market Unit

U.S. Midwest Market Unit

Energy Trading Market Unit

New Market Units

New Markets: Russia, Italy, Spain

Climate & Renewables Market Unit

3

4

6

21

53

81

95

111

125

137

138

156

2

E.ON Italia S.p.A.,

Milan

Italy MU

E.ON Sverige AB,

Malmö

Nordic MU

E.ON Russia Power,

Moscow

Russia MU

E.ON U.S. LLC1,

Louisville

U.S. Midwest MU

E.ON Climate & Renewables GmbH,

Düsseldorf

Climate & Renewables MU

E.ON Energy Trading SE,

Düsseldorf

Energy Trading MU

E.ON España S.L.,

Madrid

Spain MU

E.ON UK plc,

Coventry

U.K. MU

E.ON Energie AG,

Munich

Central Europe MU

E.ON Ruhrgas AG,

Essen

Pan-European Gas MU

Corporate Center

E.ON AG,

Düsseldorf

Group Structure

1Discontinued operations.MU = market unit.

3

E.ON Group

4 Strategy & Investment Plan

4 Strategic Direction

5 2009–2012 Investment Plan

5 Strict Strategic and Acquisition Criteria

6 Key Figures

6 Consolidated Balance Sheets

8 Consolidated Statements of Income

9 Sales and Adjusted EBIT

10 Return on Capital Employed (ROCE) and Value Added

10 ROCE and Value Added by Segment

11 Investments by Segment

12 Employees by Segment

13 E.ON Stock Information

14 Dividend Policy

15 Shareholder Structure

15 ADR Program

16 Operating Cash Flow and Funds from Operations

17 Finance Strategy

18 Funding Policy and Access to Debt Markets

19 Debt Profile

19 E.ON Bond Profile

20 E.ON Bonds

4 E.ON Group Strategy & Investment Plan

Strategic Direction

With a broad geographic footprint and strong market posi-

tions, E.ON is one of Europe’s leading energy companies. Our

growth in recent years has enabled us to expand our pres-

ence in Europe, tap new markets like Russia, and become a

leader in renewables. We are therefore superbly positioned to

successfully meet new challenges and seize new opportuni-

ties in Europe’s energy marketplace. Key areas in the years

ahead will be supply security, affordability, and above all

climate protection. We are gearing all our businesses to meet

these challenges and opportunities and are making targeted

investments in climate-friendly and efficient energy supply.

Our strategy is founded on six key beliefs:

1. Presence along the entire value chainWe’re active along the entire value chain in power and gas:

in production, import and wholesale, distribution, and end-

customer sales. Our comprehensive market knowledge

enables us to operate efficiently and to create value along

the entire value chain.

2. Power and gas convergencePower and gas markets are strongly connected upstream

(gas supply to gas-fired generation), midstream (cross-com-

modity energy trading), and downstream (increasing popu-

larity of dual-fuel products). Our solid position in all three areas

provides us with valuable synergies and a superior compe-

titive positioning.

3. Strong market positions International scale and strong market positions give us a key

competitive edge in liberalized markets and create a solid

foundation for ensuring supply security and for making the

necessary large-scale investments in climate friendly power

generation.

4. GrowthGrowth beyond our traditional core markets (Germany, the

United Kingdom, Sweden) creates additional opportunities

to expand our business so that we sustain our success in a

consolidating European energy market.

5. Value from experienceOur deep expertise in all facets of the energy business is a

considerable competitive advantage, one that we leverage

fully by sharing best practices across our entire organization.

6. Market and competitionOpen, competitive markets are the best framework for ensur-

ing a secure, efficient energy supply. An integrated European

energy market offers E.ON superb opportunities to strengthen

our market position and to capture value from cross-border

synergies.

In line with these beliefs, E.ON pursues a clear and

focused business model

Focus on:

• Power and gas.

• Presence along the entire value chain up-, mid- and

downstream.

• Geographic focus on Europe and the U.S.

E.ON’s short- and mid-term focus

E.ON has completed a phase of significant external growth.

Consequently, the current priorities lie with performance,

portfolio streamlining and an investment plan strongly focused

on organic growth. Our Group-wide performance project

PerformtoWin will deliver up to €1.5 billion EBIT by 2011.

Portfolio-streamlining measures are expected to generate at

least €10 billion of divestment proceeds in 2009–2010. From

2010–2012, €24 billion investments are foreseen, of which

about 60 per cent are for organic growth, in particular gener-

ation, renewables as well as gas upstream and supply.

Strategy & Investment Plan

5

2009–2012 Investment Plan

€ in billions Cash-effective investments Asset swaps

2009 2010 2011 2012

12

11

10

9

8

7

6

5

4

3

2

1

2009 investments

• €9.2 billion of cash-effective investments: lower than planned as some amounts were moved from 2009 to 2010

• €2.8 billion asset swaps: mainly Yuzhno Russkoye

2010–12 investment plan

• Continuation of 2009–2011 investment plan• €24 billion between 2010 and 2012• Commissioning conventional power plants in 2010 • 3,800 MW of CCGTs in Europe • 400 MW Shaturskaya CCGT in Russia • 750 MW Trimble County 2 coal-fired power plant

in the U.S. MidwestCash outflow increasingly aligned with operating cash flow generation

9.2~10

~8

~6

2.8

Investments 2009 and Investment Plan 2009–2012

Strict Strategic and Acquisition Criteria

Strategic criteria

• Market attractiveness (returns, growth, regulation,

country risk).

• Target attractiveness (asset quality, market position,

management quality).

• Value creation potential (cost reduction, integration

benefits, transfer of best practice).

Acquisition criteria

• Value enhancing over project lifetime.

• Earnings enhancing in the first full year after acquisition.1

E.ON’s commitment

If individual assets do not contribute in line with financial

and strategic expectations, E.ON will take concrete portfolio

measures by 2010.

1Applicable to acquisitions of companies with relatively mature/stable business.

6 E.ON Group Strategy & Investment Plan

Consolidated Balance Sheets

Key Figures

E.ON AG and Subsidiaries Consolidated Balance Sheets—Assets

€ in millions

December 31

2009 2008

Goodwill 16,901 17,311

Intangible assets 8,242 6,696

Property, plant and equipment 60,787 56,480

Companies accounted for under the equity method 7,342 8,931

Other financial assets 9,131 8,823Equity investments 5,461 3,806

Non-current securities 3,670 5,017

Financial receivables and other financial assets 2,652 2,451

Operating receivables and other operating assets 3,388 3,789

Income tax assets 1,549 1,988

Deferred tax assets 3,076 2,248

Non-current assets 113,068 108,717

Inventories 4,518 4,774

Financial receivables and other financial assets 1,729 2,101

Trade receivables and other operating assets 23,007 28,848

Income tax assets 1,925 1,515

Liquid funds 6,116 6,348Securities and fixed-term deposits 1,722 2,125

Restricted cash and cash equivalents 184 552

Cash and cash equivalents 4,210 3,671

Assets held for sale 2,273 4,521

Current assets 39,568 48,107

Total assets 152,636 156,824

7

E.ON AG and Subsidiaries Consolidated Balance Sheets—Equity and Liabilities

€ in millions

December 31

2009 2008

Capital stock 2,001 2,001

Additional paid-in capital 13,747 13,741

Retained earnings 26,578 22,181

Accumulated other comprehensive income 1,552 110

Treasury shares -3,530 -3,549

Equity attributable to shareholders of E.ON AG 40,348 34,484

Minority interests (before reclassification) 4,157 4,538

Reclassification related to put options -550 -578

Minority interests 3,607 3,960

Equity 43,955 38,444

Financial liabilities 30,955 25,036

Operating liabilities 7,850 9,753

Income taxes 3,124 2,602

Provisions for pensions and similar obligations 2,884 3,559

Miscellaneous provisions 18,808 19,198

Deferred tax liabilities 7,505 6,277

Non-current liabilities 70,828 66,425

Financial liabilities 7,120 16,022

Trade payables and other operating liabilities 23,099 28,370

Income taxes 1,643 2,153

Miscellaneous provisions 4,715 4,260

Liabilities associated with assets held for sale 1,276 1,150

Current liabilities 37,853 51,955

Total equity and liabilities 152,636 156,824

8 E.ON Group Key Figures

Consolidated Statements of Income

E.ON AG and Subsidiaries Consolidated Statements of Income

€ in millions 2009 2008

Sales including electricity and energy taxes 83,718 88,885

Electricity and energy taxes -1,901 -2,132

Sales 81,817 86,753

Changes in inventories (finished goods and work in progress) 43 27

Own work capitalized 532 526

Other operating income 24,961 15,454

Cost of materials -62,087 -66,419

Personnel costs -5,357 -5,130

Depreciation, amortization and impairment charges -3,981 -6,852

Other operating expenses -22,603 -20,337

Income/Loss (-) from companies accounted for under the equity method 941 912

Income/Loss (-) from continuing operations before financial results and income taxes 14,266 4,934

Financial results -2,473 -2,351Income from equity investments -224 -458

Income from other securities, interest and similar income 601 1,159

Interest and similar expenses -2,850 -3,052

Income taxes -2,976 -834

Income/Loss (-) from continuing operations 8,817 1,749

Income/Loss (-) from discontinued operations, net -172 -128

Net income 8,645 1,621

Attributable to shareholders of E.ON AG 8,396 1,283

Attributable to minority interests 249 338

in €

Earnings per share (attributable to shareholders of E.ON AG)—basic and diluted

from continuing operations 4.50 0.76

from discontinued operations -0.09 -0.07

from net income 4.41 0.69

9

Sales and Adjusted EBIT

Central Europe

Pan-European Gas

U.K.

Nordic

U.S. Midwest

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Corporate Center

Energy Trading

New Markets

4,817

535

-304

862

949

384

649

1,754

4,720

770

-295

90

645

395

922

2,631

€ in millions 2008 (total: 9,878) 2009 (total: 9,646)

Adjusted EBIT

41,419

20,640

1,843

41,251

7,749

-44,530-36,234

10,097

3,348

41,135

27,422

1,880

31,760

5,862

11,051

3,877

Central Europe

Pan-European Gas

U.K.

Nordic

U.S. Midwest

Energy Trading

New Markets

New MarketsCorporate Center

-40,000 -30,000 -20,000 -10,000 0 10,000 20,000 30,000 40,000

€ in millions 2008 (total: 86,753) 2009 (total: 81,817)

Sales


ROCE and Value Added by Segment

Return on Capital Employed (ROCE) and Value Added

E.ON Group ROCE and Value Added

€ in millions 2009 2008

Adjusted EBIT 9,646 9,878

Goodwill, intangible assets, and property, plant, and equipment 85,930 80,487

+ Shares in affiliated and associated companies and other share investments 12,803 12,737

+ Inventories 4,518 4,774

+ Accounts receivable 11,577 14,416

+ Other non-interest-bearing current assets, including deferred income and deferred tax assets 23,629 28,493

- Non-interest-bearing provisions¹ 7,595 7,784

- Non-interest-bearing liabilities, including deferred expenses and deferred tax liabilities 44,498 50,304

- Adjustments² 2,588 1,664

Capital employed in continuing operations (at year-end) 83,776 81,155

Capital employed in continuing operations (annual average)³ 82,459 76,367

ROCE 11.7% 12.9%

Cost of capital 9.1% 9.1%

Value added 2,144 2,902

1Goodwill represents final figures following the competition of the purchase price allocation. 2Non-interest-bearing provisions mainly include current provisions, such as those relating to sales and procurement market obligations. They do not include provisions for pensions or for nuclear-waste management.

3Capital employed is adjusted to exclude the mark-to-market valuation of other share investments (including related deferred tax effects) and operating liabilities for certain purchase obligations to minority shareholdings pursuant to IAS 32. The adjustment to exclude the mark-to-market valuation of other share investments applies primarily to our shares in Gazprom.

4In order to better depict intraperiod fluctuations in capital employed, annual average capital employed is calculated as the arithmetic average of the amounts at the begin-ning of the year, the end of the year, and the balance-sheet dates of the three interim reports. Capital employed in continuing operations amounted to €82,286 million, €82,405 million, and €83,180 million at March 31, June 30, and September 30, 2009, respectively.

ROCE and Value Added by Segment

€ in millions

Central Europe Pan-European Gas1 U.K. Nordic

2009 2008 2009 2008 2009 2008 2009 2008

Adjusted EBIT 4,817 4,720 1,754 2,631 649 922 535 770

÷ Capital employed 22,171 19,310 17,638 17,594 8,947 10,101 6,098 6,948

= ROCE 21.7% 24.4% 9.9% 15.0% 7.3% 9.1% 8.8% 11.1%

Cost of capital2 9.2% 9.2% 8.8% 8.8% 9.8% 9.8% 9.3% 9.3%

Value added 2,771 2,935 194 1,091 -224 –71 -30 125

1Capital employed is adjusted to exclude the mark-to-market valuation of other share investments. This applies primarily to our shares in Gazprom.2Before taxes.

11

ROCE and Value Added by Segment (continued)

€ in millions

U.S. Midwest Energy Trading New Markets Corporate Center E.ON Group

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Adjusted EBIT 384 395 949 645 862 90 -304 -295 9,646 9,878

÷ Capital employed 6,260 6,537 527 868 19,067 15,596 1,751 -587 82,459 76,367

= ROCE 6.1% 6.0% n/a n/a 4.5% 0.6% – – 11.7% 12.9%

Cost of capital 8.7% 8.7% n/a n/a 10.4% – – – 9.1% 9.1%

Value added -163 -176 n/a n/a -1,125 -1,528 – – 2,144 2,902

Investments by Segment

Central Europe

Pan-European Gas

U.K.

Nordic

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

U.S. Midwest

New Markets

2008 (total: 18,406, thereof outside Germany: 15,415) € in millions 2009 (total: 9,200, thereof outside Germany: 6,644)

New Markets

Energy Trading

Corporate Center

53

-146

3,256

1,610

897

1,104

545

1,881

8

7,939

3,188

1,215

1,162

939

650

3,305

Cash-Effective Investments


Employees by Segment

2008 (total: 93,538) 2009 (total: 88,227)

Central Europe

Pan-European Gas

U.K.

Nordic

U.S. Midwest

Energy Trading

New Markets

New MarketsCorporate Center2

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,0001Figures do not include apprentices, managing directors, and board members.2Includes E.ON IS.

48,126

16,098

5,570

3,119

1,075

7,976

3,143

3,120

44,142

17,480

5,826

3,110

885

9,214

9,827

3,054

Employees1

13

E.ON Stock Information

Type of shares Ordinary shares with no par value/Registered shares

Stock codes Germany USA1

WKN ENAG99 Cusip No. 268 780 103 ISIN DE000ENAG999

Stock symbols Reuters Bloomberg FSE EONGn.F FSE EOAN GF Xetra EONGn.DE Xetra EOAN GY ADR EONGY.PK ADR EONGY US

1 In the United States, E.ON shares trade in the over-the-counter market (OTC market) via ADR.

E.ON Stock Key Figures per Year1

€ per share 2005 2006 2007 2008 2009

Earnings attributable to the shareholders of E.ON AG 3.75 2.82 3.69 0.68 4.80

Earnings from adjusted net income 1.84 2.22 2.62 3.01 2.80

Dividend 0.92 1.12 1.37 1.50 1.50

Dividend payout (€ in millions) 4,6142 2,210 2,560 2,857 2,858

Twelve-month high3 29.64 34.80 48.69 50.93 30.47

Twelve-month low3 21.50 27.37 32.02 23.50 18.19

Year-end closing price at Dec. 303 29.13 34.28 48.53 28.44 29.23

Number of shares outstanding (in millions) 1,977 1,979 1,895 1,905 1,905

Market capitalization4 (€ in billions) 57.6 67.6 92.0 54.2 55.7

Book value5 22.50 24.62 26.06 18.10 21.17

Market-to-book ratio6 (percentage) 129 139 186 157 138

E.ON stock trading volume7 (€ in billions) 62.5 92.5 136.2 119.2 55.9

Trading volume of all German stocks (€ in billions) 1,095.8 1,539.3 2,350.9 2,029.6 1,009.1E.ON stock’s share of German trading volume (percentage) 5.7 6.0 5.8 5.9 5.5

1Adjusted for discontinued operations.2Includes special dividend of €1.42 per share.3Xetra.4Based on ordinary shares outstanding.5Shares attributable to the shareholders of E.ON AG.6Year-end stock price expressed as a percentage of book value per share (excluding minority interests).7On all German stock exchanges, including Xetra.

Weighting of E.ON Stock in Major Indices

As of March 31, 2010 %

DAX 9.6

Dow Jones EURO STOXX 50 3.3

Dow Jones STOXX Utilities 17.5

Source: Bloomberg.

E.ON Stock

March 31,

2010 March 31,

2009

Shares outstanding (in millions) 1,905 1,905

Closing price (€) 27.34 20.91

Market capitalization (€ in billions)1 52.1 39.8

1Based on shares outstanding.

Performance and Trading Volume

January 1 – March 31 2010 2009

High (€)1 29.36 30.47

Low (€)1 25.60 18.19

Trading volume2

millions of shares 508.0 679.9

€ in billions 13.7 15.2

1Xetra.2Source: Bloomberg (all German stock exchanges).

14

Dividend Policy

Target dividend payout ratio at 50 to 60 percent of

adjusted net income

• Since 2003 the dividend has increased by 14.4 percent

per year on average.

• Payout ratio 2009: 54 percent.

Ordinary dividend Special dividend Payout ratio (%)

2.00

1.00

2003 2004 2005 2006 2007 2008 2009

0.67 0.78 0.92 + 1.42 1.12 1.37 1.50 1.50

€ per share

Strong Increase of Dividend per Share

51 544747 49

51

CAGR 14.4%

E.ON Group Key Figures

15

Shareholder Structure

According to a recent survey, 85.9 percent of all identified

shareholders are institutional and 14.2 percent retail inves-

tors. The geographical breakdown relates to 29.9 percent

domestic and 70.0 percent foreign shareholders.

ADR Program

E.ON shares trade in the United States in the over-the-counter

market (OTC market) via ADRs (American Depositary Receipt).

The OTC code is EONGY.

E.ON’s ADR program gives U.S. investors the opportunity to buy

E.ON shares and hold share certificates that are essentially

like American shares. ADRs are quoted in U.S. dollars, a signif-

icant advantage for U.S. investors. Dividends are also paid in

U.S. dollars. ADR holders have the same rights and obligations

as ordinary shareowners. They can attend and vote at Share-

holders Meetings, participate in profits, and receive information.

One E.ON ADR equals one E.ON ordinary share.

Detailed information on E.ON’s ADR program is available

from JPMorgan at www.adr.com.

Percentages

Shareholder Structure 1, 2

2.9% Switzerland

5.1% Rest of World

8.6% France

14.1% Rest of Europe

29.9%

24.8%

14.7%

1Percentages based on total investors identified.2Divergence from 100% due to rounding effects. Sources: share register (as of Feb. 18, 2010), Thomson Reuters (as of Dec. 31, 2009).

Germany

USA & Canada

U.K.


Operating Cash Flow and Funds from Operations

Strong operating cash flow generation

• The core energy business generates a strong and stable

cash flow.

• Cash provided by operating activities was 34 percent

higher in 2009 than in 2008. The increase was primarily

due to the reduction of working capital at the U.K. and

Central Europe market units, which had been relatively

high in 2008, and to positive effects from the utilization

of gas storage at the Pan-European Gas market unit. In

addition, a negative prior-year effect in the trading oper-

ations was reversed.

E.ON Operating Cash Flow and Funds from Operations 2009

€ in millions 2009

Net income 8,645

Income from discontinued operations, net 172

Depreciation, amortization and impairment of intangible assets and of property, plant and equipment 3,981

Changes in provisions 162

Changes in deferred taxes 918

Other non-cash income and expenses 419

Gain/Loss on disposal of -5,095Intangible assets and property, plant and equipment -62

Equity investments -4,829

Securities (>3 months) -204

Changes in operating assets and liabilities and in income taxes -148Inventories 739

Trade receivables 1,983

Other operating receivables and income tax assets 1,915

Trade payables -892

Other operating liabilities and income taxes -3,893

Cash provided by operating activities of continuing operations (operating cash flow) 9,054

Reversal of “Changes in operating assets and liabilities and in income taxes” 148

thereof: marking to market of derivatives1 -1,089

Funds from operations (FFO) 8,113

1The position “marking to market of derivatives“ is part of non-operating earnings. Due to its non-cash nature, the whole amount is adjusted in the cash flow statement in the position ”changes in operating assets and liabilities and in income taxes.“ However, as the adjustment for “marking to market of derivatives“ is not part of working capital changes, it has to be added back again when calculating funds from operations.

Cash provided by operating activites and funds from opera-

tions for 2009 were negatively impacted by two special items

(European Commission fine; tax payment).

17

Finance Strategy

of our competitors. Based on the methodologies currently

used by rating agencies, a debt factor from 2.8 to 3.3 is com-

patible with an A/A2 rating.

We actively manage E.ON’s capital structure. If our debt fac-

tor is significantly above 3, we apply strict investment dis-

cipline. We also utilize portfolio measures or capital increases,

if required.

Our target dividend payout ratio is an additional component

of our finance strategy. The annual target payout ratio is

between 50 and 60 percent of adjusted net income. For years,

E.ON has pursued a stable and consistend dividend policy

and intends to do so going forward. This ensures that our share-

holders can assume to hold a long-term investment with a

stable return.

Equity and debt capital are both important sources for the E.ON

Group. E.ON’s finance strategy therefore aims to balance the

interests of both shareholders and debt investors equitably.

The main focus of our finance strategy is on E.ON’s capital

structure, which we monitor using the debt factor. Debt factor

is our economic net debt divided by adjusted EBITDA. Economic

net debt includes not only our financial liabilities but also

our provisions for pensions and asset retirement obligations.

We have defined 3 as our target debt factor, which is derived

from our target rating of single A flat (A/A2). An A/A2 rating

makes it possible for E.ON to have an efficient capital structure,

gives us unrestricted access to all segments of the capital

market, and provides us with a risk buffer for unforeseeable

events. Our target rating also fits the requirements of a lead-

ing utility company and is a solid rating compared with those

Economic Net Debt

€ in millions

December 31

2009 2008

Liquid funds 6,116 6,348

Non-current securities 3,670 5,017

Total liquid funds and non-current securities 9,786 11,365

Financial liabilities to banks and third parties -35,579 -39,095

Financial liabilities to Group companies -2,198 -1,963

Total financial liabilities -37,777 -41,058

Net financial position -27,991 -29,693

Fair value (net) of currency derivatives used for financing transactions1 -6 1,988

Provisions for pensions -2,884 -3,559

Asset retirement obligations -15,050 -14,839

Less prepayments to Swedish nuclear fund 1,266 1,157

Economic net debt -44,665 -44,946

Adjusted EBITDA 13,526 13,385

Debt factor 3.3 3.4

1Does not include transactions relating to our operating business or asset management.


Funding Policy and Access to Debt Markets

Funding policy

• Our funding policy is designed to give E.ON access to a

variety of funding resources at any time.

• In general external funding is carried out by our Dutch

finance subsidiary E.ON International Finance B.V. under

guarantee of E.ON AG or by E.ON AG itself, and the funds

are subsequently on-lent within the Group.

• The funding policy is based on the following principles:

– Using a variety of markets and debt instruments to

maximize the diversity of our investor base.

– Issuing bonds with terms that give our debt portfolio a

balanced maturity profile.

– Combining large-volume benchmark issues with

smaller issues that take advantage of market oppor-

tunities as they arise.

Ready access to banks and debt capital markets

• Committed syndicated credit facility

– Tranche A: 364-day tranche of €4 billion (maturing in

November 2010); for general corporate purposes (as

of March 31, 2010: no amounts outstanding).

– Tranche B: Long-term tranche of €5 billion (maturing

in December 2011); for general corporate purposes (as

of March 31, 2010: no amounts outstanding).

• Existing capital market programs

– €10 billion European commercial paper program and

$10 billion U.S. commercial paper program (as of

March 31, 2010: equivalent of €1.6 billion outstanding

under both programs).

– €35 billion debt issuance program (as of March 31, 2010:

around €26 billion worth of bonds outstanding).

19

Debt Profile

€ in millions As of March 31, 2010

Maturity Profile of Outstanding Bonds and Promissory Notes of E.ON International Finance B.V. and E.ON AG

4,000

3,000

2,000

1,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021+

64 % Euros

Pounds sterling 16%

U.S. dollars 10 %

Other 1%Japanese yen 2%

Swedish kroner 2%Swiss francs 5%

Percentages (total: €30.3 billion)

E.ON Group Bonds and Promissory Notes by Currency1

1 Outstanding E.ON Group bonds (including private placements) and promissory notes at March 31, 2010.

Financial Liabilities by Segment

As of March 31, 2010€ in billions

E.ON AG &E.ON International Finance B.V. Market units & other E.ON Group

Bonds 27.7 1.2 28.9

Commercial paper 1.6 0 1.6

Promissory notes 1.4 0 1.4

Bank loans/other 2.3 3.7 6.0

Total 33.0 4.9 37.9

E.ON Bond Profile


E.ON Bonds

Major Bond Issues of E.ON International Finance B.V.1

Volume issued in the respective currency Initial term Repayment Coupon

EUR 1,000 million 2 years Nov 2010 4.750%

CHF 200 million 3 years Dec 2010 3.000%

CHF 500 million 2 years Feb 2011 2.000%

SEK 1,100 million 2 years May 2011 3 mth STIB+95

EUR 750 million 3 years Sep 2011 5.000%

EUR 750 million 2.5 years Nov 2011 2.500%

GBP 500 million 10 years May 2012 6.375%

USD 300 million 3 years June 2012 3.125%

CHF 250 million2 4 years Sep 2012 3.250%

EUR 1,750 million 5 years Oct 2012 5.125%


EUR 750 million 4 years Mar 2013 4.125%

EUR 1,500 million 5 years May 2013 5.125%

CHF 300 million 5 years May 2013 3.625%

GBP 350 million 5 years Jan 2014 5.125%

EUR 1,750 million 5 years Jan 2014 4.875%

CHF 525 million3 5 years Feb 2014 3.375%

EUR 1,000 million 6 years June 2014 5.250%


EUR 1,250 million 7 years Sep 2015 5.250%

EUR 1,500 million 7 years Jan 2016 5.500%

EUR 900 million 15 years May 2017 6.375%

EUR 2,375 million4 10 years Oct 2017 5.500%

USD 2,000 million5 10 years Apr 2018 5.800%

GBP 850 million6 12 years Oct 2019 6.000%

EUR 1,400 million7 12 years May 2020 5.750%

GBP 975 million8 30 years June 2032 6.375%

GBP 900 million 30 years Oct 2037 5.875%

USD 1,000 million5 30 years Apr 2038 6.650%

GBP 700 million 30 years Jan 2039 6.750%

1Listing: All bonds are listed in Luxembourg with the exception of the CHF-denominated bonds, which are listed on the SWX Swiss Exchange, and the two Rule 144A/Regula-tion S USD bonds, which are unlisted.

2The volume of this issue was raised from originally CHF 200 million to CHF 250 million.3The volume of this issue was raised from originally CHF 400 million to CHF 525 million.4The volume of this issue was raised in two steps from originally EUR 1,750 million to EUR 2,375 million.5Rule 144A/Regulation S bond6The volume of this issue was raised from originally GBP 600 million to GBP 850 million.7The volume of this issue was raised from originally EUR 1,000 million to EUR 1,400 million.8The volume of this issue was raised from originally GBP 850 million to GBP 975 million.

The following table gives an overview of all bonds issued or

guaranteed by E.ON AG. Typically, E.ON International Finance

B.V. issues bonds, guaranteed by E.ON AG. As of March 31,

2010, the following bonds were outstanding:

As of March 31, 2010, there were additionally oustanding private

placements with a total volume of approximately €2.1 billion,

as well as promissory notes with a total volume of approxi-

mately €1.4 billion.

E.ON Group

21

Central EuropeMarket Unit

22 Introduction

23 Market Overview Germany

24 Business Activities

25 2009 Sales

26 Power and Gas Activities in Europe

27 Business Activities along the Value Chain

27 2009 Power Procurement and Sales Volume

28 Location of Major Generation Assets

29 Generation Capacity by Sources

30 Generation Assets

33 Generation Output by Sources

34 Provisions for Nuclear Power

35 German Power Imports and Exports

36 Integration of Wind Energy into the Grid

37 Distribution System in the German Power Market

38 Distribution System in the German Gas Market

39 Activities in the German Sales Market—Power

40 Activities in the German Sales Market—Gas

41 Activities in the Benelux

42 Activities in France

43 Activities in Switzerland

44 Central Europe East—Activities in the Power Market

46 Central Europe East—Activities in the Gas Market

47 Power Customers in Europe

48 Composition of Power Prices in Germany

49 Composition of Power Prices

50 Key Figures

22 Central Europe Market Unit

Introduction

The Central Europe market unit is led by E.ON Energie. E.ON

Energie, which is wholly owned by E.ON, is one of the largest

non-state-owned European power companies in terms of

electricity sales. E.ON Energie had revenues of €41.4 billion,

and an adjusted EBIT of €4.8 billion in 2009. E.ON Energie’s core

business consists of the ownership and operation of power

generation facilities, the transmission1 and distribution grid and

the sale of electricity and, to a lesser extent, gas and heat, in

Germany and Continental Europe. It is one of the four interre-

gional electric utilities in Germany that are interconnected in

the western European power grid.

In late 2008, E.ON committed itself to divest 5,000 MW of gen-

er ation capacity in Germany and its extra-high voltage grid.

This grid was sold in 2009 to the dutch state-owned network

operator TenneT. The power station capacities were sold to

various European competitors, including EDF, GDF SUEZ, Stat-

kraft of Norway and Verbund of Austria, or were partly swapped

for generation capacities in France and Belgium. These trans-

actions reduced our share of the German power generation

market to about 15 percent.

E.ON Energie is embarking on a significant program to build

new generating capacity in many of the countries in which it

operates:

• In 2010 already the following units have sucessfully started

commercial operation:

– Emile Huchet 7&8 in France with a capacity of 860 MW

– Irsching 5 in Germany with a rating of 800 MW

– Rehabilitation of pumped-storage facility at Waldeck 1

in Germany

– CHP Plattling in Germany with a rating of 116 MW

The gas-fired combined-cycle plants in Malzenice/Slovakia

(430 MW) and Gönyü/Hungary (430 MW) are expected to

start commercial operation at the end of 2010 and in 2011.

• Construction is underway on new facility with a rating of

(540 MW) in Irsching (unit 4) which is based on the latest

gas turbine technology. Commercial operation is scheduled

for 2011. Construction is also underway on the new facilities

Datteln, Germany (a 1,100 MW hard-coal plant, scheduled

to begin commercial operation in 2012) and Maasvlakte,

Netherlands (a 1,100 MW hard-coal plant, scheduled to

begin operations in 2012). In addition, E.ON Energie plans

to build new plants at the location of Staudinger, Germany

(a 1,100 MW hard-coal plant) and in the harbour port of

Antwerp, Belgium, if all requirements are met.

1Sold effective December 31, 2009.

23

Market Overview Germany

Customers

Local utilities Local utilities Local utilities >800

Number of companies

Major utilities 4

Large municipal utilities 26

Regional and national distributors 70

Source: BDEW 2009.

Central Europe—Electricity Market

Billion kWhPower supplied

as of Dec. 31, 2009

Germany 297.3

France 20.2

Benelux 24.0

Czech Republic 12.8

Hungary 14.4

Romania 4.1

Bulgaria 5.2

Central Europe—Gas Market

Billion kWhGas supplied

as of Dec. 31, 2009

Germany 92.0

France 9.1

Benelux 5.6

Czech Republic 4.0

Hungary 9.9

Romania 25.6

Source: E.ON.


Business Activities1

1As of December 31, 2009.2Six of the seven regional utility companies (excluding E.ON Thüringer Energie AG) own stakes of 10 percent each. 40 percent are directly held by E.ON Energie AG.

3The remaining 4.24 percent is held by E.ON Ruhrgas AG.4Sold effective December 31, 2009.5Managed by E.ON Energie; total share: 90.2 percent (69.8 percent held by E.ON Ruhrgas International AG).

6The remaining 43.0 percent interest is held by E.ON Ruhrgas AG.

E.ON Energie AG 100%• Leading entity for the management and coordination of the market unit’s activities

• Centralized strategic, controlling and service functions

E.ON AG

Central Europe West Non-regulated

Conventional Power Plants

E.ON Kraftwerke GmbH (100%)• Power generation by conventional power plants• District heating• Industrial power plants

E.ON Benelux Holding B.V. (100%)• Power generation by conventional power plants in the Nether-

lands and Belgium• District heating in the Netherlands• Sales of power and gas in the Netherlands and Belgium

Société Nationale d’Electricité et de Thermique S.A. (SNET) (100%)• Power generation by conventional power plants in France• Sales of power in France

Nuclear Power Plants

E.ON Kernkraft GmbH (100%)• Power generation by nuclear power plants

Hydroelectric Power Plants

E.ON Wasserkraft GmbH (100%)• Power generation by hydroelectric power plants

Waste Incineration

E.ON Energy from Waste AG, formerly BKB AG, renamed in 2008 (100%)• Energy generation from waste incineration

Sales of Electricity, Gas and Heat

E.ON Vertrieb Deutschland GmbH2

• Providing sales service and management activities for E.ON Energy Sales GmbH and six regional sales companies

• Sales service and management for E WIE EINFACH Strom & Gas GmbH

E.ON Energy Sales GmbH (100%)• Supply of electricity and energy services to large industrial

customers, as well as to regional and municipal distributors• Centralized wholesale functions

Six regional sales companies and one regional utility company (E.ON Thüringer Energie AG) across Germany (shareholding percentages range from 53% to 100%)• Sales of electricity, gas, heat and water to retail customers• Energy support services

E WIE EINFACH Strom & Gas GmbH (100%)• Sales of electricity and gas to residential customers and small

and medium enterprises across Germany

Ruhr Energie GmbH (100%)• Customer service and electricity and heat supply to utilities and

industrial customers in the Ruhr region

E.ON France S.A.S. (95.76%)3

• Sales of electricity and gas in France via subsidiary E.ON Energie S.A.S.

Central Europe West Regulated

Transmission4

E.ON Netz GmbH (100%)• Operation of high-voltage grids (380 kilovolt–110 kilovolt) • System operation, including provision of regulating and balanc-

ing power

Distribution of Electricity and Gas

Six regional utility companies and one regional grid company (TEN Thüringer Energienetze GmbH) across Germany (shareholding percentages range from 53% to 100%)• Distribution of electricity and gas to retail customers

Central Europe East

E.ON Hungária Energetikai ZRt. (100%)• Generation, distribution and sales of electricity and gas in

Hungary through its group companies

E.ON Czech Holding AG (100%)• Generation, distribution and sales of electricity and gas in the

Czech Republic through its group companies

E.ON România S.R.L. (20.4%)5

• Distribution and sales of electricity and gas in Romania through its group companies

E.ON Bulgaria EAD (100%)• Distribution and sales of electricity in Bulgaria through its group

companies

E.ON Slovensko a.s. (100%)• Generation, distribution and sales of electricity in Slovakia

through its group companies (which are valued under the equity method, given E.ON Slovensko’s minority interest in those companies)

Other/Services

E.ON Engineering GmbH (57%)6

• Provision of consulting and planning services in the energy sector to companies within the Group and third parties

• Marketing of expertise in the area of conventional and renewable power generation and cogeneration, as well as a pipeline business

E.ON Facility Management GmbH (100%)• Infrastructure services

25

2009 Sales

Significant Market Positions

• One of Europe’s leading utility companies.

• A leading power supplier in Germany.

• Substantial position in Germany’s gas distribution

market.

• Strong position as international power supplier, active

particularly in the Netherlands, Belgium, France, Hun-

gary, Czech Republic, Bulgaria, Romania and Slovakia.

€ in billions Total: 41,419

Central Europe—Sales by Business Area

Other/Consolidation

Central Europe East

Central Europe West Regulated

Central Europe West Non-regulated

-2 0 2 4 6 8 10 12 14 16 18 20 22 24 26

5,323

12,288

27,427

-3,619


Power and Gas Activities in Europe

Key Figures Overall Market Power1

As of December 31, 2009Central Europeshareholdings Overall market2

Power supplied 378 billion kWh 791 billion kWh

Customers 14.2 million 76 million

Transmission system3 length (≥110 kV) 54,000 km 185,000 km

Attributable generation capacity 28,407 MW 179,000 MW

Generation output 130 billion kWh 600 billion kWh4

1Region Bulgaria, Czech Republic, Germany, Hungary, Netherlands, Belgium, Romania, France.

2Some data is only available for former years.3Extra-high voltage grid Germany sold effective December 31, 2009.4Overall figures only Germany and Netherlands.

Key Figures Overall Market Gas

As of December 31, 2009Central Europe shareholdings Overall market1

Gas supplied 146 billion kWh 1,602 billion kWh

Customers 3.6 million 32 million

1Source: eurogas (Czech Republic, Germany, Hungary, Netherlands); some data is only available for former years.

Nether-

landsGermany

Belgium

Czech

Republic

Slovakia

Hungary

Romania

Bulgaria

France Switzerland

27

Business Activities along the Value Chain

2009 Power Procurement and Sales Volume1

Upstream Midstream Downstream

Generation Transmission1 Distribution Retail

non-regulated regulated1Sold effective December 31, 2009.

PowerGas

1Excluding trading operations, which are recognized net under IFRS.25.4 billion of this is derived from jointly operated power stations.

Own generation

130.4 billion kWh

Other suppliers2

260.6 billion kWh

Power procured

391.0 billion kWh

Power supplied

378.0 billion kWh

Procurement Sales volume

Sales partners

105.9 billion kWh

Wholesale market/

Energy Trading

150.5 billion kWh

Industrial and

commercial customers

75.3 billion kWh

Residential and

SME customers

46.3 billion kWh

Transmission losses,

pumped storage

13.0 billion kWh


Location of Major Generation Assets

As of December 31, 2009.

Nuclear power station

Hard-coal-fired power station

Lignite-fired power station

Oil-fired power station

Gas-fired power station

Waste incineration

Hydroelectric power station

Nether-

lands

Germany

Hungary

France

Belgium

29

Generation Capacity by Sources

Attributable Power Generation Capacity1

MW 2009 2008 2007 2006

Nuclear 8,555 8,548 8,548 8,473

Hard coal 10,234 10,180 8,565 8,546

Lignite 921 1,314 1,314 1,315

Natural gas 4,852 4,356 5,258 5,118

Oil 1,095 1,145 1,145 1,153

Hydro 2,420 2,811 3,153 3,113

Others 329 395 216 214

Central Europe 28,407 28,749 28,479 28,172

Nuclear 8,555 8,548 8,548 8,473

Hard coal 6,272 7,475 7,466 7,461

Lignite 852 1,314 1,314 1,315

Natural gas 3,257 3,269 4,219 4,121

Oil 1,095 1,145 1,145 1,153

Hydro 2,373 2,811 3,153 3,113

Others 327 289 406 367

Germany 22,731 24,851 26,251 26,003

Hard coal 1,512 1,066 1,066 1,052

Natural gas 1,304 830 808 810

E.ON Benelux 2,816 1,902 1,880 1,868

Natural gas 228 230 95 95

Other 2 2 138 92

E.ON Hungary 230 232 233 187

Hard coal 2,451 1,531

Other 57

E.ON France 2,507 1,531

Other plants 123 233 115 114

1As of December 31, 2009.


Generation Assets

Lignite-fired Power Stations

As of December 31, 2009 Shareholders Consolidation1 Net MW

Central Europe share

Start-up date% MW

Buschhaus E.ON 2 352 100.0 352 1985

Schkopau E.ON/Saale Energie 1 900 55.6 500 1995

Total Germany 1,252 852

Other countries (<100 MW) 243 69

Total Central Europe 1,495 921

1Consolidation: 1 E.ON share • 2 Full consolidation • 3 Power procurement from non-consolidated jointly-owned power plants • 4 Operations responsibility only; not consolidated

Gas-fired Power Stations



Start-up date% MW

Burghausen E.ON 4 120 100.0 120 2001

Franken I/1 E.ON 2 383 100.0 383 1973

Franken I/2 E.ON 2 440 100.0 440 1976

GKW Weser/Veltheim 4 GT E.ON/Stw. Bielefeld 2 400 66.7 267 1975

Huntorf E.ON 2 321 100.0 321 1977

Irsching 3 E.ON 2 415 100.0 415 1974

Jena-Süd E.ON/other 2 197 53 104 1996

Kirchlengern GT 1/2 E.ON/other 4 200 62.8 126 1980/2005

Kirchmöser E.ON 2 160 100.0 160 1994

Obernburg E.ON/other 4 100 50.0 50 1995

Staudinger 4 E.ON 2 622 100.0 622 1977

Others (<100 MW) 370 249

Total Germany 3,728 3,257

Galileïstraat E.ON 2 209 100.0 209 1988

RoCa 31 E.ON 2 220 100.0 220 1996

Den Haag E.ON 2 112 100.0 112 1982

Total Netherlands 842 842

Vilvoorde E.ON 2 385 100.0 376 2001

Others (<100 MW) 77 86

Total Belgium 462 462


Total Central Europe 5,386 4,852

1Power station operated by E.ON Benelux under long-term cross-border leasing arrangement.2Consolidation: 1 E.ON share • 2 Full consolidation • 3 Power procurement from non-consolidated jointly-owned power plants • 4 Operations responsibility only; not consolidated

Oil-fired Power Stations



Start-up date% MW

Ingolstadt 3 E.ON 2 386 100.0 386 1973

Ingolstadt 4 E.ON 2 386 100.0 386 1974

Others (<100 MW) 323 323



31

Hard-Coal-fired Power Stations



Start-up date% MW

Datteln 3 E.ON 2 113 100.0 113 1969

GKW Weser/Veltheim 3 E.ON/Stw. Bielefeld 2 303 66.7 202 1970

Heyden E.ON 2 875 100.0 875 1987

Kiel E.ON/Stw. Kiel 3 323 50.0 162 1970

Knepper C E.ON 2 345 100.0 345 1971

Rostock1 E.ON/RWE/VE 4 508 50.4 256 1994

Scholven B E.ON 2 345 100.0 345 1968

Scholven C E.ON 2 345 100.0 345 1969

Scholven D E.ON 2 345 100.0 345 1970

Scholven E E.ON 2 345 100.0 345 1971

Scholven F E.ON 2 676 100.0 676 1979

Shamrock E.ON 2 132 100.0 132 1957

Staudinger 1 E.ON 2 249 100.0 249 1965

Staudinger 3 E.ON 2 293 100.0 293 1970

Staudinger 5 E.ON 2 510 100.0 510 1992

Wilhelmshaven E.ON 2 757 100.0 757 1976

Others (<100 MW) 353 322

Total Germany 6,817 6,272

Maasvlakte 12 E.ON 2 531 100.0 531 1988

Maasvlakte 22 E.ON 2 531 100.0 531 1987

Total Netherlands 1,062 1,062

Langerlo 1 E.ON 2 224 100.0 224 1975

Langerlo 2 E.ON 2 225 100.0 225 1975

Total Belgium 449 449

Emile Huchet 4 E.ON 2 115 100.0 115 1959

Emile Huchet 5 E.ON 2 330 100.0 330 1973

Emile Huchet 6 E.ON 2 600 100.0 600 1981

Hornaing 3 E.ON 2 240 100.0 240 1970

Lucy 3 E.ON 2 245 100.0 245 1971

Provence 4 E.ON 2 210 100.0 210 1967

Provence 5 E.ON 2 595 100.0 595 1984

Total France 2,335 2,335

Total 10,664 10,118

Other countries 166 116


1Sold effective to EnBW January 1, 2010.2Power station operated by E.ON Benelux under long-term cross-border leasing arrangement.3Consolidation: 1 E.ON share • 2 Full consolidation • 3 Power procurement from non-consolidated jointly-owned power plants • 4 Operations responsibility only; not consolidated


Others (Waste, Wind, Biomass et al.)1

As of December 31, 2009Total capacity

net MW MW

Waste 332 260

Wind, biomass et al. 109 69

Total Central Europe 441 329

1Information about our renewables operations is in the section of this report on our Climate & Renewables market unit starting on page 156.

Generation Assets

Hydroelectric Power Stations



Start-up date% MW

Braunau-Simbach E.ON/Verbund 3 100 50.0 50 1953

Happurg E.ON 2 160 100.0 160 1958

Jochenstein E.ON/Verbund 3 132 50.0 66 1955

Langenprozelten E.ON 2 164 100.0 164 1976

Walchensee E.ON 2 124 100.0 124 1924

Waldeck 2 E.ON 2 460 100.0 460 1974

Others (<100 MW) 1,486 1,349

Total Germany 2 2,626 2,373



1Consolidation: 1 E.ON share • 2 Full consolidation • 3 Power procurement from non-consolidated jointly-owned power plants • 4 Operations responsibility only; not consolidated2Information about our renewables operations is in the section of this report on our Climate & Renewables market unit starting on page 154.

Nuclear Power Stations



Start-up date% MW

Brokdorf E.ON/VE 2 1,410 80.0 1,128 1986

Brunsbüttel E.ON/VE 3 771 33.3 257 1976

Emsland E.ON/RWE 3 1,329 12.5 166 1988

Grafenrheinfeld E.ON 2 1,275 100.0 1,275 1981

Grohnde E.ON/Stw. Bielefeld 2 1,360 83.3 1,133 1984

Gundremmingen B E.ON/RWE 1 1,284 25.0 321 1984

Gundremmingen C E.ON/RWE 1 1,288 25.0 322 1984

Isar 1 E.ON 2 878 100.0 878 1977

Isar 2 E.ON/SWM 1 1,410 75.0 1,058 1988

Krümmel E.ON/VE 3 1,346 50.0 673 1983

Unterweser E.ON 2 1,345 100.0 1,345 1978



33

Generation Output by Sources

Power Generation Output1

GWh 2009 2008 2007 2006

Nuclear 63,313 62,062 62,214 62,766

Hard coal 40,250 45,388 42,461 39,839

Lignite 6,680 8,972 8,675 8,630

Oil/gas 8,669 9,503 9,293 8,411

Waste incineration 1,688 1,856 1,324 1,110

Hydro 6,872 7,777 7,281 7,292

Other renewables 1,128 1,256 1,775 1,599

Combined heat and power 1,628 1,458 1,466 1,629

Others 181 32 42 29

Central Europe 130,409 138,304 134,531 131,304

Nuclear 63,313 62,062 62,213 62,766

Hard coal 26,065 33,908 35,921 33,309

Lignite 6,380 8,717 8,435 8,563

Oil/gas 4,406 5,275 5,568 4,580

Waste incineration 1,688 1,856 1,324 1,110

Hydro 6,802 7,725 7,232 7,225

Other renewables 1,128 1,256 1,775 1,599

Combined heat and power 1,628 1,458 1,466 1,629

Others 1 2 43 29

Germany 111,411 122,259 123,977 120,808

Hard coal 6,919 7,211 6,540 6,531

Oil/gas 3,554 3,265 2,774 3,182

E.ON Benelux 10,473 10,476 9,314 9,713

Oil/gas 706 963 951 649

E.ON Hungary 706 963 951 649

Hard coal 7,266 4,269

Others 183 30

E.ON France 7,449 4,299

Lignite 300 255 240 67

Hydro 70 52 49 68

E.ON Czech 370 307 289 135



Provisions for Nuclear Power

Provisions for Nuclear Power

€ in billions 2009 2008

Non-contractual nuclear waste management obligations 9.09 9.16

Thereof advance payments made to the “Bundesamt für Strahlenschutz” -0.80 -0.79

Total 8.20 8.37

Contractual nuclear waste management obligations 3.86 3.74

Thereof advance payments made to waste management companies -0.03 -0.05

Total 3.83 3.69

35

Transmission System1 of E.ON Netz2

Europe

Total grid length: 43,000 km E.ON Energie Group in Germany

(including 110 kV lines of regional utilities).

Key Figures E.ON Netz 2009

Customers 244 grid customers1

Customers 290 traders

Area 140,000 km2

1E.g. regional or local energy distributors, major industry, power plants.2As of December 31, 2008.

Power Transmission System Length 2009

Kilometers 380 kV 220 kV 110 kV1

E.ON Netz GmbH 5,747 4,921 21,950

Germany 18,600 17,400 75,200

1The 110 kV is not depicted in the graphic.

1Sold effective December 31, 2009. 2As of December 31, 2008.

Vattenfall

Europe

Transmission

(VET)

RWE

Transportnetz

Strom

RWE

Transportnetz

Strom

EnBW

Transportnetze

Company Headquarters

Operating center (BZ)

Main control center

Substation

Nether lands

Denmark

Sweden

Lehrte

Bamberg

Bayreuth Czech Republic

Austria

Austria

Dachau


Integration of Wind Energy into the Grid

Total installed capacity of wind power in Germany E.ON control zone Other control zone

Wind Power Boom in Germany

1995 2000 2002 2004 2005 2006 2010 2015 2020

1,100 6,100 11,900 16,394 18,286 20,432 30,000 36,000 48,000MW

40,000

30,000

20,000

10,000

Source: ISET, ENE, dena.

37

Europe

Distribution System in the German Power Market

Central Europe—Major Shareholdings

As of December 31, 2009 %

E.ON Hanse AG 73.8

E.ON Westfalen Weser AG 62.8

E.ON Mitte AG 73.3

E.ON edis AG 70.2

E.ON Avacon AG 65.8

TEN Thüringer Energienetze GmbH 53.0

E.ON Bayern AG 100.0

E.ON Mitte AG

E.ON Westfalen Weser AG

E.ON Hanse AG

E.ON Bayern AG

TEN Thüringer Energienetz GmbH

E.ON Avacon AG

E.ON edis AG


Europe

Distribution System in the German Gas Market

Central Europe—Major Shareholdings


E.ON Hanse AG 73.8

E.ON Westfalen Weser AG 62.8

E.ON Mitte AG 73.3

E.ON edis AG 70.2

E.ON Avacon AG 65.8

TEN Thüringer Energienetze GmbH 53.0

E.ON Bayern AG 100.0

E.ON Mitte AG

E.ON Westfalen Weser AG

E.ON Hanse AG

E.ON Bayern AG

TEN Thüringer Energienetz GmbH

E.ON Avacon AG

E.ON edis AG

Majority shareholdings

Gas supply of E.ON Hanse

in the supply area of E.ON edis

39

Europe

Activities in the German Sales Market—Power

Central Europe—Major Shareholdings Power


E WIE EINFACH Strom & Gas GmbH 100.0

E.ON Vertrieb Deutschland GmbH 84.6

Key Figures Power


Power supplied 297.3 billion kWh1 555 billion kWh

Customers 7 million 45 million

Transmission system3 length (220/380 kV) 10,600 km 111,200 km4

Generation capacity 22,731 MW 138,424 MW

Generation output 111.4 billion kWh 490 billion kWh

1Including sale of power of E.ON Energy Sales (EES) in other European countries.2Source: BDEW; data is only available for former years.3Sold effective December 31, 2009.4Including 110 kV.

E WIE EINFACH

E.ON Vertrieb DeutschlandMunich

Cologne


Europe

Activities in the German Sales Market—Gas

Key Figures Gas

As of December 31, 2009Central Europeshareholdings1 Overall market

Gas supplied 92.0 billion kWh 922.2 billion kWh

Customers 1 million 19.1 million2

1Consolidated shareholdings >50.0 percent.2Source: eurogas; data is only available for fomer years.

Central Europe—Major Shareholdings Gas


E WIE EINFACH Strom & Gas GmbH 100.0

E.ON Vertrieb Deutschland GmbH 84.6

E WIE EINFACH

E.ON Vertrieb DeutschlandMunich

Cologne

41

Europe

Activities in Benelux

Central Europe—Shareholdings


E.ON Benelux 100.0

Key Figures Power and Gas


Power supplied1, 2 24.0 billion kWh 95 billion kWh

Customers 0.31 million 8.0 million

Generation capacity 2,816 MWel 20,904 MWel

Generation output 10.5 billion kWh 96 billion kWh

Gas supplied 5.6 billion kWh –

Gas customers 0.17 million –

1Source: BDEW; data is only available for former years.2Only retail business.

Leiden 83 MW

Den Haag 112 MW

UCML 70 MW

Maasvlakte 1,062 MW

Galileïstraat 209 MW

Delft 93 MW

RoCa 269 MW

Vilvoorde 385 MW

Langerlo 556 MW



Nether lands

Belgium

Luxembourg


Key Figures

As of December 31, 2009 France2 Overall market1

Power supplied2 20.2 billion kWh 446 billion kWh

Attributable generation capacity 2,335 MW 120.3 GW

Generation output2 7.5 billion kWh 519 billion kWh

Gas supplied 9.1 billion kWh 529 billion kWh

Customers 203 2 35 million

1Source: CRE.2Industrial customers.

Activities in France

Europe


Paris

240 MW Hornaing

1,045 MW Emile Huchet

245 MW Lucy

805 MW Gardanne

43

Europe

Activities in Switzerland

Minority shareholding ≥20 percent

Key Figures

As of December 31, 2009Central Europeshareholdings1 Overall market3

Power supplied2 8.1 billion kWh 58.7 billion kWh


Transmission system length 763 km 13,400 km

Generation capacity 2,465 MW 17,100 MW

1Source: BKW. Figures not consolidated into E.ON Group.2In Switzerland.3As of December 31, 2008.

E.ON Energie—Shareholdings


BKW 21.01

1Equity interest 21.0 percent, voting interest 20.0 percent.

BKW

21%


Europe

Central Europe East—Activities in the Power Market


Minority shareholdings ≥20 percent;

management by E.ON

Slovakia

Hungary

Czech Republic

Romania

Bulgaria

45

Key Figures Power1

As of December 31, 2009Central Europeshareholdings2 Overall market3

Bulgaria 2008 2008

Power supplied 5.2 billion kWh 33 billion kWh


Transmission system length (≥110 kV) 34 km 14,610 km

Generation capacity 0 MW 9,675 MW

Romania 2009 2009

Power supplied 4.1 billion kWh 41.6 billion kWh


Transmission system length (≥110 kV) 3,952.3 km 9,028.8 km


Slovakia 2009 2009



Transmission system length (≥110 kV) 2,758 km 9,357 km


Czech Republic 2009 2009

Power supplied 12.8 billion kWh 60.5 billion kWh




Hungary 2009 2008





1Key figures of all shareholdings > 20 percent as of December 31, 2008.2Only power plants > 20 MW included.3Overall market figures pro forma, as not all data available for 2009.

Central Europe—Shareholdings Power


Bulgaria

E.ON Bulgaria EAD (holding and services) 100.0

E.ON Bulgaria Grid AD 67.0

E.ON Bulgaria Sales AD 67.0

Romania

E.ON România S.R.L. 20.41

E.ON Moldova Distributie S.A. 51.0

E.ON Moldova Furnizare S.A. 51.0

Slovakia

E.ON Slovensko, a.s. 100.0

Západoslovenská Energetiká 40.0

Czech Republic

E.ON Czech Holding AG 100.0

Teplárna Otrokovice, a.s. 66.0

E.ON Distribuce, a.s. (power and gas) 100.0

E.ON Energie, a.s. (power and gas) 100.0

E.ON Česká republika, s.r.o. 100.0

E.ON Trend s.r.o. 100.0

Teplárna Tábor, a.s. 51.0

E.ON Servisni, s.r.o. 100.0

Hungary

E.ON Hungária Energetikai ZRt. 100.0

Debreceni Kombinált Ciklusú Erömü Kft. 100.0

Nyíregyházi Kombinált Ciklusú Erömü Kft. 100.0

E.ON Energiatermelö Kft. 100.0

E.ON Dél-dunántúli Áramhálózati ZRt. 100.0

E.ON Észak-dunántúli Áramhálózati ZRt. 100.0

E.ON Tiszántúli Áramhálózati ZRt. 100.0

E.ON Energiaszolgáltató Kft. 100.0

E.ON Hálózati Szolgáltató Kft. 100.0

E.ON Ügyfélszolgálati Kft. 100.0

E.ON Gazdasági Szolgáltató Kft. 100.0

1Additional 69.8% held by E.ON Ruhrgas International.


Europe

Central Europe East—Activities in the Gas Market

Key Figures Gas


Czech Republic

Gas supplied 4.0 billion kWh 93.8 billion kWh1


Hungary

Natural gas supplied 9.9 billion kWh 130 billion kWh2


Romania

Gas supplied 25.6 billion kWh 140.1 billion kWh


1Source: eurogas.2Data 2008.

Central Europe—Shareholdings Gas


Czech Republic

E.ON Distribuce, a.s. (power and gas) 100.0

E.ON Energie, a.s. (power and gas) 100.0

E.ON Česká republika, s.r.o. 100.0

Prazská Plynárenská, a.s. 49.0

Hungary

E.ON Dél-dunántúli Gázhálózati ZRt. (DDGÁZ) 99.9

E.ON Közép-dunántúli Gázhálózati ZRt. (KÖGÁZ) 99.9

Romania

E.ON Gas Distributie S.A.1 51.0

E.ON Gas România1 51.0

1Since December 31, 2008.


Minority shareholdings ≥20 percent

1PP share of 49 percent but consolidation is pursued according to new corporation contract with the town of Prague since January 1, 2010.

PP1 Slovakia

Hungary

Czech Republic

Romania

Bulgaria

47

Power Customers in Europe

Customers in millions Total: approx. 17.0

Direct- and Indirect-Access Customers

approx. 1.7 Indirect-access customers in Germany via companies with shareholdings >20.0%

approx. 1.3 Indirect-access customers outside Germany via companies with shareholdings >20.0%

Direct-access customers in Germany

(consolidated Group companies)

Direct-access customers outside Germany

approx. 7.6

approx. 6.5


Composition of Power Prices in Germany

ct/kWh Average price for households: 23.69

13.89 Procurement, grid access fee, energy data management, and sales

3.78 VAT

2.05 Power Tax

1.79 Concession fee2

2.18 CHP & Renewables Act

1Power supplied to households; annual sales volume 3,500 kWh as of spring 2010.2Concession fees vary from city to city depending on number of residents.Source: BDEW.

Average Power Price for Households1

Power generation, transmission and supply CHP Act Power Tax Renewable Energies Act Concession fee

Average Power Price for Industrial Customers1

2000

6.05

2001

6.47

2002

6.86

2003

7.98

2004

8.92

2005

9.73

2006

11.53

2007

11.41

2008 2009 20102

13.25 11.40 11.44ct/kWh

12

10

8

6

4

2

1Supply at medium voltage level. Demand of 100 kW/1,600 h to 4,000 kW/5,000 h.2As of spring 2010.Sources: VEA, BDEW.

0.26

0.13

0.20

5.46

0.31

0.11

0.19

0.24

5.62

0.36

0.11

0.05

0.35

5.99

1.23

0.11

0.05

0.42

6.17

1.23

0.11

0.05

0.51

7.02

1.23

0.11

0.05

0.69

7.65

1.23

0.11

0.05

0.88

9.26

1.23

0.11

0.05

0.98

9.04

1.23

0.11

0.05

1.13

10.74

1.23

0.11

0.05

1.20

8.81

1.23

0.11

0.05

2.05

8.00

Generation, network, supply State burden

100%

80%

60%

40%

20%

NorwayGermany Hungary Belgium Poland Czech RepublicRomania

Power Price in Europe1

1Residential customers with annual consumption of 2,500–5,000 kWh.Source: Eurostat.

49

Composition of Power Prices

Source: BDEW, 2009.

Monthly power bill fora 3-person household (3,500 kWh/year)

20091999

67.7048.20

41.53

33.80

26.17

14.40

60.00

40.00

20.00

Taxes, Renewable Energies Act, CHP Act, Power Tax, Concession fee, VAT

Generation, transport and supply

Development of Power Prices for Average Household Customers in Germany


Key Figures

Central Europe Key Figures

€ in millions 2009 2008 +/- %

Total sales 41,419 41,135 +0.7

Adjusted EBITDA 6,479 6,266 +3.4

Depreciation/amortization and write-downs -1,662 -1,546 +7.5

Adjusted EBIT 4,817 4,720 +2.1

Cash provided by operating activities 5,180 4,016 +29.0

Returns

Capital employed 22,171 19,310 +14.8

ROCE 21.7% 24.4% -2.7

Cost of capital1 9.2% 9.2% 0.03

Power procurement2

Own generation 130.4 bn kWh 138.3 bn kWh -5.7

Purchases 260.6 bn kWh 251.4 bn kWh +3.7from jointly owned power plants 5.4 bn kWh 4.5 bn kWh +20.0Energy Trading/outside sources 255.2 bn kWh 246.9 bn kWh +3.4

Power procured 391.0 bn kWh 389.7 bn kWh +0.3

Station use, line loss, pumped storage hydro -13.0 bn kWh -13.5 bn kWh +3.7

Power sales 378.0 bn kWh 376.2 bn kWh +0.5

Power sales by customer segment

Residential and small commercial 46.3 bn kWh 46.8 bn kWh -1.1

Industrial and large commercial 75.3 bn kWh 82.0 bn kWh -8.2

Sales partners 105.9 bn kWh 101.7 bn kWh +4.1

Wholesale market/Energy Trading 150.5 bn kWh 145.7 bn kWh +3.3

Installed attributable generating capacity 28,407 MW 28,479 MW -0.3

1Before taxes.2In 2009, we deployed a new IT system across our company for gathering energy-related data and also modified our classification methods.3Change in percentage points.

51

Pan-European GasMarket Unit

52 Introduction

53 Market Overview Germany


55 E.ON Ruhrgas—Business Activities along the Gas Value Chain

55 E.ON Ruhrgas—2009 Sales

56 European Gas Imports Development

57 E.ON Ruhrgas—Gas Supply Structure by Country in 2009

58 E.ON Ruhrgas—Sales Volumes by Sectors 2009

59 E.ON Ruhrgas—2003–2009 Sales Abroad

59 European Gas Infrastructure

60 Liquefied Natural Gas (LNG)

61 Activities of E.ON Ruhrgas in LNG

62 LNG Flows to Europe 2008 vs. 2010

63 E.ON Ruhrgas International Shareholdings

65 E.ON Ruhrgas—Upstream Activities

66 E.ON Ruhrgas—Activities in Russia

67 Gas Production in Russia—Yuzhno Russkoye

68 E.ON Gastransport—Pipeline and Storage Joint Ventures

69 E.ON Gastransport—Pipelines in Germany

69 E.ON Gastransport—Transmission

70 E.ON Gastransport—Transport

71 E.ON Gas Storage

73 E.ON Ruhrgas—Involvement in the German Gas Market

74 German Natural Gas Consumption by Market Sector

74 Residential Heating Systems in Germany

75 E.ON Ruhrgas—Activities in Slovakia

76 E.ON Ruhrgas—Activities in Hungary

77 E.ON Ruhrgas—Activities in Romania

78 Key Figures

52 Pan-European Gas Market Unit

Introduction

E.ON Ruhrgas is the lead company of the Pan-European Gas

market unit and is responsible for all of E.ON’s non-retail gas

activities in Europe. In terms of sales, E.ON Ruhrgas is one of

the leading non-state-owned gas companies in Europe and

the largest gas company in Germany. E.ON Ruhrgas’s principal

business is the exploration and production, supply, transmis-

sion, storage and sales of natural gas. E.ON Ruhrgas also holds

numerous stakes in German and other European gas compa-

nies, as well as a minority shareholding in Gazprom, Russia’s

main natural gas exploration, production, transportation and

marketing company. In 2009, the Pan-European Gas market

unit recorded revenues of €20.6 billion and adjusted EBIT of

€1.7 billion.

In 2009, E.ON Ruhrgas entered into the following significant

transactions:

• In October 2009, E.ON finalized the acquisition of just

under 25 percent of Yuzhno Russkoye, a natural gas field

in Siberia, from Gazprom. Yuzhno Russkoye has more

than 600 billion m3 of reserves, making it one of the world’s

largest gas fields.

• Production started at Rita field in the Southern North

Sea in March 2009. Rita, in which E.ON has a 74-percent

stake and is the operator, represents a significant tech-

nical achievement: the first successful completion of a

dual lateral well in a carboniferous reservoir in the U.K.

continental shelf. Rita produces 200 million m3 of gas annu-

ally for the U.K. market, enough to supply 100,000 homes.

• In October 2009, a new production platform was secured

to the seabed in 42 meters of water in Babbage gas

field. Located in the Southern North Sea 80 km off the

U.K. coasts, it is the first new platform to be operated

by E.ON Ruhrgas. Babbage field, in which E.ON Ruhrgas

owns a 47-percent stake, begins production in July 2010.

• E.ON Ruhrgas expanded its LNG spot-cargo activities,

securing attractively priced LNG to supply our markets

and our gas-fired power plants in Spain. On the lique-

faction side, E.ON Ruhrgas took on a leading role in a

promising new LNG project in Equatorial Guinea.

• In 2008, E.ON Gastransport and bayernets formed a

company called NetConnectGermany (“NCG”) to create

a joint market area. In 2009, the NCG market area was

expanded to include the gas networks of ENI Gas Trans-

port Deutschland, GRTgas Deutschland, and GVS Netz.

This further simplifies transport for gas shippers, increases

liquidity at NCG’s virtual trading point, and promotes

competition in gas sales.

• New gas storage capacity entered services at an E.ON

Gas Storage facility in Zsana, Hungary, in December 2009.

The expansion project, which took less than two years to

complete, increased Zsana’s working gas capacity from

1.5 billion m3 to 2.1 billion m3, making it one of the biggest

gas storage facilities in Central and Eastern Europe.

• In December 2009, E.ON sold most of Thüga to Integra/

KOM9, a consortium of municipal utilities, for approximately

€2.9 billion. Thüga’s stakes in GASAG Berliner Gas werke,

HEAG Südhessische Energie, Stadtwerke Duisburg, and

Stadtwerke Karlsruhe have been excluded from the sale.

53

Market Overview Germany

5 supra-regional long-distance companies Level 1

Gas consumption

895 billion kWh

10 regional long-distance gas companies

Transmission companies

Imports

916 billion kWh

Domestic production

142 billion kWh

Over 700 regional and local municipalities

Distribution companies

Sources: WEG Wirtschaftsverband Erdöl- und Erdgasgewinnung e. V., Statistisches Bundesamt, BMWi; January 2010.

Pan-European Gas—Gas Markets with E.ON Core Presence

Billion kWhGas demand

as of Dec. 31, 2009

Slovakia 75 billion kWh

Hungary 125 billion kWh

Romania 150 billion kWh

Italy 890 billion kWh

Germany 895 billion kWh

Source: E.ON estimate.


Business Activities1

E.ON AG

Pan-European Gas Market Unit

E.ON Ruhrgas Non-regulated E.ON Ruhrgas Regulated E.ON Ruhrgas Others

Exploration & Production

• E.ON Ruhrgas Exploration &

Produktion GmbH 100%

• E.ON Ruhrgas UK Exploration &

Production Ltd. 100%

• E.ON Ruhrgas Norge AS 100%

• ZAO Gazprom YRGM Develop-

ment 100%

• E.ON Ruhrgas E&P Exploration &

Produktion Ägypten GmbH 100%

• E.ON Ruhrgas E&P Exploration &

Produktion Algerien GmbH 100%

Transmission

• E.ON Gas Grid GmbH 100%

• E.ON Gastransport GmbH 100%

• Marketing of transmission

capacities/operation of pipeline

network

Storage

• E.ON Gas Storage GmbH 100%

• E.ON Földgáz Storage Zrt. 100%

E.ON Ruhrgas

International AG 100%

• E.ON Földgáz Trade Zrt 100%

• Approx. 25 energy shareholdings

• Development and expansion of

business activities in Europe

Supply & Sales

E.ON Ruhrgas AG 100%

• Gas procurement

• Gas sales

• Network operation

• Technical development, advice,

service

Regulated project companies and

other companies

• Construction and operation of

high-pressure gas pipelines

Non-regulated project companies

and other companies

• Worldwide design, construction

and operation of pipeline sys-

tems for the transportation,

storage and distribution of gas,

oil, products, water and slurries

• Construction and operation of

underground gas facilities

• Laying and rental of fibre-optic

cables for telecommunications

companies

OAO Gazprom 3.5%1As of December 31, 2009.

55

E.ON Ruhrgas—Business Activities along the Gas Value Chain

E.ON Ruhrgas—2009 Sales

Major market positions

• E.ON Ruhrgas is the market leader in Germany with total

gas sales of 609 billion kWh (2009).

• E.ON Ruhrgas is among the leading gas companies in

Europe.

• Sound relationship with all major gas producers, above

all in the Netherlands, Norway and Russia.

• Strategic pipeline assets and transmission rights facilitate

access to important sales markets in Europe.

• Competence and expertise in pipeline operations as a

basis for participation in other strategic pipeline projects.

• E.ON Gas Storage subsidiary is among the leading storage

operators in Europe.


Production Transmission/Storage Supply/Wholesale Distribution Retail

non-regulated regulated (Storage: different systems, e.g. in Germany no tariff regulation)

4.647

17.659

€ in millions

Sales by Business

Other/consolidation

Regulated

Non-regulated

0 2,500 5,000 7,500 10,000 12,500 15,000 17,500

–1.666


European Gas Imports Development

Key challenges of European gas markets

• The financial crisis currently leads to reduced gas demand

and to temporary oversupply in the markets.

• In the long run increasing gas demand and declining

indigenous production require additional import sources

that need to be developed in time.

• Goal of EU liberalization policy to promote more open

and competitive gas markets: e.g. remove bottlenecks in

cross-border capacities, develop trading hubs.

• Enhance security of supply (long-term supply contracts,

additional infrastructure, further supply diversification

opportunities through LNG).

Billion m3

Gas Supply

1Of which: Qatar 4%, Egypt 1%, Trinidad 1%, Nigeria 2% (2009).Basis for imports: contracted volumes and prolongations. Demand forecast according to IEA World Energy Outlook 2009.

200913%

202024%

203025% LNG share in supplies

456 520 570

15% Domestic production24%

38%

17% Norway

18%20%

30% Russia30%23%

12% Algeria13%

10%

9% Other non-EU imports110%

9%

2% Advanced projects 2%

15% Future projects 3%

57

E.ON Ruhrgas—Gas Supply Structure by Country in 2009

Long-term import contracts secure gas supplies

• In order to provide a sound basis for gas supplies, E.ON

Ruhrgas concludes long-term agreements with producers

and relies on a diversified portfolio of purchase sources.

• Long-term take-or-pay commitments enable the producers

to invest the billions required to develop new gas fields

and lay the pipelines to connect them to the transmission

infrastructure.

• At the same time, these commitments are the foundation

for ensuring long-term supplies of gas at competitive

prices in the purchasing countries.

• This fair balance of risks is a sound basis for cooperation

in a spirit of trust and in the interests of both parties.

Billion kWh Total: 624.1 billion kWh

134.4 Germany

93.1 Netherlands

17.7 Denmark

47.8 Others1

Norway 166.8

Russia 164.3

E.ON Ruhrgas—Gas Supplies by Country

1Belgium, Spain, Hungary, Italy, U.K., Austria, France.


E.ON Ruhrgas—Sales Volumes by Sectors 2009

Contractual flexibility

• Most customers buy all the gas they need from E.ON

Ruhrgas under flexible contracts.

• E.ON Ruhrgas structures its gas deliveries to the distri-

bution companies flexible enough so that they are able

to meet the fluctuations in demand due to rises and falls

in temperature.

• This flexibility can be provided based on the contractual

flexibility of the E.ON Ruhrgas supply portfolio and the

underground storage facilities.

E.ON Ruhrgas

Contracts

1,601

Points of supply

2,070

Breakdown of natural gas sales

42% 22% 13% 23%

Number of customers/countries

14 customers 103 customers 152 customers 13 countries

Regional distributors Local utilities Industrial customers Sales abroad

Prices

• Gas prices are based on competing fuels (mainly gas oil).

• The gas prices follow the development of gas oil prices

with a certain time lag.

• The gas prices for the distribution and industrial customers

of E.ON Ruhrgas are adjusted automatically at pre-deter-

mined intervals in accordance with the price adjustment

clauses agreed in the contracts.

59

Lisbon

Sines

Huelva

Córdoba

MadridValencia

BilbaoBarcelona

Lyon

Paris

Bern

Brussels

Essen Prague

Vienna

Rovigo

Ljubljana

Zagreb

Belgrade

Sofia

Istanbul

BrindisiRome

Athens

TunisSkikdaAlgiersArzew

BucharestLa Spezia

Krk

Bratislava

Budapest

Isle of GrainLondon

Emden

Ecofisk

Tyra

Dublin

Belfast

Sleipner

Heimdal

FriggTroll

Kollsnes

OsebergKarsto

Oslo

Stockholm

Helsinki

St. Petersburg

Minsk

WarsawBerlinWilhelmshaven

Copenhagen

Stavanger

Statfjord Gullfaks

Milford Haven

Zeebrugge

Montoir

Fos-sur-Mer

Cartagena

El Ferrol

E.ON Ruhrgas—2003–2009 Sales Abroad

European Gas Infrastructure

LNG regasification terminals existing planned/under construction

Pipelines existing planned/under construction

Gas field

Billion kWh

65

2003 2009

146

150

100

50

E.ON Ruhrgas—2003–2009 Sales Abroad

88

2004

135

2005

160

2006 2007

180

2008

175


Liquefied Natural Gas (LNG)

Options

Strong projected growth in global LNG demand which gives

E.ON opportunity to:

• Diversify gas supply portfolio through long-term and

spot LNG supply contracts and regasification capacity in

E.ON’s target markets.

• Build up an integrated LNG position including upstream.

Value chain

Equity gas Liquefaction Transport by ship Regasification Markets

Percentages

Source: E.ON Ruhrgas.

10 LNG

90 Pipeline gas

LNG—Natural Gas Supplies to EU30 and Share in 2009

Percentages

Source: E.ON Ruhrgas.

24 LNG

76 Pipeline gas

LNG—Natural Gas Supplies to EU30 and Share in 2020

61

Activities of E.ON Ruhrgas in LNG

E.ON is actively developing all parts of the LNG value chain.

The global market for LNG is highly competitive. E.ON is com-

peting with players from all over the world, e.g. utilities and

international oil and gas companies.

Supply

Key task of E.ON Ruhrgas in the LNG business is to purchase

LNG volumes and optimize LNG supply.

The current geographical focus for securing LNG supplies is

the Middle East and Africa. In these regions E.ON Ruhrgas is

active in:

• Establishing contacts and building relevant relationships

with stakeholders.

• Analyzing and exploring E&P potential.

• Discussing with potential upstream and liquefaction

partners.

• Negotiating Sales and Purchase Agreements (SPAs) with

potential suppliers of LNG.

Integrated LNG projects

• E.ON Ruhrgas has been selected as lead investor (25%)

for a gas gathering project in Equatorial Guinea which

sets out to fulfil the prerequisites for developing a new

integrated natural gas liquefaction project in that country.

• In Nigeria, E.ON Ruhrgas has been prequalified as a core

investor in the southeastern concession area of the Nige-

rian Gas Master Plan. Our strategic objective is develop-

ing LNG export schemes while at the same time addressing

domestic infrastructure needs.

Shipping

Focusing on competitive transportation costs combined with

high HSE1 and reliability standards, E.ON is preparing to secure

needed shipping capacity for fob2 volumes under long-term

SPAs and for short-term spot or trading cargoes.

Regasification

E.ON Ruhrgas is currently managing strategically important

regasification assets all over Europe:

• Isle of Grain Terminal (U.K.): contracted annual capacity

of 1.7 billion m³/year for the duration of 19 years starting

end of 2010.

• Gate Terminal (Netherlands) contracted annual capacity

of 3 billion m³ for the duration of 20 years starting end

of 2011.

• OLT Offshore LNG Toscana (Italy): majority shareholder in

a consortium with Iride, Golar LNG and OLT-Energy to

build and operate a FSRU (floating storage and regasifi-

cation unit) 22 km offshore Livorno with a capacity of

3.75 billion m³/year starting end of 2011.

• Wilhelmshaven (Germany): majority shareholder in

DFTG (Deutsche Flüssigerdgas Terminal Gesellschaft);

the project remains a value mid-/long-term option for

further expanding our regas portfolio.

• Isle of Krk (Croatia): majority shareholder in a consortium

(Adria LNG d.o.o.) with OMV, Total and Geoplin to build

a regasification terminal with a capacity of 10 to 15 bil-

lion m³/year; this project is at an early stage of project

development.

Trading

Beside the long-term LNG supply contracts a global LNG spot

market has emerged where regas capacities and arbitrage

opportunities are being utilized. For E.ON, acquiring LNG spot

cargoes allows for a quick entry into the market and to gain

further operational experience.

1HSE—health, safety, environment.2fob—free on board.


LNG Flows to Europe 2008 vs. 2010 1

LNG supplies 2008: 55.3 billion m3

Imports 2010: 94 billion m3

1 In billion m3/year.2 Including 3.5 billion m3/year from Nigeria via Montoir for Enel/Italy.Source: Cedigaz.

from Norway

Isle of GrainMilford Haven

Montoir

Zeebrugge

Rovigo

La Spezia

Fos-sur-Mer

BilbaoEl Ferrol

Sagunto

Sines

Huelva Cartagena

Arzew

Skikda

BrindisiMarmara Ereglisi

Revithoussa

Marsa el Brega

Aliaga

from Egypt, Oman, Qatar, Yemen

from Egypt, Oman, Qatarfrom Nigeria

from Trinidad

Barcelona

3.5 Enel

2.6

28.7

1.6

0.9

5.3

12.62

2.5

1.0

4

27

15

10

10

22

1

5

63

E.ON Ruhrgas International Shareholdings

As of December 31, 2009.

Supply country

Supplies/supply agreement

Cooperation agreement

Affiliate

Office/station

Lithuania

Latvia

Estonia

Finland

Russia

Belarus

Ukraine

Romania

Bulgaria

Croatia

Slovenia

Austria

Germany

Luxembourg

Belgium

Netherlands

SwitzerlandFrance

Italy

Liechtenstein Hungary

Slovakia

Czech

Republic

United

Kingdom

Poland

Denmark

Sweden

Norway


E.ON Ruhrgas International Shareholdings

E.ON Ruhrgas International Shareholdings outside Germany

Shareholdings Country Share held %Gas sales 2009

billion kWh

Gasnor AS Norway 14.00 2.2

Swedegas AB1 Sweden 29.59 –

Gasum Oy Finland 20.00 40.6

AS Eesti Gaas Estonia 33.66 6.5

JSC Latvijas Ga- ze Latvia 47.23 15.4

AB Lietuvos Dujos Lithuania 38.91 11.9

Rytu Skirstomieje Tinklai AB Lithuania 20.28 –

Inwestycyjna Spólka Energetyczna Sp. z o.o. (IRB) Poland 50.00 –

EUROPGAS a.s.2 Czech Republic 50.00 –

Nafta a.s. Slovakia 40.45 1.1

SPP as3 Slovakia 24.50 61.65

E.ON Földgáz Trade ZRt. Hungary 100.00 107.0

Panrusgáz ZRt. Hungary 50.00 72.6

Colonia-Cluj-Napoca-Energie S.R.L. (CCNE) Romania 33.33 –

S.C. Congaz S.A. Romania 28.59 3.2

E.ON România S.R.L.4 Romania 69.81 30.3

Ekopur d.o.o.5 Slovenia 100.00 –

Holdigaz SA Switzerland 2.21 –

Enovos S.A.6 Luxembourg 10.8 34.4

1Sold in February 2010.2EUROPGAS a.s. holds 50.0 percent of SPP Bohemia a.s. and 48.18 percent of Moravské naftové doly a.s. (MND) in the Czech Republic.3Via 50-percent shareholding in Slovak Gas Holding B.V. (the Netherlands).4Steered and consolidated by E.ON Energie AG (20.36 percent); further shareholder: European Bank for Reconstruction and Development (EBRD), London (9.83 percent).5Ekopur d.o.o. holds 7.1 percent of Geoplin d.o.o. in Slovenia.6Enovos is the result of a merger between SOTEG, CEGEDEL, and Saar Ferngas which became effective as of January 23, 2009.

65

E.ON Ruhrgas—Upstream Activities1

Norwegian Sea

Central North Sea

Southern North Sea

Minke

Hunter

Ravenspurn North

Johnston

Rita

Caister

Norway

U.K.

1Only fields in production by the end of 2009; therefore without Skarv.

Europe

Norwegian Sea

Interest

Njord 30%

E.ON Ruhrgas Exploration & Production

2009 2008 2007

Gas

U.K. 846 million m3 768 million m3 751 million m3

Norway 574 million m3 592 million m3 20 million m3

Total gas 1,420 million m3 1,360 million m3 771 million m3

Oil and

liquids

U.K. 2.4 million bbl 2.5 million bbl 2.9 million bbl

Norway 3.1 million bbl 3.4 million bbl 2.1 million bbl

Total oil and

liquids 5.5 million bbl 5.9 million bbl 5.0 million bbl

Total

production 14.4 million boe 14.4 million boe 9.8 million boe

Central North Sea

Interest

Elgin/Franklin 5.2%

Scoter 12.0%

West Franklin 5.2%

Merganser 7.9%

Glenelg 18.6%

Southern North Sea

Interest

Rita 74.0%

Ravenspurn North 28.8%

Johnston 50.1%

Hunter 79.0%

Caister 40.0%

Minke 42.7%

Merganser

Scoter

Elgin

Glenelg

West Franklin

Franklin


E.ON Ruhrgas—Activities in Russia

Gazprom Group

• Gas reserves 33.1 trillion m3

• Gas production1 462 billion m3

• Pipeline system1 159,500 km

• Exports

– Europe1 140 billion m3

– CIS and Baltic states 66 billion m3

1As of December 31, 2009. Source: Gazprom Investor Presentation, February 2010.

Partnership with Gazprom

• Russia is one of the main sources of natural gas for

Europe.

• E.ON Ruhrgas and Gazprom with long-standing

partnership.

• Long-term supply contracts running up to 2036.

• E.ON Ruhrgas interest/direct and indirect 3.5 percent.

67

Supergiant Giant (> 100 billion m3) Gas field

Pipeline system existing pipelines planned pipelines

• Start of production Q4/2007.

• Proven and probable reserves of more than 600 billion m³

or at least 35 years of production.

• Plateau production of approximately 25 billion m³/year.

• Total investment for field development €2 billion.

• E.ON interest participation of 25 percent.

Gas Production in Russia—Yuzhno Russkoye

Russia

Surgut

NoyabrskSergino

Sveltyor

Berezovo

Salekhard

Labytnangi

Vorkuta Novyy Port

Jamburg

Dudinka

Norilsk

UrengoyYuzhno Russkoye


E.ON Gastransport—Pipeline and Storage Joint Ventures

Joint-venture pipelines: existing planned/in construction

Joint-venture underground storage

Europe

Shareholdings1

Percentages

(NETG) Nordrheinische Erdgastransportleitungsgesellschaft mbH & Co. KG, Haan (Rhld.)2 50.00

(METG) Mittelrheinische Erdgastransportleitungsgesellschaft mbH, Haan (Rhld.)2 100.00

(TENP) Trans Europa Naturgas Pipeline GmbH & Co. KG, Essen2 51.00

MEGAL Mittel-Europäische Gasleitungsgesellschaft mbH & Co. KG, Essen2 51.00

DEUDAN Deutsch/Dänische Erdgastransport-Gesellschaft mbH & Co. KG, Handewitt2 25.00

NETRA GmbH Norddeutsche Erdgas Transversale & Co. KG, Emstek2 40.60

GHG Gasspeicher Hannover Gesellschaft mbH, Hanover3 13.20

(EGL) Etzel Gas-Lager GmbH & Co. KG, Friedeburg-Etzel3 74.80

Transitgas AG, Zurich, Switzerland4 3.00

Baumgarten-Oberkappel Gasleitungsgesellschaft m.b.H., Vienna, Austria4, 5 15.00

(IUK) Interconnector (UK) Limited, London, United Kingdom4 15.09

BBL Company V.O.F., Groningen, Netherlands4 20.00

Nord Stream AG, Zug, Switzerland4 20.00

Tauerngasleitung Studien- und Planungsgesellschaft mbH (TGL), Wals, Austria4 45.00

E.ON Ruhrgas Nord Stream Anbindungsgesellschaft, Essen4, 6 100.00

1As of December 31, 2009. 2Held by E.ON Gastransport GmbH, Essen. 3Held by E.ON Gas Storage GmbH, Essen. 4Held by E.ON Ruhrgas AG, Essen. 5Holds the assets of the WAG West Austria Gasleitung via a financial lease agreement with OMV Gas. 6Has a 25-percent share in NEL and a 20-percent share in OPAL.

Zeebrugge

Brussels

Saarbrücken

TENP

SEL

MEGAL

WaidhausPrague

Passau

WAG

ViennaMunich

Bern

Milan

Transitgas

Wallbach

NETG

GHG

Salzwedel

Hamburg

NEL

Berlin

Dresden

OPAL

DEUDAN

Nord Stream

Essen

Emden

Dornum

NETRA EGL

IUK

BBL

Bacton

London

METG

69

E.ON Gastransport

• E.ON Gastransport GmbH is a subsidiary of E.ON Ruhrgas

AG and Germany‘s leading natural gas transmission

company.

• E.ON Gastransport operates Germany‘s largest and most

complex natural gas pipeline system.

• The business activities of E.ON Gastransport are subject to

the regulation supervised by the Federal Network Agency.

• Network operators E.ON Gastransport GmbH, bayernets

GmbH, Eni Gas Transport Deutschland S.p.A. (ENI D),

GRTgaz Deutschland GmbH and GVS Netz GmbH all com-

bined their group H-gas market areas under the

umbrella of NetConnect Germany GmbH & Co. KG (NCG)

as of 1 October 2009, creating the largest natural gas

market area in Germany.

• NCG handles balancing group management, the provi-

sion and operation of a virtual trading point, the online

provision of billing and control energy data and control

energy management.

• The NCG web portal can also be used for concluding bal-

ancing group contracts with E.ON Gastransport GmbH

for E.ON Gastransport GmbH’s L-gas market area.

E.ON Gastransport—Pipelines in Germany

E.ON Ruhrgas Pipelines in Germany1

km TotalMaintained by

E.ON Ruhrgas AG

Owned by E.ON Gastransport 6,498 6,428

Co-owned pipelines 1,805 602

DEUDAN (PC) 110 –

EGL (PC) 67 67

MEGAL (PC) 1,092 1,092

METG (PC) 425 425

NETG (PC) 285 144

NETRA (PC) 341 106

TENP (PC) 998 998

Companies in which E.ON Ruhrgas AG holds a stake through its subsidiary ERI – 2,037

Owned by third parties – 1,043

Total in Germany 11,621 12,942

1As of December 31, 2009.(PC) project company.


E.ON Gastransport—Transport

E.ON Gastransport pipeline system

Europe

Structural Data1

Length of transmission system 11,551 km

Annual quantities offtaken 658.6 billion kWh

Number of exit points 1,047

Simultaneous maximum annual offtake load 142.5 billion kWh2

1As of December 31, 2009.2On December 15, 2009, 09.00 p.m. Note: Figures do not include volumes attributable to coke oven gas.

71

Europe

E.ON Gas Storage

• E.ON Gas Storage, a wholly-owned subsidiary

of E.ON Ruhrgas, bundles all E.ON storage activities

and operates throughout Europe.

E.ON Gas Storage

Natural gas pipelineCompressor stationUnderground storage facilityOther stationGas import pointCompressor station with operation facility

Flensburg

Lübeck

Zwickau

Bamberg

Hamburg

Bremen

Hanover

Meppen

Emsbüren

Bielefeld

Essen

Bocholt

Aachen

Cologne

Koblenz

Trier

Saarbrücken

Karlsruhe

Freiburg

Stuttgart

Nuremberg

Regensburg

Munich

Frankfurt

Giessen

Winterberg

BremerhavenEtzel

Empelde

Stockstadt

Hähnlein

Sandhausen

Inzenham-WestBreitbrunn

Bierwang

Epe

Krummhörn

Berlin


E.ON Gas Storage

E.ON Gas Storage GmbH’s Underground Gas Storage Facilities in Germany1

E.ON Gas Storage GmbH’s share in

working capacity (million m3)

E.ON Gas Storage GmbH’s share in maximum with-

drawal rate (thou-sand m3/hour)

E.ON Gas Storage GmbH’s share in

storage facility or in the project

company %Operated by

E.ON Ruhrgas AG

Bierwang3 E.ON Gas Storage GmbH 1,441 1,200 100.0 Yes

Empelde2 GHG Gasspeicher Hannover Gesellschaft mbH4 9,8 47 13.2 –

Epe2 E.ON Gas Storage GmbH 1,870 2,900 100.0 Yes

Eschenfelden3 E.ON Gas Storage GmbH/N-ERGIE AG 48 87 66.7 Yes

Etzel2 Etzel Gas-Lager GmbH&Co. KG4 807 987 74.8 –

Hähnlein3 E.ON Gas Storage GmbH 80 100 100.0 Yes

Krummhörn2, 5 E.ON Gas Storage GmbH – – 100.0 Yes

Nüttermoor² EWE AG 110 248 Leased –

Sandhausen3 E.ON Gas Storage GmbH/Gasversorgung Süddeutschland GmbH 15 23 50.0 Yes

Stockstadt3 E.ON Gas Storage GmbH 135 135 100.0 Yes

Breitbrunn3 RWE Dea AG/Exxon Mobil Gasspeicher Deutschland GmbH7/E.ON Gas Storage GmbH8 9926 520 Leased7 Yes8

Inzenham-West3 RWE Dea AG 500 350 Leased –

Total 6,007.8 6,597

1As of December 31, 2009.2Salt cavern.3Porous rock.4Project company.5Currently out of service for repairs/adjustments.6992 million m3 is the current working gas capacity available to E.ON Ruhrgas AG.7Underground section.8Above-ground-part, particularly the storage compressor station.

73

E.ON Ruhrgas—Involvement in the German Gas Market

Natural gas pipelineCompressor stationUnderground storage facilityOther stationGas import pointCompressor station with operation facility

Europe

E.ON Ruhrgas International Shareholdings in Germany

Percentages Share held

Ferngas Nordbayern GmbH1 53.10

Gas-Union GmbH1 25.93

1Interest held via ERI’s wholly-owned subsidiary RGE Holding GmbH.

Key Figures in 2009

E.ON

Ruhrgas AGOverall market

Market share

Sales 4631 bn kWh 895 bn kWh 51.7%

Pipeline systems2, 6 11,621 km 61,0004 km 19.0%

Storage capacities3, 7 6.0 bn m3 20.35 bn m3 29.0%

1609.1 billion kWh including gas sales volume abroad and other volumes.2Including co-owned pipelines and joint-venture pipelines.3Working gas capacity.4As of December 31, 2006. Source: BDEW-Gasstatistik, high- and mid-pressure networks.

5As of December 31, 2008. Source: LBEG Niedersächsisches Landesamt für Bergbau, Energie und Geologie.

6Hold by E.ON Gastransport GmbH, Essen.7Hold by E.ON Gas Storage GmbH, Essen.

Flensburg

Lübeck

Zwickau

Bamberg

Hamburg

Bremen

Hanover

Bielefeld

Aachen

Karlsruhe

FreiburgMunich

Giessen

Winterberg

Bremerhaven

EssenBocholt

Saarbrücken

Trier

Koblenz

Frankfurt

Stuttgart

Nuremberg

Regensburg

Emsbüren

Meppen

Cologne

Berlin


German Natural Gas Consumption by Market Sector

Residential Heating Systems in Germany

• Approximately 51 percent of new dwellings have a gas-

fired heating system.

• Over the years, gas has steadily increased its share of

the residential space-heating market.

• Today, gas is the most popular choice for heating homes.

• The number of homes heated by gas has been steadily

growing since the 1970s. This development is continuing.

Today, 49 percent of the nearly 38 million homes in

Germany use gas for heating and the trend is upwards.

45 Residential and commercial

25 Industrial

13 Others

17 Power stations

Percentages Total: 895 billion kWh

1 2009. Source: preliminary figures 2009; AG Energiebilanzen.

Gas Consumption by Sector1

20302009

19

2020

20

20

15

10

5

Million dwellings

20

Homes with a Gas-fired Heating System

48.7 Gas

29.8 Heating oil

12.6 District heating

6.0 Electricity

2.9 Solid fuels

Percentages Total: 38.2 million

Residential Heating Systems by Fuel

75

E.ON Ruhrgas—Activities in Slovakia

Shareholders of SPP

• Slovak Gas Holding B.V. 49 percent plus management

control (E.ON Ruhrgas International and GdF Suez

50 percent each).

• Slovak state 51 percent, no management control.

Europe

Key Figures 2009

Sales 2.76 billion

Gas sendout 5.8 billion m3

Customers 1.5 million

Transit gas volume 66.0 billion m3

Employees (as of December 31, 2009) 5,146

Basis: 2009 annual reports, IFRS consolidated.

Lan HotNové Mestro

Plavecký

Peter

Nitra

Nitra Zvolen

Bystrica

Lučenec

BanskáPrievidza

Žilina

Poprad

Košice

KošicePoprad

Michalovce

Velké

Kapusany

Transit network of eustream

Compressor station of eustream

High-pressure distribution network of SPP Distribucia

Underground gas storage of Nafta/Pozagas

BratislavaBratislava

Baum-garten

Láb

Komárno


Földgáz Storage Transmission

networks MOL Transport

E.ON Ruhrgas—Activities in Hungary

Europe

Key Figures 2009

E.ON

Földgáz TradeE.ON

Föld gáz Storage

Sales 2,838 million 173 million

Gas sendout 10.4 billion m3 –

Customers 43 11

Employees (Dec. 31) 47 169

Basis: HAS (Hungarian Accounting Standards).

Budapest

Total E.ON Földgáz Storage

Peak cap.: 55.1 million m3/dMobile: 4,230 million m3

Cushion gas: 4,654 million m3

Injection cap.: 32.2 million m3/d

E.ON Földgáz Headquarter

Hajdúszoboszló




Pusztaederics

Peak cap.: 3.1 million m3/dMobile: 340 million m3

Cushion gas: 266 million m3


Zsana




Kardoskút

Peak cap.: 3.2 million m3/dMobile: 280 million m3

Cushion gas: 260 million m3


77

E.ON Ruhrgas—Activities in Romania

Shareholders of E.ON România S.R.L.1

• E.ON Ruhrgas: 69.8 percent.

• E.ON Energie: 20.4 percent (steers and consolidates

shareholding).

• European Bank for Reconstruction and Development

(EBRD): 9.8 percent.

1Holds, inter alia, 51 percent of E.ON Gaz România and E.ON Gaz Distributie, respectively. Other 49 percent of both companies is held by Romanian State.

Europe

Key Figures 2009

E.ON Gaz România

E.ON Gaz Distributie

Sales 603 million 171 million

Gas sendout 2.4 billion m3 0.5 billion m3


Employees (Dec. 31) 433 4,274

Source: RAS (Romanian Accounting Standards).

Baia

Mare

Bihor Cluj

Bistrița

Suceava

E.ON Gaz România and

E.ON Gaz Distributie

Headquarter

E.ON România

Headquarter

Vaslui

Bacău

Harghita

Mehedinti

Dolj

Mureș

Tg. Mureș

Alba

Hunedoara

Timișoara

Pitești

BrașovFagaras

Prahova

Buzău

Călărași

Bucharest

Targoviste

Giurgiu

Constanța

Tulcea

Galati

Ialomita

Vâlcea

Gorj

Sibiu

Arad

Storage

Transmission pipeline (high-pressure pipeline of Transgaz)

License area E.ON Gaz România and E.ON Gaz Distributie


Key Figures

Pan-European Gas Key Figures

in millions 2009 2008 +/- %

Sales 20,640 27,422 -25

Adjusted EBITDA 2,275 3,113 -27

Adjusted EBIT 1,754 2,631 -33

ROCE 9.9% 15.0% -5.11

Cost of capital 8.8% 8.8% –

Value added 194 1,091 -82

Cash provided by operating activities 645 2,081 -69

Investments 1,610 1,215 +33

Employees (at year-end) 3,143 9,827 -6

1Change in percentage points.

E.ON Group

79

U.K.Market Unit

80 Introduction

80 Market Overview U.K.


82 2009 Sales

83 Activities in U.K.




88 Regional Distribution

90 Supply Structure

90 Power and Gas Customers

91 Energy Services

92 Key Figures

80 U.K. Market Unit

Introduction

Generation

~30 power operators

Transmission

3 system operators

Distribution

7 network operators

covering 14 distribution areas

Retail

6 major suppliers

E.ON UK is one of the leading integrated power and gas com-

panies in the United Kingdom. It was formed as one of the

four successor companies to the former Central Electricity

Generating Board as part of the privatization of the power

industry in the United Kingdom in 1989. E.ON UK and its asso-

ciated companies are actively involved in power generation,

distribution, and retail. As of December 31, 2009, E.ON UK

owned or through joint ventures had an attributable interest

in 10,330 MW of generation capacity, including 359 MW of

CHPs. E.ON UK served approximately 7.9 million electricity and

gas customer accounts at December 31, 2009 and its Central

Networks business served 5 million customer connections.

The U.K. market unit sales amounted to €10.1 billion in 2009

and adjusted EBIT of €649 million.

Market Overview U.K.

U.K. Power and Gas Supply

Billion kWh Supply1

Power 389.6

Gas 1,090.0

1As of December 31, 2008. 2009 figures not available as of the date of this document.

Source: E.ON.

81

Business Activities

E.ON AG

E.ON UK plc 100%

Regulated Business1 Non-regulated Business Other/Consolidation

Distribution (Central Networks)

Central Networks East plc

Central Networks West plc

• Power distribution

• New connections

– Connection of both business

and domestic customer to the

power distribution network

Generation

• U.K.-based power generation

plants fueled by coal, oil, gas

E.ON UK CHP Ltd.

• Operation and maintenance of

combined heat and power

plants

Cottam Development Centre Ltd.

• Power station operation

Corby Power Ltd.

• Power station operation

Corporate Center

Corporate functions

• UK Finance

• UK Information Technology

• UK Human Resources

• UK Services

Retail

E.ON Energy Ltd.

• Sale of power and natural gas

for residential, small and

medium enterprises, industrial

and commercial customers

Energy Services

E.ON UK Energy Services Ltd.

• Providing meter installation,

data retrieval & management

services and providing home

energy installations and repairs

1Subject to price control regulation.

82 U.K. Market Unit

Significant market positions

• One of the U.K.’s leading national energy brands with

about 7.9 million customer accounts (5.0 million electricity

and 2.9 million gas).

• Flexible generation position, well balanced against

mass-market retail operations.

• E.ON UK’s share of distribution network is 132,912 km,

overall market is 780,482 km, giving a market share

of 17.0 percent.

• One of the leading U.K. CHP operators.

2009 Sales

Sales by Business Units

€ in millions

Regulated business 717

Non-regulated business 9,526

Other/consolidation -146

Total 10,097

83

Activities in U.K.

Power

E.ON UK

shareholdings Overall U.K. market Market share %

Power supplied 78.0 billion kWh 389.6 billion kWh 20.0of which own generation1 32.8 billion kWh 389.6 billion kWh 8.4

Customer accounts 5.0 million 28.8 million 17.4

Distribution network 132,912 km 780,428 km 17.0

Generation capacity 10.3 GW 83.5 GW2 12.3

1Excludes CHP and renewables generation.2Official U.K. Government Figures for U.K. Plant Capacity have yet to be released for 2008 (figures based on prior year).

Natural Gas

E.ON UK

shareholdings Overall U.K. market Market share %

Sales 71.3 billion kWh1 1,090 billion kWh 6.5

Customer accounts 2.9 million 22.0 million 13.2

1Sales to industrial and commercial customers and sales to retain mass market customers. No sales to market/E.ON Energy Trading due to the transfer of gas contracts to Energy Trading during 2008.

Europe

Central Networks West

Central Networks East

Coal-fired power station



CCGT power station

84 U.K. Market Unit


Upstream Downstream

Generation Distribution Retail

non-regulated regulated

PowerGas

2009 Power Procurement and Sales Volume

Own generation

32.8 billion kWh

Other suppliers

48.8 billion kWh

Power procured

81.6 billion kWh

Power sales

78.0 billion kWh


Sales partners/

Wholesale market

34.3 billion kWh

Industrial & commercial

customers

16.4 billion kWh

Private customers

27.3 billion kWh


other

3.6 billion kWh

85


Power Generation by Energy Source

MW 20091 2008 20072 20062 2005

Gas 3,5063 3,865 3,865 3,849 3,849

Coal 4,910 4,910 4,910 4,910 4,910

Other 1,9143 1,555 1,806 1,788 1,788

E.ON UK 10,330 10,330 10,581 10,547 10,547

Gas 34,019 34,019 33,878 33,913 32,848

Coal 23,137 23,137 23,008 22,882 22,627

Nuclear 10,979 10,979 10,979 10,969 11,852

Other 15,407 15,407 15,099 14,621 14,036

U.K. market overall 83,542 83,542 82,964 82,385 81,363

1Official U.K. Government Figures for U.K. Plant Capacity have yet to be released for 2009 (figures based on prior year). 2Prior-year figures have been updated in the latest UK Government release. 3CHP plants now included in “Other” instead of “Gas“.

Generation Output

GWh 20091 2008 20072 20062 20052

Gas 20,100 19,799 19,723 14,479 16,405

Coal 12,700 19,972 22,856 22,143 21,840

Other – 619 756 857 934

E.ON UK 32,800 40,390 43,335 37,480 39,179

Gas 176,749 176,749 165,784 140,828 152,642

Coal 125,315 125,315 136,545 149,214 134,637

Nuclear 52,486 52,486 63,028 75,451 81,618

Other 35,099 35,099 31,687 31,799 29,406

U.K. market overall 389,649 389,649 397,044 397,292 398,303

1Official U.K. Government Figures for UK electricity fuel use, generation and supply have yet to be released for 2009 (figures based on prior year). 2Prior-year figures have been updated in the latest UK Government release.

E.ON U.K. Sales by Customer Segment1

Billion kWh 2009 2008 +/- %

Power residential and SME 27.3 29.8 -8.4

Power I&C 16.4 17.6 -6.8

Power market sales 34.3 41.7 -17.7

Total power sales 78.0 89.1 -12.5

Gas residential and SME 52.8 54.7 -3.5

Gas I&C 18.5 21.4 -13.6

Gas market sales2 0.0 34.6 -100.0

Total gas sales 71.3 110.7 -35.7

1Excludes energy trading activities. 2Following the transfer of gas contracts to Energy Trading during 2008, gas sales to Energy Trading in 2009 are zero.

86 U.K. Market Unit

Generation Assets

Natural-Gas-fired Power Stations


net MW

E.ON UK’s share

Start-up date%Attributable

capacity MW

Cottam Development Centre (CDC) Module 400 100.0 400 1999

Connahs Quay U1 345 100.0 345 1996

Connahs Quay U2 345 100.0 345 1996

Connahs Quay U3 345 100.0 345 1996

Connahs Quay U4 345 100.0 345 1996

Corby Module 401 50.0 200 1993

Enfield 408 100.0 408 2002

Killingholme Mod 1 450 100.0 450 1992

Killingholme Mod 2 450 100.0 450 1993

Merchant CHP 218 100.0 218

Total 3,707 3,506

Hard-Coal-fired Power Stations


net MW

E.ON UK’s share


capacity MW

Ironbridge U1 485 100.0 485 1970

Ironbridge U2 485 100.0 485 1970

Kingsnorth U1 485 100.0 485 1970

Kingsnorth U2 485 100.0 485 1971

Kingsnorth U3 485 100.0 485 1972

Kingsnorth U4 485 100.0 485 1973

Ratcliffe U1 500 100.0 500 1968

Ratcliffe U2 500 100.0 500 1969

Ratcliffe U3 500 100.0 500 1970

Ratcliffe U4 500 100.0 500 1970

Total 4,910 4,910

87

Other Power Stations


net MW

E.ON UK’s share


capacity MW

CHP schemes 359 100.0 359

Total 359 359



net MW

E.ON UK’s share


capacity MW

Grain U1 650 100.0 650 1982

Grain U4 650 100.0 650 1984

Total 1,300 1,300



net MW

E.ON UK’s share


capacity MW

Grain Aux GT1 28 100.0 28 1979

Grain Aux GT4 27 100.0 27 1980

Kingsnorth Aux GT1 17 100.0 17 1967

Kingsnorth Aux GT4 17 100.0 17 1968

Ratcliffe Aux GT2 17 100.0 17 1967

Ratcliffe Aux GT4 17 100.0 17 1968

Taylors Lane GT2 68 100.0 68 1981

Taylors Lane GT3 64 100.0 64 1979

Total 255 255

E.ON UK—investments in generation

• E.ON UK remains committed to building a technologi-

cally advanced cleaner-coal power station at Kingsnorth

in southeast England. Due to its location (which allows

connection to depleted gas fields in the North Sea) and

its position as a short-listed candidate in a U.K. govern-

ment CCS competition for funding, Kingsnorth remains

one of the most attractive options in the E.ON Group for

the large-scale demonstration of CCS.

• In 2007 E.ON UK started construction of one of the U.K.’s

largest gas-fired CHP stations which will generate 1,275 MW

of power and export up to 340 MW of heat at its Isle of

Grain site in Kent. This station is due to commission in 2010.

• In January 2009, E.ON UK and RWE npower formed Hori-

zon Nuclear Power, a 50-50 joint venture whose purpose

is to develop up to 6 GW of new nuclear capacity in the

U.K.—enough to power a city the size of Greater London—

by 2025.

88 U.K. Market Unit

Regional Distribution

Europe

Scottish &

Southern Energy

Scottish Power

Energy Networks

CE Electric UK

Central Networks

EDF Energy

EDF Energy

EDF EnergyWestern Power

Distribution

Scottish & Southern

Energy

Western Power

Distribution

Scottish Power

Energy Networks

Electricity

North West

89

In January 2004, E.ON UK acquired Midlands Electricity for

£1.2 billion. The distribution network of Midlands Electricity

is adjoining E.ON UK’s existing East Midlands Electricity

network. The combined system is known as Central Networks,

with 5.0 million customer connections.

Customer accounts in millions Total: 28.8

Western Power Distribution

Electricity North West Limited

0 1 2 3 4 5 6 7

2.4

2.6

Scottish Power Energy Networks

3.5

Scottish & Southern Energy

3.6

CE Electric UK 3.8

Central Networks 5.0

EDF Energy 7.9

Regional Distribution in U.K.

90 U.K. Market Unit

Supply Structure

Energy production Purchase

Retail Distribution

Industrial &

commercial

Small & medium

enterprises

Residential All customer groups

Non-regulated Business

• Activities throughout U.K.

• Free choice of electricity supplier.

• Competition and minimal regulation.

Regulated Business

• Operating in East Midlands and in Midlands

(since January 16, 2004).

• Only electricity distribution.

• Strict separation from retail business.


Power and Gas Customers1

Marketing, customer services, and products create loyalty to

the E.ON brand.


26 Industrial and commercial

108 Small & medium enterprises

2,779 Residential

Customers in thousands Total: 2,913

E.ON UK—Gas

Customers in thousands Total: 5,055

E.ON UK—Power

40 Industrial and commercial

379 Small & medium enterprises

4,636 Residential

91

1In January 2009, the regulated New Connections activities moved to Central Networks, with the goal of improving the competitiveness of the remaining business. Metering installation, which remains within Energy Services, continues to be an important part of our business as we work with the government to achieve a nationwide rollout of smart meters over the next decade. The Home Energy Services and Sustainable Energy Solutions activities will become self-contained end-to-end businesses (instead of being split between Energy Services and Retail at present).

Energy Services1

• Metering Services—Provides meter installation, data

retrieval, data management and meter maintenance

services to external customers and our retail business.

• Home Energy Services—Provides home energy installa-

tions and repairs, including loft and cavity wall insulations,

boiler service and repair work to domestic customers,

local authorities and housing associations.

Energy Services Key Figures

2009

Home installations

Number of heating jobs 116,414

Number of local authority/housing association contracts 7

Metering

Smart meters fitted 1,834

92 U.K. Market Unit

Key Figures

U.K. Key Figures

2009 2008 +/- %

Sales €10,097 million €11,051 million -9.0

Adjusted EBITDA €1,080 million €1,396 million -23

Adjusted EBIT €649 million €922 million -30

ROCE 7.3% 9.1% -1.81

Cost of capital 9.8% 9.8% +0.01

Value added -€224 million -€71 million -215

Cash provided by operating activities €1,562 million €893 million +75

Investments €897 million €1,162 million -23

Employees (at year-end) 16,098 17,480 -8.0


E.ON Group

93

NordicMarket Unit

94 Introduction

95 Market Overview Power

96 Market Overview Gas


98 2009 Sales

99 Activities in the Nordic Region




102 Location of Major Generation Assets



106 Distribution Regions in Sweden and Finland

107 The Natural Gas Market in Sweden

108 2009 Gas Procurement and Sales Volume

108 Key Figures

94 Nordic Market Unit

Introduction

E.ON Sverige is a leading energy company in the Nordic market

and drives E.ON’s business in the region. Its integrated energy

business in Northern Europe encompasses power and heat

generation; power, gas, and heat distribution; power, gas, and

heat marketing; and a wide range of energy services. As of

the end of 2008, E.ON Sverige is the second-largest Swedish

utility (on the basis of power sales and production capacity).

E.ON Sverige and its associated companies are actively involved

in the ownership and operation of power generation facilities.

As of December 31, 2009, E.ON Sverige owned interests in

power stations with a total installed capacity of approximately

17,903 MW, of which its attributable share was approximately

6,842 MW (not including mothballed and shutdown power

plants).

In 2009, about 45 percent of the electric power generated by

E.ON Sverige was generated at nuclear facilities and about

43 percent at hydroelectric plants. The remaining approximately

12 percent was generated using fuel oil, biomass, natural gas,

wind power and waste. E.ON Sverige also supplies gas, is

active in the heat and waste business and conducts electricity

trading activities. In 2009, E.ON Sverige had sales of €3.3 billion

and adjusted EBIT of €535 million.

Electricity contributed approximately 76 percent, heat 12 per-

cent, gas 5 percent and other 7 percent of 2009 sales, net of

energy taxes. Other sales are mainly attributable to the waste

business, as well as contracting activities. E.ON Sverige sold a

total of approximately 44.5 billion kWh of electricity in 2009

(including both purchases and sales). E.ON Sverige is primarily

active in Sweden, but also operates to a minor degree in Fin-

land, Denmark, Norway and Poland. In 2009, E.ON Sverige esti-

mates that it supplied about 16 percent of the electricity con-

sumed by end users in Sweden.

95

Market Overview Power

Generation

~350 operators

(Vattenfall, Fortum, Statkraft, E.ON and Dong account for

~60% of the market)1

Trading

~400 operators1

Transmission

Sweden: Svenska Kraftnät 100%

Finland: Fingrid 100%

Norway: Statnett 90%, others 10%2

Denmark: Energinet 100%3

Distribution

~500 operators

(Vattenfall, Fortum, Statkraft, E.ON and Hafslund account

for ~30% of the market)3

Retail

~350 operators

(Vattenfall, Fortum, Statkraft, E.ON and Hafslund account

for ~40% of the market)4

1 Nord Pool. 2 Statnett Annual Report 2009. 3 ERGEG. 4Fortum Annual Report 2009 and Annual Report of Dong and Hafslund.

Nordic Power Market

Billion kWh Power supplied1

Sweden 138

Norway 124

Finland 81

Denmark 35

Total 378

1Source: Energimyndigheten for Sweden, Montel Powernews for Norway, Finsk energiindustri for Finland, Danish Energy Agency for Denmark.


Sweden Denmark Finland

Production Production Production

Sweden imports all natural gas1 2 operators

Dansk Undergrunds Consortium

DUC & Dong

Finland imports all natural gas5

Transmission Transmission Transmission

2 operators

E.ON Gas and Swedegas2

1 operator

Energinet3

1 operator

Gasum Oy5

Distribution Distribution Distribution

5 operators

E.ON Gas Sverige, Göteborgs Energi,

Öresundskraft, Lunds Energi & Var-

bergs Energi2

4 operators

Dong distribution, HNG—Naturgas

midt-nord, Ålborgs Kommune, Natur-

gas Fyn Distribution4

31 operators5

Retail Retail Retail

7 operators: E.ON Försäljning, Göte-

borgs Energi, Öresundskraft, Dong,

Lunds Energi, Varberg Energi, HNG—

Naturgas midt-nord2

6 operators

Dong, HNG—Naturgas midt-nord,

Statoil Gazelle, OK, Dansk Shell,

Ålborgs Kommune Gasforsyningen4

Few operators, the largest is Gasum

Oy5

1energimarknadsinspektionen.se2gasforeningen.se3energinet.dk4gasprisguiden.dk5ERGEG National reporting 2009.

Market Overview Gas

Nordic—Natural Gas Market Sweden, Denmark and Finland

Billion kWh Gas supplied1

Sweden 14.02

Finland 37.43

Denmark 46.04

12009. Interpreted as natural gas consumed on the individual national markets.2Gasföreningen.3Statistical Agency Finland.4Danish Energy Agency.

97

Business Activities

E.ON AG

E.ON Sverige AB 100%1

Regulated Business Non-regulated Business Other/Consolidation

Power and Gas Distribution

• Distribution of electricity and

gas to end customers

Generation

Power production based on

• Nuclear

• Hydropower

• Oil/Gas

Retail

• Development, sale and delivery

of power, gas and heat to indus-

trial and private customers

Heat and Waste

• Combined heat and power

production

• Production of heat for direct

heating

Services

• Providing services for mainte-

nance and construction

10.05 percent minority shareholders.


2009 Sales


• Sweden’s second-largest power company.

• No. 4 in power generation with 8 percent of total 398 bil-

lion kWh in the Nordic region.

• No. 3 in power/gas retail with 0.8 million customers in the

Nordic region.

• Substantial position in Sweden’s natural gas market with

approximately 61 percent market share in distribution.

Sales by Business Units

€ in millions

Regulated business 728

Non-regulated business 2,616

Other/consolidation 4

Total 3,348

99

Activities in the Nordic Region

Majority shareholders

Key Figures—Sweden

As of December 31, 2009 E.ON shareholdings Overall market Market share %

Electricity

Power supplied 42.7 billion kWh 138 billion kWh1 31

Customers 803,500 5,300,000 15

Distribution grid length 124,314 km 528,000 km2 24

Generation capacity 6,778 MWel 34,987 MWel 19

Generation output 18.6 billion kWh 133.7 billion kWh1 14

Natural gas

Natural gas supplied 7.0 billion kWh 14.0 billion kWh 50

Customers 25,100 ~41,0003 61

Transmission system length 204 km 650 km2 31

1Energimyndigheten.2ERGEG, The Energy Markets Inspectorate EI R2009:08.3Number of reading points, including gas-stoves.

Europe

E.ON Sverige

Denmark

Norway

Sweden

FinlandE.ON Suomi Oy

Kainuun Energia Oy

E.ON ES Norge

Karhu Voima Oy

E.ON Danmark



18.0 billion kWh of jointly operated stations.


Own generation

19.0 billion kWh

Other suppliers1

27.3 billion kWh

Power procured

46.3 billion kWh

Power sales

44.5 billion kWh


Sales partners

Nord Pool

26.6 billion kWh

Industrial & commercial

customers

10.8 billion kWh

Private customers

7.1 billion kWh


other

1.8 billion kWh

Upstream Downstream

Generation Distribution Retail


PowerGas

101


Power Generation Capacity by Energy Source

MW 2009 2008 2007 2006 2005

Nuclear 2,770 2,593 2,601 2,593 2,608

Hydro 1,768 2,758 2,754 2,751 2,771

Renewables1 0 0 51 52 –

Oil, other 2,304 1,778 2,031 2,015 2,215

E.ON Sverige 6,842 7,229 7,437 7,411 7,594

Thermal2 23,575 23,984 23,539 22,003 22,003

Nuclear 11,584 11,988 11,288 11,632 11,632

Hydro 48,776 48,784 47,925 47,445 47,445

Renewables 11,591 11,496 10,230 10,219 10,219

Nordic market overall 95,525 96,251 92,982 91,299 91,299

1Transferred to the new market unit Climate & Renewables as of January 1, 2008.2Includes coal, oil, gas, other.


Location of Major Generation Assets

Nuclear power station

(including jointly owned power stations)




Biofuel

Europe

Norway

Denmark

Sweden

Finland

103

Generation Assets

Nuclear Power Stations

As of December 31, 2009 Shareholders Net MW

E.ON share Start-up date% MW

Forsmark 1 MKG/Vattenfall 978 9.3 91 1980

Forsmark 2 MKG/Vattenfall 990 9.3 92 1981

Forsmark 3 MKG/Vattenfall 1,170 10.8 126 1985

Oskarshamn 1 E.ON Sverige/Fortum 467 54.5 255 1972

Oskarshamn 2 E.ON Sverige/Fortum 640 54.5 349 1974

Oskarshamn 3 E.ON Sverige/Fortum 1,400 54.5 763 1985

Ringhals 1 E.ON Sverige/Vattenfall 855 29.6 253 1976


Ringhals 3 E.ON Sverige/Vattenfall 1,045 29.6 309 1981


Total 9,346 2,770




Barsebäck GT E.ON Sverige 84 100.0 84 1974

Bråvalla E.ON Sverige 240 100.0 240 1972

Halmstad G11 E.ON Sverige 78 100.0 78 1973

Halmstad G12 E.ON Sverige 172 100.0 172 1993

Karlshamn G1 E.ON Sverige/Fortum 336 70.0 235 1971



Cresundsverket GT E.ON Sverige 126 100.0 126 1971

Oskarshamn GT E.ON Sverige/Fortum 80 54.5 44 1973

Other (<50 MW installed capacity) 77 41

Total 1,861 1,487

Gas-fired Power Stations



Heleneholm G11, G12 E.ON Sverige 130 100.0 130 1966+1970

Öresundsverket ÖVT(CHP) E.ON Sverige 450 100.0 450 2009

Total 130 130


Generation Assets




Balforsen E.ON Sverige 88 100.0 88 1958

Bergeforsen E.ON Sverige/Vattenfall 160 44.0 70 1955

Blåsjön E.ON Sverige/Fortum/Nybrovikenskraft 60 50.0 30 1957

Degerforsen E.ON Sverige 63 100.0 63 1965

Edensforsen (Åseleälven) E.ON Sverige 67 96.5 65 1956

Edsele E.ON Sverige 60 100.0 60 1965

Forsse E.ON Sverige 52 100.0 52 1968

Gulsele (Åseleälven) E.ON Sverige/Vattenfall 68 65.0 44 1955

Hällby (Åseleälven) E.ON Sverige/Vattenfall 84 65.0 55 1970

Hjälta E.ON Sverige 178 100.0 178 1949

Moforsen E.ON Sverige 135 100.0 135 1968

Löwön E.ON Sverige 36 100.0 36 1974

Pengfors E.ON Sverige 56 65.0 36 1954

Ramsele E.ON Sverige 157 100.0 157 1958

Rätan E.ON Sverige 60 100.0 60 1968

Sollefteåforsen E.ON Sverige/Municipality of Sollefteå 62 50.0 31 1966

Stensjön (Harkan) E.ON Sverige/Nybrovikenskraft 95 50.0 48 1968

Storfinnforsen E.ON Sverige 112 100.0 112 1953

Trangfors E.ON Sverige 73 100.0 73 1975

Other (<50 MW installed capacity) 1,910 792

Total 3,576 1,768


As of December 31, 2009 Net MW


Abyverket G1, G2, G3 (CHP) 128 100.0 128 1962–1974

Händelö (Norrköping) (CHP) 90 100.0 90 1983

Kainuun Voima (CHP) 72 26.0 18 1989

Other (<1 MW attributable capacity) 2,250 1

Total 2,540 237

Shutdown

As of December 31, 2009 E.ON share % Start-up date Shutdown date

Barsebäck 1 (nuclear) 25.8 1975 1999

Barsebäck 2 (nuclear) 25.8 1977 2005

105


Power Generation Output by Energy Source

Billion kWh 2009 2008 2007 2006 2005

Thermal 2.4 1.7 1.05 2.1 2.1

Nuclear 8.5 15.4 15.7 16.6 17.5

Hydro 8.1 13.3 10.4 15.4 13.4

Renewables1 0 0.1 0.2 0.2 0.2

E.ON Sverige 19.0 30.5 27.4 34.3 33.1

Thermal 55.22 72.7 50.4 50.4 69.1

Nuclear 72.62 87.0 91.8 91.8 96.8

Hydro 203.72 192.4 222.2 222.2 183.6

Renewables 35.92 31.7 30.5 30.5 29.9

Nordic market overall 367.42 383.8 394.9 394.9 379.3

1Not considering hydroelectric and biomass; transferred to the new market unit Climate & Renewables as of January 1, 2008.2Preliminary figures, Nordel, May 2009.


Distribution Regions in Sweden and Finland

Europe

Mid-Norrland

81,000 customers

Mälardalen/Örebro

100,500 customers

Stockholm

120,000 customers

Norrköping

106,000 customers

Southern Sweden

595,000 customers

Denmark

Norway

Sweden

Finland

Kainuun Energia

57,000 customers

Karhu Voima

13 industrial

customers

107

The Natural Gas Market in Sweden

• Gas distribution market in Sweden: 10 billion kWh.

• E.ON Sverige market share in gas distribution: 55 percent.

• Gas represents approximately 20 percent of total energy

supply in the Nordic region, while at the national level,

it comprises somewhat less than 2 percent of Sweden’s

total energy supply.

• The 390 km national gas transmission pipeline is owned

by Swedegas AB.

• E.ON Sverige owns, operates and maintains a regional high-

pressure gas pipeline with a length of 230 km and a low-

pressure gas distribution pipeline with a length of 1,855 km.

• In addition, E.ON Sverige has an underground gas storage

facility in Getinge with a working capacity of 8.75 million m3

and a maximum withdrawal rate of 40,000 m3/hour. In

2009, E.ON Sverige transported a total of 7.6 billion kWh

of gas through its gas pipeline system.

• All gas is imported from Denmark. The Swedish natural

gas market is currently connected to the Danish natural

gas market through one supply route. Sweden’s strategic

location between two of the largest producers, Russia

and Norway, has led to the initiation of several studies

and projects with the aim of increasing supplies to or

via Sweden.

Europe

Gas pipeline

StenungssundBorås

Gnosjö Gislaved

Stockholm

Hyltebruk

Åstorp

KlippanBjuv

Eslöv

LundStaffanstorp

Svedala

Göteborg

Varberg

Falkenberg

Halmstad

Ängelholm

Höganäs

Helsingborg

Landskrona

Malmö

Trelleborg


2009 Gas Procurement and Sales Volume

Key Figures

Gas procured

8.1 billion kWh1Distribution

Industrial customers

4.0 billion kWh1

Private customers

0.2 billion kWh1

Wholesale

0.4 billion kWh1

Own power and heat

generation

3.5 billion kWh1


1Including liquefied petroleum gas and biogas.

Nordic Key Figures

in millions 2009 2008 +/- %

Total sales 3,348 3,877 -14%

Adjusted EBITDA 851 1,112 -23%

Adjusted EBIT 535 770 -31%

ROCE 8.8% 11.1% -2.3%1

Cost of capital 9.3% 9.3% -0%1

Value added -30 125 -124%

Cash provided by operating activities 523 835 -37%

Investments 1,104 939 +18%

Employees (at year-end) 5,570 5,826 -4%


E.ON Group

109

U.S. MidwestMarket Unit

110 Introduction

110 Market Overview Power


112 2009 Sales

113 Power Service Territory

114 Gas Supply Area

115 Power Business Activities along the Value Chain


116 Generation Capacity and Output by Sources


121 Distribution Map

122 Supply Structure

122 Power and Gas Customers

123 U.S. Midwest Region

124 Key Figures

110 U.S. Midwest Market Unit

Introduction

E.ON U.S. is an integrated energy services company with busi-

nesses in power generation, electric utility and retail gas ser-

vices, as well as asset-based energy marketing. Asset-based

energy marketing involves the off-system sale of excess power

generated by physical assets owned or controlled by E.ON U.S.

and its affiliates. E.ON U.S.’s power generation and retail elec-

tricity and gas services are located principally in Kentucky, with

a small customer base in Virginia and Tennessee. As of Decem-

ber 31, 2009, E.ON U.S. owned or controlled aggregate gener-

ating capacity of approximately 7,500 MW. In 2009, E.ON U.S.

served almost 1 million customers. The U.S. Midwest market

unit recorded sales of €1,843 million in 2009 and adjusted EBIT

of €384 million.

In April 2010, E.ON sold the power and gas business of E.ON U.S.

to PPL Corporation. The agreed-on purchase price is €7.6 bil-

lion. We expect the transaction, which is subject to antitrust

and regulatory approval, to close in late 2010. Effective the

second quarter, E.ON U.S. will be classified as a discontinued

operation for the entire financial year.

Market Overview Power1

Generation

~36 operators

(Ohio Power Co, Virginia Electric & Power Co, Detroit

Edison Co, Duke Energy Indiana and Appalachian Power Co

account for ~47% of the market)

Trading

~51 operators

(Ohio Power Co, Indiana Michigan Power Co, Ohio Valley

Electric Corp, Wabash Valley Power Assoc., and Appala-

chian Power Co account for ~41% of the market)

Transmission

~57 operators

(Appalachian Power Co, Virginia Electric & Power Co, ITC

Midwest LLC, American Transmission Co, and American

Transmission Systems account for ~32% of the market)

Distribution

~94 operators

(Commonwealth Edison Co, Consumers Energy Co, Detroit

Edison Co, Appalachian Power Co, and Virginia Electric &

Power Co account for ~29% of the market)

Retail

~46 operators

(Commonwealth Edison, Detroit Edison Company, Public

Service Electric & Gas, Consumers Energy and Virginia

Electric & Power Co account for ~36% of the market)

U.S. Midwest Power and Gas Supply

Billion kWh Supply1

Power 1,064

Gas 1,026

1As of 2008, EIA.

1Based on operating company data.

111

Business Activities

E.ON AG

E.ON U.S. LLC 100%1

Regulated Utilities Non-regulated Business

Louisville Gas & Electric

Company (LG&E) 100%

Kentucky Utilities

Company (KU) 100%

E.ON U.S. Capital Corp.

LG&E Energy Marketing 100%

E.ON U.S. Services Inc. 100%

Centro 45.9%

Cuyana 14.2%

1Based on operating company data.



• One of the U.S.’s lowest-cost energy providers.

• Honored several times by JD Power for outstanding

customer satisfaction.

• More than 7.5 GW of low-cost generation capacity.

• Proven environmental track record through the reduction

of SO2 by 58 percent and NOX by 60 percent per unit

since 1990.

2009 Sales

€ in millions Total: €1,843 million

1,798 Regulated business

45 Non-regulated/other

Sales

113

Power Service Territory

LG&E

Kentucky Utilities

Power Sector

E.ON U.S. LLC

shareholdings Kentucky marketE.ON U.S. LLC market share in Kentucky %

Power supplied 32.4 billion kWh 88.8 billion kWh 36.0

Customers 0.9 million 2.2 million1 41.0

Transmission system length 4,944 miles 13,363 miles1 37.0

Generation capacity 7,507 MW 23,362 MW1 32.0

Generation output 30.9 billion kWh 91 billion kWh 34.0

12008 data.

Falmouth

Henderson

Madisonville

PrincetonPaducah

Maysville

Alexandria

Williamstown

Cynthiana

MoreheadGeorgetownFrankfort

Louisville

Lexington Winchester

Nicholasville

RichmondDanville

BardstownRadcliff

ElizabethtownLebanon

Greensburg

Cave City

Columbia

Mount Vernon

LondonSomerset

CumberlandCorbin

PinevilleHarlan

Middlesborough

Valley

Station

U.S. Midwest


Texas Gas transmission line

Tennessee Gas transmission line

Major gas line

Gas take point

Town served

Underground gas storage field

Gas Supply Area

Natural Gas Sector

E.ON U.S. LLC

shareholdings Kentucky market1

E.ON U.S. LLC market share in Kentucky %

Sales volume 12.6 billion kWh 66.0 billion kWh 19.0

Customers 0.32 million 0.84 million 38.0

Gas storage2 8.0 billion kWh 64.6 billion kWh 12.0

12008 data.2Total capacity.

Trimble

Bedford

Campbellsburg

New Castle

HenrySmithfield

Lagrange

Oldham

CrestwoodEminence

Pewee Valley Pleasureville

Simpsonville

Shelby

Mt. WashingtonFern

CreekSpencerBullitt

Shepherdsville

Jefferson

Louisville

West Point

Brandenburg

BreckinridgeRineyville

Vine

GroveRadcliff

Nelson

Bardstown

LarueHardin

Hodgenville Loretto

Buffalo

Washington

Marion

TaylorGreen

Magnolia

Hart

Center Storage Field Center

Metcalfe

Barren

Magnolia Storage Field

(Upper & Deep)

Meade

Doe Run Storage Field

Muldraugh Storage Field

U.S. Midwest

115

Power Business Activities along the Value Chain


Own generation

30.9 billion kWh

Other suppliers

3.3 billion kWh

Electricity procured

34.2 billion kWh

Power supplied

32.4 billion kWh

Generation and procurement Sales volume1

Retail

31.6 billion kWh

Wholesale market/

Energy Trading

0.8 billion kWh

regulated


Generation Wholesale (incl. Transmission Distribution Retail

off-system sales)Power

Transmission losses

1.8 billion kWh

1Excludes brokered sales and discontinued operations.


Generation Capacity and Output by Sources


MW 2009 2008 2007 2006 2005 2004

Gas/petroleum 2,164 2,164 2,164 2,141 2,244 2,244

Hydro 76 76 74 72 72 72

Hard coal 5,267 5,267 5,281 5,294 5,294 5,294

E.ON U.S. 7,507 7,507 7,519 7,507 7,610 7,610

Gas/petroleum/other 510,740 493,160 479,000 459,790 450,970 451,888

Hydro 76,510 76,730 76,720 100,590 95,140 98,405

Hard coal 312,860 311,210 311,370 310,660 309,330 313,020

Nuclear 101,190 100,560 100,470 100,050 100,110 99,628

U.S. market overall 1,001,300 981,660 967,560 971,090 955,550 962,941


GWh 2009 2008 2007 2006 2005 2004

Gas/petroleum 278 449 986 722 885 197

Hydro 299 213 167 287 231 309

Hard coal 30,336 34,776 33,510 34,183 34,508 33,915

E.ON U.S. 30,912 35,482 34,663 35,192 35,624 34,421

Gas/petroleum/other 1,122,096 1,067,845 1,091,136 997,128 984,842 943,478

Hydro 267,785 241,847 241,318 281,397 258,510 259,929

Hard coal 1,764,486 1,994,385 2,020,572 1,987,224 2,014,173 1,978,620

Nuclear 796,751 806,182 806,487 787,219 780,465 788,528

U.S. market overall 3,951,118 4,110,259 4,159,513 4,052,968 4,037,990 3,970,555

117

Generation Assets

Green River E.W. Brown Dix Dam

Trimble County

Ghent

Tyrone

Haefling

Mill Creek

Cane Run

Paddy’s Run

Ohio Falls

Zorn




U.S. Midwest


Generation Assets

Hard-Coal-fired Electric Power Stations


net MW

E.ON U.S.’s share


capacity MW

Cane Run 41 155 100.0 155 1962

Cane Run 51 168 100.0 168 1966

Cane Run 61 240 100.0 240 1969

E.W. Brown 12 101 100.0 101 1957

E.W. Brown 22 167 100.0 167 1963

E.W. Brown 32 429 100.0 429 1971

Ghent 12 475 100.0 475 1974

Ghent 22 484 100.0 484 1977

Ghent 32 480 100.0 480 1981

Ghent 42 493 100.0 493 1984

Green River 32 68 100.0 68 1954

Green River 42 95 100.0 95 1959

Mill Creek 11 303 100.0 303 1972

Mill Creek 21 301 100.0 301 1974

Mill Creek 31 391 100.0 391 1978

Mill Creek 41 477 100.0 477 1982

Trimble County 11 511 75.0 383 1990

Tyrone 32 71 100.0 71 1953

Total 5,409 5,281

1Power station owned by LG&E.2Power station owned by KU.

119

Gas-fired Electric Power Stations


net MW

E.ON U.S.’s share


capacity MW

Cane Run 111 14 100.0 14 1968

E.W. Brown 53 117 100.0 117 2001

E.W. Brown 63 154 100.0 154 1999

E.W. Brown 73 154 100.0 154 1999

E.W. Brown 82 106 100.0 106 1995

E.W. Brown 92 106 100.0 106 1994

E.W. Brown 102 106 100.0 106 1995

E.W. Brown 112 106 100.0 106 1996

E.W. Brown IAC3 98 100.0 98 2000

Haefling 12 12 100.0 12 1970

Haefling 22 12 100.0 12 1970

Haefling 32 12 100.0 12 1970

Paddy’s Run 111 12 100.0 12 1968

Paddy’s Run 121 23 100.0 23 1968

Paddy’s Run 133 158 100.0 158 2001

Trimble County 53 160 100.0 160 2002

Trimble County 63 160 100.0 160 2002

Trimble County 73 160 100.0 160 2004

Trimble County 83 160 100.0 160 2004

Trimble County 93 160 100.0 160 2004

Trimble County 103 160 100.0 160 2004

Zorn 11 14 100.0 14 1969

Total 2,164 2,164

1Power station owned by LG&E.2Power station owned by KU.3Power station jointly owned by LG&E and KU.



net MW

E.ON U.S.’s share


capacity MW

Dix Dam2 24 100.0 24 1925

Ohio Falls1 50 100.0 50 1928

Total 74 74

1Power station owned by LG&E.2Power station owned by KU.


Generation Assets

Mothballed/Shutdown/Reduced Electric Power Stations


net MW

E.ON U.S.’s share


capacity MW

Green River 11 22 100.0 22 1950

Green River 21 22 100.0 22 1950

Tyrone Unit 11 27 100.0 27 1947

Tyrone Unit 21 31 100.0 31 1948

Total 102 102

1Power station owned by KU.

121

Distribution Map

Electric system

Major electricity transmission line

Gas system

Major gas line

Gas take point

Town served

Underground gas storage field

Henderson

Louisville Frankfort

Lexington

U.S. Midwest


Power and Gas Customers

Generation

Transmission

Distribution Asset-based energy marketing

Retail Wholesale (off-system sales)

Residential Commercial & industrial Other regulated

• Clear responsibilities for customer segments.

• Optimal supply chain management.

• Optimizing generation capacity by sales and trading.

Supply Structure


• Louisville Gas & Electric and Kentucky Utilities serve over

1 million customers in 81 of Kentucky’s 120 counties.

• Kentucky Utilities also serves customers in five counties

of southwestern Virginia through Old Dominion Power

Company.

Customers in thousands1 Total: 940

E.ON U.S. Midwest—Electricity

797 Residential

127 Commercial

14 Public authority/ other businesses

2 Industrial

12009 data. 12009 data.

295 Residential

24 Commercial

1 Public authority/ other businesses

1 Industrial

Customers in thousands1 Total: 321

E.ON U.S. Midwest—Gas

123

U.S. Midwest Region

• 29 percent of U.S. electricity demand is in the Midwest.

• Important power interchanges with good network/grid

interfaces.

• Heavily industrialized region.

• Potential for consolidation in a fragmented market.

• Favorable regulatory conditions.

An attractive region within the U.S. North American pools

ChicagoDetroit

Louisville

New York

U.S. Midwest


Key Figures

U.S. Midwest Key Figures

2009 2008 +/- %

Sales €1,843 million €1,880 million -2.0

Adjusted EBITDA €552 million €549 million +0.5

Adjusted EBIT €384 million €395 million -2.8

ROCE 6.1% 6.0% +0.11

Cost of capital2 8.7% 8.7% +0.01

Value added -€163 million -€176 million +7.4

Cash provided by operating activities €342 million €271 million +26.2

Investments €545 million €650 million -16.2

Employees (at year-end) 3,119 3,110 +0.3

1Change in percentage points.2Before taxes.

Sales by Customer Segment

Billion kWh 2009 2008 +/- %

Retail customers 31.6 33.3 -5.1

Off-system sales 0.8 3.1 -74.2

Power sales 32.4 36.4 -11.0

Retail customers 12.5 13.6 -8.1

Off-system sales 0.1 0.3 -66.7

Gas sales 12.6 13.9 -9.4

125

Energy Trading Market Unit

126 Introduction

127 The Commercial Heart of E.ON

128 Market Developments

129 Overview of Market Coupling/Splitting Projects

130 Exchanges and Hubs

132 Trading Activities

133 E.ON’s Global Coal anf Freight Trading (2009)

134 E.ON Energy Trading Offices

Energy Trading Market Unit126

E.ON Energy Trading is the commercial heart of the E.ON Group

and one of Europe’s leading energy trading businesses. As

the link between E.ON and the world’s wholesale energy mar-

kets, Energy Trading buys and sells primarily electricity, natural

gas, coal, oil, and carbon allowances. Its trading activities

play a vital role in helping to ensure fair prices and secure

energy supplies for millions of customers across Europe.

Introduction

Energy Trading Key Figures


Sales 41,251

Adjusted EBITDA 961

Adjusted EBIT 949

Trading Volume by Commodity

2009

Electricity 1,240 billion kWh

Natural gas 1,498 billion kWh

CO2 allowances 501 mmt

Oil 69 mmt

Coal 223 mmt

mmt = million metric tons.

MU Nordic

MU Central Europe

E.ON Energy Trading

MU U.K.

MU Spain

MU Italy

127

The Commercial Heart of E.ON

Vision

E.ON Energy Trading’s vision is to be the leading asset-backed

energy trader in Europe.

Role

The role of E.ON Energy Trading is integrated commodity

optimization for the E.ON Group in the short- and mid-term

three years prior to delivery. Integrated means that all

commodity risk positions for the Group created by owning

assets, including customer portfolios, are brought together

within E.ON Energy Trading.

As an asset-backed trader E.ON Energy Trading commercializes

one of Europe’s broadest and diverse asset positions, consist-

ing of about 60 GW of electricity-generating capacity and well

over 1,000 billion kWh of natural gas.

Dedicated teams of highly experienced traders work side by

side in its Düsseldorf headquarters, combing cross-commodity

and cross-market expertise. This centralized approach, which

combines E.ON Energy Trading’s integrated market view with

E.ON’s outstanding asset portfolio, enables the Group to

better manage commodity risk, maximize value from its assets,

and create additional growth.

Value creation

E.ON’s diverse and flexible range of assets provides E.ON

Energy Trading with a strong basis for creating value from opti-

mization through a range of standard and more innovative

structured and longer-term origination deals.

E.ON Energy Trading takes advantage of the growing oppor-

tunities resulting from converging regional markets in

Europe and proactively contributes to the development of

exchanges, market rules and liquidity throughout European

energy markets. This passionate belief in open and free mar-

kets directly supports the EU’s objectives of ensuring security

of supply and creating more customer choice.

E.ON Energy Trading also applies its in-depth fundamental

knowledge of pan-European and global energy markets to cre-

ate additional value through its proprietary trading activities.

2009 developments

Building on a very good performance in 2008, E.ON Energy

Trading continued to deliver substantial additional value to

the Group in 2009 with an adjusted EBIT of €949 million.

The optimization segment, the main purpose of which is to

limit risks and optimize the deployment of the E.ON Group’s

generation and production assets, contributed €825 million,

continuing its strong development from the end of 2008 and

benefited from the inclusion of Italian trading activities for

the first time. The proprietary trading segment contributed

an adjusted EBIT of €124 million, which is below the excep-

tional prior-year figure.

One key factor affecting trading operations in 2009 was the

global economic crisis, which resulted in sharp drops in all

commodity prices. Although the resulting uncertainty led to

lower trading volumes across some markets, overall energy

markets remained robust and continued to offer enough

liquidity for efficient risk management. Having a single, inte-

grated view of risk across different markets and regions is

crucial, especially in volatile markets where things move very

quickly. Energy Trading, benefiting from this integrated

approach, was able to deliver its excellent operating perfor-

mance while steering its way through the financial crisis.

In addition to posting strong results during difficult economic

conditions, E.ON Energy Trading reached a number of signifi-

cant milestones in 2009 including:

• Registering to trade at a number of new European

exchanges and gas hubs.

• Starting the supply of coal and gas to new E.ON power

stations.

• Supporting the E.ON Group with the successful divestment

of 4,800 MW of generating capacity.

• Completing its first power trade in the United States in

support of E.ON Climate & Renewables’ activities.

• Completing the full integration of Czech, Bulgarian and

Hungarian trading activities.

• Confirmation of its international status by making the

legal conversion from Aktiengesellschaft (AG) to Societas

Europaea (SE).

• Being named Energy Risk magazine’s Electricity Europe

—House of the Year 2009.

2009 Developments

€ in millions

Adjusted EBITDA Adjusted EBIT

2009 2008 2009 2008

Proprietary trading 127 180 124 179

Optimization 834 469 825 466

Total 961 649 949 645

128 Energy Trading Market Unit

Market Developments

Liberalization continues

Three years ago, E.ON made the decision to position its trad-

ing business to take advantage of opportunities presented

by the ongoing liberalization of Europe’s energy markets. Three

years on Europe’s markets have made significant progress

in this direction, although we cannot be complacent.

Markets are becoming more liquid, prices more transparent,

and risks more quantifiable, which ultimately benefits the

European economy and European consumers. Well-functioning

markets will continue to play an important role in delivering

secure energy supplies at fair prices, while helping to encour-

age much needed investment in the next generation of cli-

mate-friendly technology.

Greater physical interconnection and market coupling

bring Europe closer together

Construction of new infrastructure—interconnector cables and

pipelines, cross-border transfer capacity, and LNG regasifi-

cation terminals—is continually improving the physical inter-

connection between European markets, but more can be

done. Market coupling is also an important driver for market

integration because it facilitates cross-border trading. Market

coupling between the German and Nordic markets began

in December 2009, while in August last year the day-ahead

power markets of the Czech Republic and Slovakia were

combined, resulting in a quadrupling of liquidity on the first

day of trading. In 2010, market coupling is set to link Germany,

France, Belgium, the Netherlands and Luxembourg. The lib-

eralization process also continues through the unbundling of

transmission infrastructure.

Building trust in markets

As the world begins to emerge from the economic and finan-

cial crisis, it’s more important than ever for energy markets

to become more integrated and more open. As one of Europe’s

leading market participants, E.ON Energy Trading supports

increased market integrity and greater transparency to ensure

that governments, regulators, industry and consumers have

more trust in the market and have more confidence in the mar-

ket’s ability to help meet the significant energy challenges

that we are now facing. We support this vision by consulting

with policymakers and regulators on measures to ensure that

the development of European markets continues.

Regulatory risk

There are currently discussions both in the US and the EU that

potentially could have significant implications on the regula-

tory frameworks in which E.ON Energy Trading operates. These

discussions include proposals for the mandatory clearing of

all over-the-counter (OTC) trades. E.ON understands this and

would like to contribute to the development of a solution

which ensures a safer financial system, while taking the con-

cerns of end users of OTC derivatives into account. We see

advantages in exchange trading and clearing as a means of

increasing efficiency and mitigating credit risk. However,

the proposed mandatory clearing and exchange trading of

standardized OTC derivatives would be a significant burden

to end users of OTC derivatives. Increased capital requirements

could potentially hinder fundamental players in managing

their underlying risks and liquidity could go down. Furthermore,

it would not be proportionate as the systemic risk is lower

for products linked to the nonfinancial sector compared to

those used by financial institutions.

129

Overview of Market Coupling/Splitting Projects

Established

Nordic Market SplittingIberian Market SplittingFR/BE/NL Dec. 2006CZ/SK Sept. 2009EMCC Nov. 2009Baltic Cable to EMCC May 10

Running Projects

2 FR/BE/NL/DE 07. 09. 20103 NO/NL End 2010

Announced Initiatives

4 Nordic/CWE/Mibel5 IT/SLO Q4 20106 UK/NL (BritNed) Q2 20117 HU/RO/AT8 CZ/SK/PL/AT

4

2

5

7

8

6

3


Exchanges and Hubs

E.ON Energy Trading is active in over 40 countries

worldwide and at all major European energy

exchanges and hubs

Energy exchanges and hubs will continue to play a vital role

in integrating Europe’s energy markets, which will increase

liquidity and support efficiency.

E.ON Energy Trading expanded its reach and registered to

trade at several new exchanges and hubs in 2009, including

the Central European Gas Hub (CEGH) in Austria, Powernext

in France, N2EX (a new spot power exchange in the United

Kingdom), South Pool (a spot power market for Slovenia and

Serbia), and OMIP (a power exchange in Portugal for the Ibe-

rian market). In addition, it places trading volume or acts as

market maker to support the development of a number of hubs

and exchanges across Europe, including in France, Italy, Spain

and Germany. Through its activities in these marketplaces,

E.ON Energy Trading actively supports E.ON’s vision of inte-

grated, open markets. For example, trading points like Net-

Connect Germany (NCG) and CEGH are showing solid liquidity

growth and form a link between the markets of Southeastern

and Northwestern Europe.

The creation of new exchanges reflects the emergence of

larger, multicountry markets. Ultimately, not all of these

exchanges will survive and we believe the market—and energy

consumers—will benefit from further consolidation, which

would result in fewer exchanges, each with a broader geo-

graphic scope.

131

E.ON Energy Trading activities

Active

Under development

Trading activities

Spot

Futures

Option

ICE

Coal

Brent oil

Gas oil

NBP gas

Carbon

Nord Pool

Power

Carbon

POLPX

Power

EEX

Power

Gas

Carbon

Coal

PXE

Power

EEX (CH)

Power

EXAA

Power

PXE/EXAA HU

Power

HUPX

Power

IPEX

Power

South Pool (SI and RS)

Power

APX UK

Power

Gas

N2EX

Power

Bluenext

Power

Carbon

Gas

APX NL

Power

Gas

Belpex

Power

Omel

Power

Omel (PT)

Power

Omip

Power

Powernext

Endex

Power NL, BE

Gas


Power and emissions

Backed by an asset base that includes about 60 GW of gener-

ating capacity, E.ON Energy Trading is one of the largest play-

ers in the European wholesale electricity markets.

Our centralized power trading teams benefit from a single

integrated view on all markets and assets, improving their

ability to optimize the E.ON portfolio. They are also well-posi-

tioned to better realize the benefits of power and gas con-

vergence, trading spread products such as dark spreads, spark

spreads and regional spreads in power.

As part of its strategy to build on its existing power trading

platform, E.ON Energy Trading registered to trade at a number

of new power exchanges in 2009 including N2EX, South Pool,

and OMIP, as well as launching the trading of power contracts

in the United States in support of E.ON Climate & Renewables’

activities in Texas.

E.ON Energy Trading also has one of Europe’s leading carbon

emissions trading desks, which in turn helps the E.ON Group

meet its compliance obligations within the EU emissions

trading scheme.

Power trading volumes increased more than 40 percent in 2009

to 1,240 billion kWh, up from 878 billion kWh in 2008.

Gas and oil

E.ON is a leading participant in Europe’s wholesale gas markets.

It supplies gas to E.ON’s gas retail businesses and gas-fired

power plant and, together with its oil trading function, pro-

vides E.ON’s market units with risk management services. To

do this, it is active in all liquid and semiliquid European gas

markets, as a pan-European player optimizing E.ON’s consid-

erable gas assets, and actively supporting the development

of more liquid gas markets across Europe.

In 2009 E.ON Energy Trading registered to trade at new gas

hubs—Powernext, Central European Gas Hub, and Nord

Pool—as part of its ongoing strategy to expand gas trading

activity to improve market access and the connectivity of its

European portfolio. The gas team also secured E.ON’s first LNG

shipment into Spain, in conjunction with E.ON’s Pan-European

Gas market unit.

Gas trading volumes increased by more than 60% in 2009 to

1,498 billion kWh, up from 938 billion kWh in 2008. Oil trading

volumes increased by 50%, from 46 million tons in 2008 to

69 million tons in 2009.

Coal, Biofuels and Freight

E.ON Energy Trading is responsible for the supply of coal to

E.ON’s 21 GW of hard-coal-fired generation across Europe. As

part of that task, the business began supplying coal to E.ON’s

recently acquired French power stations in 2009. Overall, our

traders purchase about 20 million metric tones of steam coal

per year. The coal comes from all over the world, including

Russia, South Africa, Colombia, and the United States.

Since 2008, EET has seen a lot of potential to improve its

financial coal trading capabilities as well as its freight trading

and vessel management. In 2009, it began acting as its own

vessel operator. By combining coal trading and shipping, E.ON

Energy Trading is moving from pure fuel procurement to a

fully integrated global coal and ocean freight logistics business,

which can manage the whole supply chain, from sourcing

and storage, to transportation and risk management. Devel-

oping financial coal and freight trading on the back of its

increased physical position also improves its ability to better

hedge associated financial risks.

Coal trading volumes increased by more than 100% in 2009 to

223 million metric tons, up from 107 million metric tons in 2008.

Trading Activities

133

E.ON’s Global Coal and Freight Trading (2009)

CanadaCanada

East Australia

Colombia

Europe

India

Indonesia

South Africa

Far East

Far East

Coal shipping routes

Sources of steam coal 2009


Trading office

Dispatch office

Trading operated by

local market unit

E.ON Energy Trading

Trading locations

E.ON Energy Trading operates from a centralized trading floor

at the company’s headquarters in Düsseldorf. More than

1,000 dedicated energy professionals from 45 nations work

side by side, sharing knowledge and industry expertise.

Dispatch locations

Since the creation of E.ON Energy Trading, one team across

multiple locations has managed the dispatch of our entire gen-

eration fleet in Northwest Europe on a day-to-day basis. From

this transnational perspective, our power stations constitute

a single, European portfolio. The dispatch team has 24/7

responsibility for determining which of our European power

plant run and for how long. It works closely with the genera-

tion businesses at the Central Europe, UK, and Nordic market

units and with the gas dispatch team at Pan-European Gas.

E.ON Energy Trading Offices

135

New Market Units 136 New Markets—Russia

136 Introduction

137 Power Industry Reform—Reshaping the Market Structure

138 Power Industry Reform—Stepwise Liberalization

139 Power Market—Two Pricing Zones

141 Spot Market—Future Basis of the Power Wholesale Market

142 E.ON Russia Power—Presence along the Value Chain

142 E.ON Russia Power—Market Position

143 Russia Market Unit: Generation Assets

144 E.ON Russia Power—2009 Sales

145 E.ON Russia Power—Generation Assets and Key Figures

145 Key Figures

146 New Markets—Italy

146 Market Overview

147 E.ON Italia—Generation Structure

147 E.ON Italia—Presence along the Value Chain

148 E.ON Italia—Key Figures

148 E.ON Italia—Generation Assets

149 E.ON Italia—Gas Downstream Assets

149 Key Figures

150 New Markets—Spain

150 Market Overview

151 Market Specifics

151 E.ON España—Presence along the Value Chain

152 E.ON España—Generation Assets

153 E.ON España—Key Figures

154 Climate & Renewables Market Unit

154 Organizational Setup

155 Technologies to Be Rolled Out

156 Technologies for the First Commercial Plants

156 Technologies in Proof-of-Concept and R&D Stage

157 Focus on the Most Attractive Markets: Current Footprint

158 Generation Portfolio

159 Assets in Operation: Germany (Wind)

160 Assets in Operation: Germany (Biogas)

161 Assets in Operation: France

162 Assets in Operation: Iberia (Spain and Portugal)

163 Assets in Operation: Italy

164 Assets in Operation: Poland

165 Assets in Operation: U.K. (Part 1)

166 Assets in Operation: U.K. (Part 2)

167 Assets in Operation: Nordic

168 Assets in Operation: North America



169 Long-Term Targets

170 Carbon Sourcing (JI/CDM)

170 Joint Implementation (JI) and Clean Development Mechanisms (CDM)

171 Key Figures

136 New Market Units New Markets—Russia

E.ON’s operations in Russia encompass power generation,

power sales to large industrial customers, and wholesale

power marketing.

The key strategic priority for E.ON in Russia is to take advan-

tage of the promising Russian market, and in the long run

to make our business in Russia a significant contributor to

EON’s earnings. E.ON aims to gain the leading position in

Russia in terms of efficiency of operations through optimiza-

tion of existing facilities and construction of new highly effi-

cient units. In addition, we will secure a high level of safety

and environment consciousness.

E.ON Russia Power, the lead company managing our operations

in Russia, is well positioned for the ongoing liberalization of

the country’s electricity market.

Russia’s wholesale power market is divided into two separate

markets: the electricity market and the capacity market. The

progressive liberalization of the electricity market began in

2007 and will be completed by 2011. The progressive liberal-

ization of the capacity market began in July 2008 and is now

synchronized with that of the electricity market.

Through OGK-4, E.ON Russia Power has 8.3 GW of net installed

generating capacity. About 70 percent of this capacity is rela-

tively new and modern and has a high load factor. OGK-4’s

current generating capacity accounts for about 6 percent of

Russia’s total thermal capacity. A key mid-term focus is to

enlarge OGK-4’s capacity through organic growth.

We are building four high-efficiency combined-cycle gas tur-

bines (CCGTs) and one lignite-fired generating unit at our

existing power plants Surgutskaya 2, Shaturskaya, Yaivinskaya

and Berezovskaya. The new units are scheduled to enter

service in 2010–2013. Expected investments in the projects

will total about €2.3 billion.

New Markets—RussiaIntroduction

137

Power Industry Reform—Reshaping the Market Structure

• Stepwise deregulation 2007–2011.

• Introduction of new market segments

(e.g. day-ahead market, capacity market).

• Spot market and free bilateral contracts are focus of the

new market.

• Capacity is traded separately.

• Balancing market to reduce imbalances.

• Long-term capacity sales agreements are to be launched

in 2010.

• Regulated agreements —electricity and capacity are sold

under the tariffs set by the regulator.

• Day-ahead market—spot market with electricity sales on

day-ahead basis.

• Balancing market—real-time spot market.

Illustrative

Pre-reform model(before 2007)

Current model(2007–2010)

Target model(for 2011)

Regulated Agreements

Day-ahead spot market

Free agreements with

prescribed counter-

parties

Capacity market

Balancing market

• Prices are set by the regulator.

• Prescribed counterparties.

• Take-or-pay obligations for electricity and capacity volumes.

• Until 2007 tariffs on a “cost plus” basis.

• From 2008 indexation formula for setting tariffs.

• Prices are driven by demand/supply, and input fuel costs.

• Day-ahead basis.

• Price-setting and price-taking bids and offers.

• Hourly equilibrium prices.

• Free counterparties.

• Free price, terms and conditions.

• Limited volumes within the transition period until 2011.

• Fully regulated until July 1, 2008—capacity payments mainly cover generator’s fixed costs.

• Since July 1, 2008 liberalization according to power market scenario.

• Capacity auctions.

• Capacity exchange trade with link to power volumes.

• Prices are driven by demand/supply.

• Designed to eliminate imbalances between demand/supply.

• Price-setting and price-taking bids and offers.

• System services market is expected to be launched.

Evolution of Russian Electricity Market

138

Regulated sector (residential) Liberalized sector Regulated sector (industrial) New capacity + deviations from 2007 FTS balance (illustrative)

100

80

60

40

20

Source: Government Resolution No. 205 dated April 7, 2007.

1H 2007 2H 2007 1H 2008 2H 2008 1H 2009 2H 2009 1H 2010 2H 2010 1H 2011

5

95

10

10

90

10

15

85

10

25

75

10

30

70

10

50

50

10

60

40

10

80

20

10

100

10

Liberalization Scenario of the Wholesale Electricity Market in Russia

New Market Units New Markets—Russia

Power Industry Reform—Stepwise Liberalization

In April 2007, the Russian government adopted stepwise

liber alization of the electricity and capacity market.

• Liberalization ratios are applied to the electricity and

capacity volumes (liberalization of capacity sales started

2H 2008) included in the Federal Tariff System (FTS) bal-

ance for 2007 (excluding volumes sold to the households).

• Capacity and power for households are sold under regu-

lated agreements.

• Decree on the long-term capacity market has been

signed in Q1 2010.

• Heat market will remain fully regulated until special

resolution of the government.

139

Power Market—Two Pricing Zones

• The Russian power market is subdivided into two pricing

zones.

• Far East Energy System is isolated from Unified Energy

System and fragmented within itself.

• Interconnection between zones is very limited.

• Pricing zones further segmented into free power flow

zones driven by grid limitations.

• Russian transmission grid part of IPS/UPS power system.

• Feasibility study on synchronous interconnection of the

power system of IPS/UPS with UCTE has been carried

out—synchronous interconnection is feasible in the long

term but significant investment is needed.

Region with E.ON position First pricing zone Second pricing zone Energy System of Far East

Smolenskaya GRES

Smolensk region

Shaturskaya GRES

Moscow region

Berezovskaya GRES

Krasnoyarsk region

Yaivinskaya GRES

Perm regionSurgutskaya GRES-2

Tyumen region


Power Market—Two Pricing Zones

• Advantageous exposure to coal as primary fuel source.

• Hydro and coal capacities prevail in Siberia.

• No nuclear facilities.

• Reserve margins highly dependent on water levels.

• No immediate access to fuel sources in European Russia;

proximity to gas in Urals.

• Dominant positions of gas-fired generation.

• Significant share of nuclear generation.

• Relatively low reserve margins.

• Strong dependence on seasonality.

• Different merit orders.

• Different structure of electricity demand and,

accordingly, different growth rates of consumption.

Strongly different fuel mix within the two pricing zones

Percentages Percentages

First Pricing Zone (European Russia, Urals) Second Pricing Zone (Siberia)

65 Gas

17 Coal

12 Nuclear

5 Hydro

50 Hydro

2 Gas

48 Coal

141

Spot Market—Future Basis of the Power Wholesale Market

Spot market is expected to be a cornerstone for future

wholesale electricity market.

• Spot price is highly volatile due to its dependence on:

– seasonality

– weather conditions

– day of the week

– periods of maintenance

– water flows and load of hydro generation.

• Absence of a forward market further increases spot

price volatility.

• First pricing zone: spot prices are normally set by

gas-fired and fuel oil power units.

• Second pricing zone: spot prices are usually set by hydro

power plants and coal-fired generation.

1,200

1,100

1,000

900

800

700

600

500

400

300

200

100

RUB/MWh First pricing zone Second pricing zone

1/1/08 4/1/08 7/1/08 10/1/08 1/1/09 4/1/09 7/1/09 10/1/09 1/1/10

Source: Administrator of Trading System.

Spot Market Price in the First and Second Pricing Zones


E.ON Russia Power—Market Position

• Amongst leading power producers in Russia.

• No. 1 among thermal wholesale generating companies

in power generation.

• One of the leading thermal wholesale generating com-

panies in power sales.

• Leading market position in Tyumen region.

• Substantial positions in fast-growing regions:

Moscow, Perm, Krasnoyarsk and Smolensk.

E.ON Russia Power—Presence along the Value Chain

stepwise liberalization regulated

Upstream Midstream

Generation Wholesale

Power

OGK-4 Presence on Local Electricity Markets

Total capacity1, 2

MW (gross)OGK-4 capacity

MW (net)OGK-4 output

million kWh

Ural region: Tyumen oblast (first pricing zone) 11,479 4,686 35,210

Siberia region: Krasnoyarsk kray (second pricing zone) 11,258 1,418 9,425

Central region: Moscow oblast (first pricing zone) 14,988 1,017 3,636

Central region: Smolensk oblast (first pricing zone) 4,178 579 1,722

Ural region: Perm kray (first pricing zone) 6,032 568 3,955

Total Russia 219,0003 8,268 53,948

1Based on 2007.2Total capacity figures refer to installed capacity of the corresponding administrative states of the Russian Federation (“oblast”/“kray”).3Rounded.

143

Russia Market Unit: Generation Assets



Shaturskaya

Yaivinskaya

Surgutskaya 2

Smolenskaya

Berezovskaya


E.ON Russia Power—2009 Sales

• Regulated electricity sales 32.2 billion kWh.

• Non-regulated electricity sales 25.1 billion kWh.

• Heat sales approx. 2 billion kWh.Percentages

55 Regulated electricity sales

42 Non-regulated electricity sales

3 Heat sales

OGK-4 Sales Structure 2009

145

E.ON Russia Power—Generation Assets and Key Figures

OGK-4 Electric Power Stations


MW (net)

OGK-4’s share


capacity MW

Gas: Surgutskaya GRES-2 4,686 100.0 4,686 1985–1988

Coal: Berezovskaya GRES 1,418 100.0 1,418 1987–1991

Gas/coal/peat/fuel oil: Shaturskaya GRES 1,017 100.0 1,017 1971–1986

Gas/coal/peat: Smolenskaya GRES 579 100.0 579 1978–1985

Gas/coal: Yaivinskaya GRES 568 100.0 568 1963–1965

Total 8,268 8,268

OGK-4 Power Generation by Power Plant

MWh 2009 2008 2007 2006 2005

Surgutskaya GRES-2 35,210 34,408 34,406 32,884 31,936

Berezovskaya GRES 9,425 10,821 8,529 6,921 6,675

Shaturskaya GRES 3,636 5,002 4,911 4,763 4,581

Smolenskaya GRES 1,722 2,212 2,099 2,388 2,139

Yaivinskaya GRES 3,955 4,234 4,296 4,074 3,652

Total 53,948 56,676 54,241 51,030 48,983

Russia’s market overall 972,4001 1,023,3001 1,015,893 991,424 953,071

1Rounded.

Key Figures

Russia Key Figures


Sales 973

Adjusted EBITDA 203

Adjusted EBIT 73

146 New Market Units New Markets—Italy

Market Overview

• Italy is the fourth-largest power and the third-largest gas

market in Europe.

• Up to 2008 the power sector showed an annual demand

growth of about 1 percent, whilst roughly 44 billion kWh

of power have been imported to meet Italy’s demand.

• In 2009, due to the heavy economic downturn affecting

the country, the demand collapsed to 317 billion kWh

(-6.7 percent vs. 2008).

Key drivers for power demand growth

• Demand development is mainly affected by the economic

downturn.

• Economic recovery is expected to return demand on

growth track, with demand from service sector being a

main driver.

New Markets—Italy

• The future demand growth in the gas sector is expected

to be driven mainly by increasing consumption from gas-

fired power plants.

2009

317

Billion kWh

Power Demand Development

2004

325

2005

330

2006

337

2007

340

2008

339

2003

321

340

330

320

Source: Terna.

147

E.ON Italia—Generation Structure


1To be transferred to Energy Trading.

E.ON Italia—Presence along the Value Chain


Generation Trading1 Distribution Retail

PowerGas

Percentages Total: 16.5 billion kWh

1December 2009. Source: Italian Energy Authority.

60 Gas

26 Coal

13 Hydro 1 Other

Market Unit Italy—Generation Structure1

148 New Market Units New Markets—Italy

E.ON Italia—Key Figures

E.ON Italia—Generation Assets

Italy market unit: generation assets

1E.ON’s stake: 58.4 percent; accounted for as an associated company.2E.ON’s stake: 50 percent; accounted for as an associated company.3E.ON’s stake: 75 percent.

Tavazzano

1,740 MW

Ostiglia

1,450 MW

CEF1

142 MW

Terni

530 MW

Scandale2

814 MW

Livorno Ferraris3

805 MW

Fiume Santo

980 MWCET1

143 MW

Trapani

170 MW

CCGT power station

Hydro power station



Key Figures (2009)

GW E.ON Italia Overall market

Generation capacity 5.6 103.21

1Terna estimate.

Europe

149

E.ON Italia—Gas Downstream Assets

Current gas downstream assets

Key Figures

Italy Key Figures


Sales 4,964

Adjusted EBITDA 821

Adjusted EBIT1 540

1Adjusted EBIT is affected by purchase price allocation effects.

Italy


Minority shareholdings

Europe

150

Percentages Total: 93 GW

33 Renewables

24 CCGT

Fuel/Gas 4

Hydro 17

Nuclear 8

Coal 14

Source: Red Eléctrica.

Generation Market Structure (by installed capacity)

New Market Units New Markets—Spain

Market Overview

• Fifth-largest market in Europe (9 percent of EU30).

• One of the largest fast-growing power markets in

Europe.

• Diversified fuel mix.

After years of growth, power demand decreased drastically in

2009 due to economic crisis and lower industrial consumption.

Opportunities due to changing generation structure.

• Replacement of old generation capacity currently

under way.

• Shift in fuel types, from domestic coal and oil towards

gas and renewables.

New Markets—Spain

Percentages Total: 263 billion kWh

30 Renewables

29 CCGT

Fuel/Gas 1

Hydro 9

Nuclear 19

Coal 12


Generation Market Structure (by production)

Billion kWh

Power Demand Development

260

250

240


2004

236

2009

251

2005

246

2006

253

2007

262

2008

264

151

Market Specifics

E.ON España—Presence along the Value Chain

• Renewables and CHP constitute a significant share of

the fuel mix (26 percent of the total demand in 2009).

• Gas market capacity increase: 1) new pipeline from

Algeria (Medgaz) in 2009, and 2) new LNG facilities will

be running in the following years.

• Full commitment to CO2 reduction limits, emissions

regulations, energy efficiency and smart metering

implementation.


1From July 1, 2009 clients under P<10kW could have regulated tariff.2To be transferred to Energy Trading.


Generation Trading2/Supply Distribution Retail1

Power

• Full liberalization of gas and electricity markets took

place in July 2009. Regulated tariffs were eliminated;

only Last Resort Supply for vulnerable consumers

remains.

152 New Market Units New Markets—Spain

E.ON España—Generation Assets

Location of assets and fuel types

Power Generation Capacity by Fuel Type

MW 2009

Coal 1,433

Gas (CCGT) 1,213

Hydro 707

Spain market unit 3,353

1Not including 26 MW Aguayo/Aguilar conventional hydro power plant.Note: Begasa hydro power plant (4.7 MW total installed capacity, 55% E.ON interest) is not represented on the map.

A technologically advanced CCGT located in Algeciras on

Spain‘s southern coast began operational testing in late 2009

and will enter service in mid-2010. It will increase our total

capacity in Spain to 4.2 GW.

Navia

202 MW

Picos

114 MW

Puente Nuevo

324 MW

Bahía de Algeciras

820 MW planned

Los Barrios

567 MW

Aguayo1

362 MW

Cercs

162 MW

Tarragona

395 MW

Escatrón

818 MW

Escucha

159 MW

Puertollano

221 MW

Hydro power station


CCGT power station

Europe

153

Position in power distribution

Network 30,700 km

Distributed power 3.0 billion kWh

Customers 670,000

Power sales

Smart metering

• Targets established by the Spanish government imply

that by 2014 50% of meters should be based on a smart

technology. By 2018, 100% should be accomplished.

• E.ON España has over 157,000 smart meters already

installed.

• Plan for a complete rollout of 752,000 smart meters by

2014—well ahead of the legal deadline.

Power Sales

Million kWh 2009

Residential customers and small and medium enterprises 2,575

Industrial and commercial customers 2,075

Market sales 11,055

Total 15,655

E.ON España—Key Figures

Spain Key Figures


Sales 1,346

Adjusted EBITDA 227

Adjusted EBIT1 103

1Adjusted EBIT is affected by purchase price allocation effects.

• Continued investments in infrastructure and technology

will enable us to further enhance our service quality, and

will help our customers use energy more efficiently.

154

Business Units

Nordic North America Carbon Sourcing

Central Europe Biogas/Biomethane

U.K. Emerging Technologies &

New Markets

Iberia Solar Photovoltaic (PV)

Italy

Board

Corporate Functions Operational Functions

Strategy, Business Development &

Stakeholder Management

Finance and Business Control

HSSE1

Business Services

Procurement

Construction

Asset Strategy and Technical Excellence

New Market Units Climate & Renewables Market Unit

Organizational Setup

Climate & Renewables Market Unit

Key strategic issues

• Shaping the next stage of industry development as a

leading global player with a lookout on worldwide

opportunities.

• Focus on scalable technologies, scalable already or in

the future, moving the business from boutique to indus-

trial standards and scale.

• A fast and consistent pace of operational delivery in

order to build material renewables capacity.

1Health, Safety, Security & Environment.

• Superior value chain management together with first-

class assets, locations and strategic partnerships with

industry leaders such as Siemens, Masdar and Abengoa

give E.ON Climate & Renewables a competitive

advantage.

• Flexible and agile organization with a diverse and experi-

enced workforce along with a strong performance drive.

• Fully leveraging existing Group-wide skills and

capabilities.

155

Wind

Onshore• 70 wind parks currently in operation; 2,754 MW worldwide.

• Long-term experience in Germany and U.K.

• Commissioning of Roscoe, the world‘s largest wind farm

in late 2009.

• Papalote II (approx. 200 MW) to be commissioned during

2010.

Offshore• First mover in market (Blyth, U.K.; 2000).

• 4 operational offshore wind parks in Europe with 113 MW

in U.K., Denmark and Germany.

• Robin Rigg, a 180 MW project, to be commissioned in

April 2010.

• alpha ventus, Germany’s first offshore wind farm, is a

pioneering deepwater far-shore project in a joint venture

with our partners EWE and Vattenfall. It was completed

in late 2009.

• Start of construction of London Array1 Phase I (630 MW)

in late 2009, with all equipment contracts secured.

• Rødsand (Denmark), a 207 MW project under construction,

to be completed in 2010.

• E.ON will contribute around 40% of the total European

offshore capacity growth in 2010.

E.ON Climate & Renewables’ intention is to become a leading

player and to drive the market development to scale.

Biogas/biomethane

• E.ON Climate & Renewables have several biogas and bio-

methane plants across Europe and ten years experience

in pace-setting biomethane Research & Development (R&D).

• E.ON Climate & Renewables owns and operates the larg-

est biomethane plant in Europe (Schwandorf, Germany).

• E.ON Climate & Renewables subsidiary E.ON Bioerdgas

GmbH has increased its portfolio from 90 million kWh/year

up to 400 million kWh/year.

• Project pipeline of 2,000 GWh/year in various stages of

development.

Biomass

Biomass refers to solid biomass (wood, wood waste, straw,

agricultural waste) for generating power and heat through

a combustion technology.

• Steven’s Croft (44 MWel), one of the largest wood-burning

plants in Europe, was commissioned by E.ON Climate &

Renewables in the last quarter 2007.

E.ON Climate & Renewables is looking to extend a strong

current position through focus on developing and operating

large coastal and inland plants, as well as building experience

in cutting-edge gasification technology.

Our purchasing of biomass will strictly ensure that the eco-

logical and ethical benefits of these technologies are not put

at risk.

Small hydro

The further development of this technology will be managed

within the E.ON Group through the Competence Centre Hydro

in Nordic.

Technological Focus

– Technologies to Be Rolled Out

1Joint venture of E.ON (30%), Dong (50%) and Masdar (20%).

156 New Market Units Climate & Renewables Market Unit

Technological Focus

– Technologies for the First Commercial Plants

– Technologies in Proof-of-Concept and R&D Stage

Solar

These are the technologies in which we are focused on the

first commercial plants:

• The first commercial photovoltaic plants have built our

know-how with various technologies:

– Le Lauzet (France), the Group’s first solar ground plant,

with a capacity of 2.5 MW. The first megawatt is using

Malibu thin-film technology, the rest of the plant uses

state-of-the-art poly crystalline silicon modules.

– Fiumesanto power plant (Italy), very-high-efficiency

monocrystalline silicon modules have been integrated

into a parking structure in a very short time.

– Besides modules, we are evaluating various Balance of

Plant Architectures and equipments for optimization.

• Co-location/sun farms:

– We will review our wind portfolio for complementary

photovoltaic/thin-film installations.

– Developing solar farms in sun belt.

Ocean energy

• E.ON Climate & Renewables started to explore ocean

energy in 2005 in U.K.

• Planning commercial trials of ocean energy from 2010

and 2011 (~1 MW).

– Pelamis wave technology, a full-scale ocean testing of

commercial-scale device is scheduled for May 2010.

E.ON Climate & Renewables is driving technology development

and will focus on devices with potential to deliver scale and

rapid reduction in capital and operating costs.

• CSP—concentrating solar power1

– In 2009 E.ON Climate & Renewables has realized its

market entry into the CSP business through a joint

venture with its partner Abengoa Solar.

– The joint venture has 2x50 MW of projects under con-

struction in Spain, which will be commissioned in 2011.

– The scale of these CSP plants is significantly greater

than PV. This will play to our strengths of developing

large-scale generation technologies.

E.ON Climate & Renewables will drive cost-effective solutions

together with step change potential for cost reduction and

reliability.

1Identical to solar thermal plants.

157

Focus on the Most Attractive Markets: Current Footprint

Installed renewables capacity as of December 2009 (MW1)

North America

1,720

Total

2,957

90 Other renewables

2,867 Wind

U.K.

245

Germany

208

Nordic

52

Europe (others)

58

396

IberiaItaly

278

1E.ON equity MW (figures rounded), excluding large hydro. Source: E.ON.


Generation Portfolio

0 200 400 600 800 1,000 1,200 1,400 1,600

Denmark 33.1

Germany

Italy

207.9

278.1

France 43.7

Poland 13.3

Portugal 74.8

Spain 320.7

Sweden 18.9

U.K. 245.1

U.S. 1,720.1

1Excluding large hydro.

MW Installed capacity: 2,957 MW

Installed Renewables Capacity as of December 20091

Percentages

Onshore wind 94

Biogas/biomethane 1

1 Biomass

4 Offshore wind

<1 Other

Renewables Generation Portfolio as of December 2009

159

Assets in Operation: Germany (Wind)

Europe

Wind Parks in Germany

Onshore wind Project location Project status Net capacity (MW1) Commissioning year

1 Brandenburg In operation 50.8 2001

2 Mecklenburg-West Pomerania In operation 36.7 2001

3 Saxony-Anhalt In operation 19.9 2002

4 Saxony In operation 23.6 2004

5 Kessin In operation 0.4 2002

6 Schönerlinde In operation 0.8 2002

7 Riethnordhausen In operation 7.4 2007

8 Rheiner Windpark In operation 2.5 2002

9 Dargelütz In operation 22.0 2006

10 Helmstedt-Treue In operation 8.0 2005

11 Treue-Ost In operation 8.0 2007

12 Cuxhaven In operation 2.5 2006

Offshore wind Project location Project status Net capacity (MW1) Commissioning year

13 alpha ventus In operation 15.8 2009

Total 198.4

1E.ON equity MW (figures rounded). Source: E.ON.

Operating Sites

Offices

1

6

4

1213

3

10

11

8

5

2

7

9

Essen

Düsseldorf

Munich

Potsdam


Assets in Operation: Germany (Biomass, Biogas and Biomethane)

Europe

Biomass, Biogas and Biomethane Plants in Germany

Biogas Project location Project status Net capacity (MW1) Commissioning year

1 Ducherow In operation 0.9 2008

2 Malchin In operation 3.7 2007

3 Roggenhagen In operation 0.1 2006

4 Fürstenwalde In operation 0.5 1998

5 Hasenwinkel In operation 0.4 2007

6 Ketzin In operation 0.7 2007

7 Sauen In operation 0.4 2006

8 Kaakstedt In operation 0.8 2006

9 Sembten In operation 1.6 2008

10 Havelberg In operation 0.4 2009

Total 9.5


Operating Sites

Offices

1

6

10

11

1314

12

4

3

8

5

2

7

9

Essen

Düsseldorf

Munich

Potsdam

161161

Assets in Operation: France

Europe

Onshore Wind Parks in France


1 Lehaucourt In operation 10.0 2007

2 Ambon In operation 10.0 2008

3 LV Cernon In operation 10.0 2008

4 CE Cernon In operation 3.7 2008

5 Muzillac In operation 10.0 2008

Total 43.7

1E.ON equity MW (figures rounded). Source: E.ON

Operating Sites

Office

Paris 3/4

1

25

162

Operating Sites

Offices

New Market Units Climate & Renewables Market Unit

Assets in Operation: Iberia (Spain and Portugal)

Europe

Onshore Wind Parks in Portugal


14 Joguinho (Torres Vedras) In operation 11.7 2006

15 Alto Folgorosa In operation 8.1 2008

16 Espinhaço de Cão In operation 10.0 2008

17 Barão São João In operation 45.0 2009

Total 74.8


Onshore Wind Parks in Spain


5 Ascoy In operation 1.5 1998

6 Bodenaya In operation 18.0 2005

7 Zaragoza In operation 125.6 2006

8 Carcelén In operation 11.4 2004

9 Páramo de Poza In operation 15.0 2002

10 Pax In operation 19.2 1997

11 Pico Gallo In operation 24.4 2001

12 Mingorrubio In operation 26.0 2009

13 Sierra de Tineo In operation 44.0 2009

Total 285.1


Biomass and Small Hydro Sites in Spain

Biomass Project location Project status Net capacity (MW1) Commissioning year

1 Juneda (Lerida) In operation 4.3 2001

2 VAG (Lerida) In operation 6.0 2004

Small hydro Project location Project status Net capacity (MW1) Commissioning year

3 Giribaile (Jaén) In operation 20.0 2007

4 E2I project (Murcia) In operation 5.3 1959

Total 35.6


Madrid

Lisbon

9

1/2

1311 6

14

15

16 17

12

8

3

5

4

7

10

163

Assets in Operation: Italy

Europe

Onshore Wind Parks in Italy


1 Florinas In operation 20.0 2004

2 Vizzini In operation 23.8 2006

3 Trapani In operation 32.3 2007

4 Montecute In operation 44.0 2006

5 Poggi Alti In operation 20.0 2006

6 Marco A. Severino In operation 44.0 2007

7 Iardino In operation 14.0 2005

8 Serra Pelata In operation 42.0 2007

9 Piano di Corda In operation 38.0 2007

Total 278.1


Operating Sites

Offices

3

1 4

8/9

5

2

6

7

Rome

Milan


Assets in Operation: Poland

Europe

Onshore Wind Parks in Poland


1 Lebcz 1 (Gdańsk) In operation 5.9 2007

2 Lebcz 2 (Gdańsk) In operation 7.4 2008

Total 13.3


Operating Sites

Office

Szczecin

1 2

165

Assets in Operation: U.K. (Onshore Wind)

Onshore Wind Parks in U.K.


1 Askam (Cumbria) In operation 4.6 1999

2 Bessy Bell (Northern Ireland) In operation 5.0 1995

3 Blood Hill (Norfolk) In operation 2.3 1992

4 Bowbeat (Scotland) In operation 31.2 2002

5Deucheran Hill (Kintyre Peninsula) In operation 15.8 2001

6Great Eppleton (Northumberland) In operation repower

7 Holmside (County Durham) In operation 5.1 2004

8 High Volts (County Durham) In operation 7.8 2004

9 Hare Hill (County Durham) In operation 5.1 2004

10 Lowca (Cumbria) In operation 4.6 2000

11 Oldside (Cumbria) In operation 5.4 1996

12 Out Newton (Northumberland) In operation 9.1 2002

13 Ovenden Moor (Yorkshire) In operation 4.6 1993

14 Rheidol (Wales) In operation 2.4 1997

15 Rhyd-y-Groes (Wales) In operation 3.6 1992

16 Royd Moor (Yorkshire) In operation 3.3 1993

17 Siddick (Cumbria) In operation 4.2 1996

18 St. Breock (Cornwall) In operation 5.0 1994

19 Stags Holt (Cambridgeshire) In operation 18.0 2007

Total 137.1


Europe

Operating Sites

Office

12

3

18

14

15

1

10

11

8

4

5

27

9

6

17

13 16

19

Coventry


Assets in Operation: U.K. (Biomass and Offshore Wind)

Offshore Wind Parks and Biomass Plants in U.K.

Biomass Project location Project status Net capacity (MW1) Commissioning year

1 Steven’s Croft (Lockerbie) In operation 44.0 2008


2 Blyth (Northumberland) In operation 4.0 2000

3Scroby Sands (Great Yarmouth) In operation 60.0 2004

Total 108.0


Europe

3

1

2

Coventry

Operating Sites

Office

167

Assets in Operation: Nordic

Europe

Onshore and Offshore Wind Parks in Nordic Countries


1 Southern Sweden In operation 18.9 2003–2007


2 Nysted 1 (Gedser) In operation 33.1 2003

Total 52.0


2

Malmö1

Operating Sites

Office


Assets in Operation: North America

Onshore Wind Parks in U.S.


1 Forest Creek (Texas) In operation 124.2 2007

2 Sand Bluff (Texas) In operation 90.0 2008

3 Munnsville (New York) In operation 34.5 2007

4 Roscoe (Texas)2 In operation 209.0 2008

5 Champion (Texas)2 In operation 126.5 2008

6 Panther Creek (Texas) In operation 457.5 2008/2009

7 Inadale Phase 1/2 (Texas)2 In operation 197.0 2008/2009

8 Pyron (Texas)2 In operation 249.0 2009

9 Papalote I (Texas) In operation 197.0 2009

10 Stony Creek (Pennsylvania) In operation 52.5 2009

Total 1,720.1

1E.ON equity MW (figures rounded). Source: E.ON. 2Part of the Roscoe Complex.

Chicago

Denver

Austin

3

9

10

1

2

5

4

6

7

8

Operating Sites

Office

169



Attributable Power Generation Capacity

MWDecember 31,

2009

Onshore wind 2,753.7

Offshore wind 112.9

Biomass 44.0

Biogas/biomethane 19.8

Small hydro 25.3

Solar PV/CSP 1.0

Total 2,956.7

Power Generation Output

GWh 2009

Onshore wind 4,509.6

Offshore wind 348.9

Biomass 242.3

Biogas 27.7

Small hydro 32.6

Total 5,161.1

Long-Term Targets

Major projects

• Major wind onshore projects in construction 2010:

Wielkopolska and Barzowice I in Poland (total 68.7 MW)

La Victoria and Matabuey in Spain (38.4 MW)

Papalote II in U.S. (~200 MW)

• Wind offshore projects in construction 2010:

London Array 630 MW (U.K.)

Robin Rigg, 180 MW (U.K.)

Rødsand II, 207 MW (Denmark)

GW Renewables capacity1

10

8

6

4

2

1Excluding large hydro.

2007

1

2010

approx. 4

2015

approx. 10

Long-Term Target Zone


Carbon Sourcing (JI/CDM)

To help Parties meet their emission targets in the

most economically efficient way the Kyoto Protocol

put in place market-based mechanisms:

Clean Development Mechanism (CDM)• CDM projects take place between developed countries

(e.g. EU) and developing countries (e.g. China).

• CDM projects produce carbon credits called Certified

Emission Reduction (CERs).

• CERs generated by a project are based on the difference

between business-as-usual emissions and emissions with

the project, based on external audit process.

• CERs are used to offset emissions in developed

countries.

Joint Implementation (JI)• JI projects take place between industrial countries that

have an emission cap under the Kyoto protocol (e.g. Russia,

Germany).

• JI projects produce carbon credits called Emission

Reduction Units (ERUs).

• ERUs generated by a project are deducted from the host

country’s CO2 allocation.

• ERUs are to offset emissions in developed countries.

Our technology focus in different markets

Global supply for Phase II (2008–2012) is estimated

at 1–1.5 billion tons of carbon dioxide.

We aim to develop a leading carbon sourcing business

worldwide.

EC&R Carbon Sourcing Activities:

• “Make”: EC&R as project developer and minority share-

holder in offset projects.

• “Buy”: EC&R buys offset certificates from existing

projects.

• “Sell”: EC&R sells sourced certificates internally or to

third parties.

E.ON Climate & Renewables’ project development will focus on

technologies and geographical areas where we can leverage

E.ON’s existing technical knowledge, local presence and strong

partnerships. We purchase credits from robust projects and

reliable counterparties around the world.

Total portfolio of >25 Mt CO2 to be delivered by 2012.

Joint Implementation (JI) and Clean Development Mechanisms (CDM)

Southeast Asia• Local office

in Singapore

MENA region• EMIC (E.ON and Masdar

Intergrated Carbon), established January 2010

Russia• “Make” with OGK-4 in Russia

171

Key Figures

Climate & Renewables Key Figures


Sales 466

Adjusted EBITDA 294

Adjusted EBIT 146

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Financial Calendar

August 11, 2010 Interim Report: January – June 2010 November 10, 2010 Interim Report: January – September 2010

March 9, 2011 Release of 2010 Annual Report May 5, 2011 2011 Annual Shareholders Meeting May 6, 2011 Dividend Payout May 11, 2011 Interim Report: January – March 2011 August 10, 2011 Interim Report: January – June 2011 November 9, 2011 Interim Report: January – September 2011

E.on strategy & key figures 2010

Technology

Transcript of E.on strategy & key figures 2010