FACTS & FIGURES 2009 - RWE Group · RWE Facts&Figures 2009 contains certain forward-looking...

FACTS & FIGURES 2009(Updated May 2009)

RWE Facts & Figures | Update May 2009 5/28/2009 2

* Footnotes are to be inserted manually (using “copy” and “paste“).

RWE Facts&Figures 2009 contains certain forward-looking statements as defined by US federal securities laws. This predominantly relates to the following statements:

Projections of revenue, income, earnings per share, capital expenditure, dividends, the capital structure and other financials;Statements of plans or objectives for future operations or concerning the company’s future competitive position;Expectations of future economic performance; andStatements of assumptions underlying several of the foregoing types of statements, all of which are forward-looking statements.

Also words such as “anticipate”, “believe”, “estimate”, “intend”, “may”, “will”, “expect”, “plan”, “project”, “should” and similar expressions are intended to identify forward-looking statements. The forward-looking statements reflect the judgement of RWE’s management based on factors currently known to it. No assurances can be given that these forward-looking statements will prove accurate and correct, or that anticipated, projected future results will be achieved. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Such risks and uncertainties include, but are not limited to, changes in the general economic and social environment, business, political and legal conditions, fluctuating currency exchange rates and interest rates, price and sales risks associated with a market environment in the throes of deregulation and subject to intense competition, changes in the price and availability of raw materials, risks associated with energy trading (e.g. risks of loss in the case of unexpected, extreme market price fluctuations and credit risks resulting in the event that trading partners do not meet their contractual obligations), actions by competitors, application of new or changed accounting standards or other government agency regulations, changes in, or the failure to comply with, laws or regulations, particularly those affecting the environment and water quality (e.g. introduction of a price regulation system for the use of power grids, creating a regulation agency for electricity and gas or the introduction of trading in greenhouse gas emissions), changing governmental policies and regulatory actions with respect to the acquisition, disposal, depreciation and amortisation of assets and facilities, operation and construction of plant facilities, production disruption or interruption due to accidents or other unforeseen events, delays in the construction of facilities, the inability to obtain, or to obtain on acceptable terms, necessary regulatory approvals regarding future transactions, the inability to successfully integrate new companies within the RWE Group to realise synergies from such integration and the potential liability for remedial actions under existing or future environmental regulations and the potential liability resulting from pending or future litigation. Any forward-looking statement is valid only as of the date on which it is made. RWE neither intends to, nor assumes any, obligation to update these forward-looking statements. For additional information regarding risks, investors are urged to consult RWE’s latest annual report, other reports recently filed with the Frankfurt Stock Exchange or the SWX Swiss Exchange and the material furnished to the US Securities and Exchange Commission by RWE.

Forward-Looking Statement


150 RWEElectricity

GenerationFuelsTradingGridSupply

GasUpstreamLNGTradingTransportDownstream

AccountingNuclear ProvisionsPension Provisions

Investor Relations

154154178181185189194194202204206212221221223224

82

64

4

8686

107111112115128128135

6670767879

71212334042424659

Market DataElectricity

GenerationFuelsTradingGrid Supply

GasLNGDownstream

Political Framework ConditionsCombined Heat and Power Generation (CHP) ActNational Allocation Plan IILarge Combustion Plant Directive (LCPD)Nuclear ConsensusGrid

At a GlanceStructureStrategy

Strategic CornerstonesAcquisitions and DivestmentsSustainability

Financial InformationRWE ShareFixed Income Financing

Risk Governance

At a

Gla

nce

Polit

ical

Fram

ewor

kC

ondi

tions

Mar

ket D

ata

RW

E

Table of Contents


RWEMarket Data

At a Glance

Political Framework ConditionsAt a Glance

RWE Facts & Figures | Update May 2009 4

7 Structure12 Strategy42 Financial Information59 Risk Governance


RWE Acquisition Criteria30

Major Acquisitions since FY 1999/2000: Water 35

Stable Portfolio: 31% of Operating Result Derived from Regulated Businesses (2008) 27We Confirm our Capex Programme to Capture Growth Opportunities and Secure Market Share 28How Growth and Efficiency Enhancement Capex will Impact our Underlying Earnings Performance29

RWE Today: One of the Top 5 Integrated European Utilities 8

RWE's Utility Customers (2008) 11

Major Acquisitions since FY 1999/2000: Gas 34Major Acquisitions since FY 1999/2000: Electricity 33

Strategic Cornerstones [12 – 32]

Structure [7 – 11]At a Glance [7– 63]

Acquisitions and Divestments [33 – 39]RWE's Mid-Term Financial Targets 32Efficiency Enhancement Programme is on Track to Deliver € 1.2 Billion by 2012 31

Less CO2: Our Strategy to Reduce our Exposure Physically and Financially26Nabucco Will Link Caspian & Middle East's Supply to Cover Europe's Increasing Demand25Excelerate Technology Increases Flexibility in Gas Supply24Innovation Strategy: Leading the Way in Terms of Technology, Business Innovation and Products 23Besides Essent our Focus is on Organic Growth and Selective Small M&A Outside Germany 22Strategy for Fossil Fired Generation: Growth, Higher Flexibility, Less CO2 Emissions 21Our Strategy in Renewable Energy: Growing Generation Capacity and Profit − in Existing and New Markets 20Nuclear Strategy: Preservation of Nuclear Competence, Growth in New and Existing Markets, Zero CO219Essent Matches our Strategy and Asset Portfolios … 18Track Record 2008/09: Entering New Markets and Reducing CO2 Exposure at the Same Time 17RWE’s Simple Strategy – Where to and Why? 16Our Strategic Platform – Long-Term, Well-Balanced and Weather-Proof 15Our Focus Remains Europe – but with a Far Wider Remit 14More Growth, Less CO2 – Our Strategic Roadmap for 2012 13RWE's Strategy – Stability and Growth: The Right Mix for Adding Value 12

Strategy [12 – 41]

RWE's Position in Central Eastern European Markets: Poland, Czech Republic, Slovakia, Hungary (2008) 10Benefits of Vertical Integration of the Energy Business in the RWE Group 9

RWE Group Structure as of 2009: More Market-Driven, Leaner and Faster 7

Table of Contents


Asset Management: Investment Strategy (excl. Plan Assets UK and Germany)47

Major Divestments since FY 1999/2000 until 2008: Core Business (II) 37Major Divestments since FY 1999/2000 until 2008: Core Business (I) 36

Credit Risk Management at RWE Supply & Trading63System of RWE Supply & Trading Commodity Risk Limits62

Fixed Income Financing [46 − 58]

Financial Information [42 − 58]RWE Share [42 − 45]

Risk Governance [59 – 63]

Sustainability [40 – 41]

Strategy [12 − 41]At a Glance [7– 63]

RWE's Commodity Risk Management Infrastructure 61RWE's Governance Structure for Commodity Risks60Organisation of Risk Management in the RWE Group59

RWE Securities58RWE Bond Programme 57RWE AG: Managing Interest Rate Risk – Asset/Liability Management 56RWE AG: Financial Risks55Credit Rating 2009 – RWE AG 54Essent Acquisition Brings RWE into Target Corridor of the Planned Leverage Factor53Optimising the Balance Sheet52Maturity Profile of Capital Market Debt51Gross Financial Debt Currency and Interest Exposure50RWE AG: Flexible Funding Structure and Diversified Funding Sources – Even after the Bid for Essent49RWE's Centralised Treasury – Basis for Groupwide Financial Risk Management 48

Centralised Asset Management: Structure46

RWE's Dividend Policy (II) 45RWE's Dividend Policy (I) 44RWE Share Profile 43Shareholder Structure of RWE AG 42

The Technology of the Future: RWE to Gain Leadership in Europe in Virtually CO2-free Power Plant Technology 41RWE's Strategy for Climate Protection: The Measures 40

Major Divestments since FY 1999/2000 until 2008: Non-Core Business (II) 39Major Divestments since FY 1999/2000 until 2008: Non-Core Business (I) 38

Acquisitions and Divestments [33 – 39]

Table of Contents


RWE Group Structure as of 2009: More Market-Driven, Leaner and Faster

RWE AG(Group Centre)

RWE TSO Electricity GermanyRWE TSO Gas GermanyRWE TechnologyInternal Services

Central Eastern Europe

UKNetherlands/Belgium

Germany Trading/Gas Midstream

UpstreamGas & Oil

Renewables

RWE PowerRWE RetailGermany- RWE Aqua- eprimoEnergy efficiency /E-MobilityRWE Distribution Networks GermanyenviaM/MitgasKEVAGLEWSüwagVSEKELAG

Essent(acquisitionplanned untilQ3 2009)

RWE npower RWE HungariaRWE PolskaVSE (Slovakia)RWE Transgas(Czech Republic)

RWE Innogy RWE Dea RWE Supply& Trading

Region Function

StructureMarket DataPolitical Framework ConditionsAt a Glance RWE


We have leading positions in two of Europe’s largest markets as well as in strongly growing CEE markets and own a large upstreamposition in both Europe and North Africa.

RWE Core Markets

Gas

Leading Positions in Core Markets

ElectricityMarket*)

Product

Germany No. 2 No. 3

UK No. 4 No. 4

No. 2 in HungaryNo. 3 in SlovakiaActive in Poland

No. 1 in the Czech RepublicLeading position in HungaryActive in Slovakia

Eastern Europe

Total Europe No. 3 No. 6

United Kingdom

Netherlands

Luxembourg

Austria

Hungary

Poland

Slovakia

CzechRepublic

Germany

RWE Today: One of the Top 5 Integrated European Utilities

Electricity Gas Water

*) Market positions of the RWE Group in terms of sales.



Benefits of Vertical Integration of the Energy Business in the RWE Group

RWE Dea

Gas and oil production

RWEInnogy

Renewable energy

Power generation

RWE npowerRWE npowerUnitedKingdom

RWE EnergyRWE Supply & Trading

RWE PowerContinental Europe

Electricity and gas supply

Supra-regional and regional electricity and gas grids

Gas midstream (commercial optimisation of procurement, transport and storage) and energy trading

Upstream (generation)

Integrated business model: strong presence along all parts of the energy value chainStability and growth: well balanced portfolio of leading market positions in mature and growing markets in Europe



RWE's Position in Central Eastern European Markets: Poland, Czech Republic, Slovakia, Hungary (2008)

Prague

Budapest

Bratislava

Košice

Miskolc

POLAND

CZECH REPUBLIC

HUNGARY

Warsaw

SLOVAKIA

*) Including shareholdings ≥ 20%.

RWE’s current market shares

Hungary

Slovakia

CzechRepublic

Poland

SalesGeneration

WaterGasElectricity

7,6135,843Employees

4.43.7Customers (million)

134,724,1Sales (TWh)

5,1242,834External revenue (€ million)

GasElectricityCEE key figures*)



RWE's Utility Customers (2008)

*) Only Continental European customers, without American Water.

13

6

14

0 2 4 6 8 10 12 14 16

Water

Gas

Electricity

in million

*)



RWE's Strategy – Stability and Growth: The Right Mix for Adding Value

Regional orientationCost leadershipFocus on high-value customers and regulated businessVertical integrationSynergies

Electricity

Gas

Focus on European key regions

Focus primarily on energy*)

Germany

UK

Central and South-Eastern Europe

Focus on high-quality marketsStrong presence with critical mass Regional synergiesNo "problem zones"

*) Including remaining water activities in Germany and Central Eastern Europe.

Strategy – Strategic CornerstonesMarket DataPolitical Framework ConditionsAt a Glance RWE


What we aim to do Target for 2012

Defend and expand existing margins in RWE key markets Germany and UK

Increase level of regional diversification

Boost proportion of renewables in our generation portfolio while creating value

Reduce carbon exposure

Strengthen gas midstream activities

Grow equity gas business organically

GER: defend/grow margins on current volumesUK: defend/grow volumes and profitability

Share of non-German operating result grows from 27% (2008) to 40 - 50%

More than tripling of installed base to 4,500 MW

Reduction by 20% (compared to 2006 emissions)

Profitably increase contracted European gas supply purchase volume from 40 to 60 bcm p.a.

Doubling of hydrocarbon production by 2012/2013 to 12 bcm p.a.

More Growth, Less CO2 – Our Strategic Roadmap for 2012



x.yx.y

RWE Core markets with established market position

Growth markets where bridgehead positions have been attained

Additional markets especially for renewables business

Growth markets under strategic monitoring

Electricity consumption growth in % p.a. 2010 − 2020Gas consumption growth in % p.a. 2010 − 2020

0.61.5 1.4

1.5

0.61.1

4.62.0

Our Focus Remains Europe – but with a Far Wider Remit



Entrepreneurial, performance-oriented culture

Operational and commercial excellence to achieve a strong, integrated core business

OrganicGrowth M&A Innovation

Leveraging strength for

growth

Expandingour footprint

Innovation in technology, products, business models

Growthpillars

RWE'sfoundation

Our Strategic Platform – Long-Term, Well-Balanced and Weather-Proof



RWE's Simple Strategy – Where to and Why?

Strengthening RWE‘s business along the entire value chain (from upstream to the customer)Reducing risks from different markets and regulators by geographic diversificationReducing selective commodity positions (CO2)Stable regulated business

Modernisation of power plant portfolioStrong expansion of renewable energies

… moresustainable

High share of investments outside of GermanyGrowth in regions new to RWE

… moreinternational

…and in the end more valuable despite all challenges!

… more robust



We avoided large M&A at the peak of the marketIn renewables, we focused on access to pipelines rather than developed projectsIn nuclear, we prepare for extensive growth – but spread the risks via JV structures

What we did – and what not…

*) (Including) project pipeline.

300 MW*)

51% JV1,000 MW*) 100 MW*) 150 MW

73MW*)

50% JV500 MW*)

9% JV1,400 MW 960 MW*)

49% JV2,000 MW

50% JV6,000 MW47 MW

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

(global LNG)

(NL) (LUX) (UK)

(IT) (CZ)

(HU)

(ESP)

(UK)

(UK) (ROM) (GER) (BUL)

(ESP) (UK)

FAVORIT

(GER)

Track Record 2008/09: Entering New Markets and Reducing CO2 Exposure at the Same Time



Essent Matches our Strategy and Asset Portfolios …

… in Dutch power generation … in Dutch supply

… in renewables

Combination creates number 1 European energy tradingand origination house Strong geographic presence throughout EuropeCombination of Essent’s established pan-European origination activities with RWE’s comprehensive trading operations and balance sheetOptimisation of combined fuel sourcing, cross-borderShort-Term Position ManagementEssent and RWE share same asset-backed trading philosophy

… in energy trading

Total installed capacity:2.0 GW (RWE & Essent)

Total installed capacity:2.0 GW (RWE & Essent)

Biomass7%

Germany54%

Other 3%Onshorewind 53%

Offshorewind 3%

Hydro37%

UK 17%

Spain 17%

Netherlands5%

France3%

Essent new build projectEssent generation plant in operation Eemshaven (Coal)

1,560 MW (2012)

Amer 8 (Coal)645 MW

Amer 9 (Coal)600 MW

Claus C (Gas)1,275 MW (2012)

Moerdijk (Gas)339 MW + 426 MW (2011)

Borssele (Nuclear)485 MW

(50% owned by Essent via EPZ)

Claus A (Gas)640 MW

RWE new build project

Total number of customers Electricity: 8.0 million

Total number of customersGas: 6.9 million

Electrabel 2%

Nuon28%

Essent26%RWE

3%

Eneco 24%

Centrica 3%

Delta 2% Other 10%

E.ON 2%Electrabel 1%

Other 8%

Nuon30%

Essent26%

RWE 2%

Eneco24%

Centrica5%

Delta 2%

E.ON 2%



Nuclear Strategy: Preservation of Nuclear Competence,Growth in New and Existing Markets, Zero CO2

Belene

NDA sites

Cernavoda

Investment criteria

Security: Focus on countries with an existing nuclear framework (legal, infrastructure, waste)Nuclear framework: Highest standards (plant security, technology, quality), focus on new buildsStrategic fit: attractive market, fit with RWE‘s portfolio and strategyFinancial criteria: the same standard criteria as for other generation new build projects

Romania

Construction of two new CANDU units (2 x 720 MW) in CernavodaCommissioning planned for 2015/16

Bulgaria

Construction of two AES 92 units (2x 1,000 MW) pressurised water reactor units in BeleneCommissioning plannedfor 2014/15

UK

New nuclear pro-gramme since 2006Auctioning of NDA sites in 2009JV with E.ON to buildat least 6 GW

NPP units being planned/considered

National framework for new build until 2015

National framework for new build between 2016 and 2025

RWE activities

National frameworks



Our Strategy in Renewable Energy: Growing Generation Capacity and Profit − in Existing and New Markets

0

2

4

6

8

10

12

14

Our existing generation assets and project pipeline

Inoperation

Underconstruction

Pipelinestatus 1

Pipelinestatus 2

Totalpipeline

Pipelinestatus 3

Biomass

HydroOffshore windOnshore wind

1.30.5

1.0

5.7

5.2 11.9

in GW (pro rata)

RWE Innogy: Organic capacity ramp-up translating into profits

– Capacity ramp-up to 3.7 GW in 2013 based on current organic growth projects

– On this basis, operating result is expected to exceed € 500m by 2013

– We stick to our capacity target of 4.5 GW in operation or construction by 2012, which translates into generation of 15 TWh/a in 2013 – the planned acquisition of Essent will contribute 1 GW to this

– Value creation remains priority over additional MW

Leveraging the crisis: Securing turbines at attractive prices

– Framework agreement signed with REpower: Delivery of up to 250 turbines with 5/6 MW each between 2011 and 2015 (up to 1.3 – 1.5 GW in total)



Strategy for Fossil Fired Generation: Growth, Higher Flexibility, Less CO2Emissions

Comparison of ramp capacities(new CCGT unit and old coal unit)

0

200

400

600

800

1.000

0 5 10 15 20 25 30

in MW

min

Max cap. ~ 875 MWMin cap. ~ 260 MW*)

Max gradient +/- 38 MW/min

New CCGT

Max cap. ~ 600 MWMin cap. ~ 420 MWMax gradient +/- 8 MW/min

*) One turbine gets turned off.

Old coal

Max cap. ~ 800 MWMin cap. ~ 320 MWMax gradient +/- 26 MW/min

New coal

,

Lingen: 875 MW highly flexible CCGT plant for all load regimes

Eemshaven: coal fired 1,600 MW plant –2 flexible 800 MW units for mid merit regime

Small and flexible units can be dispatched more quickly to capture extra margin potential along the merit order



Besides Essent our Focus is on Organic Growth and Selective Small M&A Outside Germany

UK: approx. € 3 billion

CCGT new build, offshore wind, nuclear new build

Benelux: approx. € 15 billion

Acquisition of Essent (NL), increased stake in Luxembourg, low-carbon generation (Eemshaven)

Building up a low-carbon generation portfolio taking advantage of privatisations to achieve an integrated market position/capex projects

Upstream/Midstream gas and LNG: approx. € 2 billion

Organic capex in upstream, exploiting optimisationpotential for all non-regulated gas midstream businesses

CEE/SEE/Turkey: approx. € 2 billion

Time horizon 2009 – 2012:



Innovation Strategy: Leading the Way in Terms of Technology, Business Innovation and Products

Technologies

Compressed air energy storage

Business Innovation Products

Carboncapture and sequestration

WTA® Lignitepre dryingprocess

Tidal stream energyJV with Voith

E-Mobilitycooperation with Daimler

Mobile power plants

"ProKlima" tariff CO2-free power

3-year fixed pricepower and gas

Quiet Revolutionsmall scalewindpower units

"Smart Home"metering service

Topell biocoalpellets

REVOLTzinc-airbatteries

RWE Innogy Venture Capital

More on RWE Innogy ventures on the internet: www.rweinnogy.comMore on RWE‘s R&D on the internet: www.rwe.com/RandD



Gulf Gateway (USA)Northeast Gateway (USA)

Excelerate Deepwater Ports Excelerate GasPorts Ship to ship transfer (STS)

Teesside GasPort (UK)Third party GasPorts in Bahia Blanca (Argentina) and Kuwait*)

German GasPort (development underway)

Transfer between conventional and Excelerate ships is possible

Main assets: two US offshore deepwater ports (ca. 10 bcm/a capacity); GasPort in UK (ca. 4 bcm/a capacity), a fleet of currently six LNG vessels with ca. 4.8 bcm/a transport capacity, third party GasPortsOther import projects under development utilising these technologiesDischarge of LNG at conventional import terminals also possible

*) to be commissioned in 2009.

Excelerate Technology Increases Flexibility in Gas Supply



Nabucco Will Link Caspian & Middle East's Supply to Cover Europe's Increasing Demand

2.2

Nabucco pipeline

RWE pipelines

RWE customer markets

Number of RWE customers

Potential Gas Sources for Nabucco

RWE Dea's Gas Fields

UK 2.7 m

Germany3 m

Czech Rep.2.3 m

Hungary2.1 m

Netherlands0.2 m

The Nabucco pipeline project links RWE'sdownstream positions with the Caspian region and other potential gas resources3,300 km pipeline link to large gas resources in the Caspian and Middle EastConstruction of first phase expected to be finished in 2014; final phase finished by 2019/20 with 31 bcm/a Required gas volume for the first two phases is available in the region Partners: BOTAS (Turkey), Bulgargaz (Bulgaria), Transgaz (Romania), OMV (Austria), MOL (Hungary) and RWE each holding 16.7%

EGYPT

IRAQ

IRAN

KAZAKHSTAN

TURKMENISTAN

SAUDI ARABIA



114

172

138

2008

RWE planned

new-buildsExtension of lifetime of Biblis A

CDM/JIRenewables/

CHP new-builds

RWE planned

new-buildsExtension of lifetime of Biblis B

Renewables/ CHP

new-builds

CCS power plant

2012e 2015e

-72)

-144)

-82)

-23)

~ 34 million t (- 20%)

~ 56 million t (- 33%)

up to -65)

up to -73)

up to -83)

up to -65)

CO2-mitigation in RWE Group: Physical and financial measures and potential (million t/a)1)

Requirements for economically and ecologically reasonable CO2-mitigation:Political framework allows for extension of lifetimes of nuclear power plants, an economic use of renewables and CCS technology.Power plants with above average CO2 emissions will be decommissioned, as long as it is economic and security of supply will not be endangered.

1) Excl. growth investments and market induced load factor changes.2) New-builds with decommissioning and lower load factors of old plants

(depending on market conditions).3) Depending on political framework; avoidance of emissions from old

coal plants.

of which additional - 6 m t fromRWE Innogy renewable projects

4) CDM/JI-projects for covering a maximum of 22% of CO2-allocation in Germany and 9% in UK (avg. 10 – 12 €/t mix of price and costs).

5) Avoidance of emissions from coal- and gas-fired plants.

Less CO2: Our Strategy to Reduce our Exposure Physically and Financially



Stable Portfolio: 31% of Operating Result Derived from Regulated Businesses (2008)External revenue (€ 48,950 million) Operating result (€ 6,826 million)

Unregulated business 67%

Regulated business 33%

Regulated business includes: German electricity and gas grids Czech gas distribution and supply business Electricity supply in Poland and Hungary Continental European water business

Unregulated business 69%

Regulated business 31%



We Confirm our Capex Programme to Capture Growth Opportunities and Secure Market Share

About half of capex will be spentfor growth/efficiency enhancement

About half of capex will be spent outsideof Germany

German versus international capex

Replacement versus growth and efficiency enhancement

GermanInternational

Maintenance/Replacement

Growth/efficiency

enhancement

CAPEX2009 – 2012

€ 6.5 bnp.a.

+/- 10%

RWE npower€ 1,100 m p.a. (+/-20%)

RWE Energy€ 1,800 m p.a. (+/-20%)~ 80 % grid~ 20 % others

RWE Dea€ 900 m p.a. (+/-20%)

RWE Power€ 1,700 m p.a. (+/-30%)

RWE Innogy> € 1,000 m p.a. (+/-30%)



How Growth and Efficiency Enhancement Capex will Impact our Underlying Earnings Performance

12 12

51

1

8

Total capex2009 – 2012

Growth/efficiencyenhancement capex

2009 – 2012

Average underlying earnings impact after finalising projects

Growth

Replacement

Mandatory (grid)

Maintenance

100%

Efficiencyenhancementapprox. 20%

26

13

*) Average impact. Depending on depreciation period, operating result lower in early years and higher in later years.

in € billion

EBITDA:

Operating result*):

+ € 1,200 m p.a.

+ € 1,500 m p.a.



RWE Acquisition Criteria

IRR > Hurdle rate (after tax) – hurdle rate based on project specific WACC(5.5 - 6.5%, upstream 8.5%) plus value contribution and risk premium dependent on risk of the business and regionROCE has to match WACC in the 3rd year of full inclusion of acquired assets (including goodwill)Consistent with target leverage factor (2.8 – 3.4 x net debt/EBITDA)

Financial criteria

Business complementarity– Products– Regions– SynergiesProvide growth potentialImprovement of CO2 profile

Strategic criteria



Efficiency gains will be fully accretive to operating result (i.e. post cost inflation and one-off cost of programme)Underpinned by a significant portfolio of projects across the group. For example: Cost savings from RWE Energy’s “continuous improvement” project GO

(e.g. merging of call-centres, standardisation of back-office processes, bundling of purchasing in IT and grid maintenance) Key performance improvement projects in RWE Power and RWE npower to increase thermal efficiency, availability and capacity

of existing stations

in € million

Cumulative operating result contribution of the programme compared to 2006

2007 2008 2009 2010 2011 2012

€ 1,200 millionannual contributionin total as of 2012versus 2006

1,200

900700

450

200100

Efficiency Enhancement Programme is on Track to Deliver € 1.2 Billion by 2012



RWE's Mid-Term Financial Targets

Targets

Recurrent net income Dividend Efficiency

In the order of 10% CAGR*) to 2012 (excluding Essent) based on an average realized price for German electricity forwards of at least € 60/MWh

Payout ratio of 50 − 60% of recurrent net income

Compliant with at least “A flat” rating category

5 − 10% CAGR*) to 2012 (excluding Essent) based on an average realized price for German electricity forwards of at least € 60/MWh

€ 1.2 billion improvement in annual operating result by year-end 2012 vs. 2006

Operating result

Capital structureCapital structure

*) Based on 2008.



Major Acquisitions since FY 1999/2000: Electricity

n.p.50n/a2008Greater Gabbard Offshore Windparks Ltd., UKn.p.100n/a2008Powerhouse Holding B.V., Netherlands

n.p.49 to 100n/a2009Luxempart Energie S.A. (holds stake in SOTEG S.A.), Luxembourg

n.p.50n/a2008Fri-El S.p.A., Italyn.p.100n/a2)2008Urvasco Energía S.A., Spain

230100n.p.2005Great Yarmouth Power Ltd.n.p.1001002007eprimo GmbH, Germany

n.p.204262003Wuppertaler Stadtwerke AG, Germany130492562002VSE, Slovakia370853952002Stoen S.A., Polandn.p.100102002AERSA, Spain

5,0551006,2002002RWE Innogy plc, UK70251202002Elettra (= Energy Holding of Lucchini), Italy

n.p.20792002Stadtwerke Velbert GmbH, Germanyn.p.201,4552002GEW RheinEnergie AG, Germanyn.p.From 71.5 to 952502002Harpen AG, Germanyn.p.From 25.15 to 74.951102001Stadtwerke Düren, Germanyn.p.From 50 to 1007002001SSM Coal B.V., Netherlandsn.p.13.72122001

Energie- und WasserversorgungBonn/Rhein-Sieg GmbH, Germany

480493462001KELAG, Austrian.p.From 25 to 752972001Turbogás Produtora Energética S.A., Portugal

n.p1)204032000Stadtwerke Duisburg AG, Germany

RWE AG (old) 29,561VEW AG 5,8521004,8172000

VEW AG, GermanyMerger with RWE AG (old)

Equity value in € million

Percentage of participation

External revenue in € million

Year of acquisition

Company

1) n.p. = not published. 2) n/a = not applicable.

Strategy – Acquisitions and DivestmentsMarket DataPolitical Framework ConditionsAt a Glance RWE


Major Acquisitions since FY 1999/2000: Gas

n.p.50n/a3)2008Excelerate Energy, USAn.p.From 75 to 1001,2592002Thyssengas GmbH, Germany

n.p. n.p.

49 21

––

20022002

VOG (Veba Oil & Gas), Germany:German Oil & Gas Egypt GmbHRWE-Dea Norway GmbH

181100222002Highland Energy(Gas Fields North Sea), UK

4,1401003,1452002Transgas2) + 8 regional distributors,Czech Republic

33090.051622002Obragas Holding N.V., Netherlandsn.p.40742001Nafta a.s., Slovakia

n.p.1)From 50 to 751,1132000Thyssengas GmbH, Germany




Year of acquisition

Company

1) n.p. = not published.2) 100% closed in June 2003.3) n/a = not applicable.



Major Acquisitions since FY 1999/2000: Water

4,5001001,7002003American Water Inc., USAn.p.From 74.9 to 79.8972002

RWW Rheinisch-WestfälischeWasserwerksgesellschaft mbH, Germany

194From 14.3 to 74.9972002RWW Rheinisch-WestfälischeWasserwerksgesellschaft mbH, Germany

n.p.48.89.72)2002China Water Company, China95751482002

Water activities of the Iberdrola Group (Ondagua, Pridesa), Spain

15025.5202002ESSEL, Chilen.p.1)–222001ANSM, Chile

6701001902000E’town Corporation Inc., USA34050.96462000ESSBIO, Chile

7,1001002,2472000Thames Water plc, UK




Year ofacquisition

Company

1) n.p. = not published.2) Six months ended October 31, 2001.



Major Divestments since FY 1999/2000 until 2008: Core Business (I)

75–2004Turbogas-Produtora Energética S.A., Portugal205

100–2004Portugen S.A., Portugal1.23–2004Atel AG, Switzerland

26920–2004Motor-Columbus AG, Switzerland

25018.5–2004CONSOL Energy Inc., USA405From 48.9 to 18.52,2572003CONSOL Energy Inc., USA218From 73.6 to 48.92,2572003CONSOL Energy Inc., USA2243.5–2003Bergemann GmbH/ Ruhrgas AG, Germanyn.p.––2003Canadian CONSOL Activities, USA199404752003Stadtwerke Leipzig, Germanyn.p.1001162002

TOMAN Handels- und Beteiligungsgesellschaft mbH,Germany

n.p.49.99342002BAWAG Bayerische Wasserkraftwerke AG, Germanyn.p.14.88682002STEAG AG, Germanyn.p.261992001Erdgas Schwaben GmbH, Germanyn.p.44.931762001EMB Erdgas Mark Brandenburg GmbH, Germanyn.p.11.954992001GASAG Berliner Gaswerke AG, Germanyn.p.–1912001Rhenag AG, Germany

n.p.2)28.12192000Gelsenwasser AG, Germany32.51,9012000Vereinigte Energiewerke AG (VEAG), Germany

1,3001)47.56252000Electricity/GasLausitzer Braunkohle AG (Laubag), Germany




Year of divestment

Company

1) Divested in a package.2) n.p. = not published.



Major Divestments since FY 1999/2000 until 2008: Core Business (II)

n.p.50n/a2008Tarragona Power, Spainn.p.8.23n/a2008Rhenag, Germany

7335–2003STE, Czech Republic

n.p.–362007EKT Energie- und Kommunaltechnologie GmbH, NL400––2007Obragas Net/NetBeheer Haarlemmermeer, NLn.p.1002007

Harpen Immobilien GmbH & Co KG/HarpenImmobilien Verwaltungsgesellschaft mbH, Germany

n.p.100–2006Harpen Italia Spa., Italyn.p.25–2006KazGerMunai, Kazakhstann.p.1001,7002006RWE Solutions Group2), Germanyn.p.1001222004RWE Piller GmbH, Germanyn.p.1001422004RWE Solutions BU Transformers, Germanyn.p.251402004Elettra GLL S.p.A., Brescia, Italy

n.p.1)25–2004ISKEN A.S., Iskenderun, Turkey




Year of divestment

Company

1) n.p. = not published.2) Divested in a package.



Major Divestments since FY 1999/2000 until 2008: Non-Core Business (I)

n.p.39.7902005Aliatel a.s., Czech Republic

3,57929.371,4872000E-Plus Mobilfunk GmbH, Germany

n.p.48.751691999TelecommunicationsTeleColumbus GmbH, Germany

About 1,300 229

From 50.01 to 15.12From 15.12 to < 10

3,658 –

2004 2007

Heidelberger Druckmaschinen AG, Germany317From 56.15 to 50.015,3032001

HeidelbergHeidelberger Druckmaschinen AG, Germany

750 81

201

From 46.5 to 9.56 From 9.56 to 5.62

From 5.62 to 0

1,9752004 2005 2006

HOCHTIEF AG, Germanyn.p.100712000

HOCHTIEFHOCHTIEF Verkehrswegebau-Gruppe(RKB, Otto Rohr, Helmus), Germany

1,50050–2002Joint venture Shell & DEA Oil GmbH, Germany

n.p.1003422001Rheinelektra-Technik-Gruppe, Germany

1,3001002,5282000Chemical activities under the brand name CONDEA

n.p.*)1001552000Maquet AG, Germany




Year of divestment

Company

*) n.p. = not published.



Major Divestments since FY 1999/2000 until 2008: Non-Core Business (II)

n.p.100–2006SSM Coal B.V., Netherlands

n.p.from 100 to 39.5%–2008American Water, USA

7,200100–2006RWE Thames Water Holdings plc

–––2005 – 2006

Water Division Sale of the international water activities in Thailand,Spain, Chile and Indonesia

n.p.1001,8302005RWE Umwelt AG

n.p.–1872003More than 50 RWE Umwelt AG subsidiaries andjoint ventures in Germany, Poland and Spain

n.p.1001002001RWE Ambiente Italia S.p.A. (Group), Italy

n.p.*)1001601999Environmental ServicesENSR Corp. (Group), USA




Year of divestment

Company

*) n.p. = not published.



RWE's Strategy for Climate Protection: The Measures

Energy efficiency

Renewable energies

Clean DevelopmentMechanism1)/JointImplementation2)

Increasing energy efficiency ...... invest in best available technology: lignite, hard coal, gas, Combined Heat and Power Generation ... strong R&D: Develop new technologies e.g. fluidised bed drying, increasing steam parameters... transfer energy efficiency into a business case … reduce internal consumption

Substantial increase of current investment budget (on average at least 1 billion p.a. until 2012)

€ 150 million budget for developing international projects for the reduction of greenhouse gas emissions (target: 90 million t 2008 – 2012)

Industrial scale with coal gasification, CO2 capture and storage; integrated project; 450 MW; 2014 commissioning

1) Emission reduction caused by investment of an industrialised country in a country without reduction commitments are credited to the emission account of the investor country.

2) Emission reduction caused by investment of one industrialised country in a second industrialised country are credited to the emission account of the investor country.

3) CCS: Carbon Capture and Storage.

As of May 2009.

Power plantbased on CCS3)

Strategy – SustainabilityMarket DataPolitical Framework ConditionsAt a Glance RWE


The Technology of the Future: RWE to Gain Leadership in Europe in Virtually CO2-free Power Plant Technology

1) IGCC: Integrated Gasification Combined-Cycle.

2) CCS: Carbon Capture and Storage.

In parallel, CO2 scrubbing for lignite and hard coal will be developed further for advanced conventional power plant technology:− RWE npower plans to design and build the first carbon dioxide capture pilot plant at a UK coal power station. The 1 MW pilot plant

will be located at Aberthaw power station in South Wales.− Possible 25 MW demonstrator plant at Tilbury.− RWE Power, BASF and Linde have joined forces to develop new processes for CO2 capture from combustion gases in coal-fired

power plants. This includes the construction and operation of a pilot facility at our lignite-fired power plant in Niederaussem to test new developments and solvents for the capture of CO2.

− American Electric Power (AEP) and RWE plan to collaborate in a similar project, which will be implemented in the AEP hard coal-fired Mountaineer plant (1,300 MW) in New Haven, West Virginia. Alstom will also participate in the project.

3

RWE Power plans to develop and build a plant virtually CO2-free 450 MW coal-fired IGCC1) plant including CO2 transport and storage to demonstrate the whole CCS2)-chain. The new power plant, which will be fuelled by local lignite resources, is to be constructed on the Goldenbergwerk site in Huerth near Cologne. Commissioning is scheduled for 2014.

2

RWE Group R&D budget at € 1 bn 2007 to 2013; more than two thirds are directed to carbon avoidance.1

Strategy – SustainabilityMarket DataPolitical Framework ConditionsAt a Glance RWE


Shareholder Structure of RWE AG1)

45 1

3

6

2

260,000 shareholders own 562.4 million shares79% of all RWE shares are held by institutional investors. The regional breakdown is as follows:– Germany 39%– USA/Canada 17%– UK/Ireland 11%– Continental Europe (excl. Germany) 11%– Rest of the world 1%

Shares of the voting rightsRW Energie-Beteiligungsgesellschaft 16.1%Capital Research and Management 5.1%

Free Float2) 78%(excluding RW Energie-Beteiligungsgesellschaft and own shares)

6%Own shares5

15%RW Energie-Beteiligungsgesellschaft1

100%RWE AG total:1%Employee shareholders6

14%Private shareholders4

79%Institutional shareholders total:59%Other institutional shareholders35%Capital Research and Management2

Shares of the subscribed capital

1) As of December 31, 2008.2) Ordinary shares.

Financial Information – RWE ShareMarket DataPolitical Framework ConditionsAt a Glance RWE


RWE Share Profile*)

39,000,000 preferred shares39,000,000 preferred shares

523,405,000 common shares491,670,527 common shares

Total number of sharesTotal number of shares outstanding

Non-par-value sharesShare information

Germany – official –Frankfurt/Main DüsseldorfXetraAbroadSIX Swiss Exchange (secondary listing)New York, OTC trading(Sponsored level-one ADR programme for common shares)

Listings–74975E303US CUSIP No. (ADR)1158 8901158 883Swiss Security ID code703714703712German Security Identification No.DE 000703 7145DE 000703 7129ISINRWE3 GYRWE GYBloomberg

RWEGpr.F (Frankfurt)RWEGpr.DE (Xetra)

RWEG.F (Frankfurt)RWEG.DE (Xetra)

Reuters

*) As of December 31, 2008.



2001 2002 2003 2004 2005 2006 2007 2008

RWE's Dividend Policy (I)

Dividend yield based on year-end price of RWE ordinary shares

2001 2002 2003 2004 2005 2006 2007 2008

Dividend per share

Bonus€ 0.10

4.2%

€ 3.50

*) Truncated fiscal year of RWE AG from July 1 to December 31, 2001.

*)

3.2% 4.5% 4.0% 3.7% 2.8%

€ 1.00 € 1.00 € 1.25 € 1.50 € 1.75

3.3%

€ 3.15 € 4.50

7.1%



RWE's Dividend Policy (II)

Payout developmentDividend in € million

984 844

703 619

2,401

1,772

1,968

0

500

1000

1500

2000

2500

3000

2002 2003 2004 2005 2006 2007 2008 2009e 2010e

One-off payoutratio increase

(sale of Thames Water)

One-off payoutratio increase

(sale of 39.5% of American Water)

3,000

2,500

2,000

1,500

1,000

500

0

Regular payoutratio of

50% – 60%



Defines investment strategy

Sets guidelines for the implementation

Members: CFO RWE AG, Head of Finance RWE AG, CFOs RWE Power, RWE Energy, RWE npower

RWE AG Group Finance

Investment guidelines

Master “KAG”: 1

"Spezialfonds": 12Subfunds: 49

RWE Energy AG: € 2.6 bnRWE Pensionstreuhand e.V.: € 3.2 bnRWE Pensionsfonds AG: € 4.5 bn

UK Pension Trust RWE npower: £ 3.1 bn

Assetmanagement

contract

Asset Management Committee (AMC)

MembersRecommendationsreporting

Investment strategy,guidelines & restrictions

Centralised asset management by RWE AG

Marketable securities (Group): € 8.1 bn*)

Internal management External management

Centralised Asset Management: Structure

*) as of December 31, 2008.

Financial Information – Fixed Income FinancingMarket DataPolitical Framework ConditionsAt a Glance RWE


0%

5%

10%

15%

20%

25%

30%

Bond Range

Min15%

Strategic Asset Allocation (SAA) Target Portfolio

SAA is defined by weight per asset class; not single securities Each asset class defined by a specific benchmark index SAA is reviewed once a year

Equity Range

55%

60%

65%

70%

75%

80%

85%

Europe

USA

Pacific

Totalequity Max

25%

European bonds

Min67.5%

Max85%

US highyield

Strategic asset allocation

MinMax

Bonds: 72%

Alternative investments: 8%

Total bonds

Asset Management: Investment Strategy (excl. Plan Assets UK and Germany)

Equities: 20%

MaxMin



RWE's Centralised Treasury – Basis for Groupwide Financial Risk Management

RWE AG

Liquidity transfer via cashpool Hedging (fx, interest rates) Intercompany loans

RWE Subsidiaries

RWE AG acts solely as external counterparty for financial transactions (excluding regulatory requirements)Centralised Group Treasury has the overall responsibility for treasury operationsCentral database for a groupwide financial risk management

External Market

Capital market

Ratings

FX deals (incl. derivatives)

Interest deals (incl. derivatives )

CP programme

Money market



RWE AG: Flexible Funding Structure and Diversified Funding Sources –Even after the Bid for Essent

Available credit facilities1) 2)

0

5

10

15

20

25

Access to substantial committed and uncommitted linesStrong and stable operating cash flow trend going forward

1) As of February 16, 2009.2) Excluding uncommitted bilateral lines..

€ 20 bn

€ 13.4 bn $ 5 bn

$ 0.8 bn€ 3.6 bn

€ 0.0 bn

for liquidityback-up and refinancing

Available

Medium-term noteprogramme

(up to 30 years)

Commercial paper(up to 1 year)

Fully committedsyndicated loan

(€ 1.6 bn 364 days)(€ 2.0 bn maturity

Oct. 2011)

Amounts used

General financing Essent acquisition financing

0

5

10

15

20

25

30€ 30 bn

Amounts used as of February 16, 2009.

+ € 10 bn

Credit facility

€ 7.5 bn€ 13.4

bn

Medium-term noteprogramme

(up to 30 years)



Gross Financial Debt Currency and Interest Exposure1) 2)

Gross financial debt currency

£ 35%

€ /others 59%

1) Excluding American Water; Including cross-currency swaps. 2) As of December 31, 2008.

With debt in foreign currencies we hedge the translationrisk of our international activities.

Gross financial debt interest exposure

Fixed 91%

Floating 9%

$ 6%



Total: € 13.4 bn

Liability side is controlled via maturity structure and fixed/floating mix

27%22%45%6%Relative share

3.62.96.00.8in € bn

>12 Years8 – 12 Years4 – 7 Years0 – 3 YearsMaturity range

1) As of February 27, 2009.2) Nominal value outstanding of capital market

debt excluding commercial paper programme.

0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2053

2055

0.5

1.0

1.5

2.0

2.5

3.0

0

2.5

5.0

7.5

10.0

12.5

15.0

€bn

(Cap

ital m

arke

t deb

t)

€bn

RWE AG/RWE Finance

— Accumulated outstanding debt


Maturity Profile of Capital Market Debt1) 2)


Optimising the Balance Sheet

We aim to actively manage our balance sheet via a new leverage target.This target is based on a new definition of net debt (including all major long-term provisions) and a leverage factor (net debt/EBITDA). This methodology will probably become sector standard.The targeted leverage factor is at least in line with a single A flat/A2 rating (based on current rating agencies′ models).

Organic capex

Selective M&A projects

Shareholder returns

Targetleverage factor

2.8x – 3.4x by 2010

The

thre

e to

ols

to le

vera

ge



Essent Acquisition Brings RWE into Target Corridor of the Planned Leverage FactorLeverage measured by ratio of Net Debt/EBITDA (= leverage factor):

Net financial debt+ provisions for pension+ provisions for nuclear decommissioning+ provisions for mining damage

RWE's targeted range for the leverage factor: 2.8x – 3.4x by 2010Expected leverage factor for 2009 is at least implicitly in linewith Single A flat/A2 rating (based on rating agencies' current models)

Net debt Leverage Factor

2006 2007 2008 2009E

2.5

Net

Deb

t/EBI

TDA*

)

2.1

Leverage Factor: 2.8x – 3.4x

16,5147,915

17,8277,172

2.2 Expected leverage of RWE

including acquisitionof Essent

18,6598,314

*) Net debt in € million; EBITDA in € million.



Credit Rating 2009 – RWE AG

Standard & Poor's (A, "Outlook Negative")The ratings on Germany-based integrated utility RWE AG are underpinned by its leading position in generation and supply in Germany, and significant share of regulated earnings. These strengths are partially offset by the high carbon intensity of RWE's generation fleet; its exposure to wholesale power prices, which is mitigated by the group's prudent strategy of selling forward the bulk of its output; its reliance on competitively exposed generation for future growth; and its lesser international diversification than major peers at a time of heightened regulatory pressures in Germany.On January 13, 2009, Standard & Poor's revised its outlook on RWE’s rating to negative from stable, following RWE's debt-funded bid for the unregulated generation and supply businesses of Dutch utility Essent N.V. (A+/Watch Neg/A-1).

Moody's (A1, "under review for possible downgrade")RWE's A1 rating is based on a low/medium business risk profile, which in turn reflects: (i) its regulated asset base and the stable and predictable cash flows that this generates; (ii) its substantial vertically integrated generation and supply business, and (iii) some exposure to electricity prices and upstream commodities. Moody's assessment also factors in the risks associated with the relatively high carbon content of its generation portfolio, and its objective of increasing its diversification beyond Germany, both of which the Group is looking to address through its medium-term investment programme.On January 15, 2009, Moody's placed RWE's rating on review for possible downgrade. The review reflects the negative pressure exerted by the planned acquisition of Dutch utility Essent N.V. on RWE's A1 ratings which currently carry a negative outlook. While recognising the potential benefits of the acquisition and that it is consistent with RWE's 'More Growth, Less CO2' strategy, these are offset in Moody's view by the negative impact on RWE's financial profile of the debt required to fund it, as well as by the additional risks implied by an increased exposure to unregulated markets.



Counterparty riskForeign exchange (FX) riskInterest rate risk

RWE AG: Financial Risks

Main financial risk factors are:

Interest-bearing debt

Assets under management

Investments

Other financial positions, e.g.: derivatives, collaterals

FX hedges for commodities

RWE Group companies are subject to strict risk managementFinancial derivatives are not to be used for speculative purposes and serve only to hedge risks arising from operations



RWE AG: Managing Interest Rate Risk – Asset/Liability Management

Assets:− Measurement of portfolio duration vs. benchmark duration− Analysis of value at risk of bond portfolio (VaR € 53.0 m*) )

Liabilities:− Measurement of market values and value at risk of financial debt and derivatives (portfolio view; VaR € 129.0 m*))− Sensitivity analysis of interest rate curve movements for net interest and the underlying market values− Target/actual comparison of net interest

*) VaR (95/1) in average 2008.



RWE Bond Programme

Major bonds issued by the RWE Group*)

*) As of March 31, 2009.

Issuer Placement Currency Volume Issue Currency in Mio.

Volumein Mio. €

Termin Years Maturity Coupon (%) ISIN-No

RWE AG Private CZK 750.00 27.38 6 04/22/2009 floating XS0172975111RWE AG Private EUR 86.00 86.00 7 06/03/2009 5.625 DE0007956864RWE AG Private NOK 350.00 39.37 7 10/28/2009 7.000 XS0156891292Redemptions 2009 152.75RWE AG Private NOK 250.00 28.12 7 06/18/2010 4.890 XS0170287238RWE AG Private SGD 50.00 24.71 7 07/08/2010 2.300 XS0171753600RWE Finance BV Public GBP 500.00 537.17 7 08/17/2010 4.625 XS0170731847Redemptions 2010 590.00RWE Finance BV Public EUR 1,808.00 1,808.00 11 10/26/2012 6.125 XS0147030554RWE Finance BV Public GBP 630.00 676.84 11 06/03/2013 6.375 XS0147048259RWE Finance BV Public EUR 1,000.00 1,000.00 5 11/20/2013 5.750 XS0399648301RWE Finance BV Public EUR 530.00 530.00 10 07/23/2014 4.625 XS0196302425RWE Finance BV Public EUR 2,000.00 2,000.00 6 02/10/2015 5.000 XS0412842428Redemptions 2011 - 2015 6,014.84RWE Finance BV Public EUR 850.00 850.00 15 04/20/2016 6.250 XS0127984747RWE AG Private EUR 100.00 100.00 15 11/15/2017 floating XS0158243013RWE Finance BV Public EUR 980.00 980.00 15 07/23/2018 5.125 XS0172851650RWE Finance BV Public EUR 1,000.00 1,000.00 10 01/31/2019 6.625 XS0399647675Redemptions 2016 - 2020 2,930.00RWE Finance BV Public GBP 570.00 612.38 20 04/20/2021 6.500 XS0127992336RWE Finance BV Public EUR 1,000.00 1,000.00 12.5 08/10/2021 6.500 XS0412842857RWE Finance BV Public GBP 487.50 523.74 20 12/06/2023 5.625 XS0170732738RWE Finance BV Public GBP 760.00 816.50 28 06/03/2030 6.250 XS0147048762RWE AG Private EUR 600.00 600.00 30 02/14/2033 5.750 XS0162513277Redemptions 2021 onwards 3,552.62Total 13,240.22



RWE Securities

Securities in RWE's Group accounts as of 12/31/2008

Securities held as non-current assets: € 317mSecurities held as current assets: € 7,735mTotal securities: € 8,052m

Fixed income 91%

Equities/other 9%



Organisation of Risk Management in the RWE Group

RWE Group Center

Risk CommitteeRisk Management Committee Asset Management Committee

Supervises commodity price and credit risk management in operating companies

Members: CFO, heads of the Group Risk Management, Group Finance and Value Chain Management departments of RWE AG, CFOs of RWE Power, RWE Dea, RWE Energy, RWE npower, managing directors (finance) of RWE Supply & Trading and RWE Innogy

RWE npower RWE EnergyRWE Dea RWE Supply & TradingRWE Power RWE Innogy

Group Risk Management

Responsible for implementing, monitoring and refining the group wide risk management system

Members: heads of RWE AG’s Corporate Controlling, Finance, Risk Management, Legal/Corporate Matters, Accounting, Strategy, Audit and Insurance departments

Manages risks associated with investments in securities

Members: CFO of RWE AG, head of Corporate Finance, CFOs of RWE Power, RWE Dea, RWE Energy and RWE npower

RWE AG Executive Board

Risk GovernanceMarket DataPolitical Framework ConditionsAt a Glance RWE


RWE's Governance Structure for Commodity Risks

RetailPortfolio

Management

Portfolio Management

Commercial Development & Infrastructure

Trading Desks/ Portfolio

Management

Asset Management

Short-Term Position Management (Continent)

Risk ControlRisk ControlRisk Control Risk ControlRisk Control Risk Control

Asset Management

Short-Term Position Management (UK)

RWE Group Center

RWE npower RWE EnergyRWE Dea RWE Supply & TradingRWE Power RWE Innogy

Value Chain Management Group Risk Management


Risk Committee



RWE's Commodity Risk Management Infrastructure

Overall responsibility for risk management systemDefines the Group's commodity risk appetite and sets principles of the Group‘s commodity risk strategyDefines global limit structures and hedge policies for operating companies

Monitors commodity risks and commodity risk management in operating companiesApproves global credit risk limits and individual credit risk limitsEstablishes unified methods for the capture and valuation of commodity positions

Develops market and credit risk strategies, guidelines and frameworks for commodity risk managementIs responsible for approval of methods and models for valuation of commodity risks Details the global limit structure and risk policies of operating companies in cooperation with Value Chain Management

Perform operative commodity and credit risk managementControl and monitor commodity risk positions

Risk Committee (headed by CFO of RWE AG)


Group Risk Management

Operating Companies

Value Chain Management

Establishes the infrastructure for implementing risk strategies of operating companies in internal commodity marketsDefinition and dynamic adjustment of hedging strategies for liquid commodity positions and approvals of large commodity transactions in cooperation with Group Risk Management



System of RWE Supply & Trading Commodity Risk Limits

RWE Supply & Trading is the RWE Group’s interface to the wholesale markets for energy and energy commodities, while serving as an internal transaction partner for hedging commodity risks. The global risk limits in the energy trading business are set and constantly monitored by the Executive Board of RWE AG and the Risk Committee. Risk limits are then further detailed:


Global limits for market and credit risks / single counterparty limits

granted by

granted by

granted by

RWE AG Executive Board / Risk Committee

Group Risk Management (to be agreed with Value Chain

Management)

RWE Supply & Trading Board

Detailed commodity limits

Limits for single desks / books / traders /individual counterparties

restrict

restrict


Credit Risk Management at RWE Supply & Trading


RWE Supply & Trading was a key driver of the EFET*) standards for power and gas RWE Supply & Trading has now signed more than 130 EFET*) -agreements RWE Supply & Trading has a leading role in the development of exchanges/OTC clearing

Driver of Credit Risk Mitigation

Counterparties are assessed using internal rating tools. The results of the internal rating tools are mapped with the results of external rating if availableAll counterparties are monitored frequently and reviewed on a regular basis

Robust Counterparty Risk Assessment and Monitoring

Costs for credit capital are based on the rating of a counterparty Performance determination includes credit risk charges

Clear Credit Incentives

Potential future credit exposure (= potential replacement value) is calculated with a Value-at-Risk like methodologyIn addition the current and the future settlement exposure is measuredCounterparty credit exposures are reviewed on a near real time basis

State of the Art Measurement and Monitoring of Exposures

The Credit Policy is set by the RWE AG Risk CommitteeThe Credit Policy contains both, an overall CVaR (Credit Value-at-Risk) limit and maximum individual counterparty limits and tenors (based on the creditworthiness of a counterparty)

High Level Credit Policy

*) EFET: European Federation of Energy Traders.


Political Framework Conditions


RWEMarket DataAt a Glance Political Framework Conditions

66 Combined Heat and Power Generation (CHP) Act

70 National Allocation Plan II76 Large Combustion Plant Directive

(LCPD)78 Nuclear Consensus79 Grid


Nuclear Consensus [78]

The German Energy Industry Act: Unbundling in the German Energy Market 80The German Energy Industry Act: Regulating Grid Access and Grid Fees in the Electricity and Gas Markets 79

The UK Large Combustion Plant Directive 76

German Combined Heat and Power Generation (CHP) Act 66

Grid [79 – 81]

Large Combustion Plant Directive (LCPD) [76 – 77]

National Allocation Plan II [70 – 75]

CDM/JI Projects Give RWE Access to Cost-Effective Reduction of Greenhouse Gas Emissions (I)

Political Framework Conditions [66 – 81]

The German Energy Industry Act: Key Elements of Grid Fee Calculation 81

Results of German Nuclear Consensus Talks: 810 TWh Nuclear Electricity Production for RWE 78

Large Combustion Plant Directive (LCPD): Shut-Down of 13 GW by 2015 (or Earlier) in UK 77

CO2 Avoidance Costs through Building New Power Plants Related to Old Lignite Units 75RWE's Current Kyoto Credit Portfolio for 2008 – 12 74CDM/JI Projects Give RWE Access to Cost-Effective Reduction of Greenhouse Gas Emissions (II) 73

72UK: Expected Impact of NAP II on RWE 71Germany: Expected Impact of NAP II on RWE 70

Renewable Energy Surcharges Expected to Increase further 69German Renewable Energy Act (REA) (II) 68German Renewable Energy Act (REA) (I) 67

Combined Heat and Power Generation (CHP) Act [66 – 69]

Table of Contents


German Combined Heat and Power Generation (CHP) Act*)

Grid operators have the right to pass on all feed-in paymentsPassing-on clause

Max. 0.05 ct/kWh for large consumers with a yearly consumption of more than 100,000 kWh Max. 0.025 ct/kWh for energy-intensive industry (> 4% of energy costs of gross production value)

Limitation of the burden for industry

Allocation to total supplies to end customers from the public supply gridFunding

Annually cap of € 750 million including € 150 million for heat pipes.€ 648 million in 2007; € 4,357 million since April 2002

Volume

Specific subsidisation of CHP plants dependant on– Commissioned since January 1, 1990– Modernised plants– Small plants– Block-type central cogeneration and fuel cell plants

Levels of subsidy

Electricity actually generated in CHP plants (back pressure) including internal consumption of industry. Support is no longer connected to the feed into supply grids

Object of subsidy

Modernisation and new build of high efficient CHP plants for energy conservation and CO2 reduction 25% share of CHP electricity generation by 2020

Aim

Effective since April 2002 with new amendment which came into effect as of January 1, 2009 Term

CHP LegislationSubject

*) Figures and scheme taken from amendment in 2008 which came into effect as of January 1, 2009.

CHPMarket DataPolitical Framework ConditionsAt a Glance RWE


German Renewable Energy Act*) (REA) (I)

Grid operators have the right to pass on all surcharge payments to the suppliersPassing-on clause

Hardship clause came into effect as of January 1, 2006; reduced amount of 0.05 ct/kWh if a company consumes more than 10 GWh and electricity costs are at least 15% of gross production value

Limitation of the burden for industry

Amount allocated to total supplies to end customers from the public supply grid was about 1 ct/kWh in 2008

Funding

Approx. € 9.64 billion feed-in tariffs in 2008 without following system costs (grid, balancing power); projection 2009: € 10.3 billion, projection 2012: € 14.5 billion

Volume

Different price schemes of renewable plants and different price schemes for new plants (wind, water, biomass, solar)

Levels of subsidy

Electricity actually generated in renewable plants which supply gridObject of subsidy

Supports introduction of renewables-based electricity generation plants and meets the emissions reduction target set by the federal government: min. 30 % electricity production from renewables by 2020

Aim

Effective since April 2000 and amended by August 1, 2004 and January 1, 2009 Different support of plants with service lives of up to 20 years

Term

Renewable Energy LegislationSubject

*) Figures and scheme taken from the EEG which came into effect as of January 1, 2009.



German Renewable Energy Act1) (REA) (II)

31.94 – 43.01Photovoltaics

5.02 – 9.20 (onshore)3.50 – 15.00 (offshore)

Wind power

10.50 – 23.00Geothermal energy

7.79 – 23.09Biomass

4.16 – 9.00Landfill gas, sewage gas, pit gas

3.50 – 12.67 Hydropower

1) Figures and scheme taken from the EEG which came into effect as of January 1, 2009.2) Depend on size of plant, year of commercial operation and technology.

Sources: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit(Federal Ministry for the Environment, Nature Conservation and Nuclear Safety).

Subsidy rates2) of REA in ct/kWh



2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Power generated Power generated (forecast) Feed-in fees Feed-in fees (forecast)

in € billion

in TWh1401201101009080706050403020100

Renewable Energy Surcharges Expected to Increase further

Development of power generated in accordance with the German Renewable Energy Act(REA) and REA surcharges for 2000 – 2012 (forecast)

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), April 2008.

0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 10.0 16.09.0 12.0

130

11.0 14.013.0 15.0



65

114

20

27

0

20

40

60

80

100

120

140

160

2008 2008 2008 – 2012 2008 – 2012

Germany: Expected Impact of NAP II on RWE

CO2 emissions and free-of-charge allocation of RWE in Germanyin million tons

2008CO2 emissions

2009 – 2012Expected number

of certificatesgranted p.a.*)

Free-of-charge allocation (post auctioning) ca. 60%= ca. 95 – 100 million t +/- 10%

From contractuallysecured capacityFrom own power plants

2008CO2 certificates

granted

2009 – 2012Expected rangeof annual CO2 emissions*)

Free-of-chargeallocation ca. 60%

141

85

150+/- 10%

NAP IIMarket DataPolitical Framework ConditionsAt a Glance RWE

*) As of 2009, these figures include CO2 certificates for the Huckingen and Hamborn customer-owned power stations, all of which, however, must be provided by the customer.


0

5

10

15

20

25

30

2008 2008 2009-2012 2009-2012

UK: Expected Impact of NAP II on RWE

CO2 emissions and free-of-charge allocation of RWE in the United Kingdom*)

in million tons

2008CO2 emissions

2009 – 2012Expected number

of certificatesgranted p.a.

Free-of-charge allocation (post auctioning) ca. 70%= ca. 15 million t

2008CO2 certificates

granted

2009 – 2012Expected rangeof annual CO2

emissions

Free-of-chargeallocation 60%

25

15

22+/- 10%

*) Numbers for 2009 – 2012 exclude new build plant; but include additional CHP plant in the scheme.



CDM/JI*) Projects Give RWE Access to Cost-Effective Reduction of Greenhouse Gas Emissions (I)

*) Clean Development Mechanism (CDM), Joint Implementation (JI).

Source: UNFCCC; http://cdm.unfccc.int.

Clean Development Mechanism (CDM):

Emission reductions through investment by an industrialised country in a country without reduction commitments are credited to the emission account of the investor country

Joint Implementation (JI):

Emission reductions through investment by one industrialised country in a second industrialised country are credited to the emission account of the investor country

Germany/UK

Germany/UK e.g. Russia

Emission rights e.g. China

Emission rights

Investment

Investment



CDM/JI*) Projects Give RWE Access to Cost-Effective Reduction of Greenhouse Gas Emissions (II) Expected average annual certificates from registered CDM projects by host country in March 2009in %

As of March 2009, the UN has approved nearly 1,556 CDM projects that are expected to supply more than 1.5 billion certificates by the end of 2012.Much of the certificate volumes contracted are accounted for by Chinese projects, while India is leading in the number of projects.

*) Clean Development Mechanism (CDM), Joint Implementation (JI).

Source: UNFCCC; http://cdm.unfccc.int.

China 56.7

India 12.2

Brazil 7.2

Republic of Korea 5.3

Mexico 3.1

Others 15.5



RWE's Current Kyoto Credit Portfolio for 2008 – 12

Projects as of December 31, 2008 Contract volume by technology

0

20

40

60

80

100

120

Contract volume Risk adjustedvolume

RWE's RedemptionCapacity

mill

ion

certi

ficat

es

100

In Validation

InOperation2)

Contract volume by region

ERPA1)

N2O 11.96

Hydro 15.01Other 1.74Geothermal 0.90Biomass 2.67Coal mine methane 2.25Biogas 0.79Wind 2.50Energy efficiency 12.46HFC23 10.68

China 42.62Ukraine 0.27Bulgaria 0.40South-East-Asia 1.03India 1.83Indonesia 3.30Egypt 3.48South Korea 7.90

Risk adjustedvolume


1) ERPA: Emission Reduction Purchase Agreement.2) In Operation: All projects which have already issued certificates.


0 10 20 30 40 50 60 70 80 90 100 110 120 130 140

Photovoltaic

Hydro

Wind

CCGT

Hard coal

Nuclear power

Lignite (BoA)

CO2 Avoidance Costs through Building New Power Plants Related to Old Lignite Units1)

Specific CO2 reduction costs in €/t of CO2

1) Calculation of costs:– Allocation of CO2 certificates is not taken into account– Subsidies for renewables are not considered– Rough estimation of costs of sequestration– A comparison with prices of European emission allowances is not possible on basis of this illustration

2) CCGT: Combined-Cycle Gas Turbine.

17 – 19

24 – 28

31 – 33

41 – 45

38 – 64

46 – 78

525 – 670

2)



The UK Large Combustion Plant Directive

From 2008, UK coal- and oil-fired power stations have been governed by the Large Combustion Plant Directive. This set new limitson the amounts of Sulphur Dioxide (SOx), Nitrous Oxides (NOx) and dust power stations can emit.

Step 1Power stations had to choose whether to be part of LCPD or to request a limited life derogation (opt out).

Power stations which opted-out are allowed to run for 20,000 hours, or until the end of 2015, whichever comes sooner.

Step 2Those power stations which are part of LCPD had to choose to be governed in one of two ways: Emission Limit Value (ELV)

The power station must meet specific limits to the amounts of pollutants produced on a “milligramme per cubic metre of waste gas“ basis.*)

National Emission Reduction Plan (NERP)A company is given an overall allowance (= bubble: amount of a pollutant that can be emitted per year) of emissions it may produce.*)

The emission allowances issued under NERP are tradable within a member state.

Step 3In addition to the above, power plants must reduce Nitrous Oxide emissions from 500 mg/Nm3 to 200 mg/Nm3 by January 1, 2016. This will entail fitting selective catalytic reduction (SCR) equipment.

*) Due to the Environment Agency regulatory framework, those stations which chose ELV were allocated an annual limit of emissions (called a company B limit) and those stations that chose NERP were allocated site specific annual emission limit values.

LCPDMarket DataPolitical Framework ConditionsAt a Glance RWE


Large Combustion Plant Directive (LCPD): Shut-Down of 13 GW by 2015 (or Earlier) in UK

1) Compliant with emission limits in LCPD (Drax, Eggborough, Peterhead and Longannet in NERP). 2) Limitation of operating hours to 20,000 between 01/01/2008 and 12/31/2015. No requirement to fit FGD.3) FGD: Flue gas desulphurisation.

11,84221,997257133,839TotalNo FGD1,3000121,300OilE.ON UKGrainNo FGD1,0000121,000OilRWE npowerFawleyNo FGD1,3700131,370OilRWE npowerLittlebrookFitted039313393CoalUskmouth PowerUskmouthUnder construction052012520Coal/OilAESKilrootFitted01,500131,500CoalRWE npowerAberthawNo FGD1,1520241,152CoalScottish PowerCockenzieUnder construction02,304142,304CoalScottish PowerLongannetN/A01,320121,320CCGTScottish & Southern EnergyPeterheadFitted02,000242,000CoalEDF EnergyWest BurtonFitted01,000121,000CoalInternational PowerRugeleyNo FGD1,0000121,000CoalE.ON UKIronbridgeFitted02,000142,000CoalE.ON UKRatcliffeNo FGD2,0000142,000Coal E.ON UKKingsnorthNo FGD1,0200241,020CoalRWE npowerTilburyNo FGD2,0000142,000CoalRWE npowerDidcot AFitted02,000142,000CoalScottish & Southern EnergyFiddlers FerryFitted 1,0001,000242,000CoalScottish & Southern EnergyFerrybridgeFitted02,000142,000CoalEDF EnergyCottam2 units fitted02,000142,000CoalBritish EnergyEggboroughFitted03,960163,960CoalDrax PowerDrax

FGD3)

statusCapacity

opted out2)

(MW)

Capacity opted in1)

(MW)

Number of plant

Numberof boilers

Installed Capacity

(MWe)

FuelOperatorInstallation

LCPDMarket DataPolitical Framework ConditionsAt a Glance RWE


Results of German Nuclear Consensus Talks: 810 TWh Nuclear Electricity Production for RWE

Biblis A1)

Biblis B2)

Gundremmingen B2)

Gundremmingen C2)

Mülheim-Kärlich

Emsland

What does this mean for RWE's nuclear power plants?

62.0 TWh

81.5 TWh

160.9 TWh

168.4 TWh

230.1 TWh

1970 '80 '90 2000 '10 '20 2030'75 '85 '95 '05 '15 2025

Capacity to be transferred: 107.25 TWh

Presumed remaining operational lifetime given high capacity utilisation.

1) RWE Power has filed a request for permission to transfer 30 TWh of the Emsland contingent.2) Possible lifetime extension by transferring generation allowances.

Nuclear ConsensusMarket DataPolitical Framework ConditionsAt a Glance RWE


The German Energy Industry Act: Regulating Grid Access and Grid Fees in theElectricity and Gas Markets

Unbundling of grids from generation, wholesale and retail

(number of operators)

Exploration/ Generation

Regulation of grid access and grid fees

Retail

Competition

CustomersExchange Trading

OTC

CompetitionCompetition

Transport Bundesnetz-

agentur(electricity: 4,

gas: 14) Distribution Federal States

(ca. 1,200)

DistributionBundesnetzagentur

(ca. 300)

GridMarket DataPolitical Framework ConditionsAt a Glance RWE


The German Energy Industry Act: Unbundling in the German Energy Market

TSO1)

1) TSO = Transport System Operator.

2) DSO = Distribution System Operator.

DSO2)

>100,000 customers

DSO2)

<100,000 customers

Legal unbundling

Obligatory

Obligatory

Functional unbundling

Obligatory

Detailed rules to unbundlestaff, equal treatmentprogramme

Accountingunbundling

Obligatory

Auditor’s certificate

plus separate balance sheetsand profit and loss accountsmust be disclosed and sentimmediately to the regulator



The German Energy Industry Act: Key Elements of Grid Fee Calculation

All grid fees must be approved ex-ante. All ex-ante approvals can be revoked by the BNetzA at any time.The permitted proportion of equity financed assets is restricted to 40%.Current cost accounting for rate of return and imputed depreciation will continue to apply for all investments until December 31, 2005. All investments as from January 1, 2006, will yield interest based on the method of inflation-adjusted historic cost accounting and be subjected to imputed depreciation.Tax treatment:– No recognition of corporation taxes (incl. taxes on

fictitious profit) until the incentive regulation has entered into force but recognition of „Gewerbe-steuer” (trade tax).

– Recognition of the taxes on fictitious profit as from the introduction of incentive regulation. At the same time, adjustment of the required rates of return.

Improved conditions for upcoming incentive-based regulation as of 2009: Improved returns on equity7.56% for existing electricity and gas assets and 9.29% for new investmentsSpecial treatment of investment in growth and restructuringFast track treatment of large budgeted growth investment projects by the regulator to ensure adequate and timely remuneration for utilitiesIncrease of expected average efficiencyAverage efficiency of German electricity distribution companies estimated 94% indicating average company-specific efficiency targets of only 1.0% p.a. ("individual X factor")

6.5

7.917.56

6.37

7.8

9.29

7.82

9.21

0

1

2

3

4

5

6

7

8

9

10

Current allowed RoE First proposal Final decisionFirst proposal Final decision

10.00

9.00

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

0.00

GasElectricity

Investments before 2006 Investments since 2006

in %



Market Data

RWE Facts & Figures | Update October 2008 82

RWEPolitical Framework ConditionsAt a Glance Market Data

86 Electricity128 Gas


Trading [111]Major European Electricity Trading Exchanges 111

Fuels [107 – 110]

Reach of Uranium Reserves (II) Reach of Uranium Reserves (I)

Hypothetical Gas Demand Assuming an Immediate Switch from Lignite to Gas Based Power Production

German Merit Order: Theoretical Power Pricing with and without Emissions Trading

Substantial Investment in Capacity Needed in the UK to Replace Shut-Downs and Meet Rising Demand (I)

Need for Action: More than 30 GW of Additional Capacity Needed in Germany by 2020

German Energy and Power Mix (2008)

110109

103

101

98

91

89

Power Generation in Germany: CO2 Emissions per Plant Type

Electricity [86 – 127]Market Data [86 – 149]

Main Sea Freight Trading Routes for Hard Coal (II) 108Main Sea Freight Trading Routes for Hard Coal (I) 107

Balancing Power: How Does it Work? 106Remaining Power Generation Capacity in Germany 105Remaining Power Generation Capacity in Europe 104

UK Merit Order: Theoretical Power Pricing with and without Emissions Trading (at Wintertime with High Gas Prices) 102

The “Marginal Power Plant” Principle – Key to Price Formation on the Wholesale Market in Germany 100Substantial Investment in Capacity Needed in the UK to Replace Shut-Downs and Meet Rising Demand (II) 99

Nuclear Power Plants in Germany: Remaining Capacities after Shut-Down 97Phase-Out of Nuclear Power Plants in Germany is another Tightening Factor 96CO2 Reduction through Higher Efficiency Essential for Hard Coal Plants 95

94Attractiveness of Coal and Gas Differs in Germany and the UK 93Scarce European Generation Capacity Increases the Value of our Existing and Future Asset Base 92

UCTE Systematic for Evaluating the Remaining Generation Capacity in Europe 90

Age Structure of Power Plants in Europe in 2007 88Development of the European Power Plant Portfolio from 2005 to 2030 87Shares of Primary Energy Sources in Total Electricity Generation in Europe (2008) 86

Generation [86 – 106]

Table of Contents


Transfer Capacities in Europe from and to Germany (Summer 2009) Germany: Import and Export of Electricity (2008) Control Areas of Germany's Transmission System Operators (2008)

Grid [112 – 114]112113114

Forecasted World Wide Growth in LNG Capacity and Regasification (II) 134Forecasted World Wide Growth in LNG Capacity and Regasification (I) 133

Government Inflates German Electricity Bills 125

Present Capacity of Liquefied Natural Gas (LNG) (2009) (II) 132Present Capacity of Liquefied Natural Gas (LNG) (2009) (I) 131

Gas [128 – 149]LNG [128 – 134]

Supply [115 – 127]

Industrial Customers Paying Higher Governmental Charges and Net Electricity Prices are Slightly above the Level of 1998

Since 1999, Competition is Real: Freedom of Choice for German Electricity Customers (II)

Structure of the German Electricity Market (2008)

124

122

119

The Largest Electricity Companies in Europe (2008)

Electricity [86 – 127]Market Data [86 – 149]

Shipments of Liquefied Natural Gas (LNG) to Europe in 2007 130How the Value Chain of Liquefied Natural Gas (LNG) Works 129LNG is Becoming an Increasingly Important Component of Global Gas Supply 128

The Largest Electricity Companies in Germany by Sales to End Customers (2007) 127Government Charges Account for 39% of German Household Electricity Bills 126

Fees for Electricity Consumption in Germany 123

Since 1999, Competition is Real: Freedom of Choice for German Electricity Customers (I) 121Structure of the UK Electricity Market (2007) 120

Pan-European Comparison of the Annual Electricity Bill of an Average Home Taking Country-Specific Consumption into Account 118Electricity Prices in Europe 117Development of Energy Consumption in Germany 116

115

Table of Contents


Downstream [135 – 149]

Government Charges Included in the German Gas Price 140

Czech Gas Market: Gas Price Setting Mechanism

European Gas Trading Points

Gas Price Setting in Germany (II)

Europe's Largest Gas Companies (2008)

148

145

137

135

The Structure of the UK Gas Market (2008)

Gas [128 – 149]Market Data [86 – 149]

Czech Gas Market: Basics of the Regulatory Framework 149

Status of Czech Gas Market Liberalisation and Regulation 147Relevant Institutions and their Role in Regulating the Czech Gas Market 146

Natural Gas Supplies in Germany (2008) 144Grid Access in the German Gas Market 143The German Gas Market (2008) 142

141

German Household Gas Prices from 1999 to 2008 Compared with Other European Countries 139German Household Gas Prices Compared with Other European Countries 138

Gas Price Setting in Germany (I) 136

Table of Contents


388.4

149.6

321.2

29.1

47.7

153.1

107.2

3.6

318.4

29

39.6

63

639.1

579.6

77.1

36.4

83.5

84.9

67.3

0 100 200 300 400 500 600 700

Shares of Primary Energy Sources in Total Electricity Generation in Europe (2008)

0% 20% 40% 60% 80% 100%

UK

Sweden

Spain

Slovak Republic

Portugal

Poland

Netherlands

Luxembourg

Italy

Ireland

Hungary

Greece

Germany

France

Finland

Denmark

Czech Republic

Belgium

Austria Nuclear

Hydro

Wind

Gas

Oil

Coal/Lignite

Other

Total power generation

Source: Cambridge Energy Research Associates, 2009.

in % in TWh

0 20 40 60 80 100

Electricity – GenerationMarket DataPolitical Framework ConditionsAt a Glance RWE


Development of the European Power Plant Portfolio from 2005 to 2030

Additional demand

300,000 MWuntil 2020

Replacement need

2006Wind 8%Coal, oil, gas 57%Nuclear 17%Hydro power 18%

900

800

700

600

500

400

300

200

100

0

in GW*)

2005 2010 20302015 2020 2025

Wind

Coal, oil, gas

Nuclear

Hydro power

?

*) EU.

Source: VGB PowerTech, Electricity Generation 2008.



Sources: BCG, RWE.Half lifetime (typically)

~70% in 2nd half of their lifecycle

0 4 8 12 16

>50

45

40

35

30

25

20

15

10

5

1

~60% in 2nd halfof their lifecycle

0 4 8 12 16

>50

45

40

35

30

25

20

15

10

5

1


0 4 8 12 16 20

>50

45

40

35

30

25

20

15

10

5

1


0 4 8 12 16 20

>50

45

40

35

30

25

20

15

10

5

1

Age (years)

Hard coal (131 GW)

Age (years) Age (years) Age (years)

Lignite (60 GW) Gas/Oil (201 GW) Nuclear (136 GW)

Age Structure of Power Plants in Europe in 2007



German Energy and Power Mix (2008)

Primary energy consumption:478 million tons of coal equivalent

Gross power generation: 639 TWh*)

Natural gas 22%

Other 35%

Renewables 7%

Lignite 11%

Nuclear 12%

Hard coal 13%

Natural gas 13%

Nuclear 23%

Renewables 11%

Lignite 23%

Hard coal 20%

Other 10%

*) Estimated figures.Source: Arbeitsgemeinschaft Energiebilanzen (Energy Balance Working Group), BDEW, February 2009.



UCTE Systematic for Evaluating the Remaining Generation Capacity in Europe

Installed national generating capacity+ Hydro power stations+ Nuclear power stations+ Fossil fuel power stations+ Renewable energy sources (other than hydro)+ Not clearly identifiable energy sources

= National generating capacity- Unusable capacity

– Of which mothballed capacity- Outages and overhauls (fossil fuel power stations)

= Reliable available capacity- Load

= Remaining capacity

5% - 10%

Minimum criteria: For an individual country, remaining capacity should be at least 5% or 10% of the national generating capacity

Source: UCTE.



1) Sources: RWE, Boston Consulting Group, trend:research 2008, terms of German nuclear phaseout 2002new builds currently under construction included; without announced new builds; without offshore wind farms.

2) Required capacity to assure today‘s level of security of supply with respect to EU-20/20/20-goals.

Base load75 %

capacity need2)

0

50

100

Hydro

Nuclear

Hard coal

Gas

Lignite

> 30 GW capacity gap

in 2020

Peak load25 %

Others

Generation capacity1)

in GW

Need for Action: More than 30 GW of Additional Capacity Needed in Germany by 2020

2009 202020162012



Scarce European Generation Capacity Increases the Value of our Existing and Future Asset Base

1) Source: DENA, April 2008. Basis: nuclear phaseout, full achievement of government targets in renewable energy and CHP, flat consumption (15.8 GW) or reduction in consumption by 0.5% p.a. (11.7 GW).

2) Category A: projects under construction or operating after 2005, Category B: projects with high probability of execution.3) Power plant projects already operating since 2005 included in DENA new build category A (2.7 GW secured capacity).

Significant reliable new build needed1) … … but current projects are insufficient to fill gap

0

1020

3040

50

6070

8090

100

Secu

re c

apac

ity (i

n G

W)

DENA 2020projections1)

(April 2008)

RWE market survey of fossil fuelled power plant projects in Germany

(August 2008)

New build (Cat. B)2)

New build (Cat. A)2)

Renewable Energy/CHP expansion

Existing Generation Capacity 2020

Built3)Most likelyUnder construction

Cancelled/stopped

QuestionablePostponedUnlikely

11.71)15.81)

Required secure capacity1)



Attractiveness of Coal and Gas Differs in Germany and the UK

1) Including renewables and CHP.2) Oil, OCGT, hydro, etc.

Germany Power price UK Power price

Large proportion of low marginal cost plant from nuclear, lignite, CHP and wind.Load factor for new coal plant somewhat higher in Germany than in UK.

Higher share of high marginal cost plant.New gas plant in UK has significantly higher load factor than inGermany.

0 10 20 30 40 50 60 70 80 90 100

Proportion of installed capacity (in %)

MustRun1)

Hard coal

OC

GT

+C

CG

T

LigniteNuclear

Peak

ing2)

NewLignite

NewHard coal

NewCCGT

Hourly DemandMin Max

Pow

er p

rice

0 10 20 30 40 50 60 70 80 90 100

Proportion of installed capacity (in %)

Inter-connector

+Must Run1)

Hardcoal

CCGTNuclear

Peak

ing2)

NewHard coal

NewCCGT

Hourly DemandMin Max

Pow

er p

rice

Summergas prices



0

0,5

1

1,5

Lignite Hard coal Natural gas

Power Generation in Germany: CO2 Emissions per Plant Type1)

in kg/kWh

CO2 emissions from new plant technology (BoA)2):0.95 kg CO2/kWh

1) Unweighted factor per fuel specific installed capacity.

2) Lignite-optimised plant.

1.14

0.92

0.44


1.50

1.00

0.50

0


Average, worldwide

EU

State of theart technology

Steam power plant700 °C technology

But:Efficiencylosses of

7 to 12%-points

2010 2020

>50%

669 g CO2/kWh

288 g coal/kWh

30%

1,116 g CO2/kWh

480 g coal/kWh 38%

881 g CO2/kWh

379 g coal/kWh 45%

743 g CO2/kWh

320 g coal/kWh

… %

… g CO2/kWh

… g coal/kWh

CCStechnology2)

CO2 Reduction through Higher Efficiency Essential for Hard Coal Plants

CO2 emission per kWh

1) Average data for hard coal plants.2) CCS: Carbon Capture and Storage.

Efficiency1)

CO2 emission

Use of fuel

Source: VGB Tech, electricity study Facts & Figures 2008, February 2009.



Phase-Out of Nuclear Power Plants in Germany is another Tightening Factor

ObrigheimBiblis ANeckarwestheim-1Biblis BBrunsbüttelIsar-1UnterweserPhilippsburg-1GrafenrheinfeldKrümmelGundremmingen BGundremmingen CPhilippsburg-2GrohndeBrokdorfIsar-2EmslandNeckarwestheim-2

146257814878

11887

150158161168199201218231230236

Replacement of more than 20,000 MW in nuclear power capacity required

TWh remaining by 2000 according to Nuclear Energy Act

1970 1980 1990 2000 2010 2020 2030

Feb 2009

Plant lifetime based on residual electricitygenerationRWE asked for transfer of 30 TWh from Emsland to Biblis A (lifetime extensionuntil mid 2013)Transfer of 21.45 TWhfrom Mülheim-Kärlich to Biblis B (without govern-mental permission, life-time extension until early2013)

Remark: RWE has a total allotment of 107.25 TWhfrom Mülheim-Kärlich

Stade 23



Nuclear Power Plants in Germany: Remaining Capacities after Shut-Down

17,27310/04/20101)1,2275RWEBiblis B

007/11/20231,30519EnBW: 99.8% / Deutsche Bahn: 0.2%Neckarwestheim 21,30503/12/20221,32918RWE: 87.5% / EON: 12.5% Emsland 2,63403/18/20211,40017EON: 75% / SW München: 25% Isar 24,03402/07/20201,41016EON: 80% / Vattenfall: 20% Brokdorf5,44403/02/20191,36015EON: 83.3% / SW Bielefeld: 16.7% Grohnde6,80411/15/20181,39214EnBW: 99.8% / Deutsche Bahn: 0.2%Philippsburg 28,19612/29/20171,34613Vattenfall: 50% / EON: 50%Krümmel9,54203/22/20171,28812RWE: 75% / EON: 25% Gundremmingen C

10,83004/17/20161,28411RWE: 75% / EON: 25% Gundremmingen B12,11404/09/20151,27510EONGrafenrheinfeld 13,38905/23/20121,3459EONUnterweser14,73405/19/20128908EnBW: 99.8% / Deutsche Bahn: 0.2%Philippsburg 115,62407/15/20118787EONIsar 116,50201/29/20117716Vattenfall: 66.7% / EON: 33.3% Brunsbüttel

18,50003/10/20101)1,1674RWEBiblis A19,66702/13/20107853EnBW: 99.8% / Deutsche Bahn: 0.2%Neckarwestheim 120,45705/11/20053402EnBW: 99.8% / Deutsche Bahn: 0.2%Obrigheim20,75711/14/20036401EON: 66.7% / Vattenfall 33.3%Stade21,397

RemainingGerman capacity

after shut-down2)

Date of shut-down

(load factor: 85%)

Capacity per power plant

MW

Chronologicalorder of

phase-out

OwnerPower Plant

1) Separate estimation for Biblis A and B, including extended inspection outages in 2009.2) Inconsistencies are caused by increased power outputs of the remaining plants due to retrofits.As of February 2009.



Substantial Investment in Capacity Needed in the UK to Replace Shut-Downs and Meet Rising Demand (I)Generation capacity development with no new buildin GW

Approximately 20 – 40 GW of new capacity (= 25 – 50% of total capacity) will be required by 2020 to maintain margins.Market fundamentals support a sustained return of value to the generation sector.

Capacity margin

0

10

20

30

40

50

60

70

80

90

2008 2010 2012 2014 2016 2018 20200%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Other

Renewables

Gas

Coal

Nuclear

Capacity margin

Peak demand



Substantial Investment in Capacity Needed in the UK to Replace Shut-Downs and Meet Rising Demand (II)New build required to maintain 20% capacity margin in GW

0

5

10

15

20

25

30

35

40

45

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020



The “Marginal Power Plant” Principle – Key to Price Formation on the Wholesale Market in Germany

Daily demand on the European Energy Exchange (EEX) is met by a large number of electricity products based on a variety of energy sources. Every type of power plant (nuclear, gas, coal, etc.) has marginal costs in terms of usage.Marginal costs are primarily determined by the “variable cost” of fuel (incl. CO2) and operating assets - costs that are incurred when the power station is up and running and must at least be earned back.On the EEX, power plant capacity is drawn upon, starting from the lowest-cost option, until the demand is met.The offer price of the last power station needed to satisfy this demand (“marginal power plant”) determines the market price for all the other power stations. Power prices are thus the result of the point at which supply and demand intersect. Therefore, to cover high demand, a gas-fired power plant with relatively high marginal costs would tend to determine prices, whereas to cover low demand, a more affordable coal-fired power station would be preferable.

in €/MWh

Market price

Total costVariable cost + cost of capital

Supplied capacity in MW (staggered by offer price)

1 2 3 4 5

Capacity in demand

Short-term variable costs by power plant type (fuel + operating assets) + CO2

Offer price



German Merit Order: Theoretical Power Pricing with and without Emissions Trading

Assumed range of power demand

Marginal plant

Market price incl. CO2

Pow

er p

rice

Impact of emissions trading on power price

CO2 costs of fossil fuel-firedpower plants

CCGT2)

new

NuclearLignitenew

Hardcoalnew

Ligniteold

Hardcoalold

Variable costs of power plants (excl. CO2)

Power installed

1) OCGT: Open-Cycle Gas Turbine.2) CCGT: Combined-Cycle Gas Turbine.3) Must run: run-of-river, wind, CHP.

Source: RWE.

Market price excl. CO2

Must run3)

OCGT1)

old



UK Merit Order: Theoretical Power Pricing with and without Emissions Trading (at Wintertime with High Gas Prices)

CCGT2)

Normal thermal efficiencies assumed.1) OCGT: Open-Cycle Gas Turbine.2) CCGT: Combined-Cycle Gas Turbine.

Source: RWE.

Assumed range of power demand

Marginal plant

Market price incl. CO2

Pow

er P

rice

CO2 costs of fossil fuel-fired power plants

Nuclear Variable costs of power plants (excl. CO2)

Installed Capacity

Market price excl. CO2

Mustrun

OCGT1)

Coal Oil



129 129

149 149

27 2740 40

62 62

150

0

233

83

0

100

200

300

400

500

600

700

Actual Scenario "Lignite to Gas"

Hypothetical Gas Demand Assuming an Immediate Switch from Lignite to Gas Based Power Production

Additional gas demand of ~275 TWh (~26 bcm )~ 30% of total existing German national gas consumption

Source: RWE estimates.

TWhel

150 TWh

Electricity generation (gross) by energy source in Germany in 2008

Gas (electric)LigniteOtherWind

639 639

168

443

0

100

200

300

400

500

600

700

Actual Scenario "Lignite to Gas"

Gas demand for electricity generation in Germany in 2008

+ 275 TWh

(+ 165%)

TWhth

HydroNuclear energyHard coal



368.1 384.0

32.9 33.5

29.3 29.2

107.8 107.0

Remaining Power Generation Capacity in Europe

Status: December 2006in GW


Total European power plant capacity

- Unusable capacity

- Reserve capacity- Outages and overhauls*)

Reliable available capacity

- Load

*) Outages and overhauls of thermal power plants.

Source: Union for the Coordination of Transmission of Electricity (UCTE).

625.1 639.7

= 455.1 = 470.0

Remaining capacity87.0 86.0

Import balance2.4 3.0



70.0 69.5

6.06.77.07.3

22.9 25.6

Remaining Power Generation Capacity in Germany



Total German power plant capacity

- Unusable capacity

- Reserve capacity- Outages and overhauls*)

Reliable available capacity

- Peak load

*) Outages and overhauls of thermal power plants.

Source: Union for the Coordination of Transmission of Electricity (UCTE).

124.1 127.8

= 87.2 = 89.2

Remaining capacity17.2 19.7Import balance2.2 3.7



Balancing Power: How Does it Work?

Primary– Automatic Control at the generator/

turbine – e.g. Thermal power plants

Secondary reserve– Automatic Control by the TSO,

Load Frequency Control– e.g. Pumped storage

Frequency

5 s 30 s 15 min 1 h

5 s 30 s 15 min 1 h

Primary Secondary

Minute reserve Hour reserve

TSO1) BRP2)

Starting point – e.g. Power station breakdownf

...

Minute reserve– Manual activation by TSO– Manual e.g. Thermal power

plants

1) TSO: Transmission System Operator2) BRP: Balance Responsible Party



Main Sea Freight Trading Routes for Hard Coal (I)

Hard Coal Seaborne Trade 2007: 820 million t in million t

API = All Publications Index

29

74

68

478

53

189

250

To theFar East

Canada/USA

INDONESIA

SOUTH AFRICA

CHINA

POLANDCANADA

USA

COLOMBIA/VENEZUELA

AUSTRALIA

API#2

API#4

API#3

COMMONWEALTH OF INDEPENDENT

STATES

Source: Verein der Kohlenimporteure e.V. (Coal Importers‘ Association), Annual Report 2008, published in June 2008.

37

Electricity – FuelsMarket DataPolitical Framework ConditionsAt a Glance RWE


Main Sea Freight Trading Routes for Hard Coal (II)

Major products traded on worldwide coal marketsAPI#2 The TFS API#2 is a monthly basket index for the ARA (harbours of Amsterdam, Rotterdam, Antwerp)

coal price with a basis of 6,000 Kcal/kg, CIF, ARA, NAR (net as received) calculated on the last businessday of the month. Calculation: (MCIS NWE Steam Coal Marker Price + International Index) divided by 2.

API#3 The TFS API#3® is a weekly (every Friday) basket index price with a basis of 6,700 Kcal/kg, GAD (gross air dryed) FOB Newcastle (Australia) and published on a weekly and a monthly averagebasis. Calculation: (FOB Newcastle Price + Barlow Jonker Index (BJI)) divided by 2.

API#4 The TFS API#4® is a weekly (every Friday) basket index price with a basis of 6,000 Kcal/kg, NAR FOB Richards Bay (South Africa) and published on a weekly and a monthly average basis. Calculation: (FOB Richards Bay Price ascertained by McCloskey + SACR Spot Coal Price Index + FOB Richards Bay Price ascertained by Argus Media) divided by 3.

API = All Publications IndexCIF = Cost, Insurance, FreightCIS = Commonwealth of Independant StatesFOB = Free On BoardThe TFS API was a registered trade mark of the Tradition Financial Services Company (TFS). The TFS ascertains different API prices by a price survey from Argus Media and McCloskey.

API-Index was renamed from July 2005 on in AM API#... (A for Argus Media and M for McCloskey).

Source: Verein der Kohlenimporteure e.V. (Coal Importers‘ Association), Annual Report 2008, published in June 2008.



Reach of Uranium Reserves (I)

50 100 150 > 200

Provenreserves 230

> 1,000 years Reach

600Definitively probable reserves Probable reserves

Conventional uranium production Non-conventional uranium production

Uranium from phosphates & sea

water

Improved uranium use through breeders

Result of exploration activity from 1950 to 1970. Significant new uranium

exploration only since 2005

Source: OECD/Nuclear Energy Agency (NEA) and International Atomic Energy Agency (IAEA).

Based on a constant annual consumption of about 70,000 mt (capacity currently installed in nuclear power plants)



Reach of Uranium Reserves (II)

The amount of uranium that can be produced and the reach of the reserves depend on the effort required, especially in terms of production techniques and production costs.

Most of the deposits are in regions that are politically stable such as Australia, Canada and America. Major reserves have also been developed and are being mined in South Africa, Kazakhstan and Uzbekistan.

Today’s known and probable reserves are the result of exploration activity conducted from 1950 to 1970. Given the sufficient levels of supply and low uranium prices, major uranium exploration was not carried out again until 2005.

Similar to other raw materials such as oil, gas and coal, the level of known uranium reserves depends on the phases the exploration cycles are going through.

Uranium exploration is currently going through the beginning of the second exploration cycle. Other raw materials already have more than five cycles behind them.

Since uranium only accounts for a small portion of total electricity generation costs, rises in the price of uranium only have a minor effect on them.



Major European Electricity Trading Exchanges

NordPool Oslo

European Energy Exchange (EEX) Leipzig

APX Power NL Amsterdam

APX Power UK London

Powernext Paris

Belpex Brussels

Omel Madrid

Energy Exchange Austria (EXAA) Graz

UK

SPAIN

FRANCE

NORWAY

AUSTRIA

NETHER-LANDS

GERMANY

SWEDEN

FINLAND

DENMARK

BELGIUM

Electricity – TradingMarket DataPolitical Framework ConditionsAt a Glance RWE


Control Areas of Germany's Transmission System Operators (2008)

Vattenfall Europe Transmission GmbH

E.ON Netz GmbH

RWE Transportnetz Strom GmbH

EnBW Transportnetze AG

Electricity – GridMarket DataPolitical Framework ConditionsAt a Glance RWE


Germany: Import and Export of Electricity (2008)

Source: RWE.

in TWh SWEDEN2.51

DENMARK8.92

1.37 0.54

POLAND

1.320.01

8.34

CZECHREPUBLIC

3.79

AUSTRIA

3.83SWITZERLAND

0.24

11.194.25

FRANCE2.18

14.76

LUXEMBOURG

BELGIUM

0.0914.52

GERMANY

∑ Import 30.98∑ Export 46.88

NETHERLANDS



Transfer Capacities1) in Europe from and to Germany (Summer 2009)

Transmission capacities betweenGermany and its neighbouring countriesare small compared to capacitiesinstalled in Germany.Wholesale markets in Germany, Austriaand Switzerland are graduallyconverging; due to its size, Germany isthe dominant sub-market.

1) Transfer capacities should be consideredseparately and are not cumulative.

2) Depending on wind situation in Germany.

Source: www.etso-net.orgNTC-Matrix Summer 2009

in MW DENMARK EAST550

SWEDEN600WEST2)

1,500

NETHERLANDS

3,900 4,000

GERMANY

POLAND2)950 550 600

1,200800

2,100

CZECHREPUBLIC2)

1,600

AUSTRIA

1,600

4,400

2,060

2,700

2,400

FRANCE

800

SWITZERLAND



The Largest Electricity Companies in Europe (2008)

Consolidated electricity sales volumein bn kWh1)

1) Last completed fiscal year in each case. Net figures, excluding proprietary trading.

2) 2007 Value.

Source: RWE, April 2009.

58

131

168

182

189

270

317

614

656

0 100 200 300 400 500 600 700

British Energy (GBR)

EnBW (GER)

GDF/Suez (FRA)

Iberdrola (ESP)

Vattenfall (SWE)

ENEL/Endesa (ITA)

RWE (GER)

E.ON (GER)

EdF (FRA) 2)

2)

Electricity – SupplyMarket DataPolitical Framework ConditionsAt a Glance RWE


Development of Energy Consumption in Germany

Development by segment

8.3 8.3 8.78.5 8.3

256.0255.3253.7249.7248.5

16.2 16.2 16.3 16.4 16.5

121.5120.8119.8118.7118.5

140.4 141.3 141.5 140.2 139.5

0

100

200

300

400

500

600

2004 2005 2006 2007 2008

Electricityin TWh

Residential customers TransportServices Industry

Agriculture

Gas in TWh

Residential and commercial customersIndustryPower plants and district heating

Source: Bundesverband der Energie- und Wasserwirtschaft e.V.(German Energy and Water Association), April 2009. 2008 figure ispreliminary and rounded.

83 104 104 126

400 408 410 386 367

479 468 459 438 437

1150

200

400

600

800

1000

1200

2004 2005 2006 2007 2008

531.9 534.2 539.6962 980 973 940

Source: Bundesverband der Energie- und Wasserwirtschaft e.V.(German Energy and Water Association), April 2009. Estimatedfigures.

1,200

1,000

541.2

Industrial consumption decreased by 5% in 2008 due to the economic downturn.

542.2

930



5.145.57

5.906.14

6.606.88

7.438.148.29

8.608.868.958.979.049.159.299.37

9.8810.272)

10.9511.19

11.9713.02

16.90

0 2 4 6 8 10 12 14 16 18

EstoniaBulgaria

FranceFinland

LatviaSwedenCroatiaPoland

LithuaniaNetherlands

RomaniaPortugal

AustriaSlovenia

SpainGermany

Great BritanBelgium

ItalyCzech Republic

HungarySlovakia

IrelandGreece

Electricity Prices in Europe

Electricity prices for industrial customers1) for the first half of 2008 in selected European countries in €ct/kWh

1) Basis: industrial customers with a consumption of 500 – 2,000 MWh, prices excluding value-added tax. 2) 2007 data. Source: Eurostat, April 2009.



832

472

826686 620 615 651

457 498654

501 521 458 410 473 413

555

550

118257

239 205 93281 205

47154 125

154 2921125

0

200

400

600

800

1000

1200

1400

1600

Sw

eden

Denm

ark

Irel

and

Finl

and

Aus

tria

Bel

gium

Luxe

mbo

urg

Ger

man

y

Ital

y

UK

Net

herl

ands

EU-2

7

Spa

in

Fran

ce

Gre

ece

Port

ugal

494

Pan-European Comparison of the Annual Electricity Bill of an Average Home Taking Country-Specific Consumption into AccountAveraged over a year, German homes spend slightly more than European homes, first half of 2008

1) Tax and levy share including CHP, REA and concession fees.2) Price level of second half of 2007, no 2008 data available.Source: Eurostat, April 2009, rounding differences may occur.Eurostat adopted new survey methodology, which explains the decline in prices in certain cases.

1)

1387

1022944 944

655744

859738

563703

820

646701

443

Ø-EU-27

Ø-Bill total in €/yearTax and levy shareElectricity price without taxes and levies


582

2)


Structure of the German Electricity Market (2008)

Number of companies

Electricity supply to end customers

Major

Regional

Local Local

Net electricity consumption of 521 TWh*)

Industry Privatehouseholds

Trade, commerce,

public institutions

Others

*) Preliminary figures.

Source: BDEW, Bundesverband der Energie- und Wasserwirtschaft e.V.

236 TWh = 45% 139.5 TWh = 27% 120.5 TWh = 23% 25 TWh= 5%

4

≈ 60

> 800



Structure of the UK Electricity Market (2007)

Over 30 electricity generators

1 transmission system operator

7 distribution network operators,operating 14 distribution zones

7 major suppliers

Net electricity consumption 342 TWh

Industrial & commercial customers(incl. transport and agriculture) Residential customers

Source: RWE, Department for Business Enterprise & Regulatory Reform, UK, 2008.

116 TWh226 TWh



Since 1999, Competition is Real: Freedom of Choice for German Electricity Customers (I)

Customers who signed a new contract with their existing supplier 48%

Customers who switched vendors 52%

Industry and Business Commerce*)


Customers who did not change their agreements 37%

Customers who switched vendors 13%

*) Companies with up to 50 employees.

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), November 2007 (for Industry and Business) and February 2009 for Commerce.



Since 1999, Competition is Real: Freedom of Choice for German Electricity Customers (II)Households

Customers who did not change their agreements 40%


Customers who switched vendors 19% (= 7.5 million)

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), February 2009.



6.46 6.27 6.35 6.20 6.20

2.172.142.07 2.09 2.16

4.754.704.302.92 3.73

0.630.550.700.85

0.79

0

2

4

6

8

10

12

14

16

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fees for Electricity Consumption in Germany

State-caused charges for all electricity customersin € billion

Licensing fees

Electricity tax

Kraft-Wärme-Kopplungsgesetz (German Combined Heat and Power Act)1)

Erneuerbare-Energien-Gesetz (German Renewable Energy Act)2)

1) Old Combined Heat and Power Act of May 2000 replaced by new Combined Heat and Power Act in April 2002.2) Previously Stromeinspeisegesetz (Electricity Feed-In Act), since April 2000: German Renewable Energy Act.

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), February 2009; 2009 figures estimated by Arbeitskreis Steuerschätzung.

12.8812.3011.8911.359.488.50

6.92

4.08

2)

13.49 13.62 13.74



101%113%

95%97%84%75%

65%63%60%60%

92%98%

28%

28%

26%25%

23%21%

20%10%10%7%

4%2%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Industrial Customers Paying Higher Governmental Charges and Net Electricity Prices are Slightly above the Level of 1998

Taxes, levies & fees Renewable Energy Act, Combined Heat and Power Act, electricity tax.Net electricity pricesGeneration, transmission and sales.

*) Medium voltage, purchase of 500 kW/3,150 h.Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), February 2009.

In 2000, industry benefitted from liberalisation by some € 5.6 billion.In 2009, industrial net electricity prices are slightly above the level of 1998.

Development of industrial*) electricity prices (including electricity tax)1998 = 100%

+ 29%

+ 1,230%

+ 3%

100 96

67 70 7385

96107

122 121

Change (1998 = 100%)141


129


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Government Inflates German Electricity Bills

Average monthly electricity bill of a three-person household (3,500 kWh/a)in €/month

Taxes, levies & feesRenewable Energy Act, Combined Heat and Power Act, concession fees, electricity tax and value-added tax.

Net electricity pricesGeneration, transmission, distribution, metering, sales and marketing.

Gains resulting from deregulation are being eroded by additional

burdens imposed by policymarkers.

49.95 48.20

40.66 41.7646.99 50.14

52.38 54.43 56.7660.20

24.7%29.9%

38.1% 40.0%39.8% 39.7%

39.7% 39.9% 39.2%40.7%

Change (1998 = 100%)

+ 36%

+ 110%

+ 11%75.3%

70.1%61.9% 60.0%

60.2% 59.5% 60.3% 60.1% 60.8% 59.3%


63.15

39.8%

60.2%


67.70

38.4%

61.6%


Government Charges Account for 39% of German Household Electricity Bills1)

22.70 ct/kWh break down as follows (as of January 2009):

Wholesale Price/Grids/Sales:13.88 ct/kWh

Grid Fee/Metering/Energy Data

5.60 25% Management

Wholesale7.68 34% Price3)

Sales and0.60 2% marketing

1) 3,500 kWh/a.2) VAT at 19%.3) Wholesale prices for prorated purchases for 2009.

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), February 2009.

State:8.82 ct/kWh

Value-added tax2) 3.62 16%

Electricity tax 2.05 9%

Concession fee 1.79 8%RenewableEnergy Act 1.13 5%

Combined Heatand Power Act 0.23 1%

39%



The Largest Electricity Companies in Germany by Sales to End Customers (2007) in billion kWh*)

*) Including consolidated participations.


4.2

6.9

8.3

8.4

10.1

11.8

19.5

81.9

83.7

85.0

0 10 20 30 40 50 60 70 80 90 100

Stadtwerke Hannover AG, Hanover

N-ERGIE AG, Nuremberg

RheinEnergie AG, Cologne

Stadtwerke München GmbH, Munich

MVV Energie AG, Mannheim

EWE AG, Oldenburg

Vattenfall Europe AG, Berlin

EnBW AG, Karlsruhe

RWE AG, Essen

E.ON AG, Düsseldorf



LNG is Becoming an Increasingly Important Component of Global Gas Supply

Global natural gas demand and LNG's share in bcm

Source: CERA.

7%13% 15% 17%

2003 2010 2015 2020

2,000

3,000

4,000

1,000

Asia PacificAfricaMiddle East

South and Central AmericaNorth AmericaGlobal LNG

Europe and Eurasia

Gas – LNGMarket DataPolitical Framework ConditionsAt a Glance RWE


How the Value Chain of Liquefied Natural Gas (LNG) Works

Gasfield

Pipeline

Liquefaction

Storage

Shipping

Storage

Regasification

Pipeline

Vessel transport volume (standard range):135 – 155 thousand m3 LNG ≈ 81 – 93 million m3 regasified volume≈ 495 – 565 thousand boe≈ 0.9 – 1.0 TWh

Transport System

Liquefaction PlantGas: ∼ 600 m3 at 15 °C

LNG: 1 m3 at -162 °C

Power Generation

Regasification TerminalGas: ∼ 600 m3 at 15 °C

LNG: 1 m3 at -162 °C



Shipments of Liquefied Natural Gas (LNG) to Europe in 2007

in billion cubic metres/year

Europe's import of LNG is showing a growing tendancy becauseindigenous gas production is droppinga more diversified portfolio of gas supply is desirednew regasification infrastructure is being built

0.070.07Norway

1.462.312.430.8112.973.1724.186.01Total

0.390.060.072.090.06Trinidad & Tobago

0.272.754.45Qatar

0.12Oman

2.313.788.331.42Nigeria

0.76Libya

0.160.311.214.040.08Egypt

0.642.430.507.850.354.324.45Algeria

UKPortugalItalyGreeceFranceBelgiumSpainTurkey

Source: BP Statistical review, June 2008.



Present Capacity of Liquefied Natural Gas (LNG) (2009) (I)

in million tons/year

4.00Gassi Touil12.30Arzew

23.8Algeria

29.7Nigeria8.4021.30NLNG

4.003.50Skikda

9.60Sakhalin9.6Russia

5.00PLNG5.0Peru

1.50Kenai1.5USA

23.20MLNG23.2Malaysia

9.70Tangguh16.70Bontang1.40Arun LNG

27.8Indonesia7.20Brunei LNG

7.2Brunei4.30Pluto LNG

3.50Darwin LNG15.90North West Shelf

23.7Australia

TotalCapacity underconstruction

Existing capacity

Source: Pira, 2009.



Present Capacity of Liquefied Natural Gas (LNG) (2009) (II)

in million tons/year

5.00Luanda5.0Angola

6.00Adgas

7.8028.50RasGas

6.0Abu Dhabi

23.4017.80QatarGas77.5Qatar

3.60Qalhat7.10Oman LNG

10.7Oman7.00Yemen LNG

7.0Yemen4.20Snøhvit

4.2Norway3.70EGLNG

3.7Equatorial Guinea14.90Atlantic LNG

14.9Trinidad and Tobago2.200.60Marsa el-Brega

2.8Libya5.005.00SEGAS

7.20ELNG17.2Egypt

TotalCapacity underconstruction

Existing capacity


Source: Pira, 2009.


Forecasted World Wide Growth in LNG Capacity and Regasification (I)

in bcm/a

Source: Gas Strategies and other industry sources, 2007.

Possible new Asia Pacific LNG capacity plus debottleneckingPossible new Middle East LNG supply plus debottleneckingPossible new Atlantic Basin LNG capacity plus debottleneckingExisting/Under Construction Asia Pacific capacityExisting/Under Construction Middle East capacityExisting/Under Construction Atlantic Basin capacity

Liquefactioncapacity

Regasificationcapacity

As above but with more bullish view and allowance for future projects “High Case”As above plus a conservative view on known projects “Mid Case”Existing and Under Construction “Existing”

0

100

200

300

400

500

600

700

800

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020



Forecasted World Wide Growth in LNG Capacity and Regasification (II)

Source: Gas Strategies and other industry sources, 2007.

Notes to the dataThe graph flattens as we get to around 2014/2015. This is because there is not as reliable information about what projects (liquefaction and regasification) will be built futher out in time. Existing liquefaction capacity is that already built, and under construction which is defined as those projects for which a Final Investment Decision has been taken. Possible new liquefaction capacity is based on announced plans and includes debottlenecking of existing facilities. Existing regasification capacity takes into account only those regasification projects that exist or are firmly committed. The “Mid Case” considers known regasification projects and takes a conservative view of how many will actually be built.

Comments A more than doubling of the global LNG business within 10 years is a virtual certainty, and the growth could be higher. Regasificationcapacity outstrips liquefaction capacity. Surplus is as a result of opportunism of investors and extra capacity in order to exploit regional arbitrage.



Europe's Largest Gas Companies1) (2008)

Gas sales volume2)

in billion m3

1) No information on Centrica available.2) Standard factor: 1 TWh = 0.093 billion m3.3) 2007 Values.

Source: RWE market analysis made from annual reports.

14

18

25

31

39

78

78

104

114

0 20 40 60 80 100 120

VNG (GER)

Distrigaz (BEL)

Gas Natural (ESP)

RWE (GER)

Wintershall (GER)

GdF/Suez (FRA)

Gasterra (NED)

ENI (ITA)

E.ON (GER)

3)

3)

3)

Gas – DownstreamMarket DataPolitical Framework ConditionsAt a Glance RWE


Gas Price Setting in Germany (I)

Generally speaking, natural gas prices in Germany track to a large extent heating oil prices with a certain delay while smoothing out peaks and troughs along the entire supply chain (importer, regional/local distributors and end customers).

For short- to medium-term transactions, gas-linked pricing replaces oil-linked pricing more and more. Gas-to-gas competition will increase in future by increasing liquidity in the traded markets. Nevertheless a logical natural linkage between oil and gas prices will persist: An oil and gas producer can always decide whether to drill for oil or gas and will choose the commodity with the best expected earnings, related to the associated risks. According to the law of supply and demand, the prices and thus earnings will inevitably adapt.

A contractually fixed best substitute linkage is an elementary constituent in the European gas market for the time being. This is stipulated by the relevant producers that have sold for the most part their gas only on an oil-linked basis in the long-term contracts.

The price link for importers, distributors and deliveries to large consumers is established automatically via contractually binding formulas (sliding price formulas with escalator clauses).

Gas prices are linked to the relevant substitute energy source (“best substitute principle”), including the following major ones: For local distributors (to supply private customers): gasoil For large consumers: fuel oil For power generation: coal

Examples of common escalator clauses stipulate: The 6/1/3 rule for local distributors: 6-months average with a lag of 1 month, valid for 3 months (example: if the gas price was

adjusted effective October 1, 2006, average oil prices from March 1, 2006 to August 31, 2006 would be considered in the sliding price formula; the resulting gas price would then be valid until January 1, 2007).

The 3/1/3 rule for large consumers: 3-months average with a lag of 1 month, valid for 3 months (example: if the gas price was adjusted effective October 1, 2006, average oil prices from June 1, 2006 to August 31, 2006 would be considered in the sliding price formula; the resulting gas price would then be valid until January 1, 2007).



Gas Price Setting in Germany (II)

Gas prices for residential and commercial customers are not determined using sliding price formulas. Instead, they are determinedindependently by the local gas utility (e.g. RWE Westfalen-Weser-Ems), taking supplier price trends into account.

Using formulas to help determine gas prices is not unique to Germany. This practice is common in other gas-importing Western European countries as well. Even on markets where prices are not linked to oil (e.g. the UK and USA), gas prices track oil prices, albeit with higherpeaks.

Advantages of linking prices to best substitutes:− Consumer protection: Linking prices to best substitutes keeps gas producers from having too much market power (supply oligopoly),

keepinggas prices high. In addition, short-term fluctuations in gas prices, which are often a cause of consumer uncertainty, can be avoided.

− Security of investment: Linking prices to best substitutes ensures that gas remains competitive compared with other major sources of energy such as heating oil, in turn ensuring that the substantial sums of money invested by gas producers to produce gas and by gas utilities to construct, expand and maintain grids are secured.



01

23

45

67

89

1011

1213

14

DEN SWE AUT NED CZE ESP POL GER ITA BEL FRA UK

German Household Gas Prices Compared with Other European Countries

All-gas household: annual consumption: 5,560 – 55,560 kWh1)

in €ct/kWh (incl. taxes)

1) Cooking, hot water and heating.2) 2007 Value.

Source: Eurostat 2008; prices for first half of 2008, based on purchasing power standards.

Average gas price

6.74


6.0

13.32)

8.47.9

6.2 6.06.6 6.4

3.84.7

5.4

6.4


0

1

2

3

4

5

6

7

8

9

10

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

German Household Gas Prices from 1999 to 2008 Compared with OtherEuropean CountriesAll-gas household: annual consumption: 23,500 kWh*)

in €ct/kWh (incl. taxes)

Belgium

Austria

Germany

Italy

*) Cooking, hot water and heating; 5,560 – 55,560 kWh after 2007S02.

Source: Eurostat, 2008.

Spain

France

Netherlands

United Kingdom



Government Charges Included in the German Gas Price

*) Example based on the average price per kWh for an all-gas household (as of January 2008) with a consumption of 20,000 kWh.

Source: Bundesverband der Energie- und Wasserwirtschaft e.V. (German Energy and Water Association), 2008.

Some 29% of the gas price*) payable by an all-gas household is allocable to taxes and levies(gas tax, license fee, production levy and value added tax).

Import/production,transportation, storage and distribution 71%

Prorated production levy 2%

Value added tax 16%

Gas tax 9%

License fee 2%



The Structure of the UK Gas Market (2008)

Source: BERR Dukes Data, 2009.

Total supply 1,091 TWh

Conversion to power & other energy industry use

Production / Import / Export

Producers and shippers

1 gas transporter

9 major suppliers

4 gas distribution operators

Industrial & commercial customers Residential customers

483 TWh 367 TWh241 TWh



The German Gas Market (2008)

*) Preliminary figures.

Regional long distance gas companiesLevel 2 (without direct access to import/production)

Erdgas Münster, GVS, Bayerngas, Saar Ferngas, E.ON Avacon, Gas-Union, FGN, EVG, EWE, RWE WWE

End Customers(Private households and commercial customers, industry, power plants)

Total supply 930*) TWh

Power generation(public supply)

Industrial customers

Residential and smallcommercial customers

437*) TWh367*) TWh126*) TWh


Foreign ProducersGerman Producers

Over 700 regional and local distributors

Supra-regional long distance gas companies Level 1(with direct access to import/production)

E.ON Ruhrgas, VNG, Wingas, RWE Supply & Trading



Grid Access in the German Gas Market

Grid access was modified and simplifiedas of October 1, 2008. Cooperation agreement signed by RWE to activelypromote competition.Currently there are 10 market areas with virtualtrading point (VTP) in each throughout Germany.This enables unlimited access within each marketarea.

Source: RWE.

Source of gas/Point of import

Two-

cont

ract

mod

el

Entry contract

Exit contract

Long-distance gridoperator

VTP

End consumer

MARKET SECTOR

MARKET SECTOR

Grid connection point

Grid connection point

Regional gridoperator

Local grid operator

VTP = Virtual trading point, where trading activities can be transactedVTP



Natural Gas Supplies in Germany (2008)

Total volume: 1,095 TWh*)

Russia 405 TWh 37%

Norway 285 TWh 26%

Netherlands 197 TWh 19%

National 164 TWh 14%

Denmark/United Kingdom, others 44 TWh 4%

*) Preliminary figure.




European Gas Trading Points

BactonZeebrugge

DENMARK

Zelsate

NETHERLANDS(TTF)

OudeEmden

Frankfurt an der Oder

CZECHREPUBLIC

SWITZERLAND

Balgzand

Vesterled

Lang

eled

Fran

pipe

Zeep

ipe

Norpipe

Euro

pipe

1+2

Ellund

DEU

DAN

BBL NETRA

IUK

Blaregnies

Dunkirk

GERMANY(EGT/BEB/WG/RWE/ONTRAS)

WEDALRTR

TENPFRANCE

(PEG)Obergailbach

St. Katherina

WAGOberkappel

TAG

AUSTRIATarvisio

Wallbach

Griesspass

Baumgarten(CEGH)

UNITED KINGDOM

(NBP)

Gas trading pointTransport routes

MEGAL

Waldhaus

BocholtzS‘Gravenvoeren

LUXEMBOURG

BELGIUM


Aachen


Relevant Institutions and their Role in Regulating the Czech Gas Market

Market regulation is monitored by 3 institutions: − Energy Regulatory Office (ERO)− State Energy Inspection Board− Ministry of Industry and Trade

ERO is an autonomous authority, which is responsible for the regulation of the Czech energy market. Mostly important, ERO handles thegranting of licenses and the regulation of TPA tariffs to networks.

The State Energy Inspection Board is authorised to assess buyer and seller behaviour and recommend sanctions to the ERO.

The Ministry of Industry and Trade is basically responsible for approving new investment projects; it also refines energy policies, issuesbasic legislation (Energy Act and related explanatory decrees).



Status of Czech Gas Market Liberalisation and Regulation

The opening of the Czech market began in 2005. Since January 1st, 2006, all end customers have become eligible customers with the exception of residential customers. Since January 1st, 2008, all customers including residential customers became eligible customers and the process of market opening was completed.

The transmission company RWE Transgas Net, s.r.o. was set legally apart from RWE Transgas, a.s. which holds the gas trade license. The ownership however still stays at RWE. Starting from January 1st, 2007, regional gas companies (RGCs) were separated from the regional gas distribution companies (DSOs).

Full market liberalisation with 100% market opening was achieved and first competitors entered the market.

At the same time a new market model was introduced. It consists of a virtual trading point, an entry-exit system and the possibility of gas sales beyond the distribution companies’ (DSOs) own balancing zones. In order to control the constitution of the market, legal restrictions are set as a framework in which for example the principal of discrimination-free supply conditions to non consolidated regional gas companies (RGCs) is monitored.

Due to the dominant position in the Czech gas market, RWE Transgas is subject to the following regulations:− The commodity price (i.e. gas price): This price is being monitored by ERO. RWE Transgas has to offer non discriminatory prices to the

same customer segment.− Transportation and distribution price: This price is regulated and has to be approved by the ERO. The calculation is made on a “cost plus”-

basis and the costs have to be justified in detail.− Storage prices: This price was regulated and is now closely monitored by the ERO.



Czech Gas Market: Gas Price Setting Mechanism

External factors influence approx. 70 – 80% of the end price of natural gas

1) Including transit to Czech Republic.

2) Negotiated third party access.

RWE TransgasRegional Gas

company

4 – 8%

supervisedby ERO

Gross Trade margin

Entity

Portion of end price

Price composition

The ”value chain” Commodity1) Storage Distribution Transmission

Typical priceconstruction

linked to otherfuels (oil, coal)

nTPA2), tariffslimited by

EROregulated regulated

70 – 80% 4 – 8% 15 – 20% 3 – 5%

Foreignproducers(Russia, Norway)

RWE Gas Storage

Distribution System

Operators

RWE Transgas Net



Czech Gas Market: Basics of the Regulatory Framework

Costs: ”Inflation - X” escalation (Inflation is composed of Producer Price Index (PPI) and wage growth in industries index); for DSOs also growth in number of connected off-take points. Incentives stem from outperfomance potential over the X-factor set by ERO.

Depreciation: ”PPI” escalation (DSOs) or actual book values with 2 years time lag accounted every year (TSO).

Regulated Asset Base: ERO defines the value, which forms the basis. Annual planned net investments are added on top of the basis. Ex-post corrections reflect actual net investments (DSO) or book values (non-regulated) with 2 years time lag (TSO).

Unbundling: ERO acknowledges the adjusted value of extraordinary costs which are related to the unbundling of system operators from vertically integrated companies.

Revaluation: For regulatory purposes, ERO currently only partially acknowledges revaluated depreciation of revaluated assets (according to Czech accounting standards). For further details please see page 146.

Escalation of Costs, Depreciation and Regulated Asset Base



RWE


Market DataPolitical Framework ConditionsAt a Glance RWE

154 Electricity194 Gas221 Accounting224 Investor Relations


RWE Market Shares in European Power Generation by Core Region (2008) 155RWE Generation: No 2 in Europe 154

RWE's Share in German Power Generation Market Relative to Peers (2007) 156

Trading [181 – 184]

RWE Group Generation Output and Capacity by Load Factor (2008) 160RWE's German Power Plant Portfolio (2008) (I) 161RWE's German Power Plant Portfolio (2008) (II) 162

RWE's UK Power Plant Portfolio (2008) (II) 166RWE's UK Power Plant Portfolio (2008) (I) 165

Fuels [178 – 180]

RWE Lignite Production in the Rhenish Mining Area Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (II)

RWE's German Power Plant Portfolio (2008) (IV)

174175

164

What is Short-Term Position Management? Short-Term Position Management: Managing Generation Assets More Efficiently

Thermal Efficiency of RWE's German Power Plants

RWE Group Electricity Production by Region (2008)

183184

172

158

RWE's Use of Fuels in Own Power Plants (II)

RWE's Hard Coal Purchases by Country of Origin in 2008

RWE Power's Major Power Plants in Germany

RWE's Other International Power Plant Portfolio (2008) (I)

180

178

169

167

Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (I)

Electricity [154 – 193]RWE [154 – 224]

RWE Supply & Trading: The Group's Wholesale Risk Pool and Portfolio Manager in the UK 182RWE Supply & Trading: The Group's Wholesale Risk Pool and Portfolio Manager in Germany 181

RWE's Use of Fuels in Own Power Plants (I) 179

RWE Power's Decommissioning Concept for Nuclear Power Plants 177RWE's Emissions Profile in 2008 176

173

Age Structure of RWE Power Plants in Germany in 2008 in MW 171RWE npower's Major Power Plants in the UK 170

RWE's Other International Power Plant Portfolio (2008) (II) 168

RWE's German Power Plant Portfolio (2008) (III) 163

The Role of Electricity Purchase Agreements at RWE Power in Germany (2008) 159

RWE Group Electricity Production by Primary Fuel (2008) 157

Generation [154 – 177]

Table of Contents


Trading [204 – 205]RWE Supply & Trading: Full Integration of RWE Group's Midstream and Trading Activities 204RWE's Counterparties in the Gas Market in 2008 205

Transport [206 – 211]RWE's Position in European Gas Transit Business 206RWE Transgas Located in Strategically Important Part of European Transit Network 207RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (I) 208RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (II) 209RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (III) 210RWE's German Gas Market Areas 211

RWE Dea's Asset Resource Contribution (2008) 197

Gas [194 − 220]

RWE's German Electricity Grid (2007) 187How Power in RWE's Electricity Grid Gets to the Customer 186

RWE's German Transmission Business (2007) 188

Grid [185 – 188]Electricity: Grid Fee Cuts of RWE for 2008 185

LNG [202 – 203]

Upstream [194 – 201]

Supply [189 – 193]

The Value Chain of the Upstream Business 194

RWE npower: Value-Oriented Retail Strategy with Growing Customer Numbers 193

Liquefied Natural Gas (LNG) will be of Growing Importance for RWE

RWE Dea's Key Performance Indicators

RWE Electricity Customers by Core Region (2008)

202

199

190

Electricity [154 – 193]RWE [154 – 224]

Excelerate – Our Asset Light Entry into the Attractive Global LNG Market 203

Upstream Oil & Gas – Overview of RWE Dea's Activities 201Investment in Organic Growth: RWE Dea's Capex Plan per Region 200

RWE Dea – Gas and Oil Production, Ambitious New Targets 198

RWE Dea – Reserves/Resources (P50) 196Classification of Reserves & Resources 195

RWE Electricity Sales by Customer Group (2008) 192RWE Group Electricity Sales Volume (2008) 191

RWE Shares in European Electricity Supply Markets (2008) 189

Table of Contents


Investor Relations of RWE AG – Contacts 224Investor Relations [224]

Pension Provisions: RWE's Proceeding for Setting up a Contractual Trust Arrangement (CTA) and Pensionsfonds223Pension Provisions [223]

How the Size of the Provision is Determined 222Nuclear Provisions 221

Nuclear Provisions [221 – 222]Accounting [221 – 223]

Downstream [212 – 220]

Transmission and Storage System in the Czech Republic at a Glance

RWE Shares in the European Gas Downstream Market (2008)

219

212Gas Customers of RWE in Europe (2008) 213

RWE's Regional Gas Companies: Nationwide Coverage in the Czech Republic 220

Gas [194 − 220]RWE [154 – 224]

RWE Ranks Among the Top European Gas Players (2008) 218In 2008, 15% of RWE Group's Gas Consumption was Covered by Own Production 217RWE Group Gas Sales Volume (2008) 216Gas Sales of RWE by Customer Group (2008) (II) 215Gas Sales of RWE by Customer Group (2008) (I) 214

Table of Contents


RWE Generation: No 2 in Europe

EU 27 (2007): 3,184.5 TWh

*) Of which RWE Power: 6%, RWE npower: 1%.

Source: 2007 annual reports

EdF (incl. EnBW) 19%

Others 54%

Enel 4%

Vattenfall 5%

E.ON 7%

RWE*) 7%

GdF/Suez 4%

Market DataPolitical Framework ConditionsAt a GlanceElectricity – GenerationRWE


RWE Market Shares in European Power Generation by Core Region (2008)

in %

*) Including contracted generation.

Source: UCTE 2008, Cambridge Energy Associates 2009, RWE.

31

14 15

4

0

10

20

30

40

Germany UK Hungary Austria*)



RWE's Share in German Power Generation Market1) Relative to Peers (2007)

1) Base: Net Generation in Germany (including self generators): 597.3 TWh.2) Including contracted generation.

Source: Annual reports; BDEW; RWE calculations.

RWE (176.2 TWh) 30%2)

E.ON (124.0 TWh) 21%

Vattenfall Europe(72.8 TWh) 12%

EnBW (73.5 TWh) 12%

Others (150.8 TWh) 25%



RWE Group Electricity Production by Primary Fuel (2008)

0

20

40

60

80

100

120

Lignite Hard coal Nuclear Gas Renewableenergies

Pumpedstorage, oil,

other

Electricitypurchases

in bn kWhTotal bn kWh: 334.2*)

RWE capacityContractually secured capacity

*) The difference between 334.2 bn kWh of power generation output and 317.1 bn kWh of electricity sales is explained by grid losses and own use.

Lignite Hard coal Nuclear Gas Renewable energies

Pumped storage, oil,

other

Electricitypurchases

49.3

31.2

2.4

110.1

28.6

73.9

62.0

5.3



RWE Group Electricity Production by Region (2008)

in bn kWh

*) Net, excluding trading. Purchases for physical deliveries to customers only.

5.31.3

0.7–

0.90.7

3.70.6

Renewable energiesthereof contracts

62.028.6

0.4–

18.0–

43.628.6

Hard coalthereof contracts

334.229.455.7249.1Total

110.122.618.169.4Electricity purchases*)

224.16.837.6179.7Subtotal

2.41.4

––

0.5–

1.91.4

Pumped storage, oil, otherthereof contracts

31.20.118.212.9Gas

49.3––49.3Nuclear

73.95.6–68.3Lignite

Total Other international UK Germany



The Role of Electricity Purchase Agreements at RWE Power in Germany (2008)

Total capacity*): 32.2 GW Total generation: 172.7 TWh

Evonik (STEAG) 13 %

RWE 72 %

Others 9 %

E.ON 6 %Others 3 %

RWE 82 %

Evonik (STEAG) 9 %

E.ON 6 %

*) As of December 31, 2008.

RWE has full entrepreneurial control over power plantsLong-term contracts from fossil-fired and hydro power plantsRWE can use most outside purchases until the end of the power plant’s useful lifePricing is largely dependent on generation costs (fuel, CO2)



RWE Group Generation Output and Capacity by Load Factor (2008)

Output Capacity

Base load1) 83%

Peak load2) 17%

Base load3) 67%

Peak load4) 33%

1) Base in Germany: lignite, nuclear, coal (70%), run-of-river, renewables, gas (cogeneration); base in the UK: coal (70%), gas, renewables; base for other international: lignite (70%), gas (70%), water, renewables.

2) Peak in Germany: coal (30%), gas (condensation), oil, pump storage; peak in the UK: coal (30%), oil, water; peak for other international: lignite (30%), gas (30%).

3) Base in Germany: lignite, nuclear, coal (50%), run-of-river, renewables, gas (cogeneration); base in the UK: coal (50%), gas, renewables, water;base for other international: lignite (50%), gas, water, renewables.

4) Peak in Germany: coal (50%), gas (condensation), oil, pump storage; peak in the UK: coal (50%), oil; peak for other international: lignite (50%).



RWE's German Power Plant Portfolio*) (2008) (I)

Hard coal270100.0270100.02701971RWE PowerEnsdorf C600100.0600100.06001984RWE PowerGersteinwerk Werne Kv2

49.0Steag36451.0714100.07141981RWE PowerGW Bergkamen A709100.0709100.07091985RWE PowerIbbenbüren

75.4Vattenfall, E.ON12524.612524.65081991RWE PowerRostock588100.0588100.05881963, 1969RWE PowerWestfalen A-C

95100.09569.01061963RWE EnergyVSE Unit 12,7513,1013,495Total hard coal

5,4866,2956,295Total nuclear25.0E.ON96675.01,288100.01,2881985RWE PowerGundremmingen C25.0E.ON96375.01,284100.01,2841984RWE PowerGundremmingen B12.5E.ON1,16387.51,329100.01,3291988RWE PowerKKW Emsland

1,227100.01,227100.01,2271976RWE PowerBiblis B1,167100.01,167100.01,1671975RWE PowerBiblis A

Nuclear

10,05110,05110,051Total lignite

118100.0118100.01181901, 1987, 1988

RWE PowerWachtberg54100.054100.054RWE PowerFortuna Nord52100.052100.0521939, 1993RWE PowerBerrenrath

2,050100.02,050100.02,0501955-1975RWE PowerWeisweiler151100.0151100.01511993, 1994RWE PowerGoldenberg941100.0941100.09412003RWE PowerNiederaussem (BoA1)

2,619100.02,619100.02,6191963-1974RWE PowerNiederaussem2,060100.02,060100.02,0601972-1976RWE PowerNeurath2,006100.02,006100.02,0061957-1970RWE PowerFrimmersdorf

Lignite%MW%MW%MW

stake in

PartnerRWE'seconomic

stake

RWE's legal consolidation

stake

Net Capacity

Commis-sioned

OperatingCompany

Country(Germany unless stated)

Power Plant


*) Rounding differences may occur on the power plant list.


RWE's German Power Plant Portfolio (2008) (II)

Oil50.0RuhrEnergie050.0050.01001974RWE PowerScholven G (decommissioned)

119100.0119100.01191994RWE EnergyGroßkayna (enviaM)17100.017100.0171995RWE EnergySermuth (enviaM)

50.0E.ON650.01150.0111987, 1990RWE EnergyLEW Peissenberg (gas oil)141147247Total oil

3,9214,1924,408Total gas49.01151.02251.022RWE InnogyBTB (various sites)

14100.014100.014RWE InnogyHeidelberg427100.0210100.0427RWE EnergyenviaM (various)

21.2Municipal shareholders578.8778.87RWE EnergySüwag Gas10.1989.91090.0102000RWE EnergyLEW Aviko

100.0Krupp-Mannesmann00.0214100.02141975, 1976RWE PowerHuckingen379100.0379100.03791975, 1976RWE PowerHuckingen

100.0Bayer AG00.0260100.02602000RWE PowerGuD Dormagen326100.0326100.03262000RWE PowerGuD Dormagen

12100.012100.0122004RWE PowerDortmund20100.020100.0202004RWE PowerBochum

498100.0498100.04982006RWE PowerWeisweiler VGT G, H4100.04100.042004RWE PowerGoldenberg Gas Motors

112100.0112100.01121984RWE PowerGersteinwerk Werne Kv11,285100.01,285100.01,2851973RWE PowerGersteinwerk F - I

820100.0820100.08201973, 1974RWE PowerEmsland B, CGas

%MW%MW%MW

stake in


stake


stake

Net Capacity

Commis-sioned

OperatingCompany


Power Plant



RWE's German Power Plant Portfolio (2008) (III)

153100.0153100.01531989RWE PowerKöpchenwerk (pump storage)3various3various3RWE EnergyRWE Energy (landfill gas)

49.0051.0151.01RWE InnogyRWE Innogy (landfill gas)50.01950.0050.0381995RWE InnogyBaienfurt (biomass wood)

1100.01100.012007RWE EnergyBiogas plant Ostrau (biomass)217227243Total renewables other

49.0551.01051.010RWE InnogySchöneweide(biomass / hard coal)

12100.011100.0122003RWE EnergyenviaM Malchin (biomass oil)49.0251.0951.032003RWE InnogyKehl (biomass wood)

0100.020100.002006RWE InnogyBergkamen (biomass wood)20100.020100.0202005RWE InnogyBerlin-Neukölln (biomass wood)

2100.02100.02RWE InnogySolar (various sites)Renewables other

529551565Total renewables hydro run-of-river10100.010100.010RWE EnergyenviaM Wasser

22.4Municipal shareholders1377.61777.617RWE EnergySÜWAG WasserVarious shareholders153various153various165RWE EnergyLEW Wasser

244100.0244100.0244RWE InnogyRWE Innogy Laufwasser(various sites)

22.0RADAG6278.08078.080RWE InnogyRADAG (various)32100.032100.032RWE InnogySaarwasser

50.0State contract with Luxemb.250.0550.05RWE PowerLuxembourgPalzem12100.012100.012RWE PowerKW Laufwasser (various sites)

Renewables hydro run-of-river

435252Total renewables wind68.7131.3331.33RWE EnergyWindpark Westerwald (GmbH)42.5957.51557.515RWE EnergyWindpark Westerwald (KEVAG)

22100.022100.022RWE EnergyenviaM (various sites)

12100.012100.012RWE InnogyRWE Innogy Wind (various sites)

Renewables wind (onshore)%MW%MW%MW

stake in


stake


stake

Net Capacity

Commis-sioned

OperatingCompany


Power Plant



RWE's German Power Plant Portfolio (2008) (IV)

31,91733,38034,133Total German capacity

8,7098,6958,709Total contractually secured plants1,096*)100.01,0960.01,096RWE PowerSEO Vianden (pump storage)

870*)100.08700.0870RWE PowerSchluchsee (pump storage)160*)100.01600.0160RWE PowerAustriaKaunertal (pump storage)

37*)100.0230.037RWE InnogySwitzerlandVarious other waterrun-of-river sites

10*)100.0100.010RWE PowerRhein-Main-Donau (water run-of-river)

29*)100.0290.029RWE PowerNeckar (water run-of-river)557*)100.05570.0557RWE PowerOther hard coal811*)100.08110.0811RWE PowerSaarEnergie (hard coal)

2,111*)100.02,1110.02,111RWE PowerRuhrEnergie (hard coal)3,028*)100.03,0280.03,028RWE PowerSTEAG (hard coal)

Contractually secured plants

696969Total other1100.01100.012003RWE PowerSRS Ecotherm

30100.030100.0301996RWE PowerMVA Weisweiler38100.038100.0381987RWE PowerMHKW Karnap

Other%MW%MW%MW

stake in


stake


stake

Net Capacity

Commis-sioned

OperatingCompany


Power Plant

*) Plants where RWE has a contractual right through long-term agreements to the generation.



RWE's UK Power Plant Portfolio (2008) (I)

2,6572,6572,657Total oil549100.0549100.0549RWE npowerOCGTs (gas oil, various sites)968100.0968100.09681969-70RWE npowerFawley

1,140100.01,140100.01,1401982-84RWE npowerLittlebrook DOil

508508508Total cogeneration (gas)15100.015100.0152003RWE npowerHuntsman Tioxide27100.027100.0271998RWE npowerDow Coming

6100.06100.061998RWE npowerIrelandWhitegate9100.09100.091995RWE npowerFort James7100.07100.071999RWE npowerSCA Hygiene Products

99100.099100.0991994RWE npowerAylesford Newsprint81100.081100.0811997RWE npowerBASF58100.058100.0582000RWE npowerBridgewater Paper55100.055100.0551999RWE npowerPhillips Petroleum

135100.0135100.01351999RWE npowerEsso Fawley16100.016100.0161995RWE npowerMillenium Inorganic Chemicals

Cogeneration (gas)

2,4052,4052,405Total gas1,390100.01,390100.01,3901996-1997RWE npowerDidcot B

635100.0635100.06351994RWE npowerLittle Barford380100.0380100.03802001RWE npowerGreat Yarmouth

Gas

4,5754,5754,575Total hard coal1,063100.01,063100.01,0631968-1975RWE npowerTilbury B1,958100.01,958100.01,9581972-1975RWE npowerDidcot A1,554100.01,554100.01,5541971-1979RWE npowerAberthaw B

Hard coal%MW%MW%MW

stake in


stake


stake

Net Capacity

Commis-sioned

OperatingCompany

Country(UK unlessstated)

Power Plant



RWE's UK Power Plant Portfolio (2008) (II)

3100.03100.032008RWE InnogyThe Hollies4100.04100.042008RWE InnogyBilbster

16100.016100.0162008RWE InnogyKnabs Ridge

10,54510,24410,635Total UK capacity

Renewables wind (onshore unless stated)66.72)51)100.0033.351993RWE InnogyKirkby Moor66.72)91)100.0033.391993RWE InnogyTaff Ely66.72)101)100.0033.3101994RWE InnogyBryn Titli66.72)1133.3033.3341996RWE InnogyCarno66.72)233.3033.361996RWE InnogyTrysglwyn66.72)733.3033.3221996RWE InnogyWindy Standard66.72)733.3033.3201997RWE InnogyLlyn Alaw66.72)633.3033.3171997RWE InnogyNovar66.72)333.3033.3101998RWE InnogyMynydd Gorddu66.72)333.3033.381999RWE InnogyBeinn Ghlas66.72)233.3033.372000RWE InnogyLambrigg66.72)333.3033.3102001RWE InnogyBears Down66.72)133.3033.322001RWE InnogyTow Law66.72)481)100.0033.3482003RWE InnogyCauseymire66.72)921)100.0033.3922004RWE InnogyFarr66.72)321)100.0033.3322006RWE InnogyFfynnon Oer66.72)601)100.0033.3602003RWE InnogyNorth Hoyle (offshore)

6100.06100.062007RWE InnogyHameldon Hill5100.05100.052007RWE InnogyBurgar Hill

33534425Total renewables wind

Renewables hydro run-of-river65100.065100.065RWE Innogynpower Renewables

(various sites)656565Total renewables hydro run-of-river

%MW%MW%MW

stake in


stake


stake

Net Capacity

Commis-sioned

OperatingCompany

Country(UK unlessstated)

Power Plant

1) Plants where RWE has a contractual right through long-term agreements to the generation.2) M&G Investment Management Limited, JPMorgan Investment Management Inc.



RWE's Other International Power Plant Portfolio (2008) (I)

18100.018100.0182007RWE InnogySpainSiglos21100.021100.0212007RWE InnogySpainBancal24100.024100.0242005RWE InnogySpainLanternoso39100.039100.0392003RWE InnogySpainRio Gallego24100.024100.0242002RWE InnogySpainPlana Maria22100.022100.0222002RWE InnogySpainBosque Alto

129152192Total gas

Gas49.03351.06551.0652007RWE PowerHungaryMátra

96various87various1272000–2005RWE EnergyHungarySinergy (various sites)

Lignite49.0EnBW, MVM39651.077751.07771967HungaryMátra

396777777Total lignite

Renewables wind (onshore)67.7132.3032.342005RWE InnogyPortugalSirigo67.7132.3032.322003RWE InnogyPortugalBulgueira

10100.010100.0102007RWE InnogyFranceEnergies Hauts Traits10100.010100.0102007RWE InnogyFranceEnergies du Petit Caux18100.018100.0182002RWE InnogySpainAcampo Armijo

22.31377.71677.7161998RWE InnogySpainEE de Muel14100.014100.0142001RWE InnogySpainGrisel I

3100.03100.032005RWE InnogySpainGrisel II19.01981.02481.0242002RWE InnogySpainLos Labrados19.01981.02481.0242002RWE InnogySpainPlana de la Balsa19.01981.02481.0242002RWE InnogySpainPlana de Zaragoza55.65744.4044.41292004RWE InnogySpainDanta54.92145.1045.1472005RWE InnogySpainAldehuelas

354290473Total renewables wind

%MW%MW%MW

stake in

PartnerRWE's

economicstake


stakeNet

Capacity

Commis-sionedOperating

Company

Country

Power Plant



RWE's Other International Power Plant Portfolio (2008) (II)

1100.01100.01RWE EnergyHungaryÉMÁSZ132.3032.331993RWE InnogyPortugalRibadouro (INVESTERG )

Renewables hydro run-of-river45100.045100.0451958–1989RWE InnogyFranceEnergies France (various sites)12100.012100.0121998–2000RWE InnogySpainAERSA (various sites)16100.016100.0161996–2004RWE InnogyPortugalINVESTERG (various sites)

757477Total renewables hydro run-of-river

Renewables other66.7033.300.011994RWE InnogySpainAERSA (solar, various sites)

20100.020100.020RWE InnogyCzech RepublicNachod and others(biomass / lignite)

212021Total renewables other

9741,3141,540Total other international capacity

43,43644,93746,308Total capacity

%MW%MW%MW

stake inPartner

RWE'seconomic

stake


stakeNet

CapacityCommis-sioned

OperatingCompany

CountryPower Plant



RWE Power's Major Power Plants in Germany

Natural GasPower PlantHeating Power PlantGas and SteamWaste Gas Recycling

Brown Coal:Opencast PitPower PlantFactory

Hard Coal:Power Plant

Nuclear Power:Nuclear Power Plants

Other:HydropowerRefuse Incineration



RWE npower's Major Power Plants in the UK

Didcot A 1,958 MW

Aberthaw B 1,554 MW

Didcot B 1,390 MW

Fawley 968 MW

Great Yarmouth 380 MW

Little Barford 635 MW

Littlebrook D 1,140 MW

Tilbury B 1,063 MW

*) CCGT: Combined-Cycle Gas Turbine.

GasCoalCCGT*)

Oil/Gas



0 400 800 1200 1600 2000

>50

45

40

35

30

25

20

15

10

5

1

0 400 800 1200 1600 2000

>50

45

40

35

30

25

20

15

10

5

1

0 400 800 1200 1600 2000

>50

45

40

35

30

25

20

15

10

5

1

0 400 800 1200 1600 2000

>50

45

40

35

30

25

20

15

10

5

1

~44% older than average ~52% older than average ~74% older than average ~44% older than average

Hard coal (9,380 MW) Lignite (9,930 MW) Gas/Oil (3,800 MW) Nuclear (5,490 MW)

1) Westfalen2) BoA 1

Age (years)Age (years) Age (years)

2)

3)

Age (years)

5)

Age Structure of RWE Power Plants in Germany in 2008 in MW

Average age of existing power plantsAverage age incl. new build projects

3) BoA 2&34) IGCC Hürth5) CCGT Lingen

Existing RWE power plantsNew build

Source: RWE.

MW MWMWMW 4)1)



Thermal Efficiency of RWE's German Power Plants

Lignite Coal Gas

German average2)

Highest thermal efficiency of RWE’s power plant projects

1) Lignite-fired power plant with optimised technology.2) Including capacities of power plants owned by RWE.

Weighted degree of efficiencyin %

3638

444346

59

0

10

20

30

40

50

60

70

BoA

2&31

)

Ham

m a

ndEe

msh

aven

(NL)

CC

GT

in L

inge

n

>

>

>



Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (I)

Thermal efficiencyin %

50

40

30

20

10

01957 1972 1987 2003 2009 2020

1957Frimmersdorf:150 MWη = 30.8

1966Frimmersdorf:300 MWη = 31.4

1975Weisweiler:600 MWη = 36.6

1970Niederaußem:300 MWη = 35.8

2003Niederaußem:BoA 11,000 MWη > 43

2009Neurath:BoA 2&31,100 MWη > 43

2020700 °C-TBK1,100 MWη ≈ 50



Lignite-Fired Power Generation: Higher Efficiency, Less CO2 (II)

Drop in CO2 emissions in million t/a

due to new 1,000 MW power plant

5.86.8

9.7

1957 2003 2020η = 30.8% η > 43% η ≈ 50%

- 30% - 40%



RWE Lignite Production in the Rhenish Mining Area

0

20

40

60

80

100

120

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

in million t lignite

Frimmersdorf-Süd

Frimmersdorf-West

Fortuna-Garsdorf

IndenSüdrevier

Zukunft-West

Frechen Bergheim

Garzweiler IGarzweiler II

Hambach I

Inden I + II

Numberof

mines10 11 9 9 5 3 3 3 3 34

Actual values Mining capacityPosition: January 2009.



RWE's Emissions Profile in 2008

Germany: power produced in 2008 in TWh1) UK: power produced in 2008 in TWh

Gas 18.2

Hard coal 18.0

Renewables 0.9Pumped storage,oil, other 0.5

Total 37.6

Lignite 68.32)

Hard coal 43.6

Nuclear 49.3

Gas 12.9

Renewables 3.7Pumped storage,oil, other 1.9

Total 179.7

1) Including electricity procured from power plants not owned by RWE that we can deploy at our own discretion on the basis of long-term agreements, totalling 28.6 TWh (hard coal), 0.6 TWh (renewables) and 1.4 TWh (pumped storage, oil, other).

2) Including plant consumption by RWE opencast mines.

CO2 emissions in 2008

141 million tons

CO2 emissions in 2008

25 million tons



RWE Power's Decommissioning Concept for Nuclear Power Plants

35 – 40%share of costs

5 – 7 years 10 – 15 years 2 – 3 years

Decommissioning

Post operational phaseNuclear dismantling

(immediate, deferred)

Conventional dismantling/

demolitionFinal disposal

Power production has ceased.

Technical infrastructure partly needs to be operated for some further period.

Fuel elements meanwhile cool down in pond storage to be suitable for dry cask (CASTOR) storage on site.

Shut down of systems no longer needed

Treatment of operational materials and wastes

Dismantling of contaminated and activated systems, structures and components.

Materials and waste management (treatment, conditioning).

Conventional demolishing of buildings/components which are no longer under legislation of the German Atomic Energy Act (AtG).

10 – 15%share of costs

about 50%share of costs

Final disposal of decommissioning wastes



RWE's Hard Coal Purchases by Country of Origin in 2008*)

*) All figures refer only to own power plants.

Source: RWE.

in millionmetric tons in %

Russia 5,435,336 42.54

Germany/UK 3,909,762 30.6

Colombia 856,059 6.70

USA 711,679 5.57

South Africa 672,070 5.26

Australia 649,072 5.08

Indonesia 489,359 3.83

Venezuela 28,109 0.22

Poland 25,554 0.20

Total: 12,777,000 metric tons

Market DataPolitical Framework ConditionsAt a GlanceElectricity – FuelsRWE


RWE's Use of Fuels in Own Power Plants (I)

*) Adjusted figure.

Source: RWE.

Use of hard coal in RWE power plants

12.7 12.9

15.2

12.9 12.1

0

4

8

12

16

2004 2005 2006 2007 2008

in million metric tons

Use of lignite in RWE power plants

95.4 100.1 96.3 97.6 101.3

0

25

50

75

100

125

2004 2005 2006 2007 2008

in million metric tons

Use of natural gas in RWE power plants

6.8 6.6

4.6

6.3 5.9

0

1,5

3

4,5

6

7,5

2004 2005 2006 2007 2008

in billion cubic metres

7.5

6.0

4.5

3.0

1.5

0


*)


RWE's Use of Fuels in Own Power Plants (II)

Use of nuclear fuels in RWE power plants

128

90

136129130

0

30

60

90

120

150

2004 2005 2006 2007 2008

in metric tons

Use of biomass in RWE power plants

129

616682

882

1,132

0

200

400

600

800

1000

1200

2004 2005 2006 2007 2008

in thousand metric tons

Source: RWE.


1,200

1,000


RWE Supply & Trading: The Group's Wholesale Risk Pool and Portfolio Manager in Germany

Sells standardforward

products, fuel

spreads, options

Buys CO2certificates, coal, gas

Buyspower

Sellspower

RWE Energy

Sells to customersBuys back-to-backLocks in sales marginBears volume andcredit risk

Industrial

Small and medium enterprises

Municipalities

Residential

Sellspower

RWE STPM2) Continental

Manages RWE’s short-term position (< 2 months) on the Continent, including power plant dispatch, fuels, CO2 and retail load

Transfers day-ahead position

Loadprofile

Transfer of generation capacity incl. fuels

and CO2

Short-term/spot markets (< 2 months) and Intraday market

Balancing and Reserve markets

RWE Power

Long-term asset managementHedges with standard instruments, fuel spreads and spread optionsInternal market maker as regards retail for load profiles/shapeHedges fuels andCO2 for power sold

Embeddedlignite supply

RWE Supply & Trading

Buys forward products / fuel spreads / spread options from RWE PowerManages risk within defined limitsInternal market maker for power, fuels and CO2

Emissions Trading

World coal market

Wholesalepower market

1) Part of gas value chain, for details see section ‘RWE – Gas – Trading’.

2) Short-Term Position Management

Sells capacityand services

Buysand sells

Transfers day-ahead position

Long-term gassupply contracts and gas markets

Sellsgas1)

Sellsgas1)

Market DataPolitical Framework ConditionsAt a GlanceElectricity – TradingRWE


Sellspower

RWE npower Generation

Long-term asset managementHedges CO2 for capability not yet transferred to Trading

Buyspower

Sellspower

RWE npower Retail

Sells to customersBuys back-to-backLocks in sales marginBears volume andcredit risk

Industrial

Small and medium enterprises

Residential

RWE STPM2) UK

When an option is exercised, STPM*) manages generation capability until production (< 1 week)Manages optionality of plants (dispatch including fuels), andretail load

Option exerciseLoadprofile

Sells capacityand services

Buys and sells

Spot market(< 1 week)

Balancingmarket


Buys capabilityfrom RWE npowerManages the spread option within defined limitsInternal market maker for power, fuels and CO2

Emissions Trading

World coal market

Wholesale gas market

Wholesalepower market

Transfer ofcapabilityincl. CO2

Buys CO2certificates

RWE Supply & Trading: The Group's Wholesale Risk Pool and Portfolio Manager in the UK

Buys and sells

Generationavailability

Sellsgas1)

Sellsgas1)


1) Part of gas value chain, for details see section ‘RWE – Gas – Trading’.

2) Short-Term Position Management



Short-Term Position Management is a common function of RWE Power and RWE Supply & Trading functionally lead by RWE Supply & Trading.

Short-Term Position Management: Managing Generation Assets More Efficiently

Short-TermPosition

Management

RWE Power

AssetManagement

Markets for power, fuels and CO2

Sells power plant flexibility

Receives Profit and Loss



What is Short-Term Position Management?

STPM Continental Europe was formed with effect from January 1, 2004 to better minimise the risks and capture trading opportunities in the most volatile short-term energy markets (<2 months).

STPM has the overall responsibility for positions within the short-term markets: STPM buys all power plant flexibility from RWE Power as well as the RWE Power delivery obligations at market price. STPM trades the power plant option and is responsible for the actual plant dispatch. STPM trades in commodities related to the power plant option (power, gas, coal, CO2).

STPM is a profit centre within RWE Supply & Trading, staffed by experts from RWE Power and RWE Supply & Trading and functional lead by RWE Supply & Trading.



Electricity: Grid Fee Cuts of RWE for 2008

TSO ElectricityRWE Transportnetz Strom

Halle

DresdenEssen

Ludwigshafen

Chemnitz

Frankfurt am Main

Stuttgart

Munich

Saarbruecken

Leipzig

Osnabrueck

Koblenz

GelsenkirchenDortmund

Hamburg

BerlinHanover

Augsburg

Bad Kreuznach

RWE

RWE

VSE

Kevag Süwag

Pfalzwerke

LWE

eviaM

Region WestVSE/energis

- 7%

- 1%Region SouthLechwerke

Region EastenviaM

Region NorthRWE Westfalen-Weser-Ems

Region CentreRWE Rhein-Ruhr

Region SouthwestSüwag Energie AG

- 16%

- 8%

- 13%

- 1%

- 5%

Market DataPolitical Framework ConditionsAt a GlanceElectricity – GridRWE


How Power in RWE's Electricity Grid Gets to the Customer

KeywordRWE Transportnetz Strom GmbH (transmission system operator – TSO) handles the RWE Group's full range of transmission grid operations, encompassing the engineering, construction and management of 380 kV and 220 kV grids.Furthermore, RWE TSO Strom coordinates the exchange programme for the northern part of the European integrated power system.

KeywordDistribution grid operations are handled by legally independent entities (distribution system operators – DSOs) beneath the regional companies of RWE Rhein-Ruhr, RWE Westfalen-Weser-Ems, LEW, enviaM, VSE/energis and Süwag.They oversee development plans, investment strategies, maintenance strategies and schedules as well as sales of grid services (including the calculation of grid fees) for medium and low voltage grids.

Peak voltage 220kV/380kVTransmission grid

TSO

DSO

Integrated power grid

Power plantHigh Voltage 110kV

Supra regional distribution gridTransformer station

Large scale industry/railway transportationMedium Voltage 10/20kV

Regional distribution grid

Transformer station

Small scale industry

Low voltage 230/400V

Transformer station

TSO

DSO

Private households/commerce/lighting



RWE's German Electricity Grid (2007)

RWE grid regions in Germany

Circuit length of 337,517 km, with– 89,915 Substations and transformers– 3,837,155 Connection points: end users

and redistributors

20337,5501,671,300Total19206,5501,067,100low voltage (≤ 1 kV)2096,300493,000medium voltage (≤ 60 kV)3123,60075,200high voltage (110 kV)

Distribution3111,10036,000

Transport(extra high voltage (380/220 kV))

RWE in %

RWEGerman market

Length in km

Essen

Ludwigsburg

Frankfurt am Main

Stuttgart

Munich

Saarbruecken

Osnabrueck

Koblenz

GelsenkirchenDortmund

Chemnitz

DresdenLeipzig

Halle



RWE's German Transmission Business (2007)

30,000 MWEffective demand 2007 (RWE control area including grid losses)

340Trader/balancing group supervisors

76Grid customers (380/220 kV-grid)

3,600Number of schedule transactions per day

192 TWhElectricity transmitted

44 GWInstalled capacity in the control area

11,100 kmGrid length (380/220 kV)

380 kV-grid

220 kV-grid

Essen

Frankfurt am Main

Stuttgart

Osnabrueck

Dortmund

Bonn

Karlsruhe

FRANCE

AUSTRIA

POLAND

CZECH REPUBLIC

BELGIUM

NETHERLANDS

LUXEM-BOURG

GERMANY

Bavaria

Baden-Wuerttemberg

North Rhine-Westphalia

Lower Saxony

RhinelandPalatinate



in %

16 17

37

13

68

0

10

20

30

40

Germany UK Hungary Slovakia Austria Poland*)

RWE Shares in European Electricity Supply Markets (2008)

*)

*) Including minority holdings ≥ 20%.

Market DataPolitical Framework ConditionsAt a GlanceElectricity – SupplyRWE


RWE Electricity Customers by Core Region (2008)

in million

RWE Energy RWE npower

7.0

4.2

4.5

Total: 15.5

Germany

Direct customers

Netherlands 0.1Austria 0.2Slovakia 0.6Poland 0.9Hungary 2.2

Indirect customers

(including minority holdings ≥ 20%)



RWE Group Electricity Sales Volume (2008)

*) Difference between electricity production and electricity sales volume due to grid losses, own consumption of lignite production and pumped-storage powerplants.

317.1*)2.318.37.252.5236.8Total

70.1----70.1Electricity trading(net of electricitypurchased fromthird parties)

87.61.05.30.5-80.8Distributors

100.60.67.03.231.158.7Industrial andcorporate customers

58.80.76.03.521.427.2Private andcommercial customers

TotalOthersHungaryPolandUKGermany

January – December in TWh



Industrial and corporate customers 59%

RWE Electricity Sales by Customer Group (2008)


RWE Energy

Total: 179.1 billion kWh

RWE npower


Private and commercial customers 41%Distributors 41%

Private and commercial customers 20%



RWE npower: Value-Oriented Retail Strategy with Growing Customer Numbers

Development of customer numbersin million accounts

2

4.24.44.3 4.2 4.3 4.5

2.62.51.91.9

2.7

2003 2004 2005 2006 2007 2008

Gas

Electricity

Dec 31

6.2(1.2)

6.1(1.4)

6.3(1.6)

6.9(2.1)(of which dual fuel)

Value-oriented retail strategy

Price volatility in wholesale gas and power prices has continued

Competition remains intense

However, RWE npower has increased customer numbers by approx. 600,000 since December 2003

The number of dual fuel customers increased by 83% since 2003

Successful branding and price proposition

RWE npower is continuing to build a value-oriented customer portfolio

7.1(2.2)

6.8(2.2)



The Value Chain of the Upstream Business

€ million

293

€ million

606

ActualLicenses

RWE Dea

thousandkm2

200

Expenses2008

RWE Dea

Capex2008

RWE Dea

Production2008

RWE Dea

millionboe

36

Exploration

Participationin bid roundsFarm in

SeismicData processingDrilling (dry wells)

Drilling*)

EngineeringConstruction(field and infrastructure)

OperationTransportSale

Development ProductionLicensing

*) Inclusive capitalised exploration and appraisal wells.

Market DataPolitical Framework ConditionsAt a GlanceGas − UpstreamRWE


Classification of Reserves & Resources

Range of uncertainty

1PProved

2PProved

+ Probable

3P Proved

+ Probable + Possible

Low estimate Best estimate High estimate

Low estimate Best estimate High estimate

P9090% chance of more than

the estimate


the estimate


the estimate

Res

erve

sR

esou

rces

C1

C2

C3

E1

E2

S1

S2

Com

mer

cial

Sub-

com

mer

cial

Onproduction

Underdevelopment

Planned fordevelopment

Discovered (contingent)

Undiscovered(prospective)

C-Reserves

S-Resources



RWE Dea – Reserves/Resources (P50)

Reserves = proved + probable.

Resources = S1 + S2.

300

560 592

165 126 104

251 280 294

593

468 443

0

200

400

600

800

1000

12001,200

1,000

800

600

400

200

02008 2010e 2012e Outlook

Oil:Replacement rate= 100%

Gas:Replacement rate> 100%

416

1,028

406

1,035

398

Natural gas resources

Natural gas reserves

Crude oil resources

Crude oil reserves

in million bbl oil equivalent – end of year status

893



RWE Dea's Asset Resource Contribution (2008)

1Poland

9Libya

1Denmark4UK

11Algeria13Norway20Germany41Egypt

in %Discovered reserves + resources (C+S)

Discovered reserves + resources (C+S) (RWE Dea share)

North Africa/Middle East 61%

Total: 1,309 million boe2)

1) CIS = Commonwealth of Independent States.2) Barrel of oil equivalent. 1Mauretania

1Netherlands

3Morocco3Ireland

1Algeria1Libya2UK

3Poland5Germany

13Norway67Egypt

in %Undiscovered (risked) resources (E)

Total: 1,793 million boe2)

North Africa/Middle East 74%

Undiscovered (risked) resources (E) (RWE Dea share)

Germany 20%

Europe/CIS1) 19%

Germany 5%

Europe/CIS1) 21%



RWE Dea – Gas and Oil Production, Ambitious New Targets

Target: Doubling of annual production (million boe)

Organic growth through defined development projectsGrowth of P50 reserves (9% CAGR 2006 – 2010) through conversion of existing resourcesGrowth of resources by stepping up exploration in all core areasNumber of exploration/appraisal wells quadrupled since 2005 (10 approx. 40 wells)High exploration/appraisal success ratio maintained (approx. 50%)

2007 2012/13e

Gas

Oil

2016

20

55

0

20

40

60

80

CAGR ~ 11%

36

75



RWE Dea's Key Performance Indicators

1) Source: Herold Global Upstream Performance Review – 2007 Final Report.

2) Operational expenditures, 5-year average.

7.04.7$/bblProduction costs2)

8.44.5$/bblReserve replacement costs (P50)2)

161.6172.0%Reserve replacement rate (P50)2)

13.911.4yearsReserve life (P90)

2002 – 20062002 – 2006

WorldwideIndustry Average1)

RWE DeaIndicators



Investment in Organic Growth: RWE Dea's Capex Plan per Region

*) CIS = Commonwealth of Independent States (Soviet union succession states).

approx. 900606RWE Dea

Egypt: offshore Nile Delta

Libya, Algeria

approx. 550270North Africa

UK: Southern North SeaDenmark: Danish North SeaNorway: Barents Sea; Norwegian SeaCEE/Russia: new ventures

approx. 250226Europe/CIS*)

Gas: further production wells and compression facilitiesOil: further production wells at offshore field MittelplateStorage: extension of storage capacity

approx. 100110Germany

Average p.a. 2009 – 2012

2008

Additionally approx. € 200 – 250 million p.a. exploration expenses as of 2008 (not categorised as capex)

in € million



Upstream Oil & Gas – Overview of RWE Dea's Activities

North Sea/Barents SeaMature regionRWE Dea holds position in Norwegian oil production andis increasing gas production in UK.Objective: – Bring on stream new gas fields in UK– Commence Liquefaction of Natural Gas export from

Norwegian Snøhvit field

GermanyMature regionRWE Dea holds strong position in oil and gas production and gas storageObjective: Stabilise production

North AfricaHigh potential regionRWE Dea holds outstanding position in gas reserves in Egypt and owns licenses in Libya and AlgeriaObjectives: – Boost gas production and Liquefaction of Natural Gas

export in Egypt by intensive drilling and field development– Intensify exploration in Libya and Algeria.

CEE1) / Eastern NV2)

High potential regionRWE Dea holds licenses in PolandObjective:– Identify and assess projects in Russia, Ukraine and

Caspian Region to establish an upstream position

Production & ExplorationExploration

1) Central and Eastern Europe.2) Eastern New Ventures (Russia and Caspian Region).

NORWAY

DENMARK

POLANDUK

ALGERIA LIBYA EGYPT

GERMANY

MAURITANIA

IRELAND


MOROCCO


Liquefied Natural Gas (LNG) will be of Growing Importance for RWELi

quef

actio

nLi

quef

actio

nR

egas

ifica

tion

LNG offers customers flexibility and alternative supply sources. LNG offers producers the opportunity to capturebest market price on a global basis (somethingthat pipeline gas does not always do). LNG markets continue to be clustered regionallyaround the Americas, Europe and North East Asia, but growing interaction offers increasedopportunities to those that control LNG production, shipping and regasification.

Snøhvit liquefaction

ExistingUnder constructionProposed

Adria LNG regasification

Algeria liquefactionLibya liquefactionEgypt liquefaction

Market DataPolitical Framework ConditionsAt a GlanceGas − LNGRWE


Total capacity at Excelerate entry points ~154 cargoes p.a.RWE Dea upstream positions with LNG potential in 4 countriesLarge LNG fleet will allow diversions to worldwide markets

Gulf Gateway

WilhelmshavenGasPort

Northeast Gateway

Adria

Excalibur (traditional vessel)

Excelsior

Excellence

Excelerate

Explorer

Express (due Q2 09)

Exquisite (due Q3 09)

Exemplar (due Q4 09)

Expedient (estimated Q2 10)

LNG Fleet

Teesside GasPort

RWE Dea upstream activities related to LNG

Bahia Blanca GasPort

Kuwait GasPort

Excelerate – Our Asset Light Entry into the Attractive Global LNG Market

Market DataPolitical Framework ConditionsAt a GlanceGas − LNGRWE


RWE Supply & Trading: Full Integration of RWE Group's Midstream and Trading Activities

Gas procurement for RWE Energy's supply operations

Gas procurement for RWE Power's power plants

Management of gas sales for RWE Dea

Commercial responsibility for all liquefied natural gas (LNG) activities

Non-regulated gas transport, transit and storage

Functional responsibility for gas trading

Econ

omic

tran

sfer

of s

uppl

y ar

rang

emen

tsRWE Power

Supp

lyin

g

RWE Energy

RWE npower

RWE Dea

Power Generation

UK, Germany

Downstream business

UK, Germany, Netherlands,

Czech Republic, Slovenia

Consolidation, optimisation and growth platform for RWE's unregulated gas midstream and trading business

Market DataPolitical Framework ConditionsAt a GlanceGas − TradingRWE


RWE's Counterparties in the Gas Market in 2008

Continental Europe

Approx. 90 counterparties

Counterparty structure: Overall traded volume

Counterparty examples: EdF, Electrabel, Essent , Exxon, Gaselys, Merrill Lynch, Morgan UK, Nuon, Total, UBS

UK

Approx. 60 counterparties

Counterparty structure: Overall traded volume

Counterparty examples: Accord, Barclays, BP, Deutsche Bank, EdF, Essent, GSI, Merrill Lynch, SSE, Sempra

Top 10 47%

Other counterparties 53%

Top 10 61%

Other counterparties 39%

Trading volume: 480 TWh Trading volume: 1,290 TWh

Market DataPolitical Framework ConditionsAt a GlanceGas − TradingRWE


RWE's Position in European Gas Transit Business

Transgas

Production fieldPipeline operational

Significant position in transit of Russian natural gas to EuropeDirect long-term contractualrelations with Gazexport

MEG

AL WAG

TAG

SOL

HAG

Stegal

Bulgaria

Mac

edon

iaSoyuz

Yam

alEu

rope

NothernLights

Ureng

oy

Prog

ress

Market DataPolitical Framework ConditionsAt a GlanceGas − TransportRWE


8.9

7.9

6.1

22.3

7.6

35.9

10.4

1.1

5.8

0.6

Source: Gazprom Quarterly Reports 2008.

MEGAL

AUSTRIA

POLAND

CZECHREPUBLIC

GERMANY SLOVAKIA

HUNGARY

CROATIASLOVENIA

FRANCE

ITALY

DEU

DAN

RHG

NEL

NEGP

OPAL

NETRA

JAGAL

YAMALBBL

WEDAL

MEGAL

MIDAL

STEGAL

SELWAG

TAG

HAG

TEN

P

Nabucco

Hora Svate Kateriny

Beregdaroc

Steinitz

RWE Transgas

SWITZERLAND ROMANIA

UKRAINE

Imports of Russian gas (bcm/y)

Gazprom gas sales volumes 2008

RWE transport capacity

BELGIUM

LUXEMBOURG

NETHERLANDSUKBELARUS

DENMARK

RWE Transgas Located in Strategically Important Part of European Transit Network



RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (I)

RWE Transportnetz Gas signed a cooperation agreement with other grid operators, which allows for gas to be transmitted under standardised conditions. RWE thus offers its customers flexible ways to have gas fed in and out of the grid in the various market areas. RWE customers will be able to transmit gas across grid levels and grid operators within market areas with just one entry contract and one exit contract.

Grid access was modified and simplified as of October 1, 2008, and stipulates the following conditions for gas grid operators: Non-discriminatory access Efficient grid access suitable for all trading activities A transaction- and transmission path-independent system Flexible usability and manageability of system capacity Common contractual standards among grid operators Simplest possible switch of suppliers – for household customers as well



RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (II)In terms of grid access, this means:

Conclusion of just two contracts− All suppliers/transmission customers are able to supply an end consumer/customer by making just two bookings.− Only one entry contract and one exit contract will be needed.− All other measures required to process grid access will be carried out and agreed on by the grid operators amongst themselves. − Starting in October 2008, transmission system operators (TSOs) including RWE Transportnetz Gas took charge of balancing power

purchases to offset fluctuations in the amounts of electricity fed into the grids in the market areas they coordinate.

Market areas covering multiple grid operators− Vertically integrated grid market areas that cover several grid operators enabling transmission customers to make flexible use of

booked capacity are defined. Within these market areas, customer switches will be possible based on a simplified method.− Currently, there are 10 market areas nationwide. RWE Transportnetz Gas is responsible for the overarching management of balancing

zones for two market areas.− A market area is like a system of interlinked grids operated by various grid operators, in which gas of uniform quality is transmitted.

Each market area starts at the entry points and extends as far as the exit points at the gas customers' sites.

There will be a decrease in the number of market areas served this year, since several of them will be combined.

RWE Transportnetz Gas joined the “Marktgebiete.com” booking platform in February 2009. It enables transmission customers in seven market areas between Aachen and Frankfurt/Oder as well as between Emden and Chemnitz to book capacity as easily as from a web store. Other partners to the platform are the grid operators ONTRAS, EWE Netz, Erdgas Münster Transport, Gasunie Deutschland Transport Services, DONG Energy Pipelines and Statoil Hydro Deutschland.



RWE's Entry-Exit System for the German Gas Market: The Two-Contract Model (III)

Virtual trading points− Virtual trading points, at which gas can be supplied and traded, will be established in every market area at the supra-regional long-

distance gas grid level.− Access to these virtual trading points will be obtained via an entry contract/entry capacity booking with the supra-regional grid operator

and an exit contract/exit capacity booking with the grid operator who owns the exit point.− There will be no need to book capacity separately for purely trading gas at these points. This is supposed to facilitate trading as long as

there is sufficient liquidity at these points.Switching suppliersIt is possible to switch between suppliers (without increasing capacity) within the same market area, without performing additional capacity checks.Management of balancing zonesOverarching management of balancing zones for each market area will be handled by the balancing system operator. All transmitted gas is accounted for as part of this process. Possibilities of gas trading in the RWE Entry-Exit System− Through an Internet marketplace RWE transmission customers are enabled to trade with each other.− Virtual trading points increase the flexibility of the traders. − RWE takes part in the Internet platform “trac-x” (implemented by several German Transport System Operators) where gas customers

can trade transmission capacity. RWE EESy Opens New Markets to Biogas Plant OperatorsBy injecting biogas into natural gas grids, biogas producers can improve both sales and revenue:− They can sell biogas to operators of block-type thermal power plants capable of converting the gas into electricity and heat with a high

degree of efficiency, enabling them to benefit from subsidies under the German Renewable Energy Act (EEG). − They can sell their generation to industrial enterprises and gas traders intending to boost their image by using eco-friendly energy, or sell

the biogas to ecologically oriented customers. − Another option would be to sell the biogas to natural gas filling stations. − With RWE EESy, biogas suppliers can offer biogas at the virtual trading point (entry), using it as a hub for selling the gas to as many

customers as they wish (exit).



RWE's German Gas Market Areas

The transmission network of RWE Transportnetz Gas has a total length of 4,000 km and includes two market areas.

Market area Calorific valuecomprimising subgrids of natural gas

kWh/mN3RWE I (H-Gas) 10.6 - 12.8RWE II (L-Gas) 9.5 - 10.7

GMA Gas blending facilitiesHydraulic separationEntry-points

UGS Underground gas storage facilitiesFEA Liquefied natural gas facility



RWE Shares in the European Gas Downstream Market (2008)

*) Including minority holdings ≥ 20%, supply to end customers.

8

39

69

96

0

20

40

60

80

100

in %

Germany CZ*)UK*) NL*)HUN*)

Market DataPolitical Framework ConditionsAt a GlanceGas − DownstreamRWE


Gas Customers of RWE in Europe (2008)

in million

1.0

2.6

2.0

2.3

2.1

0.3

RWE Energy RWE npower

Total: 7.7

4.1

Germany

indirect customers(including

participations ≥ 20%)

direct customers

Others

Hungary

Czech Republic



Gas Sales of RWE by Customer Group (2008) (I)

RWE Energy




Distributors 35%


Distributors 87%


RWE Power



Gas Sales of RWE by Customer Group (2008) (II)

RWE npower






RWE Group Gas Sales Volume (2008)

January – Decemberin TWh

327.834.658.280.3154.7Total

110.3––15.395.0Distributors

106.926.99.731.538.8Industrial and corporatecustomers

110.67.748.533.520.9Private and commercialcustomers

TotalOthersUKCzech RepublicGermany



In 2008, 15% of RWE Group's Gas Consumption was Covered by Own Production

Being active in all stages of the value chain, we can balance our earnings.

In 2008, 15 % of our gas sales volume and of the gas used in our power stations is covered by RWE's own oil and gas production.

Our aim is to grow equity gas organically; our target is to double hydrocarbon production to 12 bcm p.a.

RWE Dea aims to gain resources in new markets (e.g. Caspian region, Black Sea region, Russia) in addition to the focus regionsNorthwestern Europe, North Africa.

RWE Dea wants to grow resource bases and upgrade identified resources to proven reserves.

Equity Gas/Oil (Upstream)5.8 bcm*)

RWE Dea

Gas-fired power generation and gas sales(Downstream)40 bcm*)

RWE Power

RWE npower

RWE Energy

RWE Supply& Trading

*) For simplification, this number is stated in bcm gas equivalents. The relevant number in million barrel oil equivalents would be:upstream 36.0 mboe and downstream 250 mboe.



1) Excluding RWE Supply & Trading. Rounding differences may occur.2) Including potential extensions.3) Share in German grid: Transmission System Operator 11%, Distribution System Operator 10%.

RWE Dea RWE Energy RWE npower RWE Group

Gas reserves in oil equivalent in million m3 48 – – 48

Gas production in bn m3 3.3 – – 3.3

Storage capacity in bn m3 1.9 4.22) – 6.1

Pipelines in km (total)3) – 95,2005) – 116,405

Gas transport gridGermanyAbroad

Gas distribution gridGermany Gas pressure regulation and metering station Connection points: end users and redistributors

Abroad

7,7005)

4,1005)

3,6005)

87,5005)

30,7005)

2,850783,00056,8005)

Customers in million – 3.66) 2.6 6.2

Sales volume in bn kWh 524) 242 58 352

External gas revenue in € bn 1.84) 9.7 2.1 13.8

4) Including oil sales/oil revenue.5) 2007 figures; excluding connection lines.6) Fully consolidated companies;

7.7 million customers including shareholdings > 20%.

RWE Ranks Among the Top European Gas Players (2008)1)



Transmission and Storage System in the Czech Republic at a Glance

AUSTRIA

POLAND

CZECHREPUBLIC

SLOVAKIA

Hradec Králové

Praha

České Budĕjovice

Brno

HPS Olbernhau

HPS Waidhaus

CS Veselí n. L.

CS Kralice

CS Hostim

SF Háje

SF D. Dunajovice SF Tvrdonice

SF ŠtramberkSB Lobodice

Ostrava

Transgas headquartersGas transmission systemVery-high pressures systemCompressor stationBorder transfer stationInland transfer stationTransfer and metering stationUnderground storage facilityHeadquarters of regional distribution companies

In the Czech Republic, RWE holds exclusive license for transmission and licenses for storage and supplyof natural gas

RWE has a 100% stake in RWE Transgas

GERMANY

SF Třanovice

Ústí n. Labem

Plzeň

MTS Hora Sv. Kateřiny

CS Kouřim

CS BřeclavHPS Lanžhot

CS Strážovice



RWE's Regional Gas Companies: Nationwide Coverage in the Czech Republic

AUSTRIA

POLAND

CZECHREPUBLIC

GERMANY

SLOVAKIA

SMP

JMP

PP

STP

Majority owned by RWE

Total number of customers: approx. 2.3 million

Gas consumption in 2008: industry: 51%; commercial: 15%; households: 34%

VČP

SČP

JČP

ZČP



Nuclear Provisions

Provisions for uncertain liabilities as per IAS 37

Public-law liabilities under Sec. 9a of the Germany Nuclear Energy Act

Provisions are made for

1) Disposal of spent nuclear fuel assembliesFlasks, transport, conditioning, intermediate and final storage

2) Decommissioning of nuclear power plantsPost-operation phase, deconstruction, removal, final storage

3) Disposal of radioactive operating waste (e.g. cleaning cloths, oils, resins) Conditioning, flasks, intermediate and final storage

Since 98/99 FY: recognition of provisions as per IAS 37

Inflation of current cost to the assumed disposal date by a set inflation rate; then discountingof the result back to today (discount rate 5.0%)

Market DataPolitical Framework ConditionsAt a GlanceAccounting – Nuclear ProvisionsRWE


How the Size of the Provision is Determined

Material is earmarkedfor disposal

Step 1:Determine disposal costs at

current price level

Step 2:Inflation by priceincrease rate k Future cost

(as per IAS 37):market value of costs

in n years, when disposal takes place

Step 3:Discount by rate i

(i = 5.0% p.a. before taxes)

Present value offuture cost

Transfer to provisions

t0 tn

Market DataPolitical Framework ConditionsAt a GlanceAccounting – Nuclear ProvisionsRWE


Pension Provisions: RWE's Proceeding for Setting up a Contractual Trust Arrangement (CTA) and Pensionsfonds*)

RWE has externalised the major share of the pension provisions into a CTA and Pensionsfonds*)

Reasons for setting up a CTA/Pensionsfonds*): Increased transparency allowing better international comparison Increased transparency of funding for pension liabilities Additional protection of pensions against insolvency

Timing for the process: Q1 2007 transfer of ca. € 7.9 bn assets into the CTA as an initial funding amount Transfer of ca. € 4.6 bn assets from the CTA into the Pensionsfonds*) effective as of November 1, 2007 to cover the pension liabilities

of the retired employees Q3 2008 transfer of another ca. € 1.4 bn assets into the CTA as an initial funding amount for further liabilities to be covered Q3 2008 transfer of another ca. € 0.8 bn assets from the CTA into the Pensionsfonds*) to cover the pension liabilities

of the retired employees Subsequent to the initial funding transactions, regular funding of newly accumulated pension liabilities (annual service cost) by

contributions to the CTA Subsequent to the initial funding transactions, regular transfers from the CTA into the Pensionsfonds*) with respect to retirements Parts of the remaining unfunded pension liabilities (€ 1.9 bn) may be transferred into the CTA/Pensionfonds*) in the following years

Neutral from Rating Agencies' perspective

*) Separate legal entity under the supervision of the German Federal Financial Supervisory Authority (BaFin); legal standing differs from that of typical UK and US pension funds.

Market DataPolitical Framework ConditionsAt a GlanceAccounting – Pension ProvisionsRWE


Investor Relations of RWE AG – Contacts

Gunhild GrieveManager Investor RelationsTel.: +44 207 015 5459E-mail: [email protected]

Oliver van der MondManager Investor RelationsTel.: +49 201 12-15141E-mail: [email protected]

Lars KorinthManager Investor RelationsTel.: +49 201 12-15043E-mail: [email protected]

Ingo AlphéusVice President Investor RelationsTel.: +49 201 12-15030E-mail: ingo.alphé[email protected]

Martin VahlbrockManager Investor RelationsTel.: +49 201 12-15055E-mail: [email protected]

Dr. Burkhard PahnkeManager Investor RelationsTel.: +49 201 12-15182E-mail: [email protected]

RWE AGOpernplatz 145128 EssenGermany

Cornelia RathManager Investor RelationsTel.: +49 201 12-15039E-mail: [email protected]

Contacts for Institutional Investors & Analysts:

Contacts for Private Investors:

Market DataPolitical Framework ConditionsAt a GlanceInvestor RelationsRWE

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