Safeguard existing business – exploit growth potential

• Potential for optimisation of several hundred million
• EnBW also reinforces its generation position in the field of renewable energies
• Market entry in Turkey imminent

Karlsruhe. EnBW Energie Baden-Württemberg AG plans to invest a total of € 7.7 billion by the year 2011. It thereby intends to safeguard its existing business in the long term and exploit growth potential. “We are investing in the sustainable and profitable growth of EnBW, strengthening Germany as an energy location, and our investments will also make a contribution to boosting the economy in our country,” said Hans-Peter Villis, CEO, at this year’s annual general meeting of EnBW.

EnBW is well equipped for the coming years
Potential for optimisation of several hundred million

EnBW considers itself well equipped for the coming years. Revenue increasing by 10.8% in 2008 to € 16,305.4 million and adjusted earnings before interest and taxes (adjusted EBIT) improving by 14.8% in comparison to the prior year to € 1,793.9 million provide EnBW with sound earnings power. Nevertheless, even EnBW will not be able to escape the pull of the current economic crisis. Electricity sales to industrial customers fell by 14.1% in the first quarter of 2009 following the development of the general economy.

"Growth and consolidation"

“We have managed our business well and have done our homework. EnBW is efficient and profitable. In addition, our ongoing efficiency increases will lead to savings of several hundred million in the medium term,” said Villis.

Building on this earnings power, EnBW pursues a clear strategy. “We combine growth and consolidation,” continued Villis. EnBW will continue to make its investments while observing strict operational criteria and ensuring that it retains its A rating.

Alliance with EWE AG

The planned acquisition of 26% of the shares in EWE AG will open up a wide range of development options for both companies, particularly in the field of energy generation and in the gas segment. EnBW is confident that all relevant issues relating to the proceedings pending before the Federal Anti-Trust Office will be resolved by mid-year, allowing the alliance forged between EnBW and EWE in June 2008 to be put into practice.

In addition to acquisitions to reinforce EnBW’s position in the gas business, EnBW also invests in electricity generation. Our aim is to significantly expand our generation position in the field of renewable energies and maintain our generation capacities from conventional power stations. In addition, we intend to gradually enter the Turkish market.

Renewable energies are to be expanded

EnBW plans to generate sustainable and profitable growth in the field of renewable energies. With its acquisition of three new onshore wind farms in Lower Saxony (Schwienau II with 10 megawatts, Buchholz with 36 megawatts) and Brandenburg (Alt Zeschdorf with 6 megawatts) EnBW has significantly increased its wind power capacities to 80 MW (previously 28 MW). With an annual output of around 112,000 megawatts these wind farms generate electricity for more than 60,000 people. Likewise, EnBW is consistently implementing its projects in the area of offshore wind farms. Following EnBW’s acquisition in 2008 of the rights to build a total of four offshore wind farms with a total output of around 1200 megawatts off the German coast of the North Sea and the Baltic Sea, all major contracts have now already been awarded for the construction of the first wind farm, Baltic 1 (around 50 megawatts). EnBW has thus taken an important step towards implementing the first commercial offshore wind farm in Germany. Baltic 1 is scheduled to go into operation in 2010.

EnBW’s investments in the field of renewable energies include capital expenditure on hydro-electric power. The construction of the new run-of-the-rive power station in Rheinfelden will cost in excess of € 400 million. The new power station will have four tubular turbines, each with an output of 25 megawatts. “The first turbines of our new power station will go into operation in the first half of 2010. The total output of the power station will be sufficient in future to provide electricity for 330,000 people,” stated Villis.

Iffezheim power station is similarly being expanded. “In only a few weeks time work will start on expanding the power station by adding a fifth turbine," Villis announced. Preparatory measures for the construction work have already started at Iffezheim. With the new turbine (38 megawatts), Iffezheim power station will then have an installed capacity totalling 148 megawatts and generate electricity for more than 500,000 people. This makes Iffezheim one of the largest run-of-the-river power stations in Europe.

Market entry in Turkey

In the context of EnBW’s entry into the Turkish market, the focus similarly is on renewable energies. Together with the Turkish industrial conglomerate Borusan Holding, EnBW intends to build up generation capacities of around 2000 megawatts over the coming twelve years, primarily in the field of renewable energies. A joint venture is scheduled to be formed over the new few days.

Hans-Peter Villis: “Our aim is, and remains, to virtually double our share of renewable energies to 20%. Our current projects clearly show that we consistently put into practice everything we announce. Nevertheless, supply reliability, viability and the demands of climate protection can only be purposefully combined with a broad energy mix involving all forms of generation.”

Strengthening conventional generation

Accordingly, EnBW also invests in state-of-the-art and efficient coal power stations. EnBW has secured the option to develop a hard coal power station in Dörpen (Emsland) jointly with the Swiss BKW FMB Energie AG (BKW). The technical concept for the facilities is scheduled to be completed by summer 2009.

In addition, EnBW is to acquire shares in Lippendorf and Bexbach power stations from E.ON AG, thus expanding its generation capacities. This brought the negotiations to a successful conclusion following the memorandum of understanding on the sale of the shares signed by E.ON and EnBW at the end of 2008. With the acquisition of E.ON’s share (50%) in Lippendorf’s Unit S, EnBW now has more than 880 megawatts of installed capacity. Similarly, EnBW has acquired from E.ON 8.3% of the shares in Bexbach power station. EnBW already held a 50% share in each of the power stations. The acquisition of the shares is still subject to the approval of the European Commission.