Burgess COMMENTARY

Peter Burgess

Essen, 24 October 2015, RWE AG Deutsch “Standby”* of lignite-fired power plants contributes to climate targets Five 300-MW units of RWE at Fimmersdorf, Niederaußem and Neurath to serve as “standby*” Power generation from Rhenish lignite to decrease by some 15 percent Necessary personnel downsizing to be socially cushioned

The German Federal Government determined on 1 July 2015 that the German lignite industry has to make an additional contribution to the climate protection action program. As a result, the greenhouse gas emissions in Germany are to be reduced by 40 percent by 2020 versus the level of 1990. 12.5 million tons of carbon dioxide are to be saved in the lignite industry by transferring power plants with a capacity of altogether 2,700 megawatts step-by-step into a “standby*” for four years before being shut down. This is what the Federal Ministry of Economic Affairs agreed on with the companies involved. RWE will transfer five power plant units with a total capacity of some 1,500 MW into the “standby”. The company currently operates 20 units with a total capacity of just over 10,000 MW in the Rhenish lignite area. “This solution will enable our lignite-fired power plants to make a major contribution to the additional CO2-reduction of 12.5 million tons. This is positive. However, it hits the company hard and means a huge burden for our employees. After all, our power generation from Rhenish lignite will decline by 15 percent”, said Peter Terium, CEO of RWE AG. “There is no doubt that we will play a constructive part in shaping the energy transition,” Terium went on to say. “This transformation has to happen without any structural disruptions. It must not demand too much of the companies, their employees and the affected regions involved.” Under the agreement, lignite-fired units will be taken off the grid each for four years between 2016 and 2019. They will only be available as facilities of last resort for a limited period of time to safeguard power supplies. During the period of four years the units will be kept in standby mode by the required qualified staff. The rules for the technical deployment concept and the remuneration for this “standby”* will be laid down by law by the Federal Government. The “standby”* of the 300 MW units registered by RWE will start for units P and Q at Frimmersdorf on 1 October 2017, for units E and F at Niederaußem on 1 October 2018 and for unit C at Neurath on 1 October 2019. After the period of four years, the respective units are to be shut down for good. “When selecting the units, we carefully evaluated all the technical, economic and licensing-related aspects; the regional economic impact has also been taken into account. It was important to safeguard the future viability of the remaining units, sites and opencast mines. Another important factor was the possibility to keep the transformation socially acceptable and fair”, explained Matthias Hartung, CEO of RWE Power AG. * “Standby” refers to the German term “Sicherheitsbereitschaft” used by the German Federal Ministry of Economic Affairs. Contact: Dr. Peter Heinacher RWE AG Corporate Affairs T + 49 201/12-15596 Stephanie Schunck RWE Power AG Corporate Communications T +49 201/12-22088