Delivering long-term value through sustainable management As of December 2017
Disclaimer This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management, and are based on information currently available to the management. Forward-looking statements shall not be construed as a promise for the materialisation of future results and developments and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those described in such statements due to, among other things, changes in the general economic and competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, affecting the Company, and other factors. Neither the Company nor any of its affiliates assumes any obligations to update any forward- looking statements. RWE AG | SRI presentation | December 2017 2
Contents I. Strategic outlook 5 II. Sustainability challenges and commitments 10 III. Governance & management compensation 30 RWE AG | SRI presentation | December 2017 3
Sustainable management is integral for long-term value creation ✔ Reliable and flexible provider of affordable and secure energy supply ✔ Target to reduce CO 2 emissions by 55 to 65 million tonnes by 2030 ✔ Development of low carbon generation projects and new technologies ✔ Strong track record of exemplary recultivation of lignite mining areas ✔ Focus on providing a safe, inclusive and inspiring workplace ✔ Committed to long-term sustainable value creation RWE AG | SRI presentation | December 2017 4
Strategic outlook RWE AG | SRI presentation | December 2017 5
Continuing to actively shape our future Operating business Portfolio management Lignite & European Supply & innogy Nuclear Power Trading Provider of secure and affordable Financial investment to energy supply cover long-term liabilities RWE AG | SRI presentation | December 2017 6
Strategy designed to benefit from market requirements Traditional energy markets Renewables expansion Future energy markets > Established merit order > Decreasing conventional > Increasing use volumes of electricity > Focus on volume and fuel efficiency > Intermittent production > Emerging technologies > CO 2 reduction via > Reduction of firm capacity > Remuneration conventional new-build of firm capacity Strategic approach Optimise existing operations Enhance portfolio Tap into evolving opportunities RWE AG | SRI presentation | December 2017 7
Powering. Reliable. Future. Evolution of technologies for firm capacity Conventional plants Flexible plants Storage Sector coupling > Operational > Proprietary > Sizeable pumped > Strong R&D track excellence across engineering storage facilities record all technologies know-how > Operational battery > Scalable projects > Strong cost > Dedicated storage projects (once commercially optimisation track commercial viable) record optimisation unit + + - TWh Max TWh Flex > Growing reliance on electricity increases need for firm capacity > Broader framework decisions drive implementation rate of technologies > Comprehensive system integration and commercial optimisation skills essential for operations RWE AG | SRI presentation | December 2017 8
Strategic focus on evolution of existing business portfolio Optimise Enhance Tap into evolving existing operations portfolio opportunities Lignite & Nuclear/ European Power > Explore technologies European Power able to provide security > Develop portfolio of supply > Manage cost base for future market > Invest selectively in requirements > Apply capital allocation new technologies discipline > Participate in (e.g. batteries) opportunistic asset > Actively manage consolidation (core portfolio markets) Supply & Trading Supply & Trading > Restore profitability > Expand organically RWE AG | SRI presentation | December 2017 9
Sustainability challenges and commitments RWE AG | SRI presentation | December 2017 10
Strong commitment to corporate responsibility Focus area Target 2016 > We are committed to reduce our CO 2 emissions in Reduction of line with European and national greenhouse 55 – 65 m tonnes CO 2 Climate change 140 m tonnes reduction targets to support the UN climate goals emissions by 2030 > We strive to safeguard water resources, protect No major Environment diversity and preserve the habitats at the locations environmental 0 accidents of our operations accidents > We aim for full compliance with internationally Supply chain recognised social and environmental standards as 100% coverage 99.7% integral part of our supply contracts > We seek to guarantee the health and work ability LTIF 1 ≤ 1.8 Health & Safety 2.1 LTIF 1 of our employees and the employees of our by 2018 subcontractors > We want to maintain and promote the motivation 30% 2 women on of our employees Workforce 1 st management 25% 2 > We promote diversity, inclusion and social level by 2022 engagement in the company > We are committed to the Group-wide compliance with RWE’s Code of Conduct 100% compliance Resilience 100% > We aim to effectively protect our operations from with Code of Conduct cyber attacks 1 Lost time injury frequency | 2 RWE AG RWE AG | SRI presentation | December 2017 11
Climate change Support of UN climate goals and Paris pledge to limit temperature increase to 2ºC ✔ Doubling of gas-fired capacity over the last 10 years ✔ 18% reduction of CO 2 emissions since 2012 Target to reduce CO 2 emissions by 55 to 65 million tonnes by 2030 ✔ compared to 2015 ✔ Investments in low-carbon technologies, e.g. CCGTs, batteries ✔ R&D of new technologies to support energy transition RWE AG | SRI presentation | December 2017 12
Climate change Doubling of gas- fired capacity in RWE’s generation portfolio over last 10 years RWE generation capacity in core markets Conventional power generation capacity as of 31 December 2016 (net, in %) 1 of the RWE Group (net, in GW) 3 1 2006 2016 18 UK 8.5 GW Gas 6.9 15.2 121% 10 78 17 39 Germany 26.3 GW 3 15 Coal 2 24.7 20.2 -18% 19 Netherlands/ 38 Belgium 5.4 GW 56 -36% Nuclear 6.3 4.1 3 Lignite Hard coal Nuclear Gas Hydro Biomass Other 1 Excluding innogy, Mátra in Hungary (0.8 GW) and Denizli in Turkey (0.8 GW) | 2 Coal = Hard coal and lignite RWE AG | SRI presentation | December 2017 13
Climate change Significant CO 2 reduction in line with broader European and national roadmap CO 2 emissions by RWE in Germany, Benelux and the UK in million tonnes > Shut-down of coal-fired power plants, e.g. Voerde Target 1 : minus 55 – 65 A/B (2017), stand-by million tonnes reserve (2017-2019), 171 vs. 2015 2 -18% Gersteinwerk K2 (2019) 140 > End of Inden mine and shut- ca. -15% down of adjacent power plant site Weisweiler ca. -30% > Conversion of Dutch coal- fired power plants Amer 9 and Eemshaven to biomass co-firing > Lower load hours of lignite and hard coal plants 2012 2016 2020 2030 1 Referring to our existing power generation portfolio | 2 2015 CO 2 emissions: 141 m tonnes Note: Excludes emissions of Mátra in Hungary RWE AG | SRI presentation | December 2017 14
Climate change Lignite contributes majority of CO 2 reduction 2020 2030 Planned Stand-by reserve End of Inden mine capacity decrease 2 x 300 MW Weisweiler 1 2 x 300 MW Frimmersdorf 2017 2021 ~2030 2 x 600 MW Weisweiler 1 2 x 300 MW Niederaußem 2018 2022 1 x 300 MW Neurath 2019 2023 By 2020 By 2030 CO 2 reduc- -15% tion vs. 2015 -40 % ‒ -50% > Transfer of 1.5 GW into stand-by reserve > Shut-down of adjacent plant site Weisweiler > Final shut-down after 4 years in reserve > Additional CO 2 reduction measures and options (efficiency enhancement, reduction of full-load hours, lower capacity utilisation) 2 1 When Inden mine’s supply comes to an end | 2 Depending on expansion of renewable energy sources RWE AG | SRI presentation | December 2017 15
Climate change Various low carbon projects in the pipeline Biomass Gundremmingen Tilbury Energy Centre > Conversion to biomass > Development of open cycle > Development of three new- co-firing of Amer 9 (80%) gas turbine plant for grid build options: and Eemshaven (15%) stabilisation reserve – Combined cycle gas > Total subsidies of € 2.6 bn > Use of nuclear power plant turbine (CCGT) plant of for capex and higher site with existing grid up to 2,500 MW procurement costs for connection and infrastructure – Open cycle gas turbine biomass > Planned capacity of plant of up to 300 MW > Total CO 2 reduction of approximately 650 MW – Battery storage facility of approx. 4 million tonnes per > Expected tender decision by up to 100 MWh annum with full targeted TSO in 2018 and final co-firing capacity > Expected participation in investment decision in 2019 capacity market auction in 2021 (provided all necessary planning and environmental permissions have been granted) RWE AG | SRI presentation | December 2017 16
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