Energy Transition or Electricity Transition?wec-france.org/DocumentsPDF/Evenements/6-Forum-Europeen...901 1,160 226 197 87 459 44 19 34 We are a global leader in wind energy and operate

Energy Transition or Electricity Transition?

World Energy Council FranceParis, 22nd May 2017

innogy SE · Volker Stehmann, Corporate Affairs, Head Markets & Renewables

Agenda

1Innogy – a majorEuropean energy utility

2Electricity transition or energytransition?

3Outlook

RWE forged innogy to become a blueprint utility for a decarbonised, decentralized & digitalized energy system

3

We are innogy!

Our strategic pillarsThree „D“s that will transform

the energy world

Decarbonisation

Decentralisation

Digitalisation

innogy is a major European utility company

4

208

230

374

400

414

497

968

1 189

1 225

1 731

Colruyt

Blackstone

SSE

UniCredit

Stadtwerke München

China Guodian Corp

Vattenfall

innogy

E.ON

DONG

356 000346 000

138 00082 000

33 000 32 000 27 000 19 70018 800

Top 10 off-shore wind operators (MW)

Top German distribution grid operators (km)Top 10 renewable capacity operators (MW)

Distributed power in Germany (TWh)

143

100

55

innogy E.ON EnBW

8 227

4 703 4 463 4 088 3.674 3.654 3 638 2 967 2 503 2 482

Source: Bloomberg new energy finance as of 02/2016, Grid operators according to StromNEV; company data 1 accounting view2innogy. Based on grid operated. Figure as per 2015

innogy SE · December 2016

1 2

901

1,160 226

197

87

459

44

19

34

We are a global leader in wind energy and operate more than 3,100 MW of renewable capacity

Renewables

1 As of December 31, 2015; pro-rata view, excluding Zephyr portfolio. innogy has further renewable capacity of 0.3 GW in consolidated participations related to the Grid and Infrastructure segment | 2 By capacitySource: Bloomberg New energy finance; asset owner database, as of March 2016, http://www.innogy-renewableslive.com/#/dashboard

Installed capacity (MW)1

5innogy SE · December 2016

#3worldwide

offshorewind2

4,400 MW

project pipeline1

3,100 MW

in operation1

+ ca.500 MWin 20161

http://www.innogy-renewableslive.com/#/dashboard

We provide access to energy through the No.1 distribution grid1 in Central Europe

Grid and Infrastructure

Note: All figures as per 2015. Rounding differences may occur 1 Based on distributed volumeSource: Moody’s

GasElectricity

6

GER PL

HU

SKCZ

16.5m peopleconnected

309 TWhsupplied

1.5xdistance to moon(574,000 km)


Our pan-European customer base is being supplied with electricity and gas

7

Retail

Customer Base

Customers (000) 1

GER 60

NL/BE 10

East 10

UK 20

Total 110

Note: B2B including industrial customers as well as resellers, B2C including residential and commercial customers. Depending on national regulations and market specifics, the individual attribution of customers to our B2C or B2B business may vary to a certain extent across our markets. 1 Customer numbers are rounded to the nearest 10,000 customers. Numbers may not add up due to rounding differences

Customers (000)1

GER 8,060

NL/BE 4,700

East 5,400

UK 4,980

Total 23,130

# contracts in m as of 2015

6.8

1.3

2.5

2.2

3.0 2.0

0.9

0.5 0.1

UK

GERNL/BE

2.1

0.31.3

PL

CZ

SK

ROSL0.1

CR

HU

Electricity Gas

For companies/B2B business

For home/B2C business


We offer future oriented energy+ products and services to our customers

8

Retail

Connected homeE-mobility1

• Overall >5,400 charging points in >20 countries

• 470,000 charging processes

• 4.5 GWh electricity charged

• More than 130 (municipal) utilityand 50 B2B partners in Germany

1 As of December 31, 2016 | 2 SmartHome devices and units are also sold to end customers through regional companies, up to 2015.Total number also includes devices and units sold to those regional companies |3 As of 30 June 2016

• SmartHome: 800,000 units sold2

• Roll-out to further countries in preparation

• Cooperation with Nest: >30,000 units soldin UK and NL3

Internet based suppliers Energy services

• Energy audits and savings solutions

• Contracting, maintenance and repair services

• Energy management/IT solution for cus-tomers with decentral energy generation

• eprimo leading in Germany with ~1.3 mn customers in 2016, trademark of the year

• Energiedirect leading in the Netherlands with ~0.7 mncustomers in 2016


London

Silicon Valley

Berlin

Tel Aviv

We are at the pulse of the global hot spots of the energy revolution with our innovation hubs

9

Innovation

Source: innogy


Moving made simpleInnovating and reducing the costsof moving for everyone

Internet of Things (IoT)Making the development for IoT powerful but simple

Prosumer everywhereSwitching customers to independent and green, locally produced energy

The future is lightCreating flexible solutions and push the limits of organic electronics for customers’ benefit

Put data to workIdentifying “energy vampires”in customer’s homes

Our start-ups provide solutions to meet the needs of customers and the rapidly changing energy industry

innogy SE · December 2016 10

Innovation

Source: innogy venture capital portfolio, examples only

Agenda



3Outlook

Steady growth of RES. System integration remains a challenge.

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3663

105

152

196

0

50

100

150

200

250

20

00

20

01

20

02

20

03

20

04

20

05

200

6

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

Renewable Electricity in Germany (TWh)

• The German Renewable Support scheme “EEG” was very successful to boost large volumes of renewable energy into the system

• Largest share from intermittent sources Wind and PV

• More than 32% renewable share of gross electricity consumption in 2015

• However, high “technological pioneering cost”

32.6%

CAGR = 12% 25.2%

17.0%

10.2%

4.3%

x.x% Renewable share of gross electricity consumption

• Rapid growth of intermittent renewables was not adequately backed by parallel grid expansion (e. g. “North-South-Links”)

• Increasing need to counterbalance grid congestions with curtailment of renewables and re-dispatch of conventional plants

• EEG 2017 “on the break”: growth restrictions in “grid expansion areas”, offshore North Sea

innogy‘s „Energy Policy Compass“

Sector coupling

13

Enablers & framework

Overarching policy target

Technologies & Fuels

Combined Heatand Power

Renewables

Gas in downstream

Energy efficiency

Digitalisation

European integration

Decentralisation

Role of DSO

Decarbonisation

Key lever

RenewablesGridRetail

0

100

200

300

400

500

600

700

800

Transport Industry Households services,trade and

commercial

TWh End Energy in economic sectors

electricity non electric

14Source: own illustration, based on FFE 2016.

Explanation

• Overall share of electricity in end user energy demand is relatively low (~20%)

• Larger share is driven by heating in industry and household sectors and by mechanical energy demand in transport and industry.

• According to FFE it is possible to substitute about 2/3 of non electric energy with electricity.

There is potential for more electricity…

Classical demand (incl. 25% efficiency gains) [420 TWh]

power to heat [220 TWh]

emobility [110 TWh]

Source: RWE electrification projec, based on Fraunhofer/IWES.

• Furthermore, renewable electricity is substituting fossil fuels in transport and heat sectors.

• Whilst the traditional electricity demand is reduced, new demand will outgrow the reduction, so that we see a net growth in electricity. Gas and other fuels will probably shrink on a net demand level.

• A precondition for this to happen is a level playing field of taxes and levies on the various energy carriers.

Classical demand [511 TWh]

power to heat [17 TWh]

20142050

15

…in particular in heating and transport…

• Overall demand for heat, transport and electric energy has to shrink significantly to meet energy transition targets.

…however this does not necessarily mean „all electric“. Decarbonisation also needs „green fuels“.

Figures in Mio. t CO2-equivalent p.a., based on UBA

CO2-emissions 2050Allowed volume:(95%-target)63 Mio. t

CO2-emissions 2050

Unavoidable(agriculture, steel, chalk, cement, …)ca. 60 Mio. t

“long distancetransport”(aviation, ships, road transport)ca. 150 Mio. t

Remainingemissions(cars, industry, chemical, domestic heating…) ca. 750 Mio. t

Difficult to electrify

Potentially entirely avoidable

Agenda



3Outlook

The energy world is moving quickly.

Distributed generation

storage

E-mobility

Smart grids

Renewable generationwith backupInnovative

electrical heating

Green fuels

Sector coupling Electricy Generation

We are committed to

creating a sustainable energy system for new

generations to live in a world worth having

We are a fast-moving company,

committed to radical innovation and playing to win in an ever changing

game of business and market development

We are committed to

inspiring people,

offering solutions beyond their current needs and

expectations and making their lives easier

Our mission is to create an energy company that exceeds the expectations of our customers

19innogy SE · December 2016

LET‘S INNOGIZE