E.on Se · XETR:EOAN
E.on — Investor Presentation (December 2015)
28 slides from E.on's investor presentation, December 2015
Slide 1: E.ON Business Deep Dive - Renewables
E.ON Business Deep Dive - Renewables December, 2015
Slide 2: Agenda
Agenda E.ON Renewables Position E.ON Renewables Business Approach Market Trends 2
Slide 3: E.ON Renewables highlights
E.ON Renewables highlights 4.5 GW diversified portfolio (average age of 8 years) across Europe & US1 Global #2 in offshore wind Global #12 in onshore wind Multi-technology developer, constructor, operator and asset partner with broad international footprint 12.3 TWh electricity produced in
Slide 4: Portfolio overview
Portfolio overview1 Chicago San Francisco 2310 207 Headquarter Office location Austin Capacity (MW) Malmö Onshore wind Offshore wind 913 Hamburg Solar Szczecin Coventry Essen 462 155 95 US 328 Rome 48% 52% Europe 5.2 GW of operated capacity 1. Forecasted 2015 FY pro-rata share (includes Humber
Slide 5: Investments in renewables
Investments in renewables Investments (bn€) Key facts 2,3 Total investments of ~11bn 1,7 1,5 (gross) in new capacity since 1,0 1,2 1,2 0,9 1,0 inception of EC&R In the first four years focus largely 2007 1 2008 2009 2010 2011 2012 2013 2014 2015 on onshore wind, since then an increased share in
Slide 6: Track-record
Track-record Key facts Project examples 5.9 GW of capacity built since 2007 London Array, the world’s largest offshore wind farm Extensive construction expertise COD: Q2 2013 > 50 projects delivered Capex :1 € 2400m E.ON share: 30 % > 90% of projects delivered in budget and Capacity: 630 MW
Slide 7: Earnings
Earnings EBITDA Development (€bn) Key facts EBITDA growing since inception 0.8 0.7 with a CAGR of 33% 0.6 0.6 Growth pace fastest in the phase 0.5 2007-2010 0.3 0.2 Since then capital rotation and disposals slightly impacted 2008 2009 2010 2011 2012 2013 2014 2015 earnings development Strong
Slide 8: Agenda
Agenda E.ON Renewables Position E.ON Renewables Business Approach Market Trends 8
Slide 9: E.ON key success factors and portfolio approach
E.ON key success factors and portfolio approach E.ON Key Success Factors in E.ON Portfolio Approach in Renewables Renewables Access to premium sites Focus on attractive technologies Capture attractive remuneration Cost competitiveness and end-to- schemes across different markets in end process excel
Slide 10: Site selection
Site selection Examples – offshore wind Example – Grandview (Texas, US) Water depth [m] 50 Positioning of 45 UK round 3 projects1 40 London Array 35 Rampion Alpha Ventus 30 25 Kårehamn Amrumbank West 20 Humber Gateway Site layout 15 Scroby Sands Size of this circle corresponds 10 Robin Rigg to 200 M
Slide 11: Current regulatory regimes and frameworks
Current regulatory regimes and frameworks Remuneration scheme by geography E.ON Market Highlights Summary US: Tax Credits (PTC and ITC) Accelerated Depreciation (MACRS) Renewable Portfolio Standards (RPS) Expected positive impact from Clean Power Plan UK: Renewable Obligation PAYMENT MECHA
Slide 12: Industry learning curve
Industry learning curve LCOE1 Installed capacity Fixed subsidies Tenders Higher competition High policy support & cost pressure 1. Levelized Cost Of Electricity As markets mature and competitiveness increases, operational excellence will 12 remain key for sustainable, profitable growth
Slide 13: LCOE development trends
LCOE development trends LCOE global trend1 LCOE key drivers Offshore Wind Coal Onshore Wind Gas (€/MWh) 140 CAPEX and OPEX Reduction 120 100 80 Output Optimization 60 40 2013 2017 2020 2023 1. Assumed conversion rate €/$ = 1.12. Average of China, India, US and Europe Source: Stiftung (Offshore Wind)
Slide 14: LCOE development at E.ON
LCOE development at E.ON Cost Structure – Example of onshore wind E.ON project LCOE examples (€/MWh)1 Installation Offshore Generation cost -22% Risk-margin 100% Other CAPEX 78% Turbines CAPEX 2011 (Humber) 2015 (Rampion) Other OPEX (only partially controllable) Onshore -40% 100% OPEX O&M 60% 2009 (
Slide 15: CAPEX reduction
CAPEX reduction CAPEX/MWh examples1 CAPEX reduction levers Offshore Optimized design LCOE-driven layout (optimizing wind yield and installation costs) 2011 100% (Humber) Fit for purpose design/selection of components (site specific economically optimal wind turbine types) -18% Standardized and
Slide 16: OPEX reduction
OPEX reduction O&M cost containment – Onshore1 O&M levers O&M improvement measures 2011 baseline for 2015 100% O&M contracting and concept: Roll-out of self-perform and mixed team sites; break-out of full service contracts O&M into standard contract modules 4% Contracting Spares concept and cont
Slide 17: Load factor and availability
Load factor and availability Offshore Onshore US Onshore EU 50 46 50 50 40 36 35 40 35 34 37 36 40 30 30 30 30 30 25 25 20 20 20 Load factor 10 10 10 (%) 0 0 0 2013 2014 2013 2014 2013 2014 48+% load factor in recent projects3 50+% load factor in recent projects3 Net load factor for ~5 years old far
Slide 18: IRR vs WACC spreads examples
IRR vs WACC spreads examples Bps above WACC 1.000 750 500 250 Size of this circle corresponds to 200 MW wind farm size WACC 2009 2010 2011 2012 2013 2014 2015 Year of final investment decision Onshore wind Offshore wind Attractive returns above WACC plus hurdle 18
Slide 19: Additional value creation
Additional value creation Partnering Third Party Services Third party investors, especially in large-scale Offering full scale operations, maintenance, asset projects, increase flexibility and support a & energy mgmt. services to third party asset diversified portfolio development owners Partn
Slide 20: Capital recycling
Capital recycling Transaction type Main rationale Past transactions Reduce exposure to cluster and regulatory Rampion (Offshore) risks of large projects Partnering Increase flexibility and support a diversified portfolio development Cap: 400 MW Additional value from Third Party Services Sold:
Slide 21: PV projects & initiatives
PV projects & initiatives Key facts Capacity built1 (MW) 152 PV project delivery experience of >150 MW (14 projects), including development and 49 11 92 construction Current geographical focus in US ~90% of the projects delivered on time and US Italy France Total on budget In the past, focus
Slide 22: Agenda
Agenda E.ON Renewables Position E.ON Renewables Business Approach Market Trends 22
Slide 23: Market trends – renewable capacity growth
Market trends – renewable capacity growth Global1 (GW) Global growth trends 2.000 Recent market development 7% 1.000 Wind & Solar cover largest share of capacity additions with focus on emerging markets 0 Largest markets for Wind & Solar until 2020: 2015 2020 2025 2030 China, India, United State
Slide 24: E.ON key strengths
E.ON key strengths Proven track record in the most attractive technologies across different markets Cost competitiveness & process excellence as well as best site selection and scale Solid position and grow path in core markets Well positioned to further benefit from continuous growth in renewables
Slide 25: Agenda
Agenda E.ON Renewables Position E.ON Renewables Business Approach Market Trends Appendix 25
Slide 26: Current regulatory regimes and frameworks (cont'd)
Current regulatory regimes and frameworks (cont’d) UK Germany US Offshore Offshore Onshore ROC per MW FIT with direct marketing obligation Remuneration based wholesale Term: 20 years Remuneration (EEG 14): market or PPA, plus certain Remuneration: Wholesale price - Initial tariff: 154 €/
Slide 27: E.ON project examples
E.ON project examples Summary Amrumbank (COD ´15) 288 MW FIT („Stauchnungsmodell“) 100% share Colbeck's Corner (COD ´16) 200 MW Merchant 100% share Maricopa West1 (COD ´15) 28 MW Rampion (COD ´18) 100% share 400 MW To be disposed in ‘15 20 years ROC scheme 75% share Countries
Slide 28: Disclaimer
Disclaimer This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON Group Management and other information currently available to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between