Powering ahead.
Annual Report 2020
rwe.com
Our energy for a sustainable life.
For more than 120 years, our product has always been the same:
electricity. What has changed is how we produce it. We generated our
very first megawatt hour in 1900 – from hard coal. Later, lignite and
nuclear fuel rods were our major energy sources. Today, they have
been replaced in this role with natural gas, wind, sun and water.
Tomorrow, we will make a full transition to zero-carbon energy sources.
Because our objective is carbon-neutral power generation. And we aim
to accomplish this by 2040. Therefore, every year we are investing
billions in the expansion of renewable energy.
Green energy is the lifeblood of a carbon-neutral economy. And it is
in rising demand also outside of the energy sector. Be it in industry,
transport or buildings, fossil fuels such as oil and natural gas must be
replaced by zero-carbon energy sources everywhere. And where it is
not possible to switch to green electricity directly, for example in steel
production, hydrogen is a suitable alternative – that is hydrogen
produced using electricity from renewables. Which we believe also
presents us with an opportunity. Together with renowned partners from
industry and science, we have set our sights on a hydrogen economy.
We have already launched more than 30 projects. Our long-term goal
is to supply both green electricity and green hydrogen, a second
product with huge potential demand.
Opening a new chapter also means closing an old one. Last year, we
shut down our last two German hard coal-fired power stations. In
doing so, we ended what started our business in 1900. In 2020, we
also closed our last hard coal power plant in the United Kingdom.
Now we are also exiting the German lignite business – in a socially
acceptable manner and without jeopardising security of supply.
Why are we doing all of this? Because as a world leading power
provider, we shoulder a unique responsibility for implementing the
Paris Climate Agreement. Our purpose “Our energy for a sustainable
life” expresses that this responsibility is what drives us and shapes our
entrepreneurial actions. We want to play our part in the joint effort to
limit the global rise in temperature to far below two degrees Celsius
compared to the pre-industrial era. Our accomplishments
demonstrate how seriously we are taking this: since 2012, we have
reduced our annual carbon dioxide emissions by 62 percent. Based on
a review by the independent Science Based Targets Initiative, our
emission reduction strategy is in line with the Paris climate target.
This is scientific proof that we are on the right path.
Our path leads to a sustainable, carbon-neutral energy world.
Come join us!
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
At a glance
RWE Group – key figures
Power generation
External revenue (excluding natural gas tax / electricity tax)
Adjusted EBITDA
Adjusted EBIT
Income from continuing operations before tax
Net income
Adjusted net income
Cash flows from operating activities of continuing operations
Capital expenditure1
Property, plant and equipment and intangible assets
Financial assets
Free cash flow
2020
2019
GWh
146,775
153,165
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
13,688
13,125
3,235
1,771
1,196
995
1,213
4,125
3,358
2,285
1,073
1,132
2,489
1,267
– 752
8,498
–
– 977
1,771
1,767
4
– 2,053
Number of shares outstanding (annual average)
thousands
637,286
614,745
Earnings per share
Adjusted net income per share
Dividend per share
€
€
€
1.56
1.90
0.852
13.82
–
0.80
+/–
– 6,390
563
746
504
1,948
– 7,503
–
5,102
1,587
518
1,069
3,185
22,541
– 12.26
–
0.05
Net debt of continuing operations3
€ million
Workforce4
31 Dec 2020
31 Dec 2019
4,432
19,498
6,927
19,792
– 2,495
– 294
1 Only cash investments; prior-year figures restated accordingly.
2 Dividend proposal for fiscal 2020, subject to the passing of a resolution by the 28 April 2021 Annual General Meeting.
3 New definition and restated prior-year figure; see commentary on page 62.
4 Converted to full-time positions.
3
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Contents
1
1.1
1.2
1.3
1.4
2
2.1
2.2
2.3
To our investors
Interview with the CEO
The Executive Board of RWE AG
Supervisory Board report
RWE on the capital market
Combined review of operations
Strategy
Innovation
Business environment
2.4 Major events
2.5
2.6
Business performance
Financial position and net worth
2.7 Notes to the financial statements of
RWE AG (holding company)
2.8 Outlook
2.9
Development of risks and opportunities
2.10 Disclosure relating to German takeover law
2.11 Remuneration report
5
6
9
11
18
21
22
29
34
42
47
59
64
66
69
79
82
3
Responsibility statement
4
4.1
4.2
4.3
4.4
4.5
Consolidated financial statements
Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
4.6 Notes
4.7
4.8
4.9
List of shareholdings (part of the notes)
Boards (part of the notes)
Independent auditor‘s report
4.10
Information on the auditor
5
5.1
5.2
5.3
Further information
Five-year overview
Imprint
Financial calendar
97
99
100
101
102
104
106
107
192
226
233
241
242
243
244
245
We provide detailed information on our sustainability activities in our Sustainability Report and Non-Financial Report. These publications are available at
www.rwe.com/en/responsibility-and-sustainability. The reports on fiscal 2020 will be published in April 2021.
4
RWE Annual Report 2020
01
To our
investors
Interview with the CEO
1.1
1.2 The Executive Board of RWE AG
1.3 Supervisory Board report
1.4 RWE on the capital market
6
9
11
18
Kårehamn Offshore wind farm in the Baltic Sea, Sweden l photo by Tristan Stedman
1
To our investors
Interview with the CEO
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Interview with the CEO
“Drawing on our skills, we can hold our own against anyone.”
Rolf Martin Schmitz on the goals and accomplishments in the past fiscal year, new
Mr. Schmitz, 2020 was an unusual year in many ways. If you had to put it in nutshell from
competitors in the expansion of wind energy, more flexible ways of working since the
RWE’s perspective, what would you say?
onset of the pandemic, and the upside to his retirement.
I think “accomplished more than planned despite corona” sums it up pretty well. We started
the year with specific goals in mind. We wanted to complete the asset swap with E.ON,
integrate our new colleagues into our organisation, and implement our plan for expanding
renewable energy. We succeeded on all counts. In addition, we wanted to wrap up the
contractual framework for the German coal phaseout while safeguarding both our interests
as a company and those of our employees. We accomplished this too. But some issues were
not on our to-do list at the beginning of the year ...
... for example, the acquisition of the European development business of wind turbine
manufacturer Nordex and the capital increase in August ...
... transactions enabling us to substantially accelerate the expansion of renewable energy.
Furthermore, at the beginning of the year, I didn't expect us to have made such a fast
exit from hard coal-fired generation in Germany. And the list should also include the fact
that we surpassed our earnings forecast for 2020. All this was accomplished under the
unprecedented circumstances sparked by the global pandemic, which fortunately only had
a minor impact on our business.
A newspaper wrote that only a handful of managers have transformed their company as
thoroughly as you have done. Do you agree?
That is up to others to decide. Yes, we did initiate an extensive transformation process. But,
to me, this isn’t anything but the logical continuation of a company’s evolution. Our main
product, electricity, hasn’t changed. By using renewable energy, we have merely opted for a
new way of producing it.
6
RWE Annual Report 2020 1
To our investors
Interview with the CEO
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Well, the capital market is certainly very supportive of RWE’s development, as demonstrated
The auction is a prime example of the fact that we can. We secured the right to develop
for years by the company’s above-average share performance. Recently, renewable energy
3,000 megawatts of generation capacity. Bids for nearly 8,000 megawatts were invited.
has almost been hyped up. And the situation with hydrogen is similar. Doesn’t this harbour a
And we are paying the lowest annual fee per megawatt among all successful bidders.
potential danger?
This means that we applied an intelligent bidding strategy. Now we must demonstrate that
we can develop the sites quickly and successfully. And that we can build and operate
First and foremost, the development of our share price proves that the capital market
state-of-the-art wind farms cost-effectively. In a nutshell, we have to prove our operational
endorses our strategy. Almost daily, the media reports on governments setting ambitious
and technological skills. Then we can hold our own against anyone.
climate targets and seeking to expand renewable energy. And of course, sectors such as
transport and heating must be electrified at least to some degree and hydrogen is the ideal
You mentioned technological expertise as a competitive advantage. Would you define RWE
fuel when it comes to making those parts of the economy that cannnot transition to green
as a tech company?
electricity. So I don't see why anyone would speak of a hype. To me, this is the logical path to
carbon neutrality.
When I started my career in Germany's energy industry 35 years ago, utilities like RWE were
tech companies. Back then, power plant construction still harboured a lot of potential for
But aren’t you wary of more and more competitors entering the market to get in on the
new technology. This was followed by a phase during which the focus shifted from new
action? Some major oil companies have already announced aggressive growth targets in
builds to the commercial optimisation of existing stations. Now we are seeing a return to
relation to renewable energy?
considerable investments in generation capacity. This increases demand for technical
solutions. One example of this is the numerous initiatives for developing floating platforms
If politicians are being serious about protecting the climate, which I don’t doubt, then we will
for offshore wind farms. We’re also active in this area, as we’re involved in several projects.
have an enormous renewable energy market with enough room for both established players
We know that floating foundations will multiply the potential utilisation of offshore wind
and new entrants. Take the United Kingdom for example, which aims to quadruple its
power and that we have to be on board for such new developments early on.
offshore wind capacity to 40 gigawatts by 2030. Germany plans to triple its capacity to
20 gigawatts during the same period, and Poland has hit the ground running in the offshore
Let’s talk about the integration of the renewables business in the RWE Group. Have the
wind business. There may be a danger of newcomers initially placing aggressive bids in wind
4,000-plus former employees of E.ON and innogy, who work for RWE now, settled into the
power auctions, running the risk of projects being unprofitable. However, such irrational
‘new world’?
strategies are not sustainable. Shareholders of these companies will definitely not look on
idly if management repeatedly pours money down the drain.
I have the impression that most of them have been well integrated and feel at home. But it
goes without saying that an integration of this scale takes more than a year to complete.
It became apparent that competition is increasing at the auction for seabed lease
I know from experience that it takes at least twice as long. Moreover, it isn’t only important
agreements in the United Kingdom in early 2021. In addition to RWE, BP and Total also
for our new colleagues to feel comfortable, but also for those who were in the organisation
won contracts. Can RWE survive in the long run in the face of competitors with such
before they arrived. It’s very important to me that our coworkers in the lignite and nuclear
financial clout?
business of the 'old world' be treated with respect. Having said that, I’ve only heard good
things on this front.
7
RWE Annual Report 2020 1
To our investors
Interview with the CEO
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Wasn’t the coronavirus pandemic an obstacle to the integration? It must have been difficult
wasn't the only objective. By participating in the state shutdown auctions, we were able to
for many to get to know their new colleagues while working from home.
secure a modest, but not insignificant, compensation, which we will use to make growth
In-person encounters are indeed very important, especially if two people don't know each
investments.
other. So of course, COVID-19 made it more difficult for the teams to become cohesive.
2020 was a strong fiscal year for RWE. Will 2021 be equally as good?
However, as strange as this may sound, the restrictions have also been beneficial in some
ways. Instead of spending endless hours on business travel, meetings took place online. All
As far as the operating result is concerned, probably not. Unfortunately, in February there
of a sudden, physical distance was irrelevant. This often led to more thorough discussions,
were massive supply shortages in Texas as the state experienced the worst cold snap in a
especially when working across borders. The pandemic has changed the way we work.
century. Plant outages and regulatory intervention forced us to purchase electricity at
And we’ve realised that everything still works despite this. We should maintain this flexibility
absurd prices. This reduced our earnings considerably. Nevertheless, 2021 should also be
after COVID-19.
a satisfying year for RWE. It is important that we continue our course for growth in the
renewable energy business with determination and achieve our envisaged returns. If we
In addition to the coronavirus, the German coal phaseout was one of the issues that shaped
manage to do so, many good fiscal years will await RWE even beyond 2021.
the past year. The exit has been given a legal framework, which has been cemented in an
agreement between the federal government and the lignite companies. You indicated at the
Mr. Schmitz, soon you will become an onlooker. At the end of April, you are resigning your
beginning that you are satisfied with the result ...
office, after twelve years on the Executive Board of RWE. Wouldn’t you have been keen to
I find the solution that was reached to be acceptable. The decision to exit the coal business
continue the RWE journey?
by 2038 was made by politicians. We cannot and don’t want to challenge this. On the
Well, as you said, I can still keep an eye on what's going on, albeit from the outside. But I’m 63
contrary, now we know where we stand and can plan for the future. It was important to me
and I have to stop working at some point. Plus, you should always quit while you’re ahead.
that the coal phaseout did not cause any unreasonable hardship for those affected. This
In earnest, I’m grateful to be able to pass the baton at a time when RWE is doing well again
applies to us as a company as well as to our employees. The commitments made by the
after weathering the storms of the past. And I'm convinced the company will be in safe
government and the collective agreement reached in August 2020 ensure that there will be
hands with Markus Krebber and his team. Of course, I look forward to being able to spend
no such hardships and that no one will be left high and dry.
more time with my family and not having to be available all the time. Waking up in the
morning without having to check your e-mails immediately is a luxury. And this is the luxury
Do you realise that by closing RWE’s last two German hard coal-fired power stations, you
I am going to enjoy now.
have effectively eliminated the company’s very first core business?
This interview was conducted by Burkhard Pahnke and Jérôme Hördemann.
Of course I’m aware of that. After all, I’m familiar with RWE’s history. However such issues are
secondary when we make decisions about our future. The closure of the state-of-the-art
Westfalen E block was a huge surprise to many. But we went over everything with a fine tooth
comb and are convinced that it was the right course of action. And reducing emissions
8
RWE Annual Report 2020 1
To our investors
The Executive Board of RWE AG
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
1.2 The Executive Board of RWE AG
Dr. Rolf Martin Schmitz
Chief Executive Officer
Dr. Markus Krebber
Chief Financial Officer
Chief Executive Officer from 1 May 2021
Rolf Martin Schmitz, born in 1957 in Mönchengladbach, holds a doctorate in mechanical
Markus Krebber, born in 1973 in Kleve, is a trained banker and holds a doctorate in
engineering. His first career milestones were STEAG AG from 1986 and VEBA AG from
economics. He started his career in 2000 at McKinsey & Company. Thereafter, he held
1988, after which he was appointed a Member of the Board of Management of rhenag
various managerial positions at Commerzbank AG. In November 2012, Markus Krebber
Rheinische Energie AG in 1998. Mr. Schmitz then held several managing board positions at
joined the Board of Directors of RWE Supply & Trading GmbH, where he was responsible for
Thüga AG and Thüga Beteiligungen AG. In addition, Rolf Martin Schmitz was Chairman of
finance, assuming chairmanship in March 2015. Markus Krebber has been the Chief
the Board of Directors of E.ON-Kraftwerke GmbH and of the Board of Management of
Financial Officer of RWE AG since October 2016. In May 2021, he will succeed Rolf Martin
RheinEnergie AG. In May 2009, he joined the Executive Board of RWE AG and was appointed
Schmitz as Chief Executive Officer.
Chief Executive Officer in October 2016. From May 2017 to October 2020, he was also the
company's Labour Director. Rolf Martin Schmitz will retire from the Executive Board at the
end of April 2021.
9
RWE Annual Report 2020 1
To our investors
The Executive Board of RWE AG
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Dr. Michael Müller
Member of the Executive Board since 1 November 2020
Chief Financial Officer from 1 May 2021
Zvezdana Seeger
Member of the Executive Board since 1 November 2020
Chief Human Resources Officer and Labour Director
Michael Müller, born in 1971 in Cologne, is an economist and holds a doctorate in
Zvezdana Seeger, born in 1964 in Jajce, Bosnia and Herzegovina, holds a degree in economics.
mechanical engineering. After five years at McKinsey & Company, in mid-2005 he joined the
She started her career in mechanical engineering. From 1995 to 2008, she worked for
RWE Group where he held executive positions at RWE Power AG, RWE Generation SE and
Deutsche Telekom AG, exiting as Managing Director of T-Systems Enterprise Service GmbH.
RWE AG. In September 2016, he became the Managing Director of RWE Supply & Trading
In 2010, Zvezdana Seeger joined the Board of Directors of DHL Global Forwarding Freight.
GmbH in charge of finance. Since November 2020, Michael Müller has been a Member of
In 2015, she was responsible for IT and operations on the Board of Management of Postbank
the Executive Board of RWE AG where he will succeed Markus Krebber as Chief Financial
AG. After Postbank was folded into DB Privat- und Firmenkundenbank AG, she sat on the
Officer in May 2021. Until then, he will remain a Managing Director of RWE Supply & Trading
Board of Management of the latter company. In addition, she was COO of the Private and
GmbH.
Corporate Business Unit of Deutsche Bank AG. As of November 2020, Zvezdana Seeger was
appointed to the Executive Board of RWE AG, with responsibility for human resources and IT.
She is also the company's Labour Director.
10
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
1.3 Supervisory Board report
“In the midst of the
coronavirus pandemic,
RWE set the stage for an
even faster expansion of
renewable energy, thus
overachieving its goal
for the year.”
RWE definitely bucked the trend! Like a sailboat staying its course in choppy waters, the
company continued its transformation that began with the E.ON transaction almost without
losing steam. The asset swap, which was completed in legal terms in the middle of 2020,
advanced us to the ranks of the world's leading renewable energy companies. Now RWE is
rapidly transitioning its electricity generation portfolio to renewable sources and intends to
become carbon neutral by 2040 as a result. This course is widely endorsed by the general
public and the capital market in particular, as evidenced by our share's strong performance.
Despite the coronavirus pandemic, RWE shareholders earned a 30 % return on their
investment in 2020. This put our share among the DAX frontrunners for the fourth time
in a row.
And there was more good news last year: the company made rapid progress in the
expansion of renewable energy despite the coronavirus pandemic. In 2020, RWE completed
wind and solar farms with a total capacity of more than 800 MW. Only in isolated cases
were there delays due to COVID-19, but none lasted more than a few months. I would also
like to highlight the capital increase in August and the acquisition of Nordex's European
development business – two transactions that were not foreseeable at the beginning of
2020, which will help drive the company's growth further. This means that, in the midst of
the coronavirus pandemic, RWE set the stage for an even faster expansion of renewable
energy, thus exceeding its target for the year.
RWE also tackled the second major challenge – the coal phaseout – with determination.
Who could have imagined at the beginning of 2020 the unusual challenges the year would
Both of the company's German hard coal units placed winning bids in the first shutdown
have in store for us all. The coronavirus pandemic caught modern civilisation off guard and
auction conducted by the Federal Network Agency. These blocks were shut down at the end
demonstrated how shockingly vulnerable we are despite all the progress we make. I hope,
of 2020. But let us not forget that electricity production from hard coal was the driver of
dear reader, that you stay healthy and manage to cope with the negative effects of the
RWE's charge to become Germany's leading power utility after it was founded over
lockdown measures. Unfortunately, the latter cannot be said for many companies. We have
120 years ago. This business is now part of Germany's history. At the same time, RWE is
seen entire sectors fall into an existential crisis. Based on expert estimates, 2020 saw
implementing the legally mandated lignite phaseout. The first unit was taken off the grid at
Germany experience its biggest drop in growth since the financial crisis of 2008 / 2009.
the end of December although the compensation regulations are still pending EU approval.
11
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
I think that this sends an important signal: RWE is moving fast to protect the climate – and is
decisions. The Executive Board informed us of all material aspects of business developments,
doing much more than is legally required. What other company out there can claim to have
the earnings situation as well as the risks and the management thereof both verbally and in
reduced its carbon dioxide emissions by 62 % in just eight years without selling major parts
writing. This was done regularly, extensively and in a timely fashion.
of its business? I don't know of a single one. Our fast track towards reducing emissions
proves that RWE is acting in line with the Paris climate targets. This was recently confirmed
We took our decisions on the basis of detailed reports and draft resolutions submitted by the
by the Transition Pathway Initiative and the Science Based Target Initiative, both of which
Executive Board, which we discussed in depth in our plenary sessions and committees. We
are proponents of a low-emission economy over the long term.
were also informed by the Executive Board of projects and transactions of special
Looking back at 2020, I must highlight two issues directly relating to the Supervisory Board's
the resolutions required of us by German law or the Articles of Incorporation, occasionally by
work. The first matter is the new composition of the Executive Board. Rolf Martin Schmitz will
circular. As Chairman of the Supervisory Board, I was constantly in touch with the Executive
step down as CEO at the end of April 2021. We made early arrangements for his succession
Board, allowing us to discuss major developments without delay. The company helped us to
and have found what I believe to be a very good solution: Markus Krebber, our current CFO,
acquire the expertise we needed to fulfil our tasks by organising in-house informational
will spearhead the company in the future. We expect him to continue the current strategy,
events on topics of special relevance. This is noteworthy given that the German Corporate
keeping RWE on course for success. He will receive assistance from Michael Müller and
Governance Code (GCGC) requires supervisory board members to ensure that they take
Zvezdana Seeger, who we appointed to the Executive Board as of 1 November 2020. More
their basic and advanced training into their own hands.
importance or urgency in extraordinary meetings as well as between meetings. We passed
on this later. The second matter, which was a premiere for my fellow Supervisory Board
members and me, was the first completely virtual Annual General Meeting ever held in RWE
Main points of debate of the Supervisory Board meetings. Last year, the Supervisory
AG's history. The corona pandemic didn't give us a choice. Although this involved working
Board convened for five ordinary and two extraordinary meetings. Due to the COVID-19
under new legal and organisational conditions, the Annual General Meeting went smoothly.
social distancing restrictions, we conducted our sessions strictly online from April onwards.
The employees in charge at RWE proved extremely professional and flexible. In my capacity
However, this was not to the detriment of the quality of our work on the Supervisory Board.
as Chairman of the Annual General Meeting, I would like to express my sincere gratitude for
In our meetings, we were informed by the Executive Board in great detail of transactions and
this. I would also like to thank our shareholders, who would have loved to visit us at the
events of significance to RWE. We discussed certain agenda items without involving the
Grugahalle in Essen, but were understanding of the fact that it was impossible to hold an
Executive Board. The shareholder and employee representatives always met separately
in-person event. We hope that they will also be understanding of our holding a completely
before Supervisory Board meetings, so that they had the opportunity to consult on matters
virtual Annual General Meeting in 2021 as well.
and establish joint positions where necessary in advance of the plenary sessions.
Now I would like to tell you about some of the formal aspects of the Supervisory Board's
When in session, we concerned ourselves with RWE's transformation into a leading
work in 2020. As usual, we fulfilled all of the duties imposed on us by German law and
renewable energy company both frequently and in great depth. Further focal points of
the Articles of Incorporation. We advised the Executive Board on running the company and
debate were the effects of the corona crisis, the restaffing of the Executive Board and
monitored its actions with great care. Moreover, we were involved in all fundamental
the German coal phaseout. The following issues were discussed at our meetings:
12
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• Our first session last year took place on 17 January. We convened an extraordinary
• The topics addressed in April were also the focal point of the ordinary session on 25 June.
meeting to debate the shutdown roadmap for our German lignite-fired power plants
One of the tasks was to prepare the virtual Annual General Meeting, which had been
envisaged by the government as well as the compensation offered. At the time, the talks
scheduled for the following day. Succession planning for the Executive Board was discussed
between the federal and state administrations and businesses regarding the details of the
at length yet again. Furthermore, we were kept abreast of how RWE was dealing with
lignite phaseout had nearly come to a conclusion. We encouraged the Executive Board to
the coronavirus pandemic and approved the new Executive Board remuneration system,
accept the compromise that was becoming apparent. Soon thereafter, on 29 January,
which is described in more detail in the invitation to the 2021 Annual General Meeting.
the federal government adopted the draft law on the coal phaseout.
The invitation is available at www.rwe.com/agm. Another focal topic was the public law
• At our ordinary meeting on 6 March, we discussed and approved the 2019 financial
interests of the company with regard to the statutory regulations governing the lignite
contract between RWE and the German government designed to protect the justified
statements of RWE AG, the consolidated financial statements, and the separate
phaseout.
consolidated non-financial report. In addition, we approved the agenda for the Annual
General Meeting, which was originally scheduled for 28 April. The Executive Board
• Just a month later, on 31 July, we held an extraordinary meeting at which we discussed
updated us on the legislative process regarding the German coal phaseout and on the
RWE's plan to acquire the European development business of wind turbine manufacturer
acquisition of the King's Lynn power station in the UK, which had just been completed.
Nordex. Since we – just as the Executive Board – were of the opinion that the acquisition of
We thoroughly deliberated RWE's strategy. The goal of becoming carbon neutral by 2040
the project pipeline focusing on France harboured attractive potential for RWE to grow,
and the path envisaged to reach it met with our full approval. Effective incentives for
we approved the acquisition. In that session, we also deliberated how to finance the
implementing the strategy are provided by the new Executive Board remuneration
Nordex transaction and the associated accelerated expansion of renewable energy.
system, the details of which were another topic of debate. Furthermore, we adopted the
One of the options on the table was to use authorised capital and issue new RWE shares
new skills matrix for the members of our corporate body, which we had refined in 2019.
excluding subscription rights. We transferred to the Executive Committee the right to
In so doing, we drew on the findings obtained when reviewing the efficiency of our work.
decide on such a measure. This enabled the company to quickly take advantage of a
The former matrix was supplemented by several skills, to which we accord increasing
favourable situation on the capital market without having to again involve the entire
importance, e. g. know-how in the fields of renewable energy and digitisation. The skills
Supervisory Board. Thanks to this flexibility, RWE managed to increase its capital by
matrix must be taken into account when selecting candidates for appointment to the
€2 billion at very short notice in August 2020.
Supervisory Board. Therefore, it will be accorded great importance in 2021 as the
corporate body will be restaffed in April.
• At our ordinary meeting on 18 September, we debated the succession planning for the
Executive Board once again. Given that Rolf Martin Schmitz would soon retire and
• Our ordinary meeting on 28 April was dominated by the coronavirus pandemic and the
Markus Krebber had been appointed the company's future CEO, the positions of CFO,
first lockdown. This was precisely the day on which the 2020 Annual General Meeting
CHRO and Labour Director had to be filled. Against this backdrop, the Supervisory Board
would have taken place based on our original planning if we had not been forced to
appointed Zvezdana Seeger and Michael Müller to the Executive Board. During this
postpone it to the end of June due to COVID-19. The Supervisory Board passed a resolution
session, we also discussed the German Coal Phaseout Act, which had been passed by the
to hold the Annual General Meeting as a purely virtual event in order to protect both
Lower and Upper Houses of Parliament on 3 July. Moreover, the Executive Board reported
employees and shareholders alike. Another item on the agenda was the succession plan
on the significance of hydrogen to RWE as well as on various aspects of the renewable
for the CEO Rolf Martin Schmitz.
energy business.
13
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• At our ordinary meeting on 11 December, we reviewed and adopted the company's
• The Audit Committee was in session four times, at which all predetermined focal topics
planning for fiscal 2021. In addition, we fulfilled our corporate governance reporting
were addressed. The Committee was extremely careful in reviewing the financial
duties. Together with the Executive Board, we adopted an updated statement of
statements of RWE AG and the Group, together with the combined review of operations,
compliance pursuant to Section 161 of the German Stock Corporation Act and approved
the report for the first half of the year, the quarterly statements and the consolidated
the passages of the corporate governance declaration relating to the Supervisory Board
non-financial report. It discussed the financial statements with the Executive Board before
in accordance with Section 289a of the German Commercial Code. These documents
they were published and received reports on the outcome of the audits and audit-like
can be viewed at www.rwe.com/en/statement-of-compliance-and-reports and
reviews from the independent auditors. Furthermore, the Audit Committee submitted
www.rwe.com/corporate-governance-declaration. A further point of focus of the meeting
a recommendation to the Supervisory Board regarding the election of the independent
was RWE's hydrogen strategy, on which we were informed extensively by the Executive
auditors for fiscal 2020, prepared the grant of the audit award to the independent
Board. We also discussed the sale of a 49 % stake in the Humber UK offshore wind farm.
auditors including the fee agreement, and set the priorities of the audit. The Committee
Following our approval, the transaction was completed on 15 December. We also gave
verified the independence of the auditors and the quality of the audit. In addition, as usual,
the go-ahead to the partial sale of four Texan onshore wind farms. During the session,
the Committee was informed of the effectiveness of the accounting-related Internal
we also debated how to handle related party transactions. The German law on the
Control System (ICS). The report did not reveal any issues that would call the effectiveness
implementation of the Second Shareholders Directive (ARUG II) stipulates that, under
of the ICS into question. Furthermore, the Committee dealt with the planning and findings
certain conditions, these transactions are subject to the approval of a Supervisory Board
of internal audits, the RWE Group’s exposure to risk pursuant to the German Corporate
or one of its committees. We tasked the Audit Committee with performing the review and
Control and Transparency Act, the risk management system of RWE Supply & Trading,
valuation of such transactions required by law.
data security, compliance matters as well as legal and tax issues. The independent
auditors attended all of the Audit Committee meetings and also exchanged information
Supervisory Board committees. Last year, the Supervisory Board had six standing
with the Committee Chairman between meetings. In-house experts were consulted
committees, the members of which are listed on page 230. These committees are charged
regularly.
with preparing topics and resolutions for plenary sessions. In certain cases, they exercise
decision-making powers if they have been conferred on them by the Supervisory Board.
• The Personnel Affairs Committee held five meetings during the year being reviewed.
The Supervisory Board is informed of the work of the committees by their chairs at every
Consultations centred on the succession plan for the Executive Board of RWE AG and the
ordinary meeting. In the year under review, a total of 18 committee meetings were held,
new Executive Board remuneration system.
which I would like to touch upon in more detail.
• The Executive Committee held four meetings, three of which took place in August to
Board elections, scheduled for 2021. In this context, the Committee also discussed
prepare and approve the capital increase. The Committee conducted the usual discussion
procedural matters relating to the planned introduction of staggered tenures for the
of the company’s planning for fiscal 2021 as well as the outlook for the two subsequent
shareholder representatives. Another point of debate was the remuneration for work done
years in its fourth session, which took place in December.
on the committees of the Supervisory Board. We are of the opinion that compensation for
• The Nomination Committee convened three times. The focal point was the Supervisory
these tasks should increase.
14
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• The Strategy and Sustainability Committee (formerly the Strategy Committee) held
• The Mediation Committee pursuant to Section 27, Paragraph 3 of the German
two meetings. In its first session, which was held in February, it dedicated itself to the new
Co-Determination Act did not have to meet in 2020.
Group strategy, which was presented to the public soon thereafter, in mid-March. At its
second meeting, the Committee discussed RWE's plans with respect to the hydrogen
economy.
Attendance at meetings in fiscal 2020 by Supervisory Board member
Supervisory
Board
Executive
Committee
Audit
Committee
Dr. Werner Brandt, Chairman
Frank Bsirske, Deputy Chairman
Michael Bochinsky
Sandra Bossemeyer
Martin Bröker
Anja Dubbert
Matthias Dürbaum
Ute Gerbaulet
Prof. Dr. Hans-Peter Keitel
Dr. h. c. Monika Kircher
Harald Louis
Dagmar Mühlenfeld
Peter Ottmann
Günther Schartz
Dr. Erhard Schipporeit
Dr. Wolfgang Schüssel
Ullrich Sierau
Ralf Sikorski
Marion Weckes
Leonhard Zubrowski
1 Dr. Werner Brandt attended meetings of the Audit Committee as a guest.
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/41
3/4
4/4
4/4
4/4
4/4
4/4
7/7
7/7
7/7
7/7
7/7
7/7
7/7
6/7
7/7
6/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
6/7
15
Personnel
Affairs
Committee
5/5
5/5
Nomination
Committee
3/3
Strategy and
Sustainability
Committee
2/2
2/2
3/3
2/2
3/3
2/2
2/2
1/2
5/5
5/5
5/5
5/5
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Attendance. The table on the previous page contains an overview of Supervisory Board
The Supervisory Board reviewed the financial statements of RWE AG and the Group, the
member attendance at the meetings of this corporate body and its committees. As the
combined review of operations, the Executive Board’s proposal regarding the appropriation
Mediation Committee did not convene in 2020, it has been omitted from this table. Here is
of distributable profit, and the consolidated non-financial report. No objections were raised
an example of how to interpret the numbers: ‘3 / 4’ means that the individual attended
as a result of this review. As recommended by the Audit Committee, the Supervisory Board
three out of four meetings. As can be seen from the overview, absences were an exception.
approved the results of the audits of the financial statements of RWE AG and the Group and
approved both financial statements. The 2020 financial statements are therefore adopted.
Conflicts of interest. The members of the Supervisory Board are obliged by law and the
The Supervisory Board concurs with the Executive Board’s proposal regarding the
GCGC to immediately disclose any conflicts of interest they have. We were not notified of
appropriation of profits, which envisages paying a dividend of €0.85 per share.
any such conflict in fiscal 2020.
Personnel matters. The composition of the Supervisory Board and of its committees did not
Financial statements for fiscal 2020. PricewaterhouseCoopers GmbH Wirtschaftsprüfungs-
change in the past fiscal year. However, there were some major personnel changes on the
gesellschaft (PWC) audited and issued an unqualified auditor’s opinion on the 2020 financial
Executive Board of RWE AG. I told you earlier that Markus Krebber will take over as CEO from
statements of RWE AG, which were prepared by the Executive Board in compliance with the
Rolf Martin Schmitz. This resolution was passed by circular on 27 July after the Supervisory
German Commercial Code, the financial statements of the Group prepared pursuant to
Board had paved the way for this at its meeting of 28 April. By mutual consent, we
Section 315a of the German Commercial Code in compliance with International Financial
shortened the tenure of Mr. Krebber, which would have expired on 30 September 2024, to
Reporting Standards (IFRS) as well as the combined review of operations for RWE AG and
30 June 2021 and appointed him an ordinary member of the Executive Board for the
the Group including the accounts. In addition, PWC subjected the Non-financial Report to a
period thereafter running from 1 July 2021 to 30 June 2026. As Rolf Martin Schmitz will
limited assurance audit and found that the Executive Board had established an appropriate
resign his office at the end of April 2021 – two months earlier than planned – Markus Krebber
early risk detection system. The company had been elected independent auditor by the
will take over as CEO as of 1 May 2021. In addition to the succession arrangements
2020 Annual General Meeting. Thereafter, the Supervisory Board had commissioned it to
for Mr. Schmitz, we took two further personnel-related decisions: in our session on
audit the aforementioned financial statements and reports.
18 September, we appointed Michael Müller and Zvezdana Seeger to the Executive Board
as of 1 November 2020, for an initial term of three years. Michael Müller will succeed
The 2020 Annual Report and the audit reports as well as documents supporting the annual
Markus Krebber as CFO. Zvezdana Seeger was entrusted with the human resources and IT
financial statements were submitted to the members of the Supervisory Board in good time.
offices. She has also been the company's Labour Director since 1 November.
Furthermore, the Executive Board commented on the documents in the Supervisory Board’s
balance sheet meeting of 10 March 2021. The independent auditors reported at this
Thanks to our new staffing decisions, which we reached following extensive consultations
meeting on the material results of the audit and were available to provide supplementary
and with the expert support of the Personnel Affairs Committee, we have the right people in
information. The Audit Committee had previously concerned itself in depth with the financial
the right positions to ensure that the new RWE can continue to chart its course for success.
statements of RWE AG and the Group, as well as audit reports, during its meeting on
If there is one person to whom this is particularly important, then it has to be Rolf Martin
9 March 2021, with the auditors present. It recommended that the Supervisory Board
Schmitz, as it was with him as CEO that RWE set out on this course. When he steps down in
approve the financial statements as well as the appropriation of profits proposed by the
2021, he can do so safe in the knowledge that he is passing on a company that reinvented
Executive Board.
itself in difficult times and transformed itself into a profitable player in the energy transition.
16
RWE Annual Report 2020 1
To our investors
Supervisory Board report
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
He deserves the utmost recognition for everything he has done for the company. On behalf
of the entire Supervisory Board, I would like to take this opportunity to express my heartfelt
gratitude to him for his constructive, respectful and extremely successful co-operation.
A strong performance – thanks to the people who are RWE. RWE's impressive
development is naturally not solely attributable to any one single individual, but of all of the
employees who dedicate their work and lifeblood to this company. They made sure that the
new RWE continued its transformation at an unrelenting pace, despite the coronavirus
pandemic. The extremely level-headed way in which they dealt with the crisis, their ability to
adapt processes and workflow to the unprecedented circumstances – with the virtual
Annual General Meeting I mentioned earlier as a shining example – and the strict discipline
they display in abiding by the infection control concepts in their daily work have proven that
we can always count on the people at RWE. Speaking for the entire Supervisory Board,
I would like to express my sincere gratitude to them.
On behalf of the Supervisory Board
Werner Brandt
Chairman
Essen, 10 March 2021
17
RWE Annual Report 2020 1
To our investors
RWE on the capital market
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
1.4 RWE on the capital market
There was a lot of volatility on stock markets in 2020, a year that ended on an
DAX records slight gain for the year despite COVID-19. The coronavirus pandemic led to
encouraging note after a collapse in share prices in the spring caused by the corona
a turbulent year on stock markets. After hitting a record high of 13,789 points in mid-
crisis. The DAX closed up by 4 %, after losing more than one-third of its value on the way.
February, the DAX lost over one-third of its value in just a few weeks. This was mainly due to
Major stimulus came from the expansionary monetary and fiscal policy in the Eurozone,
the outbreak of the coronavirus pandemic and the first set of lockdown measures, which
which allowed for the economic consequences of the pandemic to be mitigated. RWE
temporarily caused parts of the economy to grind to a halt. Germany's blue-chip index
shareholders looked back on a very pleasing performance: the total return on our share
gained substantial traction in mid-March, after bottoming out. Loosened COVID-19
was 30 %, ranking our stock among the best in the DAX for the fourth consecutive year.
restrictions, the announcement of state economic aid packages, and the rapid recovery of
The main reason for this is our transformation into a leading renewable energy
the Chinese economy provided major stimulus to this end. The prospects of a vaccine
company. This makes us not only more sustainable and financially strong, but also
contributed to improving sentiment on stock markets as the year progressed. Despite the
more crisis-proof.
Total return of the RWE share compared with the DAX and STOXX Europe 600 Utilities
% (average weekly figures)
40
30
20
10
0
– 10
– 20
– 30
– 40
3 1 D ec 2 0 1 9
3 1 M ar 2 0 2 0
3 0 Jun 2 0 2 0
3 0 Sep 2 0 2 0
3 1 D ec 2 0 2 0
RWE share
STOXX Europe 600 Utilities
DAX
Source: Bloomberg.
18
significant rise in new infections in Germany after the summer break and the renewed
lockdown in late autumn, the DAX maintained its course for recovery, and just before the
end of the year actually eclipsed the record achieved in February. Germany’s lead index
closed the year at 13,719 points, representing a gain of 4 % in 2020.
RWE share registers 30 % total return. The RWE share lost pace only briefly during the
corona crisis, continuing the upward trend on which it embarked in 2017. It closed trading
at €34.57 at the end of 2020. Including the dividend payment of €0.80, this corresponds to
a total return for the year of 30 %. Our share thus outperformed the DAX for the fourth
consecutive year. The STOXX Europe 600 Utilities sector index (+ 11 %) also failed to keep up
with it. The RWE share's unwavering positive performance is predominantly due to our
becoming a leading renewable energy company as a result of the asset swap with E.ON
and our rapid strengthening of this position. Our analysts and investors welcome this
transformation process, as the renewable energy business is marked by relatively stable
income and widespread political acceptance. This has made RWE more financially robust,
which has proven to be a great advantage especially during the corona crisis. RWE's share
price also benefited from the clear legal framework for Germany's coal phaseout
established by policymakers and the resulting substantial decrease of the risks to which
affected companies are exposed (see pages 37 et seq.).
RWE Annual Report 2020 1
To our investors
RWE on the capital market
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
RWE share indicators
Earnings per share
Adjusted net income per share
Cash flows from operating activities of continuing operations per share
Dividend per share
Dividend payment2
Share price
End of fiscal year
Highest closing price
Lowest closing price
Share dividend yield3
€
€
€
€
€ million
€
€
€
%
2020
1.56
1.90
6.47
0.851
5751
34.57
35.02
21.00
2.5
2019
13.82
–
– 1.59
0.80
492
27.35
28.69
18.97
2.9
2018
0.54
–
7.50
0.70
430
18.97
22.48
15.10
3.7
2017
3.09
2.00
– 6.13
1.50
922
17.00
23.14
11.80
8.8
2016
– 9.29
1.26
3.83
–
5
11.82
15.95
10.17
–
Number of shares outstanding (annual average)
thousands
637,286
614,745
614,745
614,745
614,745
Market capitalisation at the end of the year2
€ billion
23.4
16.8
11.7
10.3
7.1
1 Dividend proposal for RWE AG’s 2020 fiscal year, subject to the passing of a resolution by the 28 April 2021 Annual General Meeting.
2 Calculated on the basis of the shares outstanding. As of 31 December 2020, this number totals 676,220,048.
3 Ratio of the dividend per share to the share price at the end of the fiscal year.
RWE raises capital by €2 billion. In August 2020, we issued 61.5 million new RWE shares
Dividend of €0.85 per share proposed for past fiscal year. Despite the rise in the number
to institutional investors, thereby increasing the company‘s capital stock by 10 %. Based on
of RWE shares due to the capital increase, the Executive Board maintains its dividend target
the issue price of €32.55 per share, we achieved gross proceeds of €2 billion, which we
for fiscal 2020. Together with the Supervisory Board, it will propose to the Annual General
intend to spend on additional projects to expand renewable energy. The capital increase
Meeting on 28 April 2021 a dividend of €0.85 per share. This would be €0.05 more than in
caused the number of RWE shares to rise to 676.2 million. The new and old stock confer the
the preceding year. The dividend proposal reflects the successful business trend in the past
same rights. More detailed information on the capital increase can be found on page 42.
year as well as RWE's bright prospects.
19
RWE Annual Report 2020 1
To our investors
RWE on the capital market
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Shareholder structure of RWE AG1
However, a higher threshold of 25 % applies to asset management companies like
1 % Employee shareholders
7 % BlackRock, Inc.
BlackRock.
12 % Private shareholders
87 % Institutional
shareholders
24 % Germany
24 % USA/Canada
19 %
12 %
UK
Continental
Europe
excluding
Germany
8 % Rest of the world
80 % Other
institutional
shareholders
About 1 % of our stock is owned by our current and former staff members. German and
British Group companies offer their employees the opportunity to take shares in RWE on
preferential terms. Last year, 7,641 people, representing 44 % of all qualifying staff
members, made use of these offers. They bought a total of 332,665 shares. The
preferential terms and the administration of the employee share ownership programmes
led to an expense of €3,108,005.
RWE represented on numerous stock markets. RWE shares are traded on the Frankfurt
Stock Exchange and other stock exchanges in Germany, as well as via electronic platforms
such as Xetra. They are also available on stock markets in the rest of Europe. In the USA,
instead of our shares being traded, RWE is represented via American Depositary Receipts
(ADRs) in a Level 1 programme. ADRs are share certificates issued by US depositary banks,
representing a certain number of a foreign company’s deposited shares. Under RWE’s
1 As of the end of 2020; percentages reflect shares in subscribed capital. Sources: RWE data and notifications from
programme, one ADR represents one share.
shareholders in accordance with the German Securities Trading Act.
Broad international shareholder base. Based on our latest survey, at the end of 2020, an
Reuters: Xetra
estimated 87 % of the total of 676.2 million RWE shares were held by institutional investors
and 13 % were owned by individuals (including employees). Institutional investors from
Germany owned 24 % of RWE. This investor group accounted for 12 % of RWE’s subscribed
capital in other countries in Continental Europe and 19 % in the United Kingdom. In the USA
and Canada, its share was a combined 24 %. At the end of the year, RWE AG’s single-largest
Reuters: Frankfurt Stock Exchange
Bloomberg: Xetra
Bloomberg: Frankfurt Stock Exchange
German Securities Identification Number
shareholder was the US asset management company BlackRock, which owned 7 % of our
International Securities Identification Number (ISIN)
subscribed capital.
ADR CUSIP Number
Ticker symbols and identification numbers of the RWE share
RWEG.DE
RWEG.F
RWE GY
RWE GR
703712
DE0007037129
74975E303
The free float of our shares considered by Deutsche Börse in terms of index weighting was
100 % when this report went to print. Normally, shares held by investors accounting for at
least a cumulative 5 % of the capital stock are not included in the free float.
20
RWE Annual Report 2020 02
Combined review
of operations
2.1 Strategy
2.2
Innovation
2.3 Business environment
2.4 Major events
2.5 Business performance
2.6 Financial position and net worth
2.7 Notes to the financial statements of
RWE AG (holding company)
2.8 Outlook
2.9 Development of risks and opportunities
2.10 Disclosure relating to German takeover law
2.11 Remuneration report
22
29
34
42
47
59
64
66
69
79
82
Limondale solar farm, Australia
1
To our investors
2
Combined review
of operations
Strategy
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.1 Strategy
Our asset swap with E.ON has turned us into one of the world’s leading renewable
New segment structure introduced in 2020. In our financial reporting for 2020, we
energy companies. We are now an all-rounder in electricity generation at the forefront
present the RWE Group in a new structure. We no longer state ‘innogy – continuing
of creating a sustainable energy system. In addition, we will ensure security of supply
operations’ and ‘acquired E.ON operations’ separately as they have become integral parts of
with our flexible power plants. RWE aims to become carbon neutral by 2040. To this end,
the RWE Group. Our main business, electricity generation, is now broken down by energy
we will invest billions in wind energy, photovoltaics and storage technologies, enter the
source, whereas energy trading is still presented separately. This results in the following five
green hydrogen production business, and phase out electricity generation from coal.
segments: (1) Offshore Wind, (2) Onshore Wind / Solar, (3) Hydro / Biomass / Gas,
In doing so, we are playing our part in achieving the Paris climate goals, as officially
(4) Supply & Trading and (5) Coal / Nuclear. Segments (1) to (4) represent our core business.
confirmed by the independent Science Based Targets Initiative at the end of 2020.
This is where we want to grow. In (5), we have pooled our German electricity generation from
lignite, hard coal and nuclear fuel, which will lose importance due to exit roadmaps
established by the state. Figures for 2019 have been adapted to the new segment structure
Transformation into a specialist in sustainable power generation and energy trading.
retroactively to enable comparability.
Our company has changed fundamentally over the last few years. In the past, RWE was an
integrated utility, which was active along the entire energy value chain. Now, we are a
The segments are made up of the following activities:
company specialising in power production and energy trading that wants to drive the
transformation of the energy sector, aiming for more sustainability. Our goal is carbon-
• Offshore Wind: Our business involving offshore wind is subsumed here. It is overseen by
neutral electricity supply that is both secure and affordable.
our Group company RWE Renewables.
The road to the new RWE began in 2016 when we pooled the Renewables, Retail and
• Onshore Wind / Solar: This is the segment in which we pool our onshore wind, solar power
Grid & Infrastructure divisions in a subsidiary called innogy and took it to the stock market.
and battery storage activities. Here again, operating responsibility lies with
One-and-a-half years later, in early 2018, we agreed an extensive asset swap with E.ON,
RWE Renewables.
which was implemented in two steps. First, we sold our 76.8 % investment in innogy in
September 2019 and in return received E.ON’s renewable energy business, a 16.67 % stake
• Hydro / Biomass / Gas: This segment encompasses our run-of-river, pumped storage,
in E.ON, and the minority interests in our nuclear power stations Gundremmingen (25 %) and
biomass and gas power stations. It also includes the Dutch Amer 9 and Eemshaven hard
Emsland (12.5 %) held by the E.ON subsidiary PreussenElektra. The second step was taken in
coal power plants, which we are increasingly co-firing with biomass, as well as the project
mid-2020 and involved transferring certain innogy operations back to RWE in legal terms:
management and engineering services specialist RWE Technology International. These
the renewable energy business, the German and Czech gas storage facilities, and a 37.9 %
activities are overseen by RWE Generation. In addition, this company has been
stake in the Austrian energy utility KELAG. Now we are focusing on the integration of the
responsible for the design and implementation of RWE’s hydrogen strategy since the
acquired business with more than 4,000 employees into the RWE organisation.
beginning of 2021. The 37.9 % stake in the Austrian energy utility KELAG previously held
by innogy is also assigned to Hydro / Biomass / Gas.
22
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Strategy
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• Supply & Trading: This is where we report proprietary trading of energy commodities. The
elements of our emissions reduction strategy are the rapid expansion of zero-carbon
segment is managed by RWE Supply & Trading, which also acts as an intermediary for gas,
renewable energy, increased utilisation of storage technologies and the use of carbon-
supplies key accounts with energy, and undertakes a number of additional trading-related
neutral fuel to produce electricity. In doing so, we are acting in line with the Paris climate
activities. The German and Czech gas storage facilities which we received from innogy
goals, as recently confirmed by the Transition Pathway Initiative and the Science Based
also form part of this segment.
Targets initiative. Our brand appearance demonstrates how seriously we take our
environmental responsibility. RWE’s new purpose, ‘Our energy for a sustainable life’, is an
• Coal / Nuclear: Our German electricity generation from lignite, hard coal, and nuclear fuel
expression of the determination of the Group and its approximately 20,000 employees to
as well as our lignite production in the Rhenish mining region to the west of Cologne are
ensure a sustainable energy system.
subsumed in this segment. This is also where we report our investments in Dutch nuclear
power plant operator EPZ (30 %) and Germany-based URANIT (50 %), which holds a 33 %
The new RWE: a world leading renewable energy company. The transaction with E.ON has
stake in uranium enrichment specialist Urenco. The aforementioned activities and
turned us into a world-leading producer of electricity from renewable sources. We want to
investments are assigned to our Group companies RWE Power (lignite and nuclear) and
expand this business rapidly. By the end of 2020, we already had renewable energy assets
RWE Generation (hard coal).
with a total capacity of 10.8 GW, with 9.2 GW attributable to wind and 0.2 GW to
photovoltaics. These figures reflect the generation capacity allocable to us on a prorated
Group companies with cross-segment tasks such as the Group holding company RWE AG
basis, i. e. in accordance with the stakes that we hold. In addition to existing assets, we have
are stated as part of the core business under ‘other, consolidation’. This also applies to our
a wide portfolio of growth projects in various stages of development. Here again, the focus is
stakes of 25.1 % in German transmission system operator Amprion and 15 % in E.ON.
on wind, followed by solar PV. On top of being environmentally friendly, renewable energy
However, we recognise the dividends we receive from E.ON in the financial result.
also enables stable and attractive returns. Electricity production from renewables is clearly
Furthermore, ‘other, consolidation’ contains consolidation effects.
already our strongest income generator. In the past fiscal year, it already accounted for
about half of our adjusted EBITDA.
Our goal by 2040: RWE will become carbon neutral. As one of the world’s leading energy
companies, we shoulder special responsibility for the implementation of the emission
Fast growth in wind and solar power. We want to grow our wind and solar capacity to over
reduction targets in the energy sector. The European Union aims to be carbon neutral by
13 GW (pro-rata) by the end of 2022. We plan to make over €1.5 billion in net investments
2050. Our objective is to achieve the same goal by 2040, and we have already made good
to this end every year. Reinvesting proceeds from sales of investments will actually cause the
progress on this path. We reduced our annual carbon dioxide emissions from electricity
gross expenditure to be much higher. In August 2020, we expanded our financial headroom
production by 62 % from 2012 to 2020. By 2030, we plan to have lowered them by at
by increasing our capital by €2 billion.
least 75 %. The phaseout of electricity generation from coal will play a central role. Further
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Further information
Whenever we tackle wind or solar projects, we want to cover the entire value chain from
meet the technical and economic requirements for securing supply in the long term. But we
development to construction and operation. Geographically, we are focusing on markets in
are working on changing the situation. RWE has been involved in the development,
Europe, North America and the Asia-Pacific region. As of the balance-sheet date, our largest
construction and operation of battery storage systems for several years now. We operate
construction project was the UK North Sea wind farm Triton Knoll with a total installed
such a unit in the town of Herdecke in the Ruhr area with a storage capacity of 7 MWh,
capacity of 857 MW, which is scheduled to have taken all its turbines online by 2022. We are
making it one of the biggest in Germany. We are rolling out our largest battery project to
also building huge onshore wind farms, e. g. Nysäter in Sweden with a capacity of 475 MW,
date in Hickory Park, which is located in the south of the US state of Georgia. The site will be
which is expected to be completed in 2021. Moreover, we want to commission our
home to a 196 MW solar farm coupled to an 80 MWh battery storage system. This
Limondale solar farm in New South Wales, Australia, this year, too. With an installed capacity
combination will enable electricity feeds into the local grid to be optimised, significantly
of 249 MW, it will be one of the most powerful installations of its kind in the country.
improving the solar array’s yield. We want to launch further projects of this type.
Concurrently, we are exploring innovative electrochemical storage methods. We have
Thanks to our sizeable project pipeline, we firmly believe that we will make good progress in
presented two research and development undertakings dedicated to this goal on page 32.
the expansion of renewable energy over the long term. One advantage in this respect in
Besides electrochemical storage, power-to-gas technologies can also make a substantial
addition to the project experience and technical expertise of our teams is RWE’s established
contribution to security of supply. They use electricity generated by carbon-neutral methods
position in core markets such as Germany, the United Kingdom and the USA. Existing
to produce hydrogen by electrolysis, which can later be used to generate electricity when
production sites provide points of entry and synergistic potential for new build projects. For
needed.
instance, last year we concluded agreements for lease which allow us to utilise areas in the
immediate vicinity of four existing UK offshore wind farms to develop expansion projects.
Carbon-neutral processes: a target for all sectors. Reducing emissions in the electricity
However, we also intend to grow in new markets. In 2020, we acquired a large number of
sector – as intended by the EU – is not the end of the road to achieving carbon neutrality.
onshore wind projects from Nordex in France, a country with attractive subsidy conditions in
Three quarters of European demand for energy is still being met with oil, coal and gas. But
which we were hardly present before. Furthermore, we are preparing to enter the Japanese,
that is set to change. Electrification, in other words switching energy consumption to
Taiwanese and South Korean markets where we want to implement offshore wind projects
electricity produced by carbon-neutral methods, e. g. the use of heat pumps instead of oil
together with local partners.
and gas heating systems, also enables significant emission reductions in the manufacturing,
heat and transportation sectors. Further advantages of electrification include boosting
High-capacity storage: prerequisite for 100 % electricity generation from renewables.
efficiency. For example, an electric vehicle is capable of using about 95 % of available
Electricity generation from wind and solar power greatly depends on the weather, time of
energy, compared to the mere 30 % achieved by internal combustion engines. And the
day and season. Sometimes, power produced from renewable sources only covers a
higher efficiency of electricity-based applications drives down the energy requirement. By
fraction of demand, and at other times, it exceeds local needs to such an extent that
contrast, demand for electricity generated by zero-carbon techniques – our most important
production actually has to be throttled. Consequently, storage technologies are increasingly
product – will increase steadily as electrification progresses.
coming to the fore as renewable energy continues to be expanded. They usually do not yet
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Further information
Hydrogen: integral component of the energy transition. The economy can only be
network operators. Only recently, in November 2020, did we qualify in such an auction
decarbonised completely if solutions are also found for applications where direct
for the construction of a 300 MW grid stabilisation unit at the Biblis site. We are also
electrification is not an option. Examples of this are the production of steel and fertilisers as
considering buying existing gas-fired power stations. For instance, we acquired the 382 MW
well as aviation and shipping. In the near future, these areas offer the greatest potential for
King’s Lynn station in the east of England in early 2020.
utilising hydrogen produced by zero-carbon methods. RWE intends to spur the expansion of
the hydrogen economy, especially in Germany, the Netherlands, and the United Kingdom.
Conversely, coal and nuclear power stations will increasingly lose importance within our
In pursuit of this goal, we will work along the entire value chain, from green electricity
generation portfolio. In Germany, nuclear energy is subject to a phaseout roadmap, which
generation and hydrogen production by electrolysis to hydrogen trading and storage and
stipulates a latest possible shutdown date for every single plant. Two RWE nuclear power
the conclusion of commercially optimised supply agreements with major industrial
stations are still online: Gundremmingen C and Emsland. We have permission to operate
customers. In the last two years, we have forged numerous partnerships with businesses
these assets until the end of 2021 and the end of 2022, respectively, after which we will
and research institutes seeking to co-operate with us to create nationwide hydrogen
shut them down. Thereafter, our nuclear operations will focus on dismantling our stations
infrastructure. Examples of this are the German GET H2 and AquaVentus initiatives and the
safely and efficiently. In addition, we are doing everything we can to ensure the continued
Dutch Eemshydrogen and NortH2 ventures, on which we report in detail on pages 31 et seq.
use of the nuclear power plant sites, as demonstrated by the aforementioned grid
Further information on this topic can be found at www.rwe.com/hydrogen.
stabilisation system in Biblis.
Conventional electricity generation: growing significance of gas as a source of energy.
The option of using coal as a source of energy will also vanish in the foreseeable future. All
Building the storage infrastructure required for a nationwide supply of green electricity is a
relevant RWE core markets have firm legal exit dates. The United Kingdom has set its sights on
task that will take decades, not years to accomplish. Therefore, power stations capable of
the earliest exit year, which is 2024. Aberthaw B, the last RWE hard coal-fired power plant in
offsetting fluctuating wind and solar power production will remain necessary for the
operation there, was shut down early in March 2020.
foreseeable future. With our conventional generation capacity, we are making an
indispensable contribution to the reliable and tailored supply of electricity in our core
In the Netherlands it will be forbidden to generate electricity from coal from 2029 onwards.
markets Germany, the Benelux region, and the United Kingdom. Our gas-fired power
For older assets, the ban comes into effect five years earlier. This has grave consequences
stations, most of which are state-of-the-art, are especially well suited to partner with
for our Amer 9 (631 MW) and Eemshaven (1,580 MW) power plants, which were initially
renewable energy because they emit little carbon dioxide and can react quickly to load
designed to run on hard coal only. Thanks to the state’s support, we co-fire biomass in both
fluctuations in the grid. Another advantage of gas-fired power stations is that they can be
these stations now. By the end of last year, this fuel accounted for 80 % of generated
retrofitted to run on zero-carbon fuel, e. g. green hydrogen.
capacity in Amer 9 and 15 % in Eemshaven. To continue operating the stations, we would
In terms of generation capacity, gas is already our main conventional source of energy, and
Eemshaven. This is possible technically, but so far state subsidies have only covered the
its share of our power plant portfolio is expected to increase further. Currently, however, new
additional cost of achieved levels of biomass co-firing, amounting to 80 % and 15 % for the
builds are usually uneconomical, unless they receive guaranteed payments under the
two stations, respectively. To date, there have been no prospects of an increase in these
German Combined Heat and Power Act or as a result of invitations to tender from the
funds.
have to increase these shares to 100 % by the end of 2024 at Amer 9 and 2029 at
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Further information
In Germany, in mid-2020 the Lower and Upper Houses of Parliament passed the Coal
fundamental structural change. We intend to play our part in shaping this change and help
Phaseout Act, on which we report in detail on pages 37 et seq. The new law envisages
to ensure that the energy industry continues to have a major role in the region. Some
gradually switching off all of the country’s coal power plants by 2038. The Act contains a
recultivation land is very well suited for the expansion of renewable energy. Three RWE wind
detailed exit roadmap for Germany’s lignite-fired power stations, whereas shutdowns of
farms are already located there. We also intend to continue developing our power plant
hard coal power plants will be decided via auctions. In the first few years, all the lignite
sites. For example, there are plans to build an innovation, technology and commercial park
capacity reductions will be implemented by RWE. At the end of 2020, we shut down the first
in Frimmersdorf and the surrounding area. At the Weisweiler site, within the scope of an EU
300 MW unit in the Rhenish lignite mining region. We will take a further 2.5 GW of generation
project, we are looking into the possibility of capturing geothermal heat, which could be fed
capacity offline in 2021 / 2022, and just operate our three state-of-the-art 1,000 MW
into the district heating network of the greater Aachen area. In addition, we will thoroughly
blocks from 2030 onwards. Subject to approval from the European Commission, the
explore Power-to-Gas technology at the Niederaussem Innovation Centre. Since 2013,
German government will pay us €2.6 billion in compensation for our early exit from lignite.
our research and development activities at the Centre have involved producing fuel and
However, the financial burden we will actually incur is much higher than this. We nevertheless
feedstock for the chemical industry from hydrogen and carbon dioxide obtained by
believe the Coal Phaseout Act is acceptable, as it provides planning certainty for our lignite
electrolysis.
business.
To further limit our exposure to economic risks in coal-fired power generation and make
RWE’s core business. It forms the economic link between the elements of our value chain,
faster progress en route to becoming carbon neutral, we entered the Ibbenbüren B and
the regional markets and the various energy commodities. It is overseen by the Group
Westfalen E power stations in the first hard coal shutdown auction held by the German
Network Agency (see page 44). Both stations won a remuneration contract and stopped
operating at the end of 2020. On condition that the German Network Agency approves the
company RWE Supply & Trading, which focuses on trading electricity, gas, coal, oil,
biomass, and CO2 certificates. RWE Supply & Trading mainly conducts these activities from
Europe as well as via subsidiaries in New York, Singapore, Beijing and Tokyo. Another of the
closure of the two power plants, we will not produce electricity from hard coal in Germany
Group company’s activities consists of marketing the electricity from RWE power stations
Supply & Trading: commercial hub for the generation business. Energy trading is part of
any longer.
and procuring the fuel and emission allowances required to produce it. The objective here is
to limit price risks. On top of that, RWE Supply & Trading is in charge of the commercial
The coal phaseout poses major social and operational challenges, mainly relating to our
optimisation of our power plant dispatch, the earnings of which go to our generation
lignite business. For example, we have to end our opencast mining activities in Hambach
companies. Companies outside of the RWE Group can also benefit from the expertise of our
early, while maintaining Hambach Forest, which will be extremely expensive. Furthermore, we
trading business. They are offered a wide range of products and services, running the gamut
are forced to implement major layoffs. The state will provide subsidies for the affected
from traditional energy supply contracts and comprehensive energy management solutions
employees, including an adjustment allowance. However, we will also pay for some of the
to sophisticated risk management concepts.
redundancy measures ourselves. The Rhenish lignite mining area will be subjected to
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Further information
Intermediary trading and storage of gas harbour additional earnings potential. Another
Attractive investment portfolio increases financial strength. RWE’s business operations
string to RWE Supply & Trading’s bow is the gas business. This is an area in which the
are supplemented by a portfolio of investments in energy companies, which we believe will
company aims to establish itself as a leading European intermediary. The company already
be a reliable source of substantial income. These are primarily the stakes in Amprion
supplies gas to numerous companies inside and outside of the RWE Group. To this end, it
(25.1 %), KELAG (37.9 %) and E.ON (15 %). Our interest in E.ON is solely of financial
enters into long-term supply agreements with producers, organises gas transportation by
importance to us. We are currently using this investment and our claim for compensation for
booking pipelines and optimises the timing of deliveries using leased gas storage facilities.
the early exit from lignite against the federal government to fund the mining provisions.
The greater the size and diversification of the procurement and supply portfolios, the
Conversely, we have strategic goals in respect of our stake in KELAG. RWE and KELAG’s
greater the chances to commercially optimise them. RWE Supply & Trading also concludes
co-shareholder, the Austrian state of Carinthia, have a partnership aiming, among other
transactions involving liquefied natural gas (LNG). The main objective is to take advantage
things, to strengthen the company’s role as a centre of excellence for run-of-river power
of differences in price between regional gas markets which are not connected via pipelines.
stations.
As part of the asset swap with E.ON, we received the gas storage facilities of our former
RWE AG’s management system. Ensuring sustainable growth in shareholder value is at the
subsidiary innogy: five in Germany with a total capacity of 1.6 billion cubic metres and six in
heart of our business policy. To manage the Group’s activities, RWE AG deploys a groupwide
the Czech Republic with a volume of 2.7 billion cubic metres. We report income from the
planning and controlling system, which ensures that resources are used efficiently,
management of these assets in the Supply & Trading segment. For regulatory reasons, we
and provides timely, detailed insight into the current and prospective development of
have to keep the storage business legally independent of our gas trading and gas sales
the company’s assets, financial position and net earnings. Based on the targets set by
activities. The owners and operators of these storage facilities are the Group companies
the Executive Board and management’s expectations regarding the development of
RWE Gas Storage West and RWE Gas Storage CZ, which offer their market participants
the business, once a year we formulate our medium-term plan, in which we forecast the
storage services at reasonable non-discriminatory conditions. Their customers use the
development of key financial indicators. This plan contains the budget figures for the
storage to profit from sudden and seasonal changes in gas prices. However, only small
following fiscal year and planned figures for the years thereafter. The Executive Board
margins can currently be achieved in the storage business. This holds true especially for the
submits the plan to the Supervisory Board, which reviews and approves it. During the fiscal
German market, which is characterised by excess capacity. However, we are confident that
year, we produce internal forecasts based on the budget. The Executive Boards of RWE AG
the need for storage and achievable margins will rise over the medium term, in part due to
and the main operating companies meet regularly to analyse the interim and annual
increasing demand for power plant gas. The use of our facilities to store hydrogen offers
financial statements and update the forecasts. In the event that the forecast figures deviate
additional earnings potential in the long run.
significantly from the budget figures, the underlying reasons are analysed and
countermeasures are taken if necessary. We also immediately notify the capital market
if published forecasts need to be modified.
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Further information
Major key performance indicators used in managing our business are adjusted EBITDA,
Sustainability management – more than just reducing emissions. We can only succeed
adjusted EBIT, adjusted net income, capital expenditure, and net debt. EBITDA is defined as
over the long term if we ensure society’s acceptance by embracing our corporate
earnings before interest, taxes, depreciation and amortisation. In order to improve its
responsibility (CR). General consensus equates this with matters relating to the environment,
explanatory power in relation to the development of ordinary activities, we remove non-
society and governance (ESG), meaning that CR goes far beyond the reduction of
operating or aperiodic effects: capital gains or losses, temporary effects from the fair
greenhouse gas emissions. To optimise our assessment of the expectations which society
valuation of derivatives, impairments and other material special items that are shown in
has of us, we constantly seek to engage in dialogue with stakeholder groups. These are
the non-operating result. Subtracting operating depreciation and amortisation from
primarily shareholders, financial partners, employees, politicians, associations, non-
adjusted EBITDA yields adjusted EBIT. Adjusted net income is another key operating indicator
government organisations and civic initiatives. The stimulus we receive by interacting with
for us. We arrive at this figure by correcting net income to exclude the non-operating result,
our stakeholders helps us to determine the focal points of our ESG activities. Matters of
income from discontinued operations as well as material special items in the financial result
great importance to us in addition to reducing our emissions include the health of our staff,
and in the income attributable to non-controlling interests. In addition, instead of the actual
biodiversity at our sites, the diversity of our workforce and the attractiveness of RWE as an
tax rate, which reflects one-off effects, we apply a rate of 15 %, which is oriented towards the
employer. We set ourselves specific goals in respect of numerous such issues, measure the
expected average tax burden of the coming years.
degree to which we achieve them using KPIs, and make the results transparent to the public.
The degree to which ESG targets are achieved also has a major effect on the remuneration
We primarily use the internal rate of return for evaluating the attractiveness of investment
of the Executive Board of RWE AG.
projects. The Group’s financial position is analysed using cash flows from operating
activities, amongst other things. We also attach special importance to the development of
Further information on our ESG goals and accomplishments can be found in our Sustainability
free cash flow. It is the result of deducting capital expenditure from cash flows from
Report and in the Group’s separate Non-financial Report in accordance with Section 315b,
operating activities and adding proceeds from divestments and asset disposals to them.
Paragraph 3 of the German Commercial Code. For fiscal 2020, these reports will be
Net debt is another indicator of RWE’s financial strength. It is calculated by adding
available in April 2021 and accessible at www.rwe.com/en/responsibility-and-sustainability.
provisions for pensions and similar obligations, for nuclear waste management, and for the
We also report on the assessment by independent rating agencies of our sustainability
dismantling of wind farms to RWE’s net financial position. Conversely, provisions for mining
strategy and its implementation on our website. For further details, go to
damage and the financial assets used to cover them are disregarded. In managing our
www.rwe.com/en/ratings-and-rankings.
indebtedness, we orientate ourselves towards the leverage factor, the ratio of net debt to
adjusted EBITDA in our core business.
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2.2 Innovation
How can wind farms be built in deep waters? What can we do to ensure a carbon-
How we are using new technologies for offshore wind expansion. We rank among the
neutral supply of electricity during lulls in the wind and periods of darkness? What
world’s leading companies in offshore wind power and are looking for ways to expand our
options are there to make environmentally sensible use of carbon dioxide? We at RWE
reach. The aim of some of our current R & D projects is to identify the most competitive
want to provide convincing answers to such questions. Last year, we worked with
floating foundation technologies. This would enable us to venture into entirely new wind
numerous partners in industry and science to launch or forge ahead with more than
power territories.
200 innovation projects. Most of our ventures were primarily dedicated to achieving
one goal: master the challenges of the energy transition with innovative solutions.
The foundations of offshore wind farms are typically built on the seabed. True to the
principle: the deeper the water, the more robust the structure needs to be in order to
withstand the elements. This necessitates more building materials, which, in turn, causes
Research and development at RWE: solutions for a sustainable energy system. RWE is
project costs to rise. Therefore, wind turbines are generally only profitable in waters with a
innovative in many ways. We are motivated both by a desire to remain competitive in an
maximum depth of 60 metres. However, in order to harness the potential of wind energy
ever-changing environment as well as a passion to be a driving force of this change. With
more effectively, companies are working on concepts for floating wind turbines. They are
the help of our innovation projects, we are looking to develop solutions that help us advance
mounted on a float made of steel or concrete, which is secured to the seabed using mooring
the utilisation of renewable energy, expand electricity storage, become involved in large-
lines and anchors. This opens up the possibility of deploying wind turbines in deeper waters,
scale hydrogen production, and help build a circular economy in which sensible use is made
e.g. off the coasts of Asia, the Americas or the Mediterranean region as well as in parts of
of carbon dioxide.
the North Sea. According to WindEurope, the European wind industry association, in about
80 % of all sea areas where wind speeds are suitable for electricity generation, the ocean is
Our more than 900 patents and patent applications, based on about 250 inventions, are
simply too deep for conventional foundation designs. We are currently involved in
testimony to the importance we ascribe to research and development (R & D). Last year, we
demonstration projects for three different types of floating foundations with the objective of
worked on 205 R & D projects. Around 390 of our staff were solely dedicated to these
identifying the most viable of these technologies.
activities or contributed to them in addition to performing their normal tasks. In such
ventures, we often work with other companies or research institutions, meaning we generally
One of the three demonstration projects we are working on is TetraSpar. It consists of a
only bear a portion of the project costs. This is reflected in the RWE Group’s operating R & D
tubular steel support structure which is kept stable in the water by a keel. As the support
spending which in 2020 amounted to €20 million (previous year: €21 million).
structure has a modular design, its individual parts can be prefabricated at different
On the following pages we present a small selection of our current innovation projects.
Technologies from Denmark, and Japanese power utility TEPCO. We finished assembling the
They illustrate the range of challenges we are facing in light of the energy transition and
first TetraSpar base in the Danish port of Grenaa in October 2020. It was placed in storage
demonstrate the creativity with which we are tackling these issues.
for the winter and is scheduled to be launched in the spring of 2021. We will then mount
locations, which is cost-effective. We are working on this project with Shell, Stiesdal Offshore
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a 3.6 MW wind turbine on the float at the quayside, after which tugboats will take the entire
is also used in bridge building. The floating platform weighs approximately 10,000 metric
structure to the test site ten kilometres off the Norwegian coast near Stavanger, where it will
tons with its base approximately 20 metres below sea level. The project focuses on
be attached to the seabed 200 metres below by means of three anchor chains and then
evaluating the floating technology in regard to environmental factors and analysing how
connected to the grid via a cable. Power generation is scheduled to start in the summer of
offshore wind can coexist with ocean shipping. The project is in the development stage.
2021. The floating turbine will be equipped with a large number of sensors to measure
This year, we plan to select a turbine and start negotiations with construction companies.
whether its behaviour in real-life conditions is in line with our predictions based on
calculations and tests.
How we intend to harvest high-altitude winds. For several years, RWE has been exploring
how to harness the fairly strong and steady high-altitude winds to produce electricity.
The second project is DemoSATH, in which we are working with the Spanish company Saitec
Airborne wind energy (AWE) systems offer huge potential for applications in this area. AWE
Offshore Technologies on the development and construction of a floating platform for a
systems consist of a flying device, a tether and a ground station. The flying device is usually
2 MW wind turbine in the sea near Bilbao, in northern Spain. The project is based on Saitec’s
a version of a power kite, such as that used for kite surfing, or a fixed-wing construct similar
SATH (swinging around twin hull) technology using a catamaran-like float made of pre-cast,
to that of a small aircraft. They can both operate at heights of up to 500 metres. Power is
post-tensioned concrete elements. The floating platform can freely rotate around a single
generated as the device manoeuvres crosswind. This is done either in the sky using onboard
point of mooring, depending on wind and wave directions. The DemoSATH prototype
turbines or on the ground as the tether unwinds a winch which drives a generator.
including its turbine will be assembled on a quayside in the port of Bilbao, before being
towed to its mooring point at a test site in the Atlantic, two kilometres from the Basque
As part of a collaborative venture with SkySails Power, we acquired an AWE system rated at
coast, where the water is around 85 metres deep. The floating platform will be held in place
up to 200 kW from the Hamburg-based company and want to operate it during a three-
using hybrid mooring lines consisting of chains and synthetic fibre ropes. In the project
year research and development period. Concurrently, we are developing a test site for AWE
schedule, three-and-a-half years are allocated for planning, construction and test
systems in Ireland with a view to testing further prototypes and concepts, including a
operation. After some delays due to COVID-19, the wind turbine is expected to go into
150 kW unit from our Dutch partner Ampyx Power. The EU has committed to fund this
service in summer 2022.
project. We are confident that the new technology will establish itself as a useful supplement
to traditional wind energy generation methods as AWE systems have advantages over
In the third project, New England Aqua Ventus, we are collaborating with the University of
conventional wind turbines in terms of material usage, maintenance requirements, capacity
Maine and Diamond Offshore Wind, a subsidiary of Mitsubishi Corporation. The aim is to
utilisation, noise emissions and casting shadows. Furthermore, they can be used flexibly at
deploy a 10 MW floating wind unit in the Gulf of Maine along the eastern coastline of the
various locations. Based on our assessment, commercial operation of MW-class airborne
U.S. by the end of 2023. The unit will feature the University of Maine’s patented floating hull
wind energy systems will be possible in the coming decade.
technology consisting of modular concrete components with glued joints – a technique that
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RWE Annual Report 2020 1
To our investors
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Combined review
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Innovation
3
Responsibility statement
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Consolidated financial
statements
5
Further information
How we are forging ahead with green hydrogen production. The more electricity
Another initiative harbouring substantial potential is AquaVentus. The idea behind it is to
generation switches to the wind and sun as energy sources, the more important energy
produce hydrogen offshore using electricity from offshore wind farms and transport it via
storage becomes in order to ensure the availability of electricity when needed, independent
pipelines to onshore demand hotspots. The island of Heligoland, which is situated in the
of the weather. Two alternatives exist to provide power storage to the necessary scale:
German North Sea, acts as a hub to which the hydrogen produced by offshore wind turbines
high-capacity batteries and hydrogen produced from green energy, which can be converted
is transported through pipelines. The Port of Heligoland is already a logistical centre for the
back to electricity on demand. The added advantage of hydrogen from zero-carbon
operation of offshore wind farms. Initially, the hydrogen will only be used to meet the island’s
techniques lies in its versatility: it can be used not only to store electricity but also to
needs. Once production volume increases, the hydrogen will be forwarded to the mainland,
decarbonise industrial processes and modes of transport which cannot be electrified. We
first via tanker and then via a pipeline. Our partners in AquaVentus include Gascade,
are involved in current initiatives for the expansion of hydrogen infrastructure focusing on
Gasunie, Shell and Siemens. A pilot project is being conducted to build two 14 MW wind
these hydrogen applications. RWE is working on a large number of hydrogen projects in
turbines in the coastal waters of Heligoland and integrate an electrolyser in each of their
Germany, the Netherlands and the United Kingdom. The following passages present
bases. If the project stays on schedule, the turbines could start operation in 2026. In the
four projects that could contribute to the northwestern German / Dutch region turning
long run, electrolysers with a total capacity of 10 GW could be installed in the North Sea
into a hydrogen hub. We also report on this and further major hydrogen undertakings at
through to 2035. This would be enough to produce up to 1 million metric tons of green
www.rwe.com/hydrogen.
hydrogen every year.
One of the first hydrogen initiatives spanning several industries in Germany is GET H2.
One of our most important hydrogen projects outside Germany is Eemshydrogen, based at
In addition to RWE, BASF, BP, Evonik, Nowega, OGE, ThyssenGas and Uniper, a host of
our Eemshaven power plant site in the Netherlands. This is the projected home of an
additional companies and scientific institutions are participating in the project. GET H2
electrolyser powered by electricity from our neighbouring Westereems onshore wind farm.
covers the entire hydrogen value chain, from production and transport to usage. The
The plant’s initial capacity has been set at 50 MW, although future increases in local wind
long-term objective is to build a nationwide hydrogen infrastructure in Germany. Under the
power capacity and hydrogen demand could enable capacity to be ramped up gradually.
initiative, we have joined forces with several partners to launch the GET H2 Nukleus project.
We intend to transport the hydrogen via repurposed gas pipelines, store it in a salt cavern if
RWE’s role is to install and operate an electrolyser at our Lingen power plant site, with which
necessary, and then deliver it to major customers. Talks with companies participating in the
we can use electricity from wind farms to split water into hydrogen and oxygen. The planned
development of hydrogen infrastructure and with potential off-takers in the nearby Delfzijl
capacity is 100 MW. This would make the unit much bigger than any other in operation in
industrial cluster are already underway. Current plans envisage the electrolyser being
Germany. It is envisaged that the green hydrogen will be transported via repurposed gas
commissioned in 2024.
pipelines to the northern Ruhr area where it can be used by refineries and chemical parks.
Production and transport of this hydrogen could begin as early as the end of 2023. This
NortH2 is another project planned in the north of the Netherlands. The objective is to turn
would lay the cornerstone for gradually expanding public hydrogen infrastructure. In
the region into a hub for supplying northwestern Europe with green hydrogen. A system
addition, the project partners aim to make electrolysis technology ready for mass
consisting of offshore wind farms, electrolysers, gas storage facilities and pipelines is
production by using it in large-scale plants, thereby reducing the future cost of green
expected to be set up for this purpose. NortH2 was launched in early 2020 by Gasunie,
hydrogen production.
Groningen Seaports and Shell. Equinor and RWE started contributing their expertise to the
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undertaking in December. The partners plan to build 4 GW of electricity generation and
In our second battery project – Lazarus – we are seeking to leverage an especially
electrolysis capacity by 2030, pushing up this figure to over 10 GW by 2040. The end game
affordable and sustainable storage solution with pre-used lithium-ion batteries from
is therefore of a similar order of magnitude as the German neighbour project AquaVentus.
electric vehicles. The advantage in this respect is that these ‘second-life batteries’ can be
A feasibility study will clarify whether the NortH2 project can be carried out as planned. If the
sourced affordably and often still have more than 70 % of their original storage capacity.
study has a positive outcome, the partners intend to start developing the project in the
Extending their life also makes sense from an ecological standpoint, given the greenhouse
second half of 2021.
gasses emitted during their production. Our long-term plan is to combine a number of these
batteries to form a large-scale storage system. Since August 2020, we have been working
How we plan to use batteries to ensure grid stability. Alongside hydrogen technology,
with a partner from the automotive sector on a pilot plant which we intend to use in the
electrochemical storage is an indispensable building block of climate-friendly energy supply.
balancing power market. This presents us with the technical challenge of managing the
We have operated a 7 MWh battery storage facility next to the Herdecke pumped-storage
variety of degradation levels in second-life batteries. In Project Lazarus, we will explore how
power plant on the Ruhr river since the beginning of 2018. Three freight containers,
to operate our system reliably despite this.
equipped with a total of 552 battery modules, serve as the beating heart of the unit.
Drawing on experience gained, we have initiated further battery storage projects, two of
How we are turning carbon dioxide into fuel. A complete decarbonisation of industrial
which we will present below.
processes will be all but impossible in the coming decades. So whether Europe meets its
target of carbon neutrality by the middle of the century will essentially depend on how we
Panta.rhei is the first such project: at the new RWE campus in Essen, we have been
deal with the carbon dioxide that is unavoidably emitted during manufacturing processes.
developing a redox flow battery since May 2020. What is unique to this technology is that it
One option is to store the carbon dioxide below ground, preventing it from entering the
stores electric energy in chemical compounds that are dissolved in a liquid. This explains
atmosphere. However, the more sensible alternative is capturing the carbon dioxide, e. g.,
why it is also referred to as a ‘liquid battery’. Our pilot plant has a storage capacity of
by combining it with green hydrogen and turning it into chemical products such as plastics.
390 kWh. When fully charged, it can deliver 120 kW for more than three hours. We plan to
We have been working on eco-friendly ways to use carbon dioxide for over ten years now.
harness its full potential this year. We expect to gain valuable experience from the Panta.rhei
Our research is based on the carbon dioxide from our pilot plant at the Niederaussem
project that will help us operate redox flow batteries reliably. Our test facility will initially be
Innovation Centre in the Rhenish coal mining region. Together with BASF and Linde, we
used in the balancing power market to stabilise the grid. This is because batteries can react
to changes in grid frequency within a matter of seconds. If the test facility proves itself, we
will investigate further applications. For instance, we could use liquid batteries in the
electricity wholesale market and take advantage of differences in price resulting from
fluctuations in feed-ins of wind and solar power, for example.
have been developing one of the world’s leading technologies for what is known as
CO2 scrubbing. This technique is used to separate carbon dioxide from the flue gas of a
power station or chemical plant, before liquefying it and making it available for recycling.
Our CO2 scrubbing demonstration unit has already proven its capabilities during years of
extensive testing. Since 2009, it has completed more than 85,000 operating hours,
achieving carbon capture rates of up to 98 %. We use the carbon dioxide to produce
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synthetic fuels and raw materials that can be used by the chemical industry, replacing fossil
After completion of ALIGN-CCUS in November 2020, the pilot plant remained in operation.
fuels such as oil or natural gas. The resulting fuels and materials therefore hold great
We now use it for the TAKE-OFF project, which was launched in early 2021 and is also
potential for industry and transport. Together with partners, we have already launched half a
backed by the EU. We are working with nine partners from six countries on TAKE-OFF. The
dozen projects to convert carbon dioxide. All have been approved for funding by either the
aim is to keep developing the available technology to produce aviation fuel based on DME
EU or the German Ministry of Economic Affairs and Energy (BMWi), among others. Two of
these projects, MefCO2 and ALIGN-CCUS, have already successfully run their course,
providing us with the foundation for a series of new R & D initiatives due to start in 2021.
In the MefCO2 project (methanol fuel from carbon dioxide) we have produced methanol
using carbon dioxide and hydrogen. The hydrogen, in turn, was produced by electrolysis
and methanol. In our NRW-Revier-Power-to-BioJetFuel project, we are also researching
whether we can use existing methods on an industrial scale to produce eco-friendly aviation
fuel from hydrogen and carbon dioxide. We assume that politicians are more likely to
promote the use of green kerosene for aviation before green diesel for trucks and ships.
This should make the results of this project interesting from an economic point of view.
using water and electricity. A wide variety of chemical products are based on methanol, one
Detailed information on these projects and our other R & D ventures can be found at
of the most commonly manufactured chemicals in the world. The clear liquid can also act as
www.rwe.com/innovations.
a long-term storage medium for hydrogen. We are leveraging this discovery to power a
factory vehicle, for example. We equipped the electric car with an additional fuel cell in order
to increase its range and be able to charge while driving. Here, methanol is used as a
hydrogen source. The fuel cell charges the vehicle battery with the energy released when the
hydrogen reacts with oxygen and pure water is produced. In the future, we want to explore
additional ways of using methanol as a fuel.
A total of 30 industrial enterprises and research institutions from five European countries
were involved in ALIGN-CCUS. The German Ministry of Economic Affairs and Energy (BMWi)
and the European Union committed funds to the project. With ALIGN-CCUS, we have
demonstrated how an entire value chain, from capturing and using carbon dioxide to
storing it, can be designed. For this purpose, we converted carbon dioxide and hydrogen into
dimethyl ether (DME). DME is a liquefied gas, similar to propane or LPG (autogas) and is used
as a hairspray propellant, for example. DME, just like LPG, can be used to power cars. It
burns like diesel but is low in both soot and nitrogen oxide, making it a cleaner option. The
deciding factor here is that we also produce the necessary hydrogen ourselves – from water
and green electricity. In Niederaussem, we commissioned a pilot plant in early 2020,
allowing us to produce 50 kilogrammes of DME a day using carbon dioxide and hydrogen.
We initially used the DME as fuel for a suitably converted diesel generator to produce
peak-load electricity.
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2.3 Business environment
Energy policy continues to centre on climate protection. The EU intends to enshrine an
The legislative initiative also paves the way for raising the 2030 target for reducing
ambitious emission reduction goal for 2030 in law. At the end of 2020, the European
greenhouse gas emissions. The previous goal was to reduce greenhouse gas emissions by
Council announced that it was in favour of scaling back greenhouse gas emissions
40 % compared to 1990. The March 2020 draft law proposed a decline of 50 % to 55 %,
by at least 55 % compared to 1990. The EU aims to spur the creation of a more
subject to a comprehensive impact assessment. Once the results of the assessment were
environmentally compatible economy. One goal is to better couple the electricity, heat,
published in September, the Commission set the target at no lower than 55 %. However, the
transportation and manufacturing sectors while also creating a European hydrogen
European Parliament did not feel that the measures went far enough. In early October, a
economy. The European Commission has specified in strategy papers how this can be
majority of delegates voted for a 60 % decrease of greenhouse gas emissions. Also in
accomplished. A foundation has also been laid for increased climate protection in our
October, the European Council also gave the go-ahead for the climate law, although it
home market, Germany. In mid-2020, policymakers established the legal framework for
initially omitted the interim goal for 2030. At the EU Summit in December, the heads of state
phasing out coal-fired electricity generation. This has given us increased planning
and government agreed on a reduction of at least 55 %. Representatives of the Council and
certainty for our lignite business. We also welcome the state’s assistance in cushioning
Parliament must now decide which target is ultimately adopted during formal trilogue
the social impact of necessary redundancies.
meetings, in which the Commission is also involved. The negotiations had not been
Political environment
concluded when this review of operations was prepared (early March 2021).
The climate law will serve as the foundation for the Green Deal, which envisages
far-reaching reforms to industry, energy supply, transport and agriculture. To this end, the
Europe seeks to become carbon neutral by 2050. In March 2020, the European
European Commission is planning comprehensive legislative changes and a number of
Commission presented a draft for a European climate law. It was the first legislative
different programmes in order to provide for the accelerated expansion of renewable
proposal for the implementation of the EU’s Green Deal, which the President of the
energy, a new strategy for the industrial sector, import barriers for goods produced using
European Commission Ursula von der Leyen had declared to be of the utmost priority during
processes that are harmful to the climate, and a strategy for clean transportation, among
her five-year term in office (see page 42 of the 2019 Annual Report). The objective is to
other things. Regions which are most affected by these policy measures will be supported by
make the EU goal of carbon neutrality by 2050 legally binding. EU institutions and member
way of a Just Transition Fund. The EU is also planning to reform the European Emissions
states would then be obliged to establish a framework for reducing net greenhouse gas
Trading System and, in doing so, will probably considerably reduce the number of certificates
emissions to zero by the middle of the century. By 2023, the Commission will conduct an
placed on the market. The extent of the reduction is likely to depend on the emissions
initial assessment and announce whether EU and national measures are mutually
reduction target agreed upon by the Council and the Parliament
compatible and fit for purpose. A similar evaluation of the EU’s progress is planned for every
five years thereafter.
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EU creates sustainability classification system for economic activity. In June 2020,
In an integrated energy system, hydrogen can be used to support the decarbonisation of
the European Parliament and the Council of Ministers introduced the Taxonomy Regulation
industry, transport, power generation and buildings in Europe. The EU’s hydrogen strategy
as a tool to help determine when to classify economic activity as sustainable. Players on the
addresses how to unlock this potential by way of investment, regulation, market creation,
financial market, e. g. investment funds, labelling a financial product environmentally
and innovation. The primary goal is to develop a green hydrogen economy, which largely
sustainable, will have to report the share of green investments in their portfolio as defined by
sources its hydrogen electrolytically using renewable energy. By 2024, 6 GW of electrolysis
the Regulation. Businesses will also be faced with stricter disclosure requirements.
capacity is envisaged, which would enable up to 1 million metric tons of green hydrogen to
Companies obliged to prepare non-financial reports will have to provide more detailed
be produced per year. The Commission’s roadmap seeks to make green hydrogen a core
information on the sustainability of their business activities. The EU hopes that the increased
component of the integrated energy system by as early as 2030. Then the EU should have
transparency will provide stimulus for investments that make a contribution to the Green
electrolysers with a total capacity of at least 40 GW, with annual production reaching up to
Deal. The Taxonomy Regulation entered into force on 12 July 2020. As it is a central piece
10 million metric tons of hydrogen. The EU expects green hydrogen production technologies
of legislation, there is no need to translate it into national law. The publication duties apply
to have matured by this point, allowing for large-scale rollout over the following two decades.
from 2022 onwards. However, the European Commission is yet to specify the criteria for
In order to give this additional momentum, the Commission founded the European Clean
determining the economic activities meeting the sustainability principles set out in the
Hydrogen Alliance, a body comprised of representatives from industry, national and local
Regulation.
public authorities, civil society and the European Investment Bank. RWE is a member of the
alliance, which has been tasked with driving investments to expand hydrogen infrastructure,
EU seeks to integrate energy system and drive expansion of hydrogen economy. In
among other things.
July 2020, the European Commission published strategy papers on coupling the electricity,
heat, transport and manufacturing sectors (integration of the energy system) and on
German government adopts national hydrogen strategy. The German government
hydrogen. They contained a variety of goals and measures aimed at enabling the EU to
published its hydrogen plans in June 2020 – one month ahead of the EU. Germany’s
achieve its target of carbon neutrality by 2050, as set out under the Green Deal. The
national hydrogen strategy affirms the country’s intent to establish hydrogen technologies
European Commission’s strategy to integrate the energy system aims to harness potential
as core elements of the energy transition and to create the necessary regulatory framework
emission reductions and increase efficiency. An integrated system envisages a world in
to ensure large-scale rollout. The plan is to build a strong home market in Germany and to
which vehicles are powered by solar panels, homes are heated by district heating from
focus on green hydrogen, produced using renewable electricity, with the strategy paper
factories, and manufacturing plants are operated with hydrogen produced with offshore
stating that only this option is truly sustainable in the long term. The German government
wind energy, to list a few examples. The European Commission sees increasing the share of
envisages electrolysers with a total capacity of 5 GW being built for the production of green
electricity in final energy consumption as being key to sector coupling, i. e. increasing
hydrogen by 2030, in addition to the required generation assets, with offshore wind playing
utilisation of heat pumps and electric vehicles, for example. Sectors which are likely to
a major role. The objective is to have 10 GW of electrolysis capacity by 2040 at the latest.
struggle with electrification will see a push for clean fuels, such as green hydrogen. To this
The large-scale rollout of hydrogen technology in Germany will be supported with €7 billion
end, the Commission intends to develop a new classification and certification system for
in subsidies. It is envisaged that an additional €2 billion will be set aside for international
zero and low-carbon fuels. In addition, it is planning support programmes and
partnerships. The federal government also intends to give electricity used to produce green
comprehensive adjustments to the European regulatory framework.
hydrogen preferential treatment in terms of taxes, levies and surcharges. This electricity has
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already been exempted from the surcharges under the Renewable Energy Act and the
In November 2020, the Lower and Upper Houses of Parliament passed two further laws to
Combined Heat and Power Act as well as the offshore grid apportionment as part of the
drive the expansion of renewable energy: the Offshore Wind Energy Act and the Investment
reform of the Renewable Energy Act, on which we report below.
Acceleration Act. The first of the two laws envisages the 2030 expansion target for offshore
wind power increasing from 15 GW to 20 GW, with this figure rising to 40 GW by 2040. The
German government establishes more favourable subsidy conditions for renewables.
tendering model will remain largely unchanged. In Germany, wind farms are subsidised via
In December 2020, the German Upper House and Lower House passed a reform of the
premiums. If the market price realised by the operators for their electricity is below a
German Renewable Energy Act, which entered into force on 1 January 2021. According to
reference figure, the premium offsets the difference. The reference price is determined on
the law, all electricity generation in Germany must become carbon-neutral by 2050. The
the basis of a competitive tender process, in which participants with the lowest bids are
target for 2030 is for renewables to account for 65 % of electricity consumption. To
selected. One important change is that permissible bids are now subject to higher ceilings.
facilitate this, legislators have set new expansion targets: they envisage photovoltaic and
The upper limit will be set at €73 / MWh in 2021 and at €64 / MWh and €62 / MWh in the
onshore wind capacities growing to 100 GW and 71 GW by 2030, corresponding to a rise
two following years, respectively. If the cap had not been raised, the maximum allowable bid
of around 85 % and 30 %. The law provides for a number of regulations, many with a focus
in the next call for tenders would have been limited to the lowest successful bid in the
on making the operation of solar panels more attractive. The amendment also brings
previous auction of 2018, which was €0. In addition, moving forward, developers of wind
improvements for wind farms. For example, operators of new wind farms will be able to give
energy projects will pay a higher penalty if they fail to make a final investment decision
local communities a share of the electricity revenue in order to increase local value added
24 months before the grid connection completion date. This lowers the likelihood of
and thus raise acceptance. Old wind turbines, which have come to the end of their 20-year
speculative zero-subsidy bids, fuelled by positive market forecasts.
subsidy period, will receive a follow-up subsidy until 2022, subject to certain conditions.
However, this measure still needs to be approved by the European Commission under state
The Investment Acceleration Act, passed in tandem with the Offshore Wind Energy Act,
aid law. In order to reduce the strain on electricity consumers, the legislator is limiting the
aims to decrease administrative and legal barriers to infrastructure expansion. It includes
renewable energy surcharge to 6.5 cents / kWh for 2021 and 6.0 cents / kWh for 2022. The
changes to court proceedings as well as environmental and general administrative
government will fund the shortfall from its budget. As mentioned above, electricity used to
procedures, including regional planning procedures. In accordance with the law, objections
produce green hydrogen will be exempt from the renewable energy levy and further
and actions for annulment by third parties disputing the approval of an onshore wind
surcharges in the future.
turbine with a total height of more than 50 metres no longer have a suspensive effect –
allowing projects to progress. Furthermore, legal disputes concerning onshore wind farms of
this size can now be fast-tracked through an expedited appeals process. The law provides
for higher administrative courts to have jurisdiction in the first instance.
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UK government publishes energy white paper for climate protection. In December 2020,
US government improves funding conditions for renewables. In the USA, policymakers
the UK government published its energy white paper, setting out how it envisages the
have increased the tax incentives for investments in renewable energy assets. Additionally,
country’s future climate protection trajectory. The UK is intent on achieving net zero
deadlines for incentive claims have been extended to protect investors from financial losses
emissions by 2050. The paper contains a variety of measures to pave the way for this vision.
from construction delays due to the coronavirus. In the United States, renewable energy
Particular focus has been given to offshore wind expansion: the UK government aims to
projects are subsidised using a two-pronged approach: production tax credits (PTCs) or
quadruple capacity to a total of 40 GW by 2030. It further envisages a rise of climate-
investment tax credits (ITCs). PTCs grant a tax benefit per unit of electricity for a period of
friendly hydrogen production capacity to 5 GW by the same year. A national scheme
ten years. ITCs are based on the value of the investment. RWE’s onshore wind turbines are
focused on achieving the climate targets for 2050 will replace the EU Emissions Trading
typically subsidised with PTCs. Projects launched in 2016 / 2017 would have needed to be
System. Projects for capturing and storing or using carbon dioxide are to receive £1 billion
completed in 2020 / 2021 – i. e. four years later – in order to be eligible for the full subsidy.
in funding over the course of the decade.
In light of the coronavirus pandemic, the US government extended this deadline by a year.
RWE also benefits from this as there were delays in the completion of a number of wind
Poland establishes support scheme for offshore wind. The Polish government has
farms due to COVID-19. In addition, the US government also decided to extend ITC
created the legal framework for subsidies for wind farms in the Baltic Sea, with the
subsidies for solar investments. New plants, which go into construction in 2021 or 2022, will
Parliament passing an appropriate law in January 2021. Poland intends to increase the
be granted an investment tax credit of 26 % of the total investment. For plants going into
share of renewables in electricity generation from 14 % in 2019 to 32 % in 2030. At the
construction in 2023, this figure drops to 22 %. More favourable funding conditions have
moment, there are no wind farms off the coast of Poland. However, turbines with a total
now also been introduced for offshore wind: projects set to begin construction before 2026
capacity of 10.9 GW are due to be in development or in operation by as early as 2027. The
qualify for an ITC of 30 % of the total investment.
law envisages a start phase, which will initially subsidise wind farms with a total capacity of
5.9 GW. Plant operators will be awarded contracts for difference which guarantee a fixed
German Upper and Lower House adopt regulatory framework for German coal
payment for 100,000 full load hours in generation, with a maximum subsidy period of
phaseout. On 3 July 2020, the German Upper House and Lower House passed the law on
25 years. If the market price falls below the guaranteed remuneration, the state pays the
the reduction and termination of coal-fired power generation and on the amendment of
difference. If it exceeds the specified sum, the operators are obliged to make a payment. In
other legislation (Coal Phaseout Act). The law is based on recommendations published by
the first phase, the subsidies are set administratively. Companies have until the end of
the government’s Growth, Structural Change and Employment Commission in January
March 2021 to apply for them. After the start phase, the wind farms subsidised through
2019. It provides for a gradual exit from electricity generation from coal by 2038. The Act
contracts for difference will be determined in auctions. Tenders for up to 2.5 GW are planned
also contains provisions for the continuous monitoring of security of supply and the
for both 2025 and 2027. RWE is currently developing the FEW Baltic II offshore wind project
introduction of adjustment allowances for older employees working in the coal sector as well
in Poland. This project involves building a wind farm with an installed capacity of 350 MW on
as an authorisation clause, which enables the federal government to provide electricity
Słupsk Bank. FEW Baltic II satisfies the requirements for participating in the first phase of the
consumers with financial relief if the coal phaseout leads to an increase in electricity prices.
offshore wind subsidy scheme.
In addition, the legislator extended and refined the subsidisation of combined heat and
power plants. The objective is to encourage retrofits of coal-fired power stations for more
climate-friendly electricity generation.
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Legislators have now also established a phaseout roadmap for lignite power plants. RWE will
by the state. Furthermore, a coal phaseout collective agreement we signed with the German
bear the brunt of initial capacity reductions. We decommissioned the first 300 MW block in
Unified Services Trade Union (ver.di) and the German Mining, Chemicals and Energy Trade
the Rhenish lignite mining region, Niederaussem D, at the end of 2020. This year, we will take
Union (IG BCE) in August 2020 contains provisions that determine what RWE has to do
three further 300 MW assets off the grid, with one 300 MW block and two 600 MW units
above and beyond the state measures.
scheduled for 2022. The Neurath and Niederaussem sites will be most heavily affected by
these plans, along with Weisweiler, albeit to a small extent. Furthermore, in 2022, we will
The lignite phaseout is flanked by a public law contract between the state and the lignite
discontinue briquette production in Frechen and, in turn, the operation of 120 MW in
producers. The contract contains a large number of regulations, which relate in particular to
electricity generation capacity. Thereafter, we will shut down the remaining capacities at our
the implementation of the closures and compensation. This contract will serve to protect
Weisweiler power station: one 300 MW unit (2025) and two 600 MW blocks (2028 and
the companies’ interests, which, in return, will not assert any further claims in relation to the
2029). The Inden opencast mine, which exclusively supplies Weisweiler with lignite, will then
lignite phaseout. Once approved by the Upper House, the contract was signed in early
also be decommissioned. We will shut down our last two 600 MW stations in late 2029,
2021. However, the compensations still require approval by the EU under state aid law.
one of which will remain on standby for four years to ensure security of supply. From 2030
Irrespective of this, RWE has begun to implement the statutory phaseout plan.
onwards, this leaves only our three state-of-the-art lignite blocks at 1,000 MW apiece on
the market.
The hard coal phaseout is also set out in detail in the new law. At which point each individual
power plant will be taken off the grid and how much their operators will be compensated is
The closures will have considerable consequences for the opencast mines. More than half
determined in an auction process. The law envisages annual tenders from 2020 to 2027.
the approved volume of lignite reserves will remain in the ground and Hambach Forest will
Operator bids will be subject to specific caps which are set to be lowered from €165,000 to
be preserved. Of our three opencast mines in the Rhenish lignite mining region – Inden,
€89,000 / MW during the aforementioned period. From 2027 onwards, the law provides for
Hambach and Garzweiler – we will only operate the last in the list from 2030 onwards to
closures without compensation. If the tenders do not result in enough capacity being
supply the remaining assets with fuel. Accordingly, the energy industry’s need for the
decommissioned, starting in 2024, power plant operators will be ordered to shut down
Garzweiler II opencast mine to remain operational has been enshrined in law via a clause
stations without compensation. RWE participated in the first auction, which was held in the
added to the Coal Phaseout Act.
second half of 2020. Our last two German hard coal power plants – Ibbenbüren B (794 MW)
and Westfalen E (764 MW) – placed winning bids. The stations stopped operating in late
The lignite phaseout will place a huge financial burden on our company. In accordance with
2020 (see page 44).
the law, we will therefore receive compensation in the amount of €2.6 billion, to be paid out
in equal instalments over a 15-year period. However, the damage we will actually incur will
German government seeks to provide coal regions with up to €40 billion in subsidies.
clearly exceed this figure. Our claim for compensation from the state and the majority of our
On 3 July, the Upper and Lower Houses of Parliament passed the Structural Development
expected losses have already been accounted for in our 2019 consolidated financial
Act, which applies to coal mining regions. The law envisages the federal government
statements (see page 43 of the 2019 Annual Report). Intended recipients of state
providing up to €14 billion in financial support to the lignite mining regions for investments
compensation in addition to RWE include the employees affected by the layoffs. Among
of particular importance through to 2038. Of these funds, 37 % will go to the Rhenish coal
other things, the Coal Phaseout Act provides for adjustment allowances and compensation
mining region, in which we are active, with 43 % and 20 % going to the Lausitzer and Central
for any disadvantages in relation to statutory pensions. These will be covered
German coal mining areas, respectively. The funds can be used by the states, e. g. to invest
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in industrial infrastructure and public transport. The government intends to flank this by
supporting the regions through its own measures. A total of €26 billion has been budgeted
Market environment
for this and earmarked for measures such as the expansion of the rail and road networks as
Economic output drops in all of RWE’s core markets. According to preliminary estimates,
well as the creation of research hubs.
global economic output dropped by 4 % in 2020 compared to the previous year. The
coronavirus pandemic and the associated lockdown measures caused many countries’
German government to overhaul compensation for nuclear phaseout. In September
gross domestic product (GDP) to slump drastically. Economic experts estimate a GDP
2020, the German Constitutional Court found that the compensation regulations in the
decline of about 7 % for the Eurozone. Economic output was not as adversely affected in
German nuclear phaseout plan introduced in 2018 had not entered into force. The Court
Germany and the Netherlands, our most important markets within the currency union.
thus ruled in favour of an appeal submitted by Vattenfall. The proceedings dealt with the
16th amendment to the German Nuclear Energy Act, which specified the approach to
Estimates here vary between – 5 % and – 4 %. The USA is likely to have experienced a similar
decline. However, the United Kingdom has been hit much harder by the pandemic: based on
compensating RWE, Vattenfall, E.ON and EnBW for certain financial losses due to the
available data, UK GDP probably shrank by about 10 %.
expedited nuclear phaseout. The phaseout had been enshrined in law in 2011 following
the Fukushima nuclear disaster. This was the second exit law after 2000. In 2010, the
German electricity consumption down by an estimated 4 %. Decreased economic output
government had extended the lifetimes of nuclear power stations. After the reactor incident,
has also meant lower demand for energy. According to the German Association of Energy
it reversed the extension and imposed stricter conditions on the exit. In December 2016, the
and Water Industries (BDEW), German electricity consumption in the past fiscal year was
Constitutional Court ruled that the power station operators have to be compensated for
down 4 % on 2019. Other RWE core markets have also been on the decline. Experts put the
certain losses due to the second nuclear phaseout and tasked the state with making the
downturn at 2 % for the Netherlands, 6 % for the UK and 3 % for the USA. This development
necessary legislative arrangements by mid-2018. Compensation claims were thus ruled
was largely attributable to restrictions to industrial output due to COVID-19. The mild
admissible for generation contingents that had been approved in the first nuclear phaseout
weather also had a minor impact, as less electricity was needed for heating.
in 2000, but which could no longer be used due to the decommissioning deadlines
introduced in 2011, and for investments that were now worthless and that the power plant
Better wind conditions in northern and central Europe. Utilisation and profitability of
operators had undertaken based on the lifetime extension introduced in 2010. The state
intended to implement these instructions by way of the 16th amendment to the German
renewable assets are largely weather-dependent. This is why wind speeds are extremely
important to us. In 2020, these were generally higher than the long-term average and often
Nuclear Energy Act. However, according to the most recent Constitutional Court ruling, the
up on 2019 at our production sites in northern Europe, the United Kingdom, and the
amendment never entered into force due to formal errors. Additionally, the Court also found
Netherlands. An opposite trend was witnessed in the south of Europe and of the southern
that individual provisions, which were dedicated to compensation for unusable generation
states of the USA. By and large, wind conditions in Germany, Poland and large parts of the
contingents and which could prove detrimental to the affected companies, were
USA were normal, with notable changes over 2019 being an exception to the rule.
unconstitutional. In accordance with the ruling of the highest court, the legislator is obliged
to rewrite the compensation regulations. The German government began talks with the
nuclear power plant operators on this subject at the beginning of 2021 (also see page 46).
39
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business environment
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Average RWE wind farm utilisation in 2020
Onshore
Offshore
Declining demand curbs hard coal prices. Hard coal used in power plants (steam coal)
%
Germany
United Kingdom
Netherlands
Poland
Spain
Italy
Sweden
USA
20
34
30
29
23
21
33
33
40
42
–
–
–
–
56
–
also became notably cheaper: deliveries to ARA ports (ARA = Amsterdam, Rotterdam,
Antwerp) including freight and insurance were settled for an average of US$50 / metric ton
(€45) in 2020, as opposed to US$61 / metric ton the year prior. The decline is mainly due to
a drop in demand: coal-fired power stations have most recently been underutilised in
Europe. The unusually low gas prices, which made gas much more competitive as an energy
source than coal, came to bear. Decreased energy demand due to the coronavirus
pandemic also caused hard coal usage to contract. Many market participants assume that
the market environment for coal-fired power plants will remain challenging, not least due to
the relatively high carbon emissions associated with these stations and the correlated cost
disadvantages. This assessment was reflected in the development of hard coal forward
prices: in the year under review, the 2021 forward (API 2 Index) was quoted at an average of
US$58 / metric ton (€51). This is US$12 less than was paid for the 2020 forward in 2019.
Weather-driven collapse of natural gas spot prices. The utilisation and earnings of our
conventional power plants are heavily dependent on how fuel and emission allowance
prices develop. Natural gas, our most important tradable energy source, was characterised
by an extremely low price level in the year under review. Quotations at the Dutch Title
Despite COVID-19, CO2 emission allowance prices hit record high. An important price
factor for fossil fuel-fired power plants is the procurement of CO2 emission allowances.
A European Union Allowance (EUA), entitling the holder to emit one metric ton of carbon
Transfer Facility (TTF), Continental Europe’s lead market, dropped as low as €3 / MWh in the
dioxide, was traded at an average of €25 in 2020. The reference figure for 2019 was also
first half of the year, but were able to regain considerable ground during the rest of the year.
€25. These prices relate to contracts for delivery that mature in December of the following
However, the 2020 average of €9 / MWh was notably lower overall than the previous year’s
year. At times, certificate prices dropped substantially due to the coronavirus pandemic.
(€14 / MWh). The decrease in demand for heating gas due to the mild winter of 2019 / 2020
In March 2020, they fell to below €16. Decreased industrial output weighed on prices as it
and the commensurately high storage levels at the beginning of the year played a
resulted in reduced carbon dioxide emissions, driving down demand for emission
significant role. Later on, the corona-induced decline in industrial and commercial gas
allowances. Over the rest of the year, prices rose to a record €33 in December. The
consumption affected the price trend. Forward trading prices also dropped. In the year
materialising economic recovery came to bear here. The EU initiative to raise the climate
under review, the 2021 TTF forward cost €13 / MWh on average. By way of comparison,
target for 2030 also played a role, as it stipulates that the EU significantly reduce the
in 2019, the 2020 forward traded at €18 / MWh.
number of emission allowances put on the market. Many participants in emissions trading
therefore expect a further shortage of available EUAs, despite the economy’s continued
carbon dioxide reductions.
40
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business environment
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
One-year forward prices of base-load electricity on the wholesale market
€ / MWh (average weekly figures)
2019 forward
2020 forward
2021 forward
2020 electricity forward sales: margins slightly higher year on year. In order to mitigate
the risk of short-term sales and price fluctuations, we sell most of our generation forward
and hedge the prices for the necessary fuel and emission allowances. Electricity revenue for
the period under review was thus greatly defined by the conditions of the forward contracts
for 2020, which were concluded in previous years. As we had begun conducting such
forward sales quite early for electricity production in our lignite and nuclear plants, which are
mainly used to cover base load needs, we were able to achieve higher prices and margins on
average for 2020 than for 2019. Sales of electricity from our hard coal and gas-fired
stations were subject to a shorter lead time. Here realised prices also rose, but opposing
effects were more notable due to the pre-2020 hike in CO2 emission allowance prices.
Whereas margins realised for our gas-fired power plants on the forward market were higher
overall than in 2019, margins for our hard coal-fired power stations stagnated at a low
80
70
60
50
40
30
2018
2019
2020
level.
Germany
Netherlands
United Kingdom
Source: RWE Supply & Trading.
Significant decline in wholesale electricity prices. The drop in hard coal and natural gas
prices shaped the trajectory of the wholesale electricity markets last year. The decrease in
demand for energy triggered by the coronavirus pandemic was another influential factor.
In 2020, base-load electricity traded for an average of €30 / MWh on the German spot
market as opposed to €38 / MWh in the prior year. In the UK and the Netherlands, spot
prices declined from £43 to £35 / MWh (€40) and from €41 to €32 / MWh, respectively.
Electricity prices on the forward markets were higher than spot prices. Compared to 2019,
however, they were also marked by a significant decline. The 2021 base-load forward cost
€40 / MWh on average. The comparable figure for the previous year was €48. One-year
forward prices declined from £52 to £44 / MWh (€49) in the UK and from €50 to €40 / MWh
in the Netherlands.
41
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Major events
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.4 Major events
We passed further milestones last year. In mid-2020, we completed the asset swap with
As part of the asset swap, we transferred our 49 % interest in Slovak power utility VSE to
E.ON, which has transformed us into a leading renewable energy company. We also
E . ON. We had taken over the VSE shareholding from innogy in 2019 in order to sell it to E.ON
made major inroads in the expansion of our wind and solar capacity. To gain even more
later on at the same conditions. However, this was subject to the approval of the Slovak
traction in this area, we conducted a capital increase and acquired the European
government. We received state clearance in mid-2020, enabling the transaction to be
development business of Nordex. Furthermore, we discontinued our electricity
completed in August. The price of the stake in VSE had been considered in 2019 when
generation from hard coal in Germany and the UK. In doing so, we have proven that our
settling the payment claims arising from the asset swap with E.ON.
climate protection measures go far beyond what is required by law. In the following, we
present the material events that occurred in 2020 and the beginning of 2021. We have
In December 2020, it was contractually agreed that we would receive from E.ON a 20 %
focused on transactions that have not been commented on in detail elsewhere in the
stake in the UK offshore wind farm Rampion, which had not initially been considered in
review of operations.
Events in the fiscal year
implementing the asset swap. This will increase our stake in the 400 MW wind farm to
50.1 %, making us the majority owner. We had already received a 30.1 % interest from E.ON
in September 2019. We expect to complete the acquisition in 2021. The Rampion wind
farm is located off the coast of Sussex and has been operating commercially since 2018.
Asset swap with E.ON finalised: RWE takes ownership of innogy’s renewable energy
RWE increases financial headroom for renewable energy projects by increasing equity
business. At the end of June, we successfully completed our asset swap with E.ON, marking
by €2 billion. On 18 / 19 August, we issued 61.5 million new RWE shares to institutional
one of the biggest transactions in German industrial history. The swap was agreed in early
investors, thereby increasing RWE AG’s capital stock by 10 %. The shares were placed by way
2018 and implemented in two steps once the legal requirements had been met. First, we
of accelerated book building under exclusion of subscription rights. Based on the issue price
sold our 76.8 % stake in innogy, in exchange for which we received E.ON’s renewable energy
of €32.55 per share, we achieved gross proceeds of approximately €2 billion. We intend to
business, a 16.67 % shareholding in E.ON and the non-controlling interests in our
use these funds to speed up the expansion of renewable energy. The capital increase
Gundremmingen (25 %) and Emsland (12.5 %) nuclear power plants from E.ON subsidiary
caused the number of RWE shares to rise to 676.2 million. The new and old stock confer the
PreussenElektra. These transfers took place shortly after the asset swap was approved by
same rights. Despite the increase in the number of shares, the Executive Board of RWE AG
the European Commission in September 2019. The second step, which took effect at the
maintains its dividend target. Together with the Supervisory Board, it plans to propose a
end of the day on 30 June 2020, involved E.ON returning parts of the innogy portfolio to us,
dividend of €0.85 per share for the past fiscal year to the Annual General Meeting on
i. e. the renewable energy business, the German and Czech gas storage facilities and a
28 April 2021.
37.9 % stake in Austrian power utility KELAG. We had recorded these activities in our Group
figures before they were transferred back to us, as they were already assigned to us
commercially. Now they belong to RWE also in legal terms.
42
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Major events
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
RWE acquires European wind and solar projects from Nordex. In November, RWE
US wind farms with a net capacity of over 700 MW begin commercial operation. In the
purchased the European project development business of wind turbine manufacturer
fiscal year that just ended, we commissioned four large-scale onshore wind farms with a
Nordex for €396 million. We received a project pipeline of new onshore wind and solar farms
total installed capacity of 719 MW in the USA. Peyton Creek (151 MW) was the first to go
with a total installed capacity of 2.7 GW. A total of 1.9 GW is located in France, with further
online. The Texan wind farm was commissioned in March. Although construction work was
ventures in Spain, Sweden and Poland. At the end of 2020, a final investment decision was
delayed by Tropical Storm Imelda, the wind farm managed to go online on schedule. Half a
reached for four projects in the pipeline, which will result in 76 MW of generation capacity.
year later, in September 2020, Cranell (220 MW), also located in Texas, went into
Thanks to the Nordex transaction, we have added over 70 employees to our headcount,
commercial operation. Cranell experienced slight delays due to the corona crisis. Despite
mostly in France, who will develop further projects for RWE in the future.
the pandemic, Boiling Springs (Oklahoma, 148 MW) and Raymond East (Texas, 200 MW)
were completed before year-end. However, project completion for Scioto Ridge (Ohio,
RWE concludes agreements for lease to expand four UK offshore wind farms. Together
250 MW), Cassadaga (New York State, 126 MW) and Raymond West (Texas, 240 MW) was
with project partners, we set the stage for an expansion of four wind farms off the coast of
delayed to 2021.
the UK. We concluded agreements for lease with The Crown Estate, the authority in charge
of managing the assets of the British monarch. These contracts allow us to use further
RWE sells stake in Humber Gateway wind farm in the North Sea and four wind farms
areas neighbouring the Gwynt y Môr (576 MW), Greater Gabbard (504 MW), Galloper
in Texas. To increase our financial strength and improve the balance of our generation
(353 MW) and Rampion (400 MW) wind farms. This enables existing capacity to be doubled.
portfolio, we sold shares in wind farms in the United Kingdom and the USA. In December,
Including capacity from the remaining seabed option at Rampion, this could lead to 2.6 GW
UK investor Greencoat took a 49 % interest in our Humber Gateway (219 MW) wind farm
in additional generation capacity. Based on the shareholding ratios, half of this is allocable
located off the coast of East Yorkshire in the North Sea. Humber Gateway has officially been
to RWE. Now our goal is to develop these projects rapidly. We expect the approval procedure
online since 2015, and we remain the majority owner (51 %) and operator of the wind farm.
to take between three and five years. Thereafter, we will participate in auctions for state
Also in December, we agreed to divest stakes in our Texan onshore wind farms Stella
subsidy contracts and – should we submit a winning bid – we will make the final investment
(201 MW), Cranell (220 MW), Raymond East (200 MW) and Raymond West (240 MW). The
decisions. The new wind farms could then be commissioned towards the end of the decade.
buyers are a subsidiary of Canadian energy utility Algonquin Power & Utilities and Greencoat.
Go-ahead for construction of Kaskasi wind farm in the North Sea. In March 2020, RWE
With the exception of the Raymond West transaction, these sales were completed in early
made the final investment decision to build the Kaskasi wind farm in the German North Sea.
2021. As we will only retain 25 % ownership of the US wind farms, we will stop consolidating
It will be located 35 kilometres north of the island of Heligoland. Altogether, its 38 turbines
them fully and instead account for them using the equity method. RWE will remain the
These two companies will take interests of 51 % and 24 % in the wind farms, respectively.
will have an installed capacity of 342 MW, enough to power approximately 400,000 homes.
operator.
Offshore construction work is scheduled to start in 2021. Based on our current planning,
Kaskasi should be fully online by as early as 2022. A novel vibration technique will be used to
install the foundations 18 to 25 metres under water. This new method reduces noise
emissions that can affect marine fauna and shortens construction time. Another advantage
is that Kaskasi will be located between our Nordsee Ost and Amrumbank wind farms,
enabling operation and maintenance synergies to be leveraged.
43
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Major events
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
RWE sells small hydro stations to KELAG. Austrian energy utility KELAG will purchase a
RWE stops producing electricity from hard coal in Germany. With our early exit from hard
generation portfolio comprising 19 small hydroelectric power plants in France and Portugal
coal-fired electricity generation in Germany, we have taken a major step towards improving
from us. A corresponding agreement was signed in December 2020. The portfolio has an
our carbon footprint. The stage for this was set in the second half of 2020 when we won
installed capacity of 65 MW, including several wind turbines with a combined capacity of
remuneration contracts for Unit B (794 MW) in Ibbenbüren and Unit E (764 MW) at the
3 MW. The capacity figures are prorated, meaning that they reflect capacity in line with the
Westfalen site in Hamm in the first nationwide shutdown auction for hard coal power plants.
shareholding ratios. The sale is scheduled to be completed this year. KELAG is a leading
Therefore, since 1 January 2021 we may no longer market electricity from our last two
hydroelectric power producer and RWE holds a 37.9 % stake in the company.
German hard coal power stations. We secured compensation of €216 million in the auction.
State-of-the-art gas-fired power plant acquired in the east of England. Early in 2020,
that they are not needed to maintain grid stability. Including Niederaussem Block D
we cemented our position as a leading generator of electricity from gas in the UK. In
(297 MW), which was decommissioned at the end of 2020, we are thus taking a total of
February 2020, we bought the King’s Lynn gas-fired power station in Norfolk (eastern
1.9 GW offline right at the beginning of the German coal phaseout. A collective agreement
England) from British energy utility Centrica for the equivalent of €113 million. The station
ensures that the shutdowns will be conducted in a socially acceptable manner.
We will shut down the units as soon as the relevant transmission system operators confirm
has a net installed capacity of 382 MW and boasts a high efficiency of 57 %. Its operating
mode can be adapted flexibly in response to demand. A capacity market contract secures
The hard coal auction called for bids to win state subsidies to decommission 4 GW of power
fixed payments for King’s Lynn from October 2020 to September 2035. Recently, the power
plant capacity. The deadline for submitting bids was 1 September 2020. Those requesting
plant was modernised extensively, which included equipping it with a new gas turbine.
the lowest compensatory payment per metric ton of carbon dioxide avoided won contracts.
The auction was significantly oversubscribed, and eleven assets with a combined capacity
Go-ahead to build a grid stabilisation plant at the Biblis site. Germany will be home to
of as much as 4.8 GW submitted winning bids. The invitation to tender was the first of a
a new RWE gas power station. We won the invitation to tender by transmission system
series of hard coal auctions through which the German Network Agency is implementing
operator (TSO) Amprion for the construction and operation of a grid stabilisation plant at
the legally mandated coal phaseout. As we were successful with both our German hard
the Biblis site. The station will have a capacity of 300 MW and is scheduled to be
coal-fired power stations in the first round, there is no need for us to participate in further
commissioned no later than October 2022. It will not be available to the open market,
auctions.
instead operating only on request from the TSO. Its sole purpose will be to help stabilise
power grid frequency, making a contribution to security of supply.
Welsh Aberthaw B hard coal power plant shut down. We have also stopped generating
electricity from hard coal in the United Kingdom. The last station in which we used this fuel,
Aberthaw B in Wales, was officially decommissioned at the end of March 2020. The station
consisted of three units with a total net capacity of 1,560 MW. Its British capacity market
obligations through to the end of September 2021 were transferred to third-party stations
or other units within RWE’s power plant fleet. Aberthaw B went into operation in 1971 and
has thus contributed to security of supply in the United Kingdom for nearly half a century.
44
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Major events
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
RWE successful in British capacity market auctions. In the first quarter of 2020, three
Wood pellet manufacturer Georgia Biomass sold to Enviva Partners. At the end of July,
auctions were held for the British capacity market, some of the outcomes of which will have
we sold Georgia Biomass Holding to US-based Enviva Partners. The agreed price was
a significant impact on the earnings of our power stations. The first round of bids, which
US$175 million. Georgia Biomass operates a large-scale plant in Waycross, Georgia, which
took place at the end of January, related to the delivery period from 1 October 2022 to
manufactures wood pellets for industrial use. The plant’s most recent annual production
30 September 2023. RWE power plants qualified for capacity payments for a total secured
output totalled 800,000 metric tons. Our disposal of Georgia Biomass is in line with our new
capacity of 6.5 GW. During the aforementioned period, these stations will be remunerated
strategic orientation. We no longer consider wood pellet production as one of our core
for being online and thereby contributing to security of supply. However, at £6.44 / kW (plus
businesses. The buyer Enviva Partners, based in Bethesda, Maryland, ranks among the
inflation adjustment), the capacity payment established in the bidding procedure was much
world’s leading producers of this fuel.
lower than in similar auctions in earlier years.
At the beginning of February, a second auction was held, which related to the delivery period
unable to produce electricity from biomass in the Dutch power station Eemshaven from
from 1 October 2020 to 30 September 2021. An earlier auction for this period had already
mid-May to mid-November 2020 due to fire damage. The two units ran solely on hard coal
taken place in December 2016, at which RWE stations with a total capacity of 8.0 GW
during this period. The fire broke out in a biomass supply unit. No one was injured. The fire
(including Aberthaw) qualified for a payment of £22.50 / kW. The recent auction was held to
affected our earnings by a low to medium double-digit million euro amount. The interruption
close remaining capacity gaps. Therefore, RWE only entered a small asset, which did not
of generation from biomass resulted in a commensurate reduction in the state subsidy we
submit a successful bid.
receive for co-firing this fuel. Moreover, we incurred costs for the storage of biomass stocks
Six-month interruption of generation from biomass in Eemshaven due to fire. We were
which we had purchased forward early on.
In the third auction, for the period from 1 October 2023 to 30 September 2024, which took
place in early March, remuneration was secured for 6.5 GW of RWE generation capacity.
Markus Krebber becomes CEO of RWE AG in May 2021 – Michael Müller and Zvezdana
The stations will receive a payment of £15.97 / kW (plus inflation adjustment).
Seeger on board since November 2020. Last year, the Supervisory Board of RWE AG
Capacity auctions have been held in Great Britain since 2014. The government’s objective
passed a resolution to give Markus Krebber (48) another term on the Executive Board
is to ensure that a sufficient amount of generation capacity is available to the national
(through to 30 June 2026) and appoint him CEO in the near future. He will succeed Rolf
market. In November 2018, the British capacity market had to be suspended for about a
Martin Schmitz (63), whose contract will expire, as CEO with effect from 1 May 2021. The
year, because the approval it had been granted under subsidy law was declared null and
Supervisory Board is confident that this will ensure that the Group maintains its strategic
void by the Court of the European Union. After renewed clearance from Brussels in October
orientation. Markus Krebber has been the CFO of RWE AG since 2016. Together with
2019, capacity payments were resumed and the postponed auctions were held. In January
Rolf Martin Schmitz, he has succeeded in transforming RWE into a leading renewable
reached personnel decisions that will ensure the company’s continued success. In July, it
2020, we received approximately €50 million in retroactive payments for 2018 and about
energy company.
€180 million for 2019. In our income statement, we had already recognised these cash
inflows with an effect on fiscal 2019.
45
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Major events
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Zvezdana Seeger (56) and Michael Müller (49) will be Markus Krebber’s fellow members on
auction for a contract for difference, after which we can make a final investment decision.
the Executive Board of RWE AG. The Supervisory Board appointed the two executives to the
Then the option fee will be replaced by a much lower lease payment. If the project
corporate body with effect from 1 November 2020. Before joining RWE, Zvezdana Seeger,
progresses on schedule, the new wind farms could be commissioned towards the end of the
who holds a degree in economics, was a member of the Management Board of DB Privat-
decade. Under The Crown Estate’s auction at the beginning of the year, development rights
und Firmenkundenbank AG and COO of Deutsche Bank AG’s Private and Corporate
were won for a total of six offshore sites on which wind farms with a capacity of up to
Business Unit. At RWE AG, she holds the human resources and IT offices and is also the
7,980 MW can be built. Some of the participants also securing option rights submitted
company’s Labour Director. Michael Müller has held managerial positions at RWE since
much higher bids than us. RWE will pay the lowest annual average option fee per megawatt
2005. The most recent posts held by the engineering post-doctorate and economist were
among all successful bidders.
those of Managing Director and CFO of the subsidiary RWE Supply & Trading GmbH.
Michael Müller is responsible for finance, taxes and business services at RWE AG. He will
Considerable drop in earnings due to the worst cold wave in Texas in over a century.
succeed Markus Krebber as Chief Financial Officer when Mr. Krebber takes over as Chief
In February 2021, an extraordinary cold front in parts of the USA caused substantial supply
Executive Officer from Mr. Schmitz. Michael Müller will continue to hold his positions at
outages. Winter storms and icy rain forced some RWE wind farms to go offline for several
RWE Supply & Trading concurrently until 30 April 2021.
days. We had sold forward a portion of the generation of these assets and therefore had to
More detailed information on the members of the Executive Board of RWE AG can be found
statutory price regulations, we had to pay up to US$9,000 / MWh for these purchases. This
at www.rwe.com/en/management-board-and-supervisory-board and on pages 9 et seq. of
weighed on earnings in the Onshore Wind / Solar segment by a low to medium triple-digit
this report.
million euro amount.
buy electricity in order to meet our supply obligations. Due to the tight supply situation and
Events after the close of the fiscal year
German government and power plant operators agree on compensation for nuclear
phaseout. In March 2021, the German government and the country’s nuclear power
station operators reached an agreement on the compensation due for the accelerated
nuclear phaseout. The talks were initiated because the German Constitutional Court
RWE wins rights to develop new offshore wind power sites in English North Sea. At an
declared the original statutory compensation regulations null and void (see page 39). As
auction held in February 2021, RWE secured the rights to develop 3,000 MW of offshore
regards RWE, this relates to unusable generation contingents of 25.9 million MWh and
wind capacity across two neighbouring locations in the English North Sea. In return, we will
stranded investments of about €40 million. The government has indicated that it will pay
pay an annual option fee of £82,552 / MW (plus inflation adjustment) until we make a final
€33.22 / MWh as compensation for the electricity contingents. Furthermore, the agreement
investment decision. The sites are situated on Dogger Bank in a shallow region of the
envisages that we will be reimbursed for half of the stranded investments. We accept this
North Sea. RWE is already developing Sofia, a further offshore wind project, in the vicinity.
solution. However, it is yet to be written into law and a public law contract between the
First, all the new sites will be subjected to a Plan-Level Habitats Regulations Assessment
government and power plant operators. It also needs to be reviewed by the European
(HRA). Given a positive result, we will start developing the project and paying the option fee.
Commission for compliance with subsidy law. The agreement with the government did not
As soon as the necessary permits have been obtained, we can participate in a subsidy
affect the Group’s financial statements.
46
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.5 Business performance
Despite the corona crisis, 2020 was a successful fiscal year for us. RWE achieved
our earnings: it caused slight delays in wind projects and losses in our securities
adjusted EBITDA of €3.2 billion, which exceeded the guided range. This was primarily
thanks to a very good trading performance. In addition, favourable weather conditions
enabled high utilisation of our wind farms. The pandemic only had a limited impact on
portfolio. Positive development was displayed not only by our earnings, but also by our
carbon footprint: RWE’s CO2 emissions recorded another significant decline. Last year,
they were already 62 % below the 2012 level.
Business performance in 2020: what we forecast and what we accomplished
€ million
3,235
2,489
2,676
2,183
Forecast overachieved
Forecast met
Forecast underachieved
2019 actual
Forecast for 2020 1
2020 actual
1,771
1,267
1,213
1,069
614
RWE Group
Core business
Offshore Wind
472
295
Onshore Wind /
Solar
Adjusted
EBITDA
1 See pages 94 et seq. of the 2019 Annual Report. The hatched portion reflects the forecast range.
672
621
731
539
559
306
Hydro / Biomass / Gas
Supply & Trading
Coal / Nuclear
RWE Group
RWE Group
Adjusted
EBIT
Adjusted
net income
47
RWE Annual Report 2020 GWh
Offshore Wind
of which:
Germany2
United Kingdom
Netherlands
Turkey
Coal / Nuclear2
RWE Group
1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Power generation
Renewables
Pumped storage,
batteries
Gas
Lignite
Hard coal
Nuclear
Total1
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Onshore Wind / Solar
16,762
8,056
7,009
4,116
–
–
–
–
–
–
–
–
Hydro / Biomass / Gas
5,910
4,202
2,060
1,760
49,414
50,564
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,584
9,466
–
–
–
654
3,584
8,812
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,009
4,116
16,762
8,056
61,178
66,103
12,583
11,733
25,710
34,713
18,570
16,975
4,281
2,682
1,737
2,026
2,060
1,760
8,576
7,836
460
577
3,679
1,599
–
19
–
12
–
–
–
–
–
–
–
–
25,250
33,482
11,307
6,564
4,281
2,682
29,700
16,386
2,060
1,760
50,140
50,788
36,649
48,249
7,375
14,200
20,682
21,233 146,775
153,165
726
224
36,649
48,249
3,791
4,734
20,682
21,233
61,826
74,890
1 Including production volumes not attributable to any of the energy sources mentioned (e. g. electricity from oil-fired power stations).
2 Including electricity from generation assets not owned by RWE that we can deploy at our discretion on the basis of long-term use agreements. These purchases amounted to 2,157 GWh (previous year: 1,829 GWh) in the Hydro / Biomass / Gas
segment and 1,009 GWh (previous year: 1,791 GWh) in the Coal / Nuclear segment.
Electricity production 4 % down on prior year. In the fiscal year that just came to a close,
for conventionally generated electricity. Due to the latter circumstance, less use was made
the RWE Group produced 146,775 GWh of electricity, of which 20 % was generated from
of our British gas-fired power stations than in 2019. Our electricity generation from gas
renewables, i. e. wind, sun and biomass. Natural gas accounted for a share of 34 %. Lignite
grew elsewhere; in Germany this was partly driven by said decline in the price of gas. In
and hard coal continued to lose significance, contributing 25 % and 5 % to our power
addition, in the Netherlands, Claus C resumed operations after being offline for several
production. The portion attributable to nuclear fuel was 14 %.
years because it was not profitable. More use was also made of our gas-fired power plant
in Denizli, Turkey. One of the reasons was that the large share of local electricity supply
Our electricity generation dropped by 4 % compared to the previous year. The most
customarily accounted for by hydropower experienced a weather-induced drop.
significant declines were recorded by our hard coal and lignite power stations. One
contributing factor was that gas, the energy source competing with coal, was occasionally
The contribution of renewable energy to our electricity generation rose considerably. This
much cheaper and therefore more attractive than in the previous year. Furthermore, the
was mainly because the operations transferred from E.ON to RWE in September 2019 were
corona crisis and substantial amounts of wind power put on the system reduced demand
considered in our figures for a full twelve months for the first time. In addition, we benefited
48
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
from favourable wind conditions and the commissioning of new onshore wind farms.
In addition to our in-house generation, we procure electricity from suppliers outside of the
The fact that our Dutch hard coal-fired power stations Amer 9 and Eemshaven are now
Group. In the year being reviewed, these purchases totalled 53,940 GWh (previous year:
increasingly run on biomass also had a positive impact. However, biomass usage in
46,476 GWh). In-house generation and power purchases combined for 200,715 GWh
Eemshaven was interrupted from May to November 2020 due to fire damage.
(previous year: 199,641 GWh).
Power generation from renewables
Offshore Wind
Onshore Wind
Solar
Hydro
Biomass
Total
GWh
Germany
United Kingdom
Netherlands
Poland
Spain
Italy
Sweden
USA
Rest of the world
RWE Group
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2,082
1,299
1,168
1,106
4,690
2,755
2,134
1,278
–
–
–
–
237
–
–
–
–
–
–
62
–
–
768
997
890
882
339
702
733
1,047
406
106
9,059
2,564
30
28
7,009
4,116
16,267
7,970
3
–
7
1
51
–
–
271
99
432
1
–
–
1
–
–
–
35
2
39
1,674
1,856
4
46
4,931
4,308
118
193
342
383
7,284
4,609
14
–
29
–
–
–
18
–
20
–
–
–
146
164
3,665
1,581
4,454
2,301
–
–
–
–
–
–
–
–
–
–
–
–
998
970
882
576
734
1,067
406
168
9,330
2,599
275
194
1,981
2,251
4,011
2,010
29,700
16,386
Lower generation capacity due to coal power plant closures. At the end of 2020, we had
hard coal-fired power plants were decommissioned at the end of 2020. They are scheduled
a total installed power production capacity of 40.7 GW, giving us a leading market position
to be shut down in 2021 and were therefore excluded from the capacity figures as of the
in Europe. This figure includes electricity from generation assets not owned by us that we
balance-sheet date. The Niederaussem D lignite block (297 MW) was also shut down at the
can deploy at our discretion on the basis of long-term agreements. Conversely, we no longer
end of the year. Conversely, we added a gas-fired power plant to our fleet through the
consider our five German lignite blocks, which are in legally mandated security standby and
acquisition of King’s Lynn (382 MW) in the east of England. We increased production
will be shut down for good, a process that will start in 2021 and end in 2023. We have
capacity from renewables by 1 GW primarily by completing four large-scale onshore wind
adjusted the prior-year figures accordingly.
farms in the USA (see page 43). The conversion of the Dutch Amer 9 and Eemshaven hard
coal-fired power stations for increased biomass co-firing also contributed to the rise in
Our generation capacity dropped by 0.7 GW last year, above all due to the German coal
renewable energy capacity. This led to a commensurate decline in the share of generation
phaseout. As set out on page 44, the Ibbenbüren B (794 MW) and Westfalen E (764 MW)
from these assets attributable to hard coal.
49
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
In terms of generation capacity, gas is our main energy source, accounting for a share of
The geographic focus of our generation business is Germany, where 51 % of our installed
35 % at the close of 2020. Renewables are in second place, with a share of 25 %. At the end
capacity is located. The United Kingdom and the Netherlands follow, accounting for shares of
of 2020, our wind turbines had a total installed capacity of 8.5 GW, of which 6.6 GW were
23 % and 14 %, respectively. As a result of the acquisition of E.ON’s renewable energy business
onshore and 1.9 GW were offshore. This makes wind our most important source of
in September 2019, the USA has become our fourth most important generation market.
renewable energy, followed by biomass (0.8 GW), hydropower (0.6 GW) and solar (0.2 GW).
More than half of our onshore wind turbines are situated there, most of which are in Texas.
Installed capacity1
As of 31 December 2020, MW
Renewables
Pumped storage,
batteries
Gas
Lignite
Hard coal
Nuclear
Total2
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
of which:
Germany3
United Kingdom
Netherlands / Belgium
Turkey
Coal / Nuclear3
RWE Group4
1,918
6,858
1,366
432
137
748
–
7
–
20
–
–
2,336
13,901
2,336
–
–
–
–
3,807
6,984
2,323
787
400
10,148
2,358
14,301
–
–
–
–
–
–
8,548
8,548
–
–
1,474
–
–
1,474
–
783
2,257
–
–
–
–
–
–
2,770
2,770
2020
1,918
6,877
2019
1,918
6,063
19,369
19,080
6,614
7,374
4,545
787
12,535
40,702
6,583
7,118
4,519
787
14,352
41,415
1 Assets scheduled for decommissioning are excluded from the capacity overview once they stop producing electricity. They include our five lignite units in legally mandated security standby (1,448 MW) which have therefore been excluded from
the figures for 2020 and 2019. The Ibbenbüren B and Westfalen E hard coal-fired power stations stopped being included at the end of 2020. The commercial rounding of certain figures can result in inaccurate sum totals.
2 Including capacity not attributable to any of the energy sources mentioned (e. g. oil-fired power stations).
3 Including capacity of generation assets not owned by RWE that we can deploy at our discretion on the basis of long-term use agreements. At the end of 2020, these assets accounted for a net installed capacity of 2,211 MW
in the Hydro / Biomass / Gas segment and 783 MW in the Coal / Nuclear segment.
4 Including insignificant capacity at RWE Supply & Trading.
50
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Installed capacity based on renewables1
Offshore wind
Onshore wind
Solar
Hydro
Biomass
Total
As of 31 December 2020, MW
Germany
United Kingdom
Netherlands
Poland
Spain
Italy
Sweden
USA
Rest of the world
RWE Group
598
1,272
–
–
–
–
48
–
–
1,918
666
707
268
385
447
475
116
3,543
10
6,616
3
–
–
1
45
–
–
125
47
220
432
82
11
–
12
–
–
–
65
602
1 The commercial rounding of certain figures can result in inaccurate sum totals.
Significant decline in CO2 emissions. Last year, our power stations emitted 68.9 million
metric tons of carbon dioxide. This was 19.2 million metric tons, or 22 %, less than in 2019.
The main reason for the drop was the substantial reduction in electricity generation from
lignite and hard coal last year. We posted a decrease not only in our absolute but also our
specific emissions, i. e. carbon dioxide per megawatt hour of electricity generated, which fell
from 0.58 to 0.47 metric tons.
CO2 emissions
Million metric tons
Hydro / Biomass / Gas
of which:
Germany1
United Kingdom
We need emission allowances for nearly all our carbon dioxide emissions. We normally
Netherlands
purchase the certificates on the forward market. Western European countries allocate free
emission allowances to energy companies only in exceptional cases. In the year being
reviewed, we were only able to cover 1.1 million metric tons of carbon dioxide with such
state allocations.
Turkey
Coal / Nuclear
RWE Group
–
55
737
–
–
–
–
–
–
2020
1,698
2,117
1,016
386
504
475
164
3,668
122
792
10,148
2019
1,706
2,115
855
386
459
475
164
2,949
71
9,180
2020
2019
+/–
21.2
26.3
– 5.1
3.5
9.1
7.0
1.6
47.7
68.9
3.3
12.9
9.1
1.0
61.8
88.1
0.2
– 3.8
– 2.1
0.6
– 14.1
– 19.2
1 Including CO2 emissions of power stations not owned by RWE that we can deploy at our discretion on the basis of
long-term use agreements. In 2020, these stations emitted a total of 1.1 million metric tons of CO2 (previous year:
1.3 million metric tons).
51
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
51.4 million metric tons of lignite produced. Our generation companies procure the fuel
they need either directly on the market or via RWE Supply & Trading, except for lignite, which
External revenue
€ million
we source from proprietary opencast mines. In our Rhenish mining area west of Cologne, we
Offshore Wind
produced 51.4 million metric tons of lignite last year. This was 13.4 million metric tons less
than in the preceding year, owing to the lower utilisation of our power plants. We used the
lion’s share, or 41.8 million metric tons, of lignite to generate electricity. The remainder was
employed in the manufacture of refined products (e. g. lignite powder, hearth furnace coke
and briquettes) and, to a limited extent, to generate process steam and district heat.
External sales volume: marginal gain for electricity; accounting effect reduces gas
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other
Core business
Coal / Nuclear
sales. Last year, we sold 194,465 GWh of electricity and 36,463 GWh of gas, compared to
191,973 GWh and 56,640 GWh in 2019. These transactions were largely effected by the
RWE Group (excluding natural gas tax /
electricity tax)
Supply & Trading segment. We sold slightly more of our main product, electricity. Supply
volumes at RWE Renewables rose considerably, but RWE Supply & Trading sold much less
electricity from RWE power stations externally. Our gas deliveries decreased by 36 %. The
main reason was that we started recording gas sales by RWE Supply & Trading in the Czech
Natural gas tax / electricity tax
RWE Group
2020
2019
+/–
332
1,855
1,056
9,597
9
85
1,265
1,200
9,554
6
12,849
12,110
839
1,015
13,688
13,125
208
152
13,896
13,277
247
590
– 144
43
3
739
– 176
563
56
619
Republic as pure trading transactions on 1 July 2019, eliminating them from sales volume
External revenue slightly up on 2019. Our revenue from customers outside of the Group
and revenue.
totalled €13,688 million (excluding natural gas tax and electricity tax), 4 % more than in the
prior year. Our electricity revenue recorded an increase of 14 % to €11,701 million, clearly
exceeding sales growth. Two effects came to bear here: we realised higher market prices for
the electricity generation of our conventional power stations than in 2019 and we benefited
from the shift in our production to electricity from renewables, for which we usually receive
payments exceeding the market level. Conversely, our gas revenue dropped by 54 % to
€534 million. The aforementioned change in the recognition of revenue in the Czech
Republic was the main reason. In addition, lower gas prices came to bear.
52
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
External revenue by product1
€ million
Electricity revenue
of which:
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other
Core business
Coal / Nuclear
Gas revenue
of which:
Hydro / Biomass / Gas
Supply & Trading
Core business
Other revenue
2020
2019
+ /–
Adjusted EBITDA
€ million
11,701
10,250
1,451
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
247
733
13
Other, consolidation
516
Core business
–
Coal / Nuclear
1,509
RWE Group
332
1,676
684
8,775
1
11,468
233
534
5
529
534
1,453
85
943
671
8,259
1
9,959
291
1,156
22
1,134
1,156
1,719
– 58
– 622
– 17
– 605
– 622
– 266
RWE Group (excluding natural gas tax /
electricity tax)
1 Some prior-year figures adjusted.
13,688
13,125
563
2020
2019
1,069
472
621
539
– 25
2,676
559
3,235
614
295
672
731
– 129
2,183
306
2,489
+/–
455
177
– 51
– 192
104
493
253
746
Adjusted EBITDA 30 % up year on year. Our adjusted earnings before interest, taxes,
depreciation and amortisation (adjusted EBITDA) amounted to €3,235 million. We thus
overachieved the March 2020 outlook we published on pages 94 et seq. of the 2019
Annual Report, which envisaged a range of €2,700 million to €3,000 million. Adjusted
EBITDA from our core business, which we had projected to be between €2,150 million and
€2,450 million, also clearly exceeded expectations, totalling €2,676 million. This was
primarily due to energy trading, which recorded another very strong result following the
exceptional performance in 2019. Adjusted EBITDA achieved by the RWE Group posted
30 % year-on-year growth. This was mainly because the operations transferred from E.ON
to RWE in September 2019 were considered in the consolidated financial statements for
a full twelve months for the first time. The increased utilisation of our wind farms also made
Sustainable investors are increasingly interested in the portion of total RWE Group revenue
a contribution to the rise in earnings.
accounted for by coal-fired generation and other coal products. In the fiscal year that just
ended, this share was 23 %.
The following developments were observed in the segments:
• Offshore Wind: Here, adjusted EBITDA totalled €1,069 million. Our guidance envisaged
a figure between €900 million and €1,100 million. Compared to 2019, we posted an
increase of 74 %. This was a result of the inclusion of E.ON’s renewable energy business in
our figures for a full year for the first time. Improved wind conditions also had a positive
effect. They played a role in our closing the fiscal year at the upper end of the forecast range.
53
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• Onshore Wind / Solar: Adjusted EBITDA recorded by this segment amounted to
• Coal / Nuclear: Adjusted EBITDA recorded here amounted to €559 million, which was
€472 million, falling short of the expected range of €500 million to €600 million. Corona-
within the anticipated range of €500 million to €600 million. This represents 83 % growth
induced delays in commissioning new wind farms came to bear here. Therefore, these
compared to the preceding year. The main reason for this was that we realised higher
assets were unable to make the expected contribution to earnings in 2020. The negative
wholesale prices for electricity generated by our lignite-fired and nuclear power plants
effect of the corona crisis on electricity market prices also led to unplanned earnings
than in 2019. We had already sold forward nearly all of the production of these stations in
shortfalls. This affected wind farms, the generation of which we cannot sell at firm
earlier years. Another positive effect came from our acquisition in September 2019 of
conditions and which are therefore exposed to market risks. Relative to the previous year,
E.ON’s minority interests in the Gundremmingen and Emsland nuclear power plants.
adjusted EBITDA improved by 60 %, predominantly due to the first full-year inclusion of the
renewable energy business we received from E.ON. In addition, we benefited from the
commissioning of new generation capacity.
Adjusted EBIT
€ million
• Hydro / Biomass / Gas: In this segment, adjusted EBITDA came in at €621 million. We had
Offshore Wind
forecast a figure between €550 million and €650 million. Earnings were down 8 %
compared to 2019. One reason for this was lower income from participating in the British
capacity market, which was suspended for about a year pursuant to a high court decision
in November 2018. Following the resumption of capacity payments, earnings for 2019
included back payments for 2018. In the Netherlands, the economic situation of the
Eemshaven power station deteriorated, whereas the Claus C gas-fired power plant made
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other, consolidation
Core business
a stronger contribution to earnings after having been mothballed for several years. Our
Coal / Nuclear
income from the commercial optimisation of power plant dispatch was lower than in
RWE Group
2019, but higher than planned. This was the main reason why the segment’s adjusted
EBITDA was at the upper end of the forecast range.
2020
2019
697
86
283
496
– 25
1,537
234
1,771
377
59
342
691
– 128
1,341
– 74
1,267
+ /–
320
27
– 59
– 195
103
196
308
504
• Supply & Trading: Our performance in the trading business was much better than
€1,771 million, clearly exceeding the forecast range of €1,200 million to €1,500 million.
expected. Accordingly, at €539 million, adjusted segment EBITDA was clearly above
This growth was driven by the same factors benefiting adjusted EBITDA. The difference
the forecast range of €150 million to €350 million. Despite this, we were unable to
between these two key figures is that operating depreciation and amortisation, which
match the earnings achieved in the previous year (€731 million) which benefited from
amounted to €1,464 million in 2020 compared to €1,222 million in the previous year,
an exceptionally strong trading performance. Our gas business also displayed very
is considered in adjusted EBIT, but not in adjusted EBITDA.
Adjusted EBIT 40 % up on prior year. The RWE Group’s adjusted EBIT rose by 40 % to
satisfactory development which, however, was not quite as good as in 2019.
54
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Reconciliation to net income
€ million
Adjusted EBITDA
2020
2019
+/–
Non-operating result
€ million
3,235
2,489
746
Disposal result
Operating depreciation, amortisation and
impairment losses
– 1,464
– 1,222
– 242
Effect on income from the valuation of
derivatives and inventories
Other
Non-operating result
2020
2019
+/–
13
1,886
– 2,020
– 121
48
81
– 1,210
– 1,081
– 35
1,805
– 810
960
Adjusted EBIT
Non-operating result
Financial result
Income from continuing operations before taxes
Taxes on income
Income from continuing operations
Income from discontinued operations
Income
of which:
Non-controlling interests
RWE AG hybrid capital investors’ interest
Net income / income attributable to
RWE AG shareholders
1,771
– 121
– 454
1,196
– 363
833
221
1,054
59
–
1,267
– 1,081
– 938
– 752
92
– 660
9,816
9,156
643
15
504
960
484
1,948
– 455
1,493
– 9,595
– 8,102
– 584
– 15
The non-operating result, in which we recognise certain factors which are not related to
operations or the period being reviewed, improved by €960 million to – €121 million in the
past fiscal year. Its components were as follows:
• At €13 million, income from the disposal of investments and assets was immaterial
(previous year: €48 million). It largely resulted from the sale of US wood pellet producer
Georgia Biomass (see page 45).
• At €1,886 million, the effects of the valuation of derivatives and inventories on earnings
were unusually high, after totalling €81 million in the preceding year. However, such
995
8,498
– 7,503
effects are only temporary and are due in part to the fact that, pursuant to IFRS, financial
instruments used to hedge price risks are accounted for at fair value at the corresponding
balance-sheet date, whereas the hedged underlying transactions are only recognised as
Reconciliation to net income: exceptional effects overshadow operating development.
a profit or loss when they are realised.
The reconciliation from adjusted EBIT to net income was greatly affected by one-off effects.
Substantial income from the valuation of derivatives was counterbalanced by impairments
• In the ‘other’ line item, we reported a loss of €2,020 million (previous year: €1,210 million).
of a similar order recognised for coal-fired power plants and opencast mines. Unlike in the
This was mainly caused by €1.8 billion in impairments recognised for power plants and
preceding year, the positive exceptional effect of the asset swap with E.ON did not play a
opencast mines in reaction to the German coal phaseout and deteriorated market
role in the reporting year: in 2019 the sale of innogy’s grid and retail businesses and the
prospects. We completely wrote off our German Ibbenbüren B and Westfalen E hard coal-
stake in Czech gas network operator innogy Grid Holding (IGH) led to a deconsolidation gain
fired power stations, which won decommissioning remuneration contracts in an auction
of €8.3 billion. There was no similar effect in 2020. Accordingly, net income was significantly
held by the German Network Agency. The compensation claim of €216 million obtained
below the high level achieved in the prior year.
in the bidding process was also recognised with an effect on income. The impairments
also related to our lignite business and our Dutch power stations.
55
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Financial result
€ million
Interest income
of which: E.ON dividend
Interest expenses
Net interest
Interest accretion to non-current provisions
of which: interest accretion to mining provisions
Other financial result
Financial result
2020
2019
+/–
• The other financial result dropped by €202 million to – €186 million. We suffered losses
283
182
– 296
– 13
– 255
– 186
– 186
– 454
185
–
– 258
– 73
– 881
– 581
16
– 938
on our portfolio of securities due to the turmoil on the capital markets caused by the
coronavirus pandemic, having achieved gains in the previous year. In addition,
unfavourable development of interest and currency exchange rates had a negative effect
on income from financial transactions.
Before taxes, our continuing operations posted income of €1,196 million (previous year:
– €752 million). Taxes on income amounted to €363 million, corresponding to an effective
tax rate of 30 %. In light of RWE’s tax gains, this is a fairly high number. The amortisation of
98
182
– 38
60
626
395
– 202
deferred tax assets was the main reason for this. A counteracting effect on the tax rate
484
stemmed from a reduction of our tax risk provision. After taxes, our continuing operations
achieved income of €833 million (previous year: – €660 million).
Our financial result totalled – €454 million, exceeding the year-earlier figure by €484 million.
Income from discontinued operations amounted to €221 million. It stemmed from the
Its components changed as follows:
stake in Slovak energy utility VSE, which we acquired from innogy in 2019 and transferred
to E.ON in August 2020 (see page 42). This figure includes the deconsolidation gain of
• Net interest improved by €60 million to – €13 million because, for the first time, we
€154 million. In the previous year, this item included the earnings from all of the discontinued
received a dividend from the stake in E.ON we acquired in 2019, which currently amounts
innogy operations. We sold them in September 2019, except for VSE. The deconsolidation
to 15 %. However, we also registered higher interest charges. This was in part due to the
gain (€8,258 million) caused income from discontinued operations to be exceptionally high
first full-year consideration of E.ON’s renewable energy business, which caused us to
(€9,816 million).
recognise higher expenses for financing onshore wind farms in the USA. Moreover, there
was a rise in costs incurred to hedge currencies for business activities outside of the
Non-controlling interests in income declined by €584 million to €59 million. This was due to
Eurozone.
the sale of our stake in innogy (76.8 %) in September 2019. Since then, there has been no
more income attributable to minority shareholders of the innogy Group.
• The interest accretion to non-current provisions reduced income by €255 million.
In the previous year, the decline was much more substantial (€881 million). In 2019,
The portion of earnings attributable to RWE hybrid capital investors was zero (previous year:
we significantly lowered the real discount rate applied when calculating our mining
€15 million). Our only hybrid bond classified as equity pursuant to IFRS was redeemed in
provisions. This led to an increase in the present value of the obligations, which was
March 2019. RWE’s remaining hybrid capital is classified as debt, and the interest on it is
in part recognised as an expense in the interest accretion.
recognised in the financial result.
56
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
The RWE Group’s net income amounted to €995 million (previous year: €8,498 million). This
resulted in earnings per share of €1.56 (previous year: €13.82). An average of 637.3 million
RWE shares were outstanding in the reporting year. This figure was higher than in 2019
Capital expenditure on property, plant and
equipment and on intangible assets1
€ million
(614.7 million) due to the capital increase of August 2020.
Reconciliation to adjusted net income
€ million
Original
figures
Adjustment
Adjusted
figures
Adjusted EBIT
Non-operating result
Financial result
Income from continuing operations before taxes
Taxes on income
Income from continuing operations
Income from discontinued operations
Income
of which:
1,771
– 121
– 454
1,196
– 363
833
221
1,054
–
121
139
260
145
405
– 221
184
1,771
–
– 315
1,456
– 218
1,238
–
1,238
Non-controlling interests
59
– 34
25
Net income / income attributable to
RWE AG shareholders
995
218
1,213
Adjusted net income higher than expected. Adjusted net income amounted to
€1,213 million. Due to the unexpectedly positive operating earnings, it exceeded the guided
range of €850 million to €1,150 million. We calculate adjusted net income by deducting
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other, consolidation
Core business
Coal / Nuclear
RWE Group2
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other, consolidation
Core business
from net income according to IFRS the non-operating result, income from discontinued
Coal / Nuclear
operations as well as major special items in the financial result and in income attributable to
RWE Group
other shareholders. Instead of the actual tax rate, we use a rate of 15 %, in line with the
average tax burden expected in coming years. We did not state adjusted net income for
2019 because this figure would have been of limited informational value due to the
significant one-off effects of the asset swap with E.ON.
1 Table only shows cash investments. Prior-year figures restated accordingly.
57
2020
2019
+/–
756
1,154
153
43
–
2,106
183
2,285
492
752
212
29
– 3
1,482
281
1,767
264
402
– 59
14
3
624
– 98
518
520
408
115
18
11
1,072
1
1,073
–
46
2
68
– 112
4
–
4
+ /–
520
362
113
– 50
123
1,068
1
1,069
1 Table only shows cash investments. Prior-year figures restated accordingly.
2 Including a – €4 million (2020) and €4 million (2019) consolidation effect between the core business and the
Coal / Nuclear segment.
Capital expenditure on financial assets1
€ million
2020
2019
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Business performance
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Capital expenditure substantially up on 2019. In fiscal 2020, capital expenditure
Headcount marginally down year on year. As of 31 December 2020, the RWE Group had
amounted to €3,358 million, surpassing the year-earlier level (€1,771 million) by 90 %.
19,498 people on its payroll, of which 14,701 were employed in Germany and 4,797
Unlike in the past, we now only focus on capital expenditure with an effect on cash in our
worked abroad. Part-time positions were considered in these numbers on a pro-rata basis.
financial reporting. About 85 % of the funds were used in the Offshore Wind and Onshore
Personnel figures were down slightly compared to the end of 2019 (– 294). We recorded the
Wind / Solar segments.
biggest decline in the Coal / Nuclear segment, where headcount decreased by 379, to a
certain extent due to partial retirement programmes. By contrast, the workforce in our core
Compared to 2019, our spending on property, plant and equipment and intangible assets
business grew by 85. Major contributing factors were the construction of the UK North Sea
rose by 29 % to €2,285 million. This was mainly due to the first full-year inclusion of capital
wind farm Triton Knoll and the acquisition of Nordex’s European development business. In
expenditure in the renewable energy business received from E.ON. Last year, a substantial
addition, we need more employees to continue developing the Group’s IT infrastructure. This
portion of the funds was used to build the Triton Knoll and Kaskasi wind farms in the North
led to new hires, above all in the Supply & Trading segment. A counteracting effect came
Sea as well as several major US onshore wind farms. Our capital spending on financial
from sales of operations by our subsidiary Belectric, which specialises in developing solar
assets, which was immaterial in 2019, totalled €1,073 million in the year under review.
farms and energy storage systems. Staff figures do not include apprentices or trainees. At
Major expenditure items were the 20 % stake we will take in the Rampion offshore wind farm
the end of 2020, 750 young adults were learning a profession at RWE, compared to 701 in
in the UK, the acquisition of Nordex’s European development business, and the purchase of
the previous year.
the 382 MW King’s Lynn gas-fired power station in the east of England. We have provided
detailed information on these transactions on pages 42 et seqq.
Workforce 1
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Other2
Core business
Coal / Nuclear
RWE Group
31 Dec 2020 31 Dec 2019
1,119
2,402
2,667
1,790
425
8,403
11,095
19,498
1,016
2,462
2,893
1,633
314
8,318
11.474
19,792
+/–
103
– 60
– 226
157
111
85
– 379
– 294
1 Converted to full-time positions.
2 This item exclusively comprises employees of the holding company RWE AG.
58
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Financial position and net worth
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.6 Financial position and net worth
Our financial position and net worth continued to improve in the fiscal year that just
• We have a Commercial Paper Programme for short-term refinancing, which was updated
ended. The main drivers were a significant increase in cash flows from operating
last year. It enables us to raise funds equivalent to up to €5 billion on the money market
activities and the capital increase conducted in August 2020. Our net debt dropped to
(before update: US$5 billion). We only made moderate use of these funds in the past fiscal
€4.4 billion despite the substantial amount of capital spent on renewable energy. By the
year. At times, a total of up to €1.2 billion in commercial paper was outstanding.
end of the year, it was just 1.7 times higher than adjusted EBITDA of the core business.
As a result, we remained well below the self-imposed upper limit of 3.0. The equity ratio
• Furthermore, we have access to a €5 billion syndicated credit line, which serves to secure
also displayed positive development, rising by 1.8 percentage points to 29.1 %.
liquidity. It was granted to us by a consortium of 27 international banks and consists of
two tranches: one of €3 billion, which expires in April 2025, and one of €2 billion, which we
have been granted through to April 2021. Each tranche can be extended for a year. We
Responsibility for procuring funds. Responsibility for Group financing is pooled at
require the banks’ approval for this with regard to the first tranche, but not for the second
RWE AG. As the parent company, RWE AG is responsible for acquiring funds from banks or
one. So far, RWE has not used the syndicated credit line.
the financial markets. Subsidiaries only raise debt capital directly in specific cases, for
example if it is advantageous economically to make use of local credit and capital markets.
Bond volume drops to €0.6 billion. RWE bonds with a total face value of €0.6 billion
RWE AG also acts as a co-ordinator when subsidiaries assume contingent liabilities. This
were outstanding at the end of 2020. Essentially, these were two hybrid bonds: one of
allows us to manage and monitor financial risks centrally. Moreover, it strengthens our
€282 million with a 3.5 % coupon and one of US$317 million with a 6.625 % coupon. Due to
position when negotiating with banks, business partners, suppliers and customers.
early buybacks in October 2017, the outstanding amounts are below the issuance volumes
of €550 million and US$500 million. The bonds’ earliest redemption dates are in April 2025
Tools for raising debt capital. We cover a major portion of our financing needs with
and March 2026. A third hybrid bond with a volume of €539 million and a coupon of 2.75 %
earnings from our operating activities. In addition, we have a wide range of tools to procure
was redeemed at the first call date, in October 2020, without being replaced with new
debt capital.
hybrid capital. It had an original face value of €700 million and was reduced by €161 million
through bond buybacks in 2017.
• Our Debt Issuance Programme (DIP) gives us latitude in raising debt capital for the long
term. Our current DIP allows us to issue bonds with a total face value of €10 billion.
However, RWE AG has not made any such issuances since 2015.
59
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Financial position and net worth
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Borrowing costs rise to 2.3 %. In 2020, the cost of debt for RWE was 2.3 %. It was
calculated for our average liabilities from bonds, commercial paper and bank loans held
Cash flow statement1
€ million
during the year. The cost of debt was slightly higher than in the preceding year (1.4 %). This
Funds from operations
was because we refinanced our business to a lesser extent via commercial paper. The
Change in working capital
2020
2019
+/–
4,138
1,809
2,329
– 13
– 2,786
2,773
interest rates of these bonds are relatively low due to their short maturities. In the reporting
year, we had less need for debt financing than in 2019, in part due to the capital increase
conducted in August, which resulted in proceeds of €2.0 billion (see page 42).
Cash flows from operating activities of continuing operations
4,125
– 977
5,102
Cash flows from investing activities of continuing operations
– 4,278
474
– 4,752
Cash flows from financing activities of continuing operations
1,769
189
1,580
Solid investment grade rating. The level of our borrowing costs partially depends on rating
agencies’ assessment of our creditworthiness. Moody’s and Fitch make such evaluations on
Effects of changes in foreign exchange rates and other changes
in value on cash and cash equivalents
– 34
13
– 47
request from us. They both give us a credit rating of investment grade. The agency gives our
Total net changes in cash and cash equivalents
1,582
– 301
1,883
long-term creditworthiness a rating of ‘Baa3’, which was confirmed in March 2020 after an
extensive review. In addition, Moody’s offered the prospect of an upgrade by raising the
outlook on our rating from ‘stable’ to ‘positive’. It explained this step by citing RWE’s improved
risk profile resulting from our transformation to a leading renewable energy company. Fitch
rates us one grade better than Moody’s: ‘BBB’, with a stable outlook.
Cash flows from operating activities of continuing operations
4,125
– 977
5,102
Minus capital expenditure
– 3,358
– 1,771
– 1,587
Plus proceeds from divestitures / asset disposals
365
695
– 330
Free cash flow
1,132
– 2,053
3,185
Credit rating of RWE AG (as of 31 Dec 2020)
Moody’s
Fitch
1 All items relate solely to continuing operations.
Non-current financial liabilities
Senior debt
Subordinated debt (hybrid bonds)
Current financial liabilities
Outlook
Baa3
Ba2
P–3
BBB
BB+
F2
Significantly improved operating cash flows of €4.1 billion. We generated cash flows of
€4,125 million from the operating activities of our continuing operations, compared to
– €977 million in the previous year. The substantial improvement was in part due to the
positive development of the operating result. Added to this were effects that were reflected
Positive
Stable
in the change in working capital. For example, commodity forward transactions led to
substantial cash outflows in the prior year. Conversely, we achieved considerable income
from such transactions in 2020.
60
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Financial position and net worth
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Investing activities of continuing operations led to a cash outflow of €4,278 million. This
was predominantly due to €3,358 million in capital expenditure on property, plant and
Net debt1
€ million
equipment, which was contrasted by €365 million in proceeds from divestments.
Cash and cash equivalents
Furthermore, we made substantial purchases of securities, primarily to invest the proceeds
from the capital increase temporarily. Conversely, in the previous year, we registered
significant income from the sale of securities. This was one of the reasons why we received
€474 million in net cash inflows from investing activities in 2019.
Marketable securities
Other financial assets
Financial assets
At €1,769 million, our cash flows from financing activities of continuing operations were
much higher than the year-earlier figure (€189 million). This reflected the capital increase
Bonds, other notes payable, bank debt,
commercial paper
Hedging of bond currency risk
conducted in August, from which we received proceeds of €1,990 million. Furthermore, in
Other financial liabilities
the reporting year we issued slightly more financial debt than we repaid, leading to a net
Financial liabilities
cash inflow of €61 million. Our dividend payments to RWE shareholders (€492 million) and
Minus 50 % of the hybrid capital recognised as debt
minority shareholders (€30 million) had an opposite effect.
On balance, the aforementioned cash flows from operating, investing and financing
activities increased our cash and cash equivalents by €1,582 million.
Cash flows from operating activities, minus capital expenditure on property, plant and
Net financial assets (including correction of
hybrid capital)
Provisions for pensions and similar obligations
Surplus of plan assets over benefit obligations
Provisions for nuclear waste management
equipment and intangible assets, plus proceeds from divestments and asset disposals
Provisions for dismantling wind farms
results in free cash flow. In the year under review, free cash flow amounted to €1,132 million,
Net debt of continuing operations
clearly exceeding the negative figure recorded in the prior year (– €2,053 million). The main
reason for this was the significant increase in cash inflows from operating activities.
Net debt of discontinued operations
Net debt
31 Dec 2020 31 Dec 2019
+/–
4,774
4,517
2,507
11,798
3,192
3,523
2,383
9,098
2,160
2,466
31
3,038
5,229
– 278
6,847
3,864
– 172
6,451
1,136
4,432
–
4,432
7
3,147
5,620
– 562
4,040
3,446
– 153
6,723
951
6,927
232
7,159
1,582
994
124
2,700
– 306
24
– 109
– 391
284
2,807
418
– 19
– 272
185
– 2,495
– 232
– 2,727
1 New definition of net debt (see commentary on the next page); prior-year figures changed due to retroactive
adjustments to the first-time consolidation of the renewable energy business acquired from E.ON in 2019.
61
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Financial position and net worth
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Net debt drops to €4.4 billion. As of 31 December 2020, our net debt totalled
Drop in off-balance-sheet fuel purchase obligations. Net debt does not include our
€4,432 million. It was completely attributable to our continuing operations as we sold the
off-balance-sheet obligations, which largely stem from long-term fuel and electricity
stake in VSE stated as a discontinued operation in August 2020 (see page 42). We
purchase agreements. As of the balance-sheet date, payment obligations from material
redefined net debt in 2020. It no longer contains our mining provisions, which essentially
fuel procurement contracts amounted to €23.6 billion as opposed to €27.1 billion at the
cover our obligations to recultivate opencast mining areas. The assets we use to cover these
end of the previous year. For power purchase agreements, they totalled €7.1 billion, on a par
provisions are also disregarded, for instance our €2.6 billion claim for damages from the
with 2019. These figures are based on assumptions regarding the prospective development
German lignite phaseout against the state. We have also presented net debt for 2019
of commodity prices. For further commentary on our off-balance-sheet obligations, please
based on the new definition for the sake of comparability.
see pages 181 et seq. in the Notes.
Our net debt declined by €2,727 million compared to 31 December 2019. The main drivers
Group balance sheet: equity ratio rises to 29.1 %. The balance-sheet total reported in the
were the capital increase in August, the positive free cash flow, and the deconsolidation of
2020 consolidated financial statements amounted to €61.7 billion as opposed to
VSE’s net debt. Profit distributions had a counteracting effect. Moreover, we registered a
€64.0 billion in the previous year. Significant declines were recorded by other receivables
slight increase in provisions for pensions because the discount rates we apply when
and other assets (– €2.8 billion) and other liabilities (– €2.5 billion): both line items were
determining the net present value of the pension obligations recorded a market-induced
affected by a decrease in derivatives on our books. A drop was also registered by property,
decline. Increases in the value of plan assets, which we hold to meet the obligations, were
plant and equipment (– €1.1 billion), with impairments recognised for power plants and
unable to offset this. The redemption of a €539 million hybrid bond also had a debt-
opencast mines playing a central role, as reported on page 55. By contrast, we posted
increasing effect. The reason for this is that in determining net debt, we classify half of the
an increase in cash and cash equivalents (+ €1.6 billion) and marketable securities
hybrid capital as equity.
(+ €1.0 billion). The capital increase in August 2020 was a major factor. It was also the main
reason why equity rose by €0.5 billion to €18.0 billion. The share of the balance-sheet total
Leverage factor clearly below upper limit of 3.0. One of our key management parameters
accounted for by equity (the equity ratio) was 29.1 %. This is 1.8 percentage points more
is the ratio of net debt to adjusted EBITDA of the core business, also referred to as the
than in 2019.
leverage factor. This key figure is more indicative than total liabilities because it also reflects
earning power and therefore our ability to meet our debt obligations. We set the upper limit
The Group’s 2020 balance sheet recognises the Stella, Cranell, Raymond East and
for the leverage factor at 3.0 in order to secure our financial flexibility. At 1.7, we remained
Raymond West US wind farms as ‘assets held for sale’ and ‘liabilities held for sale’ because
clearly below this threshold in the year being reviewed. Even excluding the funds from the
we will deconsolidate these assets due to the divestments presented on page 43. In the
capital increase, we would have stayed within the upper limit: the leverage factor would have
prior year’s financial statements, the stake in the Slovak power utility VSE, which we sold in
been 2.4.
August 2020, was stated in these items.
62
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Financial position and net worth
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Group balance sheet structure1
31 Dec 2020
31 Dec 2019
Group balance sheet structure1
31 Dec 2020
31 Dec 2019
€ million
%
€ million
%
€ million
%
€ million
%
Assets
Equity and liabilities
Equity
Non-current assets
34,461
55.9
35,768
55.9
Non-current liabilities
of which:
Intangible assets
Property, plant and equipment
Current assets
of which:
4,913
17,902
27,207
8.0
29.0
44.1
4,777
19,016
28,241
7.5
29.7
44.1
of which:
Provisions
Financial liabilities
Current liabilities
of which:
Trade accounts receivable
3,007
4.9
3,621
5.7
Provisions
Receivables and
other assets
Marketable securities
Assets held for sale
12,530
20.3
15,311
23.9
Trade accounts payable
4,219
1,045
6.8
1.7
3,258
1,274
5.1
2.0
Other liabilities
Liabilities held for sale
Financial liabilities
17,971
27,280
19,470
3,951
16,417
3,004
1,247
2,387
9,240
539
29.1
44.2
31.6
6.4
26.7
4.9
2.0
3.9
15.0
0.9
17,467
26,937
18,937
3,924
19,605
2,638
1,689
2,987
11,781
510
27.3
42.1
29.6
6.1
30.6
4.1
2.6
4.7
18.4
0.8
Total
61,668
100.0
64,009
100.0
Total
61,668
100.0
64,009
100.0
1 Prior-year figures changed due to retroactive adjustments to the first-time consolidation of the renewable energy business acquired from E.ON in 2019.
63
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Notes to the financial statements
of RWE AG (holding company)
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.7 Notes to the financial statements of RWE AG (holding company)
The financial statements of RWE AG primarily reflect the business performance of its
subsidiaries. In sum, the profit transfers of these companies recorded a slight increase
in 2020. The good earnings produced by the renewable energy business played a role,
whereas RWE Supply & Trading contributed less to the bottom line than in 2019 despite
a strong trading performance. At €580 million, RWE AG’s net profit was higher than in
the previous year. We intend to raise the dividend and therefore propose a payment of
€0.85 per share to the Annual General Meeting taking place in April 2021.
Balance sheet of RWE AG (abridged)
€ million
Assets
Financial assets
Accounts receivable from affiliated companies
Other accounts receivable and other assets
Marketable securities and cash and cash equivalents
Financial statements. RWE AG prepares its financial statements in compliance with the
rules set out in the German Commercial Code and the German Stock Corporation Act. The
financial statements are submitted to Bundesanzeiger Verlag GmbH, located in Cologne,
Germany, which publishes them in the Federal Gazette. They are available on the internet
at www.rwe.com/en/financial-reports.
Total assets
Equity and liabilities
Equity
Provisions
31 Dec 2020 31 Dec 2019
20,524
2,094
519
6,664
20,628
10,233
6,056
2,929
29,801
39,846
7,826
1,996
5,738
2,237
18,905
29,213
1,074
2,658
29,801
39,846
Accounts payable to affiliated companies
2020
2019
Total equity and liabilities
Other liabilities
Assets. RWE AG had €29.8 billion in total assets as of 31 December 2020, compared to
€39.8 billion in the previous year. We registered a significant decline in accounts receivable
from and payable to affiliated companies. This was the result of the merger of two
subsidiaries. A substantial account receivable from one of them and a significant account
payable to the other resulted from the asset swap with E.ON (see page 68 of the 2019
Annual Report). The merger caused the two items to net each other out. Other receivables
also declined considerably. This is because E.ON transferred parts of the innogy business
back to RWE in legal terms in mid-2020, eliminating the associated claims we had against
E.ON. The increase in the marketable securities and cash and cash equivalents on our books
1,114
– 72
– 712
250
580
– 5
575
1,758
31
– 1,550
275
514
– 22
492
64
Income statement of RWE AG (abridged)
€ million
Income from financial assets
Net interest
Other income and expenses
Taxes on income
Net profit
Transfer to other retained earnings
Distributable profit
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Notes to the financial statements
of RWE AG (holding company)
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
had a counteracting effect on the total assets. The capital increase we conducted in August,
• The ‘other income and expenses’ line item improved by €838 million to – €712 million.
which led to proceeds of €2.0 billion, came to bear here. In addition, RWE AG subsidiaries
This is because a substantial impairment was recognised for financial accounts
generated higher operating cash flows, which they transferred to the Group parent.
receivable from a Dutch subsidiary in 2019 as the framework conditions for electricity
Therefore, RWE AG’s equity rose to €7.8 billion (previous year: €5.7 billion). The equity ratio
generation from hard coal had become less favourable. The remainder was written off
increased from 14.4 % to 26.3 %.
in 2020, but the burden on earnings was much smaller than in the preceding year.
Conversely, there was a slight increase in expenses for IT projects at RWE AG.
Financial position. RWE AG is set up solidly in economic terms and has a number of
financing tools at its disposal that it can use flexibly. This is reflected in our credit ratings,
• In the year under review, we recorded tax income of €250 million (previous year:
which are investment grade. A detailed presentation of RWE’s financial position and
€275 million), largely because we reduced our tax risk provision.
financing activity in the year under review can be found on pages 59 et seqq.
• The presented earnings figures led to net profit of €580 million. This represents an
Earnings position. RWE AG’s earnings position improved slightly compared to 2019.
increase of €66 million compared to 2019.
The main items on the income statement developed as follows:
• The distributable profit of €575 million corresponds to the planned payment of a dividend
• Income from financial assets dropped by €644 million to €1,114 million. This was due to
of €0.85 per share to our shareholders.
lower income from investments and write-downs of financial assets. By contrast, profit
transfers from subsidiaries were slightly up year on year in part due to the increase in
Outlook for 2021. RWE AG’s earnings prospects will largely depend on the business
income at RWE Renewables and the first dividend we received from our 15 % stake
performance of its subsidiaries. Our current assessment makes us confident of being able
in E.ON held by a subsidiary of RWE AG. A counteracting effect resulted from RWE
to achieve a net profit in 2021 that is slightly higher than in 2020.
Supply & Trading closing the reporting year with income down on the previous one
despite a very good trading performance.
Corporate governance declaration in accordance with Section 289f and Section 315d
of the German Commercial Code. On 15 February 2021, the Executive Board and the
• Net interest deteriorated by €103 million to – €72 million. This was mainly due to a decline
Supervisory Board of RWE AG issued a corporate governance declaration in accordance with
in capital gains from the management of fund assets used to cover our pension
Section 289f and Section 315d of the German Commercial Code. The declaration
obligations.
contains the Corporate Governance Report and has been published at
www.rwe.com/corporate-governance-declaration.
65
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Outlook
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.8 Outlook
We expect to maintain our good earnings position in 2021. However, we will probably
Electricity production for 2021 largely sold forward. The future development of
close the year significantly down on the previous one in our core business. In February,
electricity prices will depend on a number of factors that are nearly impossible to predict.
extreme weather conditions in Texas brought several wind farms to a standstill and
At any rate, this would only have a limited impact on this year’s power plant margins as we
led to substantial losses due to power purchases. Furthermore, we do not anticipate
have sold forward most of our electricity generation for 2021 and secured the prices of the
income from energy trading to be as high as in 2020. Outside of our core business,
required fuel and emissions allowances. These transactions have been concluded up to
we will benefit from higher margins of our lignite and nuclear power stations. In sum, we
three years forward. Therefore, the realised electricity prices can differ significantly from the
expect the Group to post adjusted EBITDA of between €2,650 million and €3,050 million.
current market quotations. We sold forward the electricity produced by our German
In light of the favourable medium and long-term earnings prospects of our core
lignite-fired and nuclear power stations with long lead times. In doing so, we realised higher
business, the Executive Board of RWE AG aims for a slightly increased dividend of
prices for 2021 than for 2020.
€0.90 for fiscal 2021.
Changed recognition of tax benefits in the USA. As of the start of fiscal 2021, we changed
the accounting treatment of tax benefits we receive for US wind and solar projects. As set
Experts predict strong economic recovery. Despite extended lockdown measures and the
out on page 37, renewable energy is subsidised via tax credits in the USA. Furthermore,
slow progress in controlling the coronavirus pandemic, most economic research institutes
plant operators can benefit from accelerated depreciation, referred to as tax benefits. We
expect the economy to record a significant recovery in 2021. Current forecasts have the
previously recognised them in taxes on income. By contrast, we consider the benefits of tax
average rise in global economic output amounting to 5 %. Estimates for the Eurozone are of
credits in other operating income. For the sake of consistency, we will take this approach to
a similar order. Based on expert opinions, Germany and the Netherlands may well post a
tax benefits as well. This drives up adjusted EBITDA. To ensure comparability, we will restate
gain of about 4 %. UK prospects partially depend on whether the country can maintain its
the figures for 2020 accordingly in our financial reporting for fiscal 2021.
close economic ties with the EU after Brexit. If so, a 5 % rise in GDP should be feasible in the
United Kingdom. Growth of approximately 4 % has been forecast for the USA.
Power consumption expected to rise. Our expectations regarding this year’s electricity
usage are based on the above economic outlooks. A significant resurgence of the economy
will lead to increased demand for electricity. However, energy savings are expected to have
a dampening effect. We currently anticipate demand for electricity in RWE’s core markets
Germany, the Netherlands, the United Kingdom and the USA to be 2 % to 4 % up on 2020
levels.
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RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Outlook
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Forecast
€ million
Adjusted EBITDA
of which:
Core business
of which:
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
Coal / Nuclear
Adjusted EBIT
Adjusted net income
2020 actual1 Outlook for 2021
Our outlook broken down by segment is as follows:
3,287
2,650 – 3,050
• Offshore Wind: Here, adjusted EBITDA is expected to total between €1,050 million and
€1,250 million (last year: €1,069 million). The commissioning of the first turbines of the
Triton Knoll wind farm in 2021 will have a positive effect. In addition, we anticipate being
2,728
1,800 – 2,200
able to fully consolidate the Rampion UK offshore wind farm during the year. As
1,069
1,050 – 1,250
farm by 20 % to 50.1 %. However, new project developments will likely result in added
mentioned on page 42, we agreed with E.ON that we would increase our stake in the wind
524
621
539
559
1,823
1,257
50 – 250
500 – 600
150 – 350
800 – 900
costs. Moreover, if wind conditions normalise, utilisation of our UK offshore wind farms is
expected to drop.
• Onshore Wind / Solar: Adjusted EBITDA posted by this segment will probably total between
€50 million and €250 million, closing down on last year’s level, which amounted to
1,150 – 1,550
€524 million including tax benefits. This is primarily due to the impact on earnings of the
750 – 1,100
state of emergency caused by the weather in February in the USA. As set out on page 46,
1 Some figures restated due to a change in the recognition of tax benefits in the USA (see commentary
on the previous page).
production outages caused by winter storms and icy rain required us to make short-term
electricity purchases at extremely high prices. The resulting losses total a low to medium
triple-digit million euro amount. We expect the commissioning of new wind and solar
farms to have a positive impact on earnings. Furthermore, the sale of stakes in the Stella,
2021 adjusted EBITDA forecast of €2,650 million to €3,050 million. We expect to maintain
Cranell, Raymond East and Raymond West onshore wind farms will lead to a capital gain.
our good earnings position in 2021. However, we will probably close the year down on 2020 in
This will be contrasted by higher expenses incurred to develop growth projects.
part owing to losses in the Onshore Wind / Solar segment caused by the extreme weather in
Texas at the beginning of the year. In addition, we anticipate a decline in earnings from energy
• Hydro / Biomass / Gas: We expect this segment to achieve adjusted EBITDA of
trading after the very strong performance in 2020. This will be contrasted by improved
€500 million to €600 million for fiscal 2021. Compared to last year’s figure (€621 million)
margins on electricity forward sales from which we will benefit outside of the core business in
this represents a decline. One of the reasons is that income from the commercial
the Coal / Nuclear segment. The RWE Group anticipates adjusted EBITDA for 2021 to total
optimisation of power plant dispatch will probably be below the high level registered in
between €2,650 million and €3,050 million. Last year’s figure including tax benefits stood at
2020. Moreover, we will not benefit from the contribution to earnings previously made by
€3,287 million. We forecast the adjusted EBITDA of our core business to total between
wood pellet manufacturer Georgia Biomass, which we sold in July 2020. However, the
€1,800 million and €2,200 million (last year: 2,728 million). With expected operating
curtailment of earnings last year from fire damage to the Eemshaven power station will
depreciation and amortisation of about €1,500 million, the Group’s adjusted EBIT should be
not recur.
within the range of €1,150 million to €1,550 million (last year: €1,823 million). We anticipate
adjusted net income, which excludes material special items, of €750 million to €1,100 million
compared to €1,257 million last year (see page 57 for a definition of this key figure).
67
RWE Annual Report 2020 1
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2
Combined review
of operations
Outlook
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• Supply & Trading: In the long run, we anticipate annual average adjusted EBITDA here to
Net debt not to exceed three times adjusted EBITDA. One of our key management
be in the order of €250 million. We expect a figure in the range of €150 million to
parameters is the ratio of net debt to adjusted EBITDA of the core business, also referred to
€350 million for 2021. This would be much lower than the very high earnings posted
as the leverage factor. This key figure is more indicative than total liabilities because it also
last year (€539 million).
reflects earning power and therefore our ability to meet our debt obligations. We set the
upper limit for the leverage factor at 3.0, which we intend to comply with over the long term.
• Coal / Nuclear: Adjusted EBITDA in this segment is expected to total between €800 million
We expect to be able to satisfy this requirement for fiscal 2021. However, the leverage
and €900 million (last year: €559 million). The significant year-on-year growth will result
factor may well be higher than in 2020.
from higher margins on forward sales of our electricity generation. However, we anticipate
additional costs from the implementation of the German coal phaseout.
Dividend for fiscal 2021. The Executive Board aims to pay a dividend of €0.90 per share
for fiscal 2021. This represents an increase of €0.05 relative to the dividend proposal for
Capital expenditure on property, plant and equipment markedly up on previous year.
2020. The reason for the planned increase are the bright medium and long-term earnings
Capital expenditure on property, plant and equipment and intangible assets is estimated to
prospects of our core business.
be much higher than in 2020 (€2,285 million). A substantial amount of funds will be spent
on the construction of the offshore wind farms Triton Knoll in the UK North Sea and Kaskasi
near Heligoland, Germany. In addition, if we reach a positive investment decision on Sofia,
we will start building the wind farm off the coast of east England. Other focal points of
investment are onshore wind and solar projects in the USA and Europe. We plan to spend
€200 million to €300 million outside of the core business in the Coal / Nuclear segment.
These funds will primarily be used to maintain our power plants and opencast mines.
68
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.9 Development of risks and opportunities
RWE’s risk exposure has improved steadily over the last few years. The main driver is
A number of additional organisational units and committees have been entrusted with risk
our transformation into a leading provider of electricity from renewables. The high
management tasks:
share of regulated income in this business makes us more profitable as well as more
crisis-resistant. Furthermore, we benefit from the fact that the German coal phaseout
• Financial risks and credit risks are managed by the Finance & Credit Risk Department of
has finally been given a firm legal framework, which gives us planning certainty in
RWE AG.
our lignite business. Despite the coronavirus pandemic, we classify our current risks
no higher than ‘medium’. We assess and manage our risks using our proven risk
• The Accounting Department ensures that financial reporting is free of material
management system, which we present in detail in this chapter.
misstatements. It has an accounting-related internal control system for this purpose. A
committee consisting of officers from Accounting and other departments of relevance to
accounting assists in securing the quality of financial reporting. More detailed information
Distribution of risk management tasks at RWE. Responsibility for Group risk management
can be found on page 78.
lies with the parent company RWE AG. Its Executive Board monitors and manages the
Group’s overall risk. In addition, it determines the general risk appetite of RWE and
• The Internal Audit & Compliance Department monitors compliance with RWE’s Code of
defines upper limits for single risk positions. At the level below the Executive Board, the
Conduct. Its primary objective is to prevent corruption. It reports to the CEO of RWE AG or,
Controlling & Risk Management Department has the task of applying and constantly refining
if members of the Executive Board are affected, directly to the Chair of the Supervisory
the risk management system. It derives detailed limits for the individual business fields and
Board and the Chair of the Audit Committee.
operating units from the risk caps set by the Executive Board. Its tasks also include checking
the identified risks for completeness and plausibility and aggregating them. In so doing, it
• Risks from changes in commodity prices are monitored by RWE Supply & Trading in so far
receives support from the Risk Management Committee, which is composed of the heads of
as they relate to the conventional electricity generation, energy trading and gas
the following five RWE AG departments: Controlling & Risk Management (Chair),
businesses. Where these risks relate to the renewable energy business, they are managed
Finance & Credit Risk, Accounting, Legal & Insurance, and Corporate Business Development.
by RWE Renewables.
The Controlling & Risk Management Department provides the Executive Board and the
Supervisory Board of RWE AG with regular reports on the company’s risk exposure.
• Strategies to limit market risks in conventional electricity generation must be approved by
the Commodity Management Committee. This expert panel consists of the CFO of
RWE AG, members of the Board of Directors of RWE Supply & Trading and a representative
of the Controlling & Risk Management Department.
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To our investors
2
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Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• We also have a committee tasked with mitigating market risks associated with the
renewable energy business. The Renewables Commodity Management Committee
consists of the CFO of RWE AG, members of the management of RWE Renewables and
Potential damage1
a representative of the Controlling & Risk Management Department.
RWE AG risk matrix
• The strategic guidelines for the management of financial assets (including the funds held
by RWE Pensionstreuhand e. V.) are determined by the Asset Management Committee.
The following individuals belong to it: the CFO of RWE AG, the Managing Director in
charge of finance at RWE Supply & Trading, the heads of the following departments:
Finance & Credit Risk, Investor Relations, Portfolio Management / Mergers & Acquisitions
and – from the last department in the list – the head of Financial Asset Management.
Category V
Category IV
Category III
Category II
Under the expert management of the aforementioned organisational units, RWE AG and its
operating subsidiaries are responsible for identifying risks early, assessing them correctly
Category I
and managing them in compliance with corporate standards. Internal Audit regularly
assesses the quality and functionality of our risk management system. Last year, our internal
audit system was reviewed by an external auditor in accordance with the IDW PS 983
standard and certified to the standard.
Risk identification and assessment. Risks and opportunities are defined as negative or
positive deviations from expected figures. Their management is an integral and continuous
1 % ≤ P ≤ 10 %
10 % < P ≤ 20 %
20 % < P ≤ 50 %
50 % < P
Probability of occurrence (P)
Low risk
Medium risk
High risk
part of operating processes. We assess risks every six months, using a bottom-up analysis.
Potential damage1
We also monitor risk exposure between the regular survey dates. The Executive Board of
RWE AG is immediately notified of any material changes. Our executive and supervisory
€ million
Earnings risks
Potential impact on
net income (X)
Indebtedness / equity risks
Potential impact on net debt
and equity (Y)
bodies are updated on the Group’s risks once a quarter.
Category V
8,000 ≤ X
8,000 ≤ Y
Category IV
1,500 ≤ X < 8,000
4,000 ≤ Y < 8,000
Our risk analysis normally covers the three-year horizon of our medium-term plan, but can
Category III
600 ≤ X < 1,500
extend beyond that in individual cases. We measure the potential damage based on the
possible effects on net income, net debt and equity. In doing so, we take hedges into
account. We define the potential damage as the deviation from the budgeted figure in
Category II
Category I
300 ≤ X < 600
X < 300
2,000 ≤ Y < 4,000
1,000 ≤ Y < 2,000
Y < 1,000
question, aggregated over the three-year planning horizon.
1 Aggregated over the three-year medium-term plan (2021 to 2023).
70
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
We display the material risks using a matrix (see chart on the preceding page) in which they
of which is not sold at firm conditions, causing them to also bear a market risk. The risk of
are categorised by potential damage and probability of occurrence. Risks that share the
having to recognise impairments due to corona-induced declines in margins is recorded in
same cause are aggregated to a single risk if possible. To clearly assign them to the matrix
the ‘other risks’ class, which we therefore reclassified from ‘low’ to ‘medium’.
fields, we have established thresholds for net income, net debt and equity, which are
oriented towards the RWE Group’s ability to bear risks. They are presented in the table below
the matrix. Depending on their position in the matrix, we distinguish between low, medium
Risk classes
and high risks. Based on this systematic risk identification, we determine whether there is a
need for action and initiate measures to mitigate the risks if necessary.
Main risks for the RWE Group. Depending on their causes, our risks can be classified into
seven classes, which are shown in the table on the right. The highest individual risk
determines the classification of the risk of the entire risk class. The highest classification of
Market risks
Regulatory and political risks
Legal risks
Operational risks
our risks is currently ‘medium’. By contrast, in the previous year, we had identified a high
Financial risks
regulatory risk because of the uncertainty regarding the conditions of the German coal
Creditworthiness of business partners
phaseout. The Coal Phaseout Act passed in mid-2020 and the public law contract between
Other risks
the government and the affected lignite companies have created a clear legal framework.
However, the legally mandated compensation for the early closure of lignite assets is subject
Classification of the highest single risk
31 Dec 2020
31 Dec 2019
Medium
Medium
Low
Medium
Medium
Medium
Medium
Medium
High
Low
Medium
Medium
Medium
Low
to state-aid approval by the European Commission. As the compensation envisaged for us
As set out earlier, the focus of the risk analysis described in this chapter lies on the three-
is much lower than our actual financial burden, we are confident that the compensatory
year horizon of our medium-term plan. The Task Force on Climate-related Financial
payments will not be classified as unlawful aid. Increased political pressure on our lignite
Disclosures (TCFD), a panel of experts, recommended in 2017 that companies consider
business and the further acceleration of Germany’s coal phaseout can generally not be
time horizons that go far above and beyond this when identifying and assessing climate-
ruled out.
related risks. RWE implements the TCFD proposals. We explain how we do this in our 2020
Sustainability Report, which will be published in April 2021 and will then be available at
Regulatory unpredictability has decreased in general, but the coronavirus pandemic has
www.rwe.com/sustainability-report.
introduced a new cause for uncertainty. We modelled the potential consequences of
COVID-19 for RWE in an analysis of scenarios in March 2020 and updated the findings in
In this section, we provide commentary on the main risks and opportunities we have
November. We are exposed to the risk of new build projects being delayed and a significant
identified for this and the next two years and explain what measures have been taken to
drop in economic output depressing electricity prices. Both these developments were
counter the threat of negative developments.
already witnessed in 2020. Negative price effects would not only impact on our
conventional power stations, but also on those wind farms, the entire or partial generation
71
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
• Market risks. In most of the countries in which we are active the energy sector is
RWE Supply & Trading plays a central role when it comes to managing commodity price
characterised by the free formation of prices. Declines in quotations on wholesale
risks. It functions as the Group’s interface to the global wholesale markets for electricity
electricity markets can cause generation assets to become less profitable. This also
relates to renewable energy assets that are not subsidised with fixed feed-in payments.
Negative price developments can cause us to recognise impairments, which are also
and energy commodities. On behalf of our power plant companies, RWE Supply & Trading
markets large portions of our generation position and purchases the fuel and CO2
certificates needed to produce electricity. Since RWE Supply & Trading acts as the
recorded as market risks with certain exceptions.
internal transaction partner it is easier for us to limit the risks associated with price volatility
Power and gas purchase agreements with conditions that do not depend on the
reduce risks. In compliance with risk thresholds, the company also takes commodity
on energy markets. However, the trading transactions are not exclusively intended to
development of wholesale prices expose us to the risk of having to pay more for the
positions to achieve a profit.
product than we can earn when selling it. This may force us to form provisions to cover this
risk. We have identified such a risk inherent in the two contracts we concluded to purchase
Our risk management system for energy trading is firmly aligned with best practice as
electricity from the Datteln 4 hard coal-fired power plant in 2005 and 2006. Operated by
applied to the trading businesses of banks. As part of this, transactions with third parties
German energy group Uniper, the station was commissioned in the summer of 2020,
are concluded only if the associated risks are within approved limits. There are guidelines
ten years later than planned. We were unsuccessful in taking legal recourse against the
governing the treatment of commodity price risks and associated credit risks. Our
continuation of the agreements. We are currently negotiating certain contractual
subsidiaries constantly monitor their commodity positions. Risks associated with trades
conditions with Uniper and considering taking further legal steps. Our long-term gas
conducted by RWE Supply & Trading for its own account are monitored daily.
purchase agreement with Russian energy group Gazprom sets dates for regular reviews,
during which we can negotiate contractual changes depending on market conditions. In
The Value at Risk (VaR) is of central importance for risk measurement in trading and
the past, this has enabled us to mitigate our earnings risk exposure from the contract. It
finance. It specifies the maximum loss from a risk position not exceeded with a
cannot be ruled out that the results of future reviews fall short of our expectations. Vice
predetermined probability over a predefined period of time. RWE’s VaR figures are
versa, however, we also stand the chance of enforcing conditions that are more
generally based on a confidence interval of 95 % and an observation period of one day.
favourable than anticipated.
This means that, with a probability of 95 %, the daily loss will not exceed the VaR.
We assess the price risks to which we are exposed on the procurement and supply
The VaR for the price risks of commodity positions in the trading business of
markets taking account of current forward prices and expected volatility. For our power
RWE Supply & Trading must remain below a certain daily limit. The maximum allowable
plants, we limit the risks by selling most of the electricity forward and securing the prices
of the fuel and CO2 emission allowances needed for its generation. We also use financial
instruments to hedge our commodity positions. In the consolidated financial statements,
amount in the fiscal year that just ended was €40 million. The actual daily maximum was
€32 million and the average for the year was €18 million. In addition, limits derived from
the aforementioned VaR thresholds have been set for every trading desk. Furthermore, we
such instruments, including those serving the purpose of reducing interest and currency
develop extreme scenarios and factor them into stress tests, determine their impact on
risks, are usually presented through the statement of on-balance-sheet hedges. More
earnings, and take countermeasures if we deem the risks to be too high.
detailed information on this can be found on page 118 in the Notes.
72
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To our investors
2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
The management of our gas portfolio and the liquefied natural gas (LNG) business is
• Regulatory and political risks. Ambitious emission reduction targets have caused the
pooled in a dedicated organisational unit at RWE Supply & Trading. Last year, the VaR cap
governments in our core markets to intervene in the energy sector repeatedly. The most
for these activities was €14 million. The headroom actually utilised was €12 million. The
recent example of this is Germany’s Coal Phaseout Act, on which we have commented on
average VaR for the year was €6 million.
page 37et seq. It envisages gradually reducing coal-fired electricity generation to zero by
2038. In exchange for closing our lignite assets early, we will receive €2.6 billion in
We also apply the VaR concept to measure the extent to which the commodity price risks
compensation. The damage we will actually suffer is much higher. Nevertheless, we find
that we are exposed to outside the trading business can affect the RWE Group’s adjusted
this statutory regulation to be acceptable, because it gives us more planning certainty for
EBITDA. To this end, we calculate the overall risk for the Group on the basis of the
our lignite business. We now classify our regulatory and political risks as ‘medium’ instead
commodity risk positions of the individual companies; this overall risk mainly stems from
of ‘high’. The compensatory payments for the exit from the lignite business are subject to
power generation. The majority of our generation position is already hedged for 2021.
approval under EU state aid law. Despite the new legislation, it cannot be ruled out that
Opportunities for additional profits arise, because we are able to flexibly adapt our power
plant deployment to short-term market developments.
policymakers continue to increase pressure on the lignite sector, for instance by
introducing CO2 price floors or establishing extremely restrictive emission limits. In
addition, more ambitious climate targets for 2030 could make the next federal
In the UK generation business, our earnings not only depend on the development of the
government accelerate the coal phaseout.
price of electricity, fuel and emission allowances, but also on the level of the payments we
receive for participating in the national capacity market. The payments are determined in
The coal phaseout in the Netherlands was enshrined in law in 2019. The country’s exit
annual auctions and fluctuate depending on supply and demand (see page 45).
roadmap prohibits power plants built in the 1990s from using coal from no later than
We are also exposed to market risks in the gas storage business. As set out on page 27,
and Eemshaven power plants will have to stop coal-based generation at the end of 2024
the realisable margins depend significantly on the volatility of gas prices. If the short-term
and 2029, respectively. Unlike in Germany, it is not envisaged that we will receive
and seasonal price differences are large, they can be taken advantage of to generate
compensation for this. We mitigated our risk exposure from coal-based generation early
substantial income. If they are insignificant, then so is the income. The German gas
on by converting Amer 9 and Eemshaven to biomass co-firing. We are receiving state
storage business is currently characterised by overcapacity and significant pressure on
subsidies for the investment outlay and the added cost of procuring fuel. However, the
margins. However, we are confident that market conditions will improve in the long run.
subsidies fall clearly short of covering the additional cost of converting the stations to
Should they deteriorate, we may have to recognise impairment losses for our storage
100 % biomass utilisation. The legally mandated coal phaseout could thus force us to
2025 onwards. For younger stations, the ban starts in 2030. This means that our Amer 9
facilities.
close the stations early. Therefore, we believe that our ownership rights have been
violated. As the government has not offered us compensation for our financial
Our biggest market risks remain unchanged in the ‘medium’ category.
disadvantages, in February 2021 we initiated arbitration proceedings under the Energy
Charter Agreement against the Netherlands before the International Centre for
Settlement of Investment Disputes in Washington, USA.
73
RWE Annual Report 2020 1
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2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
We are also exposed to risks in the field of nuclear energy, albeit to a much lesser extent
Despite the aforementioned imponderables, the overall assessment of our regulatory and
than in the past. Since we made contributions to the German nuclear energy fund in the
political risks has improved from ‘high’ to ‘medium’. The main reason for this is the
middle of 2017, the state has assumed complete responsibility for the interim and final
establishment of a clear framework for the German coal phaseout.
storage of our radioactive waste. We are still exposed to cost risks associated with
disposal tasks which remain within our remit. For example, it cannot be ruled out that the
• Legal risks. Individual RWE Group companies are involved in litigation and arbitration
dismantling of nuclear power stations will be more expensive than estimated and we will
proceedings due to their operations or M & A transactions. Out-of-court claims have been
therefore have to top-up our provisions for this. However, we also see the opportunity to
filed against some of them. Furthermore, Group companies are directly involved in various
leverage synergies and cut costs.
procedures with public authorities or are at least affected by their outcomes. To the extent
necessary, we have accrued provisions for possible losses resulting from pending
Although the renewable energy business is characterised by fairly stable framework
proceedings before ordinary courts and arbitration courts.
conditions and wide public acceptance, imponderables exist in this area as well.
Adjustments to state subsidy schemes may result in reductions in payments and new
Risks may also result from exemptions and warranties that we granted in connection with
projects losing their appeal. This can lead to investment undertakings being broken off.
the sale of assets. Exemptions ensure that the seller covers the risks that are identified
It is also conceivable that firmly pledged state payments may be cut retrospectively. In
within the scope of due diligence, the probability of occurrence of which is, however,
the dialogue we maintain with policymakers, we point out that companies which invest in
uncertain. In contrast, warranties cover risks that are unknown at the time of sale. These
building sustainable, climate- friendly energy infrastructure need reliable framework
hedging instruments are standard procedure in sales of companies and equity holdings.
conditions.
We currently have low exposure to legal risks. This assessment did not change compared
Even in the present regulatory environment, we are exposed to risks associated with, for
to the previous year.
instance, approvals when building and operating production facilities. This particularly
affects our opencast mines, power stations and wind farms. The danger here is that
• Operational risks. RWE operates technologically complex, interconnected production
approvals are granted late or not at all and that granted approvals are withdrawn
facilities such as conventional power stations and wind farms. Damage and outages can
temporarily or for good.
weigh heavily on earnings, as recently demonstrated by the severe cold snap in the
US state of Texas (see page 46). When production facilities are built and modernised, delays
Certain statutory regulations to which we must adhere can be interpreted in various ways
and cost increases can occur, for example due to accidents, material defects, late
and are therefore in need of legal clarification. One example is the regulation which
deliveries, unfavourable weather conditions or time-consuming approval processes. In
exempts us from paying an apportionment under the Renewable Energy Act (EEG) for
such cases, there is a danger that the plants become more expensive and they contribute
electricity that we consume ourselves in our German power stations and opencast mines.
to earnings later than planned. Furthermore, delays of renewable energy projects can be
However, the legal situation surrounding the regulation is vague, for example with regard
disadvantageous to the level of subsidies they receive. We counter the described risks
to the EEG exemption of leased assets. There is a danger that the options to benefit from
through diligent plant and project management as well as high safety standards. We also
the regulation may be limited by the Germany’s highest court and that back payments
regularly maintain our facilities and take out insurance policies if economically viable.
may even have to be made for previous years.
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of operations
Development of risks
and opportunities
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Consolidated financial
statements
5
Further information
In the past fiscal year, some construction schedules could not be adhered to, in part due
Our business processes are supported by secure data processing systems. Nevertheless,
to the coronavirus pandemic. This primarily affected onshore wind projects in the USA,
we cannot rule out a lack of availability of IT infrastructure or a breach in data security.
exposing us to the risk of a reduction in tax credits for assets that could not be
Our high security standards are designed to prevent this. In addition, we regularly invest in
commissioned by the end of 2020. However, in view of the unusual circumstances, the
hardware and software upgrades.
US government extended the deadlines, enabling wind farms that are completed in 2021
to receive the full subsidy (see page 37). Due to our dependence on suppliers, however,
Despite corona-induced imponderables, as in the previous year, our operational risks are
projects may incur further delays. So far, the coronavirus pandemic has only had a minor
classified as ‘medium’.
impact on the operation of our assets. Thanks to comprehensive preventive measures
and forward-looking emergency plans, we were able to keep all major operational
• Financial risks. Changes in key financial indicators such as interest rates, foreign
processes up and running. In light of the successful development of vaccinations, we are
exchange rates, securities prices and rates of inflation can have a major impact on our
confident that the spread of the infection will soon come under control. We will keep our
net worth and earnings.
safety measures in place as long as necessary.
The shift of our power production to renewable energy sources like the wind and sun
to reductions in the prices of the securities we hold. This primarily relates to fixed-interest
increases the impact of the weather on our business. For example, extended lulls can
bonds. Last year, the VaR for the interest rate-related price risk of capital investments was
We are exposed to various interest rate risks. For example, rises in interest rates can lead
cause generation volumes and earnings of wind farms to fall significantly behind targets
€3.9 million on average at RWE AG.
in certain fiscal years. We limit the effects of the weather on the Group’s income in part
through the geographic diversification of our business. This increases the likelihood of
Moreover, increases in interest rates cause our financing costs to rise. We measure this
unfavourable meteorological conditions at one site being offset by favourable ones at
risk using the Cash Flow at Risk (CFaR), applying a confidence level of 95 % and a holding
another.
period of one year. The average CFaR at RWE AG in 2020 was €25.0 million.
RWE has ambitious goals in relation to renewable energy and has increased its
Furthermore, market interest rates have an effect on our provisions, as they are the point
investment budgets significantly. We try to ensure that our new-build projects and
of reference for the discount rates used for determining the net present values of
acquisitions satisfy our return requirements. Nevertheless, we cannot rule out that income
obligations. This means that, all other things being equal, provisions rise when market
achieved through our projects falls short of expectations or prices paid for acquisitions
interest rates fall and vice versa. On pages 154 et seqq. of the Notes, we present the
prove to be too high retrospectively. Mounting competition in the renewable energy
effects of changes in interest rates on the net present values of our pension obligations
business in particular can be detrimental to project income. We prepare our investment
and on the nuclear and mining provisions.
decisions by conducting extensive analyses to try and map the financial and strategic
effects as realistically as possible before taking investment decisions. Moreover, RWE has
specific accountability provisions and approval processes in place to prepare and
implement the decisions.
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RWE Annual Report 2020 1
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Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
In addition to interest rates, the general price level also affects the amount of provisions.
The conditions at which we can finance our business on the debt capital market are in
Rising inflation can force us to make a considerable upward adjustment to the present
part dependent on the credit ratings we receive from international rating agencies. As set
value of the obligations. Price increases are particularly detrimental when they are above
out on page 60, Moody’s and Fitch place our creditworthiness in the investment grade
average in sectors from which we procure products and services for nuclear waste
category. If the agencies lower our credit rating, we may incur additional costs if we have
disposal and recultivating opencast mine areas.
to raise debt capital. This would probably also increase the liquidity requirement when
pledging collateral for forward transactions. However, we believe that such a scenario is
We are exposed to foreign exchange risks primarily owing to our business activities in the
unlikely. Both rating agencies are of the opinion that RWE has become more financially
UK and the USA. Furthermore, energy commodities such as coal and oil are traded in
stable as a result of its transformation into a leading renewable energy company. Moody’s
US dollars. Companies which are overseen by RWE AG have their currency risks managed
upgraded our rating outlook to ‘positive’ in March 2020, which makes us believe that we
by the parent company. RWE AG aggregates the risks to a net financial position for each
stand a chance of receiving a more favourable credit rating.
currency and hedges it if necessary. We calculated an average VaR for RWE AG’s foreign
currency position in 2020 of €1.2 million.
The assessment of our creditworthiness by rating agencies, banks and capital investors
depends in part on the level of our net debt. Our goal is to ensure that it does not exceed
The securities we hold in our portfolio typically include shares. We currently hold a 15 %
three times the adjusted EBITDA of our core business. Due to our extensive investments in
stake in E.ON, which had a fair value of €3.6 billion at the end of 2020. Therefore, changes
expanding renewable energy, net debt could temporarily be above budget. This primarily
in the quotation of the E.ON share can affect our financial strength significantly.
affects fiscal years with cash inflows from operating activities or sales of stakes in projects
Risks and opportunities from changes in the price of securities are controlled by a
indebtedness within the target range. The additional financial headroom achieved
professional fund management system. Range of action, responsibilities and controls are
through the capital increase in August 2020 is helpful in this respect.
set out in internal guidelines which the Group companies are obliged to adhere to when
concluding financial transactions. All financial transactions are recorded using special
We classify our financial risks as ‘medium’. This assessment has not changed since last
software and are monitored by RWE AG.
year.
that are below average. Nevertheless, we are confident that we can maintain our
Collateral pledged for forward transactions also harbours a risk. The amount of collateral
• Creditworthiness of business partners. Our business relations with key accounts,
depends on the extent to which the contractually agreed prices deviate from market
suppliers, trading partners and financial institutions expose us to credit risks. Therefore,
quotations as of the respective cut-off date. These differences can be substantial. In recent
times, the market prices of energy commodities, e. g. CO2 emission allowances, have
fluctuated significantly, due in part to the coronavirus pandemic. Changes of this
we track the creditworthiness of our partners closely and assess their credit standing
based on internal and external ratings, both before and during the business relationship.
Transactions that exceed a certain size and all trading transactions are subject to credit
degree can lead to substantial short-term cash outflows, but can also present the
limits, which we determine before the transaction is concluded and adjust if necessary, for
opportunity to receive substantial collateral from contracting parties, resulting in a
instance in the event of a change in the business partner’s creditworthiness. At times, we
temporary increase in equity.
request cash collateral or bank guarantees. In the trading and financing business, credit
76
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2
Combined review
of operations
Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
risks and the utilisation of the limits are measured daily. We agree on collateral when
As shown by the commentary in this chapter, we no longer have any risks classified as ‘high’.
concluding over-the-counter trading transactions. Furthermore, we enter into framework
The German Coal Phaseout Act and the compensation claims against the federal
agreements, e. g. those of the European Federation of Energy Traders. For financial
government that it has written into law have substantially reduced the uncertainty of our
derivatives, we make use of the German master agreement for forward financial
lignite business. In the previous year, we had identified a major risk here. So far, RWE has only
transactions or the master agreement of the International Swaps and Derivatives
been affected by the onset of the COVID-19 pandemic to a limited extent, with the
Association.
pandemic leading to delays in projects, among other things. If the virus cannot be controlled
effectively in the near future, we may experience further delays. Moreover, there is a danger
The coronavirus pandemic has created economic problems for many companies,
that the reduced economic output will result in lower electricity prices, causing our
potentially including business partners of RWE. This is why we are monitoring critical
generation margins to shrink. However, we classify our pandemic-related risk exposure no
branches of industry more closely. Furthermore, we are extremely careful when entering
higher than ‘medium’. In this regard, it is proving advantageous once again that our
into new business relationships and extending existing ones and assign customers lower
renewable energy business gives us a strong and crisis-proof source of income. Our
credit limits where necessary. We currently do not expect any material financial losses due
substantial investments in new wind and solar farms will make this pillar even stronger.
to corona-induced insolvencies. As in the past, our risks stemming from the
creditworthiness of our business partners do not exceed the ‘medium’ category.
At the same time, our solid financial management ensures that RWE remains on a safe
course. By analysing the effects of risks on our liquidity and pursuing a conservative
• Other risks. This is the class in which we record the potential effects of damage to our
financing strategy, we ensure that we can meet our payment obligations punctually. We
reputation, compliance infringements and criminal acts. The risk of a COVID-19-driven
have considerable liquid funds and great leeway in terms of debt financing, thanks to the
reduction in energy consumption leading to low electricity prices which, in turn, forces us
Debt Issuance Programme, the Commercial Paper Programme and the syndicated credit
to recognise impairments for generation assets has also been recorded in this category.
line (see page 59). The capital increase conducted in August 2020 has made us more
Therefore, other risks have risen from ‘low’ to ‘medium’.
financially flexible. We budget our liquidity with foresight, based on the short, medium and
long-term financing needs of our Group companies, and have a significant amount of
RWE’s risks and opportunities: general assessment by management. The RWE Group’s
minimum liquidity on a daily basis.
risk exposure has improved significantly in the last few years. As a result of the asset swap
with E.ON, which we completed successfully in 2020, we have become a leading renewable
Thanks to the measures for safeguarding our financial and earning power over the long
energy company. This has increased the share of stable regulated income considerably and
term and our comprehensive risk management system, we are confident that we can
made us more financially robust. Moreover, the gradual shift of our generation portfolio
manage the current risks to RWE. At the same time, we are establishing the prerequisites for
from fossil fuels to renewables also helps us to limit our political and regulatory risks. By
ensuring that this remains the case in the future.
aiming to be carbon neutral by 2040, we are demonstrating that we want to expedite the
decarbonisation of the energy sector, thereby increasing our acceptance among politicians,
capital lenders, customers and other stakeholder groups.
77
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Development of risks
and opportunities
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Accounting-related internal control system: statements in accordance with Sec. 289,
We subject the ICS to a comprehensive review every year. As a first step, we examine
Para. 4, and Sec. 315, Para. 4 of the German Commercial Code. Our financial reporting is
whether the risk situation is presented appropriately and whether suitable controls are in
exposed to the risk of misrepresentations that could have a significant influence on the
place for the identified risks. In a second step, we test the effectiveness of the controls. If the
decisions made by their addressees. For example, stated earnings that are too high can
ICS reviews pertain to accounting-related processes, e. g., the preparation of financial
cause capital investors to invest in a company. In RWE’s Code of Conduct, we have
statements or consolidation, they are conducted by employees from the Accounting
undertaken to inform the public completely, objectively, accurately, clearly and in a timely
Department. The appropriateness and effectiveness of the controls are certified by an
manner, in compliance with capital market law. We use a series of tools to meet this
accounting firm for processes handled by service centres on our behalf, for example invoice
ambition. Examples of this are our groupwide accounting policy and the high minimum
processing. The representatives of the finance, human resources, procurement, trading, and
standards to which we subject the IT systems used to record and process accounting-
IT functions document whether the agreed ICS quality standards are adhered to by their
related data.
respective areas. Our Internal Audit & Compliance Department is also involved in the ICS
reviews. The results of the reviews are documented in a report to the Executive Board of
Furthermore, we use an accounting-related Internal Control System (ICS) for quality
RWE AG. The review conducted in 2020 once again demonstrated that the ICS is effective.
assurance purposes. The ICS aims to detect potential errors and misrepresentations that
result from non-compliance with accounting standards. Designing the ICS and reviewing its
Within the scope of external reporting, the members of the Executive Board of RWE AG take
effectiveness are under the responsibility of the Accounting Department of RWE AG. The
a half-year and full-year balance-sheet oath, confirming that the prescribed accounting
department can apply groupwide rules in performing these tasks. In addition, it receives
standards have been adhered to and that the financial statements give a true and fair view
assistance from the ICS Committee, the objective of which is to ensure that the ICS is
of the net worth, financial position and earnings. When in session, the Supervisory Board‘s
applied throughout the Group following uniform principles and meeting high ambitions in
Audit Committee regularly concerns itself with the effectiveness of the ICS. Once a year, the
terms of correctness and transparency. The Committee consists of representatives from the
Executive Board of RWE AG submits a report on this to the Committee.
Accounting, Controlling & Risk Management and Internal Audit & Compliance Departments,
along with officers from the human resources, procurement, trading, finance, taxes and IT
functions, which are highly relevant to accounting.
78
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Disclosure relating to
German takeover law
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.10 Disclosure relating to German takeover law
The following disclosure is in accordance with Section 315a, Paragraph 1 and Section
Subject to the approval of the Supervisory Board, the Executive Board may waive
289a, Paragraph 1 of the German Commercial Code as well as with Section 176,
subscription rights:
Paragraph 1, Sentence 1 of the German Stock Corporation Act. The information relates
to company-specific regulations, for example relating to adjustments to the capital
• to prevent fractional amounts resulting from the subscription ratio;
structure by the Executive Board or a change of control of the company. At RWE, these
provisions are in line with the standards of German listed companies.
• to issue shares in exchange for contributions in kind for the purposes of mergers or
acquisitions of companies, parts of companies, operations, or of stakes in companies;
Composition of subscribed capital. RWE AG’s capital stock amounts to
• in the event of a cash capital increase if the price at which the new shares are issued is not
€1,731,123,322.88 and is divided among 676,220,048 no-par-value bearer shares.
significantly lower than the price at which shares are quoted on the stock market and the
As set out on page 42, in August 2020, with the approval of the Supervisory Board, the
portion of the capital stock accounted for by the new shares, for which subscription rights
Executive Board issued 61,474,549 new RWE shares to institutional investors in exchange
are waived, does not exceed 10 % in total;
for cash contributions, waiving subscription rights. This increased the capital stock by
€157,374,845.44, or 10 %.
• and to offer shares to potential holders of convertible or option bonds commensurate to
the rights to which they would be entitled on conversion of the bond or on exercise of the
Executive Board authorisation to issue new shares. The capital increase was based on an
option.
authorisation issued by the Annual General Meeting on 26 April 2018, which contains the
following main provisions:
The Executive Board is authorised, subject to the approval of the Supervisory Board, to
determine the further details and conditions of the share issuance. In sum, the capital stock
The Executive Board is authorised to increase the company’s capital stock, subject to
may not be increased by more than 20 % through the issuance of new shares waiving
the Supervisory Board’s approval, by up to €314,749,693.44 until 25 April 2023,
subscription rights.
through the issuance of up to 122,949,099 new bearer shares in return for contributions
in cash or in kind (authorised capital). This authorisation may be exercised in full or in part,
On 18 / 19 August 2020, RWE exercised the option of conducting a cash capital increase
or once or several times for partial amounts. In principle, shareholders are entitled to
waiving subscription rights up to the upper limit of 10 %. Half of the authorised capital, i. e. a
subscription rights.
maximum of €157,374,848, may still be used for other capital measures. This corresponds
to an issuance of up to 61,474,550 RWE shares.
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Disclosure relating to
German takeover law
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Responsibility statement
4
Consolidated financial
statements
5
Further information
Shares in capital accounting for more than 10 % of voting rights. As of 31 December
Shares purchased in this way may then be cancelled. Furthermore, they may be transferred
2020, no holding in RWE AG exceeded 10 % of the voting rights.
to third parties in connection with mergers or acquisitions of companies, parts of
Limitation of share transfers. Within the scope of RWE’s employee share plan,
fulfil its obligations resulting from employee share schemes or settle rights arising from
314,760 RWE shares were issued to staff in Germany in the financial year that just ended.
convertible or option bonds. In the aforementioned cases, shareholder subscription rights
The beneficiaries may only freely dispose of the shares after 31 December 2021. RWE also
are waived. These authorisations may be exercised in full or in part, or once or several times
companies, operations, or of stakes in companies. The company may also use the shares to
has employee share schemes in the United Kingdom. Participating companies are
for partial amounts.
RWE Generation UK plc, RWE Technology UK Limited and RWE Supply & Trading GmbH UK
Branch. In 2020, a total of 17,905 RWE shares were purchased under the UK plans. These
Pursuant to the authorisation of 26 April 2018, the shares bought back could be sold for
shares are also subject to a restriction on disposal, which lasts five years from the grant
cash via other channels. This option no longer exists because the shares issued to conduct
date.
the capital increase count towards the upper limit of 10 % of the capital stock for which the
authorisation was granted. For the same reason, it is also no longer possible to transfer
Appointment and dismissal of Executive Board members / amendments to the Articles
repurchased shares to holders of convertible or option bonds if these bonds were issued
of Incorporation. Executive Board members are appointed and dismissed in accordance
waiving subscription rights and in exchange for cash contributions. In addition, the shares
with Sections 84 et seq. of the German Stock Corporation Act in conjunction with Section
bought back cannot be used to settle subscription rights which holders of convertible or
31 of the German Co-Determination Act. Amendments to the Articles of Incorporation are
option bonds would have if they exercised the options attached to bonds in exchange for
made pursuant to Section 179 et seqq. of the German Stock Corporation Act in conjunction
RWE shares.
with Article 16, Paragraph 5 of the Articles of Incorporation of RWE AG. According to the
aforementioned provision in the Articles of Incorporation, unless otherwise required by law
Effects of a change of control on debt financing. Our debt financing instruments often
or the Articles of Incorporation, the Annual General Meeting shall adopt all resolutions by a
contain clauses that take effect in the event of a change of control. Such a provision is in
simple majority of the votes cast or – if a capital majority is required – by the simple majority
place e. g. in respect of our €5 billion syndicated credit line. It essentially has the following
of the capital stock represented when the resolution is passed. Pursuant to Article 10,
content: in the event of a change of control or majority at RWE, drawings are suspended
Paragraph 9 of the Articles of Incorporation, the Supervisory Board is authorised to pass
until further notice. The lenders shall enter into negotiations with us on a continuation of the
resolutions in favour of amendments to the Articles of Incorporation that only concern
credit line. Should we fail to reach an agreement with the majority of them within 30 days
formal matters, without having a material impact on the content.
from the change of control, the lenders may cancel the line of credit.
RWE AG authorisation to implement share buybacks. Furthermore, the Annual General
Meeting on 26 April 2018 authorised the Executive Board of RWE AG to conduct share
buybacks subject to the approval of the Supervisory Board until 25 April 2023, said
buybacks accounting for up to 10 % of the capital stock as of the effective date of the
resolution or as of the exercise date of the authorisation if the capital stock is lower on this
date. At the Executive Board’s discretion, this may be done on the stock exchange or via a
public purchase offer.
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RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Disclosure relating to
German takeover law
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Change-of-control clauses also exist with regard to our bonds. The following rule applies to
By contrast, the current employment contracts of Rolf Martin Schmitz and Markus Krebber
a senior bond maturing in 2037, a small residual amount of which remained with RWE when
still have a change-of-control clause. It gives them a special right of termination in the event
we transferred our senior bonds to innogy in 2016: in the event of a change of control in
that a change of control puts them at a major disadvantage. In such a case, they are free to
conjunction with a drop in RWE AG’s credit rating below investment-grade status, creditors
resign for cause from their position within six months of the change of control by giving three
may demand immediate redemption. With regard to subordinated hybrid bonds, we have
months’ notice. In addition, they can request the termination of their employment contract
the right to cancel them within the defined change-of-control period in such cases; if this
and receive a one-off payment. The amount of the one-off payment shall correspond to the
does not occur, the annual yield of the hybrid bonds increases by 500 basis points.
compensation that would have been due until the end of the contractually agreed term of
service, but no more than three times the total contractual annual remuneration, excluding
Consequences of a change of control for Executive Board and executive remuneration.
share-based payments.
The current version of the German Corporate Governance Code dated 16 December 2019
recommends that no commitments to (additional) benefits be made in the event of the early
Change-of-control provisions also apply to the share-based payment of the Executive
termination of an employment contract by a member of the Executive Board as a result of
Board and executives. All performance shares granted on a preliminary basis for the fiscal
a change of control. We adhere to this principle in all of the new employment contracts.
year underway at the time of the change of control shall expire without replacement or
Michael Müller and Zvezdana Seeger, who joined the Executive Board as of 1 November 2020,
compensation. Conversely, rights in connection with performance shares for past fiscal
do not have a special right of termination or severance entitlements in the event of a
years, for which no payout has been effected yet, shall be preserved.
change of control. The same will apply as of 1 May 2021 to Markus Krebber when he
succeeds Rolf Martin Schmitz as CEO.
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RWE Annual Report 2020 1
To our investors
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Combined review
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Remuneration report
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
2.11 Remuneration report
Standards imposed on management and supervisory board compensation by the
Supervisory Board members who concurrently hold several offices in this body only receive
capital market have become higher. More than ever before, companies are expected to
compensation for the highest- paid position. Remuneration is prorated if a Supervisory
remunerate managing and monitoring bodies based on performance, while providing
Board member only performs a function for part of a fiscal year.
incentives for forward-looking sustainable action. RWE meets these demands.
Nevertheless, we have refined the Executive Board remuneration system in close
In addition to the remuneration paid, out-of-pocket expenses are refunded to the members
co-operation with investors. We will present the new rules to the 2021 Annual General
of the Supervisory Board. Some Supervisory Board members also receive income from the
Meeting for approval. The following commentary focuses on the compensation
exercise of Supervisory Board mandates at subsidiaries of RWE AG.
regulations for fiscal 2020.
Structure and level of Supervisory Board remuneration
The members of the Supervisory Board imposed on themselves the obligation, subject to
any commitment to relinquish their pay, to use 25 % of the total annual compensation
(before taxes) to buy RWE shares and to hold them for the duration of their membership of the
Supervisory Board of RWE AG. Last year, all of the members who do not relinquish their
The remuneration paid to the members of the Supervisory Board for fiscal 2020 was
compensation met this self-imposed obligation regarding their compensation for 2019.
based on a resolution passed by the 2013 Annual General Meeting and is governed by
the provisions of the Articles of Incorporation of RWE AG. It complies with all of the
In total, the remuneration of the Supervisory Board (excluding the reimbursement of
recommendations of the current version of the German Corporate Governance Code
out-of-pocket expenses) amounted to €2,880,000 in fiscal 2020 (previous year:
(GCGC) which was published on 16 December 2019.
€3,304,000). Of this sum, €480,000 (previous year: €465,000) was remuneration paid for
mandates on committees of the Supervisory Board and €100,000 (previous year:
The Chairman of the Supervisory Board of RWE AG receives fixed remuneration of
€543,000) was remuneration paid for mandates at subsidiaries of RWE AG.
€300,000 per fiscal year. His Deputy receives €200,000 per fiscal year. The other members
of the Supervisory Board receive fixed remuneration of €100,000 and additional
In accordance with Section 113 of the German Stock Corporation Act, we will present a
compensation for committee mandates according to the following rules: members of the
Supervisory Board remuneration scheme to the Annual General Meeting on 28 April 2021
Audit Committee receive additional remuneration of €40,000. This payment is increased to
for approval. We are considering proposing to the shareholders an increase in remuneration
€80,000 for the Chair of this committee. With the exception of the Nomination Committee,
for committee work.
the members of which do not receive additional remuneration, the members and the Chairs
of all the other Supervisory Board committees receive an additional €20,000 and €40,000
The remuneration of all individuals who served on the Supervisory Board in 2019 and / or
in remuneration, respectively. Remuneration for a committee mandate is only paid if the
2020 is shown in the table overleaf.
committee is active at least once in the fiscal year.
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of operations
Remuneration report
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Responsibility statement
4
Consolidated financial
statements
5
Further information
Supervisory Board remuneration1
Fixed remuneration
Remuneration for
committee offices
Remuneration for
mandates at subsidiaries2
Total remuneration3
€ ‘000
2020
2019
2020
2019
2020
Dr. Werner Brandt, Chairman
Frank Bsirske, Deputy Chairman
Michael Bochinsky
Reiner Böhle (until 18 Sep 2019)
Sandra Bossemeyer
Martin Bröker
Anja Dubbert (since 27 Sep 2019)
Matthias Dürbaum (since 27 Sep 2019)
Ute Gerbaulet
Prof. Dr. Hans-Peter Keitel
Dr. h. c. Monika Kircher
Monika Krebber (until 18 Sep 2019)
Harald Louis
Dagmar Mühlenfeld
Peter Ottmann
Günther Schartz
Dr. Erhard Schipporeit
Dr. Wolfgang Schüssel
Ullrich Sierau
Ralf Sikorski
Marion Weckes
Leonhard Zubrowski
Total3
300
200
100
–
100
100
100
100
100
100
100
–
100
100
100
100
100
100
100
100
100
100
300
200
100
72
100
100
26
26
100
100
100
72
100
100
100
100
100
100
100
100
100
100
–
–
40
–
20
–
20
20
–
20
40
–
20
20
20
20
80
20
40
40
40
20
–
–
40
14
20
–
1
1
–
20
30
14
20
20
20
20
80
25
40
40
40
20
2,300
2,296
480
465
–
–
–
–
–
–
–
–
–
–
–
–
20
–
–
–
–
–
–
50
–
30
100
1 Supervisory Board members who joined or retired from the corporate body during the year receive prorated remuneration.
2 Remuneration for exercising mandates at subsidiaries is only included for periods of membership of the Supervisory Board of RWE AG.
3 The commercial rounding of certain figures can result in inaccurate sum totals.
2019
–
143
–
–
–
–
–
–
–
–
–
86
20
–
–
–
215
–
–
50
–
30
2020
2019
300
200
140
–
120
100
120
120
100
120
140
–
140
120
120
120
180
120
140
190
140
150
300
343
140
86
120
100
27
27
100
120
130
172
140
120
120
120
395
125
140
190
140
150
543
2,880
3,304
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Combined review
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Remuneration report
3
Responsibility statement
4
Consolidated financial
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5
Further information
Structure of Executive Board remuneration
• Michael Müller (49) was appointed to the Executive Board for an initial period of three
years with effect from 1 November 2020. He will become CFO as of 1 May 2021.
Overview. The structure and level of the Executive Board’s remuneration are determined by
the Supervisory Board and reviewed on a regular basis to determine whether they are
• Zvezdana Seeger (56) also joined the Executive Board of RWE AG on 1 November 2020.
appropriate and in line with generally accepted principles. The remuneration system
She is the Labour Director and responsible for HR and IT. Her first tenure is also limited to
described in the following was introduced with effect from 1 October 2016. It is made up of
three years.
non-performance-based and performance-based components. The former consists of the
fixed salary, the pension instalment as well as fringe benefits. The performance- based
Fixed compensation and pension instalments. The members of the Executive Board of
components include the bonus and a share-based payment, the latter of which is a long-term
RWE AG receive a fixed annual salary, which is paid in monthly instalments. As a second fixed
component.
remuneration component, they are entitled to a pension instalment for every year of service,
which is determined on an individual basis. By contrast, Rolf Martin Schmitz, who
At its meeting on 25 June 2020, the Supervisory Board fundamentally reformed the
belonged to the Executive Board before the pension instalment was introduced, receives
remuneration system, in order to align it even more closely with the objectives of the
a pension commitment (see page 88).
company and the demands of our stakeholders. The amendments relate to various matters,
including the long-term share-based payment, personal investment in RWE shares, and the
The pension instalment is paid in cash or retained in part or in full in exchange for a
financial consequences of misconduct. With a few exceptions, the old rules applied to the
pension commitment of equal value. The accumulated capital may be drawn on retirement,
Executive Board’s remuneration in 2020. These are described in more detail in the following.
but not before the Executive Board member turns 62. When retiring, Executive Board
We have provided information on the major changes at the end of the chapter on page 96.
members can choose a one-time payment or a maximum of nine instalments. They and
their surviving dependants do not receive any further benefits. Vested retirement benefits
Recipients of Executive Board remuneration. In the financial year that just ended,
from earlier activities within the RWE Group remain unaffected by this.
Rolf Martin Schmitz, Markus Krebber, Michael Müller and Zvezdana Seeger received
compensation for their work on the Executive Board of RWE AG.
Fringe benefits. Non-performance-based compensation also includes fringe benefits,
primarily consisting of company cars and accident insurance premiums.
• Rolf Martin Schmitz (63) has been a member of the Executive Board since 1 May 2009
and its Chairman since 15 October 2016. Concurrently, he was the Labour Director from
Bonus. Executive Board members receive a bonus which is based on the economic
May 2017 to October 2020. He will retire from the Executive Board as of 30 April 2021.
performance of the company and the degree to which they achieve their individual goals
and the collective goals of the Executive Board. The starting point for calculating the
• Markus Krebber (48) was appointed to the Executive Board with effect from 1 October
individual bonus is what is referred to as the ‘company bonus’, which depends on the level of
2016 and has been CFO since 15 October 2016. His tenure on the Executive Board runs
EBIT of relevance to remuneration in the fiscal year in question. The basis for determining
through to 30 June 2026, and he will assume chairmanship as of 1 May 2021.
this figure is adjusted EBIT (EBIT minus the non-operating result). The rules of Executive
Board remuneration stipulate that the Supervisory Board may modify adjusted EBIT to
make this figure more suitable for measuring management performance. Such adjustments
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4
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5
Further information
can relate to gains on disposals, changes in provisions, as well as impairments and their
The company bonus, multiplied by the individual performance factor, results in the bonus for
consequences. This converts adjusted EBIT to EBIT of relevance to remuneration.
each Executive Board member. This is paid in full after the end of the fiscal year.
The company bonus is determined as follows: the Supervisory Board sets a target as well as
Deviating from the aforementioned rules, it was agreed that the individual performance
a floor and a ceiling for EBIT of relevance to remuneration at the beginning of every fiscal
factor for the two months of work last year of Zvezdana Seeger and Michael Müller, who
year. After the end of the fiscal year, the actual level of adjusted EBIT and EBIT of relevance
joined the Executive Board as of 1 November 2020, only be determined based on the
to remuneration resulting from the modifications explained earlier are determined. If the
achievement of individual goals. Therefore, the collective goals in categories (2) and (3) were
latter is identical to the target, the target achievement is 100 %. In this case, the company
disregarded.
bonus equals the contractually agreed baseline bonus. If EBIT of relevance to remuneration
is exactly at the pre-defined floor, target achievement is 50 %; if it is at the ceiling, target
Share-based payment. Executive Board members are granted a share-based payment,
achievement is 150 %. Between the two limits, target achievement is calculated by linear
which rewards the achievement of long-term goals. For fiscal 2020, this was done for the
interpolation. If EBIT of relevance to remuneration is below the floor, no company bonus is
last time under the 2016 – 2020 Strategic Performance Plan (SPP). The two following
paid. If the ceiling is exceeded, the maximum target achievement remains 150 %.
criteria are used by the SPP in measuring the degree to which goals are achieved in a fiscal
In addition to the company bonus, the individual performance factor determines the level
(performance), and net income of relevance to remuneration. As set out earlier, major
of bonus paid to each Executive Board member. The performance factor depends on the
aspects of the share-based payment have been modified. The changes were implemented
achievement of: (1) individual goals, (2) general collective goals, and (3) collective goals in
in the 2021 SPP, which has been in effect since the beginning of the current year. The
year: the total return of the RWE share, which is made up of the share price and the dividend
relation to corporate responsibility and employee motivation. The aforementioned target
following commentary concerns the old SPP.
categories are each weighted by one-third. After the end of every fiscal year, the
Supervisory Board evaluates the individual performance of the Executive Board members
The 2016 – 2020 SPP is based on performance shares with a term (vesting period) made
relative to the three aforementioned categories. In so doing, it orients itself towards the
up of the fiscal year to which they relate and the three subsequent years. At the beginning of
degree to which the targets set at the beginning of the year have been met. Degrees of
a fiscal year, Executive Board members receive a grant letter, in which they are informed of
achievement can range between 0 % and 200 %. However, the derivable performance
their personal gross allocation amount. The new Executive Board members Zvezdana
factor is limited to between 80 % and 120 %. This means that the performance factor for an
Seeger and Michael Müller received their allocation when they took office in November.
Executive Board member with a 150 % target achievement is only 120 %.
The number of performance shares is calculated by dividing the gross grant amount by the
average closing quotation of the RWE share over the last 30 days of trading on Xetra before
the respective grant year. However, the allocation is provisional. The final number of fully
granted performance shares to be allocated is determined after the respective grant year.
85
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3
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4
Consolidated financial
statements
5
Further information
Under the 2016 – 2020 SPP, the reconciliation of the conditionally granted performance
The performance shares remain unaffected after an Executive Board member resigns
shares to the finally granted performance shares is oriented towards net income of
from their office at the end of their contract and are paid out as planned at the end of the
relevance to remuneration, which is determined by making modifications to adjusted net
vesting period. If an Executive Board member leaves the company at their own request, or if
income. The allowable modifications are governed by the SPP conditions and ensure that
they are terminated for cause, all of the performance shares that have not reached the end
actual earnings can be compared to the predetermined target figures even in cases of
of the vesting period lapse.
unforeseen events such as rights issues, acquisitions, disposals and changes in regulations.
The Supervisory Board determines the target figures for net income of relevance to
allows the Supervisory Board to penalise misconduct by an Executive Board member by
remuneration at the beginning of the fiscal year on the basis of the company’s medium-
shortening or completely eliminating an ongoing SPP tranche. Such misconduct includes
term plan. It also establishes the ceilings and floors. Accordingly, the 2016 – 2020 SPP
the intentional breach of the Code of Conduct, the compliance guidelines, a major duty set
takes the following approach: if the actual and target figure are identical, 100 % of the
out in the employment contract, or of the duties of care defined by Section 93 of the
Malus and clawback provisions. The 2016 – 2020 SPP contains a malus clause, which
conditionally granted performance shares are fully allocated. If the actual figure is exactly at
German Stock Corporation Act.
the floor, 50 % of the conditionally granted performance shares are fully allocated; if it is at
the ceiling, the final grant amounts to 150 %. If the actual figure is below the floor, all of the
The contracts of Michael Müller and Zvezdana Seeger, both of whom joined the Executive
conditionally granted performance shares lapse. If the ceiling is exceeded, the maximum
Board in November 2020, include the extensive malus and clawback provisions of the
grant remains 150 %.
future remuneration system. These provisions allow the Supervisory Board to claw back
performance-linked compensation that has already been paid (bonus and share-based
Pursuant to the 2016 – 2020 SPP, the performance shares are fully paid out in cash to the
payment) in part or in full if the consolidated financial statements are found to contain
Executive Board member three years after the final grant. This means that the payment for
errors. Above and beyond that, in the event of misconduct by an Executive Board member,
the 2018, 2019 and 2020 tranches is still outstanding. The level of the payment depends
the Supervisory Board can exercise its discretion in reducing or cancelling any variable
on the performance of the RWE share. It corresponds to the final number of performance
compensation for the fiscal year with which the breach of duty is associated. If the variable
shares multiplied by the sum of the average closing Xetra quotation of the RWE share on the
remuneration for the fiscal year in question has already been paid, the Supervisory Board
last 30 trading days of the vesting period and the dividends accumulated in the last three
can demand that it be returned in part or in full. The malus and clawback provisions shall
years. However, a cap applies in this case as well: even in the event of an extremely good
not prejudice the obligation of the Executive Board member to compensate the company
share performance, the payment is limited to a maximum of 200 % of the initial gross grant
for damages.
amount.
The members of the Executive Board are obliged to reinvest 25 % of the payment
Executive Board were paid to exercise supervisory board mandates at affiliates. This income
(after taxes) in RWE shares. The shares must be held until at least the end of the third year
fully counted towards the bonus (Schmitz / Krebber) or fixed remuneration (Müller / Seeger)
after conclusion of the vesting period.
and therefore did not increase the total remuneration.
Remuneration for exercising mandates. During the past fiscal year, members of the RWE AG
86
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Responsibility statement
4
Consolidated financial
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5
Further information
Range of Executive Board remuneration
Payment dates. Executive Board members receive their fixed salary in monthly
Ceiling: 164 %
instalments. The pension instalment is paid out at the end of the year, unless it is converted
Strategic
Performance Plan
(Maximum: 200 %)
80 %
into a pension commitment. After the fiscal year, the Supervisory Board determines the
target achievement for the company bonus and establishes the individual performance
factor. The bonus is paid in April. For performance shares from the SPP, the payment is
made in the first quarter following the end of the vesting period. As explained earlier,
Executive Board members must invest 25 % of the payment in RWE shares and may not sell
these shares until after three additional calendar years have passed from completion of the
four-year vesting period. As a result, it takes a total of seven years for Executive Board
members to obtain the full amount of their compensation.
Bonus
(Maximum: 180 %)
54 %
Executive Board remuneration payment timeline for a fiscal year
Budget: 100 %
Strategic
Performance
Plan (100 %)
Bonus
(100 %)
40 %
30 %
Floor: 30 %
Fixed salary
30 %
Fixed salary
30 %
Fixed salary
30 %
Remuneration broken down by component. Assuming that both the company and
the Executive Board members achieved their performance targets to a degree of 100 %,
the compensation structure would roughly have broken down as follows: 30 % of total
remuneration would have been accounted for by the fixed salary, another 30 % by the
bonus, and 40 % by long-term compensation under the 2016 – 2020 SPP.
Bonus
Payment
in April
Pension
instalment
Payment
at year-end
Limitation of Executive Board remuneration. The chart above shows the percentage
Fixed salary
shares of the components of Executive Board remuneration in 2020. The company bonus
was limited to 150 % of the contractually agreed bonus budget and the individual
performance factor was capped at 120 %. Consequently, a maximum of 180 % of the bonus
budget could be reached. With regard to share-based payment under the 2016 – 2020
SPP, payout of the performance shares after the vesting period was limited to a maximum
Monthly
payment
Strategic
Performance
Plan
Payment
in the first quarter
25 % reinvestment
in RWE shares
End of the
minimum
holding period
of 200 % of the grant budget. Due to the above maximum values, there was also a cap on
Fiscal year
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
total compensation, which amounted to 164 % of the budget.
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4
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5
Further information
Pension scheme. Until the introduction of the pension instalment described earlier on
In the event of a change of control, all of the performance shares granted under the
1 January 2011, pension benefits were granted to the members of the Executive Board. Of
2016 – 2020 SPP that have been finally allocated but not been paid out are paid out early.
the Executive Board members in 2020, this only applies to Rolf Martin Schmitz; the pension
Conversely, performance shares conditionally granted by the date of the change of control
commitment made to him in 2009 remains unchanged. It entitles him to life-long
lapse without replacement or consideration.
retirement benefits in the event of retirement from the Executive Board of RWE AG upon
turning 60, permanent disability, early termination or non-extension of his employment
The latest version of the GCGC suggests that no benefits be pledged in the event of the
contract by the company. In the event of death, his surviving dependants are entitled to
early termination of an employment contract by an Executive Board member due to a
benefits. The amount of Rolf Martin Schmitz’s qualifying income and the level of benefits
change of control. We adhere to this principle in all newly concluded employment contracts.
based on the years of service determine his individual pension and surviving dependants’
In the event of a change of control, Zvezdana Seeger and Michael Müller, who were
benefits.
appointed to the Executive Board as of 1 November 2020, do not have a special right of
termination or a right to severance. The same will apply to Markus Krebber from 1 May
Change of control. The contracts of Rolf Martin Schmitz and Markus Krebber contain
2021 onwards, when he succeeds Rolf Martin Schmitz as CEO.
change-of-control clauses, which consist of the following main provisions: if shareholders or
third parties obtain control over the company and this results in major disadvantages for
Early termination of Executive Board mandate and severance cap. Following a
the Executive Board members, they have a special right of termination. They can resign
recommendation of the GCGC, the Executive Board’s employment contracts include a
from the Executive Board and request that their employment contract be terminated in
provision stipulating that if an Executive Board mandate is otherwise terminated early
combination with a one-off payment within six months of the change of control.
without due cause, a severance payment of no more than the remuneration due until the
end of the employment contract and no more than two total annual compensations is
A change of control as defined by this provision occurs when one or several shareholders or
made (severance cap).
third parties acting jointly account for at least 30 % of the voting rights in the company, or if
any of the aforementioned can exert a controlling influence on the company in another
manner. A change of control also occurs if the company is merged with another legal entity,
unless the value of the other legal entity is less than 50 % of the value of RWE AG.
On termination of their employment contract due to a change of control, Executive Board
members receive a one-off payment equalling the compensation due until the end of the
term of their contract. However, this amount will not be higher than three times their total
annual remuneration, which encompasses all compensation components including fringe
benefits but excluding the SPP.
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Remuneration report
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Responsibility statement
4
Consolidated financial
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5
Further information
Level of Executive Board
remuneration (according to HGB)
€ ‘000
Non-performance-based:
Fixed remuneration2
Pension instalments3
Fringe benefits
Performance-based:
Bonus (short-term)
of which:
credited remuneration for mandates2
Value of performance shares at grant4
(long-term)
Total remuneration
Rolf Martin Schmitz
Markus Krebber
Michael Müller1
Zvezdana Seeger1
Total
2020
1,181
1,160
–
21
3,084
1,584
2019
1,183
1,160
–
23
3,032
1,782
2020
1,145
800
300
45
2,187
1,087
2019
1,085
763
300
22
2,271
1,171
85
115
40
146
1,500
4,265
1,250
4,215
1,100
3,332
1,100
3,356
2020
2019
2020
2019
156
108
43
5
297
130
–
167
453
–
–
–
–
–
–
–
–
–
154
108
43
3
297
130
–
167
451
–
–
–
–
–
–
–
–
–
2020
2,636
2,176
386
74
5,865
2,931
2019
2,268
1,923
300
45
5,303
2,953
129
261
2,934
8,501
2,350
7,571
1 Michael Müller and Zvezdana Seeger joined the Executive Board on 1 November 2020.
2 Income of Michael Müller and Zvezdana Seeger from the exercise of Supervisory Board offices within the Group counts towards fixed pay and not the bonus; in 2020, it amounted to €7,000 for Michael Müller, whereas Zvezdana Seeger did
not have any such income.
3 The pension instalment paid to Markus Krebber, Michael Müller and Zvezdana Seeger is part of their remuneration under the German Commercial Code (HGB), but this does not apply to the annual service cost of the pension commitment to
Rolf Martin Schmitz.
4 The German Commercial Code mandates the statement of the fair value as of the grant date.
Level of Executive Board remuneration
foreseen when establishing the target figure. One such modification related to the dividend
on the 15 % stake in E.ON, which was considered in the EBIT target because it had not been
The remuneration of the Executive Board of RWE AG is calculated in compliance with the
decided at the time that we would recognise it in the financial result. Moreover, a correction
rules set out in the German Commercial Code (HGB). The members of the Executive Board
was made to income from investments that was unexpectedly high due to timing effects.
received €8,501,000 in total remuneration for their work in fiscal 2020 compared to
A further adjustment related to impairments recognised in 2019, the knock-on effects of
€7,571,000 in the previous year when the board was made up of two members. The
which were not taken into account in the target value and were therefore eliminated. The
remuneration components are shown in the table above.
adjusted EBIT target derived from the medium-term plan was €1,556 million (target
achievement of 100 %), with a floor of €856 million (target achievement of 50 %) and a
EBIT of relevance to remuneration, the basis for calculating the bonus, amounted to
ceiling of €2,256 million (target achievement of 150 %). These figures and the actual figure
€1,830 million in the fiscal year that just ended. It differs from adjusted EBIT (€1,771 million)
result in a target achievement of 120 % for 2020. This means that the company bonus was
in that we made certain modifications to it to neutralise exceptional effects that could not be
20 % higher than the bonus budget established at the beginning of the year.
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Remuneration report
3
Responsibility statement
4
Consolidated financial
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5
Further information
Calculation of the 2020 company bonus
2020
€ million
Target achievement
%
Calculation of the 2020
individual bonus
Rolf Martin
Schmitz
Markus
Krebber
Michael
Müller
Zvezdana
Seeger
Adjusted EBIT
Modifications1
EBIT of relevance to remuneration
Target
Ceiling
Floor
1 See commentary on the previous page.
1,771
59
1,830
1,556
2,256
856
–
–
120
100
150
50
Bonus budget
€ ‘000
1,100
755
108
108
Target achievement regarding
EBIT of relevance to remuneration
%
120
Company bonus
€ ‘000
1,320
Individual performance factor
%
120
120
906
120
Individual bonus
€ ‘000
1,584
1,087
120
130
100
130
120
130
100
130
Rolf Martin Schmitz and Markus Krebber each had a target achievement of 132 %. Due to
the cap, their individual performance factor was 120 %, whereas that of Michael Müller and
The Supervisory Board found that Rolf Martin Schmitz and Markus Krebber overachieved
Zvezdana Seeger was 100 %. Multiplying these figures by the company bonus results in the
the individual and collective targets. The main success factors were the completion of the
amount of individual bonus granted to each Executive Board member. It totalled
asset swap with E.ON and the progress made in transforming RWE into a leading renewable
€1,584,000 for Rolf Martin Schmitz, €1,087,000 for Markus Krebber, €130,000 for
energy company. The Supervisory Board is of the opinion that the repeated strong
Michael Müller and €130,000 for Zvezdana Seeger.
performance of the RWE share is proof of the capital market’s endorsement of RWE’s
growth strategy. Of notable mention was the Executive Board setting the stage for the
accelerated expansion of wind and solar capacity through the capital increase of August
2020 and the acquisition of Nordex’s European project development business. The
Calculation of the 2020 tranche of the
Strategic Performance Plan
2020
€ million
Target achievement
%
conclusion of the public law contract with the German government on the conditions of the
Adjusted net income
lignite phaseout and its socially acceptable provisions also contributed to the high degree of
Modifications1
target achievement. Goals associated with employee motivation, which is measured via
regular in-company surveys, were slightly exceeded. The degrees of target achievement with
respect to CR goals, which mainly relate to the carbon footprint of the generation portfolio,
occupational safety as well as conformity with compliance, environmental and social
standards, were between 95 % and 120 %. Messrs. Schmitz and Krebber fell 5 % short of the
carbon footprint target set for the generation portfolio due to delays in the completion of
renewable energy assets, which in some cases were due to COVID-19. In view of the
problem-free familiarisation process of Michael Müller and Zvezdana Seeger, the
Supervisory Board determined that these two new Executive Board members reached an
individual target achievement of 100 %. As set out earlier, this assessment did not take
account of any of the collective goals.
90
Net income of relevance to remuneration
Target
Ceiling
Floor
1 See commentary on the next page.
1,213
–170
1,043
1,007
1,507
507
–
–
104
100
150
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4
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5
Further information
The German Commercial Code stipulates that the long-term performance-based
Net income of relevance to remuneration is adjusted net income (€1,213 million) minus
remuneration component is the fair value of the performance shares granted on a
several exceptional items. As mentioned on page 89, we made a downward correction to
preliminary basis at the beginning of a fiscal year. As set out on pages 85 et seq., the level of
the unexpectedly high income from investments and eliminated knock-on effects of
the final grant depends on the development of net income of relevance to remuneration in
impairments. A further modification related to the tax rate, which is used to calculate
the fiscal year compared to a predefined target. The latter was set by the Supervisory Board
adjusted net income. It currently amounts to 15 %, whereas the target was determined
at €1,007 million for 2020 (grant of 100 %). The floor was €507 million (grant of 50 %) and
based on a tax rate of 20 %.
the ceiling was €1,507 million (grant of 150 %). The actual amount of €1,043 million led to
a target achievement of 104 %. This means that the final grant of performance shares for
2020 was 4 % higher than the preliminary grant.
Long-term incentive payment (Strategic Performance Plan): 2020 tranche
Rolf Martin Schmitz
Markus Krebber
Michael Müller
Zvezdana Seeger
Grant date
Fair value at grant date
Share price (average)
Number of performance shares allocated on a provisional basis
Measurement date of performance conditions
Target achievement in relation to net income of relevance to remuneration
Final number of fully granted performance shares
End of vesting period
€ ‘000
€
%
1 Jan 2020
1 Jan 2020
1 Nov 2020
1 Nov 2020
1,500
26.41
56,797
1,100
26.41
41,651
167
26.41
6,311
167
26.41
6,311
31 Dec 2020
31 Dec 2020
31 Dec 2020
31 Dec 2020
104
59,069
104
43,317
104
6,563
104
6,563
31 Dec 2023
31 Dec 2023
31 Dec 2023
31 Dec 2023
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5
Further information
Long-term incentive payment
(Strategic Performance Plan):
2017 – 2019 tranches
Tranche
Grant date
Fair value at grant date
Share price (average)
Number of performance shares allocated
on a provisional basis
Rolf Martin Schmitz
Markus Krebber
Year
2019
2018
2017
2019
2018
2017
1 Jan 2019
1 Jan 2018
1 Jan 2017
1 Jan 2019
1 Jan 2018
1 Jan 2017
€ ‘000
€
1,250
19.10
1,250
18.80
1,250
11.62
1,100
19.10
1,100
18.80
988
11.62
65,445
66,489
107,573
57,592
58,511
84,983
Measurement date of performance conditions
31 Dec 2019
31 Dec 2018
31 Dec 2017
31 Dec 2019
31 Dec 2018
31 Dec 2017
Target achievement in relation to net income of
relevance to remuneration
Final number of fully granted
performance shares
End of vesting period
%
150
123
115
150
123
115
98,168
81,781
123,709
86,388
71,969
97,730
31 Dec 2022
31 Dec 2021
31 Dec 2020
31 Dec 2022
31 Dec 2021
31 Dec 2020
The table below shows the increase in provisions to cover obligations from share-based
Obligations under the former pension scheme. The service cost of pension obligations to
payments under the SPP.
Addition to provisions for long-term share-based
incentive payments
€ ‘000
Rolf Martin Schmitz
Markus Krebber
Michael Müller
Zvezdana Seeger
Total
Rolf Martin Schmitz amounted to €595,000 in 2020 (previous year: €554,000). This is not
a remuneration component in accordance with the German Commercial Code. As of
year-end, the present value of the defined benefit obligation determined in accordance with
2020
2019
IFRS amounted to €16,441,000 (previous year: €14,997,000). The present value of the
pension obligation determined according to the German Commercial Code totalled
€13,166,000 (previous year: €11,894,000). It therefore increased by €1,272,000
2,726
(previous year: €1,360,000). Based on the emoluments qualifying for a pension as of
1,982
31 December 2020, the projected annual pension paid to Rolf Martin Schmitz on retiring
–
–
from the company totalled €556,000, as in the previous year. This includes vested pension
benefits due from former employers transferred to RWE AG.
2,527
2,096
54
54
4,731
4,708
92
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Remuneration report
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Presentation of Executive Board remuneration in
accordance with the GCGC (2017)
Benefits or compensation are considered granted when a binding commitment to such
is made to the management board member. In deviation from German commercial law, it is
immaterial to what extent the management board member has already provided the
In designing and presenting the remuneration system, we also follow the recommendations
services being remunerated.
of the German Corporate Governance Code. Last year, we oriented ourselves towards the
version of the Code dated 7 February 2017, which was in force at the time. It was replaced
The term ‘benefits received’ defines the extent to which the management board member
by the version of 16 December 2019, which was introduced on 20 March 2020. The new
has already received payments. In this regard, the relevant aspect is the time at which the
GCGC no longer contains recommendations regarding the presentation of management
amount being paid is sufficiently certain and not the actual time of the payment. We also
board compensation, as opposed to the old version of the Code, which recommended the
take this approach in presenting the payments made under the 2016 – 2020 SPP.
use of specific model tables. The Government Commission responsible for the Code is of the
opinion that reporting on remuneration is now sufficiently regulated by the German law on
This distinction described above can be illustrated with the example of the bonus: the
the implementation of the Second Shareholder Rights Directive (ARUG II). However, the
contractually agreed and promised budgeted bonus for the fiscal year in question is
corresponding rules pursuant to German stock corporation law become mandatory for
considered ‘granted’. Conversely, the benefits received table shows the bonus level which
fiscal 2021 and later. To avoid gaps in transparency, we are presenting the Executive
will actually be paid with a high degree of probability. In this regard, it is irrelevant that the
Board’s remuneration for 2020 using the model tables from the 2017 GCGC once again.
payment will not be made until the following year. The payment date is deemed to have
The following tables show:
been reached when the indicators needed to determine target achievement (and therefore
the bonus) are known with sufficient certainty. It is assumed that this is already the case at
the end of the year. As a result, the Executive Board bonuses are stated in the reporting year in
• the benefits granted for the reporting year including fringe benefits as well as the
the benefits received table.
theoretical maximum and minimum amounts of variable compensation;
• payments of fixed remuneration, short-term variable remuneration and long-term
variable remuneration by year of receipt; and
• the cost of pensions and other benefits.
93
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Remuneration report
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Benefits granted
€ ‘000
Fixed remuneration
Pension instalment
Fringe benefits
Rolf Martin Schmitz
Chief Executive Officer
since 15 October 2016
Markus Krebber
Chief Financial Officer
since 15 October 2016
Michael Müller
Member of the Executive Board
since 1 November 2020
Zvezdana Seeger
Chief HR Officer / Labour Director
since 1 November 2020
2020
(Min.)
2020
(Max.)
2020
Actual
2019
Actual
2020
(Min.)
2020
(Max.)
2020
Actual
2019
Actual
2020
(Min.)
2020
(Max.)
2020
Actual
2019
Actual
2020
(Min.)
2020
(Max.)
2020
Actual
2019
Actual
1,160
1,160
1,160
1,160
–
21
–
21
–
21
–
23
800
300
45
800
300
45
800
300
45
763
300
22
43
5
108
108
108
Total fixed remuneration
1,181
1,181
1,181
1,183
1,145
1,145
1,145
1,085
156
One-year variable remuneration (bonus)
Multi-year variable remuneration (SPP)
2019 tranche (term: 2019 – 2022)
2020 tranche (term: 2020 – 2023)
Total variable remuneration
0
0
–
0
0
1,980
1,100
1,1001
3,000
1,500
1,250
–
–
1,250
3,000
1,500
–
4,980
2,600
2,350
0
0
–
0
0
1,359
755
7231
2,200
1,100
1,100
–
–
1,100
2,200
1,100
–
3,559
1,855
1,823
0
0
–
0
0
Total variable and fixed remuneration
1,181
6,161
3,781
3,533
1,145
4,704
3,000
2,908
156
Service cost
Total remuneration
595
595
595
554
–
–
–
–
–
1,776
6,756
4,376
4,087
1,145
4,704
3,000
2,908
156
684
431
43
5
156
195
333
–
333
528
684
–
43
5
156
108
167
–
167
275
431
–
–
–
–
–
–
–
–
–
–
–
–
–
108
108
108
43
3
154
0
0
–
0
0
154
–
43
3
154
195
333
–
333
528
682
–
43
3
154
108
167
–
167
275
429
–
154
682
429
–
–
–
–
–
–
–
–
–
–
–
–
1 Figures restated due to the change in the method used to state the bonus.
94
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Remuneration report
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Benefits received
€ ‘000
Fixed remuneration
Pension instalment
Fringe benefits
Total fixed remuneration
One-year variable remuneration (bonus)
Multi-year variable remuneration (SPP)
Payment from the 2016 tranche
Payment from the 2017 tranche
Total variable remuneration
Total variable and fixed remuneration
Service cost
Total remuneration
Rolf Martin Schmitz
Chief Executive Officer
since 15 October 2016
Markus Krebber
Chief Financial Officer
since 15 October 2016
Michael Müller
Member of the Executive Board
since 1 November 2020
Zvezdana Seeger
Chief HR Officer / Labour Director
since 1 November 2020
2019
763
300
22
1,085
1,171
494
494
–
1,665
2,750
–
2,750
2020
108
43
5
156
130
–
–
–
130
286
–
286
2019
–
–
–
–
–
–
–
–
–
–
–
–
2020
108
43
3
154
130
–
–
–
130
284
–
284
2019
–
–
–
–
–
–
–
–
–
–
–
–
2020
1,160
–
21
1,181
1,584
2,500
–
2,500
4,084
5,265
595
5,860
2019
1,160
–
23
1,183
1,782
1,538
1,538
–
3,320
4,503
554
5,057
2020
800
300
45
1,145
1,087
1,975
–
1,975
3,062
4,207
–
4,207
95
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
Remuneration report
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
New Executive Board remuneration system as of 2021
• A new element included in the remuneration system is the Shareholder Ownership
Guidelines (SOGs) which serve to further align the interests of the Executive Board and the
As set out earlier, we refined our Executive Board remuneration system in order to bring it in
shareholders. The SOGs obligate the members of the Executive Board to have a minimum
line with the current statutory requirements and the expectations of our stakeholders. The
personal investment in RWE shares and to hold the shares during and two years after
new rules have been in force since 1 January 2021. We maintained the basic structure of
their tenure on the Executive Board. The personal investment quota is 100 % of annual
the remuneration system. This means that Executive Board compensation still consists of
gross fixed remuneration for ordinary Executive Board members and 200 % for the
fixed remuneration, the pension instalment, the performance-based bonus and the
Chairman. Every year, at least 25 % of variable gross remuneration paid must be invested
share-based payment. A detailed presentation of the new remuneration system can be
in RWE shares until the target amount is reached.
found in the invitation to this year’s Annual General Meeting, to which we will submit the
system for approval. The invitation has been published at www.rwe.com/agm.
• Another major new feature is a clawback mechanism, which supplements the existing
The following is a brief overview of some major new rules:
Executive Board member may be requested to return the variable remuneration already
paid. The old malus rule did not go that far: it simply allowed SPP tranches that had not
demerit rule. As set out in more detail on page 86, in the event of misconduct, an
• In the future, share-based payments will orientate to two additional success factors: the
been paid yet to be reduced or withheld.
carbon footprint of our generation portfolio and the relative total shareholder return,
which puts the total return of the RWE share in relation to that of other European utility
Since 2021, the employment contracts of Michael Müller and Zvezdana Seeger have
stocks. These two indicators and the development of net income of relevance to
reflected all the amendments to the remuneration system. This also applies to Markus
remuneration will determine how many of the conditionally granted performance shares
Krebber as of 1 May 2021 when he becomes CEO. It was decided not to amend the
are finally granted at the end of the performance period. This period, which in the past
conditions of the contract of Rolf Martin Schmitz, who will resign from the Executive Board
only comprised the fiscal year in question, will be extended to three years in the new
at the end of April.
remuneration system. Once it ends, all three criteria will be given equal weight in
calculating the final grant. Thereafter, the performance shares must be held for a further
year. Therefore, the vesting period will still be four years.
96
RWE Annual Report 2020 03
Responsibility
Statement
Pumped storage power plant, Herdecke, Germany
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
3 Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles,
the consolidated financial statements give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Group, and the Group review of operations
includes a fair review of the development and performance of the business and the
position of the Group, together with a description of the principal opportunities and risks
associated with the expected development of the Group.
Essen, 5 March 2021
The Executive Board
Schmitz
Krebber
Müller
Seeger
98
RWE Annual Report 2020
04
Consolidated
financial statements
4.1
Income statement
4.2 Statement of comprehensive income
4.3 Balance sheet
4.4 Cash flow statement
4.5 Statement of changes in equity
4.6 Notes
4.7 List of shareholdings (part of the notes)
4.8 Boards (part of the notes)
4.9
Independent auditor’s report
4.10 Information on the auditor
100
101
102
104
106
107
192
226
233
241
Nysäter onshore wind farm, Sweden
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Income statement
5
Further information
4.1 Income statement
€ million
Revenue (including natural gas tax / electricity tax)
Natural gas tax / electricity tax
Revenue
Other operating income
Cost of materials
Staff costs
Depreciation, amortisation and impairment losses
Other operating expenses
Income from investments accounted for using the equity method
Other income from investments
Financial income
Finance costs
Income from continuing operations before tax
Taxes on income
Income from continuing operations
Income from discontinued operations
Income
of which: non-controlling interests
of which: RWE AG hybrid capital investors’ interest
of which: net income / income attributable to RWE AG shareholders
Basic and diluted earnings per share in €
of which: from continuing operations in €
of which: from discontinued operations in €
100
Note
(1)
(1)
(1)
(2)
(3)
(4)
(5), (10)
(6)
(7), (12)
(7)
(8)
(8)
(9)
(26)
2020
13,896
208
13,688
4,931
9,814
2,365
3,154
1,950
375
– 61
1,933
2,387
1,196
363
833
221
1,054
59
995
1.56
1.27
0.29
2019
13,277
152
13,125
4,756
9,078
2,526
3,166
3,254
321
8
688
1,626
– 752
– 92
– 660
9,816
9,156
643
15
8,498
13.82
– 1.13
14.95
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Statement of
comprehensive income
5
Further information
4.2 Statement of comprehensive income
Figures stated after taxes – € million
Income
Actuarial gains and losses of defined benefit pension plans and similar obligations
Income and expenses of investments accounted for using the equity method (pro rata)
Fair valuation of equity instruments
Income and expenses recognised in equity, not to be reclassified through profit or loss
Currency translation adjustment
Fair valuation of debt instruments
Fair valuation of financial instruments used for hedging purposes
Note
(12)
(20)
(27)
Income and expenses of investments accounted for using the equity method (pro rata)
(12), (20)
Income and expenses recognised in equity, to be reclassified through profit or loss in the future
Other comprehensive income
Total comprehensive income
of which: attributable to RWE AG shareholders
of which: attributable to RWE AG hybrid capital investors
of which: attributable to non-controlling interests
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
2020
1,054
– 493
– 46
– 143
– 682
– 417
19
– 233
– 6
– 637
– 1,319
– 265
– 282
17
20191
9,156
– 639
130
279
– 230
1,079
27
479
– 15
1,570
1,340
10,496
9,706
15
775
101
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Balance sheet
5
Further information
4.3 Balance sheet
Assets
€ million
Non-current assets
Intangible assets
Property, plant and equipment
Investments accounted for using the equity method
Other non-current financial assets
Financial receivables
Other receivables and other assets
Income tax assets
Deferred taxes
Current assets
Inventories
Financial receivables
Trade accounts receivable
Other receivables and other assets
Income tax assets
Marketable securities
Cash and cash equivalents
Assets held for sale
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
102
Note
31 Dec 2020
31 Dec 20191
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(14)
(15)
(18)
(19)
4,913
17,902
3,297
4,244
131
3,435
142
397
4,777
19,016
3,281
4,337
128
3,276
264
689
34,461
35,768
1,632
2,482
3,007
9,820
228
4,219
4,774
1,045
27,207
61,668
1,585
2,359
3,621
12,756
196
3,258
3,192
1,274
28,241
64,009
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Balance sheet
5
Further information
Equity and liabilities
€ million
Equity
RWE AG shareholders’ interest
Non-controlling interests
Non-current liabilities
Provisions
Financial liabilities
Income tax liabilities
Other liabilities
Deferred taxes
Current liabilities
Provisions
Financial liabilities
Trade accounts payable
Income tax liabilities
Other liabilities
Liabilities held for sale
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
103
Note
31 Dec 2020
31 Dec 20191
(20)
(22)
(23)
(24)
(25)
(16)
(22)
(23)
(24)
(25)
17,182
789
17,971
16,964
503
17,467
19,470
18,937
3,951
797
1,154
1,908
3,924
1,050
862
2,164
27,280
26,937
3,004
1,247
2,387
237
9,003
539
16,417
61,668
2,638
1,689
2,987
193
11,588
510
19,605
64,009
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Cash flow statement
5
Further information
4.4 Cash flow statement
€ million
Income from continuing operations
Depreciation, amortisation, impairment losses / write-backs
Changes in provisions
Changes in deferred taxes
Income from disposal of non-current assets and marketable securities
Other non-cash income / expenses
Changes in working capital
Cash flows from operating activities of continuing operations
Cash flows from operating activities of discontinued operations
Cash flows from operating activities
Intangible assets / property, plant and equipment
Capital expenditure
Proceeds from disposal of assets
Acquisitions, investments
Capital expenditure
Proceeds from disposal of assets / divestitures
Changes in marketable securities and cash investments
Cash flows from investing activities of continuing operations (before initial / subsequent transfer to plan assets)
Initial / subsequent transfer to plan assets
Cash flows from investing activities of continuing operations (after initial / subsequent transfer to plan assets)
Cash flows from investing activities of discontinued operations
Cash flows from investing activities (after initial / subsequent transfer to plan assets)
104
Note (30)
2020
833
3,179
342
485
– 54
– 647
– 13
4,125
50
4,175
– 2,285
132
– 1,073
233
– 1,189
– 4,182
– 96
– 4,278
– 76
– 4,354
2019
– 660
2,754
2,825
44
– 77
– 3,077
– 2,786
– 977
– 546
– 1,523
– 1,767
72
– 4
623
1,592
516
– 42
474
– 1,203
– 729
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Cash flow statement
5
Further information
€ million
Net change in equity (incl. non-controlling interests)
Changes in hybrid capital
Dividends paid to RWE AG shareholders and non-controlling interests
Issuance of financial debt
Repayment of financial debt
Cash flows from financing activities of continuing operations
Cash flows from financing activities of discontinued operations
Cash flows from financing activities
Net cash change in cash and cash equivalents
Effects of changes in foreign exchange rates and other changes in value on cash and cash equivalents
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of the reporting period
of which: reported as ‘Assets held for sale’
Cash and cash equivalents at beginning of the reporting period as per the consolidated balance sheet
Cash and cash equivalents at the end of the reporting period
of which: reported as ‘Assets held for sale’
Cash and cash equivalents at end of the reporting period as per the consolidated balance sheet
Note (30)
2020
2,230
– 522
5,537
– 5,476
1,769
6
1,775
1,596
– 34
1,562
3,212
20
3,192
4,774
4,774
2019
– 60
– 869
– 560
15,876
– 14,198
189
35
224
– 2,028
15
– 2,013
5,225
1,702
3,523
3,212
20
3,192
105
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Statement of changes in equity
5
Further information
4.5 Statement of changes in equity
Statement of changes in equity
€ million
Note (20)
Subscribed
capital
of RWE AG
Addi tional
paid-in capital
of RWE AG
Retained
earnings and
distributable
profit
Accumulated other
comprehensive Income
Currency
trans lation
adjust ments
Fair value measurement
of financial instruments
Used for
hedging
purposes
Debt
instruments
measured at
fair value
through other
comprehensive
income
RWE AG
share-
holders’
interest
RWE AG
hybrid
capital
investors’
interest
Non-
controlling
interests
Total
Balance at 1 Jan 2019
1,574
2,385
1,139
285
17
3,336
8,736
Capital paid out / paid in
Dividends paid
Income
Other comprehensive income
Total comprehensive income
Other changes
Balance at 1 Jan 20201
Capital paid in
Dividends paid
Income
Other comprehensive income
Total comprehensive income
Other changes
1,574
157
2,385
1,844
Balance at 31 Dec 2020
1,731
4,229
– 430
8,498
– 125
8,373
– 174
8,908
– 11
– 492
995
– 682
313
– 123
8,595
812
812
1,097
– 392
– 392
705
– 430
8,498
1,208
9,706
– 1,048
16,964
1,990
– 492
995
– 1,277
– 282
– 998
493
493
– 874
2,955
– 222
– 222
– 875
1,858
17,182
28
28
45
19
19
64
940
– 869
– 61
15
15
– 25
4,581
14,257
6
– 460
643
132
775
– 4,399
503
162
– 64
59
– 42
17
171
789
– 863
– 951
9,156
1,340
10,496
– 5,472
17,467
2,152
– 556
1,054
– 1,319
– 265
– 827
17,971
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
106
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
4.6 Notes
Basis of presentation
We employ internal control systems, uniform groupwide directives, and programmes for basic and
advanced staff training to ensure that the consolidated financial statements and combined review of
RWE AG, headquartered at RWE Platz 1 in 45141 Essen, Germany, is the parent company of the
operations are adequately prepared. Compliance with legal regulations and the internal guidelines as
RWE Group (‘RWE’ or ‘Group’). RWE generates electricity from renewable and conventional sources,
well as the reliability and viability of the control systems are continuously monitored throughout the
primarily in Europe and the USA.
Group.
The consolidated financial statements for the period ended 31 December 2020 were approved for
In line with the requirements of the German Corporate Control and Transparency Act (KonTraG), the
publication on 5 March 2021 by the Executive Board of RWE AG. The statements were prepared in
Group’s risk management system enables the Executive Board to identify risks at an early stage and
accordance with the International Financial Reporting Standards (IFRSs) applicable in the European
take countermeasures, if necessary.
Union (EU), as well as in accordance with the supplementary accounting regulations applicable
pursuant to Sec. 315e, Para. 1 of the German Commercial Code (HGB). The previous year’s figures were
The consolidated financial statements, the combined review of operations, and the independent
calculated according to the same principles.
auditors’ report are discussed in detail by the Audit Committee and at the Supervisory Board’s meeting
on financial statements with the independent auditors present. The results of the Supervisory Board’s
A statement of changes in equity has been disclosed in addition to the income statement, the statement
examination are presented in the report of the Supervisory Board on page 11 et seqq.
of comprehensive income, the balance sheet and the cash flow statement. The Notes also include
segment reporting.
Several balance sheet and income statement items have been combined in the interests of clarity.
Scope of consolidation
These items are stated and explained separately in the Notes to the financial statements. The income
In addition to RWE AG, the consolidated financial statements contain all material German and foreign
statement is structured according to the nature of expense method.
companies which RWE AG controls directly or indirectly. In determining whether there is control, in addi-
tion to voting rights, other rights in the company contracts or articles of incorporation and potential
The consolidated financial statements have been prepared in euros. Unless specified otherwise, all
voting rights are also taken into consideration.
amounts are stated in millions of euros (€ million). Due to calculation procedures, rounding differences
may occur.
Material associates are accounted for using the equity method, and principal joint arrangements are
These consolidated financial statements were prepared for the fiscal year from 1 January to
31 December 2020.
accounted for using the equity method or as joint operations.
Associates are companies on which RWE AG exercises a significant influence on the basis of voting
rights between 20 % and 50 % or on the basis of contractual agreements. In classifying joint arrange-
The Executive Board of RWE AG is responsible for the preparation, completeness and accuracy of the
ments which are structured as independent vehicles, as joint operations or as joint ventures, other facts
consolidated financial statements and the Group review of operations, which is combined with the
and circumstances – in particular delivery relationships between the independent vehicle and the parties
review of operations of RWE AG.
participating in such – are taken into consideration, in addition to the legal form and contractual
agreements.
107
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Investments in subsidiaries, joint ventures, joint operations or associates which are of secondary
First-time consolidation and deconsolidation generally take place when control is obtained or lost.
importance from a Group perspective are accounted for in accordance with IFRS 9.
The list of Group shareholdings pursuant to Sec. 313, Para. 2 of the German Commercial Code (HGB) is
to €13 million, which were reported in other operating income (previous year: €18 million). Furthermore, a
Sales of shares which led to a change of control resulted in sales proceeds from disposals amounting
presented on page 192 et seqq.
The following summary shows the changes in the number of fully consolidated companies that occurred
during the reporting period:
Number of fully consolidated companies
Germany
Abroad
1 Jan 2020
First-time consolidation
Deconsolidation
Mergers
31 Dec 2020
58
4
-3
-4
55
201
16
-9
-11
197
Total
259
20
-12
-15
252
deconsolidation gain of €154 million on the sale of discontinued operations (previous year: €8,258
million) was recognised in the ‘income from discontinued operations’ line item on the income statement.
Within the framework of purchases and sales of subsidiaries and other business units which resulted in
a change of control, purchase prices amounted to €270 million (previous year: €3,592 million) and
sales prices amounted to €872 million (previous year: €14,296 million). Sales prices received from
third parties were paid exclusively in cash (previous year: using equity interests and offsetting against
other payments within the scope of the transaction agreed with E.ON). During the reporting period,
purchase prices were paid to third parties exclusively in cash (previous year: offsetting against other
payments within the scope of the transaction agreed with E.ON, with the exception of €25 million which
was paid in cash and cash equivalents). In relation to this, cash and cash equivalents (excluding assets
held for sale) were acquired in the amount of €0 million (previous year: €113 million) and were disposed
of in the amount of €5 million (previous year: €1,250 million).
Unchanged versus 31 December 2019, there were 31 investments and joint ventures accounted for
using the equity method, of which eleven were in Germany and 20 were abroad.
Acquisitions
Acquired E.ON operations
As in the previous year, two companies are presented as joint operations. Of these, Greater Gabbard
As part of the extensive asset swap agreed upon with E.ON SE on 12 March 2018, RWE gained control
Offshore Winds Limited, UK, is a material joint operation of the RWE Group. Greater Gabbard holds a
of major parts of E.ON’s former renewable energy business on 18 September 2019. The acquired
500 MW offshore wind farm, which RWE Renewables UK Swindon Limited operates together with
operations are active in onshore and offshore wind as well as in the photovoltaic business in Europe and
Scottish and Southern Energy (SSE) Renewables Holdings. RWE Renewables UK Swindon Limited
the USA.
owns 50 % of the shares and receives 50 % of the power generated (including green power certificates).
The wind farm is part of the segment Offshore Wind.
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The status at initial consolidation is presented in the following table as at 31 December 2019:
King’s Lynn power station
Balance-sheet items
€ million
Non-current assets
Intangible assets
Property, plant and equipment
Other non-current assets
Current assets
Non-current liabilities
Provisions
Financial liabilities
Other non-current liabilities
Current liabilities
Net assets
Purchase price
Goodwill
IFRS carrying
amounts (fair value)
at initial consolidation
(as at 31 Dec 2019)
10,292
The acquisition of a 100 % stake in Centrica KL Limited (CKLL), Windsor, UK, was completed on
12 February 2020, as agreed with the British energy company GB Gas Holdings Limited, a subsidiary
of Centrica plc, Windsor, UK, at the end of December 2019.
The power station is a combined-cycle gas turbine (CCGT) power plant located in King’s Lynn, Norfolk,
UK. The plant has a capacity of 382 MW and will receive reliable, stable capacity payments in the British
capacity market until 2035 based on a 15-year contract with a term starting in October 2020.
1,951
6,332
2,009
1,886
3,979
613
2,447
919
5,260
2,939
3,592
653
Initial accounting of the business combination is presented in the following table, together with the
assumed assets and liabilities:
Balance-sheet items
€ million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Purchase price
Goodwill
IFRS carrying
amounts (fair value)
at initial consolidation
125
5
9
88
33
33
An update of the figures reported upon first-time consolidation was performed during the period under
review and resulted in the following adjustments: Due to better understanding of the fair value of
operating rights and property, plant and equipment in particular, the fair value of net assets stated upon
Since its initial consolidation, the company has contributed €25 million to the Group’s revenue and
first-time consolidation was reduced by €261 million, from €2,939 million to €2,678 million. Taking
€12 million to the Group’s earnings.
account of a purchase price adjustment resulting from contractually agreed settlements, the goodwill
recognised upon first-time consolidation increased by €141 million to €794 million.
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Excluding €80 million in redeemed shareholder loans, the purchase price amounted to €33 million and
The acquired operations have not yet made any significant contributions to the Group’s revenue and
was paid exclusively in cash and cash equivalents.
earnings since they were consolidated for the first time.
Nordex wind and solar projects
The purchase price amounted to €375 million (excluding repaid shareholder loans in the amount of
In early November 2020, RWE completed the acquisition of 100 % of the shares in the companies NXD
€21 million) and was paid exclusively in cash and cash equivalents.
HOLDCO B.V. and NXD France SAS and thus gained control of the European development operations of
the wind turbine manufacturer Nordex. Since then, the names of the acquired companies have been
Goodwill is primarily based on expected future use and synergy effects.
changed to RWE Renewables HoldCo B.V. and RWE Renouvelables SAS.
The initial accounting of the business combination has not been finalised due to the complex structure
These operations encompass a pipeline of onshore wind and solar projects with a total generation
of the transaction.
capacity of 2.7 GW, of which 1.9 GW is located in France. The pipeline also includes ventures in Spain,
Sweden and Poland. Some 15 % of the pipeline will soon be ready for a final investment decision or is at
an advanced stage of development. State subsidies have already been secured for generation capacity
of 230 MW.
The assets and liabilities acquired within the scope of the transaction are presented in the following table:
Balance-sheet items
€ million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Purchase price
Goodwill
IFRS carrying
amounts (fair value)
at initial consolidation
329
0
56
6
267
375
108
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Disposals, disposal groups and discontinued operations
Key figures of discontinued operations
31 Dec 2019
Východoslovenská energetika Holding a.s. (VSEH)
On 21 August 2020, RWE sold the shares in its fully consolidated investment in the Slovak power and
gas utility Východoslovenská energetika Holding a.s. (VSEH), which was previously stated as part of
‘innogy – discontinued operations’, to E.ON. The deconsolidation gain amounted to €154 million and is
stated in the ‘income from discontinued operations’ line item on the income statement.
€ million
Non-current assets
Intangible assets
Property, plant and equipment
Other non-current assets
The elimination bookings within the scope of the consolidation of expenses and income for the
intragroup deliveries and services existing so far, which will be continuing either with such or with third
parties after the deconsolidation of the discontinued operations, were fully assigned to such operations.
Current assets
Major key figures of the activities of the discontinued operations deconsolidated as of 21 August 2020
are presented in the following tables:
Non-current liabilities
Provisions
Financial liabilities
Other non-current liabilities
Current liabilities
111
405
734
8
1,147
127
9
225
131
365
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Key figures of discontinued operations
2020
2019
The Stella wind farm (201 MW) commenced operation in December 2018, with Cranell (220 MW) and
€ million
Revenue1
Other income2
Expenses3
Income of discontinued operations before tax
Taxes on income
Deconsolidation gain
Income of discontinued operations
507
15
437
85
18
154
221
23,890
1,518
23,214
2,194
636
8,258
9,816
East Raymond (200 MW) following suit in September 2020 and January 2021, respectively. West
Raymond (240 MW) was still under construction when these Notes were prepared. It is scheduled to go
online in the second quarter of 2021 and then be sold off. The sale of a 75 % stake in the three onshore
wind farms Stella, Cranell and East Raymond was completed in January 2021 (see ‘Events after the
balance sheet date’, page 190).
As of 31 December 2020, the assets and liabilities of the four wind farms were reported as ‘held for sale’
in the balance sheet. The main groups of assets and liabilities of the disposal group are presented below:
Key figures of the disposal group
31 Dec 2020
1 Including income with continuing operations in the amount of €1,402 million in the previous year.
2 Including income with continuing operations in the amount of €108 million in the previous year.
3 Including expenses with continuing operations in the amount of €119 million (previous year: €9,772 million).
€ million
Non-current assets
Property, plant and equipment
Other non-current assets
In the previous year, RWE sold the parts of innogy stated as ‘innogy – discontinued operations’ since
30 June 2018 to E.ON SE. This primarily involved most of the grid and retail business. The deconsolidation
gain on this transaction amounted to €8,258 million in the previous year, which was recognised in the
‘income from discontinued operations’ line item on the income statement.
Current assets
Of the share of total comprehensive income attributable to RWE AG shareholders, –€469 million
Non-current liabilities
(previous year: €237 million) were allocable to continuing operations and €187 million (previous year:
€9,469 million) were allocable to discontinued operations.
Provisions
Financial liabilities
Sale of a 75 % stake in the onshore wind farms Stella, Cranell, and East and West Raymond
Other non-current liabilities
In December 2020, RWE concluded contracts with Algonquin Power Fund (America) Inc., USA, a
subsidiary of Algonquin Power & Utilities Corp., Canada, and Greencoat Capital, UK, on the sale of a total
of 75 % of the shares in the four onshore wind farms Stella, Cranell, and East and West Raymond in the
US state of Texas. These assets are part of the segment Onshore Wind / Solar. Upon completion of the
Current liabilities
individual transactions, RWE will deconsolidate the wind farms and report its remaining 25 % stake as an
investment accounted for using the equity method.
The disposal group’s accumulated other comprehensive income amounted to €18 million.
112
971
4
975
70
43
277
105
425
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Georgia Biomass
In the event of deconsolidation, the related goodwill is derecognised with an effect on income. Changes
On 31 July 2020, the sale of Georgia Biomass, which had been contractually agreed on 18 June 2020,
in the ownership share which do not alter the ability to control the subsidiary are recognised without an
was completed. Georgia Biomass was responsible for RWE’s biomass business in the USA and was part
effect on income. By contrast, if there is a change in control, the remaining shares are revalued with an
of the segment Hydro / Biomass / Gas. The deconsolidation gain on this transaction amounted to
effect on income.
€13 million, which will be recognised in the ‘other operating income’ line item on the income statement.
Seabreeze II installation ship
eliminated; intra-group profits and losses are eliminated.
In April 2020, the Seabreeze II offshore installation ship and the related equipment was sold and
transferred to SPIC Ronghe International Financial Leasing Co. Ltd. The ship was part of the Offshore
For investments accounted for using the equity method, goodwill is not reported separately, but rather
Wind segment. This transaction resulted in a gain in the medium double-digit million euro range,
included in the value recognised for the investment. In other respects, the consolidation principles
which is recognised in the ‘other operating income’ line item on the income statement.
described above apply analogously. If impairment losses on the equity value become necessary, we
Expenses and income as well as receivables and payables between consolidated companies are
Consolidation principles
report such under income from investments accounted for using the equity method. The financial
statements of investments accounted for using the equity method are also prepared using the Group’s
uniform accounting policies.
The financial statements of German and foreign companies included in the scope of the Group’s
financial statements are prepared using uniform accounting policies. On principle, subsidiaries whose
fiscal years do not end on the Group’s balance-sheet date (31 December) prepare interim financial
Foreign currency translation
statements as of this date. Three subsidiaries have a different balance-sheet date of 31 March (previous
In their individual financial statements, the companies measure non-monetary foreign currency items
year: three). Different fiscal years compared to the calendar year stem from tax-related reasons or
at the balance-sheet date using the exchange rate in effect on the date they were initially recognised.
country-specific regulations.
Monetary items are converted using the exchange rate valid on the balance-sheet date. Exchange rate
gains and losses from the measurement of monetary balance-sheet items in foreign currency occurring
Business combinations are reported according to the acquisition method. This means that capital
up to the balance-sheet date are recognised on the income statement.
consolidation takes place by offsetting the purchase price, including the amount of the non- controlling
interests, against the acquired subsidiary’s revalued net assets at the time of acquisition. In doing so,
Functional foreign currency translation is applied when converting the financial statements of compa-
the non-controlling interests can either be measured at the prorated value of the subsidiary’s identifia-
nies outside of the Eurozone. As the principal foreign enterprises included in the consolidated financial
ble net assets or at fair value. The subsidiary’s identifiable assets, liabilities and contingent liabilities are
statements conduct their business activities independently in their national currencies, their bal-
measured at full fair value, regardless of the amount of the non-controlling interests. Intangible assets
ance-sheet items are translated into euros in the consolidated financial statements using the average
are reported separately from goodwill if they are separable from the company or if they stem from a
exchange rate prevailing on the balance-sheet date. This also applies for goodwill, which is viewed as an
contractual or other right. In accordance with IFRS 3, no new restructuring provisions are recognised
asset of the economically autonomous foreign entity. We report differences to previous-year translations
within the scope of the purchase price allocation. If the purchase price exceeds the revalued prorated
in other comprehensive income without an effect on income. Expense and income items are translated
net assets of the acquired subsidiary, the difference is capitalised as goodwill. If the purchase price is
using annual average exchange rates. When translating the adjusted equity of foreign companies
lower, the difference is included in income.
accounted for using the equity method, we follow the same procedure.
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The following exchange rates (among others) were used as a basis for foreign currency translations:
period during which the products are expected to be sold. Research expenditures are recognised as
expenses in the period in which they are incurred.
Exchange rates
in €
1 US dollar
1 pound sterling
100 Czech korunas
1 Polish zloty
1 Danish crown
1 Swedish crown
1 Norwegian crown
Average
Year-end
An impairment loss is recognised for an intangible asset if the recoverable amount of the asset is less
2020
2019 31 Dec 2020
31 Dec 2019
0.87
1.12
3.77
0.22
0.13
0.10
0.09
0.89
1.14
3.90
0.23
0.13
0.09
0.10
0.81
1.11
3.81
0.22
0.13
0.10
0.10
0.89
1.18
3.94
0.23
0.13
0.10
0.10
than its carrying amount. A special regulation applies for cases when the asset is part of a cash-generating
unit. Such units are defined as the smallest identifiable group of assets which generates cash inflows;
these inflows must be largely independent of cash inflows from other assets or groups of asset. If the
intangible asset is a part of a cash-generating unit, the impairment loss is calculated based on the
recoverable amount of this unit. If goodwill was allocated to a cash-generating unit and the carrying
amount of the unit exceeds the recoverable amount, the allocated goodwill is initially written down by the
difference. Impairment losses which must be recognised in addition to this are taken into account by
reducing the carrying amount of the other assets of the cash-generating unit on a prorated basis. If the
reason for an impairment loss recognised in prior periods has ceased to exist, a write-back to intangible
assets is performed. The increased carrying amount resulting from the write-back may not, however,
exceed the amortised cost. Impairment losses on goodwill are not reversed.
Accounting policies
Property, plant and equipment is stated at depreciated cost. Borrowing costs are capitalised as part
of the asset’s cost, if they are incurred directly in connection with the acquisition or production of a
‘qualified asset’. What characterises a qualified asset is that a considerable period of time is required
Intangible assets are accounted for at amortised cost. With the exception of goodwill, all intangible
to prepare it for use or sale. If necessary, the cost of property, plant and equipment may contain the
assets have finite useful lives and are amortised using the straight-line method. Useful lives and
estimated expenses for the decommissioning of plants or site restoration. Maintenance and repair costs
methods of amortisation are reviewed on an annual basis.
are recognised as expenses.
Software for commercial and technical applications is amortised over three to five years. ‘Operating
With the exception of land and leasehold rights, as a rule, property, plant and equipment is depreciated
rights’ refer to the entirety of the permits and approvals required for the operation of a power plant. Such
using the straight-line method, unless in exceptional cases another depreciation method is better suited
rights are generally amortised over the economic life of the power plant, using the straight-line method.
to the usage pattern. The depreciation methods are reviewed annually. We calculate the depreciation of
Capitalised customer relations are amortised over a maximum period of up to ten years.
RWE’s typical property, plant and equipment according to the following useful lives, which apply
throughout the Group and are also reviewed annually:
Goodwill is not amortised; instead it is subjected to an impairment test once every year, or more
frequently if there are indications of impairment.
Development costs are capitalised if a newly developed product or process can be clearly defined, is
technically feasible and it is the company’s intention to either use the product or process itself or
market it. Furthermore, asset recognition requires that there be a sufficient level of certainty that the
development costs lead to future cash inflows. Capitalised development costs are amortised over the
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Useful life in years
Buildings
Technical plants
Thermal power plants
Wind turbines
Gas and water storage facilities
Mining facilities
Mining developments
Other renewable generation facilities
7 – 50
6 – 40
Up to 25
10 – 60
3 – 25
44 – 52
5 – 50
The initial measurement of other financial assets occurs at the settlement date. Shares in non-
consolidated subsidiaries and in associates or joint ventures are recognised at fair value through profit
or loss insofar as such can be determined reliably. Other investments are also recognised at fair value,
insofar as such can be determined reliably. The option to state changes in fair value in other comprehen-
sive income is exercised for some of these equity instruments. Non-current securities are also accounted
for at fair value and changes in value are recognised through profit or loss or other comprehensive
income depending on their classification. Gains and losses on sales of equity instruments, for which the
option to state changes in fair value in other comprehensive income is exercised, remain in equity and
are not reclassified to the income statement. An impairment in the amount of the expected credit losses
is recognised through profit or loss for debt instruments that are recognised at fair value through other
comprehensive income. The changes reported in other comprehensive income are recognised with an
effect on earnings upon the sale of these instruments.
Property, plant and equipment also include right-of-use assets resulting from leases of which RWE is the
Receivables are comprised of financial receivables, trade accounts receivable and other receivables.
lessee. These right-of-use assets are measured at cost. The cost results from the present value of the
Aside from financial derivatives, receivables and other assets are stated at amortised cost minus a
lease instalments, adjusted to take into account advance payments, initial direct costs and potential
risk provision in the amount of the expected losses.
dismantling obligations and corrected for received lease incentives. Right-of-use assets are depreciated
using the straight-line method over the lease term or the expected useful life, whichever is shorter.
Loans reported under financial receivables are stated at amortised cost minus a risk provision in the
amount of the expected losses. Loans with interest rates common in the market are shown on the
For short-term leases and leases for low-value assets, lease instalments are recognised as an expense
balance sheet at nominal value; as a rule, however, non-interest or low-interest loans are disclosed at
over the lease term. For operating leases of which RWE is the lessor, the minimum lease instalments are
their present value discounted using an interest rate commensurate with the risks involved.
recognised as income over the lease term.
Impairment losses and write-backs on property, plant and equipment are recognised according to the
principles described for intangible assets.
CO2 emission allowances and certificates for renewable energies are accounted for as intangible assets
and reported under other assets; both are stated at cost and are not amortised.
Deferred taxes result from temporary differences in the carrying amount in the separate IFRS financial
Investments accounted for using the equity method are initially accounted for at cost and thereafter
statements and tax bases, and from consolidation procedures. Deferred tax assets also include tax
based on the carrying amount of their prorated net assets. The carrying amounts are increased or
reduction claims resulting from the expected utilisation of existing loss carryforwards in subsequent
reduced annually by prorated profits or losses, dividends and all other changes in equity. Goodwill is not
years. Deferred taxes are capitalised if it is sufficiently certain that the related economic advantages can
reported separately, but rather included in the recognised value of the investment. Goodwill is not
be used. Their amount is assessed with regard to the tax rates applicable or expected to be applicable in
amortised. An impairment loss is recognised for investments accounted for using the equity method, if
the specific country at the time of realisation. The tax regulations valid or adopted as of the balance-
the recoverable amount is less than the carrying amount.
sheet date are key considerations in this regard. Deferred tax assets and deferred tax liabilities are netted
out for each company and / or tax group.
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Inventories are assets which are held for sale in the ordinary course of business (finished goods and
which occurs on their settlement date. Unrealised gains and losses are recognised through profit or loss
goods for resale), which are in the process of production (work in progress – goods and services) or which
or other comprehensive income, with due consideration of any deferred taxes depending on the
are consumed in the production process or in the rendering of services (raw materials including nuclear
underlying valuation category. An impairment in the amount of the expected credit losses is recognised
fuel assemblies and excavated earth for lignite mining).
through profit or loss for debt instruments that are stated at fair value through other comprehensive
income. Changes included in other comprehensive income are recognised through profit or loss on
Insofar as inventories are not acquired primarily for the purpose of realising a profit on a short-term
disposal of such instruments.
resale transaction, they are carried at the lower of cost or net realisable value. Production costs reflect
the full costs directly related to production; they are determined based on normal capacity utilisation
Cash and cash equivalents consist of cash on hand, demand deposits and current fixed-interest
and, in addition to directly allocable costs, they also include adequate portions of required materials
securities with a maturity of three months or less from the date of acquisition.
and production overheads. They also include production- related depreciation. Borrowing costs,
however, are not capitalised as part of the cost. The determination of cost is generally based on average
Assets are stated under Assets held for sale if they can be sold in their present condition and their sale
values. The usage of excavated earth for lignite mining is calculated using the ‘first in – first out’ method
is highly probable within the next twelve months. Such assets may be certain non-current assets, asset
(FIFO).
groups (‘disposal groups’) or operations (‘discontinued operations’). Liabilities intended to be sold in a
transaction together with assets are a part of a disposal group or discontinued operations, and are
If the net realisable value of inventories written down in earlier periods has increased, the reversal of
reported separately under Liabilities held for sale.
the write-down is recognised as a reduction of the cost of materials.
Nuclear fuel assemblies are stated at depreciated cost. Depreciation is determined by operation and
value less costs to sell, as long as this amount is lower than the carrying amount.
capacity, based on consumption and the reactor’s useful life.
Inventories which are acquired primarily for the purpose of realising a profit on a short-term resale
income from continuing operations until final completion of the sale. Gains or losses on the valuation of
transaction are recognised at fair value less costs to sell. Changes in value are recognised with an
discontinued operations and on certain assets of a discontinued operation, which are not subject to
effect on income.
the valuation rules pursuant to IFRS 5, are stated under income from discontinued operations.
Gains or losses on the valuation of specific assets held for sale and of disposal groups are stated under
Non-current assets held for sale are no longer depreciated or amortised. They are recognised at fair
Securities classified as current marketable securities essentially consist of marketable securities held
The stock option plans are accounted for as cash-settled share-based payment. At the balance-sheet
in special funds as well as fixed-interest securities which have a maturity of more than three months and
date, a provision is recognised in the amount of the prorated fair value of the payment obligation.
less than one year from the date of acquisition. Securities held in special funds are measured at fair value
Changes in the fair value are recognised with an effect on income. The fair value of options is determined
through profit or loss or at fair value through other comprehensive income. The transaction costs
using generally accepted valuation methodologies.
directly associated with the acquisition of these securities are included in the initial measurement,
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Provisions are recognised for all legal or constructive obligations to third parties which exist on the
tafeln 2018 G’ by Klaus Heubeck, and the Standard SAPS Table S2PA of the respective year for the
balance-sheet date and stem from past events which will probably lead to an outflow of resources, and the
United Kingdom, taking into consideration future changes in mortality rates). The provision derives from
amount of which can be reliably estimated. Provisions are carried at their prospective settlement amount
the balance of the actuarial present value of the obligations and the fair value of the plan assets. The
and are not offset against reimbursement claims. If a provision involves a large number of items, the
service cost is disclosed in staff costs. Net interest is included in the financial result.
obligation is estimated by weighting all possible outcomes by their probability of occurrence (expected
value method).
Gains and losses on the revaluation of net defined benefit liability or asset are fully recognised in the
fiscal year in which they occur. They are reported outside of profit or loss, as a component of other
All non-current provisions are recognised at their prospective settlement amount, which is discounted as
comprehensive income in the statement of comprehensive income, and are immediately assigned to
of the balance-sheet date. In the determination of the settlement amount, any cost increases likely to
retained earnings. They remain outside profit or loss in subsequent periods as well.
occur up until the time of settlement are taken into account.
If necessary, the cost of property, plant and equipment may contain the estimated expenses for the
utes to the plan. Contributions to the plan are reported under staff costs.
decommissioning of plants or site restoration. Decommissioning, restoration and similar provisions are
recognised for these expenses. If changes in the discount rate or changes in the estimated timing or
Waste management provisions in the nuclear energy sector are based on obligations under public law,
amount of the payments result in changes in the provisions, the carrying amount of the respective asset
in particular the German Atomic Energy Act, and on restrictions from operating licenses. These
is increased or decreased by the corresponding amount. If the decrease in the provision exceeds the
provisions are measured using estimates, which are based on and defined in contracts as well as on
carrying amount, the excess is recognised immediately through profit or loss.
information from internal and external specialists (e.g. experts).
In the case of defined contribution plans, the enterprise’s obligation is limited to the amount it contrib-
As a rule, releases of provisions are credited to the expense account on which the provision was
Obligations existing as of the balance-sheet date and identifiable when the balance sheet is being
originally recognised.
prepared are recognised as provisions for mining damage to cover land recultivation and remediation of
mining damage that has already occurred or been caused. The provisions must be recognised due to
Provisions for pensions and similar obligations are recognised for defined benefit plans. These are
obligations under public law, such as the German Federal Mining Act, and formulated, above all, in
obligations of the company to pay future and ongoing post-employment benefits to entitled current
operating schedules and water law permits. Provisions are generally fully related to the degree of mining
and former employees and their surviving dependents. In particular, the obligations refer to retirement
in question. Such provisions are measured at full expected cost or according to estimated compensation
pensions. Individual commitments are generally oriented to the employees’ length of service and
payments. Cost estimates are based on external expert opinions to a significant extent.
compensation.
Provisions for defined benefit plans are based on the actuarial present value of the respective
obligation. This is measured using the projected unit credit method. This method not only takes into
account the pension benefits and benefit entitlements known as of the balance-sheet date, but also
A provision is recognised to cover the obligation to submit CO2 emission allowances and certificates
for renewable energies to the respective authorities; this provision is primarily measured at the secured
forward price of the CO2 allowances or certificates for renewable energies. If a portion of the obliga-
tion is not covered with allowances that are available or have been purchased forward, the provision for
anticipated future increases in salaries and pension benefits. The calculation is based on actuarial
this portion is measured using the market price of the emission allowances or certificates for renewable
reports, taking into account appropriate biometric parameters (for Germany, in particular the ‘Richt-
energies on the reporting date.
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Liabilities consist of financial liabilities, trade accounts payable, income tax liabilities and other
hedge exists, unrealised gains and losses from the hedging instrument are initially stated as other
liabilities. Upon initial recognition, these are generally stated at fair value including transaction costs
comprehensive income. Such gains or losses are only included on the income statement when the
and are carried at amortised cost in the periods thereafter (except for derivative financial instruments).
hedged underlying transaction has an effect on income. If forecast transactions are hedged and such
Lease liabilities are measured at the present value of the future lease payments. For subsequent
transactions lead to the recognition of a financial asset or financial liability in subsequent periods, the
measurements, the lease payments are divided into the financing costs and repayment portion of the
amounts that were recognised in equity until this point in time are recognised on the income statement
outstanding debt. Financing costs are distributed over the lease term in such a manner that a steady
in the period during which the asset or liability affects the income statement. If the transactions result in
interest rate is created for the outstanding debt.
the recognition of non-financial assets or liabilities, for example the acquisition of property, plant and
equipment, the amounts recognised in equity without an effect on income are included in the initial
If uncertain income tax items are recognised in income tax liabilities because they are probable, the
cost of the asset or liability.
former are generally measured at the most likely amount. Measurement at expected value is only
considered in exceptional cases.
The purpose of hedges of a net investment in foreign operations (net investment hedges) is to hedge the
currency risk from investments with foreign functional currencies. Unrealised gains and losses from
Moreover, other liabilities also include contract liabilities. A contract liability is the obligation of the
such hedges are recognised in other comprehensive income until disposal of the foreign operation.
Group to transfer goods or services to a customer, for which we have already received consideration or
for which the consideration is already due.
Hedging relationships must be documented in detail and meet the following effectiveness requirements:
Derivative financial instruments are recognised as assets or liabilities and measured at fair value,
• there is an economic relationship between the hedged item and the hedging instrument,
regardless of their purpose. Changes in this value are recognised with an effect on income, unless the
• the value change of hedging relationship is not dominated by the credit risk, and
instruments are used for hedge accounting purposes. In such cases, recognition of changes in the fair
• the hedge ratio is the same as that resulting from the quantities used within the scope of risk
value depends on the type of hedging transaction.
management.
Fair value hedges are used to hedge assets or liabilities carried on the balance sheet against the risk of
Only the effective portion of a hedge is recognised in accordance with the preceding rules. The
a change in their fair value. The following applies: changes in the fair value of the hedging instrument
ineffective portion is recognised immediately on the income statement with an effect on income.
and the fair value of the respective underlying transactions are recognised in the same line item on the
income statement. Hedges of unrecognised firm commitments are also recognised as fair value hedges.
Contracts on the receipt or delivery of non-financial items in accordance with the company’s expected
Changes in the fair value of the firm commitments with regard to the hedged risk result in the recogni-
purchase, sale or usage requirements (own-use contracts) are not accounted for as derivative financial
tion of an asset or liability with an effect on income.
instruments, but rather as executory contracts. If the contracts contain embedded derivatives, the
Cash flow hedges are used to hedge the risk of variability in future cash flows related to an asset or
and risks of the embedded derivatives are not closely related to the economic characteristics and risks
liability carried on the balance sheet or related to a highly probable forecast transaction. If a cash flow
of the host contract. Written options to buy or sell a non-financial item which can be settled in cash are
derivatives are accounted separately from the host contract, insofar as the economic characteristics
not own-use contracts.
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Further information
Contingent liabilities are possible obligations to third parties or existing obligations which will probably
The rules governing valuation allowances for financial assets under IFRS 9 stipulate that the expected
not lead to an outflow of economic benefits or the amount of which cannot be measured reliably.
credit losses must be determined. The valuation allowance is based on information from within and
Contingent liabilities are only recognised on the balance sheet if they were assumed within the framework
outside the Group.
of a business combination. The amounts disclosed in the Notes correspond to the exposure at the
balance-sheet date.
The impairment test for goodwill and non-current assets is based on certain assumptions pertaining to
the future, which are regularly adjusted. Property, plant and equipment is tested for indications of
Management judgements in the application of accounting policies. Management judgements are
impairment on each cut-off date. Based on the business models, the anticipated effect of the COVID-19
required in the application of accounting policies. In particular, this pertains to the following aspects:
pandemic did not necessitate the performance of impairment tests.
• With regard to certain contracts, a decision must be made as to whether they are to be treated as
Power plants are grouped together as a cash-generating unit if their production capacity and fuel needs
derivatives or as so-called own-use contracts, and be accounted for as executory contracts.
are centrally managed as part of a portfolio, and it is not possible to ascribe individual contracts and
• Financial assets are classified by contractual cash flows and applied business model. Whereas the
cash flows to the specific power plants.
contractual cash flows are determined by the characteristics of the financial instruments, the
business model is based on the Group’s internal requirements relating to the portfolios of financial
Upon first-time consolidation of an acquired company, the identifiable assets, liabilities and contingent
instruments.
liabilities are recognised at fair value. Determination of the fair value is based on valuation methods
• With regard to assets held for sale, it must be determined if they can be sold in their current condition
which require a projection of anticipated future cash flows.
and if the sale of such is highly probable in the next twelve months. If both conditions apply, the assets
and any related liabilities must be reported and measured as assets or liabilities held for sale, respectively.
Deferred tax assets are recognised if realisation of future tax benefits is probable. Actual future develop-
ment of income for tax purposes and hence the realisability of deferred tax assets, however, may
Management estimates and judgements. Preparation of consolidated financial statements pursuant
deviate from the estimation made when the deferred taxes are capitalised.
to IFRS requires assumptions and estimates to be made, which have an impact on the recognised value
of the assets and liabilities carried on the balance sheet, on income and expenses and on the disclosure
Further information on the assumptions and estimates upon which these consolidated financial
of contingent liabilities.
statements are based can be found in the explanations of the individual items.
Amongst other things, these assumptions and estimates relate to the accounting and measurement of
All assumptions and estimates are based on the circumstances and forecasts prevailing on the
provisions. With regard to non-current provisions, the discount factor to be applied is an important
balance-sheet date. Furthermore, as of the balance-sheet date, realistic assessments of overall
estimate, in addition to the amount and timing of future cash flows. The discount factor for pension
economic conditions in the sectors and regions in which RWE conducts operations are taken into
obligations is determined on the basis of yields on high-quality, fixed-rate corporate bonds on the
consideration with regard to the prospective development of business. Actual amounts may deviate
financial markets as of the balance-sheet date.
from the estimated amounts if the overall conditions develop differently than expected. In such cases,
the assumptions, and, if necessary, the carrying amounts of the affected assets and liabilities are
adjusted.
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As of the date of preparation of the consolidated financial statements, it is not presumed that there will
RWE’s credit rating is influenced by a number of qualitative and quantitative factors. These include
be any material changes compared to the assumptions and estimates.
aspects such as the amount of cash flows and debt as well as market conditions, competition, and
the political framework. Our hybrid bonds also have a positive effect on our rating. The leading rating
Capital management. The focus of RWE’s financing policy is on ensuring uninterrupted access to the
agencies, Moody’s and Fitch, classify part of hybrid capital as equity.
capital market. The goal is to be in a position to refinance maturing debts and finance the operating
activities at all times. Maintaining a solid rating and a positive operating cash flow serve this purpose.
RWE’s creditworthiness is currently rated ‘Baa3’ by Moody’s and ‘BBB’ by Fitch. In March 2020, Moody’s
The management of RWE’s capital structure is oriented towards a leverage factor of three or less. This
electricity from renewable energy. Our rating thus remains in the investment-grade range. RWE’s
indicator is calculated by adding material non-current provisions to net financial debt and comparing
short-term credit ratings are ‘P-3’ (previous year: ‘P-3’) and ‘F2’ (previous year: ‘F2’), respectively.
raised RWE’s outlook to ‘positive’ in light of the ongoing progress towards becoming a producer of
the resulting figure to the adjusted EBITDA of the core business. RWE’s liabilities of relevance to net debt
primarily consist of hybrid bonds and provisions for pensions, nuclear waste management, and wind
farms.
RWE’s capital structure changed during the reporting period, primarily due to the capital increase
amounting to 10 % of the capital stock, which generated gross proceeds of approximately €2 billion. In
contrast to this, investment in wind and solar projects in particular increased compared to the previous
year. Additionally, the net debt of the continuing operations was strongly affected by the inflows of
variation margins on forward transactions with electricity, commodities and CO2 certificates. Variation
margins are payments with which transaction partners mutually collateralise profit and loss positions
resulting from the daily revaluation of active contracts. However, their influence on cash flows is tempo-
rary and ends once the transactions are realised. While the capital increase resulted in an increase in
financial assets, an opposite effect was felt in capital expenditures. In total, net financial debt amounted
to €4.4 billion on 31 December 2020 and was thus lower than at the end of 2019 (previous year:
€7.2 billion). Furthermore, net debt provisions rose by €0.3 billion to €11.3 billion (previous year:
€11.0 billion, excluding provisions for mining damage). On average, provisions have a very long duration;
their level is primarily determined by external factors such as the general level of interest rates. A precise
calculation of net debt and net financial debt is presented on page 28 of the review of operations. As of
31 December 2020, the leverage factor was 1.7 and was thus below the planned ceiling.
120
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Further information
Changes in accounting regulations
New accounting policies
The International Accounting Standards Board (IASB) has approved several amendments to existing
The IASB issued further standards and amendments to standards, which were not yet mandatory in the
IFRSs, which are effective for the RWE Group as of fiscal 2020 due to EU endorsement:
EU in fiscal 2020. These standards and amendments to standards, which are not expected to have any
• Amendments to References to the Conceptual Framework in IFRS Standards (2018),
• Amendments to IFRS 3 Definition of a Business (2018),
•
IFRS 17 Insurance Contracts (2017) including Amendments to IFRS 17 (2020),
• Amendments to IAS 1 and IAS 8 Definition of Material (2018),
• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
• Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform (2019),
Non-current (2020) and Presentation of Financial Statements: Classification of Liabilities as Current
see page 174 in the Notes,
or Non-current – Deferral of Effective Date (2020),
• Amendments to IFRS 16 Covid-19-Related Rent Concessions (2020).
• Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework (2020),
material effects on RWE’s consolidated financial statements, are listed below:
• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (2020),
• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts –
These new policies do not have any material effects on the RWE Group’s consolidated financial
Cost of Fulfilling a Contract (2020),
statements.
• Annual Improvements to IFRS Standards 2018-2020 (2020),
• Amendments to IFRS 4 Extension of the Temporary Exemption from Applying IFRS 9 (2020),
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform –
Phase 2 (2020),
• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting Policies (2021),
• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors:
Definition of Accounting Estimates (2021),
• Proposed amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond
30 June 2021 (2021).
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Notes to the Income Statement
(1) Revenue
Revenue is recorded when the customer has obtained control over goods or services.
We recognise income from the sale of the electricity generated by all of RWE Group’s generation
technologies and the consumer business in revenue. Revenue resulting from the commercial optimisa-
(2) Other operating income
Other operating income
€ million
Income from own work capitalised
Income from changes in product inventories
tion of generation dispatch is based on the net sale price, after deduction of the relevant material costs.
Release of provisions
By contrast, all other revenue from our generation activities and the consumer business is reported on a
Cost allocations / refunds
gross basis.
In the year under review, RWE generated external revenue with two large customers in the amount
of €6,963 million and €1,544 million (previous year: €7,455 million and €1,472 million) in the
Supply & Trading segment.
A breakdown of revenue by division, geographical region and product is contained in the segment
reporting on page 183 et seqq.
The item ‘Natural gas tax / electricity tax’ comprises the taxes paid directly by Group companies.
Certain performance obligations of the RWE Group were not yet or not yet fully met by the end of the
Disposal and write-back of non-current assets including
income from deconsolidation
Income from derivative financial instruments
Compensation and insurance benefits
Income from leases
Currency gains
Miscellaneous
2020
2019
84
10
11
175
128
3,721
66
29
71
636
4,931
67
30
10
116
525
897
34
16
3,061
4,756
fiscal year. The €3,154 million in revenue due from these performance obligations (previous year:
Income from derivative financial instruments mainly stems from our energy trading activities.
€4,276 million) is expected to be received over the following three years. The receipt of this revenue will
depend on when these performance obligations to the customer are met. It does not include future
In the Hydro / Biomass / Gas segment, write-backs of €71 million were recognised for the Scottish
revenue from contracts with an original contractual term of twelve months or less.
biomass-fired power station Markinch (recoverable amount: €0.2 billion) in the previous year. This was
predominantly due to changed assumptions regarding subsidies in the renewable energy business.
The write-ups were fully allocated to property, plant and equipment.
Furthermore, in the Hydro / Biomass / Gas segment, write-backs of €363 million were recognised for the
German Gas and Hydroelectric Power Plants cash-generating unit along with the associated power
purchase agreements (recoverable amount: €0.5 billion) in the previous year. This was largely due to the
new definition of cash-generating units in the previous European Power segment. All of the write-backs
were allocable to property, plant and equipment.
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In the previous year, miscellaneous income contained the compensatory payments of €2,600 million for
(4) Staff costs
the early exit from our lignite business awarded by the German government.
Income from the disposal of non-current financial assets and loans is disclosed under income from
investments if it relates to investments; otherwise it is recorded as part of the financial result as is the
income from the disposal of current marketable securities.
To improve the presentation of the development of business, we state unrealised and realised income
from contracts measured at fair value of the Supply & Trading segment as net amounts. The net amount
totalled €3,613 million in 2020 (previous year: €258 million).
Staff costs
€ million
Wages and salaries
Cost of social security, pensions and
other benefits
2020
2019
1,891
2,124
474
2,365
402
2,526
(3) Cost of materials
Cost of materials
€ million
Cost of raw materials and of goods for resale
Cost of purchased services
2020
2019
8,540
1,274
9,814
7,663
1,415
9,078
Number of employees
2020
2019
Employees covered by collective agreements and
other employees
Employees not covered by collective agreements
13,272
6,358
19,630
28,214
9,868
38,082
The number of employees is arrived at by conversion to full-time positions, meaning that part-time and
fixed-term employees are included in accordance with the ratio of the part-time work or the duration of the
employment to the annual employment time. On average, 669 trainees were employed; trainees are not
The cost of materials primarily includes expenses for the input materials of power plants. Expenses for
included in the headcount figures.
coal of €75 million (previous year: €195 million) were recognised at the market price prevailing at
settlement.
In the previous year, the stated number of employees (average for the year) included the discontinued
innogy operations up to end-Q2 2019. In that period, the discontinued innogy operations accounted for
In the year under review, impairments of €140 million were recognised for stock materials and coal
14,663 wage earners and other personnel and 4,561 salaried staff. On average, 1,280 trainees were
inventories. These impairments were based on lower market prices and impairment tests performed for
employed in the previous year, of which 659 were assigned to the innogy – discontinued operations
the cash-generating units Garzweiler, Hambach, Inden and the hard coal-fired power stations (see page
segment.
124 in the Notes). In the previous year, impairments of €21 million were recognised for coal inventories,
due to lower market prices.
(5) Depreciation, amortisation and impairment losses
Depreciation, amortisation and impairment losses
2020
2019
€ million
Intangible assets
Property, plant and equipment
123
156
2,998
3,154
107
3,059
3,166
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Further information
Depreciation, amortisation and impairment losses contain the following impairments:
In the Offshore Wind segment, an impairment loss of €225 million was recognised in the previous year
Impairments
€ million
Intangible assets
Property, plant and equipment
2020
2019
changed price and cost expectations.
for the Nordsee Ost offshore wind farm (recoverable amount: €0.6 billion). This primarily resulted from
18
1,712
1,730
46
1,922
1,968
Furthermore, an impairment loss of €69 million was recognised in the previous year for gas storage
facilities (of which €65 million for property, plant and equipment and €4 million for intangible assets) in
the Supply & Trading segment, primarily due to changed price expectations (recoverable amount:
€0.0 billion).
In the Hydro / Biomass / Gas segment, the impairment test for the Dutch Power Plant Portfolio cash-
In the previous year, the legal steps to reduce and end electricity generation from lignite and hard coal in
generating unit resulted in a write-down of €557 million (recoverable amount: €0.7 billion), due to the
Germany resulted in the split-up and spin-off of the two former Lignite & Nuclear and German Power
deterioration of market conditions in the Netherlands.
Plant Portfolio cash-generating units in the Coal / Nuclear segment (previously: European Power
The impairment tests performed in the Coal / Nuclear segment resulted in the recognition of impair-
segment).
ments on property, plant and equipment in the amount of €791 million. This was mainly due to changed
The impairment test performed last year in the Coal / Nuclear segment for this reason resulted in the
market conditions and specification of the coal phase-out plans. Of these impairments, €579 million
recognition of an impairment loss of €400 million (recoverable amount: – €0.2 billion) for the new
was related to the Garzweiler cash-generating unit (recoverable amount: €0.8 billion), €114 million to
Hambach cash-generating unit, of €114 million for the new Inden cash-generating unit (recoverable
the Hambach cash-generating unit (recoverable amount: –€0.7 billion) and €98 million to the Inden
amount: €0.0 billion) and of €253 million for the new Garzweiler cash-generating unit (recoverable
cash-generating unit (recoverable amount: –€0.4 billion). With the exception of the property and
amount: €1.3 billion). These effects were solely due to the agreement reached with the German
buildings reported at market value, the property, plant and equipment of the Hambach and Inden units
government to phase out electricity generation from lignite early. In the previous year, €240 million in
has been written down in full.
impairments were attributable to changes in provisions, which were capitalised in the ‘property, plant
Additionally, impairments of €231 million were recognised on property, plant and equipment of the hard
and equipment’ item.
coal-fired power stations in the Coal / Nuclear segment (recoverable amount: €0.0 billion), in relation to
The impairment test performed last year in the Hydro / Biomass / Gas segment (previously: European
the phase-out of hard coal. The power plants Ibbenbüren B and Westfalen E successfully participated in
Power segment) led to reversals of write-downs of €363 million for the new cash-generating unit
the first round of decommissioning auctions and were thus shut down early as of 1 January 2021.
German Gas and Hydroelectric Power Plants, along with the associated power purchase agreements,
Decommissioning is subject to an assessment of the systemic relevance of the two plants by the
which was recognised in other operating income (recoverable amount: €0.5 billion). For the first time, the
German Network Agency.
recoverable amount was calculated separately for each of the assets in the hard coal business in the
Coal / Nuclear segment (previously: European Power segment), owing to the changed regulatory
environment. This resulted in impairment losses of €76 million (recoverable amount: €0.2 billion). These
effects stem from the compensation lost due to the spin-off of the hard coal-fired power stations along
with the associated power purchase agreements from the former cash- generating unit. These
agreements were also valued separately for the first time last year.
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In addition, an impairment loss of €693 million (recoverable amount: €1.1 billion) was recognised in the
(6) Other operating expenses
previous year for the Dutch Power Plant Portfolio cash-generating unit in the the Hydro / Biomass / Gas
segment (previously: European Power segment). This was due to the early phase-out of electricity
Other operating expenses
2020
2019
generation from hard coal in the Netherlands.
Other impairments on intangible assets and property, plant and equipment were recognised primarily
on the basis of cost increases and changes in price expectations.
€ million
Maintenance and renewal obligations
Additions to provisions / reversals
Structural and adaptation measures
Recoverable amounts are generally determined on the basis of fair values less costs to sell; in the
Legal and other consulting and data processing services
Onshore Wind / Solar segment, they are also determined on the basis of values in use. Fair values are
determined using valuation models based on planned cash flows. In the fiscal year, the valuation models
were based on discount rates (after taxes) in the range of 2.75 % to 4.50 % (previous year: 2.50 % to
4.75 %; in the previous ‘innogy – continuing operations’ segment, they were based on discount rates
[before taxes] of 3.90 % and 4.25 %). Our key planning assumptions relate to the development of
wholesale prices of electricity, crude oil, natural gas, coal and CO2 emission allowances, market shares
and regulatory framework conditions. Based on the use of internal planning assumptions, the deter-
mined fair values are assigned to Level 3 of the fair value hierarchy.
Disposal of current assets and decreases in values
(excluding decreases in the value of inventories and
marketable securities)
Disposal of non-current assets including expenses from
deconsolidation
Insurance, commissions, freight and similar distribution costs
General administration
Expenses from derivative financial instruments
Expenses from leases
Fees and membership dues
Other taxes (primarily on property)
Miscellaneous
499
48
12
301
49
32
82
51
507
30
56
40
505
1,814
151
273
4
24
61
65
70
42
65
29
243
1,950
151
3,254
Expenses from derivative financial instruments mainly result from our energy trading activities.
In the previous year, additions to provisions primarily related to the nuclear energy and mining business.
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(7) Income from investments
(8) Financial result
Income from investments includes all income and expenses which have arisen in relation to operating
investments. It is comprised of income from investments accounted for using the equity method and
Financial result
2020
2019
other income from investments.
Income from investments
€ million
Income from investments accounted for using the
equity method
Income from non-consolidated subsidiaries
Income from other investments
Income from the disposal of investments
Income from loans to investments
Other income from investments
2020
2019
€ million
Interest and similar income
Other financial income
Financial income
375
– 82
6
4
11
– 61
314
321
Interest and similar expenses
1
1
5
1
8
Interest accretion to
Provisions for pensions and similar obligations (including
capitalised surplus of plan assets)
Provisions for nuclear waste management as well as to
mining provisions
Other provisions
329
Other finance costs
Finance costs
283
1,650
1,933
296
37
203
15
1,836
2,387
– 454
185
503
688
258
49
723
109
487
1,626
– 938
The financial result breaks down into net interest, interest accretion to provisions, other financial income
and other finance costs.
Interest accretion to provisions contains the annual amounts of accrued interest. It is reduced by the
imputed interest income on plan assets for the coverage of pension obligations. Due to the early end
of electricity generation from lignite resulting from the German coal phase-out, in the previous year the
real discount rate used to calculate provisions for mining damage was reduced and the associated
increase in the net present value of obligations of €463 million was recognised as an expense in the
interest accretion to additions to provisions.
Interest expenses incurred for lease liabilities amounted to €35 million in the year under review (previous
year: €26 million).
Net interest essentially includes interest income from interest- bearing securities and loans, income
and expenses relating to marketable securities, and interest expenses.
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In the year under review, €61 million in borrowing costs were capitalised as costs in connection with the
(9) Taxes on income
acquisition, construction or production of qualifying assets (previous year: €39 million). The underlying
capitalisation rate ranged from 3.0 % to 3.7 % (previous year: from 3.7 % to 4.0 %).
Taxes on income
€ million
Net interest
€ million
Interest and similar income
Interest and similar expenses
2020
2019
Current taxes on income
Deferred taxes
283
296
– 13
185
258
– 73
2020
2019
– 122
485
363
– 136
44
– 92
Of the deferred taxes, €439 million is related to temporary differences (previous year: €29 million). In the
year under review, changes in valuation allowances for deferred tax assets amounted to €418 million
Net interest stems from financial assets and liabilities, which were allocated to the following measure-
(previous year: €572 million).
ment categories pursuant to IFRS 9:
Interest result by category
€ million
Debt instruments measured at amortised cost
Financial instruments measured at fair value through profit
or loss
Debt instruments measured at fair value through other
comprehensive income
Equity instruments measured at fair value through other
comprehensive income
Financial liabilities measured at
(amortised) cost
2020
2019
relating to prior periods.
Current taxes on income contain €16 million in net tax expenses (previous year: income of €74 million)
Due to the utilisation of tax loss carryforwards unrecognised in prior years, current taxes on income
were reduced by €10 million (previous year: €37 million).
Expenses from deferred taxes declined by €7 million (previous year: €0 million), due to reassessments of
and previously unrecognised tax loss carryforwards.
78
3
14
187
– 295
– 13
123
30
16
16
– 258
– 73
Other financial income includes €28 million in gains realised from the disposal of marketable securities
(previous year: €19 million). Of the other finance costs, €17 million (previous year: €5 million) stem from
realised losses on the disposal of marketable securities.
127
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Income taxes recognised in other comprehensive income
2020
2019
Tax reconciliation
2020
2019
€ million
Fair valuation of equity instruments
Fair valuation of debt instruments
Fair valuation of financial instruments used for hedging
purposes
Actuarial gains and losses of defined benefit pension plans
and similar obligations1
1 Including valuation allowances.
11
– 9
107
– 40
69
€ million
– 3
Income before tax
– 12
Theoretical tax expense
Differences to foreign tax rates
Tax effects on
Tax-free dividends
Other tax-free income
– 288
176
– 127
Taxes in the amount of €311 million (previous year: €394 million) were offset directly against equity.
Expenses not deductible for tax purposes
Accounting for associates using the equity method
(including impairment losses on associates’ goodwill)
Unutilisable loss carryforwards, utilisation of
unrecognised loss carryforwards,
write-downs on loss carryforwards, recognition of
loss carryforwards
Income on the disposal of investments
Changes in foreign tax rates
Other allowances for deferred taxes in the
RWE AG tax group
Other
Effective tax expense
Effective tax rate in %
1,196
390
– 98
– 123
– 31
29
– 30
377
– 1
86
– 69
– 167
363
30.4
– 752
– 245
– 37
– 49
– 10
30
– 55
175
– 48
29
207
– 89
– 92
12.2
The theoretical tax expense is calculated using the tax rate for the RWE Group of 32.6 % (previous year:
32.6 %). This is derived from the prevailing 15 % corporate tax rate, the solidarity surcharge of 5.5 %,
and the Group’s average local trade tax rate.
128
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Notes to the Balance Sheet
(10) Intangible assets
Intangible assets
€ million
Cost
Balance at 1 Jan 2020
Additions / disposals due to changes in
the scope of consolidation
Additions
Transfers
Currency translation adjustments
Disposals
Balance at 31 Dec 2020
Accumulated amortisation /
impairment losses
Balance at 1 Jan 2020
Additions / disposals due to changes in
the scope of consolidation
Amortisation / impairment losses in
the reporting period
Transfers
Currency translation adjustments
Disposals
Balance at 31 Dec 2020
Carrying amounts
Balance at 31 Dec 2020
Development
costs
Concessions,
patent rights,
licences and
similar rights
Customer
relationships
and similar
assets
Goodwill
Prepayments
Total
40
−1
−1
1
37
36
2
−2
−1
1
34
3
3,713
161
19
6
−98
38
3,763
1,799
−155
138
2
−6
36
1,742
2,021
129
2,549
108
−46
8
2,603
6
4
10
310
−1
−13
296
6
−1
16
−1
20
276
2,603
10
6,618
268
23
5
−158
47
6,709
1,841
−156
156
−8
37
1,796
4,913
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Intangible assets
€ million
Cost
Balance at 1 Jan 2019
Additions / disposals due to changes
in the scope of consolidation
Additions
Transfers
Currency translation adjustments
Disposals
Balance at 31 Dec 2019
Accumulated amortisation /
impairment losses
Balance at 1 Jan 2019
Additions / disposals due to changes
in the scope of consolidation
Amortisation / impairment losses in
the reporting period
Currency translation adjustments
Balance at 31 Dec 2019
Carrying amounts
Balance at 31 Dec 2019
Development
costs
Concessions,
patent rights,
licences and
similar rights
Customer
relationships
and similar
assets
Goodwill
Prepayments
Total
36
1
2
1
40
33
−2
4
1
36
4
2,214
1,404
22
5
73
5
3,713
1,751
−57
98
7
1,799
1,914
1,718
794
37
2,549
9
2
−5
6
1
304
5
310
1
5
6
304
2,549
6
3,978
2,503
26
1
115
5
6,618
1,785
−59
107
8
1,841
4,777
130
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
In the reporting period, the RWE Group’s total expenditures on research and development amounted
In the third quarter of every fiscal year, an impairment test is performed to determine if there is any need
to €20 million (previous year: €25 million).
to write down goodwill. In doing so, goodwill is allocated to the cash-generating units.
Goodwill breaks down as follows:
The recoverable amount of the cash-generating unit is determined, which is defined as the higher of fair
Goodwill
€ million
Offshore Wind
Onshore Wind / Solar
Hydro / Biomass / Gas
Supply & Trading
31 Dec 2020
31 Dec 20191
party would pay to purchase the cash-generating unit as of the balance-sheet date. Value in use
value less costs to sell or value in use. Fair value is the best estimate of the price that an independent third
reflects the present value of the future cash flows which are expected to be generated with the
1,376
108
113
1,006
2,603
1,422
cash-generating unit.
121
1,006
2,549
Fair value less costs to sell is assessed from an external perspective and value in use from a company-
internal perspective. Values are determined using a business valuation model, based on planned future
cash flows. These cash flows, in turn, are based on the business plan, as approved by the Executive Board
and valid at the time of the impairment test. They pertain to a detailed planning period of three years. In
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations;
certain justifiable cases, a longer detailed planning period is taken as a basis, insofar as it is necessary
see page 109 in the Notes.
due to economic or regulatory conditions. The cash flow plans are based on experience as well as on
expected market trends in the future. If available, market transactions in the same sector or third-party
New cash-generating units were formed as of 1 January 2020. In doing so, goodwill in the amount of
valuations are taken as a basis for determining fair value. Based on the use of internal planning assump-
€606 was transferred from the former cash-generating unit innogy - continuing operations to the new
tions, the determined fair values are assigned to Level 3 of the fair value hierarchy.
cash-generating unit Offshore Wind and in the amount of €121 million to the new cash-generating unit
Hydro / Biomass / Gas. Goodwill of €816 million was transferred from the former cash-generating unit
Mid-term business plans are based on country-specific assumptions regarding the development of key
'operations acquired from E.ON’ to the new cash-generating unit Offshore Wind.
economic indicators such as gross domestic product, consumer prices, interest rate levels and nominal
The impairment test carried out in relation to the formation of new cash-generating units did not result
in any impairments.
Our key planning assumptions for the business segments active in electricity and gas markets relate to
wages. These estimates are, amongst others, derived from macro- economic and financial studies.
In the year under review, goodwill increased by €108 million as a result of the first-time consolidation of
Nordex's wind and solar projects in the Onshore Wind segment. This goodwill passed the impairment test
the development of wholesale prices of electricity, crude oil, natural gas, coal and CO2 emission
allowances, market shares and regulatory framework conditions.
in the fourth quarter of 2020. In the previous year, goodwill increased by €794 million upon the first-time
The discount rates used for business valuations are determined on the basis of market data. During the
consolidation of the acquired E.ON operations. This goodwill passed the impairment test in the fourth
period under review, they were 4.25 % (previous year: 5.50 %) for the cash-generating unit Supply & Trading,
quarter of 2019. In the year under review, goodwill declined by €8 million due to the deconsolidation of
4.25 % for Offshore Wind (in the previous year: 4.00 % for the former segment innogy – continuing
Georgia Biomass in the Hydro / Biomass / Gas cash-generating unit.
operations) and 3.75 % for Hydro / Biomass / Gas.
131
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
In the Offshore Wind cash-generating unit, we used a growth rate of 0.5 % as a basis for extrapolating
future cash flows going beyond the detailed planning period. For all of the other cash-generating units,
we do not base the extrapolation of future cash flows going beyond the detailed planning period on
growth rates. In the previous year, no growth rates were used as a basis. The growth rate for each
division is generally derived from experience and expectations of the future and does not exceed the
long-term average growth rates of the respective markets in which the Group companies are active.
The annual cash flows assumed for the years after the detailed planning period include as a deduction
capital expenditure in the amount necessary to maintain the scope of business.
As of the balance-sheet date, the recoverable amounts of the cash-generating units, which are
determined as the fair value less costs to sell, were higher than their carrying amounts. The surpluses
react especially sensitively to changes in the discount rate, the growth rate – insofar as such are used in
the model – and cash flows in terminal value.
Of all of the cash-generating units, the Hydro / Biomass / Gas cash-generating unit exhibited the
smallest surplus of recoverable amount over the carrying amounts. The recoverable amount was
€0.2 billion higher than the carrying amount. Impairment would have been necessary if the calculations
had used an after-tax discount rate increased by more than 0.7 percentage points to above 4.4 %, or
long-term cash flows reduced by more than 9 %.
132
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Land, land rights
and buildings
incl, buildings on
third-party land
Technical plant
and machinery
Other equipment,
factory and office
equipment
Prepayments and plants
under construction
(11) Property, plant and equipment
Property, plant and equipment
€ million
Cost
Balance at 1 Jan 2020
Additions / disposals due to changes in the scope of
consolidation
Additions
Transfers
Currency translation adjustments
Disposals
Balance at 31 Dec 2020
Accumulated depreciation / impairment losses
Balance at 1 Jan 2020
Additions / disposals due to changes in the scope of
consolidation
Amortisation / impairment losses in the reporting period
Transfers
Currency translation adjustments
Disposals
Additions
Balance at 31 Dec 2020
Carrying amounts
Balance at 31 Dec 2020
Total
59,292
1,710
3,773
−6
−1,061
862
62,846
40,276
2,640
2,998
−283
623
63
44,945
4,224
−236
2,389
−1,326
−185
15
4,851
873
88
−24
−1
3
933
3,918
17,901
989
15
69
7
−10
36
1,034
770
17
115
−6
34
862
172
5,323
51
443
23
−58
90
5,692
3,128
66
511
−13
22
9
3,661
2,031
48,756
1,880
872
1,290
−808
721
51,269
35,505
2,557
2,284
24
−263
564
54
39,489
11,780
133
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Property, plant and equipment
€ million
Cost
Balance at 1 Jan 2019
Additions / disposals due to changes in the scope of
consolidation
Additions
Transfers
Currency translation adjustments
Disposals
Balance at 31 Dec 2019
Accumulated depreciation / impairment losses
Balance at 1 Jan 2019
Additions / disposals due to changes in the scope of
consolidation
Amortisation / impairment losses in the reporting period
Transfers
Currency translation adjustments
Disposals
Additions
Balance at 31 Dec 2019
Carrying amounts
Balance at 31 Dec 2019
1 Including the effect of the initial adoption of IFRS 16 in the amount of €353 million.
Land, land rights
and buildings
incl, buildings on
third-party land
Technical plant
and machinery
Other equipment,
factory and office
equipment
Prepayments and plants
under construction
934
19
66
13
4
47
989
756
−12
64
5
4
47
770
219
2,061
1,295
1,077
−239
45
15
4,224
791
88
−1
5
873
3,351
4,868
282
300
1
23
151
5,323
3,073
−51
222
−6
8
91
27
3,128
2,195
43,733
3,935
1,153
217
401
683
48,756
34,214
−640
2,685
−2
169
509
412
35,505
13,251
134
Total
51,5961
5,531
2,596
−8
473
896
59,292
38,834
−703
3,059
−4
181
652
439
40,276
19,016
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Property, plant and equipment in the amount of €1,590 million (previous year: €1,024 million) were subject
During the reporting period, RWE sold an office building to an external investor within the framework of a
to restrictions from land charges, chattel mortgages or other restrictions. Disposals of property, plant and
sale-and-leaseback transaction. The fixed lease term of the leasing contract is 17.5 years.
equipment resulted from sale or decommissioning.
The following table shows the development of right-of-use assets recognised in property, plant and
Property, plant and equipment includes owned assets as well as right-of-use assets from leases of which
equipment:
RWE is the lessee.
These leases primarily comprise long-term rights of use to leased office buildings and land (e. g.
leaseholds, properties for renewable energy production) and rights of use to leased assets relating to
vehicle fleets and power plants.
Right-of-use assets
Development in 2020
€ million
Cost
Buildings
Land
Technical plant and machinery
Pumped storage power stations
Vehicle fleet
Other plant, factory and office equipment
Balance at
1 Jan 2020
Additions
Depreciation,
amortisation and
impairments
Disposals
Other changes1
Balance at
31 Dec 2020
70
666
43
261
18
23
1,081
121
49
2
13
17
7
209
17
38
6
10
11
13
95
7
2
1
1
1
12
-6
-44
-9
-1
-60
161
631
29
264
22
16
1,123
1 Other changes comprise transfers, additions, currency translation adjustments as well as additions and disposals in the scope of consolidation.
135
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Right-of-use assets
Development in 2019
€ million
Cost
Buildings
Land
Technical plant and machinery
Pumped storage power stations
Vehicle fleet
Other plant, factory and office equipment
Balance at
1 Jan 2019
Additions
Depreciation,
amortisation and
impairments
Disposals
Other changes1
Balance at
31 Dec 2019
51
274
8
27
8
12
380
30
142
37
31
7
23
270
12
25
5
1
6
12
61
4
4
8
1
279
7
204
9
500
70
666
43
261
18
23
1,081
1 Other changes comprise transfers, additions, currency translation adjustments as well as additions and disposals in the scope of consolidation.
136
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Disclosure on the corresponding lease liabilities and interest expenses can be found in Notes (8)
The following payment claims resulted from these operating leases:
Financial result, (23) Financial liabilities and (27) Reporting on financial instruments.
In addition, leases had the following effect on the RWE Group’s earnings and cash flows in the year under
Nominal lease payments from operating leases
€ million
31 Dec 2020
31 Dec 2019
8
7
5
5
4
4
7
6
6
6
37
55
review:
Effects of leases on income and cash flows
€ million
RWE as lessee
Expenses from short-term leases
Expenses from leases for low-value assets
Expenses from variable lease payments not considered in the measurement
of lease liabilities
Income from subleases
Gains or losses on sale-and-leaseback transactions
Total cash outflows from leases
RWE as lessor
Income from operating leases
2020
2019
79
1
21
6
2
107
20
14
18
60
13
Due in up to 1 year
Due in > 1 to 2 years
Due in > 2 to 3 years
Due in > 3 to 4 years
Due in > 4 to 5 years
Due after 5 years
Leases primarily relating to office buildings and wind farm sites that have been contractually agreed, but
not begun yet, lead to future lease payments of €187 million (previous year: €195 million). Moreover,
potential lease payments predominantly relating to leases of wind farm space were disregarded when
valuing lease liabilities. This relates to €405 million (previous year: €471 million) in variable payments
which may come due depending on generation volumes and €97 million (previous year: €100 million) in
potential payments associated with extension and termination options.
In addition to right-of-use assets, property, plant and equipment also include land and buildings leased
as operating leases by RWE as lessor. The carrying amount of these assets totalled €180 million
(previous year: €193 million) as of 31 December 2020.
137
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(12) Investments accounted for using the equity method
Information on material and non-material investments in associates and joint ventures accounted for
using the equity method is presented in the following summaries:
Material investments accounted for using the equity method
€ million
Balance sheet1
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Share of equity2
Goodwill
Carrying amounts
Statement of comprehensive income1
Revenue
Income
Other comprehensive income
Total comprehensive income
Dividends (prorated)
RWE shareholding
1 Figures based on a shareholding of 100 % in KEH.
2 Figures based on proportional share of equity in KEH and KELAG.
138
Amprion GmbH,
Dortmund
KELAG-Kärntner Elektrizitäts-AG /
Kärntner Energieholding Beteiligungs GmbH
(KEH), Klagenfurt (Austria)
31 Dec 2020
31 Dec 2019
31 Dec 2020
31 Dec 2019
5,953
2,838
2,001
3,488
829
5,225
1,825
2,012
2,496
638
829
638
1,780
1,664
349
946
266
393
198
591
383
869
285
383
198
581
12,622
14,773
1,300
1,285
701
-35
666
25
25 %
523
–22
501
25
25 %
112
-47
65
19
49 %
93
–15
78
15
49 %
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Amprion GmbH, headquartered in Dortmund, Germany, is a transmission system operator (TSO) for
KELAG-Kärntner Elektrizitäts-AG, headquartered in Klagenfurt, Austria, is a leading Austrian energy
the electricity sector, pursuant to the German Energy Act (EnwG). Amprion’s main shareholder is a
supplier in the fields of electricity, district heating and natural gas. RWE has an interest of 49 % in Kärntner
consortium of financial investors led by Commerz Real, a subsidiary of Commerzbank.
Energieholding Beteiligungs GmbH (KEH), KELAG’s largest shareholder.
Non-material investments accounted for using the equity method
Associates
Joint ventures
€ million
Income (pro-rata)
Other comprehensive income
Total comprehensive income
Carrying amounts
31 Dec 2020
31 Dec 2019
31 Dec 2020
31 Dec 2019
21
-28
-7
172
58
41
99
246
184
-2
182
1,658
88
16
104
1,771
The RWE Group holds shares with a book value of €3 million (previous year: €3 million) in associates and
joint ventures, which are subject to temporary restrictions or conditions in relation to their distributions
of profits, due to provisions of loan agreements.
139
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(13) Other non-current financial assets
(15) Other receivables and other assets
Other financial assets encompass non-consolidated subsidiaries, other investments and non-current
securities.
Other receivables and other assets
31 Dec 2020
31 Dec 2019
Non-current securities amounting to €29 million and €4 million (previous year: €29 million and
€ million
Non-
current
Current
Non-
current
Current
€4 million) were deposited in trust for RWE AG and its subsidiaries, in order to cover credit balances
Derivatives
675
8,109
661
11,447
stemming from the block model for pre-retirement part-time work, pursuant to Sec. 8a of the Pre-Retire-
ment Part-Time Work Act (AltTZG) and from the management of long-term working hours accounts
pursuant to Sec. 7e of the German Code of Social Law (SGB IV), respectively. This coverage applies to
the employees of RWE AG as well as to the employees of Group companies.
(14) Financial receivables
Capitalised surplus of plan assets over
benefit obligations
Prepayments for items other than
inventories
CO2 emission allowances
Miscellaneous other assets1
Financial receivables
31 Dec 2020
31 Dec 2019
€ million
Non-
current
Current
Non-
current
Current
of which: financial assets
of which: non-financial assets
172
153
148
446
1,117
9,820
8,452
1,368
144
407
758
2,462
3,276
12,756
824
11,564
2,452
1,192
2,588
3,435
855
2,580
Loans to non-consolidated subsidiaries and
investments
105
1
103
Collateral for trading activities
Other financial receivables
Accrued interest
Miscellaneous other financial receivables
2,154
43
284
2,482
26
131
25
128
1
1,638
39
681
2,359
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see
page 109 in the Notes.
The financial instruments reported under miscellaneous other assets are measured at amortised cost.
Derivative financial instruments are stated at fair value. The carrying values of exchange- traded
derivatives with netting agreements are offset.
€2,600 million of the miscellaneous other assets comprise the compensatory payments for our early
exit from the lignite business awarded by the German government (previous year: €2,600 million).
Companies of the RWE Group deposited collateral for the trading activities stated above for exchange-
based and over-the-counter transactions. These are to guarantee that the obligations from the
Furthermore, €86 million of the miscellaneous other assets (previous year: €43 million) were allocable to
trans actions are discharged even if the development of prices is not favourable for RWE. Regular
government grants awarded in relation with co-firing biomass in two Dutch power plants.
replacement of the deposited collateral depends on the contractually agreed thresholds, above which
collateral must be provided for the market value of the trading activities.
140
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(16) Deferred taxes
As of 31 December 2020, RWE reported deferred tax claims which exceeded the deferred tax liabilities
Deferred tax assets and liabilities principally stem from the fact that measurements in the IFRS
by €73 million (previous year: €144 million), in relation to companies which suffered a loss in the current
statements differ from those in the tax bases. As of 31 December 2020, no deferred tax liabilities were
or previous period. The basis for the recognition of deferred tax assets is the judgement of the manage-
recognised for the difference between net assets and the carrying value of the subsidiaries and
ment that it is likely that the companies in question will generate taxable earnings, against which
associates for tax purposes (known as ‘outside basis differences’) in the amount of €820 million
unutilised tax losses and deductible temporary differences can be applied.
(previous year: €969 million), as it is neither probable that there will be any distributions in the foreseeable
future, nor will the temporary differences reduce in the foreseeable future. €3,415 million and €4,058 mil-
The capitalised tax reduction claims from loss carryforwards result from the expected utilisation of
lion of the gross deferred tax assets and liabilities, respectively, will be realised within twelve months
previously unused tax loss carryforwards in subsequent years.
(previous year: €5,316 million and €6,166 million).
The following is a breakdown of deferred tax assets and liabilities by item:
corporate income tax loss carryforwards and trade tax loss carryforwards for which no deferred tax
claims have been recognised amounted to €3,065 million and €2,166 million, respectively (previous
It is sufficiently certain that these tax carryforwards will be realised. At the end of the reporting period,
Deferred taxes
€ million
Non-current assets
Current assets
Exceptional tax items
Non-current liabilities
Provisions for pensions
Other non-current liabilities
Current liabilities
Tax loss carryforwards
Corporate income tax (or comparable
foreign income tax)
Trade tax
Gross total
Netting
Net total
31 Dec 2020
31 Dec 20191
year: €1,492 million and €879 million).
Assets
Liabilities
Assets
Liabilities
1,465
2,539
58
3
848
1,519
6,432
687
1,382
85
653
2,033
4,840
67
14
1,166
1,450
2,437
3,876
€828 million in corporate income tax loss carryforwards for which no deferred tax claims have been
recognised will apply to the following six years. The other loss carryforwards do not have any time limits,
but they are mostly not expected to be used.
As of 31 December 2020, temporary differences for which no deferred tax assets were recognised
amounted to €13,216 million (previous year: €12,791 million).
In the year under review, deferred tax income of €42 million arising from the currency translation of
foreign financial statements was offset against equity (previous year: deferred tax expenses of
€14 million).
47
40
50
2,290
8,740
148
487
3,866
7,117
125
23
4,921
6,432
7,265
8,740
−4,524
−4,524
−6,576
−6,576
397
1,908
689
2,164
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations;
see page 109 in the Notes.
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5
Further information
(17) Inventories
Inventories
€ million
(19) Cash and cash equivalents
31 Dec 2020 31 Dec 2019
Cash and cash equivalents
31 Dec 2020 31 Dec 2019
Raw materials, incl. nuclear fuel assemblies and earth excavated for
lignite mining
Work in progress – goods / services
Finished goods and goods for resale
Prepayments
579
50
999
4
728
33
839
−15
1,632
1,585
€ million
Cash and demand deposits
4,764
3,192
Marketable securities and other cash investments (maturity less than
three months from the date of acquisition)
10
4,774
3,192
RWE keeps demand deposits exclusively for short-term cash positions. For cash investments, banks are
selected on the basis of various creditworthiness criteria, including their rating from one of the three
The carrying amount of inventories acquired for resale purposes was €964 million (previous year:
renowned rating agencies – Moody’s, Standard & Poor’s and Fitch – as well as their equity capital and
€605 million). As in the previous year, this entire amount related to gas inventories in the reporting
prices for credit default swaps. As in the previous year, interest rates on cash and cash equivalents were
period.
at market levels in 2020.
The fair value of gas and coal inventories is determined every month on the basis of the current price
curves of the relevant indices for gas (e. g. NCG) and coal (e. g. API#2). The valuations are based on prices
which can be observed directly or indirectly (Level 2 of the fair value hierarchy). Differences between the
fair value and the carrying value of inventories acquired for resale purposes are recognised on the
income statement at the end of the month.
(18) Marketable securities
Of the current marketable securities, €4,216 million were fixed-interest marketable securities
(previous year: €2,809 million) with a maturity of more than three months from the date of acquisition,
and €3 million were stocks and profit-participation certificates (previous year: €449 million).
Marketable securities are stated at fair value.
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5
Further information
(20) Equity
A breakdown of fully paid-up equity is shown on page 106 et seq. The subscribed capital of RWE AG is
structured as follows:
Subscribed capital
Shares
31 Dec 2020
Number
of shares
31 Dec 2019
Number
of shares
31 Dec 2020
Carrying amount
31 Dec 2019
Carrying amount
in ’000
676,220
in %
100.0
in ’000
614,745
in %
100.0
€ million
1,731
€ million
1,574
On 18 August 2020, RWE AG decided on a capital increase in return for cash contributions with partial
option or convertible bonds. The Executive Board is also authorised to use the treasury shares to
utilisation of the approved capital. The company's capital stock was thus increased by 10 % via the
discharge obligations from future employee share schemes; in this regard, shareholders’ subscription
issue of 61,474,549 new bearer shares, under the exclusion of existing shareholders’ subscription rights.
rights shall be excluded.
The new shares were placed with institutional investors at a price of €32.55 per share in an accelerated
bookbuilding process. As a result of the capital increase, the subscribed capital of RWE AG rose by
No treasury shares were held as of 31 December 2020.
€157,374,845.44 and its paid-in capital rose to €1,843,621,724.51. Transaction expenses of
€11,070,500.71 were offset against retained earnings.
In fiscal 2020, RWE AG purchased a total of 314,808 RWE shares for a purchase price of
Following this partial utilisation of the approved capital, based on the resolution passed by the General
of subscribed capital). Employees of RWE AG and its subsidiaries received a total of 314,808 shares
Meeting on 26 April 2018, the Executive Board is still authorised to increase the company’s capital stock
for capital formation under the employee share plan. This resulted in total proceeds of €10,516,392.73.
with the Supervisory Board’s approval by up to €157,374,848.00 until 25 April 2023 through the issue
The difference to the purchase price was offset against freely available retained earnings.
of up to 61,474,550 bearer shares in return for contributions in cash and / or in kind (approved capital).
In certain cases, with the approval of the Supervisory Board, the subscription rights of shareholders can
In the previous year, RWE cancelled the hybrid bond issued by Group companies that was previously
be excluded, but this is no longer possible for cash capital increases following the partial utilisation of the
classified as equity pursuant to IAS 32 on 6 February 2019. The redemption in the amount of €869 million
authorised capital.
was effected on 20 March 2019 without refinancing the hybrid bond with fresh hybrid capital. The
€10,633,444.15 on the capital market. This is equivalent to €805,908.48 of the capital stock (0.05 %
Pursuant to a resolution passed by the Annual General Meeting on 26 April 2018, the Company was
further authorised until 25 April 2023 to acquire shares of the Company up to a volume of 10 % of the
As a result of equity capital transactions with subsidiary companies which did not lead to a change of
capital stock when the resolution on this authorisation was passed, or if the following is lower, when this
control, the share of equity attributable to RWE AG’s shareholders changed by a total of –€145 million
authorisation is exercised. Based on the authorisation, the Executive Board is also authorised to cancel
(previous year: – €149 million) and the share of equity attributable to other shareholders changed by a
treasury shares without a further resolution by the Annual General Meeting. Moreover, the Executive
total of €395 million (previous year: – €746 million). This includes the subsequent effects of last year's
Board is authorised to transfer or sell such shares to third parties under certain conditions and
acquisition of the 23.2 % minority interest in the continuing innogy operations (change in RWE AG
excluding shareholders’ subscription rights. Furthermore, treasury shares may be issued to holders of
shareholders' interest in Group equity of –€298 million) as well as effects from the sale of a 49 % stake in
hybrid bond had a 7 % coupon and a theoretically perpetual tenor.
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5
Further information
the offshore UK wind farm Humber Gateway (€163 million change in the share of equity attributable to
Dividend proposal
RWE AG’s shareholders).
We propose to the Annual General Meeting that RWE AG’s distributable profit for fiscal 2020 be
Accumulated other comprehensive income (OCI) reflects changes in the fair values of debt instru-
ments measured at fair value through other comprehensive income, cash flow hedges and hedges of
Distribution of a dividend of €0.85 per share.
appropriated as follows:
the net investment in foreign operations, as well as changes stemming from foreign currency translation
adjustments from foreign financial statements.
As of 31 December 2020, the share of accumulated other comprehensive income attributable to
investments accounted for using the equity method amounted to – €29 million (previous year:
– €22 million).
Dividend
Profit carryforward
Distributable profit
€574,787,040.80
€25,220.47
€574,812,261.27
During the reporting year, €3 million in differences from currency translation which had originally been
amounted to €0.80 per dividend-bearing share. The dividend payment to shareholders of RWE AG
recognised without an effect on income were realised as income (previous year: expense of
amounted to €492 million (previous year: €430 million).
Based on a resolution of RWE AG’s Annual General Meeting on 26 June 2020, the dividend for fiscal 2019
€523 million).
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5
Further information
Non-controlling interests
The income and expenses recognised directly in equity (OCI) include the following non-controlling
The share ownership of third parties in Group entities is presented in this item.
interests:
Non-controlling interests in OCI
€ million
Actuarial gains and losses of defined benefit pension plans and similar obligations
Pro-rata income and expenses of investments accounted for using the equity method
Fair valuation of equity instruments
Income and expenses recognised directly in equity, not to be reclassified through profit or loss
Currency translation adjustment
Fair valuation of debt instruments
Fair valuation of financial instruments used for hedging purposes
Pro-rata income and expenses of investments accounted for using the equity method
Income and expenses recognised directly in equity, to be reclassified through profit or loss in the future
2020
2019
– 138
43
– 10
– 105
267
– 3
– 29
2
237
132
– 25
– 17
– 42
– 42
(21) Share-based payment
The LTIP SPP was introduced in 2016. It uses an internal performance target (net income of relevance to
For executives of RWE AG as well as of affiliated companies, Long Term Incentive Plans (LTIPs) are in
remuneration) derived from the mid-term planning and takes into account the development of
place as share-based payment systems known as Strategic Performance Plans (SPPs). The expenses
RWE AG‘s share price. Executives receive conditionally granted virtual shares (performance shares).
associated with these are borne by the Group companies which employ the persons holding notional
The final number of virtual shares in a tranche is determined based on the achievement of the adjusted
stocks.
net income target. Each of the issued LTIP SPP tranches has a term of four years before payment is
possible.
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5
Further information
RWE AG SPP
Start of term
2016 tranche
1 Jan 2016
Number of conditionally
granted performance shares 486,436
Term
4 years
2017 tranche
1 Jan 2017
1,338,027
4 years
2018 tranche
1 Jan 2018
883,974
4 years
2019 tranche
1 Jan 2019
932,889
4 years
2020 tranche
1 Jan 2020
935,331
4 years
Performance target
Adjusted net income
Adjusted net income
Adjusted net income
Adjusted net income
Adjusted net income
Cap / number of
performance shares
Cap / payment amount
Determination of payment
150 %
200 %
150 %
200 %
150 %
200 %
150 %
200 %
150 %
200 %
The payment amount is calculated on the basis of the determined number of performance shares multiplied by the sum of
a) the mathematical average of the closing share price of the RWE share (ISIN DE 000703129), with all available decimal places, in Xetra trading of Deutsche Börse AG
(or a successor trading system which subsequently takes the place of the Xetra system) for the last 30 trading days prior to the end of the vesting period rounded according to
standard commercial practice to two decimal places, and
b) the dividends paid per share for the fiscal years between the determination of the final number of performance shares and the end of the vesting period. Dividends do not bear
interest and are not reinvested. If a dividend payment occurs during the 30-day period for calculating the share price in accordance with item a), the share prices of the trading
days leading up to the payment (CUM share prices) are adjusted by the dividend, as the dividend would otherwise be considered twice.
Payment amount = (number of finally granted performance shares) x (mathematical average of the share price + dividends paid)
The payment amount calculated in this manner is limited to no more than 200 % of the grant amount.
Change in corporate control /
merger
A change in corporate control (‘change of control’) shall occur if
a) a shareholder gains control in accordance with Sec. 29 of the German Securities Acquisition and Takeover Act (WpÜG) by holding at least 30 % of the voting rights including
third-party voting rights attributable to it in accordance with Sec. 30 WpÜG, or
b) a control agreement in accordance with Sec. 291 of the Stock Corporation Act (AktG) is concluded with RWE AG as the dependent company, or
c) RWE AG is merged with another legal entity that does not belong to the Group in accordance with Sec. 2 of the German Company Transformation Act (UmwG), unless the value of
the other legal entity is less than 50 % of the value of RWE AG based on the agreed conversion rate; in such a case, item a) shall not apply.
In the event of a change of control, all of the performance shares which have been fully granted and have not been paid out shall be paid out early. The payment amount is
determined according to the exercise conditions, with the deviation that the last 30 trading days prior to the announcement of the change in control is to be used; plus the
dividends paid per share in the fiscal years between the determination of the final number of performance shares and the time of the change in control. The payment amount
calculated in this manner shall be paid to the plan participant together with his or her next salary payment.
All conditionally granted performance shares as of the effective date of the change of control shall lapse without consideration.
Form of settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Payment date
2020
2021
2022
2023
2024
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5
Further information
The fair value of the performance shares conditionally granted under SPP included the following sums
The performance shares displayed the following development in the fiscal year that just came to a close:
on the grant date:
Performance Shares from
the RWE AG SPP
€
2016
tranche
2017
tranche
2018
tranche
2019
tranche
2020
tranche
Fair value per share
13.78
11.62
18.80
19.10
26.41
The fair values of the tranches of the RWE AG SPP are based on RWE AG’s current share price plus the
dividends per share which have already been paid to the shareholders during the term of the corre-
sponding tranche. The limited payment per SPP was implemented via a sold call option. The option value
calculated using the Black Scholes Model was deducted. The maximum payments per conditionally
granted SPP (= option strike) established in the plan conditions, the discount rates relative to the
remaining term as well as the volatilities and expected dividends of RWE AG were considered in
Performance Shares from
the RWE AG SPP
2016
tranche
2017
tranche
2018
tranche
2019
tranche
2020
tranche
Outstanding at the start of
the fiscal year
528,513
1,632,128
1,090,995
932,889
Granted
Change1
Paid out
Outstanding at the end of
the fiscal year
Payable at the end of the
fiscal year
-528,513
11,503
-2,505
470,643
935,331
1,643,631
1,088,490
1,403,532
935,331
1,643,631
1 'Change' pertains to the final grant based on target achievement or the subsequent grant or lapse of performance
determining the option price.
shares.
For the SPP options exercised in the previous fiscal year, the average weighted daily share price on the
day of exercise was €34.07.
During the period under review, expenses for the share-based payment system totalled €38 million
(previous year: €34 million). As of the balance-sheet date, provisions for cash-settled share- based
payment programmes amounted to €85 million (previous year: €60 million).
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5
Further information
(22) Provisions
Provisions
€ million
Provisions for pensions and similar obligations
Provisions for nuclear waste management
Provisions for mining damage
Other provisions
Staff-related obligations (excluding restructuring)
Restructuring obligations
Purchase and sales obligations
Provisions for dismantling wind farms
Other dismantling and retrofitting obligations
Environmental protection obligations
Interest payment obligations
Obligations to deliver CO2 emission allowances / certificates for renewable energies
Miscellaneous other provisions
31 Dec 2020
31 Dec 2019
Non- current
Current
Total Non- current
Current
3,864
6,113
4,729
14,706
339
624
1,366
1,125
648
76
223
363
4,764
19,470
338
85
423
651
18
124
11
70
2
1,332
373
2,581
3,004
3,864
6,451
4,814
3,446
6,355
4,559
15,129
14,360
990
642
1,490
1,136
718
78
223
1,332
736
7,345
361
591
1,390
948
557
78
281
370
4,576
22,474
18,936
368
59
427
622
31
116
4
77
2
771
588
2,211
2,638
Total
3,446
6,723
4,618
14,787
983
622
1,506
952
634
80
281
771
958
6,787
21,574
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5
Further information
Provisions for pensions and similar obligations. The company pension plan consists of defined
aforementioned rules, the liability of the employer shall remain in place. The boards of RWE Pension-
contribution and defined benefit plans. The defined benefit commitments mainly relate to pension bene-
streuhand e.V. and RWE Pensionsfonds AG are responsible for ensuring that the funds under manage-
fits based on final salary. These are exposed to the typical risks of longevity, inflation and salary
ment are used in compliance with the contract and thus fulfil the requirements for recognition as plan
increases.
assets.
In the reporting period, €32 million (previous year: €24 million) was paid into defined contribution plans.
In the United Kingdom, it is legally mandated that defined benefit plans are provided with adequate and
This includes payments made by RWE for a benefit plan in the Netherlands which covers the commit-
suitable assets to cover pension obligations. The corporate pension system is managed by the sec-
ments of various employers. This fund does not provide the participating companies with information
tor-wide Electricity Supply Pension Scheme (ESPS). Following completion of the E.ON transaction,
allowing for the pro-rata allocation of defined benefit obligations, plan assets and service cost. In the
dedicated independent sections were formed for RWE for the conventional generation business, for the
consolidated financial statements, the contributions are thus recognised analogously to a defined
continuing innogy operations and for the renewables business acquired from E.ON. The sections are
contribution plan, although this is a defined benefit plan. The pension plan for employees in the Nether-
managed by trustees which are elected by members of the pension plans or appointed by the sponsor-
lands is administered by Stichting Pensioenfonds ABP (see www.abp.nl). Contributions to the pension
ing employers. The trustees are responsible for managing the pension plans. This includes investments,
plan are calculated as a percentage rate of employees’ salaries and are paid by the employees and
pension payments and financing plans. The pension plans comprise the benefit obligations and plan
employers. The rate of the contributions is determined by ABP. There are no minimum funding obliga-
assets for the subsidiaries of the RWE Group. It is required by law to assess the required financing of the
tions. Approximately €9 million in employer contributions are expected to be paid to the ABP pension
pension plans once every three years. This involves measuring pension obligations on the basis of
fund in the following fiscal 2021 (prior-year figure for fiscal 2020: €9 million). The contributions are used
conservative assumptions, which deviate from the requirements imposed by IFRS. The underlying
for all of the beneficiaries. If ABP’s funds are insufficient, it can either curtail pension benefits and
actuarial assumptions primarily include the projected life expectancies of the members of the pension
future post-employment benefits, or increase the contributions of the employer and employees. In the
plans as well as assumptions relating to inflation, imputed interest rates and the market returns on the
event that RWE terminates the ABP pension plan, ABP will charge a termination fee. Amongst other
plan assets.
things, its level depends on the number of participants in the plan, the amount of salary and the age
structure of the participants. As of 31 December 2020, we had around 600 active participants in the
The last funding valuations of the RWE section and the continuing innogy operations section were carried
plan (previous year: approximately 600).
out on 31 March 2019. They showed that the RWE section had a financing deficit of £44.3 million, which
was rectified with a payment of £48.3 million as of 31 March 2020. The next funding valuation must occur
RWE transferred assets to RWE Pensionstreuhand e.V. within the framework of a contractual trust
by 31 March 2022. A technical financing deficit of £103.4 million was revealed for the section of the
arrangement (CTA) in order to finance the pension commitments of German Group companies. There
continuing innogy operations. It was subsequently agreed with the trustees to rectify this deficit with
is no obligation to provide further funds. From the assets held in trust, funds were transferred to RWE
annual payments of £37.5 million, £36.3 million, £17.0 million and £17.0 million from 2020 to 2023.
Pensionsfonds AG to cover pension commitments to most of the employees who have already retired.
Following compleition of the E.ON transaction, an agreement was reached with the trustees to draw
RWE Pensionsfonds AG falls under the scope of the Act on the Supervision of Insurance Undertakings
forward the next valuation to 31 March 2021. A valuation was carried out for the section of the
and oversight by the Federal Financial Supervisory Agency (BaFin). Insofar as a regulatory deficit occurs
renewables business acquired from E.ON on 31 March 2020. It revealed a financing deficit of
in the pension fund, supplementary payment shall be requested from the employer. Independently of the
£7 million. From the valuation date, the sponsoring employers and the trustees have 15 months to
approve the funding valuation.
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5
Further information
The payments to settle the deficit are charged to the participating companies on the basis of a contractu-
Provisions for defined benefit plans are determined using actuarial methods. We apply the following
al agreement. Above and beyond this, payments are regularly made to finance the newly arising benefit
assumptions:
obligations of active employees which increase the pension claims.
Calculation assumptions
in %
Discount rate
Wage and salary growth rate
Pension increase rate
1 Pertains to benefit commitments to employees of the RWE Group in the UK.
31 Dec 2020
31 Dec 2019
Germany
Foreign 1
Germany
0.80
2.35
1.30
3.00
1.20
2.35
Foreign 1
2.00
3.00
1.00, 1.60 and 1.75
2.10 and 2.90
1.00, 1.60 and 1.75
1.90 and 2.80
The method for deriving the benchmark interest rate for domestic pension commitments pursuant to
IFRS was adjusted at the end of the year. In the bond universe, bonds with a nominal volume of more
than €100 million are now taken as a basis. Previously, bonds with a nominal volume of more than
€50 million were also taken into account. The resulting benchmark interest rate amounts to 0.80 %.
Compared to the previous method, this is 10 basis points higher and results in the recognition of pension
commitments which are lower by around €180 million. In the following year, this leads to a decline of
€5 million in the service cost and an increase of €2 million in the interest cost.
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5
Further information
Composition of plan assets (fair value)
31 Dec 2020
31 Dec 2019
€ million
Germany1
Equity instruments, exchange-traded funds
Interest-bearing instruments
Real estate
Mixed funds 3
Alternative investments
Other 4
1,472
3,785
1
645
711
56
Of which: Level 1
pursuant to
IFRS 13
1,449
324
542
23
6,670
2,338
Foreign 2
485
3,956
1,509
412
477
6,839
Of which: Level 1
pursuant to
IFRS 13
Of which: Level 1
pursuant to
IFRS 13
Germany1
69
116
85
270
1,539
3,620
3
705
685
64
1,519
91
375
438
30
6,616
2,453
6,577
Foreign 2
468
3,502
1,539
661
407
Of which: Level 1
pursuant to
IFRS 13
131
33
160
69
393
1 Plan assets in Germany primarily pertain to assets of RWE AG and other Group companies which are managed by RWE Pensionstreuhand e.V. as a trust, as well as to assets of RWE Pensionsfonds AG.
2 Foreign plan assets pertain to the assets of the RWE Group within the British ESPS to cover benefit commitments to employees of the RWE Group in the UK.
3 Includes equity and interest-bearing instruments.
4 Includes reinsurance claims against insurance companies and other fund assets.
Our investment policy in Germany is based on a detailed analysis of the plan assets and the pension
term. Furthermore, in order to achieve consistently high returns, there is also investment in products
commitments and the relation of these two items to each other, in order to determine the best possible
which are more likely to offer relatively regular positive returns over time. This involves products with
investment strategy (Asset Liability Management Study). Using an optimisation process, portfolios are
returns which fluctuate like those of bond investments, but which achieve an additional return over the
identified which can earn the best targeted results at a defined level of risk. One of these efficient
medium term, such as so-called absolute return products (including funds of hedge funds).
portfolios is selected and the strategic asset allocation is determined; furthermore, the related risks are
analysed in detail.
In the United Kingdom, our capital investment takes account of the structure of the pension obligations as
well as liquidity and risk matters. The goal of the investment strategy in this context is to maintain the level
The focus of RWE’s strategic investment policy is on domestic and foreign government bonds. In order to
of pension plan funding and ensure the full financing of the pension plans over time. To reduce financing
increase the average yield, corporate bonds with a higher yield are also included in the portfolio. The
costs and earn surplus returns, we also include higher-risk investments in our portfolio. The capital
ratio of equities in the portfolio is lower than that of bonds. Investment occurs in various regions. The
investment focusses on government and corporate bonds.
investment position in equities is intended to earn a risk premium over bond investments over the long
151
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statements
Notes
5
Further information
Pension provisions for pension commitments changed as follows:
Changes in pension provisions
€ million
Balance at 1 Jan 2020
Current service cost
Interest cost / income
Return on fund assets less interest components
Gain / loss on change in demographic assumptions
Gain / loss on change in financial assumptions
Experience-based gains / losses
Currency translation adjustments
Employee contributions
Employer contributions 1
Benefits paid 2
Changes in the scope of consolidation / transfers
Past service cost
General administration expenses
Change in capitalised surplus of plan assets
Balance at 31 Dec 2020
of which: domestic
of which: foreign
Present value of
pension commitments
Fair value of
plan assets
Capitalised surplus of
plan assets
16,486
13,193
153
148
238
−17
1,435
−106
−352
8
−718
71
8
17,201
10,503
6,698
201
859
−361
8
245
−690
62
−8
13,509
6,670
6,839
−10
29
172
172
Total
3,446
148
37
−859
−17
1,435
−106
−1
−245
−28
9
8
8
29
3,864
3,833
31
1 Of which: €96 million from initial and subsequent transfers to plan assets and €149 million in cash flows from operating activities.
2 Contained in cash flows from operating activities.
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Changes in pension provisions
€ million
Balance at 1 Jan 2019
Current service cost
Interest cost / income
Return on fund assets less interest components
Gain / loss on change in demographic assumptions
Gain / loss on change in financial assumptions
Experience-based gains / losses
Currency translation adjustments
Employee contributions
Employer contributions1
Benefits paid 2
Changes in the scope of consolidation
Past service cost
General administration expenses
Change in capitalised surplus of plan assets
Balance at 31 Dec 2019
of which: domestic
of which: foreign
Present value of
pension commitments
Fair value of
plan assets
Capitalised surplus of
plan assets
14,987
11,913
213
123
312
−49
1,272
43
308
6
−718
209
−7
16,486
10,041
6,445
262
1,096
315
6
157
−694
145
−7
13,193
6,616
6,577
10
−70
153
153
Total
3,287
123
50
−1,096
−49
1,272
43
3
−157
−24
64
−7
7
−70
3,446
3,425
21
1 Of which: €42 million from initial and subsequent transfers to plan assets and €115 million in cash flows from operating activities.
2 Contained in cash flows from operating activities.
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5
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Changes in the actuarial assumptions would lead to the following changes in the present value of the
defined benefit obligations:
Sensitivity analysis of pension provisions
Changes in the present value of defined benefit obligations
€ million
31 Dec 2020
31 Dec 2019
Change in the discount rate by + 50 / − 50 basis points
– Domestic
– Foreign
Change in the wage and salary growth rate by − 50 / + 50 basis points
– Domestic
– Foreign
Change in the pension increase rate by − 50 / + 50 basis points
– Domestic
– Foreign
Increase of one year in life expectancy
– Domestic
– Foreign
– 734
– 433
– 55
– 35
– 489
– 300
903
552
65
47
569
382
523
210
833
489
57
41
537
407
482
259
-792
-486
-63
-41
-518
-339
154
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5
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The sensitivity analyses are based on the change of one assumption each, with all other assumptions
Domestic company pensions are subject to an obligation to review for adjustment every three years
remaining unchanged. Actual developments will probably be different than this. The methods of
pursuant to the Act on the Improvement of Company Pensions (Sec 16 of the German Company Pension
calculating the aforementioned sensitivities and for calculating the pension provisions are in agreement.
Act (BetrAVG)). Additionally, some commitments grant annual adjustments of pensions, which may
The dependence of pension provisions on market interest rates is limited by an opposite effect. The
exceed the adjustments in compliance with the legally mandated adjustment obligation.
background of this is that the commitments stemming from company pension plans are primarily
covered by funds, and mostly plan assets exhibit negative correlation with the market yields of fixed-
Some domestic pension plans guarantee a certain pension level, taking into account the statutory
interest securities. Consequently, declines in market interest rates are typically reflected in an increase in
pension (total retirement earnings schemes). As a result, future reductions in the statutory pension can
plan assets, whereas rising market interest rates are typically reflected in a reduction in plan assets.
result in higher pension payments by RWE.
The present value of pension obligations, less the fair value of the plan assets, equals the net amount of
The weighted average duration of the pension obligations was 16 years in Germany (previous year:
funded and unfunded pension obligations.
16 years) and 17 years outside of Germany (previous year: 15 years).
As of the balance-sheet date, the recognised amount of pension provisions totalled €3,265 million for
In fiscal 2021, RWE expects to make €240 million in payments for defined benefit plans of continuing
funded pension plans (previous year: €2,889 million) and €599 million for unfunded pension plans
operations (previous-year target: €275 million), as direct benefits and contributions to plan assets.
(previous year: €557 million).
As in the previous year, a substantial portion of the past service cost related to effects in connection
with restructuring measures in Germany and severance payments in Great Britain.
Provisions for nuclear energy and mining
€ million
Provisions for nuclear waste management
Provisions for mining damage
Balance at
1 Jan 2020
Additions
Unused amounts
released
Interest accretion
Amounts used
6,723
4,618
11,341
29
44
73
−3
−15
−18
17
212
229
−315
−45
−360
Balance at
31 Dec 2020
6,451
4,814
11,265
155
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5
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Provisions for nuclear waste management are recognised in the full amount for the nuclear power
the decommissioning and dismantling work can be performed in time after the expiry of the operating
plants Biblis A and B, Emsland and Gundremmingen A, B and C, as well as Lingen and Mülheim-Kärlich.
permit. Dismantling operations essentially consist of dismantling and removal of the radioactive
Provisions for waste disposal for the Dutch nuclear power plant Borssele are included at a rate of 30 %,
contamination from the facilities and structures, radiation protection, and regulatory monitoring of the
in line with RWE’s stake.
dismantling measures and residual operations.
Provisions for nuclear waste disposal are almost exclusively reported as non-current provisions, and their
We thus subdivide our provisions for nuclear waste management into the residual operation of nuclear
settlement amount is discounted to the balance-sheet date. Based on the current state of planning,
power plants, the dismantling of nuclear power station facilities as well as the cost of residual material
these provisions will essentially be used by the beginning of the 2040s. The discount rate calculated
processing and radioactive waste treatment facilities.
on the basis of the current level of market interest rates for no-risk cash investments was 0.0 % as of the
balance-sheet date (previous year: 0.0 %). The escalation rate based on expectations with regard to
general increases in wages and prices and productivity growth was 1.5 % (previous year: 1.5 %). As a result,
Provisions for nuclear waste management
€ million
31 Dec 2020 31 Dec 2019
the real discount rate used for nuclear waste management purposes, which is the difference between
Residual operation
the discount rate and the escalation rate, amounted to – 1.5 % (previous year: – 1.5 %). An increase
Dismantling
(decrease) in this rate by 0.1 percentage point would reduce (increase) the present value of the provision
Processing of residual material and waste management
by roughly €45 million.
2,707
2,007
1,737
6,451
2,840
2,086
1,797
6,723
Excluding the interest accretion, additions to provisions for nuclear waste management are based on
quantity-related increases in the provisions and amount to €29 million. In the previous year, €719 mil-
Provisions for the residual operation of nuclear power station facilities cover all steps that must be
lion was allocable to the nuclear energy obligations assumed from the E.ON subsidiary PreußenElektra
taken largely independent of dismantling and disposal but are necessary to ensure that the assets are
within the scope of the acquisition of the minority interests in the Gundremmingen nuclear power plant
safe and in compliance with permits or are required by the authorities. In addition to works monitoring
units. Of the changes in provisions, €14 million was offset against the corresponding costs of nuclear
and facility protection, these mainly include service, recurrent audits, maintenance, radiation and fire
power plants still in operation and the fuel elements. Prepayments for services in the amount of
protection as well as infrastructural adjustments.
€8 million were deducted from these provisions. In the reporting period, we also used provisions of
€242 million for the decommissioning of nuclear power plants. Decommissioning and dismantling costs
Provisions for the dismantling of nuclear power plant facilities include all work done to dismantle plants,
had originally been capitalised in a corresponding amount and reported under the cost of the respective
parts of plants, systems and components as well as on buildings that must be dismantled to comply with
nuclear power plants.
the Nuclear Energy Act. They also consider the conventional dismantling of nuclear power plant
The provisions of the law on the reassignment of responsibility for nuclear waste disposal stipulate that
accountability for the shutdown and dismantling of the assets as well as for packaging radio active
Provisions for residual material processing and waste management include the costs of processing
waste remains with the companies. The shutdown and dismantling process encompasses all activities
radioactive residual material for non-hazardous recycling and the costs of treating radioactive waste
following the final termination of production by the nuclear power plant until the plant site is removed
produced during the plant’s service life and dismantling operations. This includes the various process-
from the regulatory scope of the Nuclear Energy Act. A request to decommission and dismantle the
es for conditioning, proper packaging of the low-level and intermediate-level radioactive waste in suitable
nuclear power plant will be filed with the nuclear licensing authority during its operating period so that
containers and the transportation of such waste to BGZ Gesellschaft für Zwischenlagerung mbH (BGZ),
facilities to fulfil legal or other obligations.
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5
Further information
which has been commissioned by the Federal government for intermediate storage. This item also
In terms of their contractual definition, provisions for nuclear waste management break down as follows:
contains the cost of transporting the waste produced by recycling and of the proper packaging of spent
nuclear fuel elements, i.e. the cost of procuring and loading freight and interim storage containers.
Commissioned by the plant operator, the internationally renowned company NIS Ingenieurgesellschaft
Provisions for nuclear waste management
€ million
31 Dec 2020 31 Dec 2019
mbH, Alzenau, assesses the prospective residual operation and dismantling costs for the nuclear power
Provisions for nuclear obligations, not yet contractually defined
plants on an annual basis. The costs are determined specifically for each facility and take into consider-
Provisions for nuclear obligations, contractually defined
ation the current state of the art, regulatory requirements and previous practical experience from
ongoing and completed dismantling projects. Additionally, current developments are also incorporated
into the cost calculations. They also include the cost of conditioning and packaging radioactive waste
4,623
1,828
6,451
4,849
1,874
6,723
generated during dismantling operations and the transportation of such waste to BGZ. Further cost
The provision for obligations which are not yet contractually defined covers the costs of the remaining
estimates for the disposal of radioactive waste are based on contracts with foreign reprocessing
operational phase of the operating plants, the costs of dismantling as well as the residual material
companies and other disposal companies. Furthermore, the cost estimates are based on plans by
processing and waste treatment costs incurred in connection with waste produced as a result of
internal and external experts, in particular GNS Gesellschaft für Nuklear-Service mbH, (GNS) Essen.
shutdowns.
Provisions for contractually defined nuclear obligations relate to all obligations the value of which is
specified in contracts under civil law. The obligations include the anticipated residual costs of reprocess-
ing and returning the resulting radioactive waste. These costs stem from existing contracts with foreign
reprocessing companies and with GNS. Moreover, these provisions also include the costs for transport
and intermediate storage containers for and the loading of spent fuel assemblies within the framework of
final direct storage. Furthermore, this item also includes the amounts for the professional packaging of
radioactive operational waste as well as the in-house personnel costs incurred for the residual operation
of plants which are permanently decommissioned.
Provisions for mining damage also consist almost entirely of non-current provisions and fully covered
the volume of obligations as of the balance-sheet date. They are reported at their settlement amount
discounted to the balance-sheet date. To a large degree, the cost estimates are backed by external
expert opinions.
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5
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In discounting the amounts used in the coming 30 years, we have oriented ourselves towards the
Excluding the interest accretion, additions to provisions for mining damage amounted to €44 million in
current market interest rates for risk-free cash investments. Since no market interest rates are available
the reporting period. The reason for this was quantity-induced increases in the obligatory volume, of
for later periods, a sustainable, long-term interest rate is used to discount the amounts used after the
which €16 million was capitalised in the item Property, plant and equipment. Releases of provisions in
next 30 years. As in the previous year, the average discount rate was 2.0 %. The effects from the lower
the amount of €15 million mainly resulted from the fact that current estimates led to a reduction in the
level of market interest rates were compensated by changes in the timing of the structure of the series of
anticipated costs of restoration. The interest accretion increased provisions for mining damage by
payments. The majority of the provisions still pertains to claims that are expected to materialise over the
€212 million.
next 30 years. Based on the currently expected price and cost increases, the escalation rate was 1.5 %
as in the previous year. The real discount rate applied for mining purposes, which is the difference
between the discount rate and the escalation rate, was thus 0.5 % as in the previous year. An increase
(decline) in the real discount rate by 0.1 percentage point would reduce (increase) the present value of
the provision by around €140 million.
Other provisions
€ million
Staff-related obligations
(excluding restructuring)
Restructuring obligations
Purchase and sales obligations
Provisions for dismantling wind farms
Other dismantling and retrofitting obligations
Environmental protection obligations
Interest payment obligations
Obligations to deliver CO2 emission allowances /
certificates for renewable energies
Miscellaneous other provisions
Balance at
1 Jan 2020
Additions
Unused amounts
released
Interest accretion
Changes in the scope of
consoli dation, currency
adjustments, transfers
Amounts used
Balance at
31 Dec 2020
983
622
1,506
952
634
80
281
771
958
6,787
550
90
242
171
110
2
1,337
293
2,795
−46
−36
−95
−6
−89
−1
−58
−16
−213
−560
1
113
81
1
1
197
23
−21
−92
−3
−2
−13
−14
−122
−521
−13
−163
−2
−15
−2
−747
−289
−1,752
990
642
1,490
1,136
718
78
223
1,332
736
7,345
158
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5
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Provisions for staff-related obligations mainly consist of provisions for pre-retirement part-time work
(23) Financial liabilities
arrangements, severance, outstanding vacation and service jubilees and performance-based pay
components. Based on current estimates, we expect most of these to be used from 2021 to 2025.
Financial liabilities
31 Dec 2020
31 Dec 2019
Provisions for restructuring obligations pertain mainly to measures for socially acceptable payroll
€ million
downsizing. We currently expect most of these to be used from 2021 to 2038. In so doing, sums ear-
Bonds payable1
marked for personnel measures are reclassified from provisions for restructuring obligations to
provisions for staff-related obligations as soon as the underlying restructuring measure has been
specified. This is the case if individual contracts governing socially acceptable payroll downsizing are
signed by affected employees.
Bank debt
Other financial liabilities
Collateral for trading activities
Miscellaneous other financial liabilities2
Non-
current
549
1,528
1,874
3,951
Current
83
716
448
1,247
Non-
current
1,110
965
1,849
3,924
Current
391
400
898
1,689
Provisions for purchase and sales obligations primarily relate to contingent losses from pending
transactions.
1 Including hybrid bonds classified as debt as per IFRS.
2 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations;
From the current perspective, we expect that the majority of the provisions for the dismantling of wind
see page 109 in the Notes.
farms will be used from 2021 to 2045, and the provisions for other dismantling and retrofitting
obligations will be used from 2021 to 2060.
The following overview shows the key data on the bonds of the RWE Group as of 31 December 2020:
Bonds payable
Issuer
Outstanding
amount
RWE AG
RWE AG
RWE AG
Bonds payable
€ 12 million
€ 282 million1
US$ 317 million1
1 Hybrid bonds classified as debt as per IFRS.
Carrying
amount
€ million
12
281
256
549
Coupon in %
Maturity
3.5
3.5
October 2037
April 2075
6.625
July 2075
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On 4 September 2020, a hybrid bond issued by RWE AG which was previously classified as equity
(25) Other liabilities
pursuant to IAS 32 was cancelled. The redemption in the amount of €539 million was effected on
21 October 2020 without refinancing the hybrid bond with fresh hybrid capital. The hybrid bond had a
Other liabilities
31 Dec 2020
31 Dec 2019
2.75 % coupon and a tenor ending in April 2075.
€ million
Non-
current
Current
Non-
current1
€31 million of the financial liabilities are secured by mortgages (previous year: €39 million). Other financial
Tax liabilities
liabilities contain lease liabilities.
(24) Income tax liabilities
Income tax liabilities contain uncertain income tax items in the amount of €939 million (previous year:
€1,174 million). This item primarily includes income taxes for periods for which the tax authorities have
not yet finalised a tax assessment and for the current year.
Social security liabilities
Derivatives
Miscellaneous other liabilities
of which: financial debt
of which: non-financial debt
1
554
599
1,154
640
514
158
14
8,106
725
9,003
8,414
589
2
391
469
862
415
447
Current
129
17
10,088
1,354
11,588
10,303
1,285
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see
page 109 in the Notes.
The principal component of social security liabilities are the amounts payable to social security
institutions.
Miscellaneous other liabilities contain €221 million in contract liabilities (previous year: €269 million).
Moreover, €43 million (previous year: €46 million) in miscellaneous other liabilities were allocable to state
investment subsidies primarily granted in connection with the construction of wind farms.
160
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Other information
(26) Earnings per share
• Debt instruments measured at fair value through other comprehensive income: the contractual cash
flows solely consist of interest and principal on the outstanding capital: there is an intention to hold
and sell the financial instrument.
Basic and diluted earnings per share are calculated by dividing the portion of net income attributable to
• Equity instruments measured at fair value through other comprehensive income: the option to
RWE shareholders by the average number of shares outstanding; treasury shares are not taken into
recognise changes in fair value directly in equity is exercised.
account in this calculation.
Earnings per share
Net income for RWE AG shareholders
€ million
of which: from continuing operations
of which: from discontinued operations
• Financial assets measured at fair value through profit or loss: the contractual cash flows of a debt
instrument do not solely consist of interest and principal on the outstanding capital or the option to
recognise changes in the fair value of equity instruments in other comprehensive income is not
exercised.
On the liabilities side, non-derivative financial instruments principally include liabilities measured at
2020
995
808
187
2019
8,498
-691
9,189
Number of shares outstanding (weighted average)
in ‘000
637,286
614,745
amortised cost.
Basic and diluted earnings per share
of which: from continuing operations
of which: from discontinued operations
Dividend per share
€
€
1.56
1.27
0.29
13.82
-1.13
14.95
0.851
0.80
Financial instruments recognised at fair value are measured based on the published exchange price,
insofar as the financial instruments are traded on an active market. The fair value of non-quoted debt
and equity instruments is generally determined on the basis of discounted expected payment flows,
taking into consideration macro-economic developments and corporate business plan data. Current
market interest rates corresponding to the remaining maturity are used for discounting.
1 Dividend proposal for fiscal 2020, subject to the resolution of the Annual General Meeting on 28 April 2021.
(27) Reporting on financial instruments
as they fall under the scope of IFRS 9. Exchange-traded products are measured using the published
Financial instruments are divided into non-derivative and derivative. Non-derivative financial assets
closing prices of the relevant exchange. Non-exchange traded products are measured on the basis of
essentially include other non-current financial assets, accounts receivable, marketable securities and
publicly available broker quotations or, if such quotations are not available, on generally accepted
cash and cash equivalents. Financial instruments are recognised either at amortised cost or at fair
valuation methods. In doing so, we draw on prices on active markets as much as possible. If such prices
value, depending on their classification. Financial instruments are recognised in the following categories:
are not available, company-specific planning estimates are used in the measurement process. These
Derivative financial instruments are recognised at their fair values as of the balance-sheet date, insofar
• Debt instruments measured at amortised cost: the contractual cash flows solely consist of interest
in the course of price determination. Assumptions pertaining to the energy sector and economy are
and principal on the outstanding capital: there is an intention to hold the financial instrument until
made within the scope of a comprehensive process with the involvement of both in-house and external
maturity.
experts.
estimates encompass all of the market factors which other market participants would take into account
161
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Notes
5
Further information
Measurement of the fair value of a group of financial assets and financial liabilities is conducted on the
• Level 1: Measurement using (unadjusted) prices of identical financial instruments formed on active
basis of the net risk exposure per business partner.
markets,
The following overview presents the classifications of financial instruments measured at fair value in
but which can be observed for the financial instrument either directly (i.e. as price) or indirectly
the fair value hierarchy prescribed by IFRS 13. The individual levels of the fair value hierarchy are
(i.e. derived from prices),
defined as follows:
• Level 3: Measurement using factors which cannot be observed on the basis of market data.
• Level 2: Measurement on the basis of input parameters which are not the prices from Level 1,
Level 1
Level 2
Level 3
Fair value hierarchy
€ million
Other financial assets1
Derivatives (assets)
of which: used for hedging purposes
Securities
Assets held for sale
Derivatives (liabilities)
of which: used for hedging purposes
Liabilities held for sale
Total
2020
4,244
8,784
1,634
4,219
8,660
1,498
3,659
1,269
214
8,085
1,634
2,950
8,404
1,498
371
699
Total
2019
4,320
12,108
2,961
3,258
9
256
10,479
1,513
4
Level 1
Level 2
Level 3
3,853
1,829
171
11,443
2,961
1,429
1
9,902
1,513
296
665
8
577
4
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
162
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5
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Due to the higher number of price quotations on active markets, financial assets with a fair value
€25 million) were reclassified from Level 1 to Level 2. Furthermore, in the previous year, derivatives with
of €43 million (previous year: €24 million) were reclassified from Level 2 to Level 1. Conversely, due to
a fair value of €44 million were reclassified from Level 2 to Level 3.
a drop in the number of price quotations, financial assets with a fair value of €93 million (previous year:
The development of the fair values of Level 3 financial instruments is presented in the following table:
Level 3 financial instruments:
Development in 2020
€ million
Other financial assets
Derivatives (assets)
Assets held for sale
Derivatives (liabilities)
Liabilities held for sale
Level 3 financial instruments:
Development in 2019
€ million
Other financial assets1
Derivatives (assets)
Assets held for sale
Derivatives (liabilities)
Liabilities held for sale
Balance at
1 Jan 2020
Changes in the scope
of consolidation,
currency adjustments
and other
296
665
8
577
4
9
−9
−9
−8
−5
Balance at
1 Jan 2019
Changes in the scope
of consolidation,
currency adjustments
and other
148
156
804
35
101
182
−819
138
Changes
Recognised in OCI
98
Changes
Recognised in OCI
−9
Recognised in
profit or loss
−85
42
−313
Recognised in
profit or loss
−23
434
−8
432
With a
cash effect
53
1
1
1
With a
cash effect
79
−107
31
−28
4
Balance at
31 Dec 2020
371
699
256
Balance at
31 Dec 2019
296
665
8
577
4
1 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
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5
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Amounts recognised in profit or loss generated through Level 3 financial instruments relate to the
following line items on the income statement:
Level 3 financial instruments:
Amounts recognised in profit or loss1
€ million
Other operating income / expenses
Income from investments
1 Prior-year figures restated.
Level 3 derivative financial instruments essentially consist of energy purchase and commodity
agreements, which relate to trading periods for which there are no active markets yet. The valuation of
such depends on the development of electricity, oil and gas prices in particular. All other things being
equal, rising market prices cause the fair values to increase, whereas declining gas prices cause them
to drop. A change in pricing by + / – 10 % would cause the market value to rise by €95 million (previous
year: €61 million) or decline by €95 million (previous year: €61 million).
Total
2020
Of which:
attributable to
financial instruments held at
the balance-sheet date
356
−86
270
852
−85
767
Total
2019
12
−34
−22
Of which:
attributable to
financial instruments held at
the balance-sheet date
12
−20
−8
164
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5
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Financial assets and liabilities can be broken down into the measurement categories with the following
The carrying amounts of financial assets and liabilities within the scope of IFRS 7 basically correspond to
carrying amounts according to IFRS 9 in the year under review:
their fair values. The only deviations are for financial liabilities. The carrying amount of these is
Carrying amounts by category
€ million
31 Dec
2020
31 Dec
2019
€4,011 million (previous year: €4,632 million), while the fair value amounts to €4,281 million
(previous year: €4,798 million). Of this, €607 million (previous year: €1,180 million) is related to Level 1
and €3,674 million (previous year: €3,618 million) to Level 2 of the fair value hierarchy.
Financial assets measured at fair value through profit or loss
10,573
10,775
of which: obligatorily measured at fair value – continuing operations
10,573
10,767
The following net results from financial instruments as per IFRS 7 were recognised on the income
of which: obligatorily measured at fair value – held for sale
Debt instruments measured at amortised cost
of which: held for sale
Debt instruments measured at fair value through other
comprehensive income
Equity instruments measured at fair value through other
comprehensive income
Financial liabilities measured at fair value through profit or loss
of which: obligatorily measured at fair value – continuing operations
of which: obligatorily measured at fair value – held for sale
Financial liabilities measured at (amortised) cost
of which: held for sale
13,366
2
8
9,543
112
1,338
1,727
3,702
7,163
7,163
7,013
315
4,247
8,970
8,966
4
7,950
311
statement, depending on the category:
Net gain / loss by category
€ million
Financial assets and liabilities measured at fair value through profit or loss
of which: obligatorily measured at fair value
Debt instruments measured at amortised cost
Debt instruments measured at fair value through other
comprehensive income
Equity instruments measured at fair value through other
comprehensive income
Financial liabilities measured at (amortised) cost
2020
2019
3,318
3,318
−248
−7
193
−303
941
941
137
38
27
−317
165
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2
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3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
The net result as per IFRS 7 essentially includes interest, dividends and results from the measurement of
In the 2020 fiscal year, €193 million (previous year: €27 million) in income from dividends from these
financial instruments at fair value.
financial instruments was recognised, of which €5 million (previous year: €5 million) is attributable to
equity instruments sold during the same year. More over, in the year under review, equity instruments
The option to recognise changes in fair value in OCI is exercised for a portion of the investments in equity
measured through other comprehensive income were sold in line with the existing investment strategy.
instruments. These are strategic investments and other long-term investments as well as securities in
Their fair value at the derecognition date amounted to €782 million (previous year: €738 million).
special funds.
The resulting loss amounted to €18 million (previous year: gain of €5 million).
Fair value of equity instruments measured at
fair value through other comprehensive income
€ million
Securities in special funds
Nordsee One GmbH
E.ON SE
31 Dec 2020
31 Dec 2019
accordance with IAS 32 or are subject to enforceable master netting agreements or similar agreements.
The netted financial assets and liabilities essentially consist of collateral for stock market transactions
The following is an overview of the financial assets and financial liabilities which are netted out in
120
3,582
due on a daily basis.
444
22
3,780
Netting of financial assets and financial liabilities as
of 31 Dec 2020
Gross amounts
recognised
Netting
Net amounts
recognised
Related amounts not set off
Net amount
€ million
Derivatives (assets)
Derivatives (liabilities)
10,111
8,024
Netting of financial assets and financial liabilities as
of 31 Dec 2019
Gross amounts
recognised
€ million
Derivatives (assets)
Derivatives (liabilities)
10,381
9,031
Financial
instruments
Cash collateral
received / pledged
902
585
-267
-495
-310
407
8
Net amounts
recognised
580
846
Related amounts not set off
Net amount
Financial
instruments
Cash collateral
received / pledged
-119
-318
-727
262
-9,209
-7,439
Netting
-9,801
-8,185
166
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3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
The related amounts not set off include cash collateral received and pledged for over-the-counter
at Risk (VaR), amongst other things. In addition, for the management of interest rate risk, a Cash Flow at
transactions as well as collateral pledged in advance for stock market transactions.
Risk (CFaR) is determined.
As an energy producer with international operations, the RWE Group is exposed to market, credit and
Using the VaR method, RWE determines and monitors the maximum expected loss arising from chang-
liquidity risks in its ordinary business activity. We limit these risks via systematic, groupwide risk manage-
es in market prices with a specific level of probability during specific periods. Historical price volatility is
ment. The range of action, responsibilities and controls are defined in binding internal directives.
taken as a basis in the calculations. With the exception of the CFaR data, all VaR figures are based on a
confidence interval of 95 % and a holding period of one day. For the CFaR, a confidence interval of 95 %
Market risks stem from changes in exchange rates and share prices as well as interest rates and
and a holding period of one year is taken as a basis.
commodity prices, which can have an influence on business results.
Due to the RWE Group’s international profile, currency management is a key issue. Fuels are traded in Brit-
es in interest rates can result in declines in the prices of securities from the holdings of RWE. This pertains
ish pounds and US dollars as well as in other currencies. In addition, RWE does business in a number of
primarily to fixed-rate instruments. A VaR is determined to quantify securities price risk. As of the balance-
currency areas. The companies of the RWE Group are required to hedge their foreign currency risks via
sheet date, it amounted to €2.5 million (previous year: €4.8 million). On the other hand, financing costs
RWE AG. Foreign currency risks arising from the involvement in and the financing of the renewable ener-
also increase along with the level of interest rates. The sensitivity of interest expenses to increases in
gy business are hedged by RWE Renewables International Participations B.V.
market interest rates is measured with the CFaR. As of 31 December 2020 this amounted to €18.6 mil-
In respect of interest rate risks, RWE distinguishes between two risk categories: on the one hand, increas-
lion (previous year: €34.8 million). RWE calculates the CFaR based on the assumption of the refinanc-
Interest rate risks stem primarily from financial debt and the Group’s interest-bearing investments. We
ing of maturing debt.
hedge against negative changes in value caused by unexpected interest-rate movements using
non-derivative and derivative financial instruments.
As of 31 December 2020, the VaR for foreign currency positions was €0.2 million (previous year:
€1.6 million). This corresponds to the figure used internally, which also includes the underlying trans-
Opportunities and risks from changes in the values of non-current securities are centrally controlled by a
actions for cash flow hedges. The VaR also reflects the risk of timing differences.
professional fund management system operated by RWE AG.
As of 31 December 2020, the VaR for risks related to the RWE share portfolio amounted to €0 million
The Group’s other financial transactions are recorded using centralised risk management software and
(previous year: €3.7 million).
monitored by RWE AG.
For commodity operations, risk management directives have been established by RWE AG’s Con-
the trading business and the VaR for the pooled gas and liquefied natural gas (LNG) business. Here, the
trolling & Risk Management Department. These regulations stipulate that derivatives may be used to
maximum VaR is €40 million and €14 million, respectively. As of 31 December 2020, the VaR was
hedge price risks. Furthermore, commodity derivatives may be traded, subject to limits. Compliance with
€25.0 million in the trading business (previous year: €12.0 million) and €6.7 million for the pooled gas and
limits is monitored daily.
LNG business (previous year: €4.7 million).
The key internal control parameters for commodity positions at RWE Supply & Trading are the VaR for
Risks stemming from fluctuations in commodity prices and financial market risks (foreign currency risks,
Additionally, stress tests are carried out on a monthly basis in relation to the trading and pooled LNG
interest rate risks, securities risks) are monitored and managed by RWE using indicators such as the Value
and gas business of RWE Supply & Trading to model the impact of commodity price changes on the
167
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2
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3
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4
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statements
Notes
5
Further information
earnings conditions and take risk-mitigating measures if necessary. In these stress tests, market price
All derivative financial instruments are recognised as assets or liabilities and are measured at fair value.
curves are modified, and the commodity position is revalued on this basis. Historical scenarios of
When interpreting their positive and negative fair values, it should be taken into account that, with the
extreme prices and realistic, fictitious price scenarios are modelled. In the event that the stress tests
exception of trading in commodities, these financial instruments are generally matched with underlying
exceed internal thresholds, these scenarios are then analysed in detail in relation to their impact and
transactions that carry offsetting risks.
probability, and – if necessary – risk-mitigating measures are considered.
Commodity risks of the Group’s power generation companies belonging to the Coal / Nuclear and
in foreign functional currencies, commodity market price risks, interest risks from non-current liabilities
Hydro / Biomass / Gas segments are hedged by the Supply & Trading segment on the basis of available
and currency and price risks from sales and purchase transactions.
market liquidity in accordance with Group guidelines. In accordance with the approach for long-term
investments for example, it is not possible to manage commodity risks from long-term positions or
positions which cannot be hedged due to their size and the prevailing market liquidity using the VaR
Fair value hedges are used to limit the market price risk exposure related to CO2 emission allowances. In
the case of fair value hedges, both the derivative as well as the underlying hedged transaction (in
concept. As a result, these positions are not included in the VaR figures. Above and beyond open
relation to the hedged risk) are recorded at fair value with an effect on income.
production positions which have not yet been transferred, the Group companies belonging to the
Coal / Nuclear and Hydro / Biomass / Gas segments are not allowed to maintain significant risk positions,
RWE held the following instruments to hedge the fair value of commodity price risks:
Hedge accounting pursuant to IFRS 9 is used primarily for mitigating currency risks from net investments
according to a Group guideline. Furthermore, commodity price risks can exist in relation to the
renewable generation positions and in the gas storage business. The commodity price risks associated
with the renewable generation positions are managed by the Renewables Commodity Management
Committee (RES CMC). The subsidiaries owning the gas storage facilities also manage their positions
Fair value hedges
as of 31 Dec 2020
independently, in compliance with unbundling regulations.
One of our most important instruments to limit market risk is the conclusion of hedging transactions.
The instruments most commonly used are forwards and options with foreign currency, interest rate
swaps, interest rate currency swaps, and forwards, options, futures and swaps with commodities.
CO2 derivatives
Nominal volume (€ million)
Secured average price (€ / metric ton)
Maturity
1 – 6
months
7 – 12
months
>12
months
39
5.57
Maturities of derivatives related to interest rates, currencies, equities, indices and commodities for the
purpose of hedging are based on the maturities of the underlying transactions and are thus primarily
Fair value hedges
as of 31 Dec 2019
short term and medium term in nature. Hedges of the foreign currency risks of foreign investments have
Maturity
1 – 6
months
7 – 12
months
>12
months
maturities of up to eleven years.
CO2 derivatives
Nominal volume (€ million)
Secured average price (€ / metric ton)
39
5.57
168
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statements
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5
Further information
Cash flow hedges are primarily used to hedge against interest risks from non-current liabilities as well as
currency and price risks from sales and purchase transactions. Hedging instruments consist of forwards,
Cash flow hedges
as of 31 Dec 2019
swaps and options with foreign currency and interest rates, and forwards, futures and swaps with
commodities. Changes in the fair value of the hedging instruments – insofar as they affect the effective
portion – are recorded in OCI until the underlying transaction is realised. The ineffective portion of
changes in value is recognised in profit or loss. When hedging commodities, underlying and hedging
transactions are based on the same price index. This generally does not result in ineffectiveness. When
Currency forwards – purchases
Nominal volume (€ million)
Avg. EUR / USD exchange rate
hedging foreign currency risks, ineffectiveness can result from the difference in timing between the
Avg. EUR / GBP exchange rate
origination of the hedged item and the hedging instrument. Ineffectiveness can likewise stem from
hedges containing material foreign currency basis spreads. Upon realisation of the underlying trans-
action, the hedge’s contribution to income from accumulated other comprehensive income is recog-
nised on the income statement or is offset against the initial value recognition of an asset or a liability.
RWE held the following instruments to hedge future cash flows relating to foreign currency risks:
Avg. EUR / CAD exchange rate
Currency forwards – sales
Nominal volume (€ million)
Avg. EUR / USD exchange rate
Avg. EUR / GBP exchange rate
Avg. EUR / CAD exchange rate
Maturity
1 – 6
months
7 – 12
months
>12
months
2,276
1.15
0.87
1.54
-2,947
1.13
0.87
1.51
134
1.18
0.89
1.56
-401
1.18
0.88
61
1.19
1.64
-112
1.26
0.86
1.57
Cash flow hedges
as of 31 Dec 2020
Currency forwards – purchases
Nominal volume (€ million)
Avg. EUR / USD exchange rate
Avg. EUR / GBP exchange rate
Avg. EUR / CAD exchange rate
Currency forwards – sales
Nominal volume (€ million)
Avg. EUR / USD exchange rate
Avg. EUR / GBP exchange rate
Avg. EUR / CAD exchange rate
Maturity
1 – 6
months
7 – 12
months
>12
months
RWE held the following instruments to hedge future cash flows relating to interest risks:
522
1.19
0.91
1.54
-945
1.20
0.90
1.55
258
1.19
0.91
1.63
-319
1.21
0.91
1.57
234
1.20
0.92
1.64
-447
1.20
0.91
Cash flow hedges
as of 31 Dec 2020
Interest swaps
Nominal volume (£ million)
Secured average interest rate (%)
Cash flow hedges
as of 31 Dec 2019
Interest swaps
Nominal volume (£ million)
Secured average interest rate (%)
169
Maturity
1 – 6
months
7 – 12
months
>12
months
1,215
1.55
Maturity
1 – 6
months
7 – 12
months
>12
months
808
1.55
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
The commercial optimisation of the power plant portfolio is based on a dynamic hedging strategy.
Hedged items and hedging instruments are constantly adjusted based on changes in market prices,
Net investment hedges
as of 31 Dec 2019
market liquidity and the sales business with consumers. Commodity prices are hedged if this leads to a
positive margin. Proprietary commodities trading is strictly separated from this when managing risks.
Hedges of net investment in a foreign operation are used to hedge the foreign currency risks of net
investment in foreign entities whose functional currency is not the euro. We use interest rate currency
swaps and other currency derivatives as hedging instruments. If there are changes in the fair value of
interest rate currency swaps, this is recorded under foreign currency translation adjustments in OCI.
Currency forwards – sales
Nominal volume (€ million)
Avg. EUR / GBP exchange rate
RWE held the following instruments to hedge net investments in foreign operations:
Maturity
1 – 6
months
7 – 12
months
>12
months
– 1,037
0.90
– 349
0.86
– 631
0.63
Net investment hedges
as of 31 Dec 2020
Currency forwards – purchases
Nominal volume (€ million)
Avg. EUR / GBP exchange rate
Currency forwards – sales
Nominal volume (€ million)
Avg. EUR / GBP exchange rate
Maturity
1 – 6
months
7 – 12
months
>12
months
277
0.90
– 5,737
0.91
– 631
0.63
170
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4
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Notes
5
Further information
The hedging instruments designated in hedging relationships had the following effects on the company’s
net asset, financial and earnings position:
Hedging instruments – effects on the net asset, financial and
earnings position as of 31 Dec 2020
€ million
Fair value hedges
Commodity price risks
Cash Flow Hedges
Foreign currency risks
Commodity price risks
Net investment hedges
Foreign currency risks
Nominal
amount
39
729
2,4441
Carrying amount
Fair value changes in the
current period
Recognised
ineffectiveness
Assets
Liabilities
192
177
1,104
366
56
-90
614
122
3,020
6
67
1 The net nominal amount stated is made up of purchases in the amount of €1,086 million and sales in the amount of –€3,530 million.
Hedging instruments – effects on the net asset, financial and
earnings position as of 31 Dec 2019
€ million
Fair value hedges
Commodity price risks
Cash Flow Hedges
Interest risks
Foreign currency risks
Commodity price risks
Net investment hedges
Foreign currency risks
Nominal
amount
39
931
296
-4,1251
Carrying amount
Fair value changes in the
current period
Recognised
ineffectiveness
Assets
Liabilities
52
2,337
135
105
87
1,046
328
11
69
26
-571
55
35
1 The net nominal amount stated is made up of purchases in the amount of €3,494 million and sales in the amount of €7,619 million.
171
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3
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4
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statements
Notes
5
Further information
The carrying amounts of the hedging instruments are recognised in the ‘Other receivables and other
assets’ and ‘Other liabilities’ balance- sheet items.
Cash flow hedges and net investment
hedges as of 31 Dec 2020
Changes in fair
value during the
current period
Reserve for
current hedges
Reserve for
terminated
hedges
The hedged items designated in hedging relationships had the following effects on the company’s
net asset, financial and earnings position:
Fair value hedges
as of 31 Dec
2020
Carrying amount
Of which: cumulative fair value
adjustments
Changes in fair
value in the
reporting year
€ million
Assets
Liabilities
Assets
Liabilities
€ million
Cash flow hedges
Interest risks
Foreign currency risks
Commodity price risks
Net investment hedges
Foreign currency risks
44
–78
–50
–59
–1,528
3,094
117
1,275
–14
–11
350
Commodity price
risks
Fair value hedges
as of 31 Dec
2019
231
192
56
Carrying amount
Of which: cumulative fair value
adjustments
Changes in fair
value in the
reporting year
Cash flow hedges and net investment
hedges as of 31 Dec 2019
Changes in fair
value during the
current period
Reserve for
current hedges
Reserve for
terminated
hedges
€ million
Assets
Liabilities
Assets
Liabilities
€ million
Commodity price
risks
174
135
Cash flow hedges
11
Interest risks
Foreign currency risks
Commodity price risks
Net investment hedges
Foreign currency risks
67
623
– 94
107
4,574
55
1,151
– 15
328
The carrying amounts of the hedged items for fair value hedges are stated in the ‘Other receivables and
other assets’ balance-sheet item. Amounts realised from OCI and any ineffectiveness are recognised in
the items on the income statement in which the underlying transactions are also recognised with an
effect on income. The amounts realised from OCI are recognised in revenue and the cost of materials,
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4
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statements
Notes
5
Further information
whereas any ineffectiveness is recognised in other operating income and expenses. Amounts
recognised and any ineffectiveness of hedging interest risks are recognised in financial income and
financial expenses on the income statement.
The reconciliation of the changes in the hedge reserve in relation to the various risk categories of
Hedge reserve 2019
€ million
Balance at 1 Jan 2019
Cash flow hedges
hedge accounting follows below:
Hedge reserve 2020
€ million
Balance at 1 Jan 2020
Cash flow hedges
Effective portion of changes in market value
Interest risks
Foreign currency risks
Commodity price risks
2,979
Gain or loss reclassified from OCI to the income
statement – realisation of underlying transactions
Effective portion of changes in market value
–1,777
Foreign currency risks
Interest risks
Foreign currency risks
Commodity price risks
Gain or loss reclassified from OCI to the income
statement – realisation of underlying transactions
Foreign currency risks
Commodity price risks
Gain or loss recognised as a basis adjustment
Interest risks
Foreign currency risks
Commodity price risks
Tax effect of the change in the hedge reserve
Net investment hedges
Effective portion of changes in market value
Foreign currency risks
Ofsetting against currency adjustments
Balance at 31 Dec 2020
–35
37
Commodity price risks
Gain or loss recognised as a basis adjustment
–1,779
Interest risks
Foreign currency risks
Commodity price risks
Tax effect of the change in the hedge reserve
Net investment hedges
Effective portion of changes in market value
Foreign currency risks
Ofsetting against currency adjustments
Balance at 31 Dec 2019
1,256
1,256
–982
1
–983
412
–147
–147
147
1,888
173
3,344
332
-53
-223
608
136
-127
263
-1,267
38
2
-1,307
434
95
95
-95
2,979
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
As part of the reform of the existing system for determining benchmark interest rates (the so-called
Credit risks. In the fields of finance and commodities, RWE primarily has credit relationships with banks
IBOR reform), the prevailing benchmark rates and methods for their determination are being replaced
that have good creditworthiness and other trading partners, most of which have good creditworthiness.
with alternative interest rates and methods. This is expected to occur by 31 December 2021 in the EU
Furthermore, RWE has credit relationships primarily with banks and other business partners with good
and the United Kingdom. However, at the time that these Notes were prepared the precise timing and
creditworthiness within the scope of large-scale projects such as the construction of wind farms. RWE
scope of the changes were not certain.
reviews counterparty default risks before contracts are concluded. RWE mitigates such risks by
establishing limits which are adjusted during the business relationships if the creditworthiness of the
RWE is managing the transition to the new benchmark rates by way of an interdisciplinary working group
business partners changes. Counterparty risks are monitored constantly so that countermeasures can
headed by the Finance & Credit Risk Department. Its focus is on supplementing, amending and
be initiated early on. Furthermore, RWE is exposed to credit risks due to the possibility of customers failing
reassessing the relevant contracts and carrying out the technically necessary system adjustments.
to meet their payment obligations. We identify these risks by conducting regular analyses of the
With regard to the RWE Group, the IBOR reform impacts hedging relationships which serve to reduce the
interest rate risks associated with non-current liabilities. These hedging relationships are based on the
Due to the coronavirus crisis, the economic situation of many companies has deteriorated. This may
1-month GBP LIBOR and the 6-month GBP LIBOR. As of the balance-sheet date, they account for a
have an impact on RWE's business partners, competitors and customers. Consequently, RWE is
nominal volume von €1,366 million. Transition to the benchmark interest rates which will be replacing
monitoring critical industries even more closely and exercising greater caution in conducting new
the LIBOR is expected to occur by the end of 2021, prior to the end of the hedging relationships involved.
transactions or extending existing ones. If necessary, previously approved limits are being lowered.
creditworthiness of our customers and initiate countermeasures if necessary.
RWE applied the amendments published in IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark
Amongst other things, RWE demands guarantees, cash collateral and other forms of security in order to
Reform in September 2019 starting from 1 January 2020. The amendments provide temporary relief
mitigate credit risks. Furthermore, RWE takes out credit insurance policies to protect against defaults.
from applying specific hedge accounting requirements to hedging relationships directly affected by
Bank guarantees received as collateral are from financial institutions with the required good ratings.
IBOR reform. The reliefs primarily mean that the uncertainties arising from the IBOR reform do not result
Collateral for credit insurance is pledged by insurers with an investment-grade rating.
in discontinuation of the hedging relationships. Hedge ineffectiveness continues to be recognised in the
profit or loss.
The maximum balance-sheet default risk is derived from the carrying amounts of the financial assets
stated on the balance sheet. The default risks for derivatives correspond to their positive fair values.
Risks can also stem from financial guarantees and loan commitments which we have to fulfil vis-à-vis
external creditors in the event of a default of a certain debtor. As of 31 December 2020, these
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4
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statements
Notes
5
Further information
obligations amounted to €163 million (previous year: €174 million). As of 31 December 2020, default
• Stage 3 – Lifetime expected credit losses (net): If in addition to the criteria for Stage 2 there is an
risks were balanced against credit collateral, financial guarantees, bank guarantees and other
objective indication of an impairment, the financial asset is assigned to Stage 3. The impairment is
collaterals amounting to €3.6 billion (previous year: €5.5 billion). Of this, €0.8 billion relates to trade
calculated analogously to Stage 2. In this case, however, the effective interest rate used for
receivables (previous year: €1.1 billion), €0.6 billion to derivatives used for hedging purposes (previous
measurement is applied to the carrying amount after impairment (net).
year: €1.1 billion), and €2.2 billion to other derivatives (previous year: €3.3 billion). There were no
material defaults in fiscal 2020 or the previous year.
In the RWE Group, risk provisions are formed for financial instruments in the following categories:
In the RWE Group, the risk provision for financial assets is determined on the basis of expected credit
• debt instruments measured at amortised cost,
losses. These are determined on the basis of the probability of default, loss given default and the
• debt instruments measured at fair value through other comprehensive income.
exposure at default. We determine the probability of default and loss given default using historical data
and forward-looking information. The exposure at default date for financial assets is the gross carrying
For debt instruments for which there has been no significant rise in credit risk since initial recognition, a
amount on the balance-sheet date. The expected credit loss for financial assets determined on this
risk provision is recognised in the amount of the expected 12-month credit losses (Stage 1). In addition,
basis corresponds to the difference between the contractually agreed payments and the payments
a financial instrument is assigned to Stage 1 of the impairment model if the absolute credit risk is low on
expected by RWE, discounted by the original effective interest rate. The assignment to one of the levels
the balance-sheet date. The credit risk is classified as low if the debtor’s internal or external rating is
described below influences the level of the expected losses and the effective interest income recognised.
investment-grade. For trade accounts receivable, the risk provision corresponds to the lifetime expected
• Stage 1 – Expected 12-month credit losses: At initial recognition, financial assets are generally
credit losses (Stage 2).
assigned to this stage – with the exception of those that have been purchased or originated credit
To determine whether a financial instrument is assigned to Stage 2 of the impairment model, it must be
impaired, which are thus considered separately. The level of impairment results from the cash flows
determined whether the credit risk has increased significantly since initial recognition. To make this
expected for the entire term of the financial instrument, multiplied by the probability of a default
assessment, we consider quantitative and qualitative information supported by our experience and
within 12 months from the reporting date. The effective interest rate used for measurement is
assumptions regarding future developments. In so doing, special importance is accorded to the sector
determined on the basis of the carrying amount before impairment (gross).
in which the RWE Group’s debtors are active. Our experience is based on studies and data from financial
• Stage 2 – Lifetime expected credit losses (gross): If the credit risk has risen significantly between
analysts and government authorities, amongst others.
initial recognition and the reporting date, the financial instrument is assigned to this stage. Unlike
Stage 1, default events expected beyond the 12-month period from the reporting date are also
considered in calculating the impairment. The effective interest rate used for measurement is still
determined on the basis of the carrying amount before impairment (gross).
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2
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of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Special attention is paid to the following developments:
A payment default and an associated assignment of the financial asset to Stage 3 is also assumed if
• significant deterioration of the internal or external rating of the financial instrument,
disproving the assumption of a payment default. Based on our experience, we generally assume that this
the contractually agreed payments are more than 90 days overdue and there is no information
• unfavourable changes in risk indicators, e. g. credit spreads or debtor-related credit default swaps,
assumption does not apply to trade accounts receivable.
• negative development of the debtor’s regulatory, technological or economic environment,
• danger of an unfavourable development of business resulting in a significant reduction in
A financial asset is depreciated if there are indications that the counterparty is in serious financial
operating income.
difficulty and the situation is unlikely to improve. We may also take legal recourse and other measures
in order to enforce the contractually agreed payments in the event of an impairment.
Independent thereof, a significant rise in credit risk and thus an assignment of the financial instrument
to Stage 2 are assumed if the contractually agreed payments are more than 30 days overdue and there
is no information that contradicts the assumption of a payment default.
We draw conclusions about the potential default of a counterparty from information from internal credit
risk management. If internal or external information indicates that the counterparty cannot fulfil its
obligations, the associated receivables are classified as unrecoverable and assigned to Stage 3 of the
impairment model. Examples of such information are:
• The debtor of the receivable has apparent financial difficulties.
• The debtor has already committed a breach of contract by missing or delaying payments.
• Concessions already had to be made to the debtor.
• An insolvency or another restructuring procedure is impending.
• The market for the financial asset is no longer active.
• A sale is only possible at a high discount, which reflects the debtor’s reduced creditworthiness.
176
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of operations
3
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4
Consolidated financial
statements
Notes
5
Further information
The following impairments were recognised for financial assets stated under the following balance-sheet
items within the scope of IFRS 7:
Impairment of financial assets
€ million
Financial receivables
Balance at 1 Jan 2020
Remeasurement due to new measurement parameters
Transfer from Level 2 to Level 1
Balance at 31 Dec 2020
Impairment of financial assets
€ million
Financial receivables
Balance at 1 Jan 2019
Remeasurement due to new measurement parameters
Newly acquired / issued financial assets
Redeemed or derecognised financial assets
Transfer from Level 2 to Level 1
Balance at 31 Dec 2019
Stage 1 –
12-month
expected credit losses
Stage 2 –
lifetime
expected credit losses
Stage 3 –
lifetime
expected credit losses
11
– 5
6
3
– 3
11
2
13
Stage 1 –
12-month
expected credit losses
Stage 2 –
lifetime
expected credit losses
Stage 3 –
lifetime
expected credit losses
23
4
2
– 18
11
6
1
– 4
3
11
11
Total
25
– 5
– 1
19
Total
40
4
3
– 18
– 4
25
177
RWE Annual Report 2020 1
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2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
For trade accounts receivable, the expected credit loss is determined by applying the simplified
approach taking account of the entire lifetime of the financial instruments.
In the RWE Group, there are no cases where a risk provision for trade accounts receivable was not
recognised due to the collateral on the books.
The following tables show the development of the risk provisions for trade accounts receivable:
Risk provision for trade accounts receivable
€ million
Balance at 1 Jan 2020
Addition
Changes in the scope of consolidation
Balance at 31 Dec 2020
Risk provision for trade accounts receivable
€ million
Balance at 1 Jan 2019
Addition
Changes in the scope of consolidation
Balance at 31 Dec 201
32
13
-3
42
27
9
-4
32
178
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
The following table presents the gross carrying amounts of the financial instruments under the scope
of the impairment model:
Gross carrying amounts of financial assets
as of 31 Dec 2020
€ million
Class 1 – 5: low risk
Class 6 – 9: medium risk
Class 10: high risk
Class 11: doubtful
Class 12: loss
Gross carrying amounts of financial assets
as of 31 Dec 2019
€ million
Class 1 – 5: low risk
Class 6 – 9: medium risk
Class 10: high risk
Class 11: doubtful
Class 12: loss
Equivalent
to
S&P scale
AAA to BBB–
BB+ to BB–
B+ to B–
CCC to C
D
Equivalent
to
S&P scale
AAA to BBB–
BB+ to BB–
B+ to B–
CCC to C
D
Stage 2 –
lifetime
expected
credit losses
42
Stage 1 –
12-month
expected
credit losses
11,600
59
19
11,678
42
Stage 3 –
lifetime
expected
credit losses
Trade accounts
receivable
2,779
153
85
14
37
11
1
12
Total
14,421
223
104
14
38
3,068
14,800
Stage 1 –
12-month
expected
credit losses
Stage 2 –
lifetime
expected
credit losses
Stage 3 –
lifetime
expected
credit losses
Trade accounts
receivable
Total
39
1
10
50
12
1
13
3,261
10,562
95
67
6
36
229
120
6
37
3,465
10,954
7,262
121
43
7,426
179
RWE Annual Report 2020 1
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2
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of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Liquidity risks. As a rule, RWE Group companies refinance with RWE AG. In this regard, there is a risk
RWE AG’s credit line was increased to €5 billion in April 2019. Its two tranches expire in April 2021
that liquidity reserves will prove to be insufficient to meet financial obligations in a timely manner. In
(€2 billion) and April 2024 (€3 billion). The commercial paper programme was extended during the year
2021, liabilities owed to banks of €0.1 billion (previous year: €0.4 billion) are due. In addition,
and now allows for issuance up to a maximum amount of €5 billion (previous year: US$5 billion). As in the
short-term debt must be repaid. Above and beyond this, no other capital market debt matures in 2021
previous year, this programme was not used as of the balance-sheet date. Above and beyond this,
(previous year: €0.5 billion, taking account of the earliest possible call date of the hybrid bond, which is
RWE AG can finance itself using a €10 billion debt issuance programme; as of the balance- sheet date,
classified as debt pursuant to IFRS).
outstanding bonds from this programme amounted to €0 billion (previous year: €0 billion) at RWE AG.
As of 31 December 2020, holdings of cash and cash equivalents and current marketable securities
amounted to €8,993 million (previous year: €6,450 million).
Financial liabilities falling under the scope of IFRS 7 are expected to result in the following (undiscounted)
Accordingly, the RWE Group's medium- term liquidity risk can be classified as low.
payments in the coming years:
Redemption and interest payments on
financial liabilities
€ million
Bonds payable 1
Bank debt
Lease liabilities
Other financial liabilities
Derivative financial liabilities
Collateral for trading activities
Miscellaneous other financial liabilities
Carrying amounts
31 Dec 2020
549
1,611
1,187
1,135
8,661
716
2,687
1 Including hybrid bonds classified as debt as per IFRS, taking into account the earliest possible call date.
Redemption payments
Interest payments
2021
2022 to 2025
From 2026
2021
2022 to 2025
From 2026
282
140
263
324
201
82
267
1,385
957
476
605
2
27
26
22
50
20
110
44
91
149
78
22
9
404
472
151
85
86
350
7,857
716
2,645
180
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2
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3
Responsibility statement
4
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statements
Notes
5
Further information
Redemption and interest payments on
financial liabilities
€ million
Bonds payable 1
Bank debt
Lease liabilities
Other financial liabilities 2
Derivative financial liabilities
Collateral for trading activities
Miscellaneous other financial liabilities
Carrying amounts
31 Dec 2019
1,110
1,356
1,102
1,645
539
393
83
800
10,479
10,092
400
3,127
400
3,123
Redemption payments
Interest payments
2020
2021 to 2024
From 2025
2020
2021 to 2024
From 2025
70
244
329
85
9
571
894
784
541
302
4
44
23
24
57
22
116
90
89
164
64
53
94
200
508
153
1 Including hybrid bonds classified as debt as per IFRS, taking into account the earliest possible call date.
2 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
Above and beyond this, as of 31 December 2020, there were financial guarantees for external creditors
Gas purchases by the RWE Group are partially based on long-term take-or-pay contracts. The
in the amount of €110 million (previous year: €121 million), which are to be allocated to the first year
conditions in these contracts, which have terms up to 2036 in some cases, are renegotiated by the
of repayment. Additionally, Group companies have provided loan commitments to third-party
contractual partners at certain intervals, which may result in changes in the reported payment
companies amounting to €53 million (previous year: €53 million), which are callable in 2021.
obligations. Calculation of the payment obligations resulting from the purchase contracts is based on
Detailed information on the risks of the RWE Group and on the objectives and procedures of the risk
management is presented on page 69 et seqq. in the review of operations.
Furthermore, RWE has long-term financial commitments for purchases of electricity. As of
(28) Contingent liabilities and financial commitments
contracts totalled €7.1 billion (previous year: €7.1 billion), of which €0.3 billion is due within one year
As of 31 December 2020, the amount of capital commitments totalled €2,071 million (previous year:
(previous year: €0.2 billion). Above and beyond this, there are also long-term purchase and service
€1,989 million). This mainly consisted of investment in property, plant and equipment.
contracts for uranium, conversion, enrichment and fabrication.
31 December 2020, the minimum payment obligations stemming from the major purchase
parameters from the internal planning.
We have made long-term contractual purchase commitments for supplies of fuels, including natural gas
We bear legal and contractual liability from our membership in various associations which exist in
in particular. Payment obligations stemming from the major long-term purchase contracts amounted
connection with power plant projects, profit- and loss-pooling agreements and for the provision of
to €23.6 billion as of 31 December 2020 (previous year: €27.1 billion), of which €0.3 billion is due within
liability cover for nuclear risks, amongst others.
one year (previous year: €0.3 billion).
181
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2
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of operations
3
Responsibility statement
4
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statements
Notes
5
Further information
On the basis of a mutual benefit agreement, RWE AG and other parent companies of German nuclear
Activities with run-of-river, pumped storage, biomass, and gas-fired power plants are bundled in the
power plant operators undertook to provide approximately €2,244 million in funding to liable nuclear
Hydro / Biomass / Gas segment. It also contains the Dutch hard coal power stations Amer 9 and
power plant operators to ensure that they are able to meet their payment obligations in the event of
Eemshaven, which are increasingly co-firing biomass, and the company RWE Technology International,
nuclear damages. From 1 January 2021 onwards, RWE AG has a 37.299 % contractual share in the
which specialises in project management and engineering services. This segment is the responsibility of
liability (30.452 % until 31 December 2020) plus 5 % for damage settlement costs.
RWE Generation. The 37.9 % stake in the Austrian energy utility KELAG is also reported in the Hydro /
As part of the Group restructuring that occurred in fiscal 2016, a large portion of the pension commit-
Biomass / Gas segment.
ments which up to then had been reported at the holding level were transferred to former Group
The Supply & Trading segment contains energy and commodities trading, the marketing and hedging of
companies (former subsidiaries innogy SE, Essen, and affiliated companies) by cancelling the perfor-
the RWE Group’s electricity position and the gas midstream business. This segment is the responsibility of
mance obligation existing on an intra-group basis. The guarantees remaining vis-à-vis external parties
RWE Supply & Trading, which also supplies certain major industrial and commercial customers with
were cancelled. The Group is liable for the accrued claims of the active and former employees of these
electricity and natural gas. Additionally, gas storage facilities in Germany and the Czech Republic also
companies in the amount of €6,404 million.
belong to this segment.
RWE AG and its subsidiaries are involved in official, regulatory and antitrust proceedings, litigation and
The Coal / Nuclear segment covers German electricity production using lignite, hard coal and nuclear
arbitration proceedings related to their operations and are affected by the results of such. In some
power, as well as lignite mining operations in the Rhineland. It also includes the investment in the Dutch
cases, out-of-court claims are also filed. However, RWE does not expect any material negative
power plant operator EPZ (30 %) and URANIT (50 %), which holds a 33 % stake in Urenco, a uranium
repercussions from these proceedings on the RWE Group’s economic or financial position.
enrichment specialist. The aforementioned activities and investments are the responsibility of the group
companies RWE Power (lignite, nuclear) and RWE Generation (hard coal).
(29) Segment reporting
RWE is divided into five segments, which are separated from each other based on functional criteria.
‘Other, consolidation’ covers RWE AG, consolidation effects and the activities of other business areas
which are not presented separately. These activities primarily include our non-controlling interests in the
In the Offshore Wind segment, we report on our business in offshore wind, which is overseen by RWE
German transmission system operator Amprion and in E.ON; the E.ON dividend is reported in the
Renewables. The main production sites are located in the United Kingdom and Germany. In addition to
financial result.
electricity generation, activities in this field also include the development and realisation of projects to
expand capacity.
Onshore Wind / Solar encompasses our activities with onshore wind, solar power and battery storage.
Here again, in addition to electricity generation, the focus is on expanding capacities. RWE Renewables
has operating responsibility. Along with the USA, the main production sites are located in the United
Kingdom, Germany, Italy, Spain, Poland and the Netherlands, as well as in Australia in the field of solar
power.
182
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To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Segment reporting
Divisions 2020
€ million
External revenue
(incl. natural gas tax / electricity tax)
Intra-group revenue
Total revenue
Adjusted EBIT
Operating income from investments
Operating income from investments
accounted for using the equity method
Operating depreciation, amortisation and
impairment losses
Impairment losses
Adjusted EBITDA
Carrying amount of investments accounted
for using the equity method
Capital expenditure on intangible assets,
property, plant and equipment
Offshore
Wind
Onshore
Wind / Solar
Hydro /
Biomass / Gas
Supply &
Trading
Other,
consolidation
Core business
Coal /
Nuclear
Consoli-
dation
RWE Group
332
959
1,291
697
127
120
372
1,069
1,490
1,855
304
2,159
86
9
– 2
386
97
472
193
756
1,154
1,059
3,144
4,203
283
53
52
338
561
621
655
153
9,789
2,778
12,567
496
– 57
6
43
64
539
3
43
7
13,042
– 6,803
– 6,796
– 25
124
125
– 25
829
382
13,424
1,537
256
301
1,139
722
2,676
3,170
2,106
854
3,075
3,929
234
95
95
325
1,097
559
127
183
– 3,457
– 3,457
13,896
13,896
1,771
351
396
1,464
1,819
3,235
3,297
– 4
2,285
Regions 2020
€ million
External revenue 1, 2
Intangible assets and property, plant and equipment
1 Excluding natural gas tax / electricity tax.
2 Broken down by the region in which the service was provided.
Germany
3,988
5,714
UK
Rest of Europe
North America
3,909
10,812
3,958
3,063
1,146
2,953
Other
687
273
RWE Group
13,688
22,815
183
RWE Annual Report 2020 1
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2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Segment reporting
Divisions 2019
€ million
External revenue
(incl. natural gas tax / electricity tax)
Intra-group revenue
Total revenue
Adjusted EBIT
Operating income from investments
Operating income from investments
accounted for using the equity method
Operating depreciation, amortisation and
impairment losses
Impairment losses
Adjusted EBITDA
Carrying amount of investments accounted
for using the equity method
Capital expenditure on intangible assets
and property, plant and equipment1
Offshore
Wind
Onshore
Wind / Solar
Hydro /
Biomass / Gas
Supply &
Trading
Other,
consolidation
Core business
Coal /
Nuclear
Consoli-
dation
RWE Group
85
682
767
377
32
19
237
272
614
1,622
492
1,265
271
1,536
59
11
13
236
83
295
230
752
1,202
3,409
4,611
342
53
51
330
772
672
720
212
9,689
3,267
12,956
691
1
34
40
88
7
12,248
– 6,901
– 6,894
– 128
132
728
12,976
1,341
229
131
248
– 1
1
842
1,216
2,183
731
– 129
3
29
639
3,214
– 3
1,482
1,029
2,385
3,414
– 74
76
75
380
785
306
68
281
– 3,113
– 3,113
– 1
4
13,277
13,277
1,267
305
323
1,222
2,001
2,489
3,281
1,767
1 Prior-year figures restated; only cash-effective investments are shown.
Regions 2019
€ million
External revenue 1, 2, 3
Intangible assets and property, plant and equipment
Germany
4,840
6,457
UK
Rest of Europe
North America
5,035
10,192
2,852
3,363
92
3,500
Other
306
281
RWE Group
13,125
23,793
1 Revised presentation due to the UK exiting the EU; prior-year figures were restated accordingly.
2 Excluding natural gas tax / electricity tax.
3 Broken down by the region in which the service was provided.
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3
Responsibility statement
4
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statements
Notes
5
Further information
External revenue by product in 2020
Offshore
Wind
Onshore
Wind / Solar
Hydro /
Biomass / Gas
Supply &
Trading
Other
Core business
Coal /
Nuclear
RWE Group
€ million
External revenue1
of which: electricity
of which: gas
of which: other revenue
1 Excluding natural gas tax / electricity tax.
.
332
332
1,855
1,676
179
1,056
684
5
367
9,597
8,775
529
293
9
1
8
12,849
11,468
534
847
External revenue by product in 2019
Offshore
Wind
Onshore
Wind / Solar
Hydro /
Biomass / Gas
Supply &
Trading
Other
Core business
€ million
External revenue1, 2
of which: electricity
of which: gas
of which: other revenue
1 Excluding natural gas tax / electricity tax.
2 Some prior-year figures adjusted.
85
85
1,265
943
322
1,200
671
22
507
9,554
8,259
1,134
161
6
1
5
12,110
9,959
1,156
995
839
233
606
Coal /
Nuclear
1,015
291
724
13,688
11,701
534
1,453
RWE Group
13,125
10,250
1,156
1,719
185
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Notes on segment data. We report revenue between the segments as RWE intra-group revenue.
Further commentary on the non-operating result can be found on page 55 et seq. of the review of
Internal supply of goods and services is settled at arm’s length conditions. Adjusted EBITDA is used for
operations.
internal management. The following table presents the reconciliation of adjusted EBITDA to adjusted
EBIT and income from continuing operations before tax:
(30) Notes to the cash flow statement
Reconciliation of income items
€ million
Adjusted EBITDA
2020
2019
Cash and cash equivalents in the cash flow statement correspond to the amount stated on the balance
The cash flow statement classifies cash flows according to operating, investing and financing activities.
3,235
2,489
marketable securities with a maturity of three months or less from the date of acquisition.
sheet. Cash and cash equivalents consist of cash on hand, demand deposits and fixed-interest
– Operating depreciation, amortisation and impairment losses
−1,464
– 1,222
Adjusted EBIT
+ Non-operating result
+ Financial result
Income from continuing operations before tax
1,771
1,267
Among other things, cash flows from operating activities include:
−121
−454
1,196
– 1,081
– 938
– 752
• cash flows from interest and dividends of €281 million (previous year: €184 million) and cash flows
used for interest expenses of €299 million (previous year: €257 million),
• – €72 million (previous year: €325 million) in taxes on income paid (less refunds),
•
income from investments, corrected for items without an effect on cash flows, in particular from
Income and expenses that are unusual from an economic perspective, or stem from exceptional events,
accounting using the equity method, which amounted to €323 million (previous year: €187 million).
prejudice the assessment of operating activities. They are reclassified to the non-operating result.
Amongst other things, these can include book gains or losses from the disposal of investments or
Flows of funds from the acquisition and sale of consolidated companies are included in cash flows from
non-current assets not required for operations, impairment of the goodwill of fully consolidated
investing activities. Effects of foreign exchange rate changes and other changes in value are stated
companies, as well as effects of the fair valuation of certain derivatives.
separately.
Non-operating result
€ million
Disposal result
Impact of the valuation of derivatives and inventories on earnings
Other
Non-operating result
2020
2019
Cash flows from financing activities of continuing operations include €492 million (previous year:
13
1,886
48
81
−2,020
– 1,210
−121
– 1,081
€430 million) which was distributed to RWE shareholders, €30 million (previous year: €51 million)
which was distributed to non-controlling shareholders, and €0 million (previous year: €61 million)
which was distributed to hybrid capital investors. Furthermore, cash flows from financing activities
include purchases of €485 million (previous year: €86 million) and sales in the amount of €562 million
(previous year: €0 million) of shares in subsidiaries and other business units which did not lead to a
change of control.
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2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
Changes in liabilities from financing activities are presented in the following table:
Statement of changes
in financial liabilities
€ million
Current financial liabilities
Non-current financial liabilities
Other items
Statement of changes
in financial liabilities
€ million
Current financial liabilities2
Non-current financial liabilities
Other items
1 Jan 2020
Increase /
repayment
1,689
3,924
15
592
−546
1 Jan 20191
Increase /
repayment
787
2,330
986
218
474
Changes in
the scope of
consolidation
38
−289
Changes in
the scope of
consolidation
6,961
2,468
Currency
effects
Changes in
fair values
Other
changes
31 Dec 2020
15
−183
−276
−234
−93
1,247
3,951
Currency
effects
Changes in
fair values
−392
17
137
Other
changes
−6,790
−1,109
31 Dec 2019
1,689
3,924
1 Including the effect of the initial adoption of IFRS 16 in the amount of €353 million.
2 Figures restated due to retroactive adjustments to the first-time consolidation of the acquired E.ON operations; see page 109 in the Notes.
The amount stated in the ‘Other items’ line item contains cash- effective changes resulting from
derivative financial instruments and margin payments, which are recognised in cash flows from
financing activities in the cash flow statement.
Restrictions on the disposal of cash and cash equivalents amounted to €45 million (previous year:
€51 million).
187
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2
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3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(31) Related party disclosures
The key items from transactions with associates and joint ventures mainly stem from supply and service
Within the framework of their ordinary business activities, RWE AG and its subsidiaries have business
transactions. In addition to supply and service transactions, there are also financial links with joint
relationships with numerous companies. These include associated companies and joint ventures,
ventures. During the reporting period, income of €0 million (previous year: €2 million) was recorded from
which are classified as related parties. In particular, this category includes material investments of the
interest-bearing loans to joint ventures. As of the balance-sheet date, financial receivables accounted
RWE Group, which are accounted for using the equity method.
for €42 million of the receivables from joint ventures (previous year: €55 million). All transactions were
Business transactions were concluded with major associates and joint ventures, resulting in the following
from those with other enterprises. €124 million of the receivables (previous year: €108 million) and
items in RWE’s consolidated financial statements:
€162 million of the liabilities (previous year: €10 million) fall due within one year. Other obligations from
completed at arm’s length conditions, i.e. on principle the conditions of these transactions did not differ
Key items from transactions with
associates
and joint ventures
€ million
Income
Expenses
Receivables
Liabilities
Associated companies
Joint ventures
executory contracts amounted to €112 million (previous year: €99 million).
2020
2019
320
187
119
134
258
142
88
123
2020
182
46
49
72
Above and beyond this, the RWE Group did not execute any material transactions with related
2019
companies or persons.
74
45
59
7
For fiscal 2020, the members of the Executive Board and Supervisory Board of RWE AG were deemed to
be key management personnel for the RWE Group. In the previous year, until 18 September 2019, this
also included the Executive Board and Supervisory Board members of innogy SE. The following
information pertains to total compensation pursuant to IAS 24.
Key management personnel (Executive and Supervisory Board members) received €8,357,000 in
short-term compensation components for fiscal 2020 (previous year: €16,457,000 ). Additionally,
share-based payments within the framework of LTIP SPP amounted to €4,731,000 (previous year:
€8,386,000) and the pension service cost amounted to €595,000 (previous year: €554,000).
Provisions totalling €32,959,000 (previous year: €29,351,000) were formed for obligations vis-à-vis
key management personnel.
188
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
The remuneration model and remuneration of the Executive and Supervisory Boards of RWE AG
(32) Auditors‘ fees
calculated pursuant to the German Commercial Code is presented in the remuneration report, which is
The fees for audit services primarily contain the fees for the audit of the consolidated financial state-
included in the review of operations.
ments and for the audit of the financial statements of RWE AG and its subsidiaries, along with the review
In total, the remuneration of the Executive Board amounted to €8,501,000 (previous year: €7,571,000).
system, as well as expenses related to statutory or court-ordered requirements. In particular, the fees
This contains share- based payments amounting to €2,934,000 (111,070 RWE performance shares)
for tax services include compensation for consultation in the preparation of tax returns and other
granted within the framework of the LTIP SPP. In the previous year, share-based payments amounting to
national and international tax-related matters as well as review of resolutions of the tax authorities.
€2,350,000 (123,037 RWE performance shares) were granted.
Other services primarily include compensation for M&A activity and IT project consulting.
of the interim statements. Other assurance services include fees for review of the internal controlling
Including remuneration from subsidiaries for the exercise of mandates, the Supervisory Board received
RWE recognised the following fees as expenses for the services rendered by the auditors of the
total remuneration of €2,880,000 (previous year: €3,304,000) in fiscal 2020. The employee represent-
consolidated financial statements, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
atives on the Supervisory Board have labour contracts with the respective Group companies.
(PwC) and companies belonging to PwC’s international network:
Remuneration occurs in accordance with the relevant contractual conditions.
During the period under review, no loans or advances were granted to members of the Executive Board.
PwC network fees
2020
Two employee representatives on the Supervisory Board had employee loans totalling €2,000.
€ million
Former members of the Executive Board and their surviving dependants received €10,962,000
Audit services
(previous year: €10,623,000), of which €671,000 came from subsidiaries (previous year: €651,000).
Other assurance services
As of the balance-sheet date, € 145,620,000 (previous year: €146,568,000) were accrued for
defined benefit obligations to former members of the Executive Board and their surviving dependants.
Of this, €6,925,000 was set aside at subsidiaries (previous year: €6,980,000).
Tax services
Other services
Information on the members of the Executive and Supervisory Boards is presented on page 226 et
seqq. of the Notes.
Total
10.7
1.2
1.3
2.5
15.7
Of which:
Germany
5.8
1.0
0.2
2.5
9.5
2019
Total
Of which:
Germany
17.5
12.9
2.5
0.9
5.8
2.3
0.3
5.6
26.7
21.1
189
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(33) Application of the exemption rule pursuant to Sec. 264, Para. 3 and Sec. 264b of the
RWE successful in auction to acquire rights to use new wind power sites in UK North Sea
German Commercial Code
In February 2021, RWE secured two neighbouring locations in the UK North Sea by placing the winning
In fiscal 2020, the following German subsidiaries made partial use of the exemption clause pursuant to
bid in an auction for option rights to use new areas for offshore wind farms. This allows us to use the
Sec. 264, Para. 3 and Sec. 264b of the German Commercial Code (HGB):
areas to develop projects with a maximum volume of 3,000 MW. In exchange, we will pay an annual
option fee of £82,552 / MW (plus inflation) until we make a final investment decision. First, the British
• BGE Beteiligungs-Gesellschaft für Energieunternehmen mbH, Essen,
Crown Estate will perform an environmental compatibility audit for the new sites. Given a positive result,
• GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen,
we will start developing the project. As soon as the necessary permits have been obtained, we can
• Kernkraftwerk Lingen Gesellschaft mit beschränkter Haftung, Lingen (Ems),
participate in a subsidy auction for a contract for difference (CfD), after which we can make a final
• KMG Kernbrennstoff-Management Gesellschaft mit beschränkter Haftung, Essen,
investment decision. Then the option fee will be replaced by a much lower lease payment. If the project
• Rheinbraun Brennstoff GmbH, Cologne,
• Rheinische Baustoffwerke GmbH, Bergheim,
progresses on schedule, the new wind farms could be commissioned towards the end of the decade.
• RV Rheinbraun Handel und Dienstleistungen GmbH, Cologne,
Considerable drop in earnings due to worst cold wave in Texas this century
• RWE Nuclear Beteiligungs-GmbH, Essen,
• RWE Technology International GmbH, Essen,
• RWE Trading Services GmbH, Essen.
In February 2021, an extraordinary cold front in parts of the USA curtailed energy supply substantially.
Winter storms and icy rain forced some RWE wind farms to go offline for several days. We had sold
forward a portion of the generation of these assets and therefore had to conduct short-term spot
purchases in order to meet our supply obligations. Due to the tight supply situation and statutory price
(34) Events after the balance-sheet date
regulations, we had to pay up to US$9,000 / MWh for these electricity purchases. This curtailed earnings
In the period from 1 January 2021 until the completion of the consolidated financial statements on
in the Onshore Wind / Solar segment by a low to medium triple-digit million euro amount.
5 March 2021, the following significant events occurred:
German government and nuclear power plant operators agree on compensation for
Sale of 75 % of the shares of the onshore wind farms Stella, Cranell and East and West Raymond
nuclear phaseout
In January 2021, the sale of a total of 75 % of the shares in the three onshore wind farms Stella, Cranell
In March 2021, the German government and the country’s nuclear power station operators reached an
and East Raymond in Texas was completed. In this transaction, 51 % of the shares were sold to Algonquin
agreement on the compensation due for the accelerated nuclear phaseout. The talks were initiated
Power Fund (America) Inc., USA, a subsidiary of Algonquin Power & Utilities Corp., Canada and another
because the German Constitutional Court declared the original statutory compensation regulations null
24 % of the shares to the UL investment firm Greencoat Capital. The underlying contracts were
and void (see page 39). As regards RWE, this relates to unusable generation contingents of 25.9 million
concluded in December 2020 and cover the sale of a total of 75 % of the shares in the onshore wind
MWh and stranded investments of about €40 million. The government has indicated that it will pay
farm West Raymond, which is expected to be completed in the second quarter of 2021.
€33.22 / MWh as compensation for the electricity contingents. Furthermore, we should be reimbursed
These wind farms are part of the Onshore Wind / Solar segment. Upon completion of the transaction in
a public contract between the government and power plant operators. It also needs to be reviewed by
January 2021, RWE deconsolidated the above wind farms and reports its remaining 25 % stake as an
the European Commission for compliance with subsidy law. The agreement with the government did not
investment accounted for using the equity method. RWE expects a profit in the medium to high
affect the Group’s 2020 financial statements.
for half of the stranded investments. We accept this solution. However, it is yet to be written into law and
double-digit million euro range from this sale.
190
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Notes
5
Further information
(35) Declaration according to Sec. 161 of the German Stock Corporation Act
The declaration on the German Corporate Governance Code prescribed by Sec. 161 of the German
Stock Corporation Act (AktG) has been submitted for RWE AG and has been made permanently and
publicly available to shareholders on the Internet pages of RWE AG1.
Essen, 5 March 2021
The Executive Board
Schmitz
Krebber
Müller
Seeger
1 www.rwe.com/en/statement-of-compliance-2020
191
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
4.7 List of shareholdings (part of the notes)
List of shareholdings as per Sec. 285 No. 11 and No. 11a and Sec. 313 Para. 2 (in relation to Sec. 315 e Para. 1) of HGB as of 31 December 2020
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Aktivabedrijf Wind Nederland B.V., Zwolle/Netherlands
Alte Haase Bergwerks-Verwaltungs-Gesellschaft mbH, Dortmund
Amrum-Offshore West GmbH, Düsseldorf
An Suidhe Wind Farm Limited, Swindon/United Kingdom
Anacacho Holdco, LLC, Wilmington/USA
Anacacho Wind Farm, LLC, Wilmington/USA
Andromeda Wind s.r.l., Bolzano/Italy
Avolta Storage Limited, Kilkenny/Ireland
Belectric Australia Pty. Limited, Melbourne/Australia
Belectric Canada Solar Inc., Vancouver/Canada
Belectric Espana Fotovoltaica S.L., Barcelona/Spain
Belectric France S.à.r.l., Vendres/France
BELECTRIC GmbH, Kolitzheim
Belectric Inversiones Latinoamericana S.L., Barcelona/Spain
Belectric Israel Ltd., Be’er Scheva/Israel
Belectric Italia s.r.l., Latina/Italy
Belectric Photovoltaic India Private Limited, Mumbai/India
Belectric Solar & Battery GmbH, Kolitzheim
Belectric Solar Ltd., Slough/United Kingdom
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
€ ’000
10,756
– 67,688
2,632
23,642
56,363
123,706
10,021
– 486
825
658
508
57
0
32
12,141
2,725
791
3,094
1,475
€ ’000
– 14,889
– 2,359
164,990
662
0
1,727
2,443
– 194
2,148
668
– 45
611
– 28,139
– 13
544
151
160
– 7,070
144
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
192
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Direct
Total
BELECTRIC Solar Power, S.L., Barcelona/Spain
BGE Beteiligungs-Gesellschaft für Energieunternehmen mbH, Essen
100
Bilbster Wind Farm Limited, Swindon/United Kingdom
Blackjack Creek Wind Farm, LLC, Wilmington/USA
Boiling Springs Holdco, LLC, Wilmington/USA
Boiling Springs Wind Farm, LLC, Wilmington/USA
Bruenning’s Breeze Holdco, LLC, Wilmington/USA
Bruenning’s Breeze Wind Farm, LLC, Wilmington/USA
Carl Scholl GmbH, Cologne
Carnedd Wen Wind Farm Limited, Swindon/United Kingdom
Cassadaga Class B Holdings LLC, Wilmington/USA
Cassadaga Wind Holdings LLC, Wilmington/USA
Cassadaga Wind LLC, Chicago/USA
Champion WF Holdco, LLC, Wilmington/USA
Champion Wind Farm, LLC, Wilmington/USA
Cloghaneleskirt Energy Supply Limited, Kilkenny/Ireland
Colbeck’s Corner Holdco, LLC, Wilmington/USA
Colbeck’s Corner, LLC, Wilmington/USA
Cranell Holdco, LLC, Wilmington/USA
Cranell Wind Farm, LLC, Wilmington/USA
DOTTO MORCONE S.r.l., Rome/Italy
Dromadda Beg Wind Farm Limited, Kilkenny/Ireland
Edgware Energy Limited, Swindon/United Kingdom
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
193
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
€ ’000
13
201
3,906
0
0
11,205
62,905
€ ’000
– 37
1
269
0
0
– 59
0
209,819
– 5,700
614
– 4,320
187,242
187,245
118,859
97,995
97,995
37
63,755
213,667
57,616
31,223
162
2,118
129
33
– 216
– 4
0
– 52
– 5,669
– 5,669
– 38
0
– 5,189
0
– 63
– 377
603
162
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
El Algodon Alto Wind Farm, LLC, Wilmington/USA
Electra Insurance Limited, Hamilton/Bermuda
Energies France S.A.S. – Group – (pre-consolidated)
Centrale Hydroelectrique d'Oussiat S.A.S., Paris/France
Energies Charentus S.A.S., Paris/France
Energies France S.A.S., Paris/France
Energies Maintenance S.A.S., Paris/France
Energies Saint Remy S.A.S., Paris/France
Energies VAR 1 S.A.S., Paris/France
Energies VAR 3 S.A.S., Paris/France
SAS Île de France S.A.S., Paris/France
Energy Resources Holding B.V., Geertruidenberg/Netherlands
Energy Resources Ventures B.V., Geertruidenberg/Netherlands
Farma Wiatrowa Barzowice Sp. z o.o., Warsaw/Poland
Forest Creek Investco, Inc., Wilmington/USA
Forest Creek WF Holdco, LLC, Wilmington/USA
Forest Creek Wind Farm, LLC, Wilmington/USA
Fri-El Anzi Holding s.r.l., Bolzano/Italy
Fri-El Anzi s.r.l., Bolzano/Italy
Fri-El Guardionara s.r.l., Bolzano/Italy
GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
Generación Fotovoltaica De Alarcos, S.L.U., Barcelona/Spain
GfV Gesellschaft für Vermögensverwaltung mbH, Dortmund
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
100
100
Total
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
51
100
100
100
€ ’000
0
25,696
33,138
€ ’000
0
– 2,871
– 9712
113,117
18,708
29,022
21,299
75,081
75,081
7,098
7,806
10,828
17,823,771
76
16,825
– 68
13,681
0
– 4,988
– 4,988
1,700
1,928
2,339
1
– 92
133,844
– 1,437
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
194
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Direct
Total
Glen Kyllachy Wind Farm Limited, Swindon/United Kingdom
Grandview Holdco, LLC, Wilmington/USA
Green Gecco GmbH & Co. KG, Essen
Hardin Class B Holdings LLC, Wilmington/USA
Hardin Wind Holdings LLC, Wilmington/USA
Hardin Wind LLC, Chicago/USA
Harryburn Wind Farm Limited, Swindon/United Kingdom
Hickory Park Solar, LLC, Wilmington/USA
Inadale Wind Farm, LLC, Wilmington/USA
innogy indeland Windpark Eschweiler GmbH & Co. KG, Eschweiler
innogy Italia s.p.a., Milan/Italy
Inversiones Belectric Chile LTDA, Santiago de Chile/Chile
INVESTERG - Investimentos em Energias, SGPS, Lda. – Group – (pre-consolidated)
INVESTERG - Investimentos em Energias, Sociedade Gestora de Participações Sociais, Lda., São João do Estoril/Portugal
LUSITERG - Gestão e Produção Energética, Lda., São João do Estoril/Portugal
Kernkraftwerk Lingen Gesellschaft mit beschränkter Haftung, Lingen (Ems)
Kernkraftwerke Lippe-Ems Gesellschaft mit beschränkter Haftung, Lingen (Ems)
Kernkraftwerksbeteiligung Lippe-Ems beschränkt haftende OHG, Lingen/Ems
KMG Kernbrennstoff-Management Gesellschaft mit beschränkter Haftung, Essen
Knabs Ridge Wind Farm Limited, Swindon/United Kingdom
Limondale Sun Farm Pty. Ltd., Melbourne/Australia
Little Cheyne Court Wind Farm Limited, Swindon/United Kingdom
MI-FONDS G50, Frankfurt am Main
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
195
100
100
51
100
100
100
100
100
100
51
100
100
100
74
100
100
100
100
100
100
59
100
€ ’000
– 4,662
88,701
73,275
92,176
96,276
115,623
– 14
– 2,344
41,689
47,422
16,849
– 38
23,900
20,034
432,269
144,433
696,225
11,886
– 42,917
35,874
1,940,959
€ ’000
– 4,712
0
4,750
0
– 35
20,662
2,274
– 2,508
– 1,133
3,359
1,083
– 7,158
3,6382
1
1
18,171
1
1,118
– 41,013
5,681
84,296
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Direct
Total
ML Wind LLP, Swindon/United Kingdom
Munnsville Investco, LLC, Wilmington/USA
Munnsville WF Holdco, LLC, Wilmington/USA
Munnsville Wind Farm, LLC, Wilmington/USA
Nordsee Windpark Beteiligungs GmbH, Essen
Panther Creek Holdco, LLC, Wilmington/USA
Panther Creek Wind Farm I&II, LLC, Wilmington/USA
Panther Creek Wind Farm Three, LLC, Wilmington/USA
Park Wiatrowy Dolice Sp. z o.o., Warsaw/Poland
Park Wiatrowy Gaworzyce Sp. z o.o., Warsaw/Poland
Peyton Creek Holdco, LLC, Wilmington/USA
Peyton Creek Wind Farm, LLC, Wilmington/USA
Piecki Sp. z o.o., Warsaw/Poland
Pioneer Trail Wind Farm, LLC, Wilmington/USA
Primus Projekt GmbH & Co. KG, Hanover
Pyron Wind Farm, LLC, Wilmington/USA
Radford’s Run Holdco, LLC, Wilmington/USA
Radford’s Run Wind Farm, LLC, Wilmington/USA
Raymond Holdco, LLC, Wilmington/USA
Raymond Wind Farm, LLC, Wilmington/USA
Rheinbraun Brennstoff GmbH, Cologne
Rheinische Baustoffwerke GmbH, Bergheim
Rheinkraftwerk Albbruck–Dogern Aktiengesellschaft, Waldshut–Tiengen
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
196
51
100
100
100
100
100
100
100
100
100
100
100
51
100
100
100
100
100
100
100
100
100
77
€ ’000
66,712
13,100
34,405
34,405
15,318
199,822
341,560
64,545
526
1,041
62,959
49,644
18,826
148,990
– 1,921
81,539
132,598
402,183
10,780
53,470
82,619
9,236
32,016
€ ’000
7,996
0
– 1,192
– 1,192
7,231
0
– 1,545
– 3,506
2,950
1,195
0
– 620
2,531
4,829
– 533
– 2,076
0
15,266
0
0
1
1
1,757
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Rhenas Insurance Limited, Sliema/Malta
Rhyl Flats Wind Farm Limited, Swindon/United Kingdom
Roscoe WF Holdco, LLC, Wilmington/USA
Roscoe Wind Farm, LLC, Wilmington/USA
RV Rheinbraun Handel und Dienstleistungen GmbH, Cologne
RWE & Turcas Güney Elektrik Üretim A.S., Ankara/Turkey
RWE Aktiengesellschaft, Essen
RWE Battery Solutions GmbH, Essen
RWE Bergheim Windparkbetriebsgesellschaft mbH, Hanover
RWE Brise Windparkbetriebsgesellschaft mbH, Hanover
RWE Canada Ltd., Saint John/Canada
RWE Eemshaven Holding II B.V., Geetruidenberg/Netherlands
RWE Energie Odnawialne Sp. z o.o., Szczecin/Poland
RWE Energy Services, LLC, Wilmington/USA
RWE Evendorf Windparkbetriebsgesellschaft mbH, Hanover
RWE Gas Storage CZ, s.r.o., Prague/Czech Republic
RWE Gas Storage West GmbH, Dortmund
RWE Generation Holding B.V., Geertruidenberg/Netherlands
RWE Generation Hydro GmbH, Essen
RWE Generation NL B.V., Geertruidenberg/Netherlands
RWE Generation NL Personeel B.V., Geertruidenberg/Netherlands
RWE Generation SE, Essen
RWE Generation UK Holdings Limited, Swindon/United Kingdom
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Total
100
50
100
100
100
70
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
€ ’000
59,547
132,198
147,030
147,030
36,694
164,540
7,825,951
25
25
226
€ ’000
75
13,822
– 10,945
– 10,945
1
– 14,933
580,251
1
1
1
73,481
– 83
– 503,514
– 455,118
107,429
532
25
328,785
350,087
– 95,405
25
50,644
1,128
1
25,576
1
– 84,542
1
– 254,514
– 234,090
14,221
264,673
1,757
1
2,865,311
183,280
Direct
100
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
197
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Direct
Total
€ ’000
€ ’000
RWE Generation UK plc, Swindon/United Kingdom
RWE Hörup Windparkbetriebsgesellschaft mbH, Hörup
RWE Investco EPC Mgmt, LLC, Wilmington/USA
RWE Investco Mgmt II, LLC, Wilmington/USA
RWE Investco Mgmt, LLC, Wilmington/USA
RWE Kaskasi GmbH, Hamburg
RWE Kings Lynn Limited, Swindon/United Kingdom
RWE Lengerich Windparkbetriebsgesellschaft mbH, Gersten
RWE Limondale Sun Farm Holding Pty. Ltd., Melbourne/Australia
RWE Lüneburger Heide Windparkbetriebsgesellschaft mbH, Walsrode
RWE Magicat Holdco, LLC, Wilmington/USA
RWE Markinch Limited, Swindon/United Kingdom
RWE Mistral Windparkbetriebsgesellschaft mbH, Hanover
RWE Nuclear Beteiligungs-GmbH, Essen
RWE Nuclear GmbH, Essen
RWE Offshore Wind Netherlands B.V., Geertruidenberg/Netherlands
RWE Personeel B.V., Geertruidenberg/Netherlands
RWE Power Aktiengesellschaft, Cologne and Essen
RWE Renewables Americas, LLC, Wilmington/USA
RWE Renewables Asset Management, LLC, Wilmington/USA
RWE Renewables Australia Pty. Ltd., Melbourne/Australia
RWE Renewables Benelux B.V., 's-Hertogenbosch/Netherlands
RWE Renewables Beteiligungs GmbH, Dortmund
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1,724,080
170,912
26
393,255
508,994
1
– 11,855
3,262
1,540,781
– 43,631
1,811
– 288
– 40,658
– 17,304
25
1
– 39,205
– 76,304
25
69,735
111,190
578
25
1
3,440
65,134
1
1
112,689
12,6891
49
– 9
2,042,043
– 572
8
4,8341
345,267
– 133,146
88,138
– 23
14,065
– 7
– 105,482
– 32,676
8,950
1,600
100
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
198
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
RWE Renewables Canada Holdings Inc., Vancouver/Canada
RWE Renewables Development, LLC, Wilmington/USA
RWE Renewables Energy Marketing Australia Pty. Ltd., Melbourne/Australia
RWE Renewables Energy Marketing, LLC, Wilmington/USA
RWE Renewables GmbH, Essen
RWE Renewables GYM 2 Limited, Swindon/United Kingdom
RWE Renewables GYM 3 Limited, Swindon/United Kingdom
RWE Renewables GYM 4 Limited, Swindon/United Kingdom
RWE Renewables HoldCo B.V., Geertruidenberg/Netherlands
RWE Renewables Iberia, S.A.U. – Group – (pre-consolidated)
Danta de Energías, S.A., Soria/Spain
Explotaciones Eólicas de Aldehuelas, S.L., Soria/Spain
General de Mantenimiento 21, S.L.U., Barcelona/Spain
Hidroeléctrica del Trasvase, S.A., Barcelona/Spain
RWE Renewables Iberia, S.A.U., Barcelona/Spain
RWE Renewables International Participations B.V., Geertruidenberg/Netherlands
RWE Renewables Ireland Limited, Kilkenny/Ireland
RWE Renewables Italia S.r.l., Rome/Italy
RWE Renewables Management UK Limited, Swindon/United Kingdom
RWE Renewables O&M, LLC, Wilmington/USA
RWE Renewables Poland Sp. z o.o., Warsaw/Poland
RWE Renewables QSE, LLC, Wilmington/USA
RWE Renewables Services, LLC, Wilmington/USA
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
100
100
100
100
100
100
100
100
100
99
95
100
60
100
100
100
100
100
100
100
100
100
€ ’000
753
99,570
– 3
– 246,449
1,109
– 12,124
– 12,126
– 34,204
294,381
162,287
€ ’000
– 644
– 15,657
– 3
– 9,097
1,0841
562
563
3,910
– 29
11,3222
– 114,300
– 114,300
– 5,891
494,451
138,042
– 3,308
248,891
– 13,528
106,527
– 2,654
30,662
– 1
13,014
19,748
530
– 53,859
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
199
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
RWE Renewables Sweden AB, Malmö/Sweden
RWE Renewables UK Blyth Limited, Coventry/United Kingdom
RWE Renewables UK Developments Limited, Coventry/United Kingdom
RWE Renewables UK Holdings Limited, Swindon/United Kingdom
RWE Renewables UK Humber Wind Limited, Coventry/United Kingdom
RWE Renewables UK Limited, Coventry/United Kingdom
RWE Renewables UK London Array Limited, Coventry/United Kingdom
RWE Renewables UK Offshore Wind Limited, Coventry/United Kingdom
RWE Renewables UK Operations Limited, Coventry/United Kingdom
RWE Renewables UK Robin Rigg East Limited, Coventry/United Kingdom
RWE Renewables UK Robin Rigg West Limited, Coventry/United Kingdom
RWE Renewables UK Swindon Limited, Swindon/United Kingdom
RWE Renewables UK Wind Limited, Coventry/United Kingdom
RWE Renewables UK Zone Six Limited, Coventry/United Kingdom
RWE Renouvelables France SAS, La Plaine St. Denis/France
RWE Seabreeze II GmbH & Co. KG, Essen
RWE Slovak Holding B.V., Geertruidenberg/Netherlands
RWE Solar Development, LLC, Wilmington/USA
RWE Solar NC Lessee LLC, Wilmington/USA
RWE Solar NC Pledgor LLC, Wilmington/USA
RWE Solar PV, LLC, Wilmington/USA
RWE Sommerland Windparkbetriebsgesellschaft mbH, Sommerland
RWE Süderdeich Windparkbetriebsgesellschaft mbH, Süderdeich
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
100
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
200
€ ’000
55,143
570
69,331
1,744,746
162,529
73,526
111,477
54,472
37,431
72,962
68,527
2,274,519
25,282
0
79,136
46,397
704,084
45,224
13,647
13,708
€ ’000
9,540
– 66
16,251
79,459
52,747
12,298
15,521
5,347
5,464
20,987
10,960
150,823
10,202
0
– 2
– 1,655
– 316
– 8,031
– 65
0
157,648
– 2,906
26
106
1
1
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
RWE Supply & Trading Asia-Pacific PTE. LTD., Singapore/Singapore
RWE Supply & Trading CZ, a.s., Prague/Czech Republic
RWE Supply & Trading GmbH, Essen
RWE Supply & Trading (India) Private Limited, Mumbai/India
RWE Supply & Trading Participations Limited, London/United Kingdom
RWE Supply and Trading (Shanghai) Co. Ltd, Shanghai/China
RWE Technology International GmbH, Essen
RWE Technology Tasarim ve Mühendislik Danismanlik Ticaret Limited Sirketi, Istanbul/Turkey
RWE Technology UK Limited, Swindon/United Kingdom
RWE Titz Windparkbetriebsgesellschaft mbH, Essen
RWE Trading Americas Inc., New York City/USA
RWE Trading Services GmbH, Essen
RWE Wind Karehamn AB, Malmö/Sweden
RWE Wind Onshore Deutschland GmbH, Hanover
RWE Wind Services Denmark A/S, Rødby/Denmark
RWE Windpark Bedburg GmbH & Co. KG, Bedburg
RWE Windpark Garzweiler GmbH & Co. KG, Essen
RWE Windparks Deutschland GmbH, Essen
RWE Windpower Netherlands B.V., 's-Hertogenbosch/Netherlands
RWEST Middle East Holdings B.V., 's-Hertogenbosch/Netherlands
Sand Bluff WF Holdco, LLC, Wilmington/USA
Sand Bluff Wind Farm, LLC, Wilmington/USA
Settlers Trail Wind Farm, LLC, Wilmington/USA
Direct
Total
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
51
100
100
100
100
100
100
€ ’000
40,476
330,845
446,778
817
13,392
8,123
12,463
64
1,999
25
9,468
5,735
34,319
77,660
8,436
75,613
13,412
24
4,761
9,654
– 1,973
– 1,882
€ ’000
10,476
79,983
1
107
10,087
– 1,101
1
1
325
1
768
1
– 187
1
5,692
510
– 84
1
3,602
33,559
– 8,828
– 8,697
162,819
– 11,820
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
201
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Sofia Offshore Wind Farm Holdings Limited, Swindon/United Kingdom
Sofia Offshore Wind Farm Limited, Swindon/United Kingdom
Solar Holding India GmbH, Kolitzheim
Solar Holding Poland GmbH, Kolitzheim
SOLARENGO Energia, Unipessoal, Lda., Cascais/Portugal
SRS EcoTherm GmbH, Salzbergen
Stella Holdco, LLC, Wilmington/USA
Stella Wind Farm, LLC, Wilmington/USA
Taber Solar 1 Inc., Vancouver/Canada
Taber Solar 2 Inc., Vancouver/Canada
Tamworth Holdings, LLC, Raleigh/USA
Tanager Holdings, LLC, Raleigh/USA
Tech Park Solar, LLC, Wilmington/USA
The Hollies Wind Farm Limited, Swindon/United Kingdom
Triton Knoll HoldCo Limited, Swindon/United Kingdom
Triton Knoll Offshore Wind Farm Limited, Swindon/United Kingdom
Valencia Solar, LLC, Tucson/USA
Vela Wind Holdco, LLC, Wilmington/USA
West of the Pecos Holdco, LLC, Wilmington/USA
West of the Pecos Solar, LLC, Wilmington/USA
West Raymond Holdco, LLC, Wilmington/USA
West Raymond Wind Farm, LLC, Wilmington/USA
Wind Farm Deliceto s.r.l., Bolzano/Italy
Direct
Total
100
100
100
100
100
90
100
100
100
100
100
100
100
100
59
100
100
100
100
100
100
100
100
€ ’000
0
– 389
5,926
16
– 151
17,194
83,308
€ ’000
0
– 16
– 7
– 2
– 70
3,435
0
207,716
– 1,961
8,890
9,534
7,367
6,891
17,617
528
92,254
– 94,320
17,594
138,043
87,811
124,904
28,748
60,577
25,558
– 66
– 62
– 2
3
686
– 44
0
– 511
1,281
0
0
– 5,948
0
0
2,455
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
202
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
I. Affiliated companies which are included in the consolidated financial statements
Shareholding in %
Equity
Net income / loss
Windpark Eekerpolder B.V., 's-Hertogenbosch/Netherlands
Windpark Kattenberg B.V., 's-Hertogenbosch/Netherlands
Windpark Nordsee Ost GmbH, Heligoland
Windpark Oostpolderdijk B.V., 's-Hertogenbosch/Netherlands
Windpark Zuidwester B.V., 's-Hertogenbosch/Netherlands
WKN Windkraft Nord GmbH & Co. Windpark Wönkhausen KG, Hanover
Direct
Total
100
100
100
100
100
100
€ ’000
– 196
765
256
– 30
8,748
2,198
€ ’000
– 194
245
1
30
– 588
182
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
203
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Adensis GmbH, Dresden
Agenzia Carboni S.r.l., Genua/Italy
Aktiebolaget Grundstenen 167184, Malmö/Sweden
Alcamo II S.r.l., Milan/Italy
Alvarado Solar S.L., Barcelona/Spain
Ashwood Solar I, LLC, Wilmington/USA
Auzoberri Desarrollo, S.L.U., Barasoain/Spain
Azagra Energy Quel, S.L.U., Barasoain/Spain
Baltic Trade and Invest Sp. z o.o., Slupsk/Poland
Baron Winds II LLC, Chicago/USA
Baron Winds LLC, Chicago/USA
Belectric International GmbH, Kolitzheim
BELECTRIC JV GmbH, Kolitzheim
Belectric Mexico Fotovoltaica S.de R.L. de C.V., Bosques de las Lomas/Mexico
Belectric Polska Sp. z o.o., Warsaw/Poland
Belectric SP Solarprojekte 17 GmbH & Co. KG, Kolitzheim
Belectric SP Solarprojekte 18 GmbH & Co. KG, Kolitzheim
Belectric SP Solarprojekte 19 GmbH & Co. KG, Kolitzheim
Belectric SP Solarprojekte 20 GmbH & Co. KG, Kolitzheim
Benbrack Wind Farm Limited, Swindon/United Kingdom
Big Star Solar, LLC, Wilmington/USA
Blackbeard Solar, LLC, Wilmington/USA
Blackbriar Battery, LLC, Wilmington/USA
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
872
207
25
15
0
2
1
322
16
3
– 11
– 11
0
– 232
– 383
9,309
– 5,135
0
0
159
53
– 24
– 136
0
0
0
0
0
– 496
– 2
– 19
– 42
3
3
3
3
3
0
0
0
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
204
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Blueberry Hills LLC, Chicago/USA
BO Baltic Offshore GmbH, Hamburg
Bowler Flats Energy Hub LLC, Chicago/USA
Bright Arrow Solar, LLC, Wilmington/USA
Buckeye Wind LLC, Chicago/USA
Burgar Hill Wind Farm Limited, Swindon/United Kingdom
Bursjöliden Vind AB, Malmö/Sweden
Camaiore Sp. z o.o., Warsaw/Poland
Camellia Solar LLC, Wilmington/USA
Camellia Solar Member LLC, Wilmington/USA
Cardinal Wind Farm, LLC, Wilmington/USA
Carmagnola Sp. z o.o., Warsaw/Poland
Casarano Sp. z o.o., Warsaw/Poland
Casey Fork Solar, LLC, Wilmington/USA
Cattleman Wind Farm II, LLC, Wilmington/USA
Cattleman Wind Farm, LLC, Wilmington/USA
Cecina Sp. z o.o., Warsaw/Poland
Cercola Sp. z o.o., Warsaw/Poland
Cerignola Sp. z o.o., Warsaw/Poland
Champaign Wind LLC, Chicago/USA
Ciriè Centrale PV s.a.s. (s.r.l.), Rome/Italy
Clavellinas Solar, S.L., Barcelona/Spain
Climagy Photovoltaikprojekt Verwaltungs-GmbH, Kolitzheim
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
205
Total
100
98
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
€ ’000
€ ’000
0
9
0
0
0
0
585
0
0
0
0
0
0
0
– 4
14
28
0
– 4
0
0
0
0
0
3
0
0
0
3
3
0
0
0
3
3
3
0
0
– 10
– 1
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Climagy PV-Sonnenanlage GmbH & Co. KG, Kolitzheim
Climagy PV-Sonnenanlage Verwaltungs-GmbH, Kolitzheim
Climagy Sonnenkraft Verwaltungs-GmbH, Kolitzheim
Climagy Stromertrag GmbH & Co. KG, Kolitzheim
Climagy Stromertrag Verwaltungs-GmbH, Kolitzheim
Clinton Wind, LLC, Wilmington/USA
Clocaenog Wind Farm Limited, Swindon/United Kingdom
Cordeneos Sp. z o.o., Warsaw/Poland
Cordova Wind Farm, LLC, Wilmington/USA
Cormano Sp. z o.o., Warsaw/Poland
Cremona Sp. z o.o., Warsaw/Poland
Curns Energy Limited, Kilkenny/Ireland
Decadia GmbH, Essen
E & Z Industrie-Lösungen GmbH, Essen
Eko-En 1 Sp. z o.o., Warsaw/Poland
Eko-En 2 Sp. z o.o., Warsaw/Poland
Eko-En 3 Sp. z o.o., Warsaw/Poland
Eko-En 4 Sp. z o.o., Warsaw/Poland
Eko-En 5 Sp. z o.o., Warsaw/Poland
El Navajo Solar, S.L., Barcelona/Spain
Enchant Solar 3 Inc., Vancouver/Canada
Enchant Solar 4 Inc., Vancouver/Canada
Eólica de Sarnago, S.A., Soria/Spain
100
100
100
100
100
100
100
100
100
100
100
70
100
100
100
100
100
100
100
100
100
100
52
0
29
26
– 20
28
0
0
0
– 643
2,290
18,074
24
417
80
447
4
6
0
0
1,583
– 2
0
– 1
– 2
0
0
0
3
0
3
3
– 142
1,398
1,200
– 69
– 98
– 46
– 53
– 2
– 4
0
0
– 17
100
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
206
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
EverPower Maine LLC, Chicago/USA
EverPower Ohio LLC, Chicago/USA
EverPower Solar LLC, Chicago/USA
EverPower Wind Development, LLC, Chicago/USA
Extension Du Parc Eolien De L'Epine Marie Madeleine SAS, Paris/France
Extension Du Parc Eolien Des Nouvions SAS, Paris/France
Extension Du Parc Eolien Du Douiche SAS, Paris/France
Farma Wiatrowa Rozdrazew sp. z o.o., Warsaw/Poland
Fifth Standard Solar PV, LLC, Wilmington/USA
Flatlands Wind Farm, LLC, Wilmington/USA
Flexilis Power Limited, Kilkenny/Ireland
Florida Solar and Power Group LLC, Wilmington/USA
Frazier Solar, LLC, Wilmington/USA
Gazules I Fotovoltaica, S.L., Barcelona/Spain
Gazules II Solar, S.L., Barcelona/Spain
GBV Achtunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
GBV Dreiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
GBV Einunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
GBV Sechsunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
GBV Siebenunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen
GBV Siebte Gesellschaft für Beteiligungsverwaltung mbH, Essen
Generación Fotovoltaica Castellano Manchega, S.L., Murcia/Spain
Generación Fotovoltaica Puerta del Sol, S.L.U., Murcia/Spain
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
0
0
0
1
29
9
– 632
0
0
0
0
0
41
12
25
25
30
25
25
100
36
3
0
0
0
0
– 28
– 2
– 3
– 136
0
0
– 1
0
0
– 24
– 24
1
1
1
1
1
1
– 29
0
100
100
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
207
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Goole Fields II Wind Farm Limited, Swindon/United Kingdom
Grandview Wind Farm III, LLC, Wilmington/USA
Grandview Wind Farm IV, LLC, Wilmington/USA
Grandview Wind Farm V, LLC, Wilmington/USA
Green Gecco Verwaltungs GmbH, Essen
Haube Wind Sp. z o.o., Slupsk/Poland
Highland III LLC, Chicago/USA
Horse Thief Wind Project LLC, Chicago/USA
INDI Energie B.V., 's-Hertogenbosch/Netherlands
INDI Solar-Projects 1 B.V., Utrecht/Netherlands
Infraestructuras de Aldehuelas, S.A., Barcelona/Spain
Infrastrukturgesellschaft Netz Lübz mit beschränkter Haftung, Hanover
Iron Horse Battery Storage, LLC, Wilmington/USA
Jerez Fotovoltaica S.L., Barcelona/Spain
Jugondo Desarrollo, S.L.U., Barasoain/Spain
Kasson Manteca Solar, LLC, Wilmington/USA
Kieswerk Kaarst GmbH & Co. KG, Bergheim
Kieswerk Kaarst Verwaltungs GmbH, Bergheim
Kiln Pit Hill Wind Farm Limited, Swindon/United Kingdom
Lake Fork Wind Farm, LLC, Wilmington/USA
Lampasas Wind LLC, Chicago/USA
Las Vaguadas I Fotovoltaica S.L., Barcelona/Spain
Las Vaguadas II Solar S.L., Barcelona/Spain
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
€ ’000
€ ’000
100
100
100
100
51
100
100
100
100
100
100
100
100
100
100
100
51
51
100
100
100
100
100
0
0
0
0
37
163
0
0
– 13
7
428
18
9,689
16
1
0
2,899
31
0
0
0
155
12
0
0
0
0
1
– 76
0
0
– 60
– 31
0
– 24
– 306
– 23
– 1,186
0
700
0
0
0
0
– 61
– 6
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
208
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Lochelbank Wind Farm Limited, Swindon/United Kingdom
Lorg Wind Farm Limited, Swindon/United Kingdom
Mahanoy Mountain, LLC, Chicago/USA
Major Wind Farm, LLC, Wilmington/USA
March Road Solar, LLC, Wilmington/USA
Maricopa East Solar PV 2, LLC, Wilmington/USA
Maricopa East Solar PV, LLC, Wilmington/USA
Maricopa Land Holding, LLC, Wilmington/USA
Maricopa West Solar PV 2, LLC, Wilmington/USA
Maryland Sunlight 1 LLC, Wilmington/USA
Mason Dixon Wind LLC, Chicago/USA
Morska Farma Wiatrowa Antares sp. z o.o., Warsaw/Poland
Mud Springs Wind Project LLC, Chicago/USA
Muñegre Desarrollo, S.L.U., Barasoain/Spain
Nordex Energy Judas, S.L.U., Barasoain/Spain
Northern Orchard Solar PV 2, LLC, Wilmington/USA
Northern Orchard Solar PV 3, LLC, Wilmington/USA
Northern Orchard Solar PV, LLC, Wilmington/USA
Nouvions Poste de Raccordement SAS, Paris/France
Novar Two Wind Farm Limited, Swindon/United Kingdom
Offshore-Windpark Delta Nordsee GmbH, Hamburg
Ohio Sunlight 1 LLC, Wilmington/USA
Oranje Wind Power B.V., 's-Hertogenbosch/Netherlands
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
€ ’000
€ ’000
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
0
0
0
0
0
0
0
0
0
84
0
2
1
0
0
0
– 2
0
246
0
0
0
3
0
0
0
0
0
0
0
0
0
– 12
0
– 201
– 359
0
0
0
– 2
0
1
0
0
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
209
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
Oranje Wind Power C.V., 's-Hertogenbosch/Netherlands
Orcoien Energy Orcoien, S.L.U., Barasoain/Spain
Owen Prairie Wind Farm, LLC, Wilmington/USA
Painter Energy Storage, LLC, Wilmington/USA
Panther Creek Solar, LLC, Wilmington/USA
Parc Eolien 101 SAS, Paris/France
Parc Eolien 102 SAS, Paris/France
Parc Eolien 103 SAS, Paris/France
Parc Eolien 104 SAS, Paris/France
Parc Eolien 105 SAS, Paris/France
Parc Eolien 106 SAS, Paris/France
Parc Eolien 107 SAS, Paris/France
Parc Eolien 108 SAS, Paris/France
Parc Eolien 109 SAS, Paris/France
Parc Eolien 110 SAS, Paris/France
Parc Eolien D'Allerey SAS, Paris/France
Parc Eolien De Beg Ar C'hra SAS, Paris/France
Parc Eolien De Canny SAS, Paris/France
Parc Eolien De Catillon-Fumechon SAS, Paris/France
Parc Eolien De Foissy-Sur-Vanne SAS, Paris/France
Parc Eolien De Ganochaud SAS, Paris/France
Parc Eolien De La Brie Nangissienne SAS, Paris/France
Parc Eolien De La Butte Aux Chiens SAS, Paris/France
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
210
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
0
13
0
0
0
€ ’000
0
– 215
0
0
0
3
3
3
3
3
3
3
3
3
3
– 23
– 48
28
35
28
35
23
27
29
– 2
– 2
– 2
– 2
– 3
– 2
– 2
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Parc Eolien De La Cabane Blanche SAS, Paris/France
Parc Eolien De La Croix Blanche SAS, Paris/France
Parc Eolien De La Jarrie-Audouin SAS, Paris/France
Parc Eolien De La Plaine De Beaulieu SAS, Paris/France
Parc Eolien De La Voie Corette SAS, Paris/France
Parc Eolien De Langeron SAS, Paris/France
Parc Eolien De L'Avre SAS, Paris/France
Parc Eolien De Luçay-Le-Libre Et De Giroux SAS, Paris/France
Parc Eolien De Martinpuich SAS, Paris/France
Parc Eolien De Mesbrecourt-Richecourt SAS, Paris/France
Parc Eolien De Nuisement Et Cheniers SAS, Paris/France
Parc Eolien De Soudron SAS, Paris/France
Parc Eolien De Villeneuve Minervois SAS, Paris/France
Parc Eolien Des Ailes Du Gótinâis SAS, Paris/France
Parc Eolien Des Grands Lazards SAS, Paris/France
Parc Eolien Des Hauts-Bouleaux SAS, Paris/France
Parc Eolien Des Nouvions SAS, Paris/France
Parc Eolien Des Raisinières SAS, Paris/France
Parc Eolien Du Balinot SAS, Paris/France
Parc Eolien Du Ban Saint-Jean SAS, Paris/France
Parc Eolien Du Bocage SAS, Paris/France
Parc Eolien Du Catesis SAS, Paris/France
Parc Eolien Du Champ Madame SAS, Paris/France
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
211
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
25
29
35
35
– 57
24
25
24
5
35
35
35
35
35
28
– 75
– 103
36
28
27
– 77
– 2
35
– 3
– 2
– 2
– 2
– 39
– 3
– 2
– 4
– 6
– 2
– 2
– 2
– 2
– 2
– 2
– 38
– 58
– 1
– 2
– 2
– 38
– 26
– 2
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Parc Eolien Du Chemin De Chálons SAS, Paris/France
Parc Eolien Du Chemin De Saint-Gilles SAS, Paris/France
Parc Eolien Du Chemin Vert SAS, Paris/France
Parc Eolien Du Mirebalais SAS, Paris/France
Parc Eolien Du Mont Hellet SAS, Paris/France
Parc Eolien Du Mont Herbé SAS, Paris/France
Parc Eolien Du Moulin De Thiau SAS, Paris/France
Parc Eolien Du Moulin Du Bocage SAS, Paris/France
Parc Eolien Du Plateau De La Chapelle-Surchésy SAS, Paris/France
Parc Eolien Du Ru Garnier SAS, Paris/France
Parc Eolien Les Pierrots SAS, Paris/France
Parc Ynni Cymunedol Alwen Cyfyngedig, Swindon/United Kingdom
Pawnee Spirit Wind Farm, LLC, Wilmington/USA
Paz 'Éole SAS, Paris/France
Pe Ell North LLC, Chicago/USA
Photovoltaikkraftwerk Götz Verwaltungs-GmbH, Kolitzheim
Photovoltaikkraftwerk Groß Dölln Infrastruktur GmbH & Co. KG, Templin
Photovoltaikkraftwerk Groß Dölln Infrastruktur Verwaltungs-GmbH, Templin
Photovoltaikkraftwerk Reinsdorf GmbH & Co. KG, Kolitzheim
Photovoltaikkraftwerk Reinsdorf Verwaltungs-GmbH, Kolitzheim
PI E&P Holding Limited, George Town/Cayman Islands
PI E&P US Holding LLC, New York City/USA
Pinckard Solar LLC, Wilmington/USA
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
9
– 5
35
28
35
28
29
28
35
29
– 3
– 9
– 2
– 2
– 2
– 2
– 3
– 2
– 2
– 2
– 331
– 232
0
0
28
0
27
– 18
29
– 29
30
42,240
41,845
0
0
0
– 2
0
– 1
– 2
0
– 2
0
– 4
– 301
0
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
212
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Pinckard Solar Member LLC, Wilmington/USA
Pinto Pass, LLC, Wilmington/USA
Pipkin Ranch Wind Farm, LLC, Wilmington/USA
Proyectos Solares Iberia I, S.L., Barcelona/Spain
Proyectos Solares Iberia II, S.L., Barcelona/Spain
Proyectos Solares Iberia III, S.L., Barcelona/Spain
Proyectos Solares Iberia IV, S.L., Barcelona/Spain
Proyectos Solares Iberia V, S.L., Barcelona/Spain
Pryor Caves Wind Project LLC, Chicago/USA
PT Rheincoal Supply & Trading Indonesia, PT, Jakarta/Indonesia
Quartz Solar, LLC, Wilmington/USA
Quintana Fotovoltaica S.L.U., Barcelona/Spain
RD Hanau GmbH, Hanau
Ribaforada Energy Ribaforada, S.L.U., Barasoain/Spain
Roadrunner Crossing Wind Farm, LLC, Wilmington/USA
Rose Rock Wind Farm, LLC, Wilmington/USA
Rowantree Wind Farm Ltd., Swindon/United Kingdom
RWE & Turcas Dogalgaz Ithalat ve Ihracat A.S., Istanbul/Turkey
RWE AUSTRALIA PTY LTD, Brisbane/Australia
RWE Belgium BVBA, Brussels/Belgium
RWE Carbon Sourcing North America, LLC, Wilmington/USA
RWE Czech Gas Grid Holding B.V., Geertruidenberg/Netherlands
RWE Dhabi Union Energy LLC, Abu Dhabi/UAE
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
49
0
0
0
27
38
25
26
26
0
246
8
0
1
0
0
0
688
37
1,419
0
0
33
0
0
0
– 4
– 27
– 5
– 4
– 4
0
– 9
3
– 4
0
– 213
0
0
0
67
– 12
– 32
0
1,526
0
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
213
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
RWE Eemshydrogen B.V., Geertruidenberg/Netherlands
RWE Energy APAC Co. Ltd., Chengdu/China
RWE Enerji Toptan Satis A.S., Istanbul/Turkey
RWE Gas Storage Beteiligungsverwaltungs GmbH, Essen
RWE Hillston Sun Farm Holding Pty. Ltd., Melbourne/Australia
RWE indeland Windpark Eschweiler Verwaltungs GmbH, Eschweiler
RWE Ingen!us Limited, Swindon/United Kingdom
RWE NSW PTY LTD, Sydney/Australia
RWE Offshore Wind A/S, Rødby/Denmark
RWE Offshore Wind Holdings LLC, Dover/USA
RWE Offshore Wind Netherlands Participations I B.V., Geertruidenberg/Netherlands
RWE Offshore Wind Netherlands Participations II B.V., Geertruidenberg/Netherlands
RWE Offshore Wind Netherlands Participations III B.V., Geertruidenberg/Netherlands
RWE Offshore Wind Netherlands Participations IV B.V., Geertruidenberg/Netherlands
RWE Pensionsfonds AG, Essen
RWE Power Climate Protection GmbH, Essen
RWE Principal Investments UK Limited, Swindon/United Kingdom
RWE Principal Investments USA, LLC, New York City/USA
RWE Renewables Australia Holdings Pty Ltd., Brisbane/Australia
RWE Renewables Chile SpA, Santiago/Chile
RWE Renewables Denmark A/S, Rødby/Denmark
RWE Renewables France SAS, Levallois-Perret/France
RWE Renewables Japan G.K., Tokyo/Japan
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
1,798
3,243
10,989
– 231
54
2,537
77
277
0
0
0
0
3,872
23
103
2,324
– 219
1,095
4,483
– 172
100
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
214
€ ’000
3
– 131
104
0
– 59
6
91
– 137
3
– 96
0
0
0
0
178
1
– 61
13,962
– 406
– 497
3
1,015
– 384
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
RWE Renewables Korea LLC, Seoul/South Korea
RWE Renewables Mexico, S. de R.L. de C.V., Mexico City/Mexico
RWE Renewables Services GmbH, Essen
RWE Renewables Services Mexico, S. de R.L. de C.V., Mexico City/Mexico
RWE Renewables Taiwan Ltd., Taipei City/Taiwan
RWE Seabreeze II Verwaltungs GmbH, Essen
RWE Solar Netherlands B.V., 's-Hertogenbosch/Netherlands
RWE Solar Poland Sp. z o.o., Warsaw/Poland
RWE Stallingborough Limited, Swindon/United Kingdom
RWE Supply & Trading Japan KK, Tokyo/Japan
RWE SUPPLY TRADING TURKEY ENERJI ANONIM SIRKETI, Istanbul/Turkey
RWE Technology International Energy Environment Engineering GmbH, Essen
RWE TECNOLOGIA LTDA, Rio de Janeiro/Brazil
RWE Trading Services Limited, Swindon/United Kingdom
RWE Wind Development AS, Oslo/Norway
RWE Wind Holding A/S, Rødby/Denmark
RWE Wind Norway AB, Malmö/Sweden
RWE Wind Projects AB, Malmö/Sweden
RWE Wind Service Italia S.r.l., Milan/Italy
RWE Wind Services GmbH, Neubukow
RWE Wind Services Norway AS, Oslo/Norway
RWE Wind Transmission AB, Malmö/Sweden
RWE Windpark Bedburg Verwaltungs GmbH, Bedburg
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
215
€ ’000
3
– 157
– 6
– 3
3
6
0
1,014
25
– 3
71
0
– 144
– 168
0
– 2
894
25
94
1,310
3,328
4,228
5
– 82
2,165
1,427
715
48
0
0
161
1
0
34
– 17
3
– 2,313
1
– 184
– 1,022
– 8
3
2
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
RWE Windpark Garzweiler Verwaltungs GmbH, Essen
RWE Windpark Papenhagen GmbH & Co. KG, Hanover
RWE Windpark Papenhagen Verwaltungs GmbH, Hanover
RWEST NA Investments GmbH, Essen
RWEST PI Bras Limited, London/United Kingdom
RWEST PI FRE Holding LLC, New York City/USA
Santa Severa Centrale PV s.a.s. (s.r.l.), Rome/Italy
SB Retrofit, LLC, Dallas/USA
Scioto Solar LLC, Wilmington/USA
Shay Solar, LLC, Wilmington/USA
Snow Shoe Wind Farm, LLC, Wilmington/USA
SP Solarprojekte 1 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 11 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 12 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 17 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 18 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 19 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 2 GmbH & Co. KG, Kolitzheim
SP Solarprojekte 2 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 20 Verwaltungs-GmbH, Kolitzheim
SP Solarprojekte 3 GmbH & Co. KG, Kolitzheim
SP Solarprojekte 3 Verwaltungs-GmbH, Kolitzheim
Sparta North, LLC, Wilmington/USA
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
216
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
27
576
33
40,522
22,135
2
– 152
0
0
0
24
29
29
– 5
26
– 6
26
0
€ ’000
– 4
– 125
8
– 120
– 926
– 13
0
3
0
0
0
– 1
0
0
3
3
3
– 2
0
3
– 2
0
0
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Sparta South, LLC, Wilmington/USA
Stillwater Energy Storage, LLC, Wilmington/USA
Storage Facility 1 Ltd., Slough/United Kingdom
Sun Data GmbH (i.L.), Kolitzheim
Sunpow 1 Sp. z o.o., Warsaw/Poland
Sunrise Energy Generation Pvt. Ltd., Mumbai/India
Sunrise Wind Holdings, LLC, Chicago/USA
Tafalla Energy Tafalla, S.L.U., Barasoain/Spain
Terrapin Hills LLC, Chicago/USA
Thor Wind Farm I/S, Rødby/Denmark
Three Rocks Solar, LLC, Wilmington/USA
Tierra Blanca Wind Farm, LLC, Wilmington/USA
Tipton Wind, LLC, Wilmington/USA
Valverde Wind Farm, LLC, Wilmington/USA
VDE Komplementär GmbH, Kassel
VDE Projects GmbH, Kassel
Venado Wind Farm, LLC, Wilmington/USA
Versuchsatomkraftwerk Kahl GmbH, Karlstein am Main
Vici Wind Farm II, LLC, Wilmington/USA
Vici Wind Farm III, LLC, Wilmington/USA
Vici Wind Farm, LLC, Wilmington/USA
Villarrobledo Desarrollo 2, S.L.U., Barasoain/Spain
Vindkraftpark Aurvandil AB, Uppsala/Sweden
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
0
0
– 51
60
0
69
0
1
0
0
0
0
0
30
16,080
0
634
0
0
0
1
6
0
0
– 32
– 7
0
3
0
– 213
0
3
0
0
0
0
– 24
– 7,035
0
31
0
0
0
– 1,186
0
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
217
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
II. Affiliated companies which are not included in the consolidated financial statements due to secondary importance
Shareholding in %
Equity
Net income / loss
for the assets, liabilities, financial position and profit or loss of the Group
Direct
Total
Vindkraftpark Brynhild AB, Uppsala/Sweden
Vortex Energy Deutschland GmbH, Kassel
Vortex Energy Windpark GmbH & Co. KG, Kassel
West Fork Solar, LLC, Wilmington/USA
Wildcat Wind Farm II, LLC, Wilmington/USA
Wildcat Wind Farm III, LLC, Wilmington/USA
Willowbrook Solar I, LLC, Wilmington/USA
Windpark Bedburg A44n GmbH & Co. KG, Essen
Windpark Bedburg A44n Verwaltungs GmbH, Essen
Windpark Winterlingen-Alb GmbH & Co. KG, Kassel
WIT Ranch Wind Farm, LLC, Wilmington/USA
WR Graceland Solar, LLC, Wilmington/USA
Zielone Glówczyce Sp. z o.o., Glówczyce/Poland
III. Joint operations
Greater Gabbard Offshore Winds Limited, Reading/United Kingdom
N.V. Elektriciteits-Produktiemaatschappij Zuid-Nederland EPZ, Borssele/Netherlands
100
100
100
100
100
100
100
100
100
100
100
100
100
€ ’000
4
4,397
1,651
0
0
0
0
€ ’000
0
– 265
– 1,029
0
0
0
0
3
3
2,501
– 2,606
0
0
419
0
0
– 527
Shareholding in %
Equity
Net income / loss
Direct
Total
50
30
€ ’000
€ ’000
1,062,256
100,186
81,302
5,609
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
218
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
IV. Affiliated companies of joint operations
Enzee B.V., Borssele/Netherlands
V. Associated companies of joint operations
B.V. NEA, Arnhem/Netherlands
Shareholding in %
Equity
Net income / loss
Direct
Total
100
€ ’000
€ ’000
3
Shareholding in %
Equity
Net income / loss
Direct
Total
28
€ ’000
73,099
€ ’000
1,385
VI. Joint ventures accounted for using the equity method
Shareholding in %
Equity
Net income / loss
AS 3 Beteiligungs GmbH, Essen
AWE-Arkona-Windpark Entwicklungs-GmbH, Hamburg
C-Power N.V., Oostende/Belgium
Elevate Wind Holdco, LLC, Wilmington/USA
Galloper Wind Farm Holding Company Limited, Swindon/United Kingdom
Grandview Wind Farm, LLC, Wilmington/USA
Gwynt y Môr Offshore Wind Farm Limited, Swindon/United Kingdom
Innogy Venture Capital GmbH, Dortmund
Rampion Renewables Limited, Coventry/United Kingdom
Société Electrique de l'Our S.A., Luxembourg/Luxembourg
TCP Petcoke Corporation, Dover/USA
URANIT GmbH, Jülich
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
514
50
27
50
25
50
50
754
604
40
50
50
€ ’000
31,308
1,073,377
262,772
138,730
70,218
256,827
– 3,002
842
13,396
30,952
72,136
€ ’000
1,489
139,732
16,589
– 94,126
48,653
– 9,497
– 1,023
128
3
3,6992
2,1762
98,103
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
219
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3
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4
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statements
List of shareholdings
(part of the notes)
5
Further information
VII. Associates accounted for using the equity method
Shareholding in %
Equity
Net income / loss
Amprion GmbH, Dortmund
ATBERG - Eólicas do Alto Tâmega e Barroso, Lda., Ribeira de Pena/Portugal
Belectric Gulf Limited, Abu Dhabi/UAE
Bray Offshore Wind Limited, Kilkenny/Ireland
DOTI Deutsche Offshore-Testfeld- und Infrastruktur-GmbH & Co. KG, Oldenburg
GNS Gesellschaft für Nuklear-Service mbH, Essen
Grosskraftwerk Mannheim Aktiengesellschaft, Mannheim
HIDROERG - Projectos Energéticos, Lda., Lissabon/Portugal
Innogy Renewables Technology Fund I GmbH & Co. KG, Dortmund
Kärntner Energieholding Beteiligungs GmbH, Klagenfurt/Austria
KELAG-Kärntner Elektrizitäts-AG, Klagenfurt/Austria
Kish Offshore Wind Limited, Kilkenny/Ireland
Magicat Holdco, LLC, Wilmington/USA
Mingas-Power GmbH, Essen
Nysäter Wind AB, Malmö/Sweden
PEARL PETROLEUM COMPANY LIMITED, Road Town/British Virgin Islands
Rødsand 2 Offshore Wind Farm AB, Malmö/Sweden
Schluchseewerk Aktiengesellschaft, Laufenburg Baden
Vliegasunie B.V., De Bilt/Netherlands
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
25
Total
€ ’000
€ ’000
25
40
49
50
26
28
40
32
784
49
135
50
20
40
20
106
20
50
754
1,946,300
220,200
5,319
7,764
– 99
57,925
45,538
134,082
12,956
18,880
918,203
917,666
– 119
251,381
4,550
49,579
1,748,102
156,564
67,766
8,323
468
1,525
– 16
– 23,919
24,9602
6,647
1,692
670
111,5252
111,723
– 16
– 6,840
3,881
– 96,341
259,854
16,001
2,809
1,644
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
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statements
List of shareholdings
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5
Further information
VIII. Companies which are not accounted for using the equity method due to secondary importance for the
Shareholding in %
Equity
Net income / loss
assets, liabilities, financial position and profit or loss of the Group
Abwasser-Gesellschaft Knapsack, Gesellschaft mit beschränkter Haftung, Hürth
Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, Essen
Anemos Ala Segarra, S.L., Reus/Spain
Ascent Energy LLC, Wilmington/USA
Awel y Môr Offshore Wind Farm Limited, Swindon/United Kingdom
CARBON Climate Protection GmbH, Langenlois/Austria
CARBON Egypt Ltd. (under liquidation), Cairo/Egypt
DBO Energia S.A., Rio de Janeiro/Brazil
Deutsche Gesellschaft für Wiederaufarbeitung von Kernbrennstoffen AG & Co. oHG, Essen
DOTI Management GmbH, Oldenburg
Dunkerque Eoliennes En Mer SAS, Montpellier/France
EMDO S.A.S., Paris/France
Eólica Alta Anoia, S.L., Reus/Spain
Eólica La Conca, S.L., Reus/Spain
Eólica La Conca 3, S.L., Reus/Spain
Eoliennes en mer de Dunkerque (EMD) S.A.S., Paris/France
Fassi Coal Pty. Ltd., Rutherford/Australia
First River Energy LLC, Denver/USA
Five Estuaries Offshore Wind Farm Limited, Swindon/United Kingdom
Focal Energy Photovoltaic Holdings Limited, Nicosia/Cyprus
Fond du Moulin SAS, Asnières sur Seine/France
Gemeinschaftswerk Hattingen Gesellschaft mit beschränkter Haftung, Essen
GfS Gesellschaft für Simulatorschulung mbH, Essen
Direct
Total
33
50
40
50
60
50
49
49
31
26
32
30
40
40
40
30
47
40
25
50
25
52
33
€ ’000
453
5,113
83,373
5,106
– 2,127
15,199
861
119
10
€ ’000
223
0
3
6,656
3
4,054
– 253
– 1,063
350
0
0
– 12,965
– 2,075
3
3
3
– 5
– 2,887
– 7,414
3
227
– 2
– 815
3
10
– 10,016
– 1,291
1,621
35
2,045
64
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
221
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3
Responsibility statement
4
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statements
List of shareholdings
(part of the notes)
5
Further information
VIII. Companies which are not accounted for using the equity method due to secondary importance for the
Shareholding in %
Equity
Net income / loss
assets, liabilities, financial position and profit or loss of the Group
Kraftwerk Buer GbR, Gelsenkirchen
KSG Kraftwerks-Simulator-Gesellschaft mbH, Essen
KÜCKHOVENER Deponiebetrieb GmbH & Co. Kommanditgesellschaft, Bergheim
KÜCKHOVENER Deponiebetrieb Verwaltungs-GmbH, Bergheim
LDO Coal Pty. Ltd., Rutherford/Australia
Limetree Bay Preferred Holdings LLC, Boston/USA
London Array Limited, Tunbridge Wells/United Kingdom
Moravske Hidroelektrane d.o.o., Belgrade/Serbia
Netzanbindung Tewel OHG, Cuxhaven
New England Aqua Ventus, LLC, Los Angeles/USA
North Falls Offshore Wind Farm HoldCo Limited, Swindon/United Kingdom
Parc Eolien De Sepmes SAS, Angers/France
PV Projects Komplementär GmbH (i.L.), Kolitzheim
Q-Portal GmbH, Grevenbroich
Rampion Extension Development Limited, Swindon/United Kingdom
Scarweather Sands Limited, Coventry/United Kingdom
TetraSpar Demonstrator ApS, Copenhagen/Denmark
Toledo PV A.E.I.E., Madrid/Spain
TPG Wind Limited, Coventry/United Kingdom
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
Versorium Energy LP, Calgary, Alberta/Canada
Walden Renewables Development LLC, New York City/USA
Windesco Inc, Boston/USA
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
Total
50
33
50
50
47
28
30
51
25
50
50
50
50
49
50
50
33
33
50
25
50
76
21
€ ’000
5,113
641
32
39
– 101
14,750
0
3,532
588
0
26
0
7,969
1,330
317
0
1,683
– 1,757
€ ’000
0
26
– 1
0
74
0
0
– 6
– 39
3
0
3
– 1
3
3
0
– 2,124
723
726
– 109
3
– 1,045
– 871
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
222
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3
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4
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statements
List of shareholdings
(part of the notes)
5
Further information
VIII. Companies which are not accounted for using the equity method due to secondary importance for the
Shareholding in %
Equity
Net income / loss
assets, liabilities, financial position and profit or loss of the Group
Direct
Total
€ ’000
€ ’000
Windpark Fresenhede GmbH & Co. KG, Kassel
Windpark Herßum-Vinnen Projekt GmbH & Co. KG, Kassel
Windpark Rotenburg GmbH & Co. KG, Kassel
Windpark Schapen GmbH & Co. KG, Kassel
WINDTEST Grevenbroich GmbH, Grevenbroich
50
50
50
50
38
1
1
1
1
966
– 572
– 410
– 847
– 939
– 308
IX. Other investments
Shareholding in %
Equity
Net income / loss
APEP Dachfonds GmbH & Co. KG, Munich
Chrysalix Energy II U.S. Limited Partnership, Vancouver/Canada
Chrysalix Energy III U.S. Limited Partnership, Vancouver/Canada
Dry Bulk Partners 2013 LP, Grand Cayman/Cayman Islands
Energías Renovables de Ávila, S.A., Madrid/Spain
E.ON SE, Essen
Focal Energy Solar Three Ltd., Nicosia/Cyprus
Glenrothes Paper Limited, Glenrothes/United Kingdom
Globus Steel & Power Pvt. Limited, New Delhi/India
High-Tech Gründerfonds II GmbH & Co. KG, Bonn
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
Direct
36
Total
36
6
5
23
17
15
8
0
18
1
€ ’000
121,538
14,906
68,311
5,368
595
€ ’000
22,134
6,936
– 44,502
– 783
0
9,728,400
788,300
5,822
634
– 1,428
103,211
648
0
– 245
0
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
223
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3
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4
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statements
List of shareholdings
(part of the notes)
5
Further information
IX. Other investments
HOCHTEMPERATUR-KERNKRAFTWERK Gesellschaft mit beschränkter Haftung (HKG)
Gemeinsames Europäisches Unternehmen, Hamm
Nordsee One GmbH, Oststeinbek
Nordsee Three GmbH, Oststeinbek
Nordsee Two GmbH, Oststeinbek
OPPENHEIM PRIVATE EQUITY Institutionelle Anleger GmbH & Co. KG, Cologne
Parque Eólico Cassiopea, S.L., Oviedo/Spain
Parque Eólico Escorpio, S.A., Oviedo/Spain
Parque Eólico Leo, S.L., Oviedo/Spain
PEAG Holding GmbH, Dortmund
Promocion y Gestion Cáncer, S.L., Oviedo/Spain
SET Fund II C.V., Amsterdam/Netherlands
Stem Inc., Milbrae/USA
Sustainable Energy Technology Fund C.V., Amsterdam/Netherlands
Technologiezentrum Jülich GmbH, Jülich
Transport- und Frischbeton-Gesellschaft mit beschränkter Haftung & Co. Kommanditgesellschaft Aachen, Aachen
Trinkaus Secondary GmbH & Co. KGaA, Düsseldorf
UMBO GmbH, Hamburg
Umspannwerk Lübz GbR, Lübz
Versorgungskasse Energie (VVaG) i.L., Hanover
Versorium Energy Ltd., Calgary/Canada
Shareholding in %
Equity
Net income / loss
Direct
Total
€ ’000
€ ’000
29
12
43
31
15
15
15
29
10
10
10
12
10
6
6
48
5
17
43
10
18
0
15
0
0
94,283
50,169
72
70
158
73
2,386
312
17,942
92
22,570
– 20,413
22,287
1,955
390
1,025
4,413
27
51,729
– 2
– 2
– 190
– 1
0
0
785
– 1
– 2,915
– 51,014
6,884
165
122
– 33
2,925
8
0
3
1 Profit and loss-pooling agreement; amounts blocked for transfer.
2 Figures from the Group’s consolidated financial statements.
3 Newly founded, financial statements not yet available.
4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.
224
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3
Responsibility statement
4
Consolidated financial
statements
List of shareholdings
(part of the notes)
5
Further information
Changes in shareholding with change of control
Additions to affiliated companies included in the consolidated financial statements
RWE Battery Solutions GmbH, Essen
RWE Kings Lynn Limited, Swindon/United Kingdom
RWE Renewables HoldCo B.V., Geertruidenberg/Netherlands
RWE Renewables Management UK Limited, Swindon/United Kingdom
RWE Renouvelables France SAS, La Plaine St. Denis/France
Vela Wind Holdco, LLC, Wilmington/USA
Disposal of affiliated companies included in the consolidated financial statements
BELECTRIC PV Dach GmbH, Sömmerda
Georgia Biomass Holding LLC, Savannah/USA
Georgia Biomass LLC, Savannah/USA
innogy Slovensko s.r.o., Bratislava/Slovakia
Jurchen Technology GmbH, Kitzingen
Jurchen Technology India Private Limited, Mumbai/India
NRW Pellets GmbH, Erndtebrück
Transpower Limited, Dublin/Ireland
Východoslovenská distribucná, a.s., Košice/Slovakia
Východoslovenská energetika a.s., Košice/Slovakia
Východoslovenská energetika Holding a.s., Košice/Slovakia
1 Control by virtue of company contract.
Shareholding in %
31 Dec 2020
Shareholding in %
31 Dec 2019
Change
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
491
100
100
100
100
100
100
– 100
– 100
– 100
– 100
– 100
– 100
– 100
– 100
– 100
– 100
– 49
Change
10
– 49
Changes in shareholding without change of control
Affiliated companies which are included in the consolidated financial statements
Nordsee Windpark Beteiligungs GmbH, Essen
RWE Renewables UK Humber Wind Limited, Coventry/United Kingdom
Shareholding in %
31 Dec 2020
Shareholding in %
31 Dec 2019
100
51
90
100
225
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statements
Boards (part of the notes)
5
Further information
4.8 Boards (part of the notes)
As of: 5 March 2021
Supervisory Board
(End of term: 2021 Annual General Meeting)
Dr. Werner Brandt
Bad Homburg
Chairman
Chairman of the Supervisory Board of ProSiebenSat.1 Media SE
Year of birth: 1954
Member since 18 April 2013
Other appointments:
• ProSiebenSat.1 Media SE (Chairman)1
• Siemens AG1
Frank Bsirske2
Isernhagen
Deputy Chairman
Former Chairman of ver.di - Vereinte Dienstleistungsgewerkschaft
Year of birth: 1952
Member since 9 January 2001
Other appointments:
• Deutsche Bank AG1
Michael Bochinsky2
Grevenbroich
Deputy Chairman of the General Works Council of RWE Power AG
Year of birth: 1967
Member since 1 August 2018
Sandra Bossemeyer2
Duisburg
Chairwoman of the Works Council of RWE AG
Representative of the disabled
Year of birth: 1965
Member since 20 April 2016
Martin Bröker2
Bochum
Head of Corporate IT & SAP at RWE AG
Year of birth: 1966
Member since 1 September 2018
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Employee representative.
3 Office within the Group.
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3
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statements
Boards (part of the notes)
5
Further information
Mag. Dr. h. c. Monika Kircher
Krumpendorf, Austria
Independent Corporate Consultant
Year of birth: 1957
Member since 15 October 2016
Other appointments:
- Andritz AG1
- Kärntner Energieholding Beteiligungs GmbH (Chairwoman)
- KELAG-Kärntner Elektrizitäts AG
- Siemens AG Österreich
Harald Louis2
Jülich
Chairman of the General Works Council of RWE Power AG
Year of birth: 1967
Member since 20 April 2016
Other appointments:
• RWE Power AG3
Anja Dubbert2
Essen
Business Development Manager
Member of the Works Council of RWE Supply & Trading GmbH
Year of birth: 1979
Member since 27 September 2019
Matthias Dürbaum2
Heimbach
Chairman of the Works Council of the Hambach Opencast Mine
Year of birth: 1987
Member since 27 September 2019
Ute Gerbaulet
Düsseldorf
General Partner of Bankhaus Lampe KG
Year of birth: 1968
Member since 27 April 2017
Other appointments:
- NRW.Bank AöR
Prof. Dr.-Ing. Dr.-Ing. E. h. Hans-Peter Keitel
Essen
Former Chairman of the Executive Board of HOCHTIEF AG
Year of birth: 1947
Member since 18 April 2013
Other appointments:
- Consolidated Contractors Group S.A.L.
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Employee representative.
3 Office within the Group.
227
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3
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4
Consolidated financial
statements
Boards (part of the notes)
5
Further information
Dagmar Mühlenfeld
Mülheim an der Ruhr
Former Mayor of the City of Mülheim an der Ruhr
Managing Director of JUNI gGmbH (Junior-Uni Ruhr)
Year of birth: 1951
Member since 4 January 2005
Peter Ottmann
Nettetal
Dr. Erhard Schipporeit
Hanover
Independent Corporate Consultant
Year of birth: 1949
Member since 20 April 2016
Other appointments:
• BDO AG Wirtschaftsprüfungsgesellschaft
• Hannover Rück SE1
Managing Director of Verband der kommunalen RWE-Aktionäre GmbH
• HDI Haftpflichtverband der Deutschen Industrie VVaG
Attorney
Former Chief Administrative Officer of Viersen County
Year of birth: 1951
Member since 20 April 2016
Günther Schartz
Wincheringen
Chief Administrative Officer of the District of Trier-Saarburg
Year of birth: 1962
Member since 20 April 2016
Other appointments:
- A.R.T. Abfallberatungs- und Verwertungsgesellschaft mbH (Chairman)
- Kreiskrankenhaus St. Franziskus Saarburg GmbH (Chairman)
- Sparkassenverband Rheinland-Pfalz
- Sparkasse Trier (Chairman)
- Trierer Hafengesellschaft mbH
- Zweckverband Abfallwirtschaft Region Trier
• Talanx AG1
Dr. Wolfgang Schüssel
Vienna, Austria
Former Federal Chancellor of the Republic of Austria
Year of birth: 1945
Member since 1 March 2010
Other appointments:
- Adenauer Stiftung (Chairman of the Board of Trustees)
- PJSC LUKOIL1
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Employee representative.
3 Office within the Group.
228
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3
Responsibility statement
4
Consolidated financial
statements
Boards (part of the notes)
5
Further information
Ullrich Sierau
Dortmund
Former Mayor of the City of Dortmund
Year of birth: 1956
Member since 20 April 2011
Ralf Sikorski2
Hanover
Deputy Chairman of IG Bergbau, Chemie, Energie
Year of birth: 1961
Member since 1 July 2014
Other appointments:
• CHEMIE Pensionsfonds AG
• Lanxess AG1
• Lanxess Deutschland GmbH
• RAG AG
• RWE Generation SE3
• RWE Power AG3
- KSBG Kommunale Verwaltungsgesellschaft GmbH
Marion Weckes2
Dormagen
Head of the Listed Companies and Corporate Governance Unit of the
Institute for Co-determination and Corporate Governance of the
Hans Böckler Foundation
Year of birth: 1975
Member since 20 April 2016
Leonhard Zubrowski2
Lippetal
Chairman of the Group Works Council of RWE AG
Year of birth: 1961
Member since 1 July 2014
Other appointments:
• RWE Generation SE3
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Employee representative.
3 Office within the Group.
229
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of operations
3
Responsibility statement
4
Consolidated financial
statements
Boards (part of the notes)
5
Further information
Supervisory Board Committees
Executive Committee of the Supervisory Board
Dr. Werner Brandt (Chairman)
Frank Bsirske
Sandra Bossemeyer
Anja Dubbert
Matthias Dürbaum
Prof. Dr. Hans-Peter Keitel
Dagmar Mühlenfeld
Dr. Wolfgang Schüssel
Mediation Committee in accordance with Section 27,
Paragraph 3 of the German Co-Determination Act
Dr. Werner Brandt (Chairman)
Frank Bsirske
Dr. Wolfgang Schüssel
Ralf Sikorski
Personnel Affairs Committee
Dr. Werner Brandt (Chairman)
Frank Bsirske
Harald Louis
Peter Ottmann
Dr. Wolfgang Schüssel
Leonhard Zubrowski
Audit Committee
Dr. Erhard Schipporeit (Chairman)
Michael Bochinsky
Mag. Dr. h. c. Monika Kircher
Ullrich Sierau
Ralf Sikorski
Marion Weckes
Nomination Committee
Dr. Werner Brandt (Chairman)
Prof. Dr. Hans-Peter Keitel
Peter Ottmann
Strategy and Sustainability Committee
Dr. Werner Brandt (Chairman)
Frank Bsirske
Prof. Dr. Hans-Peter Keitel
Günther Schartz
Ralf Sikorski
Leonhard Zubrowski
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3
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4
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statements
Boards (part of the notes)
5
Further information
The Executive Board
Dr. Rolf Martin Schmitz (Chief Executive Officer until 30 April 2021)
Dr. Markus Krebber (Chief Financial Officer until 30 April 2021)
Chairman of the Executive Board of RWE AG since 15 October 2016
Chief Executive Officer as of 1 May 2021
Member of the Executive Board of RWE AG since 1 May 2009, appointed until 30 June 2021,
Member of the Executive Board of RWE AG since 1 October 2016, appointed until 30 June 2026
will resign as of 30 April 2021
Labour Director of RWE AG from 1 May 2017 to 31 October 2020
Offices:
Offices:
• Corporate Transformation
•
Internal Audit & Compliance
• Corporate Communications & Energy Policy
• Legal & Insurance
• Corporate Business Development
Other appointments:
• E.ON SE1
• RWE Generation SE2 (Chairman)
• RWE Renewables GmbH2
• RWE Supply & Trading GmbH2
• TÜV Rheinland AG
- Jaeger Grund GmbH & Co. KG (Jaeger Gruppe, Chairman)
- Kärntner Energieholding Beteiligungs GmbH
- KELAG-Kärntner Elektrizitäts AG
• Controlling & Risk Management
•
Investor Relations
• Portfolio Management / Mergers & Acquisitions
• Accounting
• Corporate Strategy
Other appointments:
• RWE Generation SE2
• RWE Power AG2
• RWE Renewables GmbH2 (Chairman)
• RWE Supply & Trading GmbH2 (Chairman)
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Office within the Group.
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3
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statements
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5
Further information
Dr. Michael Müller (Chief Financial Officer as of 1 May 2021)
Zvezdana Seeger (Chief HR Officer)
Member of the Executive Board of RWE AG since 1 November 2020, appointed until 31 October 2023
Member of the Executive Board of RWE AG since 1 November 2020, appointed until 31 October 2023
Managing Director and CFO of RWE Supply & Trading GmbH from 1 September 2016 to 30 April 2021
Labour Director of RWE AG since 1 November 2020
(posts held concurrently since 1 November 2020)
Offices:
• Business Services
• Finance & Credit Risk
• Tax
Other appointments:
• Amprion GmbH
• RWE Generation SE2
• RWE Power AG2
Offices:
•
IT
• Human Resources
Other appointments:
• RWE Pensionsfonds AG2 (Chairwoman)
• RWE Power AG2 (Chairwoman)
• Member of other mandatory supervisory boards
-
as defined in Section 125 of the German Stock Corporation Act.
Member of comparable domestic and foreign supervisory boards of commercial enterprises
as defined in Section 125 of the German Stock Corporation Act.
1 Listed company.
2 Office within the Group.
232
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
The following copy of the auditor‘s report also includes a “Report on the audit of the electronic renderings of the financial statements and the management report prepared for disclosure purposes in accordance
with § 317 Abs. 3b HGB“ (“Separate report on ESEF conformity“). The subject matter (ESEF documents) to which the Separate report on ESEF conformity relates is not attached. The audited ESEF documents can be
inspected in or retrieved from the Federal Gazette.
4.9 Independent auditor’s report
To RWE Aktiengesellschaft, Essen
Report on the audit of the consolidated financial statements and of the
group management report
• the accompanying group management report as a whole provides an appropriate view of the Group’s
position. In all material respects, this group management report is consistent with the consolidated
financial statements, complies with German legal requirements and appropriately presents the
opportunities and risks of future development. Our audit opinion on the group management report
does not cover the content of those parts of the group management report listed in the “Other
Audit Opinions
Information” section of our auditor’s report.
We have audited the consolidated financial statements of RWE Aktiengesellschaft, Essen, and its
subsidiaries (the Group), which comprise the consolidated statement of financial position as at
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our audit has not led to any reserva-
December 31, 2020, and the consolidated statement of profit or loss, the consolidated statement of
tions relating to the legal compliance of the consolidated financial statements and of the group
comprehensive income, consolidated statement of changes in equity and consolidated statement of
management report.
cash flows for the financial year from January 1 to December 31, 2020, and notes to the consolidated
financial statements, including a summary of significant accounting policies. In addition, we have
Basis for the Audit Opinions
audited the group management report of RWE Aktiengesellschaft, which is combined with the
We conducted our audit of the consolidated financial statements and of the group management report
Company’s management report, for the financial year from January 1 to December 31, 2020. In
in accordance with § 317 HGB and the EU Audit Regulation (No. 537 / 2014, referred to subsequently as
accordance with the German legal requirements, we have not audited the content of those parts of
“EU Audit Regulation”) in compliance with German Generally Accepted Standards for Financial
the group management report listed in the “Other Information” section of our auditor’s report.
Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in
In our opinion, on the basis of the knowledge obtained in the audit,
compliance with the International Standards on Auditing (ISAs). Our responsibilities under those
Germany] (IDW). We performed the audit of the consolidated financial statements in supplementary
• the accompanying consolidated financial statements comply, in all material respects, with the IFRSs
Audit of the Consolidated Financial Statements and of the Group Management Report” section of our
as adopted by the EU, and the additional requirements of German commercial law pursuant to
auditor’s report. We are independent of the group entities in accordance with the requirements of
§ [Article] 315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: German Commercial Code] and, in
European law and German commercial and professional law, and we have fulfilled our other German
compliance with these requirements, give a true and fair view of the assets, liabilities, and financial
professional responsibilities in accordance with these requirements. In addition, in accordance with
position of the Group as at December 31, 2020, and of its financial performance for the financial
Article 10 (2) point (f) of the EU Audit Regulation, we declare that we have not provided non-audit
year from January 1 to December 31, 2020, and
services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we
requirements, principles and standards are further described in the “Auditor’s Responsibilities for the
233
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
have obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated
the basis of fair value less costs of disposal. The impairment tests are performed at the level of the
financial statements and on the group management report.
cash-generating units or groups of cash-generating units to which the respective goodwill is
allocated. The measurements to calculate the fair value less costs of disposal carried out for the
Key Audit Matters in the Audit of the Consolidated Financial Statements
purposes of the impairment tests are based on the present values of the future cash flows derived
Key audit matters are those matters that, in our professional judgment, were of most significance in our
from the planning projections for the next three years (medium-term plan) prepared by the executive
audit of the consolidated financial statements for the financial year January 1 to December 31, 2020.
directors and acknowledged by the supervisory board. In doing so, expectations relating to future
These matters were addressed in the context of our audit of the consolidated financial statements as a
market developments and country-specific assumptions about the performance of macroeconomic
whole, and in forming our audit opinion thereon; we do not provide a separate audit opinion on these
indicators are also taken into account. Present values are calculated using discounted cash flow
matters.
models. The discount rate applied is the weighted average cost of capital for the relevant cash-
generating unit. The impairment test did not result in the recognition of a write-down. The outcome
In our view, the matters of most significance in our audit were as follows:
of these measurements is dependent to a large extent on the estimates made by the executive
Recoverability of goodwill
Changes in Segment Reporting
directors of the future cash inflows of the cash-generating units, and on the respective discount
rates and rates of growth employed as well as on further assumptions. The measurement is
therefore subject to considerable uncertainty. Against this background and due to the underlying
Impairment of property, plant and equipment
complexity of the measurement, this matter was of particular significance in the context of our audit.
Our presentation of these key audit matters has been structured in each case as follows:
As part of our audit, we evaluated the methodology used for the purpose of performing the
Matter and issue
Audit approach and findings
Reference to further information
impairment tests and assessed the calculation of the weighted average cost of capital, among other
things. In addition, we assessed whether the future cash inflows underlying the measurements
together with the weighted cost of capital used represent an appropriate basis for the impairment
tests overall. We evaluated the appropriateness of the future cash inflows used in the calculations,
among other things, by comparing this data with the Group’s medium-term plan and by reconciling
Hereinafter we present the key audit matters:
it against general and sector-specific market expectations. In this context, we also assessed whether
Recoverability of goodwill
the costs of Group functions were properly included in the respective cash-generating unit. In the
knowledge that even relatively small changes in the discount rate applied can in some cases have a
In the consolidated financial statements of RWE Aktiengesellschaft, goodwill amounting to
material impact on the fair value less costs of disposal calculated using this method, we also
€2.6 billion (4.2 % of consolidated total assets) (prior year: €2.5 billion or 4.0 % of consolidated total
evaluated the parameters used to determine the discount rate applied and assessed the measure-
assets) is reported under the balance sheet item “Intangible assets”.
ment model. Furthermore, we evaluated the sensitivity analyses performed by the Company in order
to evaluate any impairment risk (carrying amount higher than recoverable amount) in the event of a
Goodwill is tested for impairment (“impairment test”) annually or when there are indications of
reasonably possible change in a material assumption underlying the measurement. Overall, the
impairment, to determine any possible need for write-downs. The carrying amounts of the relevant
measurement parameters and assumptions used by the executive directors are in line with our
cash-generating units, including goodwill, are compared with the corresponding recoverable
expectations and are also within the ranges considered by us to be reasonable.
amounts in the context of the impairment tests. The recoverable amount is generally calculated on
234
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
The Company’s disclosures relating to goodwill are contained in the notes to the consolidated
Impairment of property, plant and equipment
financial statements in section “Notes to the Balance Sheet” in note “(10) Intangible assets”.
In the consolidated financial statements of RWE Aktiengesellschaft, power plants, refining plants
Changes in segment reporting
and opencast mining facilities (hereinafter referred to as “property, plant and equipment”) in the
“Coal / Nuclear” and “Hydro / Biomass / Gas” segments are impaired by €1.6 billion due to adverse
The executive directors of RWE Aktiengesellschaft made changes to its internal management and
long-term assumptions concerning sales prices and volumes. The recoverability of property, plant
reporting structures in financial year 2020. The separately reported activities “innogy continuing
and equipment was tested on the basis of their fair values less costs to sell, which exceed their values
operations” and “operations acquired from E.ON” have been dissolved and the power generation
in use. The fair values of the respective property, plant and equipment are determined by the
activities according to the energy source applied have been reclassified. A distinction is made
Company as the present values of the future cash flows using discounted cash flow models. The
between the five segments: (1) Offshore Wind, (2) Onshore Wind / Solar, (3) Hydro / Biomass / Gas,
planning projections for the next three years (medium-term plan) prepared by the executive
(4) Supply & Trading and (5) Coal / Nuclear, whereby the segments (1) to (4) form the core business.
directors and acknowledged by the supervisory board are used as a basis and extrapolated on the
This required a redefinition of the segments shown in the Group’s segment reporting and a
reallocation of goodwill to the cash-generating units or groups of cash-generating units. The
basis of long-term assumptions regarding electricity, coal, gas and CO2 certificate prices as well as
the planned operating times. The outcome of these measurements is dependent to a large extent
management approach required by IFRS 8 for the identification of segments and allocation of
on the estimates made by the executive directors of the future cash inflows and on the respective
goodwill involves the exercise of judgement to a high degree. The changes to segment reporting and
discount rates and rates of growth employed as well as on further assumptions. The measurement is
the reallocation of goodwill to the cash-generating units or groups of cash-generating units were
therefore subject to considerable uncertainty, so that this matter was of particular significance in the
therefore of particular significance in the context of our audit.
context of our audit.
As part of our audit, among other things, we assessed whether segment reporting in accordance
As part of our audit, we evaluated the methodology used for the purpose of performing the
with the requirements of the management approach is consistent with the Company’s internal
impairment tests for property, plant and equipment and assessed the calculation of the weighted
reporting and management structures. For this purpose, we evaluated in particular the internal
average cost of capital, among other things. In addition, we assessed whether the future cash
reporting to the executive board and satisfied ourselves by inspecting the minutes of executive
inflows underlying the measurements together with the weighted cost of capital used represent an
board meetings that the new segment structure corresponds to the Company’s regular internal
appropriate basis for the impairment tests overall. We evaluated the appropriateness of the future
reporting. Moreover, we reviewed the methodology used to reallocate goodwill and assessed the
cash inflows used in the calculations, among other things, by comparing this data with the Group’s
level of decision-making by the executive board concerning the allocation of resources. In addition,
medium-term plan and by reconciling it against general and sector-specific market expectations
we assessed the adjustments to the consolidation accounting entries required for the presentation
of the new segments and the comparative disclosures. In our view, the redefinition of the reportable
with regard to electricity, coal, gas and CO2 certificate prices as well as the planned operating times.
Furthermore, on the basis of the medium-term plan, we assessed the recoverability of the property,
segments and the reallocation of goodwill to the cash-generating units or groups of cash-generating
plant and equipment based on the evidence presented to us. In the knowledge that even relatively
units have been clearly documented and appropriately implemented overall.
small changes in the discount rate applied can have a material impact on the fair values calculated
The RWE Group’s segment reporting is contained in the notes to the consolidated financial
and assessed the measurement model. Overall, the measurement parameters and assumptions
statements in section “Other information” in note “(29) Segment reporting”.
used by the executive directors are in line with our expectations and are also within the ranges
using this method, we also evaluated the parameters used to determine the discount rate applied
considered by us to be reasonable.
235
RWE Annual Report 2020
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
The Company’s disclosures relating to the recoverability of property, plant and equipment are
Responsibilities of the Executive Directors and the Supervisory Board for the Consolidated
contained in the notes to the consolidated financial statements in section “Notes to the Income
Financial Statements and the Group Management Report
Statement” in note “(5) Depreciation, amortization and impairment losses”.
The executive directors are responsible for the preparation of the consolidated financial statements that
Other Information
comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of
German commercial law pursuant to § 315e Abs. 1 HGB and that the consolidated financial statements,
The executive directors are responsible for the other information. The other information comprises the
in compliance with these requirements, give a true and fair view of the assets, liabilities, financial
following non-audited parts of the group management report:
position, and financial performance of the Group. In addition, the executive directors are responsible for
• the statement on corporate governance pursuant to § 289f HGB and § 315d HGB included in
financial statements that are free from material misstatement, whether due to fraud or error.
such internal control as they have determined necessary to enable the preparation of consolidated
section 2.7 of the group management report
• the separate non-financial group report pursuant to § 315b Abs. 3 HGB
the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are responsible for financial reporting
The other information comprises further the remaining parts of the annual report – excluding cross-
based on the going concern basis of accounting unless there is an intention to liquidate the Group or to
references to external information – with the exception of the audited consolidated financial statements,
cease operations, or there is no realistic alternative but to do so.
In preparing the consolidated financial statements, the executive directors are responsible for assessing
the audited group management report and our auditor’s report.
Our audit opinions on the consolidated financial statements and on the group management report do
report that, as a whole, provides an appropriate view of the Group’s position and is, in all material
not cover the other information, and consequently we do not express an audit opinion or any other form
respects, consistent with the consolidated financial statements, complies with German legal require-
of assurance conclusion thereon.
ments, and appropriately presents the opportunities and risks of future development. In addition, the
Furthermore, the executive directors are responsible for the preparation of the group management
executive directors are responsible for such arrangements and measures (systems) as they have
In connection with our audit, our responsibility is to read the other information and, in so doing, to
considered necessary to enable the preparation of a group management report that is in accordance
consider whether the other information
with the applicable German legal requirements, and to be able to provide sufficient appropriate
•
is materially inconsistent with the consolidated financial statements, with the group management
report or our knowledge obtained in the audit, or
The supervisory board is responsible for overseeing the Group’s financial reporting process for the
preparation of the consolidated financial statements and of the group management report.
evidence for the assertions in the group management report.
• otherwise appears to be materially misstated.
If, based on the work we have performed on the other information we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
236
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the
• Evaluate the appropriateness of accounting policies used by the executive directors and the
Group Management Report
reasonableness of estimates made by the executive directors and related disclosures.
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and whether the group
• Conclude on the appropriateness of the executive directors’ use of the going concern basis of
management report as a whole provides an appropriate view of the Group’s position and, in all material
accounting and, based on the audit evidence obtained, whether a material uncertainty exists related
respects, is consistent with the consolidated financial statements and the knowledge obtained in the
to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
audit, complies with the German legal requirements and appropriately presents the opportunities and
concern. If we conclude that a material uncertainty exists, we are required to draw attention in the
risks of future development, as well as to issue an auditor’s report that includes our audit opinions on the
auditor’s report to the related disclosures in the consolidated financial statements and in the group
consolidated financial statements and on the group management report.
management report or, if such disclosures are inadequate, to modify our respective audit opinions.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
However, future events or conditions may cause the Group to cease to be able to continue as a going
accordance with § 317 HGB and the EU Audit Regulation and in compliance with German Generally
concern.
Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer
(IDW) and supplementary compliance with the ISAs will always detect a material misstatement.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
Misstatements can arise from fraud or error and are considered material if, individually or in the
including the disclosures, and whether the consolidated financial statements present the underlying
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
transactions and events in a manner that the consolidated financial statements give a true and fair
the basis of these consolidated financial statements and this group management report.
view of the assets, liabilities, financial position and financial performance of the Group in compliance
with IFRSs as adopted by the EU and the additional requirements of German commercial law
We exercise professional judgment and maintain professional skepticism throughout the audit. We also
pursuant to § 315e Abs. 1 HGB.
•
Identify and assess the risks of material misstatement of the consolidated financial statements and of
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
the group management report, whether due to fraud or error, design and perform audit procedures
business activities within the Group to express audit opinions on the consolidated financial statem-
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
ents and on the group management report. We are responsible for the direction, supervision and
basis for our audit opinions. The risk of not detecting a material misstatement resulting from fraud is
performance of the group audit. We remain solely responsible for our audit opinions.
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Evaluate the consistency of the group management report with the consolidated financial state-
ments, its conformity with German law, and the view of the Group’s position it provides.
• Obtain an understanding of internal control relevant to the audit of the consolidated financial
statements and of arrangements and measures (systems) relevant to the audit of the group
• Perform audit procedures on the prospective information presented by the executive directors in the
management report in order to design audit procedures that are appropriate in the circumstances,
group management report. On the basis of sufficient appropriate audit evidence we evaluate, in
but not for the purpose of expressing an audit opinion on the effectiveness of these systems.
particular, the significant assumptions used by the executive directors as a basis for the prospective
information, and evaluate the proper derivation of the prospective information from these assump-
tions. We do not express a separate audit opinion on the prospective information and on the
237
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
assumptions used as a basis. There is a substantial unavoidable risk that future events will differ
Other legal and regulatory requirements
materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned
Consolidated Financial Statements and the Group Management Report Prepared for Publication
Assurance Report in Accordance with § 317 Abs. 3b HGB on the Electronic Reproduction of the
scope and timing of the audit and significant audit findings, including any significant deficiencies in
Purposes
internal control that we identify during our audit.
Reasonable Assurance Conclusion
We also provide those charged with governance with a statement that we have complied with the
We have performed an assurance engagement in accordance with § 317 Abs. 3b HGB to obtain reason-
relevant independence requirements and communicate with them all relationships and other matters
able assurance about whether the reproduction of the consolidated financial statements and the group
that may reasonably be thought to bear on our independence, and where applicable, the related
management report (hereinafter the “ESEF documents”) contained in the attached electronic file
safeguards.
[RWE_AG_KA+KLB_ESEF-2020-12-31.zip] and prepared for publication purposes complies in all
material respects with the requirements of § 328 Abs. 1 HGB for the electronic reporting format (“ESEF
From the matters communicated with those charged with governance, we determine those matters that
format”). In accordance with German legal requirements, this assurance engagement only extends to
were of most significance in the audit of the consolidated financial statements of the current period and
the conversion of the information contained in the consolidated financial statements and the group
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
management report into the ESEF format and therefore relates neither to the information contained
regulation precludes public disclosure about the matter.
within this reproduction nor to any other information contained in the above-mentioned electronic file.
In our opinion, the reproduction of the consolidated financial statements and the group management
report contained in the above-mentioned attached electronic file and prepared for publication purposes
complies in all material respects with the requirements of § 328 Abs. 1 HGB for the electronic reporting
format. We do not express any opinion on the information contained in this reproduction nor on any
other information contained in the above-mentioned electronic file beyond this reasonable assurance
conclusion and our audit opinion on the accompanying consolidated financial statements and the
accompanying group management report for the financial year from January 1 to December 31,2020,
contained in the “Report on the Audit of the Consolidated Financial Statements and on the Group
Management Report” above.
238
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
Basis for the Reasonable Assurance Conclusion
Group Auditor’s Responsibilities for the Assurance Engagement on the ESEF Documents
We conducted our assurance engagement on the reproduction of the consolidated financial statements
Our objective is to obtain reasonable assurance about whether the ESEF documents are free from
and the group management report contained in the above-mentioned attached electronic file in
material non-compliance with the requirements of § 328 Abs. 1 HGB, whether due to fraud or error.
accordance with § 317 Abs. 3b HGB and the Exposure Draft of IDW Assurance Standard: Assurance in
We exercise professional judgment and maintain professional skepticism throughout the assurance
Accordance with § 317 Abs. 3b HGB on the Electronic Reproduction of Financial Statements and
engagement. We also:
Management Reports Prepared for Publication Purposes (ED IDW AsS 410) and the International
Standard on Assurance Engagements 3000 (Revised). Accordingly, our responsibilities are further
•
Identify and assess the risks of material non-compliance with the requirements of § 328 Abs. 1 HGB,
described below in the “Group Auditor’s Responsibilities for the Assurance Engagement on the ESEF
whether due to fraud or error, design and perform assurance procedures responsive to those risks,
Documents” section. Our audit firm has applied the IDW Standard on Quality Management: Require-
and obtain reasonable assurance that is sufficient and appropriate to provide a basis for our
ments for Quality Management in the Audit Firm (IDW QS 1).
assurance conclusion.
Responsibilities of the Executive Directors and the Supervisory Board for the ESEF Documents
• Obtain an understanding of internal control relevant to the assurance engagement on the ESEF
The executive directors of the Company are responsible for the preparation of the ESEF documents
documents in order to design assurance procedures that are appropriate in the circumstances, but
including the electronic reproduction of the consolidated financial statements and the group manage-
not for the purpose of expressing an assurance conclusion on the effectiveness of these controls.
ment report in accordance with § 328 Abs. 1 Satz 4 Nr. 1 HGB and for the tagging of the consolidated
financial statements in accordance with § 328 Abs. 1 Satz 4 Nr. 2 HGB.
• Evaluate the technical validity of the ESEF documents, i. e., whether the electronic file containing the
In addition, the executive directors of the Company are responsible for such internal control as they have
applicable as at the balance sheet date on the technical specification for this electronic file.
considered necessary to enable the preparation of ESEF documents that are free from material
non-compliance with the requirements of § 328 Abs. 1 HGB for the electronic reporting format, whether
• Evaluate whether the ESEF documents enables a XHTML reproduction with content equivalent to the
due to fraud or error.
audited consolidated financial statements and to the audited group management report.
ESEF documents meets the requirements of the Delegated Regulation (EU) 2019 / 815 in the version
The executive directors of the Company are also responsible for the submission of the ESEF documents
• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) enables an
together with the auditor‘s report and the attached audited consolidated financial statements and
appropriate and complete machine-readable XBRL copy of the XHTML reproduction.
audited group management report as well as other documents to be published to the operator of the
German Federal Gazette [Bundesanzeiger].
The supervisory board is responsible for overseeing the preparation of the ESEF documents as part of
the financial reporting process.
239
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Independent auditor’s report
5
Further information
Further Information pursuant to Article 10 of the EU Audit Regulation
We were elected as group auditor by the annual general meeting on June 26, 2020. We were engaged
by the supervisory board on July 8, 2020. We have been the group auditor of RWE Aktiengesellschaft,
Essen, without interruption since the financial year 2001.
We declare that the audit opinions expressed in this auditor’s report are consistent with the additional
report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report).
German Public Auditor responsible for the engagement
The German Public Auditor responsible for the engagement is Ralph Welter.
Essen, March 5, 2021
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
(sgd. Markus Dittmann)
(sgd. Ralph Welter)
Wirtschaftsprüfer
Wirtschaftsprüfer
(German Public Auditor)
(German Public Auditor)
240
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
Information on the auditor
5
Further information
4.10 Information on the auditor
The consolidated financial statements of RWE AG and its subsidiaries for the 2020 fiscal year –
consisting of the Group balance sheet, Group income statement and statement of comprehen sive
income, Group statement of changes in equity, Group cash flow statement and Group notes to the
financial statements – were audited by the auditing company PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft.
The auditor at PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft responsible for RWE
for the last time is Mr. Ralph Welter. Mr. Welter has performed this function in seven previous audits
of RWE.
241
RWE Annual Report 2020 05
Further
information
5.1 Five-year overview
5.2
Imprint
5.3 Financial Calendar
243
244
245
Recultivation area near Erftstadt, Germany
1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Five-year overview
5.1 Five-year overview
Five-year overview of the RWE Group1
External revenue (excluding natural gas tax/electricity tax)
Adjusted EBITDA
Adjusted EBIT
Income before tax
Net income /RWE AG shareholders’ share in income
Earnings per share
Cash flows from operating activities of continuing operations
Free cash flow
Non-current assets
Current assets
Balance sheet equity
Non-current liabilities
Current liabilities
Balance sheet total
Equity ratio
Net debt
€ million
€ million
€ million
€ million
€ million
€
€ million
€ million
€ million
€ million
€ million
€ million
€ million
€ million
%
€ million
Workforce at the end of the year2
CO2 emissions
million metric tons
1 The comparability of some of the figures for various fiscal years is limited due to changes in reporting.
2 Converted to full-time positions.
243
2020
13,688
3,235
1,771
1,196
995
1.56
4,125
1,132
34,461
27,207
17,971
27,280
16,417
61,668
29.1
4,432
19,498
68.9
2019
13,125
2,489
1,267
– 752
8,498
13.82
– 977
– 2,053
35,768
28,241
17,467
26,937
19,605
64,009
27.3
7,159
19,792
88.1
2018
13,406
1,538
619
49
335
0.54
4,611
3,439
18,595
61,513
14,257
20,007
45,844
80,108
17.8
19,339
17,748
118.0
2017
13,822
2,149
1,170
2,056
1,900
3.09
– 3,771
– 4,439
45,694
23,365
11,991
36,774
20,294
69,059
17.4
20,227
59,547
131.8
2016
43,590
5,403
3,082
– 5,807
– 5,710
– 9.29
2,352
809
45,911
30,491
7,990
39,646
28,766
76,402
10.5
22,709
58,652
148.3
RWE Annual Report 2020 1
To our investors
2
Combined review
of operations
3
Responsibility statement
4
Consolidated financial
statements
5
Further information
Imprint
5.2 Imprint
RWE Aktiengesellschaft
RWE Platz 1
45141 Essen
Germany
Phone
+49 201 5179-0
Fax
+49 201 5179-5299
E-mail
contact@rwe.com
Investor Relations
Phone
+49 201 5179-3112
Fax
+49 201 5179-420042
Internet www.rwe.com/ir
E-mail
invest@rwe.com
Corporate Communications
Phone
+49 201 5179-5009
Fax
+49 201 5179-5290
Typesetting and production
MPM Corporate Communication Solutions, Mainz
www.mpm.de
Photography
André Laaks, Essen
Translation
Olu Taylor, Geretsried, Germany
Proofreading
Nicola Thackeray, Swindon, UK
RWE is a member of DIRK – the German Investor Relations Association.
For annual reports, interim reports, interim statements and further information on RWE, please visit us
on the internet at www.rwe.com/en.
This document was published on 16 March 2021. It is a translation of the German annual report. The
consolidated financial statements and the review of operations are also published in the German
Federal Gazette. These are the definitive versions.
Forward-looking statements. This annual report contains forward-looking statements regarding the
future development of the RWE Group and its companies as well as of the economic and political
environment. These statements are assessments that we have made based on information available to
us at the time this document was prepared. In the event that the underlying assumptions do not
materialise or unforeseen risks arise, actual developments can deviate from the developments expected
at present. Therefore, we cannot assume responsibility for the correctness of these statements.
References to the internet. The contents of pages on the internet and publications to which we refer in
the review of operations are not part of the review of operations and are merely intended to provide
additional information. The corporate governance declaration in accordance with Section 289f as well
as Section 315d of the German Commercial Code is an exception.
244
RWE Annual Report 2020 Further information
Financial Calendar
2021/2022
28 April 2021
29 April 2021
03 May 2021
12 May 2021
Virtual Annual General Meeting
Ex-dividend date
Dividend payment
Interim statement on the first quarter of 2021
12 August 2021
Interim report on the first half of 2021
11 November 2021
Interim statement on the first three quarters of 2021
15 March 2022
Annual report for fiscal 2021
28 April 2022
29 April 2022
03 May 2022
12 May 2022
Annual General Meeting
Ex-dividend date
Dividend payment
Interim statement on the first quarter of 2022
11 August 2022
Interim report on the first half of 2022
10 November 2022
Interim statement on the first three quarters of 2022
The virtual Annual General Meeting and all events concerning the publication of our financial reports are broadcast live on the internet and recorded.
We will keep the recordings on our website for at least twelve months.