RWE AG Annual Report 2021

FY2021 Annual Report · RWE AG

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Focus on
growth.

Annual Report 2021

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 with natural gas, wind, sun and water. Tomorrow, we
will make a full transition to zero-carbon energy sources. Because our
objective is to be carbon neutral. And we aim to accomplish this
by 2040.

Green energy is the lifeblood of a sustainable economy. And demand
for it is also rising 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 significant opportunities. Together with renowned
partners from industry and science, we have set our sights on a
hydrogen economy. We have already launched about 30 projects. Our
long-term goal is to supply both green electricity and green hydrogen,
a second product with huge potential demand.

electrolysers for hydrogen production. In net terms, i. e. after deducting
proceeds on the sale of stakes in projects, expenditure will total some
30 billion euros. Our objective here is to double generation capacity in
our core business to 50 gigawatts. As we work to accomplish this,
we will also make a socially acceptable exit from coal-fired generation.
We want to do this as quickly as possible, while ensuring security of
supply at all times.

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. RWE‘s 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: our carbon dioxide emissions from
power production have more than halved since 2012. 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.

It takes a major effort to achieve major goals. We plan to invest
50 billion euros in green growth in the current decade – in new wind
and solar farms, battery storage, flexible backup power plants and

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 figures1

Power generation

External revenue (excluding natural gas tax / electricity tax)

Adjusted EBITDA

Adjusted EBIT

Income from continuing operations before tax

Net income / income attributable to RWE AG shareholders

Adjusted net income

Cash flows from operating activities of continuing operations

Capital expenditure

Property, plant and equipment and intangible assets

Financial assets

Proportion of taxonomy-eligible investments3

Earnings per share

Adjusted net income per share

Dividend per share

Net assets (+) / net debt (–)

Workforce5

2021

2020

GWh

160,773

141,2042

24,526

13,688

€ million

3,650

2,185

1,522

721

1,569

7,274

3,769

3,689

3,286

1,823

1,265

1,051

1,257

4,125

3,358

2,285

1,073

–

1,132

€

1.07

2.32

0.904

1.65

1.97

0.85

31 Dec 2021

31 Dec 2020

€ million

360

18,246

– 4,432

19,498

4,792

– 1,252

+ / –

19,569

10,838

364

362

257

– 330

312

3,149

411

1,404

– 993

–

3,430

38,934

– 0.58

0.35

0.05

Free cash flow

€ million

4,562

Number of shares outstanding (annual average)

thousands

676,220

637,286

1 Some prior-year figures restated due to a change in the recognition of tax benefits to subsidise renewables in the USA (see page 47).
2 Adjusted figure, as power purchases from generation assets in which RWE does not own the majority, but which we have long-term usage rights to, are no longer considered.
3 Taxonomy-eligible economic activity is activity which is subject to criteria under the EU Taxonomy Regulation – irrespective of whether the criteria are met (see page 34 et seq.).
4 Dividend proposal for fiscal 2021, subject to the passing of a resolution by the 28 April 2022 Annual General Meeting.
5 Converted to full-time positions.

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Contents

1.1

1.2

1.3

1.4

2.1

2.2

2.3

To our investors

Letter from the CEO

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

2.7

Commentary on reporting

Business performance

Financial position and net worth

2.8 Notes to the financial statements of

RWE AG (holding company)

2.9 Outlook

2.10 Development of risks and opportunities

2.11 Disclosure relating to German takeover law

Responsibility statement

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

5.1

5.2

5.3

Further information

Five-year overview

Imprint

Financial calendar

184

220

228

236

237

238

239

240

We provide detailed information on our sustainability activities in our Sustainability Report and Non-financial Report. These publications are available at www.rwe.com/responsibility-

and-sustainability. The reports on fiscal 2021 will be published in April 2022.

In accordance with Section 162 of the German Stock Corporation Act, we published the Remuneration Report for fiscal 2021 as a separate report for the first time. It has also been

included in the invitation to the virtual Annual General Meeting, scheduled for 28 April 2022. The publications are available at www.rwe.com/remuneration and www.rwe.com/agm.

RWE Annual Report 2021

“Taking on and mastering new
challenges is what RWE strives for –
and so do I.”

Feixia Li, Junior Project Manager Corporate Improvements & Projects, RWE Supply & Trading

To our investors

1.1 Letter from the CEO
1.2 Executive Board of RWE AG
1.3 Supervisory Board report

1.4 RWE on the capital market

1
To our investors

Letter from the CEO

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Letter from the CEO

1.1 Letter from the CEO

The conflict has massive ramifications for Europe as a whole. One key aspect is security of

energy supply. As a company active in critical infrastructure, we at RWE are well aware of the

great responsibility we bear at this time. We therefore support the efforts of the EU and the

German government to reduce dependence on deliveries of commodities from Russia and

simultaneously ensure a reliable supply of energy. We are working on identifying RWE power

stations which can provide additional backup capacity. We are also playing our part in

diversifying the supply of natural gas. One example of this is our participation in the planned

LNG terminal in Brunsbüttel, Germany, which will be able to receive shipments of liquefied

natural gas and, in the future, green ammonia for hydrogen production.

Even though security of supply is the centre of attention at the moment, the medium- and

long-term vision for energy policy remains unchanged. Indeed, expanding renewables and

ramping up the hydrogen economy are more important than ever – not only to protect the

climate, but also to increase our independence from commodity imports. RWE will make a

major contribution to these causes. At our Capital Market Day on 15 November 2021, we

informed the public of the action we plan to take. Our Growing Green strategy will make the

Dr. Markus Krebber, Chief Executive Officer of RWE AG

2020s a decade of growth for our company. By 2030, we intend to invest a gross sum of

Dear Shareholders,

Ladies and Gentlemen

around €50 billion in transforming RWE and thus transitioning to a sustainable energy

system. These funds will be spent on the construction of wind and solar farms, battery

storage, climate-friendly backup power stations and electrolysers for the production of

hydrogen. Our net capital expenditure, which takes into account proceeds from the sale of

stakes in projects, is expected to reach €30 billion. With this, we plan to double generation

capacity in our core business to roughly 50 GW by the end of the decade. Earnings from

Europe is experiencing particularly difficult times. The images we are seeing from Ukraine

core activities will also increase sharply: for 2030, we project adjusted EBITDA in the order

are shocking. For me, the scale of the human suffering caused by the war is almost

of €5 billion, representing an increase of around 80 % compared to 2021. These goals are

inconceivable. With the attack on Ukraine, Russia’s leadership has violated international law

ambitious, but realistic. This was reflected in the stock market’s positive reaction to our

and the right of the Ukrainian people to self-determination. Sadly, we have been reminded

Growing Green strategy, as the RWE share closed trading that day with a strong gain and

that democracy, freedom and peace cannot be taken for granted and that we must stand

continued to perform well in the following weeks.

up in support of them. Our thoughts and solidarity are with the people in Ukraine, who must

endure the horrors of war.

RWE Annual Report 20211
To our investors

Letter from the CEO

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

We are pursuing our growth strategy with determination. Since the start of 2021, we have

In closing, let me briefly look ahead to fiscal 2022. Despite the uncertain course of the

commissioned 14 wind and solar farms with a total capacity of 1.2 GW, despite supply chain

conflict in Ukraine and its consequences, I am confident that we can continue to generate

issues that led to delays for some projects. In the spring of 2021, we started building the

good earnings as was the case in 2021. At present, our projection for adjusted EBITDA

Sofia wind farm off the eastern coast of the UK, which will set new standards with its planned

foresees a range of €3.6 billion to €4.0 billion. In this regard, one key factor will be the

capacity of 1.4 GW. In addition, we set the stage for a number of attractive major projects.

earnings contributions of our new wind and solar farms. As you can see, our growth strategy

In auctions for new offshore wind farm sites in Great Britain, Germany, Denmark and the USA

is paying off. That said, we are at the very beginning of a long and challenging journey.

we secured leases for sites where we can build up to 8 GW of generation capacity.

RWE’s transformation involves much more than billions of euros of investment. Passion, the

ability to change, and, sometimes, courage are all key ingredients. I am convinced that RWE

The past year was challenging in many respects, and thus we are even more pleased that we

has all these qualities. And that means you, dear shareholders, can count on us. Thank you

outperformed our financial targets. At €3,650 million, our adjusted EBITDA was well above

for your trust and confidence! I hope you’ll continue with us on this exciting journey.

the range we had projected. We met or exceeded the expectations in all of the segments.

These achievements are driven by our dedicated employees, who have put their all into

Sincerely yours,

ensuring our company's continued success. I’d like to express my gratitude to all of them, on

behalf of the entire Executive Board. Coming against the backdrop of the coronavirus

pandemic, our performance in 2021 is all the more impressive. Thanks to the flexibility and

dedication of our employees, we were able to maintain all of our critical operations at all

times.

The catastrophic flooding in western Germany was a defining moment in the summer of

2021. All of us can recall the scenes of utter devastation. Among the many people who lost

their lives was an employee of one of RWE’s partner companies. We would like to extend our

deepest condolences to his family and friends. The floods impacted a number of our sites.

Nevertheless, we were able to limit the resulting downtime at the Inden opencast mine and

many of our run-of-river power stations to just a few days. We have the untiring efforts of our

people to thank for this. Many of them also rolled up their sleeves and personally helped

out those in need. RWE itself provided materials, machinery and funds totalling around

€2 million, with one quarter of the donations coming from our employees.

RWE Annual Report 20211
To our investors

Executive Board of RWE AG

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

1.2 Executive Board of RWE AG

Markus Krebber, Chief Executive Officer, was born in 1973 in Kleve, Germany. He has held

this position since May 2021. He trained as a banker and holds a doctorate in economics.

Markus started his career in 2000 at McKinsey & Company. Thereafter, he held various

managerial positions at Commerzbank AG. In November 2012, Markus joined the Board of

Directors of RWE Supply & Trading GmbH, where he was responsible for finance and became

CEO in March 2015. Markus joined the Executive Board of RWE AG in October 2016, where

he was Chief Financial Officer until May 2021.

Michael Müller has been Chief Financial Officer since May 2021. Born in 1971 in Cologne,

Germany, he is an economist and holds a doctorate in mechanical engineering. After

five years at McKinsey & Company, in mid-2005 he joined the RWE Group where he held

managerial positions at RWE Power AG, RWE Generation SE and RWE AG. In September 2016,

he became the Managing Director of RWE Supply & Trading GmbH in charge of finance.

Michael has been a Member of the Executive Board of RWE AG since November 2020.

Zvezdana Seeger was appointed Chief Human Resources Officer and Labour Director in

November 2020. She was born in 1964 in Jajce, Bosnia and Herzegovina, holds a degree in

economics and started her career in mechanical engineering. From 1995 to 2008, she

worked for Deutsche Telekom AG, exiting as Managing Director of T-Systems Enterprise

Service GmbH. In 2010, Zvezdana joined the Board of Directors of DHL Global Forwarding,

Freight. In 2015, she was responsible for IT and operations on the Board of Management of

Postbank AG. After Postbank was folded into DB Privat- und Firmenkundenbank AG, she sat

on the Board of Management of the latter company. In addition, she was COO of the Private

and Corporate Business Unit of Deutsche Bank AG. Zvezdana has been a Member of the

Executive Board of RWE AG since November 2020.

Michael Müller

Markus Krebber

Zvezdana Seeger

RWE Annual Report 20211
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

“RWE's growth and climate
protection strategy is both
ambitious and credible. It
justifies the trust investors
place in our company.”

Dr. Werner Brandt, Chairman of the

Supervisory Board of RWE AG

thus contributing to the success of the energy transition. After subtracting proceeds on the

sale of stakes in projects, net investments will amount to some €30 billion. RWE will use

these funds to build renewable generation assets, battery storage systems, flexible backup

power stations and electrolysers for hydrogen production with a total capacity of 25 GW.

Based on the criteria established by the EU Taxonomy Regulation, over 90 percent of the

capital expenditure should contribute to environmental sustainability. Our growth campaign

should drive the Group's adjusted EBITDA up to about €5 billion by 2030 although the

non-core business with coal and nuclear power plants will have stopped contributing to

earnings by then. Such a transformation is unrivalled in terms of speed, sustainability and

returns.

Every departure for new horizons involves bidding farewell to the past. RWE has set out to

become carbon neutral along the entire value chain by 2040. The key to achieving this goal

is the phaseout of electricity generation from coal, which in Germany goes hand in hand

with an exit from nuclear energy. This is a Herculean task for RWE, both financially and

socially. Last year, our company decommissioned its last two German hard coal-fired power

plants, five lignite units and the Gundremmingen C nuclear power station. So this part of our

transformation is also progressing at speed, as it should. However, we must not forget that

the power plants guaranteed a reliable supply of electricity and that, first and foremost,

we have the skilled and motivated staff on site to thank for that. Many of them dedicated

their entire working life to the safe and profitable operation of the stations. To honour this

loyalty, RWE will stand by its employees, ensuring that the personnel reduction is socially

You might be familiar with the proverb 'A journey of a thousand miles begins with a single

acceptable. Here, our focus rests in particular on the approximately 8,500 people working in

step.' More often than not, this is true. But at RWE, the journey from a past dominated by

the Rhenish lignite mining region. One can only consider a transformation successful if no

fossil fuel to a carbon-neutral future began with a whole series of steps. Investors, media

one is left behind. RWE is absolutely determined to rise to this challenge.

representatives and the public bore witness to the speed at which the company seeks to

continue this journey on 15 November 2021. That was the day on which management

Last year was a momentous one, and sadly the second dominated by the coronavirus

presented its ambitious growth strategy under the motto ‘Growing Green,’ which the

pandemic. Fortunately, its effects on our company and staff remained manageable. RWE

Supervisory Board had been heavily involved in developing. RWE aims to invest

took extensive protective measures, thereby ensuring that our key personnel were able to

approximately €50 billion in the company’s green transformation from 2021 to 2030,

continue working almost without restrictions. Our company demonstrated yet again how

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

well it can navigate through crises. The Supervisory Board was also able to fulfil its duties

Unfortunately, the beginning of this year is plagued by a horrifying event. The Russian

without exceptions. Six of our seven meetings - the only exception being the session in

invasion of Ukraine signals a turning point for the whole of Europe. I'm absolutely appalled

September - and nearly all committee meetings were held virtually. The same applied to the

at this act of aggression, which is a serious breach of international law. The war against

Annual General Meeting (AGM) that took place on 28 April 2021. We benefited from the

Ukraine demonstrates that peace and freedom are by no means a matter of course in

experience gained at our first purely digital Annual General Meeting held in the preceding

Europe and that we must take decisive action to preserve these ideals. We discussed the

year. In addition, we reacted to the wishes expressed by our investors by introducing some

political and economic consequences of the crisis in Ukraine at the Supervisory Board

new services. For example, the speeches by the CEO and CFO as well as my report were

meeting we held on 9 March 2022. If the situation escalates, we may face bottlenecks on

published on the company's website before the AGM. Moreover, our shareholders had the

Europe's energy markets, which would also affect RWE. However, after assessing the

opportunity to submit questions and remarks in advance. We will have to hold a purely

potential developments in depth, we currently believe that the risks to which the Group is

virtual Annual General Meeting once again in 2022. We hope that you, our valued

exposed are manageable. Our main concern is for the people in Ukraine for whom we feel

shareholders, accept this decision in light of the continued exposure to risks arising from

deeply during these difficult times.

COVID-19. No AGM is worth risking one’s health.

At RWE, our hearts went out to the many victims of the catastrophic floods in the summer in

landmark both in terms of strategy and personnel. RWE AG has had a new CEO since 1 May

the states of North Rhine-Westphalia and Rhineland-Palatinate. The floodwater claimed the

2021: Markus Krebber, our former CFO, who joined the Group in 2012. His predecessor,

life of an employee of a partner company at the Inden opencast lignite mine. We would like

Rolf Martin Schmitz, retired from the Executive Board on 30 April, 2021 after four-and-a-

to express our deepest condolences to the family and friends of those who died in this tragic

half years at the helm. Together with Markus, he initiated RWE’s transformation into a

event. RWE was affected by the floods at several of its locations. Both Inden and nearly all

leading renewable energy company. It is with great pleasure that I look back on the

our run-of-river power plants in the region were forced to interrupt operations. However, the

successful work we did with Rolf, but I also look forward to continuing this journey with

stations and mines were able to resume operations after a few days. We have the huge

Markus and his team. Zvezdana Seeger and Michael Müller joined the team in November

dedication of our employees to thank for this. I was deeply touched by their commitment

2020. Zvezdana is our Chief HR Officer and Labour Director. Michael took over as CFO from

Changes in personnel on the Executive and Supervisory Boards. The past year was a

both on and off site and the way everyone pulled together throughout the entire Group. As

Markus Krebber with effect from 1 May 2021.

sad as the catastrophic floods were, they reminded us of the phenomenal people we have

at RWE – a team on which we can rely and we can be proud of.

The Supervisory Board also went through some personnel changes last year. On conclusion

of the Annual General Meeting on 28 April 2021, the tenures of all the members of this

corporate body expired. However, it was impossible for the ten employee representatives to

be elected as the Assembly of Delegates, which is charged with this task, was not able to

convene until 15 September owing to the restrictions imposed to combat COVID-19.

Therefore, restaffing for the transitional period was implemented by court order.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

The incumbent employee representatives were reappointed to the Supervisory Board by

On 15 September 2021, the Assembly of Delegates finally elected the employee

the Essen District Court. In alphabetical order, they were Michael Bochinsky, Sandra

representatives to the Supervisory Board. This ended the tenure of the court-appointed

Bossemeyer, Martin Bröker, Frank Bsirske, Anja Dubbert, Matthias Dürbaum, Harald Louis,

members. Ralf Sikorski, Michael Bochinsky, Sandra Bossemeyer, Matthias Dürbaum, Harald

Ralf Sikorski, Marion Weckes and Leonhard Zubrowski.

Louis and Marion Weckes were re-elected. Martin Bröker, Frank Bsirske, Anja Dubbert and

Leonhard Zubrowski retired from their offices. Reiner van Limbeck, Dagmar Paasch, Dirk

By contrast, the election of the shareholder representatives was carried out as planned at

Schumacher and Andreas Wagner replaced them as new members of the Supervisory

the virtual Annual General Meeting on 28 April: Ute Gerbaulet, Hans-Peter Keitel, Monika

Board. The terms of all employee representatives will end on conclusion of the 2026 Annual

Kircher, Günther Schartz, Erhard Schipporeit, Ullrich Sierau and I received the votes required

General Meeting, in compliance with the Articles of Incorporation. As Frank Bsirske left the

to serve for another term. Dagmar Mühlenfeld, Peter Ottmann and Wolfgang Schüssel did

corporate body, the position of my Deputy had to be restaffed. Ralf Sikorski was elected to

not run for re-election. Hans Bünting, Hauke Stars and Helle Valentin were elected members

this office at the first meeting of all new Supervisory Board members on 21 September.

of the Supervisory Board in their place.

Furthermore, positions on the committees that were vacated by exiting employee

representatives were reassigned.

The elections involved a new approach, which I consider to be a great step forward: the

shareholder representatives received shortened and staggered tenures. Following

Soon thereafter, there was another personnel change among the shareholder

established practice in Germany, they used to be elected with identical five-year tenures.

representatives. Günther Schartz resigned from his office as of 30 September 2021.

The advantage of shortening terms is that the Supervisory Board’s composition can be

Thereupon, Thomas Kufen was appointed to the corporate body by the Essen District Court

adapted to new demands faster than before. Staggered tenures prevent too many people

with effect from 18 October 2021. We are pleased to have found a worthy successor to

from leaving the corporate body at the same time, causing valuable experience to be lost.

Mr. Schartz in him. As mayor of the energy metropolis Essen, he is very familiar with our

At the 2021 Annual General Meeting, five candidates were elected for three years, and

sector and with RWE. We will submit the restaffing to the Annual General Meeting on

another five were elected for four years. Future by-elections and new elections to the

28 April 2022 for the passage of a corresponding resolution.

Supervisory Board will be for three-year terms only.

One of RWE’s good traditions is the extensive support that new Supervisory Board members

At its constituent meeting following the Annual General Meeting, the Supervisory Board

receive from the company in familiarising themselves with their tasks. They go through a

re-elected me its Chairman. I consider this to be in recognition of my work to date and thank

tried-and-tested onboarding process to become acquainted with RWE’s business model,

my colleagues for the trust they have placed in me. The corporate body chose Frank Bsirske

the Group’s structures and certain topics as necessary. The Board Office, which is assigned

as Deputy Chairman. Furthermore, we restaffed the committees. Germany's law on

to Legal, has a co-ordinating function. Moreover, the Board Office informs them of their

strengthening the integrity of the financial market, which was enacted in mid-2021,

rights and duties, is of assistance through one-on-ones and ensures the provision of

stipulates that each supervisory board must have two independent experts in finance with

documents and privileges required to exchange digital information.

in-depth knowledge of accounting and financial statement audits. Thanks to Erhard

Schipporeit, Chairman of the Audit Committee, and Monika Kirchner, who is also a member

More detailed information on the new Supervisory Board members and the composition of

of this committee, we fulfil this requirement.

the committees can be found on pages 220 et seqq. of this report.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

An overview of the Supervisory Board's work in the past year. I would now like to touch on

Main points of debate of the Supervisory Board meetings. Last year, the Supervisory

the Supervisory Board's activity in the fiscal year that just ended. As usual, we fulfilled all of

Board convened for seven meetings, including one constituent and one extraordinary

the duties imposed on us by German law and the Articles of Incorporation. We advised the

session. In our meetings, we were informed by the Executive Board in great detail of

Executive Board on running the company and monitored its actions with great care. We

transactions and events of significance to RWE. We discussed certain agenda items without

were involved in all fundamental decisions. The Executive Board informed us of all material

involving the Executive Board. The shareholder and employee representatives met

aspects of business developments, the earnings situation as well as the risks and the

separately before the Supervisory Board meetings, in order to consult on matters in a

management thereof both verbally and in writing. This was done regularly, extensively and in

smaller circle and establish joint positions where necessary.

a timely fashion. In addition, I was constantly in touch with the Executive Board, allowing us

to discuss major developments without delay.

The following issues were discussed at our meetings:

When in session, we concerned ourselves with RWE's growth strategy both repeatedly and in

• Our first session last year took place on 10 March. We discussed and approved the 2020

great depth. Further focal points of debate were the effects of the coronavirus pandemic,

financial statements of RWE AG, the consolidated financial statements, and the separate

the restaffing of the Executive Board and the German coal phaseout. We took our decisions

Non-financial Report. In addition, we passed a resolution to hold last year's Annual

on the basis of detailed reports and draft resolutions submitted by the Executive Board,

General Meeting on 28 April 2021 as a purely online event. At this meeting, I reported on

which we discussed in depth in our plenary sessions and committees. We were also informed

talks I had held with institutional investors and shareholder representatives in the months

by the Executive Board of projects and transactions of special importance or urgency in

prior. The agenda also included legal matters, e. g. Germany's new Supply Chain Due

extraordinary meetings as well as between meetings. We passed the resolutions required of us

Diligence Act, which requires companies to ensure that human rights are observed in their

by German law or the Articles of Incorporation, occasionally by circular.

supply chains. We also concerned ourselves extensively with the success achieved by RWE

in an auction in Great Britain, at which the company won the rights to build wind farms on

One of the Supervisory Board’s key tasks is maintaining dialogue with the shareholders. As

two offshore sites.

I do not believe that this exchange of information should be limited to the Annual General

Meeting, I have been holding regular talks with investors and shareholder representatives

• We convened in two sessions on 28 April, the first of which was mainly dedicated to

for many years now. This is a practice I maintained despite COVID-19. The focal points of

preparing the Annual General Meeting, which took place thereafter. We held the

these talks were the staffing of the Supervisory Board, the staggered tenures, the Executive

constituent meeting of the Supervisory Board with the newly elected shareholder

Board remuneration system, RWE's strategy and the coal phaseout.

representatives right after the AGM. As set out earlier, the employee representatives had

been appointed by court order, because the Assembly of Delegates had to be postponed

We took the basic and advanced training measures needed to fulfil our tasks on our own

due to COVID-19. In addition to the election of the Chairman of the Supervisory Board

initiative. The company helped us by organising in-house informational events on topics of

and his Deputy, the meeting centred on staffing the committees. By amending the Articles

special relevance.

of Incorporation, we were able to enlarge the Strategy and Sustainability Committee by

two to eight members due to its increased importance and reduce the Executive

Committee by two to six members in exchange.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

• In the next session on 9 June, we debated the judgment of the German Constitutional

• In our session on 10 December, we reviewed and adopted the company planning for fiscal

Court on the 2019 Climate Protection Act. The Court found that the law was insufficient

2022. Moreover, we fulfilled our corporate governance reporting duties: together with the

because it identified the risk of substantial emissions reductions being shifted to future

Executive Board, we adopted an updated statement of compliance in accordance with

generations, placing too heavy a burden on them. The Executive Board informed us that

Section 161 of the German Stock Corporation Act and approved the parts of the

RWE expanded its goal of becoming carbon neutral by 2040 to include the company’s

Corporate Governance Declaration relating to the Supervisory Board pursuant to Section

entire value chain. Another piece of good news was the start of COVID-19 vaccination by

289a of the German Commercial Code. The documents are available at www.rwe.com/

RWE company physicians.

statement-of-compliance and www.rwe.com/corporate-governance-declaration

respectively. Further topics discussed were the liquidity position, plans to reorganise the

• In our session on 21 September – the only in-person meeting last year – we welcomed the

renewable energy business and the forming of the new coalition government after

newly elected employee representatives to the Supervisory Board. As mentioned before,

Germany's general elections on 26 September. We also discussed at great length the

the Assembly of Delegates had convened a few days earlier. This resulted in some

announcement of the coalition partners to accelerate the coal phaseout. Here, the

changes in personnel, which required seats on the committees to be restaffed and the

Supervisory Board and the Executive Board have affirmed their commitment to phasing

Deputy Chairman of the Supervisory Board to be elected anew. Another main point of

out RWE’s lignite-fired power generation in agreement with politicians and after weighing

debate was RWE’s strategy. I stated earlier that management informed the public of the

up all interests. Another item on the agenda was the positive feedback from analysts and

company’s roadmap for the current decade on 15 November. The Supervisory Board was

investors on our Capital Market Day in November. In a nutshell, these stakeholder groups

greatly involved in developing the strategic guidelines. During the meeting in September,

believe that we are charting the right course and have realistic goals. This confirmed that

we focused on management's growth plans in relation to RWE's green core business and

RWE’s growth and climate strategy is both ambitious and credible. It justifies the trust

the phaseout of coal-fired power generation. Talks also centred on the catastrophic

investors place in our company.

floods in the west of Germany. The Executive Board kept us abreast of the situation at the

affected sites and of RWE’s aid measures. Furthermore, we discussed the statutory

Supervisory Board committees. Last year, the Supervisory Board had six standing

transparency regulations applicable to the remuneration of the Executive Board and

committees, the members of which are listed on page 225. These committees are charged

appointed the auditor of the Remuneration Report and of the Non-financial Report for

with preparing topics and resolutions for plenary sessions. In certain cases, they exercise

fiscal 2021.

decision-making powers if they have been conferred on them by the Supervisory Board.

The Supervisory Board is informed of the work of the committees by their chairs at every

• On 10 October, we held an extraordinary meeting which focused on the extreme rise in

ordinary meeting. In the year under review, a total of 13 committee meetings were held,

commodity prices and its effects on RWE. The collateral we pledge for electricity forward

which I would like to touch upon in more detail.

contracts was at times much higher than previous levels. Thanks to a substantial liquidity

buffer and our highly professional financial management, however, the company was able

• The Executive Committee held one meeting, which took place in December. As usual, the

to meet its payment commitments at all times.

objective was to discuss the company’s planning for fiscal 2022 and the outlook on the two

subsequent years.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

• The Audit Committee was in session four times. It carefully reviewed the financial

• The Personnel Affairs Committee held three meetings. Debates centred on the personnel

statements of RWE AG and the Group, together with the combined review of operations,

changes on the Executive Board, the new Executive Board remuneration system, and its

the report for the first half of the year, the quarterly statements and the Non-financial

presentation in the Remuneration Report in accordance with Section 162 of the German

Report. It discussed the financial statements with the Executive Board before they were

Stock Corporation Act. The remuneration system was approved by the 2021 Annual

published and received reports on the outcome of the audits and audit-like reviews

General Meeting.

from the independent auditors. Furthermore, the Audit Committee submitted a

recommendation to the Supervisory Board regarding the election of the independent

• The Nomination Committee convened three times. The Supervisory Board elections and

auditors for fiscal 2021, prepared the grant of the audit award to the independent

filling the position on the Committee vacated by Günther Schartz were the points of focus.

auditors including the fee agreement, and set the priorities of the audit. It also verified the

In view of the shortened tenures, we also discussed the long-term succession plan.

independence of the auditors and the quality of the audit. Current laws require RWE to

appoint new independent auditors for no later than fiscal 2024. The Committee has

• The Strategy and Sustainability Committee held two sessions to consult on the details

already begun preparations for the invitation to tender. Furthermore, as usual, the Audit

and state of implementation of our growth strategy. Agendas focused on the progress

Committee was informed of the effectiveness of the accounting-related Internal Control

made in expanding renewable energy and on the Group’s numerous hydrogen projects.

System (ICS). The report did not reveal any issues that would call the effectiveness of the ICS

Committee members debated the strategy presentation shown at our Capital Market

into question. Additional points of focus were the planning and findings of internal audits,

Day in depth. Another focal point was RWE’s responsible implementation of the coal

RWE’s exposure to risk pursuant to the German Corporate Control and Transparency Act

phaseout. Moreover, the Committee maintained dialogue with the Executive Board on

(KonTraG), the risk management system of RWE Supply & Trading, data security, compliance

the varied sustainability goals and measures.

matters as well as legal and tax issues. Related party transactions also featured on the

agenda. The Committee verified that the transactions were in line with practices generally

• The Mediation Committee pursuant to Section 27, Paragraph 3 of the German

accepted on the market, as required by the German law on the implementation of the

Co-Determination Act did not have to convene in 2021.

Second Shareholders Directive. The independent auditors attended all of the Audit

Committee meetings and also exchanged information with the Committee Chairman

between sessions. In-house experts were occasionally involved in the consultations.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Attendance. The table below contains an overview of Supervisory Board member

of how to interpret the numbers: ‘3 / 4’ means that the individual attended three out of

attendance at the meetings of this corporate body and its committees. As the Mediation

four sessions held during their membership of the corporate body. The figures show that

Committee did not convene in 2021, it has been omitted from this table. Here is an example

absence from a meeting was the exception. The attendance rate was 99.5 %.

Attendance at meetings in fiscal 2021 by Supervisory Board member

Supervisory
Board

Executive
Committee

Audit
Committee

Personnel
Affairs
Committee

Dr. Werner Brandt, Chairman

Ralf Sikorski, Deputy Chairman

Michael Bochinsky

Sandra Bossemeyer

Martin Bröker

Frank Bsirske

Dr. Hans Friederich Bünting

Anja Dubbert

Matthias Dürbaum

Ute Gerbaulet

Prof. Dr. Hans-Peter Keitel

Dr. h. c. Monika Kircher

Thomas Kufen

Reiner van Limbeck

Harald Louis

Dagmar Mühlenfeld

Peter Ottmann

Dagmar Paasch

Günther Schartz

Dr. Erhard Schipporeit

1 Werner Brandt attended meetings of the Audit Committee as a guest.

1 / 1

3 / 3

1 / 1

2 / 2

3 / 3

2 / 2

4 / 41

2 / 3

4 / 4

1 / 1

4 / 4

1 / 1

4 / 4

7 / 7

4 / 4

5 / 5

4 / 4

7 / 7

1 / 1

3 / 3

7 / 7

2 / 2

3 / 3

5 / 5

7 / 7

Nomination
Committee

3 / 3

Strategy and
Sustainability
Committee

2 / 2

1 / 1

2 / 2

3 / 3

2 / 2

1 / 1

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Attendance at meetings in fiscal 2021 by Supervisory Board member

Supervisory
Board

Executive
Committee

Audit
Committee

Personnel
Affairs
Committee

Nomination
Committee

Strategy and
Sustainability
Committee

Dirk Schumacher

Dr. Wolfgang Schüssel

Ullrich Sierau

Hauke Stars

Helle Valentin

Dr. Andreas Wagner

Marion Weckes

Leonhard Zubrowski

1 / 1

3 / 3

2 / 2

7 / 7

5 / 5

3 / 3

7 / 7

4 / 4

3 / 3

2 / 2

1 / 1

2 / 2

1 / 1

1 Werner Brandt attended meetings of the Audit Committee as a guest.

Conflicts of interest. The members of the Supervisory Board are obliged by law and the

The 2021 Annual Report and the audit reports as well as documents supporting the annual

German Corporate Governance Code to immediately disclose any conflicts of interest they

financial statements were submitted to the members of the Supervisory Board in good time.

have. We were not notified of any such conflict in fiscal 2021.

Furthermore, the Executive Board commented on the documents at the Supervisory Board’s

balance sheet meeting of 9 March 2022. The independent auditors reported in this

Financial statements for fiscal 2021. PricewaterhouseCoopers GmbH

session on the material results of the audit and were available to provide supplementary

Wirtschaftsprüfungsgesellschaft (PwC) audited and issued an unqualified auditor’s opinion

information. The Audit Committee had previously concerned itself in depth with the financial

on the 2021 financial statements of RWE AG, which were prepared by the Executive Board

statements of RWE AG, the consolidated financial statements, as well as audit reports

in compliance with the German Commercial Code, the financial statements of the Group

during its meeting on the preceding day, with the auditors present. It recommended that the

prepared pursuant to Section 315a of the German Commercial Code in compliance with

Supervisory Board approve the financial statements as well as the appropriation of

International Financial Reporting Standards (IFRS) as well as the combined review of

distributable profit proposed by the Executive Board. The financial statements of RWE AG,

operations for RWE AG and the Group including the accounts. The opinion was signed by the

the consolidated financial statements, the combined review of operations, the Executive

auditors in charge, Markus Dittmann and Aissata Touré. In addition, PwC subjected the

Board’s proposal regarding the appropriation of distributable profit, and the Non-financial

Non-financial Report to a limited assurance audit and found that the Executive Board had

Report were reviewed by the Supervisory Board. The corporate body did not raise any

established an appropriate early risk detection system. The company had been elected

objections as a result of this review. As recommended by the Audit Committee, the

independent auditor by the 2021 Annual General Meeting. Thereafter, the Supervisory

Supervisory Board endorsed the findings of the audits of the financial statements of RWE AG

Board had commissioned it to audit the aforementioned financial statements and reports.

and the consolidated financial statements and approved both financial statements. The

2021 annual financial statements are therefore adopted. The Supervisory Board concurs

with the Executive Board’s proposal regarding the appropriation of profits, which envisages

paying a dividend of €0.90 per share.

RWE Annual Report 20211
To our investors

Supervisory Board report

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Success and solidarity: A big thank you to everyone at RWE. Anyone who sets off on a

major journey needs motivated people who have their sights set firmly on the destination

and are also capable of reaching it. Without a doubt, this applies to RWE. The past fiscal year

showed that our company can rely on the expertise and dedication of its employees. Despite

the coronavirus and the substantial financial loss sustained due to an unusually harsh cold

snap in Texas, 2021 turned out to be a very successful year. On behalf of the Supervisory

Board, I would like to express our deep-felt gratitude to the staff members who made this

possible. As mentioned earlier, I was extremely impressed by how everyone pulled together

and was willing to pitch in to provide the much needed assistance in the wake of the

catastrophic floods in parts of western Germany. So many people made donations and

rolled up their sleeves, demonstrating what it means to stand united. I have always been

proud to be the Chairman of RWE’s Supervisory Board. And I now have even more reason to

feel this way.

Werner Brandt

Chairman of the Supervisory Board

Essen, 9 March 2022

RWE Annual Report 20211
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

Fiscal 2021 was a good year for investors in stock markets despite the continued

DAX up 16 % thanks to economic recovery. Although 2021 was overshadowed by the

coronavirus pandemic. Driven by a global economic upturn, the DAX repeatedly hit new

COVID-19 crisis, optimism prevailed on international stock markets. The DAX continued

all-time highs. Germany’s blue chip index closed the year with a strong gain of 16 %.

its course for recovery which began in 2020, climbing from one all-time high to the next.

The RWE share was unable to match this pace, after having consistently left the DAX far

It closed the year at 15,885 points, representing a return of 16 %. The resurgence of the

behind in the four preceding years. The total return of the RWE share, made up of the

stock markets was driven by a marked acceleration of the economy. Certain sectors such

change in price and the dividend, amounted to 6 %. In part, the shortfall versus the DAX

as automotive experienced a veritable boom despite worldwide logistical problems. Share

is due to the fact that utility stocks often trail cyclical shares when the economy trends

prices were also positively affected by the European Central Bank maintaining its

upwards. By contrast, we made the headlines on the debt capital market: RWE AG issued

expansionary monetary policy despite mounting inflation.

its first green bonds in 2021, raising €1.85 billion for the expansion of renewables.

RWE share registers 6 % total return. The RWE share also posted gains, albeit smaller than

those recorded by the DAX. It closed the month of December 2021 at €35.72. Taking

account of the dividend of €0.85 paid in May 2021, this results in a total return of 6 % for

the year. Therefore, our share was outperformed not only by the DAX but also by the STOXX

Europe 600 Utilities, which registered a gain of 9 %. Financial analysts confirm the attractive

earnings prospects of renewable energy companies like RWE. However, the economic

upswing has resulted in a return to strong investment in cyclical stocks. In addition, some

capital market participants fear that mounting competitive pressure in the renewable

energy business, e. g. created by oil companies entering the market, and rising material

costs, may make wind and solar projects less profitable. In February 2021, we suffered

substantial financial losses due to extreme weather conditions in Texas, which also weighed

on the share price. RWE stock received tailwind in November when we published our growth

plans and earnings prospects for the current decade at a Capital Market Day (see pages 25

et seqq.). RWE made up for ground lost to the DAX and the sector index thereafter.

Total return of the RWE share compared with the DAX and STOXX Europe 600 Utilities
% (average weekly figures)
20

– 5

– 10

– 15

3 1 D ec 2 0 2 0

3 1 M ar 2 0 2 1

3 0 Jun 2 0 2 1

3 0 Sep 2 0 2 1

3 1 D ec 2 0 2 1

RWE share

STOXX Europe 600 Utilities

DAX

Source: Bloomberg.

RWE Annual Report 20211
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 indicators1

Earnings per share

Adjusted net income per share

Cash flows from operating activities of continuing operations per share

Dividend per share

Dividend payment

Share price

End of fiscal year

Highest closing price

Lowest closing price

Share dividend yield3

€

€ million

€

2021

1.07

2.32

10.76

0.902

6092

35.72

38.65

28.64

2.5

2020

1.65

1.97

6.47

0.85

575

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

Number of shares outstanding (annual average)

thousands

676,220

637,286

614,745

Market capitalisation at the end of the year

€ billion

24.2

23.4

16.8

11.7

10.3

1 The comparability of some of the figures for various fiscal years is limited due to changes in reporting.
2 Dividend proposal for RWE AG’s 2021 fiscal year, subject to the passing of a resolution by the 28 April 2022 Annual General Meeting.
3 Ratio of the dividend per share to the share price at the end of the respective fiscal year.

Dividend of €0.90 per share proposed for past fiscal year. In view of the Group’s good

Broad international shareholder base. Based on our latest survey, at the end of 2021, an

earnings, the Executive Board and the Supervisory Board of RWE AG will propose a dividend

estimated 87 % of the total of 676.2 million RWE shares were held by institutional investors

of €0.90 per share to the next Annual General Meeting on 28 April 2022. This is €0.05

and 13 % were owned by individuals (including employees). Institutional investors from

more than last year. €0.90 is the lower limit we have set for the dividend for the coming

Germany owned 23 % of our capital stock. This investor group accounted for 16 % in the rest

years. In the long run, we intend to pay 50 % to 60 % of adjusted net income to our

of Continental Europe, 14 % in the United Kingdom / Ireland and 26 % in North America. At

shareholders.

the end of 2021, RWE AG’s single-largest shareholder was the US asset management

company BlackRock, with a stake of 7 %.

RWE Annual Report 20211
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

Profit participation through employee shares. About 1 % of our stock is owned by our

current and former staff members. German and British Group companies offer their

1 % Employee shareholders

7 % BlackRock, Inc.

employees the opportunity to take shares in RWE on preferential terms. Last year,

87 % Institutional
shareholders

7,023 people, representing 40 % of all qualifying staff members, made use of these offers

and bought a total of 312,000 shares. The preferential terms and the administration of the

12 % Private shareholders

26 %
23 %
16 %

14 %
8 %

USA / Canada
Germany
Continental
Europe excluding
Germany
UK / Ireland
Rest of the world

80 % Other

institutional
shareholders

employee share ownership programmes led to an expense of €2.9 million.

Ticker symbols and identification numbers of the RWE share

Reuters: Xetra

Bloomberg: Xetra

German Securities Identification Number

International Securities Identification Number (ISIN)

ADR CUSIP Number

RWEG.DE

RWE GY

703712

DE0007037129

74975E303

1 As of the end of 2021; percentages reflect shares in subscribed capital. Sources: RWE data and notifications

from shareholders in accordance with the German Securities Trading Act.

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

100 % free float of the capital stock. The free float of our shares considered by Deutsche

such as Xetra. They are also available on stock markets in the rest of Europe. In the USA,

Börse in terms of index weighting was 100 % when this report went to print. Normally, shares

RWE is represented via a Level 1 ADR programme, under which American Depositary

held by investors accounting for at least a cumulative 5 % of the capital stock are not

Receipts – or ADRs for short – are traded in place of our shares. ADRs are share certificates

included in the free float. However, a higher threshold of 25 % applies to asset management

issued by US depositary banks, representing a certain number of a foreign company’s

companies like BlackRock.

deposited shares. Under RWE’s programme, one ADR represents one share.

RWE Annual Report 20211
To our investors

RWE on the capital market

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Ticker symbols and identification numbers of RWE green bonds

Issue date

Issue price
(%)

Volume
(€ million)

Maturity

Nominal
interest
rate
(%)

German
Securities
Identification
Number

International
Securities
Identification
Number

11 Jun 2021

99.711

500 11 Jun 2031

0.625

A3E5VA

XS2351092478

26 Nov 2021

99.808

750 26 Nov 2028

0.500

A3MP70

XS2412044567

26 Nov 2021

99.138

600 26 Nov 2033

1.000

A3MP71

XS2412044641

RWE enters green bond market. RWE AG issued its first green bond in June 2021. The

paper has a nominal volume of €500 million, a ten-year tenor and a 0.625 % coupon.

Later in the year, two more green bonds were placed on the market: one with a volume of

€750 million, a 0.5 % coupon and a seven-year tenor, and another with a volume of

€600 million, a 1.0 % coupon and a twelve-year tenor. All three of the issuances met with

keen interest among investors. Capital raised by the issuance of green bonds must be spent

on projects that contribute to protecting the environment and climate. RWE’s green bond

policy stipulates that proceeds on issuances be spent on wind and solar farms exclusively.

This is in line with the United Nations’ Sustainable Development Goals. One of these

objectives is to increase the share of the global energy mix accounted for by renewables.

RWE’s rules also comply with the generally accepted Green Bond Principles of the

International Capital Market Association (ICMA). This has been certified by Sustainalytics,

a prominent sustainability agency.

We have summarised the main features of our three green bonds in the above table. In

addition, we have two hybrid bonds outstanding (€282 million and US$317 million)

with earliest redemption dates in 2025 and 2026, respectively. A residual amount

(€12.2 million) of a standard bond that matures in 2037 – which we could not fully transfer

to innogy, a former subsidiary of ours acquired by E.ON, at the end of 2016 – has not been

redeemed, either. Further information on outstanding RWE bonds can be found at

www.rwe.com/bonds.

RWE Annual Report 2021“Energy is all around us. All we have to
do is harness it.”

Jason Jackson, Site Operations Manager at Hickory Park (USA), RWE Renewables

Combined review
of operations

2.1 Strategy

2.2

Innovation

2.3 Business environment

2.4 Major events

2.5 Commentary on reporting

2.6 Business performance

2.7 Financial position and net worth

2.8 Notes to the financial statements of

RWE AG (holding company)

2.9 Outlook

2.10 Development of risks and opportunities

2.11 Disclosure relating to German takeover law

1
To our investors

2
Combined review
of operations

Strategy

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.1 Strategy

In November 2021, we informed the public about our growth and earnings targets for

Carbon-neutral energy – the great challenge of our time. In most industrial countries,

this decade and received very positive feedback. By 2030, we intend to invest €50 billion

energy policy is shaped by climate change. In the past, the main objective was to provide a

in renewables, battery storage, gas-fired power stations and electrolysers. Including

reliable, affordable supply of electricity and fuel, whereas nowadays – more so than ever

proceeds from selling stakes in projects, we foresee net investments of €30 billion. This

before – our energy consumption should not be to the detriment of the Earth’s temperature.

will double our generation capacity in these technologies to 50 GW by 2030. At the

Most industrialised countries where we do business want to minimise their emissions of

same time, we are successively phasing out electricity generated from coal and setting

greenhouse gases generated by the use of fossil fuels. Over the long run, the goal is to

the stage for RWE to be carbon neutral by no later than 2040. This will not only make RWE

achieve climate neutrality, i. e. a state in which humankind zeroes out its net emissions of

greener, but also more profitable. Our 2030 goal is to achieve an adjusted EBITDA in our

greenhouse gases into the atmosphere. The European Union and the UK want to be climate

core business segments of €5 billion. This would represent an increase of around 80 %

neutral by 2050, while Germany wishes to reach this goal by 2045. Both these objectives

compared to 2021.

call for the fundamental restructuring of the way in which companies and households

consume energy. This transformation has many aspects. For the energy industry, the

following issues need to be addressed:

Who we are and what we do. RWE is a leading international energy company

headquartered in Essen, Germany, with a focus on power generation. Energy sources such

• Decarbonising electricity generation. The energy transition is basically about

as wind and solar are an increasingly important part of our business. Our core activities also

abandoning electricity generation from fossil fuels and embracing renewables. Coal and

include the storage of electricity and natural gas, the hydrogen business, trading of energy-

natural gas are finite resources, the use of which leads to the emission of greenhouse

related commodities and innovative energy solutions for industrial customers. We

generated revenues of €24.5 billion in fiscal 2021. Our key markets are Germany, the

United Kingdom, the Netherlands and the USA. In the field of renewables, we are also active

gases. By contrast, wind, solar and hydro are energy sources which do not generate
CO2 emissions, are available in abundance and thus form the foundation for a sustainable
supply of electricity and heat. The EU has set the goal of covering at least 32 % of final

in a whole host of other countries, for example in Poland, Spain, Italy, Sweden and Australia.

energy consumption from renewable sources by 2030. At present, work is under way on a

We intend to position ourselves even more broadly geographically in our renewables

directive which calls for an even higher proportion of at least 40 %. Numerous countries

business. For example, we are stepping up our efforts to win offshore wind projects in new

both inside and outside the EU have specific plans to phase out the use of coal and

markets such as Norway, Japan, South Korea and Taiwan.

ambitiously expand renewables.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Strategy

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

• Creating storage and backup capacities. Electricity generation using renewable

We’re driving the energy transition. RWE is well positioned to contribute to transforming

sources depends on the weather conditions as well as the time of day and the season.

the energy sector and the broader economy in all of the areas discussed above. And that is

Sometimes, renewables can only cover a fraction of demand, while at other times, their

precisely what we are doing, by investing billions of euros in wind power, photovoltaics,

generation exceeds local needs so much that production actually has to be throttled.

battery storage and green hydrogen, phasing out coal-based generation, building

Consequently, as energy supply becomes increasingly reliant on wind and solar farms,

environmentally friendly backup capacities and helping industrial customers optimise their

power storage systems become ever more important for stabilising the power grids.

energy consumption. These activities make us a driving force in the energy transition and

Furthermore, we need more environmentally-friendly, flexible generation assets, which

allow us to support the countries where we do business in their efforts to achieve climate

can reliably produce power when there is no wind and no sunshine. Modern gas-fired

protection targets. Our commitment in this regard is reflected by our own ambitious plans:

power stations that can be retrofitted to run on carbon-free fuels like hydrogen will be

we want to be carbon neutral by 2040 at the latest, ten years earlier than the EU. Not only

well-positioned for this task, once the necessary volumes of such fuels are available.

does this apply to our own greenhouse gas emissions (referred to as Scope 1), it also covers

• Replacing fossil fuels with green power. Simply reducing emissions in the power

ourselves ambitious goals for the current decade: by 2030, we want to reduce our

generation sector is not enough to achieve climate neutrality. At present, over 70 % of

emissions by 50 % (Scope 1 and 2) and 30 % (Scope 3) compared to 2019. At the Paris

European energy consumption is still covered by oil, coal and natural gas. Electrification –

Climate Conference in 2015, the global community committed to limiting the increase in

in other words switching energy consumption to electricity produced with carbon-neutral

average global temperatures to well below two degrees Celsius compared to pre-industrial

methods, e. g. by using heat pumps instead of oil and gas heating systems – also enables

levels. Our actions are in line with this target, as was officially confirmed by the independent

significant emission reductions in the manufacturing, heat and transportation sectors.

Science Based Targets initiative at the end of 2020. However, our ambitions do not end

Thus, over the long run, demand for electricity in our markets will expand significantly.

there. Moving forward, we have also set our sights on ensuring we adhere to the target of

the upstream and downstream value chain (Scope 2 and Scope 3). We have also set

1.5 degrees Celsius established at the Paris Climate Conference.

• Establishing the hydrogen economy. The economy can only be completely decarbonised

if solutions are also found for applications where direct electrification is not an option.

Sustainability – at the heart of our corporate culture. A sustainable business involves far

Examples of this are the production of steel and fertilisers as well as aviation and shipping.

more than cutting greenhouse gas emissions. Sustainability is measured in a myriad of

In the near future, hydrogen produced with zero-carbon methods would be a solution.

ways. The expression is generally used in relation to the environment, society and

Taking a longer-term perspective, using hydrogen as a storage medium will also be a key

governance (ESG). Last year, we reassessed our approach to the topic of sustainability.

component of a climate-neutral energy system. According to the European Commission,

Working together with internal and external experts, we defined the fields of action that are

by 2030 the EU should have electrolysers with a total capacity of at least 40 GW capable

of most significance to RWE and what we want to achieve in these areas. In addition to

of producing 10 million metric tons of hydrogen annually. Germany is looking to expand

reducing greenhouse gas emissions, one of our most important environmental efforts is

its electrolysis capacity to 10 GW by the end of the decade, as recently announced by the

preserving biodiversity at the sites where we operate. In particular, this involves the

new coalition government comprising the SPD, the Greens and the FDP.

recultivation of mining areas, as well as the erection, operation and decommissioning of

wind farms. We want to reduce the use of natural resources and significantly boost our

recycling ratio at the same time.

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As a company, we take great responsibility in the communities where we do business. We

This capital expenditure will be divided up roughly four ways between Germany, the United

want to live up to this responsibility across all our sites. In the Rhenish lignite mining region,

Kingdom, the USA and our other markets. In net terms, i. e. taking into account cash flows

we are acutely aware of our prime-aged employees who are losing their jobs due to the coal

from divestments, we expect that our investments will total around €30 billion. We will use

phaseout, and are in the process of securing socially acceptable solutions to this issue.

these funds to massively expand our climate-friendly generation capabilities. Including

Occupational health and safety is another key concern of ours. Our aim is to ensure that the

battery storage and electrolysers, we intend to have a generation capacity of around 50 GW

employees at our sites leave work at the end of each day as healthy as when they arrived.

by 2030. This target is a pro-rata figure, meaning we state our capacity according to our

We also advocate for a diverse, inclusive corporate culture. Diversity has many facets. One is

shareholding ratios. In order to reach 50 GW, we will have to build approx. 25 GW. At 21 GW,

gender equality when filling leadership roles within the company. In our core business, which

the majority of this capacity will come from wind farms, solar assets and battery storage.

covers all Group activities with the exception of Coal / Nuclear, the share of women in

It will be supplemented by flexible gas-fired power stations and electrolysers with a total

executive positions was 19 % at the end of 2021. We aim to reach 30 % by 2030.

installed capacity of 2 GW each. Our adjusted EBITDA will also rise sharply in conjunction

Our mission statement ‘Our energy for a sustainable life’ truly encompasses our purpose as

from our green core business. By comparison, in fiscal 2021 we posted adjusted EBITDA

with our generation capacities. For 2030, we project a level of €5 billion, generated solely

a company and confirms that sustainability is a principle that guides our actions. Our

of €2.8 billion from our core activities.

commitment in this regard is made tangible by the fact that achievement of ESG targets

has a direct impact on the level of Executive Board remuneration. Further information on

Turning to the individual components of our growth programme:

our ESG goals and accomplishments can be found in our Sustainability Report and in the

separate Non-financial Report in accordance with Section 315b, Paragraph 3 of the

• Offshore Wind. We have been active in offshore wind for 20 years now, making us a world

German Commercial Code. The reports for fiscal 2021 will be published in April 2022 and

leader in this field. At the end of 2021, our offshore wind power portfolio had a total pro-

will be accessible at www.rwe.com/responsibility-and-sustainability. Our website also has

rata capacity of 2.4 GW. This figure is expected to hit 8 GW by 2030. We currently operate

further information on how independent rating agencies assess our sustainability strategy

wind farms in the coastal waters of the United Kingdom, Germany, Belgium, Sweden and

at www.rwe.com/ratings-and-rankings.

Denmark. Europe is our most important region in terms of growth. Examples for this

include projects such as Sofia (UK / 1,400 MW), Kaskasi (Germany / 342 MW), Thor

Growing Green – our strategic roadmap to 2030. In mid-November 2021, we informed

(Denmark / 1,000 MW) and F. E. W. Baltic II (Poland / 350 MW). We are also looking to

the public about the strategy and goals for our business activities during the current decade

markets outside of Europe: together with local partners, we are working on offshore wind

at our Capital Market Day event. An ambitious growth programme in our green core business

projects in the USA, Japan, Taiwan and South Korea. But we are interested in more than

forms the centrepiece of our strategy, which is entitled ‘Growing Green’. In the 10-year period

just regional opportunities, as we want to tap into new technological options as well. In

from 2021 to the end of 2030, we intend to invest approximately €50 billion in new wind

order to realise the full potential of offshore wind, we will also be operating wind turbines

farms, photovoltaic assets, battery storage, gas-fired power plants and electrolysers.

on floating platforms in the future. Together with our partners, we are exploring which

types of foundations are best suited for this (see page 30 et seq.). The first prototype

co-engineered by RWE – the TetraSpar Demonstrator off the coast of Norway – started

operating in autumn 2021.

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• Onshore Wind / Solar. We also have more than two decades of experience in onshore

• Flexible gas-fired power plants. The supply gap caused by the coal phaseout cannot

wind and rank among the global leaders, with pro-rata generation capacity of 7 GW.

be resolved by energy storage solutions alone. We need to build low-carbon backup

We intend to boost this figure to 12 GW by 2030. In terms of solar, where our capacity

capacities that can balance out the fluctuations in power generation from solar and wind.

currently stands at 0.5 GW, we are still in the start phase. However, we aim for a steep

This presents growth opportunities, particularly for established power generators such as

expansion curve towards 8 GW by the end of the decade. We are concentrating our

RWE. Gas-fired power plants play a key role in this regard. With an installed capacity of

onshore wind and solar efforts on North America and Europe, where we are looking to

14.1 GW, our fleet of gas-fired stations is the second largest in Europe, and we want to

diversify geographically. For instance, we have partnered with Public Power Corporation

build another 2 GW of capacity by 2030. We see a need for investment in Germany in

(PPC), Greece’s largest energy group, to position ourselves as a solar power producer in its

particular, where the coal exit is coinciding with the nuclear phaseout. Nevertheless, the

home market. In the United States, we are also expanding into new territories. Evidence of

construction of new assets in Germany involves a high degree of political and economic

this can be found at Scioto Ridge, our first wind farm in Ohio, which started operating in

uncertainty, unless the plants receive guaranteed remuneration based on the Combined

May 2021. Our main focus in terms of growth ventures rests on countries and market

Heat and Power Act or via capacity auctions held by the grid operator. In one such

segments harbouring potential for more than one technology, e. g. for photovoltaics plus

auction, we won the right to construct a 300 MW grid stabilisation unit at our Biblis site,

wind energy and / or electricity storage.

which is scheduled to start operation in 2022.

• Battery storage. Demand for electricity storage is increasing as power generation shifts

The Institute of Energy Economics at the University of Cologne (EWI) estimates that

to wind and solar assets. RWE has been involved in the development, construction and

Germany needs to add gas-fired plants with a total capacity of 23 GW by 2030 if the

operation of battery storage systems for many years now. For this decade, we are targeting

country is set on phasing out coal over that same period. We are prepared to play our

an installed capacity of 3 GW, compared to 47 MW in late-2021. We are currently rolling

part. Not only does RWE have the necessary expertise, it also has a number of favourably

out a key battery project in Hickory Park, which is located in the south of Georgia, USA.

situated sites. That said, we can only make these investments if the necessary incentives

This site will be home to a 196 MW solar farm coupled to a 40 MW battery storage

are provided for, which could include capacity payments for example. New assets would

system. This combination will enable electricity feed-ins into the local grid to be optimised,

then receive remuneration for being online and thus ensuring security of supply. This would

significantly improving the solar array’s yield. Future photovoltaic projects will largely follow

ensure economic viability even with low capacity utilisation. Furthermore, conditions must

this approach. We are also building battery storage to provide grid services. Two examples

be in place for us to operate our gas-fired power stations using green hydrogen over the

of this are the massive batteries with storage capacities of 72 MW and 45 MW, which we

longer term. We are planning the necessary retrofits for our existing gas-fired assets and

are currently installing at our German power plant sites in Werne and Lingen.

have already finalised the relevant strategies. Power plants that do not run on hydrogen,
could separate CO2 from the flue gas and store it underground. For political reasons,
however, this option can only be considered outside Germany for the time being.

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• Hydrogen. The hydrogen economy is a crucial part of the energy transition and a perfect

Above and beyond this, RWE Supply & Trading has established itself as an intermediary

complement to our business model. We want to be active along the entire value chain,

for pipeline gas and liquefied natural gas (LNG). Thus, in addition to meeting the needs

from green electricity generation and hydrogen production by electrolysis to hydrogen

of our Group companies, it also serves numerous industrial customers around the world.

trading and storage and the conclusion of individual supply agreements with major

To this end, it enters into long-term supply agreements with producers, organises gas

industrial customers. Our regional focus in these activities is on Germany, the United

transportation by booking pipelines or LNG tankers and optimises the timing of deliveries

Kingdom and the Netherlands. In recent years, we have forged a range of partnerships

using leased gas storage facilities. In this regard, the greater the size and diversification of

with businesses and research institutes seeking to work closely with us to develop a

the procurement and supply portfolios, the better the chances to commercially optimise

comprehensive hydrogen infrastructure. Noteworthy projects include the German

them. The gas business also opens up opportunities for activities in the field of hydrogen.

initiatives GET H2 and AquaVentus, the Dutch projects Eemshydrogen and NortH2 and

One example in this regard is the long-term partnership between RWE Supply & Trading and

our partnership with Shell, which was formed at the end of 2021. At present, we are

Australian LNG producer Woodside. We intend to purchase liquefied natural gas from

participating in around 30 hydrogen projects. By 2030, we intend on developing

Woodside as of 2025 and collaborate on investigating the potential to market hydrogen to

electrolysis capacities totalling 2 GW. We are designing facilities that allow for industrial-

RWE’s customer base in Asia and Europe. Another example that relates to the development

scale production. Examples of this include the three electrolysers slated to start

of the hydrogen economy is the planned Brunsbüttel LNG terminal near Hamburg, which

production at the Lingen power station in the period from 2024 to 2026. With

RWE Supply & Trading is helping to realise. In future, green ammonia could also be imported

capacities of 100 MW each, these units will be among the largest of their kind in Europe.

to Germany via the terminal and converted into hydrogen in the port area.

More information on our hydrogen strategy and our major projects can be found at

www.rwe.com/hydrogen.

Socially-acceptable phaseout of coal-fired generation. Our growth programme is

flanked by a rapid coal exit. In the United Kingdom and Germany, we already phased out

Energy trading and customer solutions. In addition to power generation, we are also

hard-coal-fired power generation in 2019 and 2021, respectively. We are currently only

focused on energy trading as one of our core competencies. It is managed by the Group

using hard coal in our Dutch stations Amer 9 and Eemshaven, where biomass is co-fired.

company RWE Supply & Trading, which acts as our window into the energy markets.

From 2025 and 2030, respectively, we will no longer be using hard coal in these plants.

Around 200 RWE specialists trade electricity, fuel and emission rights around the clock.

For RWE, the phaseout of lignite, which is produced and turned into electricity in the Rhenish

RWE Supply & Trading also markets the electricity from our power stations and procures the

mining region to the west of Cologne, is much more complex and difficult in terms of the

fuel and emission allowances required to produce it. The objective here is to limit price risks.

social ramifications. In early 2022, we still operated lignite-fired power stations with a total

On top of that, the company is in charge of the commercial optimisation of our power plant

capacity of 7.6 GW, a third less than in 2015. This year, we will also be shutting down

dispatch, the earnings of which go to our generation companies. Companies outside of the

another 1.6 GW of capacity. Pursuant to current legislation, the last unit will go offline in

RWE Group can also benefit from the expertise of our trading subsidiary. They are offered a

2038. However, the new German government has already announced that they are

wide range of products and services, running the gamut from traditional energy supply

looking to accelerate the phaseout of coal in Germany and are working towards a deadline

contracts and comprehensive energy management solutions to sophisticated risk

of 2030.

management concepts.

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RWE supports the Federal government’s climate protection ambitions. If it were possible to

Nuclear power: Our focus is on safe and efficient decommissioning. Germany’s phaseout

provide for the necessary framework conditions in pursuit of accelerating the coal exit, we

of nuclear power will soon be completed. RWE’s Gundremmingen C power plant and two

would be able to progress more quickly on our path of reducing emissions. At the same time,

units belonging to other companies were taken offline at the end of 2021, leaving just three

this would also be associated with significant additional financial burdens for us. The

regional sites to produce electricity, of which one is run by RWE. At the end of 2022, these

present legal phaseout roadmap already presents us with tremendous challenges – from

will also cease generation. After that, our nuclear power operations will be focused

operational, financial and social standpoints. At the end of 2019, before the Coal Phaseout

exclusively on the safe and efficient decommissioning of the plants. Moreover, we are

Act entered into force, some 10,000 people were employed in the Rhenish mining region; in

making efforts to ensure that the sites continue to be used for energy-related purposes,

2030 less than 4,000 will work there. Although the personnel affected by job losses will

as illustrated by the example of the grid stabilisation unit at Biblis.

receive state support, such as an adjustment allowance, we will also pay for redundancy

measures ourselves. In August 2020, we concluded the ‘Coal Exit’ tariff agreement with ver.di,

RWE AG’s management system. Our management system is geared towards sustainable

Germany’s United Services Trade Union, and IG BCE, the country’s Industrial Mining, Chemicals

growth that creates value and is based on RWE’s strategic guidelines. To determine these

and Energy Trade Union. It defines what benefits RWE will provide above and beyond the

guidelines, we analyse the market environment and competitiveness of our segment

state-guaranteed payments. Early retirement plans will apply to most of those affected.

activities, identify growth potential and weigh up the opportunities and risks involved. Which

Younger employees will be reassigned to new positions within the Group, or – where that is

projects are ultimately realised is at the discretion of the management of the Group

not possible – will be offered severance packages.

company concerned. Larger investments are approved by the Executive Board of RWE AG.

It also determines the allocation of capital, the long-term portfolio development and the

Our responsibility to the people in the Rhenish coal region does not end at the factory gates:

type of financing.

we want to do our part to ensure that the region remains structurally resilient and integrated

within the energy sector, despite the coal phaseout. By 2030, we want to invest €4 billion in

To operationally manage the Group’s activities, RWE AG deploys a groupwide planning and

renewables, gas-fired power plants and electrolysers in North Rhine-Westphalia, with no less

controlling system, which ensures that resources are used efficiently, and provides timely,

than 500 MW of wind and solar capacities being built in the Rhenish region alone. Some

detailed insight into the current and prospective development of the company’s assets,

recultivated land is very well suited for these plans, and three RWE wind farms are already

financial position and net earnings. Based on the targets set by the Executive Board and

located there. We also want to further develop our power plant sites. For example, there are

management’s expectations regarding the development of the business, once a year we

plans to build an innovation, technology and commercial park in Frimmersdorf and the

formulate our medium-term and long-term plans, in which we forecast the development of

surrounding area. At the Weisweiler site, within the scope of an EU project, we are looking

key financial indicators. The medium-term plan contains the budget figures for the following

into the possibility of capturing geothermal heat, which could be fed into the district heating

fiscal year and planned figures for the two years thereafter. The Executive Board submits the

network of the greater Aachen area. In addition, we are researching power-to-gas

plan to the Supervisory Board, which reviews and approves it. During the respective current

technology at the Niederaussem Innovation Centre. This is where, since 2013, we have used

fiscal year, we produce internal forecasts based on the budget. Members of the Executive

hydrogen and carbon dioxide made by electrolysis to produce fuel and feedstock for the

Board of RWE AG and the main operating companies meet regularly to analyse the interim

chemical industry for research purposes.

and annual financial statements and update the forecasts. In the event that the forecast

figures deviate significantly from the budget figures during a fiscal year, we analyse the

underlying reasons and take countermeasures if necessary. We also immediately notify the

capital market if published forecasts need to be modified.

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Key earnings indicators. Among other things, we use key earnings indicators such as

Safeguarding our financial strength and creditworthiness. The RWE Group’s financial

EBITDA, EBIT and net income to manage our business; however, we adjust these indicators

position is analysed using cash flows from operating activities, amongst other things. We

by removing special items. EBITDA is defined as earnings before interest, taxes, depreciation

also attach special importance to the development of free cash flow, which is derived by

and amortisation. In order to improve its explanatory power in relation to the development

deducting capital expenditure from cash flows from operating activities and adding

of ordinary activities, we remove non-operating or aperiodic effects and present these in the

proceeds from divestments and asset disposals. Net debt is another indicator of RWE’s

non-operating result. This applies to capital gains or losses, temporary effects from the fair

financial strength: it is calculated by adding provisions for pensions and similar obligations,

valuation of derivatives, goodwill impairments and other material special items. Subtracting

for the dismantling of wind farms and for nuclear waste management to RWE’s net financial

operating depreciation and amortisation from adjusted EBITDA yields adjusted EBIT.

position. Conversely, mining provisions, our 15 % stake in E.ON and compensation for the

Adjusted net income is another key operating indicator for us. We calculate it by correcting

German lignite exit, as confirmed by the German government, are disregarded.

net income to exclude the non-operating result, and material special items in the financial

result. Instead of the actual tax rate, which reflects one-off effects, we apply the budgeted

In managing our indebtedness, we orientate ourselves towards the leverage factor, i. e. the

rates of 15 % (until 2022) and 20 % (from 2023), which we have derived in consideration of

ratio of net debt to adjusted EBITDA in our core business. Given that we recorded positive

the earnings in our core markets, the tax rates applicable there and the utilisation of loss

net assets rather than net debt as of 31 December 2021, the leverage factor was below

carryforwards.

zero. For the coming years, we expect net debt to trend upward, as we will partially finance

our growth investments with debt capital. Over the medium term, however the leverage

Expected minimum return on investments. We primarily use the internal rate of return (IRR)

factor should not exceed 3.0, as we wish to maintain our financial flexibility. For the period

to evaluate the attractiveness of investment projects. We only undertake projects if – at the

after 2025 we believe that an upper limit of 3.5 is reasonable, as the expansion of

time of the investment decision – the expected IRR stays within a defined minimum

renewables will enhance our financial stability and our political risk exposure will decline

threshold, which is determined on the basis of the weighted average cost of capital (WACC).

with the gradual phaseout of coal-based power generation.

The WACC is augmented with project-specific risk premiums, which usually range from

100 to 300 basis points, depending on the technology or region. Using this approach, we

Attractive dividend of at least €0.90 per share. Despite the significant funds needed for

have set lower limits which vary from 5 % to 9 % for offshore wind projects. Minimum returns

capital expenditure, RWE will remain an attractive dividend stock in the future. We will

of 4 % to 7 % are applied to projects involving the construction of onshore wind farms, solar

propose a dividend of €0.90 per share to the Annual General Meeting on 28 April 2022 for

assets or batteries in Europe or the USA. The thresholds for new gas-fired power plants or

fiscal 2021. This will also constitute the minimum payout for the coming years. Over the

hydrogen activities are set between 6 % and 11 %.

long term, we plan to distribute 50 % to 60 % of adjusted net income to our shareholders.

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2.2 Innovation

The success of the energy transition doesn’t simply hinge on the dedication with which

On the following pages, we present a small selection of our current innovation projects. They

we implement it. It is also the degree of innovation deployed to fuel these strategies

illustrate the breadth and variety of the challenges we face in light of the energy transition

that is decisive. Whether it’s expanding renewable energy capacities, transitioning to a

and demonstrate the creativity with which we are tackling these issues.

hydrogen economy or opting for environmentally friendly carbon recycling methods,

technical challenges lurk behind every turn, waiting for solutions to address them. In

How we are using new technologies for offshore wind expansion. There are currently

2021, RWE worked on close to 200 research and development projects in collaboration

170 offshore wind farms operating around the world. All are located in shallow coastal

with partners from industry and science. All these projects share one common goal:

waters with turbines firmly anchored to the seabed. Coastal regions with greater water

to overcome hurdles on the road to an environmentally friendly, stable and sustainable

depths have – until recently – been off-limits to offshore wind farms. After all, the deeper

energy world.

the water, the more expensive the foundation. Wind power projects generally become

uneconomical at depths of over 60 metres. According to WindEurope, the European wind

industry association, in about 80 % of all coastal sea areas where wind speeds are suitable

Solutions for a sustainable energy system. RWE is innovative in many ways. We are

for electricity generation, the ocean is simply too deep for conventional foundation designs.

motivated both by a desire to remain competitive in an ever-changing environment as well

However, in order to harness the potential of wind energy more effectively, companies are

as a passion to be a driving force of this change. Our innovation projects are dedicated to

turning their efforts to concepts for floating wind turbines. The units are mounted on floating

developing solutions that help us advance the utilisation of renewable energy, expand

platforms made of steel or concrete, which are secured to the seabed using mooring lines

electricity storage and become involved in large-scale hydrogen production. We also want

and anchors. This opens up the possibility of deploying wind turbines in deeper waters, e. g.

to help build a circular economy in which sensible use is made of carbon dioxide.

coastal areas in Asia, the Americas and the Mediterranean region as well as in parts of the

Our more than 964 patents and patent applications, based on about 241 inventions, speak

are currently involved in three demonstration projects, researching the pros and cons of the

volumes about RWE’s capability for innovation. The Group’s various activities in the field of

various floating foundations. Our aim is to identify which technology is the most viable for

North Sea. RWE has taken a leading role in the development of these new foundations. We

research and development (R & D) are also testimony for this expertise. Last year, we worked

the respective wind power initiative.

on 196 R & D projects. Around 400 RWE employees were solely dedicated to these activities

or contributed to them in addition to performing their normal tasks. Such ventures often

The DemoSATH project is a partnership with Spanish company Saitec Offshore

entail working with other companies or research institutions and we could not implement

Technologies that aims to develop and construct a floating platform for a 2 MW wind

many of these projects without their valuable insights. These collaborations are also financially

turbine. The project relies on Saitec’s SATH (swinging around twin hull) technology, which is a

advantageous, as costs are shouldered by many stakeholders. This limits operating R & D

catamaran-like floating platform made of tensioned concrete elements. This design allows

spending, which in 2021 amounted to €22 million (previous year: €20 million).

the floating platform to rotate freely around a single point of mooring, depending on wind

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and wave directions. We have commissioned a prototype, DemoSATH, which will be

How we are improving the sustainability of wind power facilities. In essence, a wind

assembled on a quayside in the port of Bilbao, in northern Spain. Once complete, tugs will

turbine consists of a tower, a nacelle and three rotor blades. To ensure it doesn’t just produce

move the floating wind turbine to a mooring point three kilometres from the Basque coast,

green electricity but is also entirely environmentally friendly, a turbine should be completely

where it will start generating electricity before the end of the year.

recyclable once it reaches the end of its service life. Although tried-and-tested recycling

The New England Aqua Ventus project is a collaboration with the University of Maine and

when it comes to the rotor blades. These components are made using composite materials

Diamond Offshore Wind, a subsidiary of Mitsubishi Corporation. The unit will feature a

that are almost impossible to separate, due to the glass fibre-reinforced epoxy resin that

technology developed by the University of Maine, where the floating platform consists of

becomes completely solid once hardened. In a ground-breaking project, we are now helping

modular concrete components with glued joints – a construction technique seen in bridges.

to identify end-to-end recycling solutions at our Kaskasi wind farm, off the coast of

We aim to have built an 11 MW prototype by 2024, which will be deployed in the Gulf of

Heligoland. A number of the 38 wind turbines being erected there this year will be fitted with

Maine on the eastern coast of the USA. This testing process will provide us with valuable

special recyclable rotor blades. Our supplier Siemens Gamesa is manufacturing them using

technical learnings, as well as helping us to understand how best to limit potential for friction

a new type of resin with a chemical structure that allows for the different materials to be

methods for the tower and components of the nacelle already exist, it’s a different story

between the plant and local fisheries.

separated, preserving their properties. This makes it possible to reuse the individual

components once the rotor blade has reached the end of its lifetime. We will test these

TetraSpar Demonstrator is our most advanced project. It is a collaboration with Shell,

sustainable rotor blades in real-life settings over the coming years. Should they prove

Japanese utility TEPCO and Danish company Stiesdal Offshore Technologies, and involves

effective, then resin solutions of this nature could become standard for future RWE wind

a floating platform comprising two sections that are cost-effectively prefabricated across

farms.

various locations. A keel below the platform is used to keep the steel top section stable in

the water – similar to a ship. We assembled the sections in the Port of Grenaa in Denmark.

How we are forging ahead with green hydrogen production. Zero-carbon hydrogen has

A 3.6 MW wind turbine was then mounted on the floating platform. In summer 2021, we

the potential to be used for multiple processes within the context of the energy transition.

towed the structure to a test site 10 kilometres off the Norwegian coast, near Stavanger.

Not only is it suitable for storing electricity, it could also be used to decarbonise industrial

Once on site, it was attached to the seabed 200 metres below using mooring lines and

processes and modes of transport that either cannot be electrified or where electrification

anchor chains, before being connected to the Norwegian power grid. The floating turbine

has proven to be prohibitively expensive or arduous. Most of our hydrogen projects focus on

has been operating since November. We have fitted a number of sensors to measure

decarbonising industrial applications. RWE is working with partners on around 30 such

whether real-life performance matches up to forecasts created using calculations and

initiatives with a geographical focus on Germany, the Netherlands and the United Kingdom.

tests.

Several have a good chance of being classified as ‘Important Projects of Common

European Interest’ (IPCEI) by the EU. This means they would qualify for national subsidies.

Our HyTechHafen Rostock project as well as parts of the GET H2 and AquaVentus

collaborative initiatives backed by RWE all made it onto the shortlist of the Federal Ministry

of Economics. In the following pages, we will take a closer look at the undertakings.

RWE Annual Report 20211
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GET H2 was launched in 2019, making it one of the first hydrogen initiatives involving

Our HyTechHafen Rostock project is dedicated to harnessing the potentials of the port of

several industries in Germany. A host of companies and scientific institutions including RWE,

Rostock as a promising location for the hydrogen economy, not least due to its industrial

BASF, BP, Evonik, Nowega, OGE and ThyssenGas are participating in the project. GET H2

infrastructure. Together with our partners, port operator Rostock Port and energy providers

spans the entire hydrogen value chain, from production and transport to industrial usage.

RheinEnergie and EnBW, we will initially focus on constructing 100 MW of electrolysis

The long-term objective is to build a nationwide hydrogen infrastructure in Germany. As part

capacity. The unit will be built next to a power plant operated by RheinEnergie and EnBW in

of the initiative, we joined forces with four partners at our Lingen power plant in 2020 to

the vicinity of the port and the green hydrogen generated on site will be delivered to local

launch the GET H2 Nukleus project. By 2026, three electrolysis plants are to be built on site,

industrial customers via pipelines. Going forward, the infrastructure could also be used for

each with a capacity of 100 MW. The aim is to use electrolysis technology on a larger scale

road, rail and sea traffic. If the project stays on schedule and the framework is suitable, the

to bring it to series production and unlock cost cutting potential. The green hydrogen

port area could one day boast up to 1 GW of electrolysis capacity, as the site grows to

produced in Lingen will be transported using repurposed natural gas pipelines to the

become a hydrogen hub.

northern Ruhr region, where it will be used in the BP refinery in Gelsenkirchen. This would

form the heart of the public hydrogen infrastructure. The IPCEI funding application also

How we are preparing to generate electricity with green hydrogen. The more we rely on

envisages that the hydrogen grid be expanded towards Salzgitter, Duisburg, and the
Netherlands. Furthermore, the first German H2 cavern storage facility is expected to be
connected to the hydrogen grid in Gronau-Epe.

wind and solar power for our electricity supply, the more crucial it will be to have ample

energy storage facilities to ensure a reliable, weather-independent supply of electricity that

satisfies demand. Battery-based solutions and green hydrogen for electricity generation are

promising concepts. This is why we want to build flexible gas-fired power stations with a total

Another initiative with substantial potential is AquaVentus. The idea behind it is to produce

capacity of 2 GW as part of our ‘Growing Green’ strategy. In the long-term, the plants will run

hydrogen at sea using electricity from offshore wind farms and transport it via pipelines to

on green hydrogen, once supplies are sufficient. To improve the technical conditions for this,

demand hotspots on land. The island of Heligoland will act as a hub. In a first step, the plan is

we have joined forces with one of the world’s leading turbine manufacturers, Kawasaki

to transport the hydrogen there via pipelines to cover demand on the island itself. Once

Heavy Industries. The aim of this partnership is to trial a hydrogen-capable gas turbine.

production volumes increase, hydrogen in ever greater volumes will then be forwarded to

It is due to be built at our Lingen power plant, have a capacity of 34 MW and become

the mainland, initially by tanker and later via a collector pipeline. Our AquaVentus partners

include the island of Heligoland, Gascade, Gasunie, Shell and Siemens. A pilot project is

being conducted to build two 14 MW wind turbines in the coastal waters of Heligoland and

integrate an electrolyser in each of their bases. If the project stays on schedule, the turbines

could become operational in 2026. But this is only the beginning. By 2035, electrolysers

with a total capacity of 10 GW could be installed in the North Sea. This would be enough to

produce up to 1 million metric tons of green hydrogen every year.

operational in 2024. The turbine will be the largest gas turbine in the world that can be
operated using 100 % H2. It would also be possible to use the turbine to co-fire natural gas
and hydrogen in any desired ratio. This flexibility is a massive plus, for as long as the
hydrogen industry is in its infancy, the average available volume of H2 will probably not
suffice to exploit the turbine’s capacity to the desired extent.

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What we are doing to support carbon-neutral economic cycles. Many experts believe

In mid-2021, we took a multi-fuel-conversion plant online in Niederaussem, which we

that human intervention in the climate can only be limited effectively if the global economic

intend to use to test whether phosphorus can be reclaimed from sewage sludge using

system successfully makes the shift to closed carbon cycles. Ideally, only as much carbon
enters the atmosphere, by way of greenhouse gas emissions such as CO2 or methane, as is
bound by other processes at the same time. The transition to a circular carbon economy is

high-temperature conversion. The process works as follows: by heating the sewage sludge

to up to 1,500 degrees Celsius, we achieve gasification of the phosphorus, hydrogen and

carbon contained therein. The phosphorus can then be separated from this gas and used

a Herculean task, that hinges on innovation. For more than ten years now, RWE has been
developing techniques that use CO2 in an ecologically meaningful way. Within the context of
this work, we collaborate with universities and research institutes, with whom we seek to

to produce fertiliser, for example. Additional process steps can then be taken to convert the

remaining gas mixture of hydrogen and carbon back into chemical raw materials or fuels.

We should have the first test results back by late-2022. However, the potential of the

contribute to the creation of the necessary technical and systemic conditions for carbon-

multi-fuel-conversion technology is by no means likely to be exhausted. In future, we also

neutral economic cycles.

want to apply this technology to other waste streams and biomass.

A key process in transitioning to the circular carbon economy is thermal conversion. Here,

Another project dedicated to the use of carbonaceous waste materials launched in June

heat is applied to carbonaceous materials, converting them into synthesis gas, which largely

2021. The NRW-Revier-Power-to-BioJetFuel study we are conducting together with

consists of hydrogen and carbon and can be used as a basic raw material in the production

BP Europe and the Jülich Research Centre is assessing the prerequisites for manufacturing

of fuels, plastics and fine chemicals. At the RWE Niederaussem Innovation Centre, we are

carbon-neutral aviation fuel on an industrial scale. This research focuses on questions such

dedicated to developing a high-temperature process to thermally convert different

as: ‘What kind of regulatory framework is necessary to ensure the economic viability of plans

materials, and thus reuse basic resources in manufacturing. We have partnered with the

to operate a demonstration plant for deriving synthetic fuels from alternative carbon

Fraunhofer Institute for Environmental, Safety and Energy Technology (Fraunhofer

sources (e. g. sewage sludge, biomass or power plant flue gas) at an RWE site in the Rhenish

UMSICHT) and Bochum Ruhr University for this purpose.

region?’ We are also determining to what extent the resulting fuels could be further

processed and used for industry in the Ruhr region. If the results are promising, project

development for the construction of a demonstration plant could start as early as this year.

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2.3 Business environment

All signs point to more stringent climate protection measures in Europe. Last year, the

The European Commission specified the instruments that would be necessary to achieve its

EU upped its greenhouse gas reduction goal for 2030 from 40 % to 55 %. The baseline

new climate protection target for 2030 in the ‘Fit for 55’ legislative package. The package

year is 1990. Germany has set its sights even higher: the largest economy in Europe has

was made public on 14 July 2021, and includes proposals for a number of measures that

increased its target from 55 % to 65 %. We welcome this change, as it encourages the

will, for example, improve energy efficiency, cut carbon emissions in transport, construction

rapid expansion of renewable energy. The economic environment also presents us with

and agriculture, bring the taxation of energy products in line with current objectives, expand

opportunities. Soaring natural gas and emission allowance prices have caused prices

natural carbon sinks and cushion the social implications of climate protection. Renewables

on electricity markets to skyrocket. This favours climate-friendly generation assets in

are due to be scaled up rapidly and should cover at least 40 % of primary energy

particular. Given that most of our power production had already been sold forward, the

consumption in the EU by 2030. A goal which, until now, had been set at 32 %. Furthermore,

increased price levels had little impact on our earnings in 2021. In 2022, however, we

the Commission wants to adapt the EU Emissions Trading System (ETS). The aim here is to

expect margins to improve notably.

Regulatory environment

decrease the total number of emission allowances placed on the market. At present,

companies in the energy, industry and aviation sectors are participating in the ETS. In future,

there is likely to be a similar system for heating and all other transport. In addition, the

Commission plans to introduce a carbon border adjustment mechanism to ensure products

manufactured in the EU are not subjected to higher carbon prices than imports. This is to

Emission reduction target for 2030: EU adopts stricter benchmark of 55 %. The

prevent domestic companies suffering a competitive disadvantage and thus relocating

European climate law came into force on 29 July 2021, under which the EU and its member

their production sites to countries outside the EU. The ‘Fit for 55’ package is being debated

states are obligated to decrease their net greenhouse gas emissions to zero by 2050. There

by member states and in the European Parliament. Draft laws have already been submitted

had been some initial disagreement, in particular with regard to the emission reduction goal

for most of the legislative initiatives. However, Parliament and the Council of Ministers are

for 2030. The Commission had suggested an increase from 40 % to 55 % versus 1990. The

expected to go through a lengthy process to establish their positions and reach an

European Council (Council of Ministers) had also voted in favour of this change, while the

agreement.

European Parliament had backed a reduction of as much as 60 %. Following a number of

trilateral meetings, representatives of the individual institutions ultimately agreed on 55 %.

EU taxonomy: Commission defines conditions for ‘green’ economic activity. In a

They also approved the formation of a panel known as the European Scientific Advisory

delegated act published in mid-2021, the European Commission defined technical

Board on Climate Change. The 15 senior scientific experts on this advisory board will be

screening criteria to determine whether economic activity is mitigating or adapting to

responsible for delivering a greenhouse gas budget, which can be used to determine an

climate change. Most renewable energy assets are likely to meet the criteria. The act

intermediate target for 2040.

formalises the provisions of the Taxonomy Regulation, introduced by the European

Parliament and the Council of Ministers in mid-2020. The Regulation is designed as a tool

to help determine when to classify economic activity as sustainable. The EU is taking this

stance to improve transparency for investors and channel capital flows into environmentally

friendly activities.

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To be recognised as taxonomy-aligned, an economic activity must contribute to at least one

In the first year of reporting, companies are allowed to follow a simplified process, whereby

of the following environmental objectives, without significantly harming any of the others:

disclosure is limited to whether taxonomy criteria exist for a given economic activity and not

(1) climate change mitigation, (2) climate change adaptation, (3) sustainable use and

whether the applicable conditions for said activity have been met. Activities for which

protection of water and marine resources, (4) transition to a circular economy, (5) pollution

taxonomy criteria exist are classed as ‘taxonomy-eligible’. Up to 88 % of our capital

prevention and control and (6) protection and restoration of biodiversity and ecosystems.

expenditure in 2021 met this requirement. It should be noted that taxonomy-relevant

The Commission’s first delegated act was concerned with defining the criteria for the first

capital expenditure (€6.0 billion) is not defined in the same way as the figure shown on

two objectives, with the remaining targets to be delivered over the course of the coming year.

pages 58 et seq. (€3.8 billion) and also cover, for example, additions from mergers of

companies. In the past year, 18 % of revenue (€24.5 billion) was taxonomy-eligible along

In February 2022, the Commission passed a supplementary delegated act which formalises

with 25 % of operational expenditure (€1.6 billion). From 1 January 2023, we will report what

the taxonomy criteria for new gas and nuclear power stations. It states that gas-fired power

percentage of our economic activities actually meet the technical screening criteria and is

plants which are approved before 2030, can be classed as sustainable even if they exceed
the upper emissions limit of 100 g CO2 / kWh, provided they replace more carbon-intensive
assets and are fully operated using climate-friendly gases like hydrogen no later than 2036.
There will also be a cap on CO2 emissions. The act mentions two upper limits, of which one
has to be complied with, namely 270 g CO2 / kWh or – alternatively – 550 kg CO2 / kW as an
annual average over a period of 20 years. The standards imposed are ambitious, but can

thus considered ‘taxonomy-aligned’. We have set ourselves the target of ensuring that more

than 90 % of our investments are dedicated to such activities in future.

New climate law: Germany seeks to become carbon neutral by 2045. On 24 June 2021,

the German Upper House passed a reform of the climate law, imposing a stricter

greenhouse gas reduction target, which was greenlit by the Lower House one day later.

be met given the right framework conditions. These include the rapid expansion of hydrogen

Germany has now set its sights firmly on being carbon neutral by 2045 – five years ahead

infrastructure. The delegated act does not require formal approval from the European

of the climate law’s original schedule, drawn up in 2019. By 2030, greenhouse gas

Parliament or Council of Ministers. However, both authorities have veto powers: they can

emissions are to be reduced by 65 % compared to 1990. The original target was 55 %. It is

reject an act entirely within six months of its passage by the Commission.

also the first time that an emission reduction target for 2040 has been set: it amounts to

The Taxonomy Regulation has also introduced new transparency obligations. Players on

shouldering the majority of additional emissions cuts: in 2030, the sector is limited to

the financial market, e. g. investment funds that label a financial product as environmentally

emitting 108 million metric tons of carbon. The original emissions threshold had been set at

88 %. The law also specifies targets for individual sectors, with the energy industry

sustainable, now have to disclose the share of green assets in their portfolio. Listed companies

175 million metric tons.

will also have to observe stricter disclosure requirements. Under the new requirements,

businesses that are already obliged to prepare non-financial reports will now have to disclose

These legislative amendments were seen as a reaction to a decision handed down by the

what percentage of their capital expenditure, revenue and operational expenditure are

German Constitutional Court and published in April 2021. The judges in Karlsruhe had

classed as sustainable in accordance with EU taxonomy regulations. This obligation applies

found the Climate Protection Act of 2019 to be insufficient and had called for more

to all annual reports published on or after 1 January 2022.

concrete regulations for the period after 2030. They highlighted the enormous burden that

irreversibly delaying considerable emission reductions would place on future generations.

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How exactly these additional emission reductions will be achieved is now down to the new

United Kingdom launches national emissions trading system. The new British trading

government coalition between Germany’s Social Democrats, Greens and Free Democrats.

system for carbon emission allowances entered into force in early 2021. On 19 May, the

A range of measures have already been announced, such as further expediting the phaseout

first 6.1 million certificates (UK Allowances, or UKAs for short) were auctioned off, each

of coal, which is ideally to be achieved by 2030. The German government is also looking to

entitling the holder to emit one metric ton of carbon. At £44 (€51), the price was twice as

move up a gear in other areas, including expanding renewable capacities and scaling up the

high as the lower regulatory limit. Additional auctions followed every two weeks. In 2021,

hydrogen economy.

around 83 million emission allowances were auctioned off in total, and around 38 million

were allocated free of charge. The UK sought to establish its own emissions trading system

Germany imposes stricter emissions limits for air pollutants. At the eleventh hour,

as a result of leaving the EU. Britain has not participated in European emissions trading

Germany transposed the new EU requirements for limiting air pollutant emissions from
power plants into national law. Midway through 2021, an amendment to the 13th German
Emission Control Act and new co-firing requirements in the 17th German Emission Control

since the end of 2020. Until now, both systems have been kept strictly separate, i. e. it has

not been possible to use EU Allowances (EUAs) in the UK nor has using UKAs been

permissible in the EU. This can give rise to price discrepancies (see page 38). In addition to

Act entered into force, introducing more stringent limits on nitrogen oxides and mercury, in

a number of renewable energy assets, our UK power generation portfolio includes ten

particular. To ensure compliance, we have optimised the nitrogen oxide reduction processes

gas-fired power plants with a total capacity of 7 GW. The carbon emitted by these facilities

in all our lignite-fired power plants and equipped our three most state-of-the-art units with

amounted to 12.8 million metric tons in 2021.

additional mercury removal systems. Gas-fired stations are also affected by the stricter

regulations. Existing plants and those under construction are marginally compliant with the

Netherlands limits use of coal in power plants. The Dutch parliament and senate have

current nitrogen oxide thresholds, without having to rely on retrofits. However, future power

passed an amendment to the country’s legislation on the Coal Phaseout Act, which places

stations must be fitted with catalytic exhaust gas purification systems, which will increase

costs significantly.

German government establishes new system for nuclear phaseout compensation.
The 18th Amendment to the German Nuclear Energy Act entered into force on 31 October

additional restrictions on the use of coal for electricity generation. Under the new law,
annual CO2 emissions from coal use may in future not exceed 35 % of the level that is
theoretically possible in the respective plant. The regulation will apply from 2022 to 2024.

Plant operators are to be compensated, however this is yet to be approved under state aid

law by the EU Commission. RWE operates two hard coal power plants in the Netherlands,

2021. It governs remuneration for German nuclear power plant operators impacted by the

Amer 9 and Eemshaven. Amer 9 runs on 80 % biomass and is therefore not affected by the

accelerated nuclear phaseout. RWE was entitled to €880 million in compensation. We

upper limit. Eemshaven, on the other hand, will be severely impacted by the law as it only

received the funds at the end of November. It had been necessary to readdress the issue of

uses 15 % biomass.

remuneration in light of the German Constitutional Court’s findings that the regulations

drawn up in 2018 had never entered into force and were, moreover, unconstitutional. We

provided additional context on this matter on page 39 of the 2020 Annual Report. The new

law is flanked by an associated public-law contract between the Federal Republic of

Germany and the power plant operators, which was signed by the contracting parties in

March 2021.

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Poland establishes funding framework for offshore wind. The Polish government has

finalised the legal framework for offshore wind farm subsidies, with the Polish parliament

Market environment

passing a corresponding law in January 2021. Poland intends to increase the share of

Strong economic output in all of RWE’s core markets. In 2021, global output made a

renewables in its power generation portfolio to 32 % in 2030; in 2020 this figure stood at

strong recovery, following the economic downturn witnessed during the pandemic. Initial

16 %. At the moment, there are no wind farms off the coast of Poland. However, turbines

estimates put increased economic performance at 6 % year on year. While the USA saw a

with a total capacity of 10.9 GW should be in development, under construction or in

similar level of growth, the Eurozone fell behind by approximately one percentage point. In

operation by as early as 2027. Wind farms with a total capacity of 5.9 GW will be able to

Germany and the Netherlands, our two most important markets within the currency union,

take part in the first round of subsidies. Plant operators will be awarded contracts for

current data suggests a rise of 3 % and 5 %, respectively. The UK economy is centred around

difference which guarantee a fixed payment for 100,000 full load hours. The maximum

the service industry and was therefore hit much harder by the pandemic. However, figures

subsidy period is set at 25 years. RWE succeeded in securing a contract of this nature for

suggest the nation’s economy could have since rebounded by 7 %. The global economic

its F. E. W. Baltic II project, on which we report in detail on page 41.

recovery was reflected in the significant rise in demand for commodities, which led to a

notable increase in prices. There were also supply shortages and project delays, which have

The US government plans to extend tax benefits for renewables. Shortly after his

only affected RWE to a minimal extent so far.

inauguration, US president Joe Biden presented an ambitious investment package to

subsidise infrastructure, social care and climate protection initiatives, which envisages an

German power consumption up by 3 % versus prior year. In the past year, demand for

extension to renewables tax benefits. New power stations are to continue to receive

electricity has risen across all RWE markets. This was largely attributable to the economic

Production Tax Credits (PTCs) or Investment Tax Credits (ITCs). The aim is to grant PTCs in

upswing. Preliminary data from the German Association of Energy and Water Industries

the amount of US$25 per MWh for a period of ten years, while ITCs are to account for up

(BDEW) indicates that German electricity consumption was up 3 % on 2020. For the USA,

to 30 % of the investment costs. In future, it should be possible to subsidise hydrogen and

experts estimate a rise of similar proportions, while the Netherlands (1 %) and the UK (2 %),

electricity storage projects in addition to wind power and solar systems.

will most likely have fallen short of this mark.

Before it is enshrined in law, the investment package must first pass through the Senate

Low wind speeds across the majority of RWE locations. Utilisation and profitability of

and the House of Representatives. The Democrats hold the necessary majorities in both

renewables assets are largely weather-dependent. This is why we monitor wind speeds

houses. In November, the House of Representatives greenlit the proposal. One single

carefully. In 2021, these were lower than the long-term average across most of our

Democratic senator, however, has so far prevented it from passing through the Senate.

production sites in Europe and North America. A year-on-year comparison also revealed an

Points of contention include the overall cost of the package and individual social measures.

unfavourable development: most RWE wind farms were underutilised versus 2020 due to

Commentators expect a new package to be tabled, which includes tax incentives for

weather conditions. Only pockets of southern Europe were able to benefit from higher

investing in climate protection and is capable of achieving a majority in both houses.

wind volumes. The utilisation of run-of-river power stations depends on precipitation and

However, time is of the essence here given the pending Senate elections in November 2022.

melt water volumes. In Germany, where most of the RWE Group’s hydroelectric plants are

Should the Democrats lose their narrow majority, then the Republicans could block

located, these volumes were a little below the long-term average. They were, however,

legislative proposals from the US government.

higher than in 2020.

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Average RWE wind farm utilisation

Onshore

Offshore

Increased demand from China boosts hard coal prices. Prices for hard coal used in power

2021

2020

2021

2020

plants (steam coal) also rose notably in the year under review. Deliveries to ARA ports

Germany

United Kingdom

Netherlands

Poland

Spain

Italy

Sweden

USA

–

(ARA = Amsterdam, Rotterdam, Antwerp) including freight and insurance were settled for an

average of US$122 / metric ton (€104) in 2021, as opposed to US$50 / metric ton the

previous year. This notable rise can, in part, be traced back to increased demand from

China, where the local economy recovered quickly from the economic fallout of the

pandemic. The same trend was also reflected in the development of hard coal forward

prices: in the year under review, the 2022 forward (API 2 Index) was quoted at an average of

US$95 / metric ton (€81). This is US$37 more than was paid for the 2021 forward in 2020.

CO2 emissions trading: More ambitious EU climate protection target pushes prices up.
An increasingly important price factor for fossil fuel-fired power plants is the procurement of
CO2 emission allowances. An EU Allowance (EUA), entitling the holder to emit one metric ton
of carbon dioxide, was traded at an average of €54 in 2021 – almost twice the price in

Natural gas prices skyrocket. The utilisation and earnings of our conventional power

plants are heavily dependent on how electricity, fuel and emission allowance markets

2020. This figure is based on contracts for delivery that mature in December of the

perform. Natural gas, our most important energy source for producing electricity, became

following year. Once the EUA price curve had exceeded €30 in late 2020, there was only

increasingly expensive in the year under review. In the first quarter of 2021, quotations at

one way things could go, and that was up. As 2021 drew to a close, allowance prices were

the Dutch Title Transfer Facility (TTF), Continental Europe’s lead market, were still largely

already closing in on the €80 figure. The considerable price hikes were primarily the result of

priced between €15 / MWh and €20 / MWh, but by the fourth quarter they intermittently

the introduction of a stricter European greenhouse gas reduction target for 2030. To meet

exceeded levels far above €100. In 2021, the average spot price of €48 / MWh was more

this goal, the EU needs to vastly decrease the number of emission allowances available to

than five times as high as in 2020 (€9 / MWh). This drastic price hike for natural gas is

companies. Many market participants anticipated this, making early purchases of EUAs.

partially attributable to increased demand for energy due to the global economic upturn. In

The increase in energy consumption driven by the economy contributed to the rise in prices

addition, colder weather across large parts of Europe meant that more gas was needed for

because it also drove up greenhouse gas emissions and demand for emission allowances.

heating compared to 2020. Geopolitical tensions and uncertainty surrounding the approval

of the Russian-German Nord Stream 2 gas pipeline contributed to the price increase.

Due to the aforementioned factors, forward quotations rose considerably. The 2022

As explained on page 36, the United Kingdom launched its own CO2 emissions trading
system when it left the EU. UK Allowances (UKAs) have been traded on the secondary

forward hit a record high of well above €100 / MWh in December. On average, it was quoted

market since the first auction in May 2021. In the seven and a half months to the end of the

at €34 / MWh. By way of comparison, in the previous year the 2021 TTF forward cost

year, UKAs were quoted above EUAs. The average price during this time was £57 (€67).

€13 / MWh on average.

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Surge in fuel and emissions allowance prices impacts cost of electricity. The incredible

Higher margins on electricity forward markets. In order to mitigate the risk of short-term

rise in the price of fuel and emission allowances shaped the trajectory of our most important

sales and price fluctuations, we sell most of our electricity forward, whilst also hedging the

wholesale electricity markets in Europe. The low wind energy output, due to poor weather,

prices for necessary fuels and emission allowances. Our revenue for the period under review

and maintenance-related outages at French nuclear power plants also came to bear to

was thus influenced by the conditions of forward contracts for 2021, which were concluded

some extent. In Germany, the average annual spot price for base-load electricity more

in previous years. These forward sales are largely conducted with a lead time of up to three

than tripled compared to 2020, rising from €30 / MWh to €97 / MWh. The changes were on

years for power production in our lignite and nuclear plants, which are mainly used to cover

a similar scale in the United Kingdom and the Netherlands, where quotations rose from

base-load needs. On average, we were able to achieve higher prices and margins from

£35 / MWh to £118 / MWh (€138) and from €32 / MWh to €103 / MWh, respectively.

these assets for 2021 than for 2020. Sales of electricity from our gas-fired stations were

Electricity forward markets also witnessed a drastic upward curve. An average of €89 / MWh

subject to a shorter lead time. Margins realised from these transactions were higher than

was paid for the 2022 base-load forward in Germany and the Netherlands. In the preceding

the previous year. A portion of our renewables portfolio is also subject to forward contracts.

year, this figure stood at €40 in both countries. The price of the British one-year forward

increased from £44 / MWh to £92 / MWh (€108).

We do, however, still sell some of the generated power at spot market prices valid at the time

Once-in-a-century snowstorm sees electricity spot prices in Texas hit record high. The

Furthermore, price spikes on the spot market contributed to additional income from the

North American electricity market is geographically divided into multiple sub-systems, each

short-term optimisation of our power plant dispatch.

of which is governed by an independent system operator. The most important market region

for RWE is Texas, where most of our wind farms in the USA are connected to the grid and the

The rise in the price of electricity will have a more notable impact on margins in 2022. This

system operator is the Electric Reliability Council of Texas (ERCOT). Spot prices on the

concerns generation assets that had not yet fully or had only partially sold their electricity

ERCOT market briefly peaked at US$9,000 / MWh in February 2021 due to supply

forward when prices began to climb. European wind farms, in particular, where electricity

shortages and regulatory interventions. This was due to an exceptionally harsh cold spell,

revenue depends on market prices, now enjoy improved earnings forecasts. However, a

which led to outages at several power plants. Electricity forward prices saw no long-term

portion of our conventional power plant portfolio also stands to benefit from the price trend.

of sale. The margins we achieved for these transactions were higher than in 2020.

effects from this event. Last year, a one-year forward contract in the ERCOT market cost on

average US$37 / MWh (€31), US$7 more than in 2020. Higher natural gas prices were

decisive in this regard. The more moderate electricity price level compared to Europe can be

explained by the fact that gas prices in the USA remain relatively low, despite the recent hike.

In addition, Texan electricity producers do not need to purchase carbon emission

allowances.

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2.4 Major events

In 2021, we showed just how committed we are to green growth. We secured the

The Crown Estate’s tender process allocated development rights to a total of six sites on

rights to build and operate offshore wind projects in the United Kingdom, Denmark,

which offshore wind farms with a total capacity of up to 7,980 MW can be built. A number of

Poland and Germany with a capacity of up to 5 GW. Furthermore, we forged strong

the participants, which also secured option rights, submitted significantly higher bids than

partnerships for joint wind and solar activities in new markets. In the hydrogen

us. RWE will pay the lowest average annual option fee per megawatt of all successful

business, we formalised a partnership with Shell, which we expect to deliver substantial

bidders.

synergies. RWE’s green transition strategy comprises the phaseout of coal-fired power.

Here too, we took massive strides in 2021 by decommissioning our two remaining

Danish Energy Agency awards large offshore wind project to RWE. In Denmark, we have

German hard coal-fired power stations and five lignite units. In this chapter, we present

been granted the rights to build and operate the Thor offshore wind project in the North

the main events that took place in 2021 and the beginning of 2022, focusing on those

Sea. We had taken part in an auction along with five other bidders: all participants

which are not outlined in more detail elsewhere in the review of operations.

submitted minimum bids of DKK 0.1 / MWh. On 1 December 2021, we won the auction and

Events in the fiscal year

shortly afterwards signed a concession agreement with the Danish Energy Agency, which

entitles us to build the wind farm and operate it for 30 years. Thor will be constructed about

20 kilometres off the coast of west Denmark and will be the country’s largest offshore wind

farm to date, with a capacity of approximately 1,000 MW. It is scheduled for full

RWE wins rights to develop new offshore wind power sites in the British North Sea.

commissioning in 2027. Due to our minimum bid, we will not receive state subsidies for the

At an auction held in February 2021, RWE secured the rights to build wind turbines with

electricity generated by Thor. In the early years, we will have to transfer our proceeds to the

a total capacity of 3,000 MW across two neighbouring locations in the UK North Sea. In

Danish government until they total DKK 2.8 billion (€377 million) plus annual inflation. We

return, we will pay an annual option fee of £82,552 / MW (plus inflation adjustment) until

expect our investment for the wind farm and the grid connection to amount to €2.1 billion.

we make a final investment decision. The area is situated on a sandbank in shallow waters

In Denmark, RWE already operates the Rødsand 2 offshore wind farm, which is located

known as Dogger Bank. The Sofia wind farm is also being built in the vicinity. After the

south of the island of Lolland and has an installed capacity of 207 MW.

auction, an official plan-level Habitats Regulations Assessment (HRA) was initiated, which

is expected to be finalised in 2022. Only after this is completed will the option fee period

commence. In accordance with applicable regulations, however, we had to pay an annual

fee in advance in 2021. As soon as all permits for the new wind farms have been obtained,

we will participate in an auction for a subsidy contract, after which we will make a final

investment decision. Then the option fee will be replaced by a much lower lease payment.

If connected to the grid in time, the wind farms could be commissioned as early as the end

of this decade.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Major events

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

RWE secures two offshore wind farm sites in the German North Sea. In Germany too, we

RWE becomes majority shareholder in Rampion offshore wind farm. As of 1 April 2021,

laid the groundwork for new offshore wind farms. Last year, we secured the usage rights to

we acquired a 20 % interest in the UK Rampion offshore wind farm from E.ON. The purchase

two sites in the German North Sea. We were allocated one of the sites, officially referred to

price was paid in December 2020. As a result of the transaction, we now own 50.1 % of the

as N-3.7, during an auction held by the German Network Agency in September 2021. This

400 MW wind farm and can consolidate it fully. The other owners are a consortium led by

confers us the right to build a wind farm on site with a capacity of 225 MW. To give us the

Macquarie (25 %) and Canadian energy group Enbridge (24.9 %). Rampion is located in the

best chance of winning the auction, we submitted a zero-cent bid, which means the

English Channel off the coast of Sussex and has been operating commercially since 2018.

electricity generated by the wind farm is not subject to a minimum price guaranteed by the

state. We were granted usage rights to the second site, referred to as N-3.8, following the

TCP investor consortium acquires Rampion’s grid connection. In November, investor

September auction, allowing us to build a wind farm with an installed capacity of 433 MW.

consortium Transmission Capital Partners (TCP) purchased Rampion’s grid connection, for

Originally, the winning bid had been placed by French energy group EDF, but it had to pass

which it paid a total of £279.5 million. The transaction included the offshore and onshore

on the usage rights to a joint venture between Northland Power and RWE. This is because

export cables as well as the substations at sea and on land. The sale was a regulatory

we had pre-developed the site together with our Canadian partner and therefore had a

requirement. In the United Kingdom, construction of offshore wind farms and the associated

step-in right. Now we must deliver the project at the conditions in EDF’s winning bid; the

grid connection is managed under one umbrella. The grid connection must subsequently be

company submitted a zero-cent bid.

sold to an independent third party under the supervision of UK regulator Ofgem.

Support secured for offshore wind project in Poland. We have also made good progress

Go-ahead for construction of Sofia wind farm in the North Sea. In the spring of 2021,

in relation to our first wind energy project in the Polish Baltic Sea. In April 2021, the

RWE made the final investment decision to build the Sofia wind farm in the UK North Sea,

government in Warsaw made a preliminary commitment to subsidise our F. E. W. Baltic II

one of the largest offshore wind projects in the world. We hold a 100 % stake in the project.

project. It is envisaged that the wind farm be built on the Słupsk sandbank and have a

Sofia will be located almost 200 kilometres off the coast of North East England. It will

capacity of 350 MW. It was not until January 2021 that the Polish government established

consist of 100 turbines with a total installed capacity of 1,400 MW, and will be capable of

the legal framework for subsidising offshore wind power. We were granted environmental

supplying green electricity to approximately 1.2 million homes in the UK. June 2021 saw the

clearance for F. E. W. Baltic II in December and will receive the final subsidy approval in 2022,

start of onshore construction, with offshore work scheduled to begin in 2023. According to

at which time the regulator will also decide on the level of the funding. The support will be

current plans, Sofia is set to take its full capacity online by 2026. We will be contractually

granted in the form of two-sided contracts for difference which guarantee that we receive a

remunerated for electricity generated by the wind farm in the amount of £39.65 / MWh. This

fixed price per megawatt hour for the generation volume of 100,000 full load hours. If the

amount is based on the 2012 price level and will be subject to an upward adjustment for

realised market price is lower than this amount, the state pays the difference. If it is higher,

inflation. We anticipate investing about £3 billion in Sofia. This includes expenditure for the

the operators are obliged to make a payment. The subsidy period is limited to 25 years.

grid connection, which we will sell on completion.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Major events

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Alliances to expand offshore wind forged. We have joined forces with foreign partners to

Three major US wind farms start commercial operation. We completed three onshore

improve our growth opportunities in the offshore wind business. The following is a brief

wind projects in the USA in 2021. In the spring, Scioto Ridge went online commercially after

overview of some of the most recent collaborations.

about two-and-a-half years of construction. It is our first wind farm in the state of Ohio and

• In May 2021, we agreed with UK-based National Grid Ventures that we would jointly

farms: West Raymond in Texas and Cassadaga in the US state of New York. The wind farms

participate in the New York Bight seabed lease auctions. In February 2022, we secured a

have capacities of 240 MW and 125 MW, respectively. A total of more than €800 million

site in a tender process with the potential for about 3 GW in generation capacity

was invested in the three projects.

has a total capacity of 250 MW. In the summer, we completed two further large-scale wind

(see page 45).

• Also in May, we signed an agreement with Equinor and Hydro to develop a wind energy

our generation portfolio, we sold shares in four Texan wind farms: Stella (201 MW), Cranell

project in the Sørlige Nordsjø II area in the Norwegian North Sea. The site neighbours

(220 MW), East Raymond (200 MW), and West Raymond, which was mentioned earlier. The

Danish waters and has excellent wind conditions. The favourable location should allow us

buyers are a subsidiary of Canadian energy utility Algonquin Power & Utilities and UK

to sell electricity both within and outside of Norway.

investor Greencoat, which took an interest of 51 % and 24 % in the wind farms. RWE is

therefore only a minority shareholder but is staying on as the operator of these assets. We

• In September, we forged a further alliance with Norwegian partners. Together with NTE

no longer fully consolidate them in our financial reporting and instead account for them

and Havfram, we plan to participate in auctions for floating wind farms. The Norwegian

using the equity method. The sale was agreed in December 2020 and was completed in

Ministry of Petroleum and Energy has earmarked an area known as Utsira Nord off the

January (Stella / Cranell / East Raymond) and August 2021 (West Raymond).

Stakes in four Texan wind farms sold. To increase our financial strength and better balance

country’s southern coast for this purpose. The site can accommodate wind turbines with

a total capacity of up to 1.5 GW.

Australian Limondale solar farm is officially connected to the grid. In autumn 2021,

our Limondale solar farm went online in the Australian state of New South Wales. With

• Floating wind farms are also the focus of a partnership in South Korea, which we finalised

a capacity of 249 MW, the photovoltaic system is one of the largest in the country. It

with the port city of Ulsan in November. Together with our local partner, our objective is to

consists of approximately 872,000 solar panels, spread over a 900-hectare site.

implement projects to create up to 1.5 GW in generation capacity off the coast of the

Construction started in 2018. Our capital expenditure on Limondale amounted to

country. South Korea is aiming for 12 GW in offshore wind capacity by 2030 and wants to

approximately €330 million.

be climate neutral by 2050.

• In February 2022 we joined forces with Tata Power, India’s largest power generator, to

develop offshore wind projects along the country’s 7,600-kilometre coastline. India has

also set ambitious renewables expansion targets, and aims to have 30 GW in offshore

capacity by 2030.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Major events

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

RWE sets the stage to expand solar power in Greece. In October, we set up a joint venture

Partnership with Shell on hydrogen projects. In November, we reached an agreement with

with energy group Public Power Corporation (PPC) to realise solar projects in Greece. RWE

Shell to intensify our collaborative efforts to build a European hydrogen economy. Working

and PPC own 51 % and 49 % of the new company, respectively. Our partner is the country’s

together with the British energy group, we will develop projects to produce, use and sell

largest power utility and will contribute photovoltaic projects with up to 940 MW of capacity

hydrogen. RWE and Shell are already partners in the trailblazing hydrogen projects

to the joint venture. RWE will bring a project pipeline of a similar size to the table. The

AquaVentus in Germany (see page 32) and NortH2 in the Netherlands. RWE and Shell

undertakings are in various stages of development. Based on current plans, the first farms

intend to take the next step and initiate large-scale projects in the United Kingdom for

will be commissioned in 2023.

the production of green hydrogen using offshore wind energy. The partnership also

encompasses measures to decarbonise gas and biomass-fired power stations within the

Belectric Group solar services business sold. In December, the Dutch energy service

RWE Group. To this end, we will explore the following alternatives: carbon capture and

provider Elevion acquired parts of the Belectric Group from RWE. Assets affected by the

storage as well as retrofitting stations to use environmentally friendly hydrogen.

transaction were companies in Europe and Israel which provide services relating to the

construction, operation and maintenance of solar farms. Elevion is part of ČEZ, the Czech

Success in British capacity market auction. In March 2021, RWE assets totalling

Republic’s largest energy utility. Belectric’s battery business remains within the RWE Group.

6,544 MW in secured generation capacity – primarily gas-fired power stations – qualified

It was transferred to RWE Battery Solutions in 2020.

for a payment at a capacity market auction in Great Britain. The bidding process related to

the period from 1 October 2024 to 30 September 2025. Stations with a total capacity of

RWE sells small hydropower plants to KELAG. Austrian energy utility KELAG acquired

40.8 GW won a contract. These assets will be remunerated for being online and contributing

twelve French and seven Portuguese hydro assets from us, which have a total installed

to electricity supply in the aforementioned period. The auction cleared at £18.00 / kW (plus

capacity of 62 MW (RWE’s pro-rata share). We also sold a number of small wind turbines

inflation adjustment).

in Portugal with a combined capacity of 3 MW to KELAG. A corresponding agreement was

reached at the end of 2020. We transferred the French plants in April 2021, and the

Once-in-a-century Texan cold snap weighs heavily on earnings. In February 2021,

Portuguese assets followed in September. KELAG is a leading hydropower producer.

an extraordinary cold front in parts of the USA curtailed energy supply substantially (see

We currently hold a 37.9 % stake in the company.

page 39). Winter storms and freezing rain forced RWE wind farms to go offline for several

Green light for the construction of two mega batteries in Germany. We will contribute to

conduct short-term spot purchases in order to meet our supply obligations. Due to the tight

safeguarding security of supply in the future with two high-capacity batteries at our power

supply situation and regulatory price interventions, we had to pay up to US$9,000 / MWh for

plant sites in Werne and Lingen. This decision was taken in June. We expect the battery

these electricity purchases. This reduced the adjusted EBITDA in the Onshore Wind / Solar

storage units to have outputs of 72 MW (Werne) and 45 MW (Lingen) as well as storage

segment by approximately €400 million.

days. We had sold forward a portion of the generation of these assets and therefore had to

capacities of 79 MWh and 49 MWh, respectively. They are due to go online at the end of

2022. We intend to invest some €50 million in total.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Major events

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Group sites affected by catastrophic floods in western Germany. In mid-July, severe

Further lignite-fired power stations taken offline. During the year under review we closed

weather events in parts of Germany led to disastrous floods resulting in a large number of

five 300 MW power plant units in the Rhenish lignite mining region. To comply with the

fatalities and substantial damage to property. Rhineland-Palatinate and the south of North

German Coal Phaseout Act, we took Neurath B (294 MW), Niederaussem C (295 MW) and

Rhine-Westphalia were the most devastated regions. The extreme weather also affected

Weisweiler E (321 MW) offline at the end of December. The Frimmersdorf lignite power plant

our company and its employees. In the Rhenish lignite mining area, water ingress at the

was shut down three months earlier. The station’s last two units P (284 MW) and Q (278 MW)

Inden opencast mine brought production to a temporary halt. We are deeply saddened that

had been placed on security stand-by on 1 October 2017. This meant that they were

an employee of a partner company was swept away in the floods and could not be saved

forbidden by law from participating in the market, but had to remain available as a

despite a major rescue operation. In Erftstadt-Blessem, located near Cologne, the Erft river

safeguard to ensure security of supply when necessary. They were shut down for good on

burst its banks, flooding a gravel pit operated by a subsidiary of RWE Power. Nearly all

expiry of the security stand-by period. Most employees affected by the lignite exit will retire.

RWE-operated run-of-river power plants in the Eifel and on the Mosel, Saar and Ruhr rivers

Younger staff members will transfer to other areas within the Group or will receive severance

were forced to interrupt operations due to the floodwaters. Within a few days, however,

packages.

these stations and the Inden mines were available once more. Our financial burdens

resulting from the disastrous flooding will total a figure in the low two-digit million euro

Gundremmingen C nuclear power station stops operating. Also at the end of 2021,

range. RWE provided about €2 million to an emergency relief programme, one quarter of

we took Unit C of the Gundremmingen nuclear power plant offline. The plant was

which was donated by our staff.

commissioned in 1984 and had a net installed capacity of 1,288 MW. Its closure and

current dismantling are a result of the roadmap dictated by the German nuclear phaseout.

RWE stops generating electricity from hard coal in Germany. In the middle of last year,

We took Unit B of the Gundremmingen nuclear power station offline at the end of 2017.

our last German hard coal units, Westfalen E at Hamm (764 MW) and Ibbenbüren B (794 MW),

Now electricity generation at the site has stopped entirely. About 540 people were working

were closed for good. At the end of 2020, we successfully participated in the first nationwide

there as of 31 December 2021. This number will likely drop to about 440 by the end of

shutdown auction for hard coal-fired power plants with these assets. We received €216 million

2022. We will implement further socially acceptable redundancies in the years thereafter.

in compensation for their early decommissioning. In the first half of 2021, we were forbidden

from selling electricity generated by these assets, but were obligated to keep them on

standby to ensure security of supply. During this period, Westfalen E went online 13 times at

the request of the transmission system operator. The station is envisaged to continue to

contribute to security of supply, albeit without using hard coal. As the German Network

Agency has classified the power plant as system-relevant, we will convert the generator to a

rotary phase shifter to produce reactive power to maintain voltage levels, an important

element in stabilising the electricity grid. Conversely, Ibbenbüren B has not been deemed to

be system-relevant and will be fully decommissioned.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Major events

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Events after the close of the fiscal year

RWE enters US offshore wind market. At the end of February 2022, we were successful in

RWE once again successful in British capacity market auctions. Another auction, relating

an auction of seabed leases for offshore wind sites in the New York Bight. A joint venture

to the delivery period from 1 October 2025 to 30 September 2026, was held for the British

between RWE and National Grid Ventures secured an area for US$1.1 billion. About 3 GW of

capacity market on 22 February. We secured a payment for all participating RWE power

generation capacity can be built at the site, which would be capable of producing enough

stations, including two small new-builds. Altogether, these assets have a secured capacity of

electricity to power 1.1 million US homes. The auction included six lease sites, with bidders

6,647 MW. At £30.59 / kW per annum (plus inflation adjustment). A total of 42.4 GW in

only being allowed to secure one each. Every successful bid conferred the right to develop a

generation capacity qualified for a payment at the auction.

site and participate in upcoming offtake auctions in the states of New York and New Jersey.

If the project progresses as planned, our offshore wind farm in the New York Bight will be

Huge uncertainty after Russia attacks Ukraine. Russian troops marched into Ukraine at

commissioned before the end of the decade.

the end of February. As an invasion under international law, it prompted outrage and

consternation around the globe. Many countries including the USA, EU member states and

Wind joint venture with Northland Power launched. In January 2022, RWE and Northland

the United Kingdom imposed economic sanctions on Russia. Uncertainty concerning

Power formed a joint venture for the development of wind energy projects in the German

commodity deliveries from Russia to Europe has caused a significant increase in gas and

North Sea. We expect this partnership to deliver substantial synergies, resulting in cost

electricity trading quotations. In some European countries, including Germany, governments

savings in the development, construction and operation of the assets. RWE owns 51 % and

are working on measures to reduce dependency on Russian oil and gas imports. When this

our Canadian partner owns 49 % of the joint venture, which encompasses three offshore

review of operations was prepared in early March 2022, it was impossible to predict the

wind projects aiming to develop a total capacity of 1.3 GW. The sites of the future wind

development of the Ukraine conflict or its consequences. Although RWE does not have

farms are located north of the island of Juist. Before forging the joint venture, we had

business activities in Russia or Ukraine, further escalation of the conflict and discontinuation

already worked with Northland Power on two of the three projects. One project is focused on

of supply relationships with Russian companies could have notable effects on our assets,

a 433 MW wind farm on a site officially called N-3.8, which we secured via a step-in right

liabilities, financial position and profit or loss. More detailed information can be found in the

following an invitation to tender in 2021 (see page 41). The other initiative involved the

chapter entitled ‘Development of risks and opportunities’, which starts on page 70.

construction and operation of a 420 MW wind farm, which we hope to build on the N-3.5

site. We also have a step-in right for this area, but have not exercised it yet. RWE initially only

held a 15 % share of both projects and had originally developed the third joint venture

project alone. It is centred around a 480 MW wind farm at the N-3.6 site, for which we also

hold a step-in right which has not yet been made use of. The auctions for the sites N-3.5 and

N-3.6 should be held in 2023. In the event that other companies are successful, we can

exercise our step-in rights.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Commentary on reporting

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.5 Commentary on reporting

In our financial reporting, the RWE Group is broken down into five segments, which we

• Supply & Trading: Proprietary trading of energy commodities is at the core of this

present in detail in this chapter. Renewable energy, gas-fired power plants, energy

segment and is overseen by RWE Supply & Trading. The company also acts as an

storage, our hydrogen business and energy trading are distributed among the first four

intermediary for gas, supplies key accounts with energy, and undertakes a number of

segments. They play a key role in the energy transition and therefore make up our core

additional trading-related activities. Our German and Czech gas storage facilities also

business. The fifth segment covers power generation from coal and nuclear energy,

form part of this segment.

which will increasingly lose importance due to legally mandated phaseout roadmaps.

• Coal / Nuclear: This is where we report on the activities which are not part of our core

business as their importance is declining due to the course set by the energy policy in our

Group structure features five segments. We distinguish between five segments when

domestic market, Germany. First and foremost, these consist of our German electricity

reporting our business performance. The first four form our core business. Our segments

generation from coal and nuclear fuel as well as our lignite production in the Rhenish

are defined as follows:

mining region to the west of Cologne. This is also where we report our investments in

Dutch nuclear power plant operator EPZ (30 %) and Germany-based URANIT (50 %),

• Offshore Wind: We present our business relating to offshore wind here. It is overseen by

which holds a 33 % stake in uranium enrichment specialist Urenco. Most of the

our Group company RWE Renewables.

aforementioned activities and investments are overseen by RWE Power. RWE Generation

is responsible for our German hard coal-fired power plants; we shut down the last two

• Onshore Wind / Solar: This is the segment in which we pool our onshore wind and solar

stations in mid-2021.

business as well as parts of our battery storage activities. Here again, responsibility lies

with RWE Renewables.

Group companies with cross-segment tasks, such as the Group holding company RWE AG,

are stated as part of the core business under the ‘other, consolidation’ line item. This also

• Hydro / Biomass / Gas: Generation from our run-of-river, pumped storage, biomass

applies to our stakes of 25.1 % in German transmission system operator Amprion and 15 %

and gas power stations is pooled here. The segment also includes the Dutch Amer 9

in E.ON. However, the dividends we receive from E.ON are recognised in the financial result.

and Eemshaven power plants, which run on biomass and hard coal, as well as individual

Furthermore, ‘other, consolidation’ contains consolidation effects.

battery storage systems. The project management and engineering consulting company

RWE Technology International and our 37.9 % stake in Austrian energy utility KELAG

are also allocated to this segment. The activities are overseen by RWE Generation. In

addition, since 2021, this management company has been responsible for designing and

implementing our hydrogen strategy.

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

Commentary on reporting

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Changed recognition of tax benefits for renewables in the USA. At the start of fiscal

2021, we changed the way in which we account for tax benefits received for US wind

and solar projects. Renewable energy is subsidised largely via tax credits in the USA.

Furthermore, plant operators can benefit from accelerated depreciation, referred to as

tax benefits. Until 2020, they were recognised in taxes on income, whereas the benefits

of tax credits were considered in other operating income. For the sake of consistency, we

have also been recognising tax benefits since 2021. It has a positive impact on adjusted

EBITDA. To ensure comparability, we restated the prior-year figures. More information can

be found in the Notes on pages 108 et seq.

Forward-looking statements. This report contains forward-looking statements regarding

the future development of the RWE Group and its companies as well as economic and

political developments. These statements are assessments that we have made based on

information available to us at the time this document was prepared. Despite this, actual

developments can deviate from the prognoses, for instance if underlying assumptions do

not materialise or unforeseen risks arise. Therefore, we cannot assume responsibility for the

correctness of forward-looking statements.

References. The contents of web pages and publications to which we refer in this chapter

are not part of the Review of operations and merely provide additional information.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.6 Business performance

Fiscal 2021 was a very successful year for RWE, despite getting off to a lacklustre

performance. Improved generation margins provided additional income. This enabled

start. In February, extreme weather in Texas led to outages at wind farms and a

us to increase the Group’s adjusted EBITDA by 11 % compared to the previous year.

significant financial loss due to power purchases. However, we more than offset the

We clearly exceeded the earnings forecast for 2021 which we published after the events

earnings shortfalls as the year progressed, thanks to an exceptional energy trading

in Texas.

Business performance in 2021: What we forecast and what we accomplished
€ million

3,650

3,286

2,727

2,761

1,069

1,110

RWE Group

Core business

Offshore Wind

523

258

Onshore Wind /
Solar

Adjusted EBITDA

1 See pages 67 et seq. of the 2020 Annual Report. The hatched portion reflects the forecast range.

Forecast overachieved

Forecast met

2020 actual

Forecast for 20211

2021 actual

2,185

1,823

1,569

1,257

621

731

769

539

889

559

Hydro / Biomass / Gas Supply & Trading

Coal / Nuclear

RWE Group

Adjusted
EBIT

Adjusted
net income

RWE Annual Report 2021GWh

Offshore Wind

of which:

Germany

United Kingdom

Netherlands

Turkey

Coal / Nuclear

RWE Group

1
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Power generation1

Renewables

Pumped storage,
batteries

Gas

Lignite

Hard coal

Nuclear

Total2

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Onshore Wind / Solar

16,709

16,762

Hydro / Biomass / Gas

7,899

5,832

7,564

7,009

–

52,257

46,894

–

6,952

3,584

–

6,952

3,584

–

7,564

7,009

16,709

16,762

67,321

56,600

7,846

10,412

35,756

25,711

19,324

16,162

4,359

4,281

1,645

1,546

5,988

8,576

493

5733

5,725

3,679

–

35,263

25,138

6,647

8,899

4,359

4,281

32,190

29,622

52,404

47,620

45,916

36,649

7,140

6,133

22,704

20,682 160,773

141,204

147

726

45,916

36,649

188

2,549

22,704

20,682

69,179

60,833

1 No longer considers power purchases from generation assets in which RWE does not own the majority, but which we have long-term usage rights to. Prior-year figures adjusted accordingly.
2 Including production volumes not attributable to any of the energy sources mentioned (e. g. electricity from waste-to-energy plants).
3 Adjusted figure.

Electricity production 14 % up on prior year. In the fiscal year that just came to a close, the

stations were also utilised more than in 2020, whereas generation from gas was down in

RWE Group produced 160,773 GWh of electricity. Deviating from the former recognition

Germany and the Netherlands. Our Dutch power plants Amer 9 and Eemshaven, which run

method, this figure does not include power purchases from generation assets in which we

on biomass and hard coal, stepped up production considerably. The rise at Eemshaven was

do not own the majority, even if we have long-term usage rights to them. Prior-year figures

due to the station’s return to nearly full availability after fire damage in the preceding year.

including the purchases have been adjusted accordingly. Our electricity generation grew by

Our German nuclear power stations also posted a substantial rise, because there were

14 % compared to 2020. The most significant increases were recorded by our German

fewer maintenance outages. A counteracting effect was felt from the German coal

lignite power stations, which benefited from favourable market conditions. Contributing

phaseout. At the end of 2020, we ceased commercial operation of the Ibbenbüren B

factors were the rise in electricity consumption compared to the previous year thanks to the

(794 MW) and Westfalen E (764 MW) hard coal-fired power plants and shut down the

economic recovery, as well as the weather-induced drop in wind energy fed into the system.

Niederaussem D (297 MW) lignite unit.

For these reasons and despite a significant hike in fuel costs, our UK gas-fired power

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Power generation from renewables1

Offshore Wind

Onshore Wind

Solar

Hydro

Biomass

Total

GWh

Germany

United Kingdom

Netherlands

Poland

Spain

Italy

Sweden

USA

Australia

Rest of the world

RWE Group

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

1,811

2,082

939

1,168

5,557

4,690

1,719

2,134

–

727

1,245

934

1,008

196

237

293

768

997

890

882

339

–

8,961

9,059

–

7,564

7,009

15,867

16,267

–

354

245

797

–

271

1,645

1,483

–

4,398

4,740

189

2312

304

342

7,769

7,397

–

146

5,697

3,665

6,468

4,454

–

1,246

1,059

1,008

489

998

970

882

576

9,315

9,330

245

193

210

432

1,961

1,903

6,001

4,011

32,190

29,622

Production from our wind farms was roughly on a par year on year. A positive effect was felt

Lower generation capacity due to coal power plant closures. At the end of 2021, we had

from the increase in our stake in the Rampion offshore wind farm (400 MW) in the UK as of

an installed power production capacity of 36.1 GW. This figure does not include our three

1 April 2021 from 30.1 % to 50.1 % and the full consolidation of Rampion since then.

German lignite units, which are in legally mandated security standby and will be shut down

Furthermore, we commissioned the Scioto Ridge (250 MW) and Cassadaga (125 MW) wind

for good in 2022 / 2023. Certain assets, where we are not the majority owner and which

farms in the USA and started feeding electricity from the Triton Knoll offshore wind farm

generate electricity that we can completely or partially use on the basis of long-term usage

(857 MW) in the UK into the grid. Opposing effects were felt from lower wind speeds and the

agreements, are also disregarded. In the past, we included the capacities of these stations

sale of majority stakes in wind farms in Texas (see page 42).

in the figures if we were entitled to the associated generation. Prior-year figures were

In addition to our in-house generation, we procure electricity from suppliers outside of the

Group. In the year being reviewed, these purchases totalled 48,131 GWh. In-house production

and power purchases combined for 208,904 GWh (previous year: 200,715 GWh).

adjusted.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Our generation capacity declined by 1.6 GW compared to 2020. In line with the German

In terms of generation capacity, gas is our main energy source, accounting for a share of

coal phaseout, we decommissioned the Niederaussem C (295 MW), Neurath B (294 MW)

40 % at the close of 2021. Renewables take second place, with a share of 30 %. Our biggest

and Weisweiler E (321 MW) lignite units as of 31 December 2021. The legal lifetime of the

source of renewable energy is wind (8.9 GW), followed by biomass (0.8 GW), hydro (0.5 GW)

Gundremmingen C (1,288 MW) nuclear power station ended on the same day. By contrast,

and solar (0.5 GW).

we increased production capacity from renewables by 0.6 GW in part as a result of our fully

consolidating the Rampion offshore wind farm for the first time. Furthermore, we completed

The geographic focus of our generation business is Germany, where 42 % of our installed

the Limondale (249 MW) solar farm in Australia as well as the Scioto Ridge and Cassadaga

capacity is located. The United Kingdom and the Netherlands follow, accounting for shares

wind farms in the USA, whereas the sale of majority stakes in the Texan wind farms Stella

of 27 % and 14 %, respectively. The USA comes in fourth: about half of our onshore wind

(201 MW), Cranell (220 MW) and East Raymond (200 MW) had a counteracting effect.

capacity is situated there, a large portion of which is in Texas.

Installed capacity1

Renewables

Pumped storage,
batteries

Gas

Lignite

Hard coal

Nuclear

Total2

As of 31 December, MW

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

Offshore Wind

Onshore Wind / Solar

2,318

1,918

7,082

6,858

–

Hydro / Biomass / Gas

1,285

1,319

168

172

13,901

of which:

Germany

United Kingdom

Netherlands / Belgium

Turkey

Coal / Nuclear

RWE Group3

393

139

753

–

389

137

748

–

168

172

3,807

–

6,984

2,323

787

400

787

400

–

7,638

8,548

–

1,469

1,474

–

1,469

1,474

–

2020

1,918

6,877

2,318

7,110

17,115

17,158

4,407

7,376

4,545

787

4,407

7,374

4,545

787

1,482

2,770

9,559

11,752

10,697

10,102

199

194

14,301

7,638

8,548

1,469

1,474

1,482

2,770

36,104

37,708

1 No longer considers power plants taken offline as of 31 December. Assets scheduled for decommissioning are excluded from the capacity overview once they stop producing electricity. They include our lignite units in legally mandated security

standby. No longer considers generation assets in which RWE does not own the majority, but which we have long-term usage rights to. Prior-year figures adjusted accordingly. Commercial rounding can result in inaccurate sum totals.

2 Including production volumes not attributable to any of the energy sources mentioned (e. g. electricity from waste-to-energy plants).
3 Including insignificant capacity at RWE Supply & Trading.

RWE Annual Report 20211
To our investors

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Combined review
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Business performance

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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, MW

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

Germany

United Kingdom

Netherlands

Poland

Spain

Italy

Sweden

USA

Australia

Rest of the world

RWE Group

598

1,672

1,272

–

637

803

331

425

447

488

116

666

707

268

385

447

475

116

–

3,313

3,543

–

2,318

1,918

6,596

6,616

–

125

249

486

–

125

–

393

389

–

556

–

1,630

1,655

2,615

2,117

742

737

1,100

1,016

–

426

504

488

164

386

504

475

164

3,438

3,668

249

–

118

797

792

10,697

10,102

220

500

sum totals.

CO2 emissions rise due to low wind speeds. Last year, our power stations emitted
80.9 million metric tons of carbon dioxide, 13.9 million metric tons more than in 2020. This

CO2 emissions of our power stations1
Million metric tons

represents the first increase after eight years of emissions reductions totalling 62 %, and

Hydro / Biomass / Gas

2021

2020

25.0

20.3

despite the fact that we closed further coal power plants. In 2021, a series of factors drove

up usage of our lignite-fired power stations: besides a recovery of demand for electricity,

lower generation volumes from wind farms also played a part. In addition, gas-fired power

plants were less competitive, due to soaring fuel costs. We expect to return back to our

ambitious emission reduction path in 2022.

Our specific emissions, i. e. the amount of carbon dioxide emitted per megawatt hour of

electricity generated, amounted to 0.50 metric tons in the fiscal year that just came to a

close. The previous year’s figure stood at 0.47 metric tons.

of which:

Germany

United Kingdom

Netherlands

Turkey

Coal / Nuclear

RWE Group

2.6

12.8

8.0

1.6

55.9

80.9

3.5

9.1

6.1

1.6

46.7

67.0

+ / –

4.7

– 0.9

3.7

1.9

–

9.2

13.9

1 No longer considers CO2 emissions from generation assets in which RWE does not own the majority, but which we

have long-term usage rights to. Prior-year figures adjusted accordingly.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

62.6 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 62.6 million metric tons of lignite last year. This was 11.2 million metric tons more

than in the preceding year, owing to the higher utilisation of our power plants. We used the

lion’s share, or 53.2 million metric tons, of lignite to generate electricity. The remainder was

used to manufacture refined products (e. g. lignite powder, hearth furnace coke and

briquettes) and, to a limited extent, to generate process steam and district heat.

Electricity and gas sales 4 % and 25 % higher year on year. Last year, we sold 203,101 GWh

of electricity and 45,721 GWh of gas. These transactions were largely carried out by the

Supply & Trading segment. We sold 4 % more of our main product, electricity. This growth can

be traced back to the rise in generation from our power stations, which we usually sell

externally via our Group company RWE Supply & Trading. Gas deliveries were up 25 %. One

contributing factor was that RWE Supply & Trading won new key accounts, most notably

municipal utilities. In addition, existing customers increased their gas purchases from us.

External revenue 79 % up on 2020. Revenue from external customers (excluding natural

gas tax and electricity tax) totalled €24,526 million in 2021. This represents a 79 %

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other

Core business

Coal / Nuclear

RWE Group (excluding natural gas tax /
electricity tax)

2021

2020

+ / –

688

2,324

1,315

19,296

332

1,855

1,056

9,597

356

469

259

9,699

– 5

23,627

12,849

10,778

899

839

24,526

13,688

10,838

Natural gas tax / electricity tax

235

208

RWE Group

24,761

13,896

10,865

External revenue by product
€ million

Electricity revenue

2021

2020

+ / –

20,476

11,701

8,775

increase over the previous year. Electricity revenue grew by 75 % to €20,476 million,

of which:

primarily due to the steep rise in the price of electricity last year. Price effects were also the

main reason why our gas revenue quadrupled to €2,142 million. Additional information on

the development of commodity quotations can be found on pages 38 et seq.

One key performance indicator that is of particular interest to Sustainability investors is the

portion of our revenue accounted for by coal-fired generation and other coal products. In

the fiscal year that just ended, this share was 22 % (previous year: 23 %).

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Core business

Coal / Nuclear

Gas revenue

of which: Supply & Trading

Other revenue

688

2,107

877

16,540

20,212

264

2,142

1,908

332

1,676

684

8,775

11,468

233

534

529

1,453

356

431

193

7,765

8,744

1,608

1,613

455

RWE Group (excluding natural gas tax /
electricity tax)

24,526

13,688

10,838

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Adjusted EBITDA1
€ million

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other, consolidation

Core business

Coal / Nuclear

RWE Group

2021

2020

+ / –

Our adjusted EBITDA was 11 % up on the prior year. In addition to the exceptional trading

performance, improved margins of our lignite and nuclear power stations came to bear in

1,110

1,069

particular. This was contrasted by significant charges in our US wind energy business. As set

258

731

769

– 107

2,761

889

3,650

523

621

539

– 25

2,727

559

3,286

– 265

110

230

– 82

330

364

out on page 43, in early 2021, the worst cold snap in a century in Texas led to unscheduled

plant outages, forcing us to fulfil existing electricity supply commitments with expensive

power purchases on the market.

The following developments were observed in the segments:

• Offshore Wind: Adjusted EBITDA posted here amounted to €1,110 million. We had

forecast a range of €1,050 million to €1,250 million. We recorded a gain of 4 %

compared to 2020 (€1,069 million). One contributing factor was that we took a majority

interest in the Rampion offshore wind farm in the UK as of 1 April 2021 and have fully

consolidated this stake since then. Furthermore, we benefited from the partial

commissioning of the Triton Knoll offshore wind farm. This was contrasted by earnings

1 Some prior-year figures restated due to a change in the recognition of tax benefits to subsidise renewable energy

in the USA (see commentary on page 47).

Adjusted EBITDA of €3,650 million clearly exceeds expectations. Our adjusted earnings

shortfalls caused by the reduced utilisation of our assets due to the weather.

before interest, taxes, depreciation and amortisation (adjusted EBITDA) amounted to

€3,650 million. This is far above our March 2021 forecast. The outlook we published on

• Onshore Wind / Solar: In this segment, adjusted EBITDA totalled €258 million. We were

pages 67 et seq. of the 2020 Annual Report envisaged a range of €2,650 million to

therefore slightly above the targeted range of €50 million to €250 million. Improved

€3,050 million. Adjusted EBITDA from our core business was also significantly better than

margins resulting from the recent significant increase in wholesale electricity prices were

originally expected, totalling €2,761 million. We had anticipated a figure between

the main driver. Compared to the previous year (€523 million) however, adjusted EBITDA

€1,800 million and €2,200 million. The fact that we easily exceeded our forecast was

dropped considerably. This was primarily due to about €400 million in lost earnings

predominantly thanks to an outstanding energy trading performance. We also closed the

caused by the severe cold snap in Texas in February 2021. Besides this exceptional effect,

fiscal year above the forecast ranges in the Onshore Wind / Solar and Hydro / Biomass / Gas

lower wind speeds also came to bear. By contrast, we benefited from the commissioning

segments.

of new generation assets and capital gains on the sale of stakes in the US wind farms

Stella, Cranell, East Raymond and West Raymond.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

• Hydro / Biomass / Gas: Here, adjusted EBITDA came in at €731 million. This clearly

exceeded the forecast range of €500 million to €600 million. Our outlook was based on

Reconciliation to net income1
€ million

2021

2020

+ / –

the assumption that income from the commercial optimisation of our power plant

Adjusted EBITDA

3,650

3,286

364

2,185

– 650

– 13

1,522

– 690

832

–

832

1,823

– 104

– 454

1,265

– 376

889

221

1,110

– 2

362

– 546

441

257

– 314

– 57

– 221

– 278

dispatch would fall short of the high level achieved in 2020. In fact, however, it rose,

especially in the fourth quarter. This is why we also exceeded adjusted EBITDA registered

in the prior year (€621 million). The markedly improved availability of the Eemshaven

power station also played a role.

• Supply & Trading: Our performance in the trading business was exceptional. This led to

€769 million in adjusted EBITDA, which clearly surpassed the envisaged range of

Adjusted EBIT

Non-operating result

Financial result

Income from continuing operations before taxes

€150 million to €350 million. We also exceeded the previous year’s figure, which was very

Taxes on income

high (€539 million). In addition to the strong trading performance, improved earnings in

Income from continuing operations

Operating depreciation, amortisation and
impairment losses

– 1,465

– 1,463

the gas business also came to bear.

• Coal / Nuclear: Adjusted EBITDA recorded in this segment amounted to €889 million,

which was within the anticipated range of €800 million to €900 million. This represents

strong growth compared to the preceding year (€559 million). The main reason for this

was that we realised higher wholesale prices for electricity generated by our lignite-fired

and nuclear power plants than in 2020. We had already sold forward nearly all of the

production of these stations in earlier years. Income from the commercial optimisation of

Income from discontinued operations

Income

of which:

Non-controlling interests

111

Net income / income attributable
to RWE AG shareholders

721

1,051

– 330

1 Some prior-year figures restated due to a change in the recognition of tax benefits to subsidise renewable energy

power plant dispatch also rose. Furthermore, we benefited from the improved availability

in the USA (see commentary on page 47).

of our nuclear power stations. This was contrasted by earnings shortfalls caused by

extensive maintenance at lignite-fired power plants. Further burdens stemmed from the

Reconciliation to net income: Exceptional effects overshadow operating development.

implementation of the German Coal Phaseout Act and the floods in the Rhenish lignite

The reconciliation from adjusted EBITDA to net income was greatly affected by one-off

mining region, on which we report on page 44.

effects, which had a negative impact in net terms. The following is an overview of the

changes to the items of the reconciliation statement.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Adjusted EBIT1
€ million

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other, consolidation

Core business

Coal / Nuclear

RWE Group

2021

2020

+ / –

Non-operating result1
€ million

2021

2020

– 61

Disposal result

– 283

Effects on income from the valuation of derivatives

Other

Non-operating result

+ / –

– 503

– 168

– 650

1,886

– 2,389

– 2,003

– 104

1,835

– 546

636

– 145

418

721

– 106

1,524

661

2,185

697

138

283

496

– 25

1,589

234

1,823

135

225

– 81

– 65

427

362

1 Some prior-year figures restated due to a change in the recognition of tax benefits to subsidise renewable energy

in the USA (see commentary on page 47).

The non-operating result, in which we recognise certain items which are not related to

operations or the period being reviewed, amounted to – €650 million as opposed to

– €104 million in the preceding fiscal year. Its components developed as follows:

• At €21 million, income from the disposal of investments and assets was essentially

1 Some prior-year figures restated due to a change in the recognition of tax benefits to subsidise renewable energy

in the USA (see commentary on page 47).

The RWE Group’s adjusted EBIT rose by 20 % to €2,185 million, exceeding the range of

immaterial, as in the previous year (€13 million). It largely resulted from the sale of small

€1,150 million to €1,550 million forecast in March 2021. This growth was driven by the

run-of-river power stations in France and Portugal (see page 43).

same factors that bolstered adjusted EBITDA. The difference between these two key figures

is that operating depreciation and amortisation, which at €1,465 million was basically on a

• Effects from the valuation of derivatives reduced earnings by €503 million, after

par with the previous year’s level (€1,463 million), is included in adjusted EBIT, but not in

increasing them by €1,886 million in the preceding year. Such impacts are only temporary

adjusted EBITDA.

and are primarily due 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 a profit or loss

when they are realised.

• In the ‘other’ line item, we reported a loss of €168 million, which was much smaller than in

the previous year (€2,003 million). Income in 2020 was curtailed by about €1.8 billion in

impairments recognised for power plants and opencast lignite mines. Impairments

relating to our lignite business were also recognised in the year being reviewed. They

amounted to €780 million and are explained in more detail in the Notes on pages 112 et

seq. Income benefited from the €880 million compensation for the nuclear phaseout in

Germany we received from the government in November 2021.

RWE Annual Report 20211
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

2021

2020

+ / –

Income from continuing operations before tax grew by €257 million to €1,522 million.

260

186

– 340

– 80

– 138

– 121

205

– 13

283

182

– 296

– 13

– 255

– 186

– 454

At 45 %, our effective tax rate was unusually high. One contributing factor was that we wrote

– 23

off or did not recognise deferred tax assets in RWE AG’s tax group, because we are unlikely

– 44

– 67

117

391

441

to be able to use the deferred tax claims in the foreseeable future. Furthermore, an increase

in the UK corporation tax rate effective as of 2023 drove up deferred tax liabilities. By

contrast, the aforementioned tax refund for earlier years provided some relief.

In the fiscal year being reviewed, there was no income from discontinued operations. In the

preceding year, this figure amounted to €221 million. It stemmed from the stake in Slovak

energy utility VSE, which we sold to E.ON in August 2020.

Non-controlling interests in income rose by €52 million to €111 million. This is because we

started fully consolidating Rampion in April 2021 and reduced our stake in the Humber

Our financial result improved by €441 million to – €13 million. Its components changed as

Gateway wind farm in the UK North Sea (219 MW) from 100 % to 51 % at the end of 2020.

follows:

Consequently, we now state non-controlling interests of the co-owners of these wind farms.

A counteracting effect was felt from the sale of VSE: in 2020, a profit of €34 million had

• Net interest dropped by €67 million to – €80 million, in part due to higher interest

been assigned to the company’s co-shareholders.

expenses in connection with currency hedges and higher costs incurred to pledge

collateral in energy trading. Net interest includes the dividend on our 15 % stake in

The RWE Group’s net income amounted to €721 million (previous year: €1,051 million).

E.ON, which totalled €186 million (previous year: €182 million).

This resulted in earnings per share of €1.07 (previous year: €1.65). The number of RWE

shares outstanding used to calculate this indicator totalled 676.2 million compared to

• The interest accretion to non-current provisions reduced income by €138 million. In the

637.3 million in the previous year. These figures are annual averages. In August 2020,

previous year, the decline was more substantial (€255 million) because we had lowered

we issued 61.5 million new RWE shares via a capital increase.

the discount rate applied when calculating our mining provisions and the resulting

increase in the present value of the obligations had in part been recognised as an

expense in the interest accretion.

• The other financial result rose by €391 million to €205 million. The main reason for the

increase was a one-off effect of interest claims in relation to a tax refund for earlier

assessment periods. Furthermore, a charge incurred in the prior year did not recur: in

March 2020, we suffered substantial losses on security holdings owing to the turmoil on

financial markets caused by the COVID-19 pandemic.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Reconciliation to adjusted net income 2021
€ million

Adjusted EBIT

Non-operating result

Financial result

Taxes on income

Income

of which:

Non-controlling interests

Net income / income attributable
to RWE AG shareholders

Original
figures

2,185

– 650

– 13

– 690

832

111

721

Adjustment

Adjusted
figures

–

2,185

Capital expenditure on property, plant and
equipment and on intangible assets1
€ million

650

– 196

394

848

–

– 209

– 296

1,680

–

111

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other, consolidation

Core business

Coal / Nuclear

848

1,569

RWE Group

2021

2020

+ / –

1,683

1,404

294

3,430

259

3,689

756

1,154

153

–

2,106

183

927

250

141

1,324

2,2852

1,404

1 Table only shows cash investments.
2 Including a – €4 million consolidation effect between the core business and the Coal / Nuclear segment.

Adjusted net income higher than expected. Adjusted net income amounted to

€1,569 million. Due to the unexpectedly positive development of operating earnings, it was

well above the guided range of €750 million to €1,100 million. The prior-year figure of

€1,257 million was also clearly exceeded. To calculate adjusted net income, we corrected

Capital expenditure on financial assets1
€ million

net income according to IFRS by deducting the non-operating result and major special

Offshore Wind

items in the financial result from it. Instead of the actual tax rate, we applied a rate of 15 %,

which reflects the tax level net of one-off effects that can theoretically be expected.

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other, consolidation

Core business

Coal / Nuclear

RWE Group

1 Table only shows cash investments.

2021

2020

+ / –

–

520

408

115

1,072

1,073

– 493

– 381

– 109

– 11

– 992

– 1

– 993

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Business performance

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Marked increase in capital expenditure on renewable energy. In the past fiscal year, our

Workforce 1

31 Dec 2021 31 Dec 2020

capital spending totalled €3,769 million, 12 % more than in 2020 (€3,358 million). The lion’s

share of the funds was dedicated to the Offshore Wind (45 %) and Onshore Wind / Solar

(38 %) segments.

Our capital expenditure on property, plant and equipment and intangible assets amounted

to €3,689 million (previous year: €2,285 million). The Triton Knoll wind farm in the UK North

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Other2

Sea received the biggest share of investments. Significant sums were also spent to build the

Core business

Sofia wind farm off the eastern coast of England (1,400 MW), the Kaskasi wind farm near

Heligoland (342 MW), the Blackjack Creek (240 MW) and El Algodon Alto (200 MW) onshore

wind farms in Texas, and the Hickory Park solar farm in the US state of Georgia (196 MW

plus battery storage). In addition, we made advance payments for the rights we secured in

an auction in February 2021 to develop new offshore wind areas in the UK North Sea

(see page 40).

Coal / Nuclear

RWE Group

1 Converted to full-time positions.
2 This item exclusively comprises employees of the holding company RWE AG.

1,277

2,146

2,606

1,804

467

8,300

9,946

18,246

1,119

2,402

2,667

1,790

425

8,403

11,095

19,498

+ / –

158

– 256

– 61

– 103

– 1,149

– 1,252

At €80 million, capital expenditure on financial assets was much lower than the high figure

had 18,246 people on its payroll, of which 13,585 were employed in Germany and

registered in the prior year (€1,073 million), which included our acquisitions of the 20 %

4,661 worked abroad. Part-time positions were considered in these numbers on a pro-rata

stake in the Rampion offshore wind farm and Nordex’s European development business

basis. Personnel figures were down markedly compared to the end of 2020 (– 1,252). We

Headcount significantly down year on year. As of 31 December 2021, the RWE Group

(see page 43 of the 2020 Annual Report).

recorded a significant decline (– 1,149) in the Coal / Nuclear segment where many employees

accepted early retirement offers as part of the German coal phaseout. Although we created

a large number of jobs by expanding renewable energy, headcount in our core business declined

somewhat. The main reason for this was that we sold large parts of the Belectric Group.

Staff figures do not include apprentices or trainees. At the end of 2021, 785 young adults

were learning a profession at RWE, compared to 750 in the previous year.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Financial position and net worth

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.7 Financial position and net worth

Our financial position and net worth continued to improve in 2021. Even though we

• For short-term refinancing, we have a Commercial Paper Programme, which was updated

invested billions in the expansion of renewables, our net debt fell to less than zero. As of

in 2021. It allows us to raise funds equivalent to up to €5 billion on the money market.

the balance-sheet date, the RWE Group posted net assets of €360 million. This pleasing

During the past fiscal year, we accessed a large portion of this funding volume: at times,

development was particularly thanks to our strong cash flow from operating activities.

a total of up to €3 billion in commercial paper was outstanding.

Our robust credit ratings also underline how strong our financial position is. The

agencies Moody’s and Fitch raised RWE’s credit rating by one notch last year. Our

• To secure our liquidity, we also have access to a €5 billion syndicated credit line extended

current long-term ratings are investment grade, at Baa2 and BBB+ respectively.

by a consortium of 27 international banks. It consists of two tranches: one of €2 billion,

RWE AG bears responsibility for procuring funds. Responsibility for Group financing is

centralised at RWE AG. As the parent company, RWE AG is responsible for acquiring funds

from banks or the financial markets. Subsidiaries only raise debt capital directly in specific

which expires in April 2022, and one of €3 billion, which is available through to April 2026.

At our initiative, sustainability criteria were added to the conditions of the second tranche

last year. Among other things, the conditions now depend on the development of the
following three indicators: the share of renewables in RWE’s generation portfolio, the CO2
intensity of our plants and the percentage of our capex that is classified as sustainable in

cases, for example if it is advantageous economically to make use of local credit and capital

accordance with the EU taxonomy regulation. We have set goals for all three of these

markets. RWE AG also acts as a co-ordinator when subsidiaries assume contingent

criteria. If we do not achieve the targets, we will have to pay higher interest and

liabilities. This allows us to manage and monitor financial risks centrally. Moreover, it

commitment fees. Half of the additional expenses would be directed to non-profit

strengthens our position when negotiating with banks, business partners, suppliers and

organisations. This new structure for the credit line underlines our commitment to our

customers.

emissions reduction strategy.

Tools for raising debt capital. We cover most of our financing needs with earnings from

Green bonds worth €1,850 million issued. For the first time ever, RWE AG issued green

our operating activities. In addition, we have a wide range of tools to procure debt capital:

bonds in 2021. In June, we placed a 10-year bond with a nominal volume of €500 million

and an annual coupon of 0.625 %, followed by two issues in November: a 7-year bond of

• Our Debt Issuance Programme (DIP) gives us latitude in raising debt capital for the long

€750 million and a 12-year bond of €600 million, with annual coupons of 0.5 % and 1.0 %,

term. Our current DIP allows us to issue bonds with a total face value of up to €10 billion.

respectively. Additional information on these three debt securities can be found on page 21.

By issuing three green bonds, we exercised this financing option in 2021 for the first time

The proceeds of green bonds are tied to specific purposes. We will use these funds

in six years.

exclusively for wind and solar projects.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Financial position and net worth

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Bond volume rises to €2.4 billion. RWE bonds with a total face value equivalent to

€2.4 billion were outstanding at the end of 2021, versus €0.6 billion in the previous year.

Cash flow statement1
€ million

The significant increase was due to the aforementioned issues. Along with the three green

Funds from operations

bonds, RWE still has two outstanding hybrid bonds: one of €282 million with a 3.5 % coupon

Change in working capital

2021

2020

+ / –

7,103

4,108

2,995

171

154

and one of US$317 million with a 6.625 % coupon. Due to early buybacks in October 2017,

the outstanding amounts are below the issuance volumes of €550 million and

US$500 million. The earliest redemption dates for the two hybrid bonds are in April 2025

and March 2026, respectively.

Cash flows from operating activities of continuing operations

7,274

4,125

3,149

Cash flows from investing activities of continuing operations

– 7,738

– 4,278

– 3,460

Cash flows from financing activities of continuing operations

1,457

1,769

– 312

Effects of changes in foreign exchange rates and other changes
in value on cash and cash equivalents

– 34

Credit rating of RWE AG

Moody’s

Fitch

Total net changes in cash and cash equivalents

1,051

1,582

– 531

As of March 2022

Long-term debt

Senior debt

Subordinated debt (hybrid bonds)

Short-term debt

Outlook

Current

Baa2

Baa3

Ba1

P-2

Ba2

P-3

BBB+

BBB-

BBB

BB+

Cash flows from operating activities of continuing operations

7,274

4,125

3,149

Minus capital expenditure

– 3,769

– 3,358

– 411

Plus proceeds from divestitures / asset disposals

1,057

365

692

Free cash flow

4,562

1,132

3,430

Stable

Positive

Stable

1 All items solely relate to continuing operations; some prior-year figures restated due to a change in the recognition

of tax benefits to subsidise renewables in the USA (see commentary on page 47).

Solid investment grade rating. The conditions at which we can raise debt largely depend

Robust improvement in operating cash flow. Our cash flows from operating activities of

on rating agencies’ assessment of our creditworthiness. Moody’s and Fitch make such

continuing operations amounted to €7,274 million, clearly exceeding the prior-year figure

evaluations on request from us. In the past year, both agencies raised their credit rating for

(€4,125 million). The good earnings situation and the compensation paid to us in November

RWE by one notch. RWE’s long-term creditworthiness is now rated Baa2 (Moody’s) and BBB+

2021 by the German Federal government for the phaseout of nuclear energy had positive

(Fitch), both with a stable outlook. These are investment grade ratings. The ratings for our

hybrid bonds and current financial liabilities are now also one level higher (see table above).

Moody’s and Fitch cited RWE’s transformation into a leading renewables company as the

effects. The main reason for the increase, however, were high margin payments for forward
contracts for electricity, fuel and CO2 certificates. RWE concludes contracts of this kind to
reduce earnings risk exposure. For exchange-traded derivatives, we first have to provide

reason for the rating improvement. This business is characterised by attractive and

an initial margin. Additionally, over the term of the contract, we receive or pay variation

relatively stable earnings.

margins, depending on how the market value of the derivative changes. So-called collateral

has to be provided for over-the-counter derivative transactions.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Financial position and net worth

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

During the year under review, we received a high amount of variation margins, which are

included in cash flow from our operating activities. This was contrasted against significant

Net assets / net debt1
€ million

outflows of funds for initial margins and collaterals, which we reported in cash flows from

Cash and cash equivalents

financing activities.

Investing activities of continuing operations led to a cash outflow of €7,738 million (previous

year: €4,278 million). €3,769 million of this sum stemmed from our capital expenditure on

property, plant and equipment and financial assets. Moreover, we made significant

investments in securities and an extraordinary increase of the assets used to meet pension

obligations in the amount of €1,092 million. This was contrasted by revenues from the sale

Marketable securities

Other financial assets

Financial assets

31 Dec 2021 31 Dec 2020

+ / –

5,825

8,347

12,403

26,575

4,774

4,517

2,507

1,051

3,830

9,896

11,798

14,777

Bonds, other notes payable, bank debt,
commercial paper

– 10,704

– 2,160

– 8,544

Hedging of bond currency risk

– 9

– 31

of business activities and shareholdings of €1,057 million. The most important transactions

Other financial liabilities

were the sale of our stakes in the US wind farms Stella, Cranell, East Raymond and West

Financial liabilities

– 7,090

– 3,038

– 4,052

– 17,803

– 5,229

– 12,574

Raymond as well as the disposal of the grid connection for the Rampion offshore wind farm

Plus 50 % of the hybrid capital stated as debt

290

278

in the UK (see page 41).

Financing activities of continuing operations produced cash inflows of €1,457 million

(previous year: €1,769 million). In 2021, we recorded high income from bank loans taken

out, the issuance of commercial paper and the three green bonds we issued, which are

discussed on page 60. However, we also had to make substantial payments for initial

Net financial assets
(including correction of hybrid capital)

9,062

6,847

Provisions for pensions and similar obligations

– 1,934

– 3,864

Surplus of plan assets over benefit obligations

Provisions for nuclear waste management

459

– 6,029

– 1,198

360

172

– 6,451

– 1,136

– 4,432

2,215

1,930

287

422

– 62

4,792

margins and collaterals. Outflows of funds were also registered due to dividend payments

Provisions for dismantling wind farms

to RWE shareholders and minority shareholders.

Net assets (+) / net debt (–)

On balance, the aforementioned cash flows from operating, investing and financing

activities increased our cash and cash equivalents by €1,051 million.

1 Mining provisions are not included in net debt. The same holds true for the assets which we attribute to them.
At present, this includes our 15 % stake in E.ON and our claim for state compensation for the German lignite
phaseout in the amount of €2.6 billion.

Cash flows from operating activities, less capital expenditures, plus proceeds from

divestments and asset disposals, results in free cash flow. This amounted to €4,562 million,

up substantially on the prior-year figure (€1,132 million).

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Financial position and net worth

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

Net assets of €360 million. Our net debt declined by €4,792 million versus the previous

Moderate decline in off-balance-sheet fuel purchase obligations. Net debt does not

year (€4,432 million). As a result of this, we posted a net asset position of €360 million as of

include our off-balance-sheet obligations, which largely stem from long-term purchase

31 December 2021. The main reason for this was the excellent free cash flow. The market-

agreements for fuel and electricity. As of the balance-sheet date, our payment obligations

driven increase in the discount rates we use to calculate the present value of pension

from material fuel procurement contracts amounted to €22.3 billion (previous year:

obligations also played a role, as it resulted in a decline in provisions for pensions. A similar

€23.6 billion). In relation to electricity procurement, they amounted to €7.1 billion and were

effect was exerted by the income generated from managing the plan assets for our pension

thus as high as in 2020. The figures are based on assumptions regarding the prospective

obligations. While the aforementioned extraordinary funding of these assets in the amount

development of commodity prices. Our purchase commitments rose from €2.1 billion to

of €1,092 million caused provisions to decline, it was coupled with a corresponding outflow

€5.6 billion over the course of the year. Further off-balance-sheet obligations result, inter

of funds and thus did not result in a reduction of debt. Dividend payments lowered our net

alia, from liabilities for pension commitments that employees of our former subsidiary

financial position by €730 million.

innogy had earned at RWE up to its IPO in 2016.

Leverage factor below zero. One of our key management parameters is the ratio of net

Sharp increase in balance-sheet total due to temporary effects from commodity

debt to the adjusted EBITDA of the core business, also referred to as the leverage factor.

derivatives. At 31 December 2021, the Group balance sheet was strongly influenced by

This figure is more indicative than total liabilities, as it also reflects earning power and

changes in commodity derivatives. They rose by €56.4 billion on the assets side and

therefore our ability to meet our debt obligations. We set the upper limit for the leverage

€68.2 billion on the liabilities side. This was driven by the extreme increase in prices of

factor at 3.0 in order to secure our financial flexibility. As the RWE Group did not have any

electricity and natural gas. The increase in these derivatives was the main reason that the

net debt as of the balance-sheet date and posted a net asset position, this indicator was

balance-sheet total of €142.3 billion was more than twice as high as in 2020 (€61.6 billion).

below zero. However, the leverage factor should increase in the medium term, above all due

Another reason for this development was that we raised a large amount of debt capital.

to growth investments in our green core business, which we will also finance using debt

Among other things, the funds were used to collateralise derivative transactions, which

capital.

resulted in a corresponding build-up of receivables. At €17.0 billion, our equity was slightly

below last year’s level. The equity ratio amounted to 11.9 %. Due to the increase in the

balance-sheet total, this figure was significantly lower compared to 2020 (28.7 %).

RWE Annual Report 20211
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 2021

31 Dec 2020

31 Dec 2021

31 Dec 2020

€ million

Assets

Non-current assets

of which:

Intangible assets

Property, plant and equipment

Current assets

of which:

38,863

27.3

34,418

55.8

Non-current liabilities

Equity and liabilities

Equity

5,884

19,984

103,446

4.1

14.0

72.7

4,899

17,902

27,224

7.9

29.0

44.2

of which:

Provisions

Financial liabilities

Current liabilities

of which:

Trade accounts receivable

6,470

4.5

3,007

4.9

Provisions

Receivables and
other assets

Marketable securities

Assets held for sale

79,626

56.0

12,531

20.3

Trade accounts payable

8,040

657

5.6

0.5

4,219

1,061

6.8

1.7

Other liabilities

Liabilities held for sale

Financial liabilities

16,996

28,306

16,943

6,798

97,007

4,268

10,996

4,428

77,315

–

11.9

19.9

11.9

4.8

68.2

3.0

7.7

3.1

54.4

–

17,706

27,435

19,470

3,951

16,501

3,004

1,247

2,387

9,282

581

28.7

44.5

31.6

6.4

26.8

4.9

2.0

3.9

15.1

0.9

Total

142,309

100.0

61,642

100.0

Total

142,309

100.0

61,642

100.0

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewables in the USA (see page 47) and retroactive adjustments to the first-time consolidation of operations which RWE acquired

from Nordex in 2020 (see page 95).

RWE Annual Report 20211
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

2.8 Notes to the financial statements of RWE AG (holding company)

The financial statements of RWE AG are significantly influenced by the business

performance of its subsidiaries. In sum, the profit transfers of these companies recorded

an increase in 2021. This was contrasted by an impairment recognised for a subsidiary.

We posted positive developments in other income and expenses as well as in net

interest. Overall, RWE AG’s earnings position has therefore improved: at €1,108 million,

RWE AG’s net profit was substantially higher than in 2020. We intend to raise the

dividend and will therefore propose a payment of €0.90 per share to the Annual

General Meeting taking place in April 2022. This constitutes an increase of €0.05

Net profit

Income statement of RWE AG (abridged)
€ million

2021

2020

+ / –

Income from financial assets

Net interest

Other income and expenses

Taxes on income

Transfer to other retained earnings

Distributable profit

378

318

132

280

1,108

– 499

609

1,114

– 72

– 712

250

580

– 5

575

– 736

390

844

528

– 494

versus last year.

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

Total assets

Equity and liabilities

Equity

Provisions

Other liabilities

Total equity and liabilities

Accounts payable to affiliated companies

18,743

18,905

31 Dec 2021 31 Dec 2020

+ / –

17,866

20,524

– 2,658

Code and the German Stock Corporation Act. The financial statements are submitted

Financial statements in accordance with German commercial law. RWE AG prepares

its financial statements in compliance with the rules set out in the German Commercial

7,922

616

11,709

38,113

2,094

519

6,664

29,801

8,359

2,245

7,826

1,996

8,766

1,074

5,828

5,045

8,312

533

249

– 162

7,692

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/financial-reports.

Assets. RWE AG had €38.1 billion in total assets as of 31 December 2021 (previous year:

€29.8 billion). Accounts receivable from affiliated companies registered a significant rise.

This was mainly because we made cash and cash equivalents available to our subsidiary

RWE Supply & Trading as collateral for commodity forward transactions. We also posted

significant increases in ‘marketable securities and cash and cash equivalents’ and ‘other

liabilities’. In the year under review, we increased our liabilities significantly by way of bank

loans, commercial paper and green bonds. These funds were, inter alia, used to secure

liquidity, with a portion thereof, e. g. the proceeds generated by bonds issued, earmarked for

growth investments. RWE AG’s equity rose by €533 million to €8,359 million. However, the

38,113

29,801

8,312

equity ratio decreased from 26.3 % to 21.9 %, due to the increase in the balance sheet total.

RWE Annual Report 20211
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

Financial position. RWE AG is set up solidly in economic terms with high levels of cash and

• In 2021, we recorded tax income of €280 million (previous year: €250 million). This is

cash equivalents and a number of financing tools at its disposal that it can use flexibly.

largely due to the aforementioned tax refunds for earlier assessment periods.

Accordingly, rating agencies Moody’s and Fitch classify our creditworthiness as ‘investment

grade’. Last year, they both raised our respective credit rating by one level to Baa2 (Moody’s)

• Versus 2020 (€580 million), the presented earnings figures led to a considerably higher

and BBB+ (Fitch). You can find detailed information on RWE’s financial situation and on our

net profit of €1,108 million.

financing activities in the year under review on pages 60 et seqq.

• The distributable profit of €609 million corresponds to the planned payment of a dividend

Earnings position. RWE AG’s earnings position improved compared to 2020. The main

of €0.90 per share to our shareholders.

items on the income statement developed as follows:

• Income from financial assets dropped by €736 million to €378 million. One reason for

performance of its subsidiaries. Our current assessment makes us confident that we will

this was an impairment loss recognised in relation to our stake in RWE Power. However,

achieve a net profit in 2022 that offers the necessary margins for the intended dividend of

this company’s profit transfer was higher than in 2020, which was attributable to

€0.90. However, it is unlikely to match the level achieved in 2021.

Outlook for 2022. RWE AG’s earnings prospects will largely depend on the business

improved generation margins and lower charges resulting from impairments,

depreciation and amortisation. RWE Nuclear also gained considerable ground. This was

Corporate governance declaration in accordance with Sections 289f and 315d of the

due to the compensation we received from the German government for the nuclear

German Commercial Code. On 15 February 2022, the Executive Board and the Supervisory

phaseout (see page 36). By contrast, income from our stake in RWE Supply & Trading

Board of RWE AG issued its Corporate Governance Declaration in accordance with Sections

decreased.

289f and 315d of the German Commercial Code. The declaration contains the Corporate

Governance Report and has been published at www.rwe.com/corporate-governance-

• Net interest increased by €390 million to €318 million. This was in part due to a rise in

declaration.

capital gains from the management of plan assets used to cover our pension obligations

and was further boosted by interest claims relating to tax refunds for earlier assessment

periods.

• The ‘other income and expenses’ line item improved by €844 million to €132 million. In

the year under review, we recognised write-backs for financial accounts receivable from

a Dutch subsidiary. This reversed impairments in previous years to some extent.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Outlook

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.9 Outlook

We are confident of being able to pick up where we left off last year in terms of our

Our power production for 2022 has already largely been sold forward. Wholesale

earnings position. As things stand, we anticipate adjusted EBITDA of €3.6 billion to

electricity prices rose considerably last year, surging again in early 2022 due to the Ukraine

€4.0 billion. Our core business is expected to close fiscal 2022 up on last year’s

conflict. Their development during the current year is impossible to predict, but market

earnings, which had been heavily impacted by the extreme weather conditions in Texas.

fluctuations would only have a moderate impact on this year’s generation margins as we

The commissioning of new generation capacities is set to have a positive effect. We also

expect to see improved electricity margins and better wind conditions. After last year’s

extraordinarily successful energy trading performance, we anticipate income to

have already largely sold forward our electricity production for 2022 and hedged the prices
of the required fuel and CO2 emission allowances. These transactions have been concluded
up to three years ahead, and already reflect the rise in electricity prices in 2021 to a limited

normalise. Not yet included in our forecast is the fallout of the Ukraine conflict, which is

extent. A large portion of electricity generated by RWE wind farms, where revenue is market-

difficult to assess. How events unfold and how sanctions against Russia affect

dependant, has also already been sold forward.

European energy supply may have a significant impact on our business.

Ukraine crisis puts economic growth at risk. Forecasts concerning the economic

Forecast
€ million

development in our core markets are linked to considerable uncertainties related to the

Adjusted EBITDA

Ukraine conflict. Estimates available when the combined review of operations was written

had been compiled before the war broke out. Based on these figures, world economic

output could increase by about 4 % in 2022. Growth rates forecast for the Eurozone,

Germany and the USA are of a similar order, while those for the United Kingdom and the

Netherlands are expected to reach 3 %. Should energy prices remain extremely high due to

the Ukraine conflict, then the economy may well prove to be less dynamic.

Rise in electricity consumption anticipated. Higher economic output is generally

associated with additional demand for electricity. However, this is contrasted by continued

energy savings which will probably have a slightly dampening effect. Provided the

aforementioned economic prognoses prove to be accurate, demand for electricity in our

key markets Germany, the Netherlands, the UK and the USA should be between 1 % and 3 %

higher than in 2021.

of which:

Core business

of which:

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

Coal / Nuclear

Adjusted EBIT

Adjusted net income

2021 actual Outlook for 2022

3,650

3,600 – 4,000

2,761

2,900 – 3,300

1,110

1,350 – 1,600

258

731

769

889

650 – 800

700 – 900

150 – 350

650 – 750

2,185

1,569

2,000 – 2,400

1,300 – 1,700

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Outlook

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2022 adjusted EBITDA of €3.6 billion to €4.0 billion expected. Subject to the risks

• Onshore Wind / Solar: Our prognosis for this segment is adjusted EBITDA of €650 million

associated with the Ukraine conflict, which are difficult to gauge, we expect this year’s

to €800 million, clearly surpassing last year’s level (€258 million). The main contributing

business performance to pick up where we left off in terms of our good operating result in

factor will be the non-recurrence of the one-off burden due to the cold snap in Texas

2021. We forecast adjusted EBITDA for the Group of €3,600 million to €4,000 million

in 2021. In addition, we anticipate higher generation volumes due to the commissioning

(previous year: €3,650 million) for 2022 and envisage a range of €2,900 million to

of new generation capacity and more favourable wind conditions. Higher generation

€3,300 million in the core business, thus exceeding last year’s figure (€2,761 million) which

margins will also help earnings to rise. This will be contrasted by an increase in expenditure

had been heavily burdened by an extreme cold snap in Texas in February 2021. We assume

on the development of growth projects. Furthermore, last year’s result included capital

the commissioning of new wind and solar farms and higher electricity margins to have

gains on the sale of majority stakes in Texan wind farms, which will not recur.

a positive effect on earnings. Moreover, we expect to see average wind speeds, which would

improve the utilisation of our wind farms compared to 2021, which was a low-wind year.

• Hydro / Biomass / Gas: Here, we forecast adjusted EBITDA of €700 million to

By contrast, we may well fall short of the very good result achieved in the energy trading

€900 million. Therefore, the segment stands a good chance of closing 2022 up on last

business last year. We anticipate a decline in EBITDA outside of the core business, i. e. in the

year’s figure (€731 million). Higher margins on electricity forward sales will play a

Coal / Nuclear segment, due to decommissioning of generation capacities, in particular the

significant role. Moreover, we expect capital gains from the sale of a former power plant

closure of the Gundremmingen C nuclear power station as of 31 December 2021.

site in the United Kingdom. Conversely, income from the commercial optimisation of

Based on anticipated operating depreciation and amortisation of approximately

from the British capacity market will also decline. An unscheduled outage at the Dutch

€1,600 million, adjusted EBIT should range between €2,000 million and €2,400 million

Claus C gas-fired power station is also expected to have a negative effect.

power plant dispatch may well fall short of the high level achieved in 2021. Payments

(last year: €2,185 million). Net income, which excludes major exceptional effects, is

expected to total between €1,300 million and €1,700 million (last year: €1,569 million).

• Supply & Trading: Earnings in this segment are difficult to predict due to the high volatility

We explain how this key figure is calculated on page 58.

of the trading business. Assuming that business develops normally, adjusted EBITDA

Our outlook broken down by segment is as follows:

should range between €150 million and €350 million. In this case, it would be

substantially below the unusually high level recorded last year (€769 million).

• Offshore Wind: Adjusted EBITDA in this business is forecast to total between €1,350 million

• Coal / Nuclear: Here, we anticipate a decrease in adjusted EBITDA to between

and €1,600 million (last year: €1,110 million). We expect the full commissioning of the

€650 million and €750 million (last year: €889 million). The main reason for this is the

Triton Knoll wind farm to play an important part. In addition, the first full consolidation of

closure of the Gundremmingen C nuclear power station and five lignite units in 2021.

the Rampion wind farm for the year as a whole is also likely to have a positive effect.

This will be contrasted by positive effects stemming from cost savings.

Furthermore, we anticipate higher margins than last year and expect utilisation of our

assets to improve due to the weather.

RWE Annual Report 20211
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Capital expenditure on property, plant and equipment markedly up on last year. In

comparison to 2021 (€3,689 million), we plan on substantially increasing our property,

plant and equipment and intangible asset investments. Considerable funds will be allocated

to building the Kaskasi and Sofia offshore wind farms near Heligoland and in the UK North

Sea, respectively. Further investments will be made in wind, solar and battery projects in the

USA and Europe as well as the construction of a gas-fired power station at Biblis, which is

needed to stabilise the electricity grid. Outside of the core business, in the Coal / Nuclear

segment, we plan to spend about €200 million on property, plant and equipment, mainly to

maintain our power stations and opencast mines.

Leverage factor to stay below upper limit of 3.0. One of our key management parameters

is the ratio of net debt to adjusted EBITDA of the core business, also referred to as the

leverage factor. As explained on page 63, the leverage factor fell below zero in 2021.

However, it will probably rise again in the long run. This is largely on account of our planned

growth investments, a portion of which we will finance by raising debt capital. It is virtually

impossible to make leverage factor forecasts for individual years primarily due to the

significant liquidity fluctuations that can result from the collateralisation of commodity

forward transactions. Nevertheless in 2022, we anticipate this key performance indicator to

be clearly below 3.0, i. e. the cap we have set for it.

Dividend for fiscal 2022. The Executive Board of RWE AG aims to pay a dividend of €0.90

per share for the 2022 financial year. This corresponds to the dividend that we intend to

propose to the Annual General Meeting on 28 April 2022 for fiscal 2021.

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2.10 Development of risks and opportunities

RWE’s transformation into a growth company in the green economy has improved our

A number of additional organisational units and committees have been entrusted with risk

risk-opportunity profile. Thanks to the predominantly high, stable revenues that can be

management tasks:

generated with renewables, not only are we more profitable, we are also more resilient.

However, Russia’s invasion of Ukraine has given rise to new uncertainties. What this

• Financial risks and credit risks are managed by the Finance & Credit Risk Department of

conflict will mean for the energy industry and the development of RWE’s business is

RWE AG.

impossible to predict. The German government’s plans to accelerate the phaseout of

coal-based power generation also pose a risk and could be associated with significant

• The Accounting Department ensures that financial reporting is free of material

financial burdens for RWE. However, if framework conditions prove favourable, they

misstatements. It has an accounting-related internal control system for this purpose.

also offer us the chance to proceed more quickly towards climate neutrality.

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 can be found on page 79.

Distribution of risk management tasks at RWE. Responsibility for Group risk management

lies with the parent company RWE AG. Its Executive Board monitors and manages the

• Risks from changes in commodity prices are monitored by RWE Supply & Trading in so

Group’s overall risk. In addition, it determines the general risk appetite of RWE and

far as they relate to the conventional electricity generation, energy trading and gas

defines upper limits for single risk positions. At the level below the Executive Board, the

businesses. Where these risks relate to the renewable energy business, they are managed

Controlling & Risk Management Department has the task of applying and constantly refining

by RWE Renewables.

the risk management system. It derives detailed limits for the individual business fields and

operating units from the risk caps set by the Executive Board. Its tasks also include checking

• Strategies to limit market risks in conventional electricity generation must be approved

the identified risks for completeness and plausibility and aggregating them. In so doing, it

by the Commodity Management Committee. This expert panel consists of the CFO of

receives support from the Risk Management Committee, which is composed of the heads

RWE AG, members of the Board of Directors of RWE Supply & Trading and a representative

of the following five RWE AG departments: (1) Controlling & Risk Management (Chair),

of the Controlling & Risk Management Department.

(2) Finance & Credit Risk, (3) Accounting, (4) Legal, Compliance & Insurance, and

(5) Strategy & Sustainability. The Controlling & Risk Management Department provides the

• We also have a committee tasked with mitigating market risks associated with the

Executive Board and the Supervisory Board of RWE AG with regular reports on the

renewable energy business. The Renewables Commodity Management Committee

company’s risk exposure.

consists of the CFO of RWE AG, members of the management of RWE Renewables and

a representative of the Controlling & Risk Management Department.

RWE Annual Report 20211
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Under the expert management of the aforementioned organisational units, RWE AG and

its subsidiaries are responsible for identifying risks early, assessing them correctly and

managing them in compliance with corporate standards. Internal Audit regularly verifies

the quality and functionality of our risk management system. The Executive Board formally

establishes the Group’s risk bearing capacity. This took place by way of a resolution dated

23 November 2021.

Risk identification and assessment. Risks and opportunities are defined as negative or

positive deviations from expected figures. Their management is an integral and continuous

part of operating processes. We assess risks every six months, using a bottom-up analysis.

We also monitor risk exposure between the regular survey dates. The Executive Board of

Potential damage1

Category V

Category IV

Category III

RWE AG is immediately notified of any material changes. Our executive and supervisory

Category II

bodies are updated on the Group’s risks once a quarter.

Category I

Our risk analysis normally covers the three-year horizon of our medium-term plan, but can

extend beyond that in individual cases. We measure the potential damage based on the

possible effects on net income, liquidity, net debt and/or equity. In doing so, we take hedges

into account. We define the potential damage as the deviation from the budgeted figure in

question, aggregated over the planning horizon.

We display the material risks using a matrix (see chart on the right) in which they are

categorised by potential damage and probability of occurrence. Risks that share the same

Potential damage1

cause are aggregated to a single risk, if possible. To clearly assign them to the matrix fields,

we have established damage potential thresholds, which are oriented towards the

RWE Group’s ability to bear risks. They are presented in the table below the matrix.

€ million

RWE AG risk matrix

1 % ≤ P ≤ 10 %

10 % < P ≤ 20 %

20 % < P ≤ 50 %

50 % < P

Probability of occurrence (P)

Low risk

Medium risk

High risk

Earnings risks
Potential impact on
net income (X)

Indebtedness / equity risks
Potential impact on liquidity,
net debt and / or equity (Y)

Category V

8,000 ≤ X

8,000 ≤ Y

Depending on their position in the matrix, we distinguish between low, medium and high risks.

Category IV

1,500 ≤ X < 8,000

4,000 ≤ Y < 8,000

Based on this systematic risk identification, we determine whether there is a need for action

Category III

600 ≤ X < 1,500

and initiate measures to mitigate the risks if necessary.

Category II

Category I

300 ≤ X < 600

X < 300

1 Aggregated over the planning horizon.

2,000 ≤ Y < 4,000

1,000 ≤ Y < 2,000

Y < 1,000

RWE Annual Report 2021

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Further information

Risk classes

Market risks

Regulatory and political risks

Legal risks

Operational risks

Financial risks

Creditworthiness of business partners

Other risks

Classification of the highest single risk

As set out earlier, the focus of the risk analysis described in this chapter lies on the three-

31 Dec 2021

31 Dec 2020

year horizon of our medium-term plan. In 2017, the Task Force on Climate-related Financial

Medium

High

Low

Medium

Low

Medium

Low

Medium

Disclosures (TCFD), a panel of experts, recommended that companies consider time

horizons that go far above and beyond this when identifying and assessing climate-related

risks. RWE implements the TCFD proposals. We explain how we do this in our 2021

Sustainability Report, which will be published in April 2022 and will then be available at

www.rwe.com/sustainability-report.

In this section, we provide commentary on the main risks and opportunities we have

identified for this and the next two years and explain what measures have been taken to

counter the threat of negative developments.

Main risks for the RWE Group. Depending on their causes, our risks can be divided into

• Market risks. In most of the countries in which we are active, the energy sector is

seven classes, which are shown in the table. The highest individual risk determines the

characterised by the free formation of prices. This presents both opportunities and risks.

classification of the risk of the entire risk class. Our classification of risks reflects the

Over the course of the past year, prices quoted in our key European electricity forward

situation in early March 2022. It was not possible to predict the impact of the Ukraine

markets hit an all-time high. As a result, the earnings prospects of our generation assets

conflict at this time. The following changes have been made versus last year’s risk

became considerably more favourable. If limits are placed on Russian natural gas imports

classification:

in the long term due to the Ukraine conflict, then energy prices should remain at a high

level. However, there is a possibility that the economy will fall into a recession and that

• We adjusted the classification of our regulatory and political risks upwards from ‘medium’

electricity prices will drop again.

to ‘high’. One reason for this is the plan of the new government coalition, made up of the

Social Democrats, the Green Party and the Free Democrats, to accelerate the German

With regard to power and gas purchase agreements, if the conditions are not coupled to

coal phaseout without granting the affected companies compensation. Far-reaching EU

the development of wholesale prices, there is a risk of having to pay more for the product

sanctions against Russia could also have a significant impact on our business.

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

• We reclassified our ‘other risks’ from ‘medium’ to ‘low’ because the economic impact of the

electricity from the Datteln 4 hard coal-fired power plant in 2005 and 2006. The station

coronavirus pandemic has become more manageable. Previously, we believed our single-

was commissioned by energy group Uniper in mid-2020, ten years later than planned. We

largest other risk was that a reduction in demand for energy caused by the pandemic

were unsuccessful in taking legal recourse against the continuation of the agreements.

would cause electricity prices to drop over the long term and we would thus have to

A further legal dispute regarding certain contractual provisions with Uniper is still pending.

recognise impairments for generation assets. Now we feel that this is unlikely.

RWE Annual Report 20211
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RWE has a long-term gas purchase agreement with Russian energy group Gazprom.

Our risk management system for energy trading is firmly aligned with best practice as

What the Ukraine crisis will mean for this contract remains to be seen. We have the option

applied to the trading businesses of banks. As part of this, transactions with third parties

to negotiate contractual changes depending on market conditions during price reviews,

are concluded only if the associated risks are within approved limits. There are guidelines

should it remain effective. In the past, this has enabled us to mitigate our earnings risk

governing the treatment of commodity price risks and associated credit risks. Our

exposure from the contract.

subsidiaries constantly monitor their commodity positions. Risks associated with trades

conducted by RWE Supply & Trading for its own account are monitored daily.

We assess the price risks to which we are exposed on the procurement and supply

markets taking account of current forward prices and expected volatility. For our power

The Value at Risk (VaR) is of central importance for risk measurement in trading. It

plants and parts of our renewable energy portfolio, we limit the earnings risks by selling
a large portion of the electricity forward. Whenever we need fuel and CO2 emission
allowances to produce power, we secure the respective prices when we sell the electricity.

specifies the maximum loss from a risk position not exceeded with a predetermined

probability over a predefined period of time. The RWE Group’s VaR figures are generally

based on a confidence interval of 95 % and a holding period of one day. This means that,

This makes it easier for us to plan generation margins in coming years. However, if we sell

with a probability of 95 %, the daily loss will not exceed the VaR.

too much electricity forward, we run the risk of having to make expensive purchases on

the market to fulfil supply commitments in the event of production outages. An example

The VaR for the price risks of commodity positions in the trading business should not

of such a situation was the extreme cold snap in Texas in February 2021, on which we

exceed a certain daily cap. In the past, this upper limit was initially set at €40 million, but

report on page 43. The consequences of this weather event prompted us to review and

was increased by €10 million at the beginning of 2021 and again in early 2022. In the

optimise our hedging strategy.

period under review, the actual amounts averaged €32 million. The daily maximum was

€50 million. In addition, limits derived from the respective VaR thresholds have been set

We also use financial instruments to hedge our commodity positions. In the consolidated

for every trading desk. Furthermore, we develop extreme scenarios and factor them into

financial statements, these instruments are inter alia presented through the statement of

stress tests, determine their impact on earnings, and take countermeasures if we deem

on-balance-sheet hedges. The same applies to financial instruments serving the purpose

the risks to be too high.

of limiting interest rate and currency risks. More detailed information on this can be found

on pages 105 and 158 et seqq. in the Notes.

The management of our gas portfolio and the liquefied natural gas (LNG) business is

pooled in a dedicated organisational unit at RWE Supply & Trading. During the past year,

RWE Supply & Trading plays a central role when it comes to managing commodity price

the daily VaR cap for these activities was raised from €14 million to €25 million. We used

risks. It functions as the Group’s interface to the global wholesale markets for electricity

a maximum of €22 million of this headroom. The average VaR for the year was €8 million.

and energy commodities. On behalf of our power plant companies, RWE Supply & Trading
markets large portions of our electricity output and purchases the necessary fuel and CO2
certificates. Since RWE Supply & Trading acts as the internal transaction partner it is easier

The massive price spikes recently observed in energy trading could continue due to the

Ukraine conflict. Nevertheless, our market risks remain unchanged in the ‘medium’

for us to limit the risks associated with price volatility on energy markets. However, the

category.

trading transactions are not exclusively intended to reduce risks. In compliance with risk

thresholds, the company also takes commodity positions to achieve a profit.

RWE Annual Report 20211
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Further information

• Regulatory and political risks. Most countries in which we are active have set their sights

We are also exposed to risks associated with the coal phaseout in the Netherlands,

on ambitious climate protection goals. A number of them, including Germany, have

where a law was passed in 2019 that prevents us from using hard coal in Amer 9 and

recently introduced more stringent objectives. To meet these targets, they will need to

Eemshaven as of 2025 and 2030, respectively. There are no plans to offer compensation.

continue to improve the framework for renewable energy and green hydrogen. For

We accept the coal phaseout, but do not believe it is just that the law does not provide for

companies such as RWE, which have designed their business model around the energy

any remuneration for this intervention in companies’ property rights. Given the lack of

transition, this is associated with opportunities for growth. At the same time, our

concessions by Dutch policymakers, we have submitted an application for arbitration

ambitious carbon-reduction strategy has meant that regulatory interventions to improve

proceedings in accordance with the Energy Charter Treaty with the International Centre

climate protection are no longer associated with such high risks.

for Settlement of Investment Disputes in Washington. We hope this will give us the

Nevertheless, changes to political and regulatory frameworks can severely impact us. The

Netherlands introduced a cap on coal firing in power plants, which will apply from 2022 to

Ukraine crisis, in particular, is currently associated with risks. For example, there is the

2024. We are likely to be awarded compensation in relation to this measure, however it is

possibility that Russian commodities suppliers are no longer able to meet their obligations

not yet clear how much it will be. Furthermore, the EU Commission will still need to

opportunity to receive financial compensation. In addition to the coal phaseout, the

due to the sanctions against Russia, forcing us to procure these commodities on the

approve it under state aid law.

market at high prices. It cannot be ruled out that contractual partners become insolvent

because of the sanctions. Moreover, in core markets such as Germany, politicians could

Although the renewable energy business is characterised by fairly stable framework

intervene with regulatory measures to secure energy supply and stabilise consumer

conditions and wide public acceptance, political uncertainties exist in this area as well.

prices. It is not yet possible to foresee what effects this could have on RWE.

Adjustments to state subsidy schemes may result in reductions in payments and new

A core component of Germany’s climate protection strategy is reducing coal-fired

It is also conceivable that firmly pledged state payments may be cut retrospectively. In

electricity generation to zero by 2038. In exchange for closing our lignite assets early, we

the dialogue we maintain with policymakers, we point out that companies which invest in

are due €2.6 billion in compensation, which is still pending approval under EU state aid

building sustainable, climate- friendly energy infrastructure need reliable framework

projects losing their appeal. This can lead to investment undertakings being broken off.

law. There is now talk of the exit roadmap being expedited. Germany’s new government

conditions.

has announced that it ideally wants electricity generation from coal to end as early

as 2030 and that it does not intend to grant affected companies any additional

Even in the present regulatory environment, we are exposed to risks associated with, for

compensation. This would impose considerable financial burdens on RWE. However, the

instance, approvals for constructing and operating production facilities. This particularly

accelerated coal phaseout also presents us with opportunities as it presupposes more

affects our opencast mines, power stations and wind farms. The danger here is that

favourable framework conditions for the construction of environmentally friendly

approvals are granted late or not at all and that granted approvals are withdrawn

replacement plants, while the expansion of renewables would also have to be ramped up.

temporarily or for good. Furthermore, it cannot be ruled out that the courts will

This would benefit the implementation of our growth strategy. Moreover, the government

legislatively prohibit the transfer of land that has been assigned to us in the vicinity of our

might pay us compensation after all.

opencast mines.

RWE Annual Report 20211
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Further information

Producers in Germany benefit from lower tax rates on in-house electricity, gas and oil

These hedging instruments are standard practice in sales of companies and equity

consumption. RWE also utilises this financial mechanism. The Federal government,

holdings.

however, intends to reform the legal basis for these benefits in accordance with the EU’s

guidelines on climate and environmental protection and state aid for energy. There is a

We currently have low exposure to legal risks. This assessment did not change compared

risk that the new rules will be more restrictive and that we will possibly either receive lower

to the previous year.

discounts from 2023, or none at all.

Certain statutory regulations to which we must adhere can be interpreted in various ways

assets. Damage and outages can weigh heavily on earnings, as seen in 2021 during the

and are therefore in need of legal clarification. One example is the regulation which

severe cold snap in the US state of Texas (see page 43). The recent sharp rise in electricity

exempts us from paying an apportionment under the Renewable Energy Act (EEG) for

prices is associated with a higher risk of earnings losses but also presents opportunities

electricity that we consume ourselves in our German power stations and opencast mines.

should the utilisation of our assets be higher than anticipated. To mitigate these risks, we

However, the legal situation surrounding the regulation is vague, for example with regard

ensure that our supply commitments are not too high, as we may be forced to buy

to the EEG exemption of leased assets. There is a danger that using this exemption may

electricity at a high cost to meet these obligations in case of production outages, for

be limited by Germany’s highest court and that back payments may even have to be

example. Furthermore, we also regularly maintain our facilities and take out insurance

made for previous years.

policies if economically viable.

• Operational risks. RWE operates technologically complex, interconnected generation

As set out earlier, we have adjusted the assessment of our regulatory and political risks

When production facilities are built and modernised, delays and cost increases can occur,

from ‘medium’ to ‘high’, which is due to the uncertainties associated with the Ukraine

for example due to logistical bottlenecks or inadequate services provided by suppliers.

conflict and Germany’s coal exit.

The coronavirus pandemic and international trade conflicts have recently proven

to be risk factors. Project delays can cause costs to rise and earnings to be delayed.

• Legal risks. Individual RWE Group companies are involved in litigation and arbitration

Furthermore, delays of renewable energy projects can be disadvantageous to the level of

proceedings due to their operations or M & A transactions. Out-of-court claims have been

subsidies they receive. We counter these risks through circumspect planning and diligent

filed against some of them. Furthermore, Group companies are directly involved in various

project management.

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

The COVID-19 pandemic, which has persisted for two years now, continues to expose us

proceedings before ordinary courts and arbitration courts.

to risks, albeit to a manageable extent. As before, deliveries can be delayed. Theoretically,

it is also conceivable that the reliable operation of our plants may be jeopardised if a large

Risks may also result from exemptions and warranties that we granted in connection with

number of employees goes on sick leave. Thanks to comprehensive preventive measures

the sale of assets. Exemptions ensure that the seller covers the risks that are identified

and forward-looking emergency plans, so far we have been able to keep all major

within the scope of due diligence, the probability of occurrence of which is, however,

operational processes up and running, and we are confident that we can continue doing so.

uncertain. In contrast, warranties cover risks that are unknown at the time of sale.

RWE Annual Report 20211
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RWE has ambitious growth targets and has increased its investment budgets significantly.

Rises in market interest rates can lead to reductions in the prices of the securities we hold

We take care to ensure that our new-build projects and acquisitions satisfy our return

and vice versa. This primarily relates to fixed-interest bonds. In 2021, we started

requirements. If positive market developments occur after an investment decision has

measuring the price risk using a sensitivity analysis. As of the balance-sheet date, an

been made, electricity revenue and thus also returns can exceed expectations. However,

increase in market interest rates of 100 basis points would have lowered the value of the

it is also possible that income achieved through our projects falls short of forecasts and

bonds on our books by €28 million.

that prices paid for acquisitions prove to be too high retrospectively. We prepare our

investment decisions by conducting extensive analyses to try and map the financial and

Moreover, interest rates also determine our financing costs. We measure the possible

strategic effects as realistically as possible before taking investment decisions. Moreover,

impact using the Cash Flow at Risk (CFaR), applying a confidence level of 95 % and a

RWE has specific accountability provisions and approval processes in place to prepare

holding period of one year. The average CFaR at RWE AG in 2021 was €8 million.

and implement the decisions.

Our business processes are supported by secure data processing systems. Nevertheless,

inflation can force us to increase the value of our future obligations and raise provisions.

it is not possible to rule out a lack of availability of IT infrastructure or a breach in data

Price increases are particularly detrimental when they are above average in sectors from

security. There is also a risk of cyber attacks. The Ukraine crisis may trigger a rise in these

which we procure products and services for nuclear waste disposal and recultivating

sorts of attacks. We limit our IT risks with high security standards, and groupwide cyber

opencast mine areas.

Changes to the general price level can also give rise to risks and opportunities. Rising

security training programmes are designed to mitigate them. In addition, we regularly

invest in hardware and software upgrades.

With our focus on the global expansion of renewables, changes in exchange rates may

increasingly impact our earnings. Companies which are overseen by RWE AG have their

As in the previous year, we classify our operational risks as ‘medium’.

currency risks managed by the parent company. These risks are aggregated to a net

financial position for each currency and hedged using currency derivatives if necessary.

• Financial risks. Interest rates, foreign exchange rates, securities prices and rates of

Our foreign currency risks are measured using sensitivity analyses. In the course of such,

inflation are subject to fluctuations, which can be difficult to predict and can have a major

we calculate how a 10 % change in the exchange rate would affect the value of the

impact on our net worth and earnings.

respective foreign currency position. As of the balance-sheet date, the sum total of the

Changes in interest rates give rise to risks and opportunities in several respects. Market

interest rates, for example, can impact our provisions, as they are the point of reference

Security price fluctuations can have a considerable impact on RWE’s financial assets and

for the discount rates used for determining the net present values of obligations. This

pension funds. In case of a stock market crisis, for example due to the conflict in Ukraine,

means that, all other things being equal, provisions decrease when market interest rates

we would possibly need to significantly increase our pension provisions in order to

rise and increase when market interest rates fall. On pages 144 et seq. of the Notes, we

compensate our fund assets potentially losing value. We are also exposed to share price

present the effects of changes in interest rates on the net present values of our pension

risks in relation to our 15 % stake in E.ON, which had a fair value of €4.8 billion at the end

obligations and on the nuclear and mining provisions.

of 2021.

sensitivities amounted to €0.3 million.

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Risks and opportunities from changes in the price of securities are controlled by a

Despite this, net debt could temporarily be above budget, for instance if we have to pay

professional fund management system. Range of action, responsibilities and controls are

high variation margins. Nevertheless, we are confident that we can keep our indebtedness

set out in internal guidelines which the Group companies are obliged to adhere to when

below the cap.

concluding financial transactions. All financial transactions are recorded using special

software and are monitored by RWE AG.

Despite the significant increase in volatility on commodity markets, we continue to classify

our financial risks as ‘medium’.

Collateral pledged for forward transactions also harbours a risk. The amount of the

payments – variation margins in the case of exchange transactions – depends on the

• Creditworthiness of business partners. Our business relations with key accounts,

extent to which the contractually agreed prices deviate from market quotations as of the

suppliers, trading partners and financial institutions expose us to credit risks. Therefore,

respective cut-off date. If differences are substantial, then they may weigh heavily on our
liquidity. As set out on page 38 et seq., wholesale prices of electricity, natural gas and CO2
emission allowances spiked substantially in 2021. This forced us to pay unusually high

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

variation margins for electricity forward sales. Thanks to our robust financial position and

limits, which we determine before the transaction is concluded and adjust if necessary, for

use of financing instruments at our disposal, we were always able to provide the required

instance in the event of a change in the business partner’s creditworthiness. At times, we

funds. Another positive factor was that we received significant margin payments in
relation to forward sales of commodities, in particular of CO2 emission allowances.

request cash collateral or bank guarantees. In the trading and financing business, credit

risks and the utilisation of the limits are measured daily. We agree on collateral when

concluding over-the-counter trading transactions. Furthermore, we enter into framework

The conditions at which we finance our debt capital are in part dependent on the credit

agreements, e. g. those of the European Federation of Energy Traders. For financial

ratings we receive from independent rating agencies. As set out on page 61, Moody’s

derivatives, we make use of the German master agreement for forward financial

and Fitch place our creditworthiness in the investment grade category. If our rating

transactions or the master agreement of the International Swaps and Derivatives

deteriorates, we may incur additional costs if we have to raise debt capital. This would

Association.

probably also increase the liquidity requirement when pledging collateral for forward

transactions. However, we believe that such a scenario is unlikely. Just last year, Moody’s

The significant price spikes on commodity markets have increased the danger of

and Fitch raised our credit score by one notch to Baa2 and BBB+, respectively, both with

transaction partners being unable to meet their obligations. The Ukraine crisis has further

a stable outlook. In doing so, they rewarded us for our transformation into a leading

exacerbated this risk, in particular in relation to trading with Russian commodities

renewable energy company through which we have become more financially robust.

producers. This exposes us to substantial financial losses especially with regard to

contracts that are particularly valuable to us. We are monitoring the default risks closely

The assessment of our creditworthiness by rating agencies, banks and capital investors

and are assessing counterbalancing measures.

depends in part on the level of our net debt. Our goal is to ensure that, in the medium

term, it does not exceed three times the adjusted EBITDA of our core business.

Although our risks stemming from the creditworthiness of our business partners have

increased overall, they still do not exceed the ‘medium’ category.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Development of risks
and opportunities

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

• Other risks. This is the class in which we record the potential effects of damage to our

be associated with improved framework conditions for the expansion of renewables and for

reputation, compliance infringements and criminal acts. The risk of a COVID-19-driven

the creation of environmentally friendly backup assets. The additional investments and the

decrease in electricity prices which may force us to recognise impairments for generation

steeper climb towards reducing emissions should again increase our acceptance among

assets has also been recorded in this category. However, we now believe it is very unlikely

capital lenders and customers. It is also possible that the government may offer fair

that this will come to pass. Therefore, we have lowered the category of other risks from

compensation regulations, contrary to early statements.

‘medium’ to ‘low’.

RWE’s risks and opportunities: General assessment by management. Shifting our

prices remain high, renewable energy assets that do not receive fixed payments will achieve

generation portfolio from fossil fuels to renewables has improved RWE’s opportunity-risk

profile. By 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

additional revenue. This also holds true for our conventional power stations as long as
additional earnings are not offset by higher costs of fuel and CO2 allowances. However, high
electricity prices also increase the potential for greater earnings shortfalls in the event of

among politicians, capital lenders, customers and other stakeholder groups. At the same

unscheduled plant outages. Price hikes on the energy markets could also see the funds

time, our solid financial management ensures that our company remains on a safe course.

needed to collateralise forward contracts rise at short notice. The same applies to income

By analysing the effects of risks on our liquidity and pursuing a conservative financing

generated by these contracts. As a result, standards on our liquidity management would

strategy, we ensure that we can meet our payment obligations punctually. We have

become stricter and the risk of our contracting parties being unable to make payments

The booming commodity markets presents us with opportunities. If wholesale electricity

considerable liquid funds and great leeway in terms of debt financing, thanks to the Debt

would rise.

Issuance Programme, the Commercial Paper Programme and the syndicated credit line

(see page 60). We budget our liquidity with foresight, based on the short, medium and

RWE has been affected by COVID-19 to a limited extent so far, and we are confident that

long-term financing needs of our Group companies, and always hold a significant amount

this will not change. Projects may still be delayed owing to the pandemic. However, the risk

of minimum liquidity.

of a sustained COVID-19-induced economic crisis resulting in a reduction in electricity

prices and impairments to power stations has not materialised. In view of the latest

As shown by the commentary in this chapter, we consider unfavourable changes to the

economic recovery and the record energy prices, we now find that such a scenario is

political and regulatory framework to be our biggest risk. Due to the war in Ukraine,

unlikely.

developments are conceivable that could have a considerable negative impact on us. We

are monitoring events closely as they unfold and are trying to limit these risks as much as

Thanks to the measures for safeguarding our financial and earning power over the long

possible. We could also become exposed to significant financial burdens due to the

term and our comprehensive risk management system, we are confident that we can

accelerated coal phaseout. We therefore class the political and regulatory risks as ‘high’.

manage our current risks. At the same time, we are establishing the prerequisites for

In the previous year, we had classed them as ‘medium’. That being said, we also see

ensuring that this remains the case in the future. Overall, we do not currently foresee any

opportunities here. For example, we are confident that an earlier German coal exit would

risks that would undermine the viability of RWE AG or the RWE Group.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

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. First, we examine whether the

Para. 4, and Sec. 315, Para. 4 of the German Commercial Code. Our financial reporting is

risk situation is presented appropriately and whether suitable controls are in place for the

exposed to the risk of misrepresentations that could have a significant influence on the

identified risks. Then, we test the effectiveness of the controls. If the ICS reviews pertain to

decisions made by their addressees. For example, stated earnings that are too high can

accounting-related processes, e. g., to the preparation of financial statements or to

cause capital investors to invest in a company. Capital market law regulations and RWE’s

consolidation, they are conducted by employees from the Accounting Department. When

Code of Conduct require that we inform the public of our business performance and

it comes to processes handled by service centres on our behalf, for example invoice

important company specific events completely, objectively, accurately, clearly and in a

processing, an auditor certifies the appropriateness and effectiveness of the controls.

timely manner. We use a series of tools to meet this ambition. Examples of this are our IFRS

The representatives of the finance, human resources, procurement, trading, and IT

accounting regulation and the high minimum standards to which we subject the IT systems

functions document whether the agreed ICS quality standards are adhered to by their

used to record and process accounting-related data. Furthermore, we use an accounting-

respective areas. Our Internal Audit & Compliance Department also oversees the ICS

related Internal Control System (ICS) for quality assurance purposes. The ICS aims to detect

reviews. The results of the reviews are documented in a report to the Executive Board of

potential errors and misrepresentations that result from non-compliance with accounting

RWE AG. The review conducted in 2021 once again demonstrated that the ICS is effective.

standards. The Accounting Department of RWE AG is responsible for designing the ICS and

reviewing its effectiveness. In doing so, it applies groupwide rules. In addition, it receives

Within the scope of external reporting, the members of the Executive Board of RWE AG take

assistance from the ICS Committee, the objective of which is to ensure that the ICS is

an initial half-year and a full-year balance-sheet oath, confirming that the prescribed

applied throughout the Group following uniform principles and meeting high ambitions in

accounting standards have been adhered to and that the financial statements give a true

terms of correctness and transparency. The Committee consists of representatives from the

and fair view of the net worth, financial position and earnings. When in session, the

Accounting, Controlling & Risk Management and Internal Audit & Security Departments,

Supervisory Board‘s Audit Committee regularly concerns itself with the effectiveness of the

along with officers from the human resources, procurement, trading, finance, taxes and IT

ICS. Once a year, the Executive Board of RWE AG submits a report on this to the Committee.

functions, which are highly relevant to accounting.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Disclosure relating to
German takeover law

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

2.11 Disclosure relating to German takeover law

The following disclosure is in accordance with Sections 315a and 289a of the German

Employees can exercise the control rights conferred on them from the employee shares in

Commercial Code as well as with Section 176, Paragraph 1, Sentence 1 of the German

the same manner as other shareholders can whilst in compliance with statutory regulations

Stock Corporation Act. The information relates to company-specific regulations, for

and the provisions of the Articles of Incorporation.

example relating to adjustments to the capital structure by the Executive Board or a

change of control of the company. At RWE, these provisions are in line with the

Shares in capital accounting for more than 10 % of voting rights and special rights with

standards of German listed companies.

control powers. As of 31 December 2021, no holding in RWE AG exceeded 10 % of the

voting rights. There are no RWE shares with special rights that confer control powers.

Composition of subscribed capital. RWE AG’s capital stock amounts to

Appointment and dismissal of Executive Board members / amendments to the Articles

€1,731,123,322.88. It is divided among 676,220,048 no-par-value bearer shares.

of Incorporation. Executive Board members are appointed and dismissed in accordance

with Sections 84 et seq. of the German Stock Corporation Act in conjunction with Section

Limitation of voting rights or share transfers and employee share schemes. One share

31 of the German Co-Determination Act. Amendments to the Articles of Incorporation are

grants one vote at the Annual General Meeting and determines the proportion of the

made pursuant to Sections 179 et seqq. of the German Stock Corporation Act in

company’s profit to which the shareholder is entitled. This does not apply to RWE AG’s

conjunction with Article 16, Paragraph 5 of the Articles of Incorporation of RWE AG.

treasury stock, which does not confer any rights to the company. Voting rights are excluded

According to the aforementioned provision in the Articles of Incorporation, unless otherwise

by law in cases where Section 136 of the German Stock Corporation Act applies.

required by law or the Articles of Incorporation, the Annual General Meeting shall adopt all

Within the scope of an employee share plan, we issued 288,624 RWE shares to our

simple majority of the capital stock represented when the resolution is passed. Pursuant to

employees in Germany in the financial year that just ended. The beneficiaries may only

Article 10, Paragraph 9 of the Articles of Incorporation, the Supervisory Board is authorised

freely dispose of the shares after 31 December 2022.

to pass resolutions in favour of amendments to the Articles of Incorporation that only

resolutions by a simple majority of the votes cast or – if a capital majority is required – by the

RWE also has employee share schemes in the United Kingdom. Participating companies are

RWE Generation UK plc, RWE Supply & Trading GmbH UK Branch and RWE Technology UK

Executive Board authorisation to implement issuances and buybacks of RWE shares.

Limited. In 2021, employees purchased a total of 23,181 RWE shares under the UK

On 28 April 2021, the Annual General Meeting authorised the Executive Board to increase

schemes. These shares are also subject to a restriction on disposal, which lasts five years

the company’s capital stock subject to the approval of the Supervisory Board by up to

concern formal matters, without having a material impact on the content.

from the grant date.

€346,224,663.04 through the issuance of up to 135,244,009 bearer shares (authorised

capital). The authorisation is limited to five years and expires on 27 April 2026.

RWE Annual Report 2021
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

On 28 April 2021, the Annual General Meeting further authorised the Executive Board until

In sum, shares issued from authorised capital with a waiver of subscription rights and in

27 April 2026, subject to Supervisory Board approval, to issue bearer convertible and / or

connection with convertible or option bonds may not exceed 10 % of the capital stock.

option bonds with a total face value of up to €5,000,000,000 with or without a limited

The aforementioned upper limit is defined by the amount of capital stock at the time the

maturity and to grant the bondholders convertible or option rights to bearer shares in the

resolution providing the authorisation is adopted or when the authorisation is exercised, if

company. To enable the issuance of shares to holders of convertible and / or option bonds,

the capital stock is lower. Other measures taken waiving subscription rights count towards

the Annual General Meeting of 28 April 2021 conditionally increased the company’s capital

the upper limit.

stock by up to €173,112,330.24, divided into up to 67,622,004 registered or bearer

shares (conditional capital).

The Annual General Meeting of 26 April 2018 authorised the Executive Board of RWE AG,

subject to Supervisory Board approval, to purchase shares in the company accounting for

New shares from authorised capital and the aforementioned bonds may be issued in

up to 10 % of the capital stock when the resolution is passed or when the authorisation is

exchange for contributions in cash or in kind. These shares must generally be tendered

exercised, if the latter is lower at that time. At the Executive Board’s discretion, the purchase

to the shareholders for subscription. However, the Executive Board is authorised, subject

can be made on the stock exchange or via a public offer.

to Supervisory Board approval, to waive subscription rights in the following cases:

• to avoid fractions of shares resulting from the subscription rate;

Shareholder subscription rights may be waived depending on the purpose for which the

Shares acquired in this manner may be used for all purposes described in the authorisation.

• if the issuance is conducted in exchange for contributions in kind;

shares are used.

• to provide protection from dilution in connection with convertible and / or option bonds

contain clauses that take effect in the event of a change of control. Such a provision is in

Effects of a change of control on debt financing. Our debt financing instruments often

that have already been issued; and

place e. g. in respect of our €5 billion syndicated credit line, and essentially means that in the

event of a change of control or majority at RWE AG, drawings are suspended until further

• if the issue price of the new shares or bonds is not significantly below their quotation or

notice. The lenders shall enter into negotiations with us on a continuation of the credit line.

their theoretical fair value calculated by generally accepted methods of quantitative finance

The time limit for doing this is 30 days from the notification of the change of control. On

and if waived subscription rights are limited to no more than 10 % of the capital stock.

expiry of the time limit, lenders who are not satisfied with the outcome of the negotiations

may revoke their loan commitment or cancel the loan if it has already been paid out,

requesting immediate repayment.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

Disclosure relating to
German takeover law

3
Responsibility statement

4
Consolidated financial
statements

5
Further information

The green bonds issued in 2021 (see page 60) are also subject to change-of-control

Compensation agreement with the Executive Board and employees in the event of a

clauses. In the event that a change of control is announced or implemented, investors may

takeover offer. The current version of the German Corporate Governance Code dated

request that their bonds be redeemed by a certain deadline, if RWE’s long-term credit rating

16 December 2019 recommends that no commitments to additional benefits be made in

falls below investment grade due to the change of control or the rating agencies stop

the event that Executive Board members terminate their employment contract early due to

issuing us a credit rating. A similar rule applies to the senior bond that matures in 2037,

a change of control. We fully adhere to this principle, meaning that we have not included

a small portion of which remained on our books as it could not be fully transferred to innogy

clauses envisaging a special right of termination or rights to severance subject to a change

in 2016.

of control in any of the current employment contracts of the members of the Executive

In the event of a change of control, we can redeem our two subordinated hybrid bonds with

Board of RWE AG.

volumes of €282 million and US$317 million within the determined change-of-control

Share-based payments made to the Executive Board members and executives are subject

period. If they are not redeemed and our long-term credit rating also falls below investment

to the following provisions: in the event of a change of control, RWE will pay out all the

grade or credit ratings are no longer issued, their annual yield rises by 500 basis points.

performance shares that have been finally granted, but have not been paid out yet on expiry

of the holding period. Performance shares granted on a preliminary basis on the date of a

change of control are valued based on the degree to which the targets have been achieved

up to that point in time. Performance shares granted on a preliminary basis in the year of

the change of control lapse. They are replaced by a new plan of equal value for the Executive

Board members and executives for the fiscal year in which the change of control occurs and

the following years.

RWE Annual Report 2021“Wind energy has a bright future. Being
part of the energy transition is really
exciting and opens up so many doors.”

Zefiro Drieghe, Wind Farm Supervisor, RWE Renewables

Responsibility
Statement

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, 3 March 2022

The Executive Board

Krebber

Müller

Seeger

RWE Annual Report 2021

“For us, safety comes first. Both on site
and when it comes to supplying our
customers with energy.”

Ute Brimberg, Cluster Manager of the Emsland gas-fired power station, RWE Generation

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

184

220

228

236

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: 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 €

Note

(1)

(2)

(3)

(4)

(5), (10)

(6)

(7), (12)

(7)

(8)

(9)

(26)

2021

24,761

235

24,526

2,257

17,713

2,502

2,373

3,081

291

130

1,810

1,823

1,522

– 690

832

111

721

1.07

20201

13,896

208

13,688

4,977

9,814

2,365

3,136

1,950

381

– 62

1,933

2,387

1,265

– 376

889

221

1,110

1,051

1.65

1.36

0.29

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

RWE Annual Report 20211
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 non-controlling interests

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

2021

832

1,150

1,117

2,277

126

– 29

– 3,474

– 3,360

– 1,083

– 251

– 462

211

20201

1,110

– 493

– 46

– 143

– 682

– 391

– 233

– 6

– 611

– 1,293

– 183

– 200

RWE Annual Report 20211
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

Note

31 Dec 2021

31 Dec 20201

1 Jan 20202

(10)

(11)

(12)

(13)

(14)

(15)

(16)

(17)

(14)

(15)

(18)

(19)

5,884

19,984

3,021

5,477

111

3,490

233

663

4,899

17,902

3,276

4,237

131

3,434

142

397

4,777

19,016

3,252

4,337

128

3,276

264

680

38,863

34,418

35,730

2,828

12,394

6,470

66,805

427

8,040

5,825

657

103,446

142,309

1,632

2,482

3,007

9,821

228

4,219

4,774

1,061

27,224

61,642

1,585

2,359

3,621

12,755

196

3,258

3,192

1,274

28,240

63,970

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.) and retroactive adjustments to the first-time consolidation of

operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

2 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

RWE Annual Report 20211
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

Note

31 Dec 2021

31 Dec 20201

1 Jan 20202

(20)

(22)

(23)

(24)

(25)

(16)

(22)

(23)

(24)

(25)

15,254

1,742

16,996

16,916

790

17,706

16,616

503

17,119

16,943

19,470

18,937

6,798

888

1,729

1,948

3,951

797

1,355

1,862

3,924

1,050

1,094

2,197

28,306

27,435

27,202

4,268

10,996

4,428

77,271

97,007

142,309

3,004

1,247

2,387

236

9,046

581

16,501

61,642

2,638

1,689

2,987

193

11,632

510

19,649

63,970

operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

2 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Cash flow statement

5
Further information

Note (30)

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)

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

2021

832

2,117

847

840

– 268

2,735

171

7,274

– 3,689

393

– 80

664

– 3,934

– 6,646

– 1,092

– 7,738

20201

889

3,161

342

422

– 54

– 652

4,125

4,175

– 2,285

132

– 1,073

233

– 1,189

– 4,182

– 96

– 4,278

– 76

– 4,354

RWE Annual Report 20211
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)

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

Cash and cash equivalents at end of the reporting period as per the consolidated balance sheet

Note (30)

2021

– 184

– 730

16,485

– 14,114

1,457

993

1,051

4,774

5,825

20201

2,230

– 522

5,537

– 5,476

1,769

1,775

1,596

– 34

1,562

3,212

3,192

4,774

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

RWE Annual Report 20211
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

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

Debt instruments
measured at fair
value through
other compre-
hensive income

Used for
hedging
purposes

Note (20)

Balance at 1 Jan 2020 prior to
adjustment1

Adjustment1

Balance at 1 Jan 20202

Capital paid in

Dividends paid

Income2

Other comprehensive income2

Total comprehensive income2

Other changes

1,574

2,385

1,574

157

2,385

1,844

Balance at 1 Jan 20212

1,731

4,229

Capital paid out

Dividends paid

Income

Other comprehensive income

Total comprehensive income

Other changes

8,908

– 348

8,560

– 11

– 492

1,051

– 682

369

– 123

8,303

– 575

721

2,277

2,998

– 21

1,097

– 366

731

– 29

2,955

– 222

– 875

1,858

– 3,493

– 604

– 2,239

Balance at 31 Dec 2021

1,731

4,229

10,705

793

1 Restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).
2 Some prior– year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

RWE AG
share–
holders’
interest

16,964

– 348

16,616

1,990

– 492

1,051

– 1,251

– 200

– 998

16,916

– 575

721

– 1,183

– 462

– 625

15,254

Non– controlling
interests

Total

503

162

– 64

– 42

172

790

– 175

– 155

111

100

211

1,071

1,742

17,467

– 348

17,119

2,152

– 556

1,110

– 1,293

– 183

– 826

17,706

– 175

– 730

832

– 1,083

– 251

446

16,996

RWE Annual Report 20211
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

The Executive Board of RWE AG is responsible for the preparation, completeness and

accuracy of the consolidated financial statements and the Group review of operations,

RWE AG, recorded in Commercial Register B of the Essen District Court under HRB 14525

which is combined with the review of operations of RWE AG.

and headquartered at RWE Platz 1 in 45141 Essen, Germany, is the parent company of the

RWE Group (‘RWE’ or ‘Group’). RWE generates electricity from renewable and conventional

We employ internal control systems, uniform groupwide directives, and programmes for

sources, primarily in Europe and the USA.

basic and advanced staff training to ensure that the consolidated financial statements and

combined review of operations are adequately prepared. Compliance with legal regulations

The consolidated financial statements for the period ended 31 December 2021 were

and the internal guidelines as well as the reliability and viability of the control systems are

approved for publication on 3 March 2022 by the Executive Board of RWE AG. The

continuously monitored throughout the Group.

statements were prepared in accordance with the International Financial Reporting

Standards (IFRSs) applicable in the European Union (EU), as well as in accordance with

In line with the requirements of the German Corporate Control and Transparency Act

the supplementary accounting regulations applicable pursuant to Sec. 315e, Para. 1 of the

(KonTraG), the Group’s risk management system enables the Executive Board to identify risks

German Commercial Code (HGB). The previous year’s figures were calculated according to

at an early stage and take countermeasures, if necessary.

the same principles.

A statement of changes in equity has been disclosed in addition to the income statement,

pendent auditors’ report are discussed in detail by the Audit Committee and at the Supervi-

the statement of comprehensive income, the balance sheet and the cash flow statement.

sory Board’s meeting on financial statements with the independent auditors present.

The consolidated financial statements, the combined review of operations, and the inde-

The Notes also include segment reporting.

Scope of consolidation

Several balance sheet and income statement items have been combined in the interests

of clarity. These items are stated and explained separately in the Notes to the financial

In addition to RWE AG, the consolidated financial statements contain all material German

statements. The income statement is structured according to the nature of expense method.

and foreign companies which RWE AG controls directly or indirectly. In determining whether

The consolidated financial statements have been prepared in euros. Unless specified

consortial and management contracts and potential voting rights are also taken into

there is control, in addition to voting rights, other rights in company, inter-company,

otherwise, all amounts are stated in millions of euros (€ million). Due to calculation procedu-

consideration.

res, rounding differences may occur.

These consolidated financial statements were prepared for the fiscal year from 1 January

ments are accounted for using the equity method or as joint operations.

Material associates are accounted for using the equity method, and principal joint arrange-

to 31 December 2021.

Associates are companies on which RWE AG exercises a significant influence on the basis

of voting rights of 20 % up to and including 50 % or on the basis of contractual agreements.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

In classifying joint arrangements which are structured as independent vehicles, as joint

As in the previous year, two companies are presented as joint operations. Of these, Greater

operations or as joint ventures, other facts and circumstances – in particular delivery relation-

Gabbard Offshore Winds Limited, UK, is a material joint operation of the RWE Group.

ships between the independent vehicle and the parties participating in such – are taken into

Greater Gabbard holds a 500 MW offshore wind farm, which RWE operates together with

consideration, in addition to the legal form and contractual agreements.

Scottish and Southern Energy (SSE) Renewables Holdings. RWE owns 50 % of the shares

and receives 50 % of the power generated (including green power certificates). The wind farm

Investments in subsidiaries, joint ventures, joint operations or associates which are of secon-

is part of the Offshore Wind segment.

dary importance from a Group perspective are accounted for in accordance with IFRS 9.

First-time consolidation and deconsolidation generally take place when control is obtained

The list of Group shareholdings pursuant to Sec. 313, Para. 2 of the German Commercial

or lost.

Code (HGB) is presented on pages 184 et seqq.

The following summaries show the changes in the number of fully-consolidated companies

amounting to €186 million, which were reported in other operating income (previous year:

as well as associates and joint ventures accounted for using the equity method:

€13 million). Furthermore, in the previous year a deconsolidation gain of €154 million on

Sales of shares which led to a change of control resulted in sales proceeds from disposals

the sale of discontinued operations was recognised in the ‘income from discontinued

operations’ line item on the income statement.

Number of fully consolidated companies

Germany

Abroad

1 Jan 2021

First– time consolidation

Deconsolidation

Mergers

31 Dec 2021

– 2

– 3

197

– 29

– 2

205

Total

252

– 31

– 5

260

Number of companies accounted for using the
equity method

Germany

Abroad

Total

1 Jan 2021

Acquisitions

Disposals

Other changes

31 Dec 2021

– 2

RWE Annual Report 2021

1
To our investors

2
Combined review
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3
Responsibility statement

4
Consolidated financial
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Notes

5
Further information

Acquisitions

An update of the figures reported during first-time consolidation was performed during the

period under review and resulted in the following adjustments: Due to better understanding

Nordex wind and solar projects. In early November 2020, RWE completed the acquisition

of the fair value of principally operating rights, the fair value of net assets stated upon

of 100 % of the shares in the companies NXD HOLDCO B.V. and NXD France SAS and thus

first-time consolidation was reduced by €76 million, from €267 million to €191 million. As a

gained control of the European development operations of the wind turbine manufacturer

result, the goodwill recognised upon first-time consolidation increased by €76 million to

Nordex. Since then, the names of the acquired companies have been changed to RWE

€184 million.

Renewables HoldCo B.V. and RWE Renouvelables France SAS.

The status at initial consolidation is presented in the following table as at 31 December 2020:

Group’s revenue and earnings after initial consolidation.

In the previous year, the acquired operations did not make significant contributions to the

Balance-sheet items

€ million

Non-current assets

Current assets

Non-current liabilities

Current liabilities

Net assets

Purchase price

Goodwill

The purchase price (excluding €21 million in redeemed shareholder loans) amounted to

€375 million and was paid exclusively in cash and cash equivalents.

Shareholding in Rampion Renewables Ltd. increased to 100 %. On 1 April 2021, RWE

acquired the roughly 40 % share in Rampion Renewables Limited (‘RRL’), UK, which had been

held by E.ON until then. Consequently, RWE obtained control over RRL and its subsidiary

Rampion Offshore Wind Limited, in which RRL holds a 50.1 % stake. As a result of the transac-

tion, RWE became the majority owner of the UK offshore wind farm Rampion, which has

been fully consolidated since 1 April 2021. This transaction does not represent the acquisi-

tion of a business in the sense of IFRS 3 and resulted in an increase of €1,010 million in

property, plant and equipment and of €1,105 million in intangible assets. There was no

effect on earnings. The purchase price for the approximately 40 % share in RRL was already

paid in December 2020. The 400-MW wind farm is located off the coast of Sussex and has

been operating commercially since 2018.

IFRS carrying
amounts (fair value)
at initial consolidation
(as at 31 Dec 2020)

329

267

375

108

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

King’s Lynn power station. 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.

Disposals, disposal groups, assets held for sale and
discontinued operations

Sale of a 75 % stake in the onshore wind farms Stella, Cranell, East Raymond and West

Raymond. In January 2021, the sale of a total of 75 % of the shares in the three onshore

The initial accounting of the business combination from the previous year is presented in the

wind farms Stella, Cranell and East Raymond in Texas was completed. In total, 75 % of the

following table, together with the assumed assets and liabilities:

shares in West Raymond were sold in August 2021. In this transaction, 51 % of the shares

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

were sold to Algonquin Power Fund (America) Inc., USA, a subsidiary of Algonquin Power &

Utilities Corp., Canada, and another 24 % of the shares to the UK investment firm Greencoat

Capital LLP. The underlying contracts were concluded in December 2020. As of 31 Decem-

ber 2020, the assets and liabilities of the four wind farms were thus reported as ‘held for

125

sale’ in the balance sheet.

The divested wind farms were assigned to the Onshore Wind / Solar segment. Upon comple-

tion of the transaction in January and August 2021, RWE deconsolidated the above wind

farms and reported its remaining 25 % stake as an investment accounted for using the

equity method. The gain on deconsolidation amounted to €156 million and was recognised

in the ‘other operating income’ line item on the income statement. Additionally, in relation to

the derecognition of a commodity derivative in this transaction, a current expense of €34

million reported under ‘other operating expenses’ is also taken into account.

In the previous year, the company contributed €25 million to the Group’s revenue and

€12 million to the Group’s earnings after its initial consolidation.

Sale of 100 % of the shares in Energies France and Investerg to KELAG. At the end of

April 2021, RWE sold 100 % of the shares in Energies France, S.A.S., France. The gain on

Excluding €80 million in redeemed shareholder loans, the purchase price amounted to

deconsolidation amounted to €9 million and was recognised in the ‘other operating income’

€33 million, which was paid exclusively in cash and cash equivalents during the previous year.

line item on the income statement.

RWE also sold 100 % of the shares in Investerg – Investimentos em Energias, SGPS, Lda.,

Portugal, to the Austrian energy utility KELAG at the end of September 2021. The gain on

deconsolidation amounted to €7 million and was recognised in the ‘other operating income’

line item on the income statement.

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Upon completion of these two transactions that were agreed in December 2020, KELAG

Sale of the grid connection for the Triton Knoll offshore wind farm. In order to comply

acquired twelve French hydroelectric stations from RWE with a combined generation

with competition law requirements, RWE must sell the grid connection for the Triton Knoll

capacity of 45 MW, as well as the Portuguese run-of-river operations and some wind

offshore wind farm. The book value of the grid connection, which consists exclusively of pro-

turbines with a total generation capacity of 20 MW (pro-rata share of RWE). Energies

perty, plant and equipment, is reported as ‘held for sale’ in the balance sheet as of 31 De-

France was part of the Hydro /Biomass / Gas segment, while Investerg was assigned to

cember 2021, in the amount of €657 million. This asset held for sale is assigned to the Off-

Onshore Wind / Solar. KELAG is an associate company of RWE.

shore Wind segment. The sale is expected to be completed in the latter half of 2022.

Sale of the grid connection for the Rampion offshore wind farm. In order to comply with

competition law requirements, RWE was obligated to sell the grid connection for the Rampi-

on offshore wind farm, which had been fully consolidated since 1 April 2021. Sale of the grid

connection, which was part of the Offshore Wind segment, was completed on 19 November

2021. No disposal result was recorded.

Disposal of parts of the Belectric Group. In December 2021, RWE sold the companies

BELECTRIC GmbH, Belectric France S.à.r.l., Belectric Israel Ltd., Belectric Italia s.r.l. and Be-

lectric Solar Ltd. to the Elevion Group B.V., and thus disposed of its business for services in

the fields of engineering, procurement, construction, operation and maintenance of solar

plants for third parties in Germany, France, Israel, Italy and the United Kingdom. The Elevion

Group is an energy services provider headquartered in the Netherlands, which is part of the

ČEZ Group. The gain on deconsolidation amounted to €4 million and was recognised in the

‘other operating income’ line item on the income statement. The divested companies were

part of the segment Onshore Wind / Solar.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Východoslovenská energetika Holding a.s. (VSEH). On 21 August 2020, RWE sold the

Key figures of the discontinued operations

2020

2019

shares in its fully consolidated investment in the Slovak power and gas utility Východoslo-

€ million

venská energetika Holding a.s. (VSEH), which was previously stated as part of ‘innogy –

discontinued operations’, to E.ON. The deconsolidation gain in the previous year amounted

to €154 million and was stated in the ‘income from discontinued operations’ line item on the

income statement.

Revenue1

Other income2

Expenses3

Major key figures of the activities of the discontinued operations deconsolidated as of

21 August 2020 are presented in the following tables:

Key figures of the disposal group

31 Dec 2019

Income of discontinued operations before tax

Taxes on income

Deconsolidation gain

Income of discontinued operations

507

437

154

221

23,890

1,518

23,214

2,194

636

8,258

9,816

€ 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

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).

405

734

1,147

Georgia Biomass Holding LLC. The sale of Georgia Biomass Holding LLC, which had been

contractually agreed on 18 June 2020, was completed on 31 July 2020. Georgia Biomass

Holding LLC was responsible for RWE’s biomass business in the USA and was part of the

Hydro / Biomass / Gas segment. The deconsolidation gain on this transaction amounted to

127

€13 million, which was recognised in the ‘other operating income’ line item on the income

statement in the previous year.

Seabreeze II installation ship. In April 2020, the Seabreeze II offshore installation ship

(jack-up vessel) and the related equipment was sold and transferred to SPIC Ronghe

International Financial Leasing Co. Ltd. The ship was part of the Offshore Wind segment. In

the previous year, this transaction resulted in a gain in the medium double-digit million euro

range, which was recognised in the ‘other operating income’ line item on the income

statement for that period.

225

131

365

145

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Consolidation principles

Expenses and income as well as receivables and payables between consolidated companies

are eliminated; intra-group profits and losses are eliminated.

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,

For investments accounted for using the equity method, goodwill is not reported separately,

subsidiaries whose fiscal years do not end on the Group’s balance-sheet date (31 Decem-

but rather included in the value recognised for the investment. In other respects, the

ber) prepare interim financial statements as of this date. Two subsidiaries have a different

consolidation principles described above apply analogously. If impairment losses on the

balance-sheet date of 31 March (previous year: three). Different fiscal years compared to

equity value become necessary, we report such under income from investments accounted

the calendar year stem from tax-related reasons or country-specific regulations.

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.

Business combinations are reported according to the acquisition method. This means that

capital 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

Foreign currency translation

time of acquisition. In doing so, the non-controlling interests can either be measured at the

In their individual financial statements, the companies measure non-monetary foreign

prorated value of the subsidiary’s identifiable net assets or at fair value. The subsidiary’s

currency items at the balance-sheet date using the exchange rate in effect on the date they

identifiable assets, liabilities and contingent liabilities are measured at full fair value,

were initially recognised. Monetary items are converted using the exchange rate valid on the

regardless of the amount of the non-controlling interests. Intangible assets are reported

balance-sheet date. Exchange rate gains and losses from the measurement of monetary

separately from goodwill if they are separable from the company or if they stem from a

balance-sheet items in foreign currency occurring up to the balance-sheet date are

contractual or other right. In accordance with IFRS 3, no new restructuring provisions are

recognised on the income statement.

recognised within the scope of the purchase price allocation. If the purchase price exceeds

the revalued prorated net assets of the acquired subsidiary, the difference is capitalised as

Functional foreign currency translation is applied when converting the financial statements

goodwill. If the purchase price is lower, the difference is included in income.

of companies outside of the Eurozone. As the principal foreign enterprises included in the

consolidated financial statements conduct their business activities independently in their

In the event of deconsolidation, the related goodwill is derecognised with an effect on

national currencies, their balance-sheet items are translated into euros in the consolidated

income. Changes in the ownership share which do not alter the ability to control the subsidia-

financial statements using the average exchange rate prevailing on the balance-sheet date.

ry are recognised without an effect on income. By contrast, if there is a change in control,

This also applies for goodwill, which is viewed as an asset of the economically autonomous

the remaining shares are remeasured at fair value with an effect on income.

foreign entity. We report differences to previous-year translations in other comprehensive

income without an effect on income. Expense and income items are translated using annual

average exchange rates. When translating the adjusted equity of foreign companies

accounted for using the equity method, we follow the same procedure.

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The following exchange rates (among others) were used as a basis for foreign currency

Goodwill is not amortised; instead it is subjected to an impairment test once every year, or

translations:

Exchange rates

in €

1 US dollar

1 British pound

100 Czech korunas

1 Polish zloty

1 Danish crown

1 Swedish crown

1 Norwegian crown

Accounting policies

Average

Year-end

2021

2020 31 Dec 2021

31 Dec 2020

0.85

1.16

3.90

0.22

0.13

0.10

0.87

1.12

3.77

0.22

0.13

0.10

0.09

0.88

1.19

4.02

0.22

0.13

0.10

0.81

1.11

3.81

0.22

0.13

0.10

more frequently if there are triggers for an 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 develop-

ment costs are amortised over the period during which the products are expected to be

sold. Research expenditures are recognised as expenses in the period in which they are

incurred.

An impairment loss is recognised for an intangible asset if the recoverable amount of the

asset is less 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

Intangible assets are accounted for at amortised cost. With the exception of goodwill, all

exceeds the recoverable amount, the allocated goodwill is initially written down by the

intangible assets have finite useful lives and are amortised using the straight-line method.

difference. Impairment losses which must be recognised in addition to this are taken into

Useful lives and methods of amortisation are reviewed on an annual basis.

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

Software for commercial and technical applications is amortised over three to five years.

to exist, a write-back to intangible assets is performed. The increased carrying amount

‘Operating rights’ refer to the entirety of the permits and approvals required for the opera-

resulting from the write-back may not, however, exceed the amortised cost. Impairment

tion of a power plant. Such rights are generally amortised over the economic life of the

losses on goodwill are not reversed.

power plant, using the straight-line method. Capitalised customer relations are amortised

over a maximum period of up to 18 years.

100

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Property, plant and equipment is stated at depreciated cost. Borrowing costs are

received lease incentives. Right-of-use assets are depreciated using the straight-line

capitalised as part of the asset’s cost, if they are incurred directly in connection with the

method over the lease term or the expected useful life, whichever is shorter.

acquisition or production of a ‘qualified asset’. What characterises a qualified asset is that a

considerable period of time is required to prepare it for use or sale. If necessary, the cost of

For short-term leases and leases for low-value assets, lease instalments are recognised as

property, plant and equipment may contain the estimated expenses for the decommissio-

an expense over the lease term. For operating leases of which RWE is the lessor, the mini-

ning of plants or site restoration. Maintenance and repair costs are recognised as expenses.

mum lease instalments are recognised as income over the lease term.

With the exception of land and leasehold rights, as a rule, property, plant and equipment is

Impairment losses and write-backs on property, plant and equipment are recognised

depreciated using the straight-line method, unless in exceptional cases another deprecia-

according to the principles described for intangible assets.

tion method is better suited to the usage pattern. The depreciation methods are reviewed

annually. We calculate the depreciation of RWE’s typical property, plant and equipment

Investments accounted for using the equity method are initially accounted for at cost and

according to the following useful lives, which apply throughout the Group and are also

thereafter based on the carrying amount of their prorated net assets. The carrying amounts

reviewed annually:

Useful life in years

Buildings

Technical plants

Thermal power plants

Wind turbines

Gas and water storage facilities

Mining facilities

Other renewable generation facilities

are increased or reduced annually by prorated profits or losses, dividends and all other

changes in equity. Goodwill is not reported separately, but rather included in the recognised

value of the investment. Goodwill is not amortised. An impairment loss is recognised for

7 – 50

investments accounted for using the equity method, if the recoverable amount is less than

the carrying amount.

6 – 40

Up to 25

10 – 60

3 – 25

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 comprehensive 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

In relation to lignite mining and generation, the decommissioning data from the Act on Coal

their classification. Gains and losses on sales of equity instruments, for which the option to

Phaseout are taken into consideration in determining the useful life spans.

state changes in fair value in other comprehensive income is exercised, remain in equity and

Property, plant and equipment also include right-of-use assets resulting from leases of

credit losses is recognised through profit or loss for debt instruments that are recognised at

which RWE is the lessee. These right-of-use assets are measured at cost. The cost results

fair value through other comprehensive income. The changes reported in other comprehen-

from the present value of the lease instalments, adjusted to take into account advance

sive income are recognised with an effect on earnings upon the sale of these instruments.

are not reclassified to the income statement. An impairment in the amount of the expected

payments, initial direct costs and potential dismantling obligations and corrected for

101

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Receivables are comprised of financial receivables, trade accounts receivable and other

Insofar as inventories are not acquired primarily for the purpose of realising a profit on a

receivables. Aside from financial derivatives, receivables and other assets are stated at

short-term resale transaction, they are carried at the lower of cost or net realisable value.

amortised cost minus a risk provision in the amount of the expected losses.

Production costs reflect the full costs directly related to production; they are determined

Loans reported under financial receivables are stated at amortised cost minus a risk

include adequate portions of required materials and production overheads. They also

provision in the amount of the expected losses. Loans with interest rates common in the

include production- related depreciation. Borrowing costs, however, are not capitalised as

market are shown on the balance sheet at nominal value; as a rule, however, non-interest

part of the cost. The determination of cost is generally based on average values. The usage

or low-interest loans are disclosed at their present value discounted using an interest rate

of excavated earth for lignite mining is calculated using the ‘first in – first out’ method (FIFO).

based on normal capacity utilisation and, in addition to directly allocable costs, they also

commensurate with the risks involved.

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

If the net realisable value of inventories written down in earlier periods has increased, the

reversal of the write-down is recognised as a reduction of the cost of materials.

Nuclear fuel assemblies are stated at amortised cost. Depreciation is determined by

operation and capacity, based on consumption and the reactor’s useful life.

IFRS financial statements and tax bases, and from consolidation procedures. Deferred tax

Inventories which are acquired primarily for the purpose of realising a profit on a short-term

assets also include tax reduction claims resulting from the expected utilisation of existing

resale transaction are recognised at fair value less costs to sell. Changes in value are

loss carryforwards in subsequent years. Deferred taxes are capitalised if it is sufficiently

recognised with an effect on income.

certain that the related economic advantages can be used. Their amount is assessed with

regard to the tax rates applicable or expected to be applicable in the specific country at the

Securities classified as current marketable securities essentially consist of fixed-interest

time of realisation. The tax regulations valid or adopted as of the balance- sheet date are key

securities which have a maturity of more than three months and less than one year from the

considerations in this regard. Deferred tax assets and deferred tax liabilities are netted out for

date of acquisition. Securities are measured at fair value through profit or loss or at fair value

each company and / or tax group.

through other comprehensive income. The transaction costs directly associated with the

acquisition of these securities are included in the initial measurement, which occurs on

Inventories are assets which are held for sale in the ordinary course of business (finished

their settlement date. Unrealised gains and losses are recognised through profit or loss or

goods and goods for resale), which are in the process of production (work in progress – goods

other comprehensive income, with due consideration of any deferred taxes depending on

and services) or which are consumed in the production process or in the rendering of services

the underlying measurement category. An impairment in the amount of the expected credit

(raw materials including nuclear fuel assemblies and excavated earth for lignite mining).

losses is recognised 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 disposal of such instruments.

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Combined review
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Responsibility statement

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Consolidated financial
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Notes

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Further information

Cash and cash equivalents consist of cash on hand, demand deposits and current

All non-current provisions are recognised at their prospective settlement amount, which is

fixed-interest securities with a maturity of three months or less from the date of acquisition.

discounted as of the balance-sheet date. In the determination of the settlement amount,

any cost increases likely to occur up until the time of settlement are taken into account.

Assets are stated under Assets held for sale if they can be sold in their present condition

and their sale is highly probable within the next twelve months. Such assets may be certain

If necessary, the cost of property, plant and equipment may contain the estimated expenses

non-current assets, asset groups (‘disposal groups’) or operations (‘discontinued opera-

for the decommissioning of plants or site restoration. Decommissioning, restoration and

tions’). Liabilities intended to be sold in a transaction together with assets are a part of a

similar provisions are recognised for these expenses. If changes in the discount rate or

disposal group or discontinued operations, and are reported separately under Liabilities

changes in the estimated timing or amount of the payments result in changes in the

held for sale.

provisions, the carrying amount of the respective asset is increased or decreased by the

corresponding amount. If the decrease in the provision exceeds the carrying amount, the

Non-current assets held for sale are no longer depreciated or amortised. They are recogni-

excess is recognised immediately through profit or loss.

sed at fair value less costs to sell, as long as this amount is lower than the carrying amount.

As a rule, releases of provisions are credited to the expense account on which the provision

Gains or losses on the valuation of specific assets held for sale and of disposal groups are

was originally recognised.

stated under income from continuing operations until final completion of the sale. Gains or

losses on the valuation of discontinued operations and on certain assets of a discontinued

Provisions for pensions and similar obligations are recognised for defined benefit plans.

operation, which are not subject to the valuation rules pursuant to IFRS 5, are stated under

These are obligations of the company to pay future and ongoing post-employment benefits

income from discontinued operations.

to entitled current and former employees and their surviving dependents. In particular, the

obligations refer to retirement pensions. Individual commitments are generally oriented to

The stock option plans granted by RWE to executives and corporate bodies are accounted

the employees’ length of service and compensation.

for as cash-settled share-based payment. At the balance-sheet date, a provision is

recognised in the amount of the prorated fair value of the payment obligation. Changes

Provisions for defined benefit plans are based on the actuarial present value of the respec-

in the fair value are recognised with an effect on income. The fair value of options is determi-

tive obligation. This is measured using the projected unit credit method. This method not

ned using generally accepted valuation methodologies.

only takes into account the pension benefits and benefit entitlements known as of the

balance-sheet date, but also anticipated future increases in salaries and pension benefits.

Provisions are recognised for all legal or constructive obligations to third parties which

The calculation is based on actuarial reports, taking into account appropriate biometric

exist on the balance-sheet date and stem from past events which will probably lead to an

parameters (for Germany, in particular the ‘Richttafeln 2018 G’ by Klaus Heubeck, and the

outflow of resources, and the amount of which can be reliably estimated. Provisions are

Standard SAPS Table S2PA of the respective year for the United Kingdom, taking into conside-

carried at their prospective settlement amount and are not offset against reimbursement

ration future changes in mortality rates). The provision derives from the balance of the

claims. If a provision involves a large number of items, the obligation is estimated by

actuarial present value of the obligations and the fair value of the plan assets. The service

weighting all possible outcomes by their probability of occurrence (expected value method).

cost is disclosed in staff costs. Net interest is included in the financial result.

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Responsibility statement

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Notes

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Further information

Gains and losses on the revaluation of net defined benefit liability or asset are fully recogni-

sed in the fiscal year in which they occur. They are reported outside of profit or loss, as a

component of other comprehensive income in the statement of comprehensive income,

and are immediately assigned to retained earnings. They remain outside profit or loss in

subsequent periods as well.

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 obligation is not covered with allowances that are available or

have been purchased forward, the provision for this portion is measured using the market

price of the emission allowances or certificates for renewable energies on the reporting date.

In the case of defined contribution plans, the enterprise’s obligation is limited to the amount

it contributes to the plan. Contributions to the plan are reported under staff costs.

Liabilities consist of financial liabilities, trade accounts payable, income tax liabilities

Waste management provisions in the nuclear energy sector are based on obligations under

including transaction costs and are carried at amortised cost in the periods thereafter

public law, in particular the German Atomic Energy Act, and on restrictions from operating

(except for derivative financial instruments). Lease liabilities are measured at the present

licenses. These provisions are measured using estimates, which are based on and defined in

value of the future lease payments. For subsequent measurements, the lease payments are

contracts as well as on information from internal and external specialists (e. g. experts).

divided into the financing costs and repayment portion of the outstanding debt. Financing

costs are distributed over the lease term in such a manner that a steady interest rate is

and other liabilities. Upon initial recognition, these are generally stated at fair value

Obligations existing as of the balance-sheet date and identifiable when the balance sheet is

created for the outstanding debt.

being 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 provisi-

If uncertain income tax items are recognised in income tax liabilities because they are

ons must be recognised due to obligations under public law, such as the German Federal

probable, the former are generally measured at the most likely amount. Measurement at

Mining Act, and formulated, above all, in operating schedules and water law permits.

expected value is only considered in exceptional cases.

Provisions are generally fully related to the degree of mining in question. Such provisions are

measured at full expected cost or according to estimated compensation payments. Cost

Moreover, other liabilities also include contract liabilities. A contract liability is the

estimates are based on external expert opinions to a significant extent.

obligation of the Group to transfer goods or services to a customer, for which we have

already received consideration or for which the consideration is already due.

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Notes

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Further information

Government grants provided in relation to the acquisition of an asset are not deducted from

The purpose of hedges of a net investment in foreign operations (net investment hedges) is

the cost of the subsidised asset; they are reported as deferrals under other liabilities. These

to hedge the currency risk from investments with foreign functional currencies. With the

deferrals are reversed with an effect on income over the economic life of the subsidised asset.

exception of hedging costs, unrealised gains and losses from such hedges are recognised

Derivative financial instruments are recognised as assets or liabilities and measured at fair

value, regardless of their purpose. Changes in this value are recognised with an effect on

Hedging relationships must be documented in detail and meet the following effectiveness

in other comprehensive income until disposal of the foreign operation.

income, unless the instruments are used for hedge accounting purposes. In such cases,

requirements:

recognition of changes in the fair value depends on the type of hedging transaction.

Fair value hedges are used to hedge assets or liabilities carried on the balance sheet

• the value change of hedging relationship is not dominated by the credit risk, and

against the risk of a change in their fair value. The following applies: changes in the fair

• the hedge ratio is the same as that resulting from the quantities used within the scope of

• there is an economic relationship between the hedged item and the hedging instrument,

value of the hedging instrument and the fair value of the respective underlying transactions

risk management.

are recognised in the same line item on the income statement. Hedges of unrecognised firm

commitments are also recognised as fair value hedges. Changes in the fair value of the firm

Only the effective portion of a hedge is recognised in accordance with the preceding rules.

commitments with regard to the hedged risk result in the recognition of an asset or liability

The ineffective portion is recognised immediately on the income statement with an effect

with an effect on income.

on income.

Cash flow hedges are used to hedge the risk of variability in future cash flows related to an

Contracts on the receipt or delivery of non-financial items in accordance with the company’s

asset or liability carried on the balance sheet or related to a highly probable forecast

expected purchase, sale or usage requirements (own-use contracts) are not accounted for

transaction. If a cash flow hedge exists, unrealised gains and losses from the hedging

as derivative financial instruments, but rather as executory contracts. If the contracts

instrument are initially stated as other comprehensive income. Such gains or losses are only

contain embedded derivatives, the derivatives are accounted separately from the host

included on the income statement when the hedged underlying transaction has an effect on

contract, insofar as the economic characteristics and risks of the embedded derivatives

income. If forecast transactions are hedged and such transactions lead to the recognition of

are not closely related to the economic characteristics and risks of the host contract.

a financial asset or financial liability in subsequent periods, the amounts that were recogni-

Written options to buy or sell a non-financial item which can be settled in cash are not

sed in equity until this point in time are recognised on the income statement in the period

own-use contracts.

during which the asset or liability affects the income statement. If the transactions result in

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 cost of the asset or liability.

105

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Responsibility statement

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Consolidated financial
statements

Notes

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Further information

Contingent liabilities are possible obligations to third parties or existing obligations which

Management judgements in the application of accounting policies. Management judge-

will probably not lead to an outflow of economic benefits or the amount of which cannot be

ments are required in the application of accounting policies. In particular, this pertains to the

measured reliably. Contingent liabilities are only recognised on the balance sheet if they were

following aspects:

assumed within the framework of a business combination. The amounts disclosed in the Notes

correspond to the best possible estimate of the settlement amount at the balance-sheet date.

• With regard to certain contracts, a decision must be made as to whether they are to be

treated as derivatives or as so-called own-use contracts, and be accounted for as

Contingent assets are possible assets resulting from past events, the existence of which

executory contracts.

must be confirmed by future events that are not under the full control of RWE. Contingent

• Financial assets are classified by contractual cash flows and applied business model.

assets are not stated in the balance sheet. The volumes reported in the Notes correspond to

Whereas the contractual cash flows are determined by the characteristics of the

estimates of the possible financial ramifications as of the balance-sheet date.

financial instruments, the business model is based on the Group’s internal requirements

As explained on page 37, renewable energy projects in the USA are primarily subsidised via

• With regard to assets held for sale, it must be determined if they can be sold in their

tax credits and tax benefits (hereinafter referred to jointly as tax items). Within the frame-

current condition and if the sale of such is highly probable in the next twelve months. If both

work of so-called tax equity financing, tax equity investors participate directly in financing

conditions apply, the assets and any related liabilities must be reported and measured as

the generation facilities of individual project companies. Due to its financing character, the

assets or liabilities held for sale, respectively.

relating to the portfolios of financial instruments.

capital contributed by the tax equity investor is reported under financial liabilities, in the

amount of the outstanding repayment.

Management estimates and judgements. Preparation of consolidated financial state-

ments pursuant to IFRS requires assumptions and estimates to be made, which have an

Repayment of interest and capital for the tax equity liability occurs primarily via the direct

impact on the recognised value of the assets and liabilities carried on the balance sheet, on

allocation of the tax items generated by the project to the tax equity investor, which can then

income and expenses and on the disclosure of contingent liabilities.

apply the items in relation to its own tax accounting. In addition to this, repayment of interest

and capital also occurs in cash.

Amongst other things, these assumptions and estimates relate to the accounting and

measurement of provisions. With regard to non-current provisions, the discount factor to

The tax equity arrangement and the related obligation to maintain proper operations is

be applied is an important estimate, in addition to the amount and timing of future cash

treated similar to a contract for services. The income resulting from the tax items is recor-

flows. The discount factor for pension obligations is determined on the basis of yields on

ded under other operating income, with this income realised using the straight-line method

high-quality, fixed-rate corporate bonds on the financial markets as of the balance-sheet

over the anticipated duration of the tax equity contracts. In this regard, linear realisation of

date. The new government coalition consisting of the SPD, the Green Party and the FDP

the income is capped at the amount of income that will most likely be generated during the

wishes to accelerate Germany’s phaseout of coal, in the interests of climate protection.

contract, and any amounts above and beyond this are only recognised up to the amount of

2030 is stated as the desired final date in the coalition agreement. This is eight years earlier

income that is actually generated.

than envisaged in the current legal roadmap. The accounting policies continue to be based

on the 2038 decommissioning date as foreseen in the current legal regulations.

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RWE Annual Report 20211
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Responsibility statement

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Consolidated financial
statements

Notes

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Further information

The rules governing valuation allowances for financial assets under IFRS 9 stipulate that the

As of the date of preparation of the consolidated financial statements, it is not presumed

expected credit losses must be determined. The valuation allowance is based on information

that there will be any material changes compared to the assumptions and estimates.

from within and outside the Group.

The impairment test for goodwill and non-current assets is based on certain assumptions

access to the capital market. The goal is to be in a position to refinance maturing debts and

pertaining to the future, which are regularly adjusted. Property, plant and equipment is

finance the operating activities at all times. Maintaining a solid rating and a positive

tested for indications of impairment on each cut-off date. Based on the respective business

operating cash flow from continuing activities serve this purpose.

Capital management. The focus of RWE’s financing policy is on ensuring uninterrupted

models, the anticipated effects of the coronavirus pandemic did not make it necessary to

conduct any impairment tests.

The management of RWE’s capital structure is oriented towards a leverage factor of three

or less. This indicator is calculated by adding material non-current provisions, with the

Power plants are grouped together as a cash-generating unit if their production capacity

exception of mining provisions, to net financial debt and comparing the resulting figure to

and fuel needs are centrally managed as part of a portfolio, and it is not possible to ascribe

the adjusted EBITDA of the core business. RWE’s liabilities of relevance to net debt primarily

individual contracts and cash flows to the specific power plants.

consist of (hybrid) bonds, short-term borrowing and provisions for pensions, nuclear waste

Upon first-time consolidation of an acquired company, the identifiable assets, liabilities and

contingent liabilities are recognised at fair value. Determination of the fair value is based

on valuation methods which require a projection of anticipated future cash flows.

management and wind farms.

During the reporting period, RWE‘s net debt was mainly influenced by 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

Deferred tax assets are recognised if realisation of future tax benefits is probable. Actual

positions resulting from the daily revaluation of active contracts. However, their influence on

future development of income for tax purposes and hence the realisability of deferred tax

cash flows is temporary and ends once the transactions triggering the payments are

assets, however, may deviate from the estimation made when the deferred taxes are

realised. Conversely, capital expenditures, in particular on wind and solar power, increased

capitalised.

compared to the previous year. In total, net financial assets amounted to €9.1 billion on

31 December 2021 and were thus higher than at the end of 2020 (previous year: €6.9 bil-

Further information on the assumptions and estimates upon which these consolidated

lion). Furthermore, net debt provisions fell by €2.6 billion to €8.7 billion (previous year:

financial statements are based can be found in the explanations of the individual items.

€11.3 billion). On average, provisions have a very long duration; their level is primarily

All assumptions and estimates are based on the circumstances and forecasts prevailing on

tion of net debt/assets and net financial debt/assets is presented on page 62 of the review of

the balance-sheet date. Furthermore, as of the balance-sheet date, realistic assessments of

operations. In total, as of 31 December 2021, RWE‘s net assets amounted to €0.4 billion

overall economic conditions in the sectors and regions in which RWE conducts operations

(previous year: net debt of €4.4 billion). As of 31 December 2021, the leverage factor was

are taken into consideration with regard to the prospective development of business.

-0.1 (previous year: 1.7) and was thus below the planned ceiling.

determined by external factors such as the general level of interest rates. A precise calcula-

Actual amounts may deviate 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.

107

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Responsibility statement

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Notes

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Further information

RWE’s credit rating is influenced by a number of qualitative and quantitative factors. These

Even though a contract similar to contract for services is recognised, IFRS 15 is not directly

include aspects such as the amount of cash flows and debt as well as market conditions,

applicable as a tax equity contract does not fulfil the definition of a contract with a customer

competition, and the political framework. Our hybrid bonds also have a positive effect on

in the sense of IFRS 15. Instead, IFRS 15 is applied analogously, as per IAS 8.11 (a). In this

our rating. The leading rating agency, Moody’s, classifies part of hybrid capital as equity.

analogy, the contractually agreed capital payment is treated as the transaction price, while

In March and April 2021, the rating agencies Fitch and Moody’s both raised their credit

to the tax equity investor is treated as RWE’s performance obligation over time. As a result,

rating for RWE by one notch. RWE’s long-term creditworthiness is now classified as BBB+

all income resulting from the tax items is recognised in other operating income; furthermo-

(Fitch) and Baa2 (Moody’s), with a stable outlook. RWE’s short-term credit ratings are P-2

re, realisation of this income occurs using the straight-line method over the anticipated

(previous year: P-3) and F1 (previous year: F2), respectively.

duration of the tax equity contracts and is thus independent of the actual amount of the tax

the maintenance of operations in the interests of generating the tax items to be transferred

Changes in accounting regulations

items generated during the reporting period in question. This method of realising the

income results from linear performance over time, i. e. the amount paid by the tax equity

investor is viewed as a transaction price, which is recognised pro-rata over the duration of

The International Accounting Standards Board (IASB) has approved several amendments

the relevant tax equity contract.

to existing IFRSs, which are effective for the RWE Group as of fiscal 2021 due to EU

endorsement:

Compared to the previous accounting method, the approach described above primarily

leads to a different accounting treatment of tax benefits, which stem from accelerated

• Amendments to IFRS 4: Extension of the Temporary Exemption From Applying IFRS 9

depreciation in particular. Previously, these tax benefits were reported in taxes on income, in

(2020)

the amount of the tax benefits that were actually generated. Due to the change in the

• Amendments to IAS 39, IFRS 4, IFRS 7, IFRS 9 and IFRS 16: Interest Rate Benchmark

accounting method, the comparable figures for the previous year were adjusted accordingly.

Reform – Phase 2 (2020)

• Amendments to IFRS 16 Leases: Covid-19-Related Rent Concessions beyond

In fiscal 2021, RWE recognised tax benefits totalling €72 million in other operating income,

30 June 2021 (2021)

which would have been reported as €38 million in taxes on income prior to the change in the

accounting policy. The tax benefits recognised in income from investments accounted for

These new regulations do not have any material effects on the RWE Group’s consolidated

using the equity method amount to a total of €9 million. Prior to the change in the accoun-

financial statements.

ting policy, this figure would have been reported as €7 million under income from invest-

ments accounted for using the equity method.

Changes to the accounting of tax items in relation to tax equity contracts. At the

beginning of fiscal 2021, the fundamental basis for the accounting of tax items in relation

to tax equity financing arrangements was changed. In the new approach, the allocation of

tax items to the tax equity investor is accounted for as a process similar to a sales transac-

tion (see also page 106), in order to present the economic peculiarities of the US subsidy

system more accurately and thus provide more relevant information regarding the econo-

mic and financial consequences of this system.

108

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

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Consolidated financial
statements

Notes

5
Further information

The following table shows the changes in the balance sheet as of 31 December 2020 and

1 January 2020:

€ million

Investments accounted for using the equity method

Deferred tax assets

Assets held for sale

Equity

Non-current other liabilities

Deferred tax liabilities

Current other liabilities

Liabilities held for sale

31 Dec 2020
before changes

31 Dec 2020
after changes

1 Jan 2020
before changes

1 Jan 2020
after changes

3,297

397

1,045

3,276

397

1,061

17,971

17,706

1,154

1,908

9,003

539

1,355

1,8831

9,046

581

3,281

689

1,274

17,467

862

2,164

11,588

510

3,252

680

1,274

17,119

1,094

2,197

11,632

510

1 Prior to consideration of retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

The following table shows the changes to the income statement for fiscal 2020:

The retroactive application of changes to the accounting policy for tax equity agreements

€ million

Other operating income

Depreciation, amortisation and impairment losses

Income from investments accounted for using the equity
method

Income from continuing operations before tax

Taxes on income

Income from continuing operations after tax

Income

Net income / income attributable to RWE AG shareholders

Basic and diluted earnings per share in €

Jan – Dec 2020
before changes

Jan – Dec 2020
after changes

4,931

3,154

375

1,196

-363

833

1,054

995

1.56

4,977

3,136

381

1,265

-376

889

1,110

1,051

1.65

had an impact on currency translation adjustment in the statement of comprehensive

income. The figure for fiscal 2020 is €26 million higher. The change had no effect on the

cash flows from operating activities of continuing operations in fiscal 2020. The increase of

€56 million in income from continuing operations in fiscal 2020 was offset by a decline of

€18 million in depreciation, amortisation and impairment losses, a decline of €63 million in

deferred taxes, a decline of €5 million in other non-cash income/expenses and a rise of €30

million in changes in working capital.

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RWE Annual Report 20211
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Responsibility statement

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Notes

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Further information

New accounting policies

Notes to the Income Statement

The IASB issued further standards and amendments to standards, which were not yet

(1) Revenue

mandatory in the EU in fiscal 2021. These standards and amendments to standards, which

Revenue is recorded when the customer has obtained control over goods or services.

are not expected to have any material effects on RWE’s consolidated financial statements,

are listed below:

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

• IFRS 17 Insurance Contracts (2017) including Amendments to IFRS 17 (2020)

commercial optimisation of generation dispatch is based on the net sale price, after

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as

deduction of the relevant material costs. By contrast, all other revenue from our generation

Current or Non-current (2020) and Presentation of Financial Statements: Classification

activities and the consumer business is reported on a gross basis.

of Liabilities as Current or Non-current – Deferral of Effective Date (2020)

• Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework

Revenue contains state subsidies for the sale of green electricity and the refund of such to

(2020)

the state, including subsidies from contracts for differences, amounting to -€37 million

• Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use

(previous year: €51 million), which do not meet the definition of IFRS 15. These contracts for

(2020)

differences are used as a state subsidy mechanism within the framework of climate-protec-

• Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous

tion measures and essentially result in a fixed price for the electricity that is sold, by offset-

Contracts – Cost of Fulfilling a Contract (2020)

ting positive and negative deviations (in so-called two-way contracts for difference) and

• Annual Improvements to IFRS Standards 2018-2020 (2020)

negative deviations (in so-called one-way contracts for difference) from a defined reference

• Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice State-

price that is agreed with state contractual partners or the subsidy mechanism counterparty.

ment 2: Disclosure of Accounting Policies (2021)

• Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors:

In the year under review, RWE generated external revenue with three large customers in the

Definition of Accounting Estimates (2021)

amount of €4,683 million, €2,475 million and €2,471 million (previous year: two large

• Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities

customers at €6,963 million and €1,544 million) in the Supply & Trading segment.

arising from a Single Transaction (2021)

• Amendments to IFRS 17 Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 –

During the year under review, revenues rose sharply compared to the previous year, in

Comparative Information (2021)

particular due to the steep increase in electricity prices.

A breakdown of revenue by division, geographical region and product is contained in the

segment reporting on pages 174 et seqq.

The item ‘natural gas tax / electricity tax’ comprises the taxes paid directly by Group companies.

110

RWE Annual Report 20211
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Combined review
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Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Certain performance obligations of the RWE Group were not yet or not yet fully met by the

To improve the presentation of the development of business, in the previous year unrealised

end of the fiscal year. The €2,319 million in revenue due from these performance obligations

and realised gains from contracts measured at fair value in the Supply & Trading segment

(previous year: €3,154 million) is expected to be received over the following three years. The

were stated as a net amount in income from derivative financial instruments. In the previous

receipt of this revenue will depend on when these performance obligations to the customer

year, net income totalled €3,613 million. In the year under review, a net expense was

are met. It does not include future revenue from contracts with an original contractual term

recognised, which is reported in expenses from derivative financial instruments under other

of twelve months or less.

(2) Other operating income

Other operating income

€ million

Income from own work capitalised

Income from changes in product inventories

Income from release of provisions

Cost allocations / refunds

Income from 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

operating expenses.

In the reporting period, the miscellaneous operating income includes the statutory compen-

sation of €880 million for the residual production volumes of RWE-owned nuclear power

2021

20201

plants which could no longer be used as a result of the accelerated German nuclear

phaseout.

151

442

1,432

2,257

175

128

3,721

682

4,977

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.

(3) Cost of materials

Cost of materials

€ million

Cost of raw materials and of goods for resale

Cost of purchased services

2021

2020

16,589

1,124

17,713

8,539

1,275

9,814

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise
renewable energy in the USA (see commentary on pages 108 et seq.).

The cost of materials primarily includes expenses for the input materials of power plants.

Expenses for coal of €276 million (previous year: €75 million) were recognised at the

market price prevailing at settlement.

111

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Impairments amounting to €25 million were recognised on excavated earth in the year

(5) Depreciation, amortisation and impairment losses

under review. These impairments were related to the impairment test conducted for the

Garzweiler cash-generating unit. In the previous year, impairments of €140 million were

Depreciation, amortisation and impairment losses

2021

20201

recognised for stock materials and coal inventories. These impairments were based on

€ million

lower market prices and impairment tests performed for the cash-generating units Garz-

Intangible assets

weiler, Hambach, Inden and the hard coal-fired power stations (see page 113).

Property, plant and equipment

180

2,193

2,373

156

2,980

3,136

During the year under review, the cost of materials rose significantly compared to the

previous year, in particular due to the sharp increases in electricity and gas prices.

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.).

(4) Staff costs

Staff costs

€ million

Wages and salaries

Cost of social security, pensions and other benefits

The following impairments were included in depreciation, amortisation and impairment losses:

2021

2020

2,012

490

2,502

1,891

474

2,365

Impairments

€ million

Intangible assets

Property, plant and equipment

2021

20201

948

952

1,694

1,712

Number of employees

2021

2020

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

Employees covered by
collective agreements and other employees

Employees not covered by
collective agreements

Number of
employees

In full-time
equivalents

Number of
employees

In full-time
equivalents

12,994

12,754

13,539

13,272

renewable energy in the USA (see commentary on pages 108 et seq.).

RWE has entered into long-term CO2 hedging transactions in order to hedge generation
positions for its lignite-fired power stations. As a result of the increase in CO2 prices, the fair
value of these hedges has risen sharply, leading to an improvement in equity (other compre-

6,248

6,113

6,493

6,358

hensive income). Conversely, the value of the lignite-fired plants and opencast mines has

19,242

18,867

20,032

19,630

declined. The impairment test performed in 2021 in the Coal / Nuclear segment for the

Garzweiler cash-generating unit resulted in a write-down of €729 million on property, plant

and equipment (recoverable amount: €0.1 billion). Additionally, impairments of €26 million

In contrast to the previous year, the number of employees and full-time equivalents are

were recognised on property, plant and equipment outside of the Garzweiler cash-genera-

reported for the year under review. The headcount figures do not include trainees. On

ting unit. The Garzweiler cash-generating unit comprises the Niederaußem (K) and Neurath

average, 710 trainees were employed (previous year: 669). This corresponds to the figure

(F, G) power plant units, which – according to the law on coal phaseout – will remain online

calculated in full-time equivalents.

over the long term, and the Garzweiler opencast mine, along with the refining plants. With

112

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

the exception of the property and buildings reported at market value, the property, plant and

(6) Other operating expenses

equipment of the Garzweiler unit has thus been written down in full, as was already the case

with the Hambach and Inden units.

Other operating expenses

€ million

2021

2020

In the previous year, the impairment test for the Dutch Power Plant Portfolio cash-

Maintenance and renewal obligations

generating unit resulted in a write-down of €557 million (recoverable amount: €0.7 billion)

Additions to provisions / reversals

in the Hydro / Biomass / Gas segment, due to the deterioration of market conditions in the

Netherlands.

The impairment tests performed in the Coal / Nuclear segment in the previous year resulted

in the recognition of impairments on property, plant and equipment in the amount of

€791 million. This was mainly due to changed market conditions and specification of the

lignite phaseout plans. Of these impairments, €579 million was related to the Garzweiler

cash-generating unit (recoverable amount: €0.8 billion), €114 million to the Hambach

cash-generating unit (recoverable amount: – €0.7 billion) and €98 million to the Inden

cash-generating unit (recoverable amount: – €0.4 billion).

Structural and adaptation measures

Legal and other consulting and data processing services

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

538

419

322

Expenses from derivative financial instruments

1,125

Additionally, in the previous year impairments of €231 million were recognised on property,

Expenses from leases

Fees and membership dues

Exchange rate losses

Other taxes (primarily on property)

Miscellaneous

plant and equipment of the hard coal-fired power stations in the Coal / Nuclear segment

(recoverable amount: €0.0 billion), in relation to the phaseout of hard coal in Germany.

Other impairments on intangible assets and property, plant and equipment were recognised

primarily on the basis of cost increases and changes in price expectations.

Recoverable amounts are generally determined on the basis of fair values less costs to sell;

in the 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 5.00 % (previous year: 2.75 % to 4.50 %). 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 determined fair values are assigned to Level 3 of the fair

value hierarchy.

113

243

3,081

499

301

507

243

1,950

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

To improve the presentation of the development of business, in the year under review,

(8) Financial result

unrealised and realised losses from contracts measured at fair value in the Supply & Trading

segment are stated as a net amount in expenses from derivative financial instruments. In

the year under review, a net expense of €765 million was recognised. In the previous year,

Financial result

€ million

net income was recorded, which was reported in income from derivative financial instru-

Interest and similar income

ments under other operating income.

(7) Income from investments

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 other income from investments.

Other financial income

Financial income

Interest and similar expenses

Interest accretion to

Provisions for pensions and similar obligations (including
capitalised surplus of plan assets)

2021

20201

Provisions for nuclear waste management as well as to
mining provisions

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

Other provisions

Other finance costs

Finance costs

291

130

421

381

– 82

– 62

319

The financial result breaks down into net interest, interest accretion to provisions, other

financial income and other finance costs.

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.).

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.

Interest expenses incurred for lease liabilities amounted to €42 million in the year under

review (previous year: €35 million).

Net interest essentially includes interest income from interest- bearing securities and

loans, income and expenses relating to marketable securities, and interest expenses.

114

2021

2020

260

1,550

1,810

340

135

– 19

1,346

1,823

– 13

283

1,650

1,933

296

203

1,836

2,387

– 454

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Interest income includes dividend income of €186 million from the 15% stake in E.ON

Other financial income includes €60 million in gains realised from the disposal of marketa-

(previous year: €182 million).

ble securities (previous year: €28 million). Of the other finance costs, €41 million (previous

year: €17 million) stem from realised losses on the disposal of marketable securities.

In the year under review, €80 million in borrowing costs were capitalised as costs in connec-

tion with the acquisition, construction or production of qualifying assets (previous year:

(9) Taxes on income

€61 million). The underlying capitalisation rate ranged from 3.6 % to 3.7 % (previous year:

from 3.0 % to 3.7 %).

Net interest

€ million

Interest and similar income

Interest and similar expenses

Taxes on income

€ million

2021

2020

Current taxes on income

Deferred taxes

260

340

– 80

283

296

– 13

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.).

2021

20201

– 150

840

690

– 46

422

376

Net interest stems from financial assets and liabilities, which were allocated to the following

Of the deferred taxes, €931 million is related to temporary differences (previous year:

measurement categories pursuant to IFRS 9:

€425 million). In the year under review, changes in valuation allowances for deferred tax

Interest result by category

€ million

2021

2020

Current taxes on income contain €419 million in net tax income (previous year: expenses

Debt instruments measured at amortised cost

of €16 million) relating to prior periods.

assets amounted to €701 million (previous year: €370 million).

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

186

– 340

– 80

Due to the utilisation of tax loss carryforwards unrecognised in prior years, current taxes

on income were reduced by €8 million (previous year: €10 million).

Expenses from deferred taxes declined by €5 million (previous year: €7 million) due to

187

reassessments of and previously unrecognised tax loss carryforwards.

– 295

– 13

115

RWE Annual Report 2021

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

2021

2020

Tax reconciliation

2021

20201

€ 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.

€ million

Income before tax

Theoretical tax expense

Differences to foreign tax rates

Tax effects on

Tax-free dividends

Other tax-free income

– 9

107

– 40

1.035

– 105

945

Taxes in the amount of €186 million (previous year: €311 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 %

1,522

497

– 327

– 127

– 126

– 40

342

210

450

– 303

690

45.3

1,265

413

−105

−123

−31

−30

329

−1

−69

−122

376

29.7

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.)

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.

116

RWE Annual Report 2021

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 assets1

€ million

Cost

Balance at 1 Jan 2021

Additions / disposals due to changes in
the scope of consolidation

Additions

Transfers

Currency translation adjustments

Disposals

Balance at 31 Dec 2021

Accumulated amortisation /
impairment losses

Balance at 1 Jan 2021

Additions / disposals due to changes in
the scope of consolidation

Amortisation / impairment losses in
the reporting period

Transfers

Currency translation adjustments

Disposals

Write-backs

Balance at 31 Dec 2021

Carrying amounts

Balance at 31 Dec 2021

Development
costs

Concessions,
patent rights,
licences and
similar rights

Customer
relationships
and similar
assets

Goodwill

Prepayments

Total

3,832

1,058

134

5,036

1,901

– 33

167

2,050

2,986

2,679

2,736

296

– 157

152

– 11

131

2,736

6,854

903

204

7,983

1,955

– 44

180

2,099

5,884

1 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

117

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Intangible assets1

€ 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

– 1

– 2

– 1

3,713

230

– 98

3,832

1,799

138

– 6

1,901

1,931

2,549

184

– 46

2,679

310

– 1

– 13

296

– 1

276

2,679

6,618

413

– 158

6,854

1,841

156

– 8

1,955

4,899

1 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

118

RWE Annual Report 20211
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

France SAS. In the previous year, goodwill declined by €8 million due to the deconsolidation

amounted to €22 million (previous year: €20 million).

of Georgia Biomass in the Hydro / Biomass / Gas cash-generating unit.

Goodwill breaks down as follows:

Goodwill

€ million

Offshore Wind

Onshore Wind / Solar

Hydro / Biomass / Gas

Supply & Trading

31 Dec 2021

31 Dec 20201

generating units.

In the third quarter of every fiscal year, an impairment test is performed to determine if

there is any need to write down goodwill. In doing so, goodwill is allocated to the cash-

1,441

184

105

1,006

2,736

1,376

The recoverable amount of the cash-generating unit is determined, which is defined as the

184

113

1,006

2,679

higher of fair value less costs to sell or value in use. Fair value is the best estimate of the price

that an independent third party would pay to purchase the cash-generating unit as of the

balance-sheet date. Value in use reflects the present value of the future cash flows which

are expected to be generated with the cash-generating unit.

1 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which

Fair value less costs to sell is assessed from an external perspective and value in use from a

RWE acquired from Nordex in 2020 (see commentary on page 95).

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 medium- and

In the previous year, new cash-generating units were formed as of 1 January 2020. In doing

long-term business plans, as approved by the Executive Board and valid at the time of the

so, goodwill in the amount of €606 was transferred from the former 'innogy – continuing

impairment test. They pertain to a detailed planning period of three to ten years. The cash

operations' cash-generating unit to the new Offshore Wind cash-generating unit and in the

flow plans are based on experience as well as on expected market trends in the future. If

amount of €121 million to the new Hydro / Biomass / Gas cash-generating unit. Goodwill of

available, market transactions in the same sector or third-party valuations are taken as a

€816 million was transferred from the former cash-generating unit 'operations acquired

basis for determining fair value. Based on the use of internal planning assumptions, the

from E.ON’ to the new Offshore Wind cash-generating unit.

determined fair values are assigned to Level 3 of the fair value hierarchy.

The impairment tests carried out in the previous year in relation to the formation of new

The medium- and long-term business plans are based on country-specific assumptions

cash-generating units did not result in any impairments.

regarding the development of key economic indicators such as gross domestic product,

consumer prices, interest rate levels and nominal wages. These estimates are, amongst

In the previous year, goodwill increased by €184 million as a result of the first-time consoli-

others, derived from macro- economic and financial studies.

dation of Nordex's wind and solar projects in the Onshore Wind segment. This goodwill

passed the impairment test in the fourth quarter of 2020. In the year under review, the

Our key planning assumptions for the business segments active in electricity and gas

goodwill of the cash-generating unit Offshore Wind increased by €9 million as a result of the

initial consolidation of Baltic Trade and Invest Sp. z.o.o. In the Hydro / Biomass / Gas cash-

generating unit, goodwill decreased by €8 million due to the deconsolidation of Energies

markets relate to the development of wholesale prices of electricity, crude oil, natural gas,
coal and CO2 emission allowances, market shares and regulatory framework conditions.

119

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

For the Renewables segments, the valuation is based on a normal wind year, which is

calculated as the average of the last 20 years.

The discount rates used for business valuations are determined on the basis of market

data. During the period under review, they were 4.25 % for the cash-generating unit

Supply & Trading (previous year: 4.25 %), 3.75 % for Offshore Wind (previous year: 4.25 %),

3.50 % for Onshore Wind / Solar (previous year: 3.50 %) and 4.00 % for Hydro / Biomass / Gas

(previous year: 3.75 %).

In the cash-generating units Offshore Wind and Onshore Wind / Solar, we used a growth rate

of 0.50 % (previous year: 0.50 %) 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. The growth rate for each segment is generally derived from experience and expecta-

tions of the future and does not exceed the long-term average growth rates of the respec-

tive 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 Supply & Trading cash-generating unit exhibited the

smallest surplus of recoverable amount over the carrying amounts. The recoverable

amount was €0.7 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

1.25 percentage points to above 5.5 %, a growth rate reduced by more than 1.4 percentage

points to less than – 1.4 % or cash flows reduced by more than €105 million in terminal value.

120

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

(11) Property, plant and equipment

Property, plant and equipment1

€ million

Cost

Balance at 1 Jan 2021

Additions / disposals due to changes in the scope of
consolidation

Additions

Transfers

Currency translation adjustments

Disposals

Balance at 31 Dec 2021

Accumulated depreciation / impairment losses

Balance at 1 Jan 2021

Additions / disposals due to changes in the scope of
consolidation

Amortisation / impairment losses in the reporting
period2

Transfers

Currency translation adjustments

Disposals

Write-backs

Balance at 31 Dec 2021

Carrying amounts

Balance at 31 Dec 2021

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

5,728

365

165

6,133

3,697

330

3,959

2,174

51,459

564

828

2,779

883

770

55,743

39,677

– 47

1,764

262

408

41,188

14,555

1,033

– 29

1,012

862

– 27

114

881

131

4,851

– 871

2,755

– 2,844

228

4,105

933

– 34

108

– 23

981

Total

63,071

– 250

4,009

– 8

1,190

1,019

66,993

45,169

– 44

2,316

– 2

291

558

163

47,009

1 Some prior-year figures restated due to retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.) .
2 In part from the release of a provision for impending losses for purchase commitments.

121

3,124

19,984

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Property, plant and equipment1

€ 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

Write-backs

Balance at 31 Dec 2020

Carrying amounts

Balance at 31 Dec 2020

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

5,323

443

– 58

5,728

3,128

102

511

– 13

3,697

2,031

48,758

2,068

872

1,290

– 808

721

51,459

35,505

2,761

2,266

– 262

563

39,677

11,782

988

– 10

1,033

770

115

– 6

862

171

4,224

– 236

2,389

– 1,326

– 185

4,851

873

– 24

– 1

933

122

Total

59,293

1,934

3,773

– 6

– 1,061

862

63,071

40,276

2,880

2,980

– 282

622

45,169

3,918

17,902

RWE Annual Report 20211
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 €1,426 million (previous year: €1,590 million)

In the previous year, RWE sold an office building to an external investor within the framework of

was subject to restrictions from land charges, chattel mortgages or other restrictions. Disposals

a sale-and-leaseback transaction. The fixed lease term of the leasing contract is 17.5 years.

of property, plant and equipment resulted from sale or decommissioning.

The following table shows the development of right-of-use assets recognised in property,

Property, plant and equipment includes legally owned assets as well as right-of-use assets

plant and equipment:

from leases of which 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 2021
€ million

Cost

Buildings

Land

Technical plant and machinery

Pumped storage power stations

Vehicle fleet

Other plant, factory and office equipment

Balance at
1 Jan 2021

Additions

Depreciation,
amortisation and
impairments

Disposals

Other changes1

Balance at
31 Dec 2021

161

631

264

1,123

117

132

273

164

– 4

– 1

243

758

258

1,271

1 Other changes comprise transfers, write-backs, currency translation adjustments as well as additions and disposals in the scope of consolidation.

123

RWE Annual Report 20211
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 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

666

261

1,081

121

209

– 6

– 44

– 9

– 1

– 60

161

631

264

1,123

1 Other changes comprise transfers, write-backs, currency translation adjustments as well as additions and disposals in the scope of consolidation.

124

RWE Annual Report 20211
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

In addition to right-of-use assets, property, plant and equipment also include land and

Notes (8) Financial result, (23) Financial liabilities and (27) Reporting on financial instruments.

buildings leased as operating leases by RWE as lessor. As of 31 December 2021, the

carrying amount of these assets totalled €153 million (previous year: €180 million).

In addition, leases had the following effect on the RWE Group’s earnings and cash flows in

the year under review:

The following payment claims resulted from these operating leases:

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 leases1

RWE as lessor

Income from operating leases

1 Restated prior-year figure.

2021

2020

Nominal lease payments from operating leases
€ million

31 Dec 2021

31 Dec 2020

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

235

215

Leases primarily relating to wind farm sites that have been contractually agreed, but not

begun yet, lead to future lease payments of €118 million (previous year: €187 million).

Moreover, potential lease payments predominantly relating to leases of wind farm space were

disregarded when valuing lease liabilities. This relates to €390 million (previous year:

€405 million) in variable payments which may come due depending on generation volumes

and €261 million (previous year: €97 million) in potential payments associated with

extension and termination options.

125

RWE Annual Report 20211
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 after taxes3

Other comprehensive income

Total comprehensive income

Dividends (prorated)

RWE shareholding

1 Figures based on KEH's consolidated financial statements; KELAG is fully consolidated in these figures.
2 Figures based on proportional share of equity in KEH and KELAG.
3 Some prior-year figures restated.

126

Amprion GmbH,
Dortmund

KELAG-Kärntner Elektrizitäts-AG /
Kärntner Energieholding Beteiligungs GmbH
(KEH), Klagenfurt (Austria)

31 Dec 2021

31 Dec 2020

31 Dec 2021

31 Dec 2020

6,676

4,982

2,657

5,681

833

5,953

2,838

2,001

3,488

829

833

829

1,826

1,780

346

950

253

436

198

634

349

946

266

393

198

591

9,000

12,622

1,061

1,300

137

– 20

117

25 %

495

– 35

460

25 %

110

– 6

104

49 %

112

– 47

49 %

RWE Annual Report 20211
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

KELAG-Kärntner Elektrizitäts-AG, headquartered in Klagenfurt, Austria, is a leading

for the electricity sector, pursuant to the German Energy Act. Amprion’s main shareholder is

Austrian energy supplier in the fields of electricity, district heating and natural gas. RWE has

a consortium of financial investors.

an interest of 49 % in Kärntner Energieholding Beteiligungs GmbH (KEH), KELAG’s largest

shareholder and also holds 12.85 % of KELAG directly (imputed RWE shareholding of 37.9 %).

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 2021

31 Dec 20201

31 Dec 2021

31 Dec 20201

367

-28

-4

213

160

173

1,187

187

-2

185

1,642

1 Some prior-year figures restated due to retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see commentary on pages 108 et seq.).

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 conditions in loan agreements.

127

RWE Annual Report 2021
1
To our investors

2
Combined review
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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 2021

31 Dec 2020

Non-current securities amounting to €146 million and €3 million (previous year:

€133 million, adjusted by €104 million, and €4 million) were deposited in trust for RWE AG

and its subsidiaries, in order to cover credit balances stemming from the block model for

pre- retirement part-time work, pursuant to Sec. 8a of the Pre-Retirement Part-Time Work Act

and from the management of long-term working hours accounts pursuant to Sec. 7e of the

German Code of Social Law IV, respectively. This coverage applies to the employees of

RWE AG as well as to the employees of Group companies.

€ million

Derivatives

Capitalised surplus of plan assets over
benefit obligations

Prepayments for items other than
inventories

emission allowances

(14) Financial receivables

Miscellaneous other assets

Non-
current

Current

Non-
current

Current

668

64,492

675

8,109

459

172

167

793

2,363

1,353

3,490

66,805

64,584

2,587

3,434

855

2,221

2,579

148

446

1,118

9,821

8,452

1,369

Financial receivables

31 Dec 2021

31 Dec 2020

of which: financial assets

€ million

Non-
current

Current

Non-
current

Current

of which: non-financial assets

1,134

2,356

Loans to non-consolidated subsidiaries and
investments

101

105

Collaterals for trading activities

Other financial receivables

Accrued interest

Miscellaneous other financial receivables

11,997

332

12,394

111

131

2,154

284

2,482

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.

The increase in derivatives during the reporting period resulted from the significant price

rises for over-the-counter commodity derivatives for electricity and natural gas, which

cannot be netted.

Companies of the RWE Group deposited collateral for the trading activities stated above for

our early exit from the lignite business awarded by the German government (previous year:

exchange- based and over-the-counter transactions. These are to guarantee that the

€2,600 million). The EU Commission is expected to grant approval in 2022, as part of the

obligations from the trans actions are discharged even if the development of prices is not

review of compliance with state aid law.

€2,600 million of the miscellaneous other assets comprise the compensatory payments for

favourable for RWE. Regular 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.

128

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Furthermore, in the previous year €86 million of the miscellaneous other assets were

Deferred taxes

31 Dec 2021

31 Dec 20201

allocable to government grants awarded in relation with co-firing biomass in two Dutch

power plants.

(16) Deferred taxes

Deferred tax assets and liabilities principally stem from the fact that measurements in the

IFRS statements differ from those in the tax bases. As of 31 December 2021, no deferred

€ million

Non-current assets

Current assets

Exceptional tax items

Non-current liabilities

tax liabilities were recognised for the difference between net assets and the carrying value

Provisions for pensions

of the subsidiaries and associates for tax purposes (known as ‘outside basis differences’) in

the amount of €817 million (previous year: €820 million), as it is neither probable that there

will be any distributions in the foreseeable future, nor will the temporary differences reduce in

Other non-current liabilities

Current liabilities

the foreseeable future. €36,348 million and €35,531 million of the gross deferred tax assets

and liabilities, respectively, will be realised within twelve months (previous year: €3,404 milli-

Tax loss carryforwards

on and €4,047 million).

The following is a breakdown of deferred tax assets and liabilities by item:

Corporate income tax (or comparable
foreign income tax)

Trade tax (or comparable foreign local
income tax)

146

Assets

Liabilities

Assets

Liabilities

487

2,055

663

9,875

26,245

1,373

126

900

356

26,473

9,286

37,206

38,638

1,367

2,526

848

1,521

6,323

645

2,031

4,797

Gross total

Netting

Net total

37,353

38,638

4,858

6,323

– 36,690

– 4,461

663

1,948

397

1,862

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.) and retroactive adjustments to the first-time
consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

As of 31 December 2021, RWE reported deferred tax claims which exceeded the deferred

tax liabilities by €48 million (previous year: €73 million), in relation to companies which

suffered a loss in the current or previous period. The basis for the recognition of deferred tax

assets is the judgement of the management that it is likely that the companies in question

will generate taxable earnings, against which unutilised tax losses and deductible temporary

differences can be applied.

129

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The capitalised tax reduction claims from loss carryforwards result from the expected

The carrying amount of inventories acquired for resale purposes was €2,340 million

utilisation of previously unused tax loss carryforwards in subsequent years.

(previous year: €964 million). As in the previous year, this entire amount related to gas

inventories in the reporting period.

It is sufficiently certain that these tax carryforwards will be realised. At the end of the

reporting period, corporate income tax loss carryforwards and trade tax loss carryforwards

The fair value of gas inventories is determined every month on the basis of the current price

(or such related to comparable foreign income tax) for which no deferred tax claims have

curves of the relevant indices for gas (e. g. NCG). The valuations are based on prices which

been recognised amounted to €4,187 million and €2,965 million, respectively (previous

can be observed directly or indirectly (Level 2 of the fair value hierarchy). Differences

year: €2,811 million and 1,912 million).

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.

The corporate income tax loss carryforwards do not have any time limits, but are not

expected to be used for the most part.

(18) Marketable securities

As of 31 December 2021, temporary differences for which no deferred tax assets were

€8,036 million (previous year: €4,216 million) which predominantly have a maturity of

recognised amounted to €14,678 million (previous year: €13,216 million).

more than three months from the date of acquisition. Stocks and profit-participation

certificates accounted for €4 million (previous year: €3 million). Marketable securities

Current marketable securities include fixed-interest marketable securities totalling

In the year under review, a deferred tax expense of –€68 million arising from the currency

are stated at fair value.

translation of foreign financial statements was offset against equity (previous year: deferred

tax income of €41 million).

(19) Cash and cash equivalents

(17) Inventories

Inventories

€ million

Raw materials, incl. nuclear fuel assemblies and earth excavated for
lignite mining

Work in progress – goods / services

Finished goods and goods for resale

Prepayments

436

2,368

– 7

579

999

31 Dec 2021 31 Dec 2020

Cash and demand deposits

Cash and cash equivalents

€ million

Marketable securities and other cash investments (maturity less than
3 months from the date of acquisition)

31 Dec 2021 31 Dec 2020

5,824

4,764

5,825

4,774

RWE keeps demand deposits exclusively for short-term cash positions. For cash investments,

2,828

1,632

banks are selected on the basis of various creditworthiness criteria, including their rating

from one of the three renowned rating agencies – Moody’s, Standard & Poor’s and Fitch –

as well as their equity capital and prices for credit default swaps. As in the previous year,

interest rates on cash and cash equivalents were at market levels in 2021.

130

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

(20) Equity

On 28 April 2021, the General Meeting also decided on a conditional increase of the

A breakdown of fully paid-up equity is shown on page 92. The subscribed capital of RWE AG

company’s capital stock by up to €173,112,330.24, divided into up to 67,622,004 bearer

consists exclusively of common no-par-value bearer shares.

shares. This conditional capital increase serves the purpose of granting shares to the

Subscribed capital

31 Dec 2021
Number of
shares

31 Dec 2020
Number of
shares

31 Dec 2021
Carrying
amount

31 Dec 2020
Carrying
amount

holders or creditors of convertible and / or option bonds. It shall only be implemented by

27 April 2026 to the extent that the holders or creditors of convertible and / or option bonds

issued on the basis of the resolution passed by the Annual General Meeting on 28 Ap-

ril 2021 by the company or a company affiliated with the company within the meaning of

676,220

1,731

direct or indirect stake of at least 90 %, exercise conversion / option rights, fulfil conversion /

in '000.

€ million

Sections 15 et seqq. of the German Stock Corporation Act, in which the company has a

option obligations, or shares are tendered and no other forms of fulfilment are used. The

Executive Board is authorised, subject to Supervisory Board approval, to determine further

On 18 August 2020, RWE AG decided on a capital increase in return for cash contributions

details of implementing conditional capital increases.

with partial utilisation of the approved capital authorised by the General Meeting on

26 April 2018. The company's capital stock was thus increased by 10 % via the issue of

Pursuant to a resolution passed by the Annual General Meeting on 26 April 2018, the

61,474,549 new bearer shares, under the exclusion of existing shareholders’ subscription

company was further authorised until 25 April 2023 to acquire shares of the company up to

rights. The new shares were placed with institutional investors at a price of €32.55 per share

a volume of 10 % of the capital stock when the resolution on this authorisation was passed,

in an accelerated bookbuilding process. As a result of the capital increase, in the previous

or if the following is lower, when this authorisation is exercised. Based on the authorisation,

year the subscribed capital of RWE AG rose by €157,374,845.44 and its paid-in capital

the Executive Board is authorised to cancel treasury shares without a further resolution by

rose to €1,843,621,724.51. Transaction expenses of €11,070,500.71 were offset against

the Annual General Meeting. Moreover, the Executive Board is authorised to transfer or sell

retained earnings in the previous year.

such shares to third parties under certain conditions and excluding shareholders’ subscrip-

tion rights. Furthermore, treasury shares may be issued to holders of option or convertible

As the approved capital was partially utilised in this capital increase, the General Meeting

bonds under certain conditions. The Executive Board is also authorised to use the treasury

passed a resolution to replace the remaining authorisation with new approved capital on

shares to discharge obligations from future employee share schemes; in this regard,

28 April 2021. Pursuant to this resolution, the Executive Board is authorised, subject

shareholders’ subscription rights shall be excluded.

to Supervisory Board approval, to increase the company’s capital stock by up to

€346,224,663.04 – equivalent to approximately 20 % of the current capital stock –

No treasury shares were held as of 31 December 2021, as was also the case at last year's

until 27 April 2026 through the issue of up to 135,244,009 bearer shares in return for

reporting date.

contributions in cash and/or in kind (approved capital).

In certain cases, with the approval of the Supervisory Board, the subscription rights of

for a purchase price of €9,459,816.32 on the capital market (previous year:

In fiscal 2021, RWE AG purchased a total of 288,624 RWE shares (previous year: 314,808)

shareholders can be excluded.

€10,633,444.15). This is equivalent to €738,877.44 of the capital stock (0.04 % of

subscribed capital) (previous year: €805,908.48 and 0.05 % of subscribed capital).

Employees of RWE AG and its subsidiaries received a total of 288,624 shares for capital

131

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

formation under the employee share plan (previous year: 314,808). This resulted in total

Dividend proposal

proceeds of €9,356,616.42 (previous year: €10,516,392.73). The difference to the

We propose to the Annual General Meeting that RWE AG’s distributable profit for fiscal

purchase price was offset against freely available retained earnings.

2021 be appropriated as follows:

As a result of equity capital transactions with subsidiary companies which did not lead to a

Distribution of a dividend of €0.90 per share.

change of control, the share of equity attributable to RWE AG’s shareholders changed by a

total of – €10 million (previous year: – €145 million) and the share of equity attributable to

Dividend

other shareholders changed by a total of €6 million (previous year: €395 million). In the

previous year, this included the subsequent effects of the 2019 acquisition of the 23.2 %

Profit carryforward

Distributable profit

non-controlling interest in the continuing innogy operations (change in RWE AG shareholders'

interest in Group equity of – €298 million) as well as effects from the sale of a 49 % stake in

€608,598,043.20

€25,045.09

€608,623,088.29

the offshore UK wind farm Humber Gateway (€163 million change in the share of equity

Based on a resolution of RWE AG’s Annual General Meeting on 28 April 2021, the dividend for

attributable to RWE AG’s shareholders).

fiscal 2020 amounted to €0.85 per dividend-bearing share. The dividend payment to

shareholders of RWE AG amounted to €575 million (previous year: €492 million).

Accumulated other comprehensive income (OCI) reflects changes in the fair values of

debt instruments measured at fair value through other comprehensive income, cash flow

hedges and hedges of the net investment in foreign operations, as well as changes stem-

ming from foreign currency translation adjustments from foreign financial statements.

As of 31 December 2021, the share of accumulated other comprehensive income attribu-

table to investments accounted for using the equity method amounted to – €11 million

(previous year: – €29 million).

During the reporting year, €7 million in differences from currency translation which had

originally been recognised without an effect on income were realised as income (previous

year: income of €3 million).

132

RWE Annual Report 2021

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Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Non-controlling interests

The income and expenses recognised directly in equity (OCI) include the following non-

The share ownership of third parties in Group entities is presented in this item.

controlling interests:

Non-controlling interests in OCI
€ million

Currency translation adjustment

Fair valuation of financial instruments used for hedging purposes

Income and expenses recognised directly in equity, to be reclassified through profit or loss in the future

2021

2020

100

– 25

– 17

– 42

133

RWE Annual Report 20211
To our investors

2
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Notes

5
Further information

Material non-controlling interests are attributable to the subsidiary Rampion Offshore Wind

(21) Share-based payment

Limited., headquartered in Coventry, United Kingdom.

For executives of RWE AG as well as of affiliated companies, Long Term Incentive Plans

Subsidiaries with material non-controlling interests

€ million

Balance sheet

Non-current assets

Current assets

Non-current liabilities

Statement of comprehensive income

Revenue

Income

Total comprehensive income

Cash flows from operating activities

Non-controlling interests

Dividends paid to non-controlling interests

Income of non-controlling interests

Share of non-controlling interests in equity

Share of non-controlling interests in voting rights

Rampion
Offshore Wind
Limited,
United
Kingdom

31 Dec 2021

1,929

169

250

278

123

183

49.90 %

(LTIPs) are in place as share-based payment systems known as Strategic Performance

Plans (SPPs). The expenses associated with these are borne by the Group companies which

employ the persons holding notional stocks.

The LTIP SPP 2016-2020 was introduced in 2016. It uses an internal performance target (net

income of relevance to remuneration) derived from the mid-term planning and takes into

account the development of RWE AG‘s share price. Executives receive conditionally granted

virtual shares (performance shares). The final number of virtual shares in a tranche is

determined based on the achievement of the adjusted net income target. Each of the issued

LTIP SPP tranches has a term of four years before payment is possible.

The plan conditions of the LTIP SPP were adjusted and extended for grants starting from

fiscal 2021. In the future, along with the development of adjusted net income of relevance

to remuneration, the share-based payment scheme LTIP SPP 2021 will orientate to two

additional success factors: the 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 stocks. These three success factors determine how many of the

conditionally granted performance shares are finally granted at the end of the performance

period. The performance period was extended from the previous one year to three years.

Once it ends, all three success factors 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.

Rampion Offshore Wind Limited, United Kingdom, was fully consolidated for the first time in

the second quarter of 2021.

134

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

LTIP SPP 2016-2020

2017 tranche

Start of term

1 Jan 2017

Number of conditionally granted
performance shares

1,338,027

Term (vesting period)

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

Cap / number of
performance shares

Cap / payment amount

Determination of payment

150 %

200 %

150 %

200 %

150 %

200 %

150 %

200 %

(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 by holding at least 30 % of the voting rights including

third-party voting rights attributable to it in accordance with Sec. 30 of the German Securities Acquisition and Takeover Act, or

b) a control agreement in accordance with Sec. 291 of the German Stock Corporation Act 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, 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

Payment date

2021

2022

2023

2024

135

RWE Annual Report 2021
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To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

LTIP SPP 2021

Start of term

Number of conditionally granted
performance shares

Term (vesting period)

Performance targets

Weighting of performance
targets

2021 tranche

1 Jan 2021

823,566

4 years

1. Adjusted net income; 2. CO2 intensity; 3. Relative total shareholder return

Average achievement of performance targets, each weighted 1/3

Performance period

3 years

Cap / number of
performance shares

Cap / payment amount

Determination of payment

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.

Change in corporate control /
merger

third-party voting rights attributable to it in accordance with Sec. 30 of the German Securities Acquisition and Takeover Act, or

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 without change on expiry of the
holding period. The payment amount is determined according to the exercise conditions, with the deviation that the takeover price per share is to be used, plus the dividends
paid per share in the fiscal years between the start of the vesting period and the time of the change in control. The value of all performance shares granted conditionally at the
time of the change of control shall be determined with appropriate application of the exercise conditions based on the full-year results for the targets that are available up to
the fiscal year in which the change of control occurs, even if in this case the performance period only lasts one or two years. The payment amount is determined according to
the exercise conditions, with the deviation that the takeover price per share is to be used, plus the dividends paid per share in the fiscal years between the start of the vesting
period and the time of the change in control.
All conditionally granted performance shares for the calendar year of the change of control shall lapse without consideration.

Form of settlement

Cash settlement

Payment date

2025

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The fair value of the performance shares conditionally granted under SPP included the

The performance shares displayed the following development in the fiscal year that just

following sums on the grant date:

came to a close:

Performance Shares from
the RWE AG SPP
€

2017
tranche

2018
tranche

2019
tranche

2020
tranche

2021
tranche

Performance Shares from
the RWE AG SPP

2017
tranche

2018
tranche

2019
tranche

2020
tranche

2021
tranche

Fair value per share

11.62

18.80

19.10

26.41

34.07

Outstanding at the start of
the fiscal year

1,643,631

1,088,490

1,403,532

935,331

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 corresponding 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 determining the option price.

Multivariate Monte Carlo simulations were used for the valuation of RWE AG’s 2021 tranche

of the SPP. In this context, the success factors not dependent on the capital market were

Granted

Change1

Paid out

Outstanding at the end of
the fiscal year

Payable at the end of the
fiscal year

-1,643,631

-10,609

-7,973

77,820

823,566

1,077,881

1,395,559

1,013,151

823,566

1,077,881

1 'Change' pertains to the final grant based on target achievement or the subsequent grant or lapse of performance

shares.

taken as the best estimators without variability. In the valuation model, due consideration

For the SPP options exercised in the previous fiscal year, the average weighted daily share

was given to the maximum payment amounts stipulated in the programme’s conditions for

price on the day of exercise was €34.51.

each conditionally granted SPP (= option strike), the success factors not dependent on the

capital market, the current level of the RWE AG share and the index, the volatilities and

During the period under review, expenses for the share-based payment system totalled

correlations, the discount rates for the remaining term and the expected dividends of RWE AG.

€33 million (previous year: €38 million). As of the balance-sheet date, provisions for

cash-settled share- based payment programmes amounted to €85 million (previous year:

€85 million).

137

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

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 CO

emission allowances / certificates for renewable energies

Miscellaneous other provisions

138

31 Dec 2021

31 Dec 2020

Non- current

Current

Total Non- current

Current

1,934

5,577

4,871

12,382

304

579

1,266

1,196

553

223

367

4,561

16,943

452

122

574

832

213

2,099

422

3,694

4,268

1,934

6,029

4,993

3,864

6,113

4,729

12,956

14,706

1,136

610

1,479

1,198

647

223

2,099

789

8,255

339

624

1,366

1,125

648

223

363

4,764

21,211

19,470

338

423

651

124

1,332

373

2,581

3,004

Total

3,864

6,451

4,814

15,129

990

642

1,490

1,136

718

223

1,332

736

7,345

22,474

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Provisions for pensions and similar obligations. The company pension plan consists of

scope of the Act on the Supervision of Insurance Undertakings and oversight by the

defined contribution and defined benefit plans. The defined benefit commitments mainly

Federal Financial Supervisory Agency (BaFin). Insofar as a regulatory deficit occurs in the

relate to pension benefits based on final salary. These are exposed to the typical risks of

pension fund, supplementary payment shall be requested from the employer. Independently

longevity, inflation and salary increases.

of the aforementioned rules, the liability of the employer shall remain in place. The boards of

RWE Pensionstreuhand e.V. and RWE Pensionsfonds AG are responsible for ensuring that

In the reporting period, €36 million (previous year: €32 million) was paid into defined

the funds under management are used in compliance with the contract and thus fulfil the

contribution plans. This includes payments made by RWE for a benefit plan in the Nether-

requirements for recognition as plan assets. In March 2021, RWE made an extraordinary

lands which covers the commitments of various employers. This fund does not provide the

funding payment of €1,049 million to the assets held in trust, in order to further improve the

participating companies with information allowing for the pro-rata allocation of defined

capital coverage of the domestic pension obligations.

benefit obligations, plan assets and service cost. In the consolidated financial statements,

the contributions are thus recognised analogously to a defined contribution plan, although

In the United Kingdom, it is legally mandated that defined benefit plans are provided with

this is a defined benefit plan. The pension plan for employees in the Netherlands is adminis-

adequate and suitable assets to cover pension obligations. The corporate pension system is

tered by Stichting Pensioenfonds ABP (see www.abp.nl). Contributions to the pension plan

managed by the sector-wide Electricity Supply Pension Scheme (ESPS). Following completi-

are calculated as a percentage rate of employees’ salaries and are paid by the employees

on of the E.ON transaction, dedicated independent sections were formed for RWE for the

and employers. The rate of the contributions is determined by ABP. There are no minimum

conventional generation business (RWE Section), for the renewables business acquired

funding obligations. Approximately €9 million in employer contributions are expected to be

legally from innogy which has been consolidated with RWE without interruption (Innogy

paid to the ABP pension fund in the following fiscal 2022 (prior-year figure for fiscal 2021:

Section) and for the renewables business acquired from E.ON (Former E.ON Section). The

€9 million). The contributions are used for all of the beneficiaries. If ABP’s funds are

sections are managed by trustees which are elected by members of the pension plans or

insufficient, it can either curtail pension benefits and future post-employment benefits, or

appointed by the sponsoring employers. The trustees are responsible for managing the

increase the contributions of the employer and employees. In the event that RWE termina-

pension plans. This includes investments, pension payments and financing plans. The

tes the ABP pension plan, ABP will charge a termination fee. Amongst other things, its level

pension plans comprise the benefit obligations and plan assets for the subsidiaries of the

depends on the number of participants in the plan, the amount of salary and the age

RWE Group. It is required by law to assess the required financing of the pension plans once

structure of the participants. As of 31 December 2021, we had around 600 active

every three years in compliance with the UK regulations for pensions (a so-called funding

participants in the plan (previous year: approximately 600).

valuation). This involves measuring pension obligations on the basis of conservative

assumptions, which deviate from the requirements imposed by IFRS. The underlying

RWE transferred assets to RWE Pensionstreuhand e.V. within the framework of a contrac-

actuarial assumptions primarily include the projected life expectancies of the members of the

tual trust arrangement (CTA) in order to finance the pension commitments of German

pension plans as well as assumptions relating to inflation, imputed interest rates and the

Group companies. There is no obligation to provide further funds. From the assets held in

market returns on the plan assets.

trust, funds were transferred to RWE Pensionsfonds AG to cover pension commitments to

most of the employees who have already retired. RWE Pensionsfonds AG falls under the

139

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The last funding valuation for the RWE section was carried out on 31 March 2019 and

It revealed a financing deficit of £7 million. In December 2021, the sponsoring employers

showed that the RWE section had a financing deficit of £44.3 million, which was rectified with

and the trustees decided to transfer the members of this section to the Innogy Section.

a payment of £48.3 million as of 31 March 2020. The next funding valuation must occur by

Consequently, there is no need to settle the financing deficit.

31 March 2022. A financing deficit of £103.4 million was revealed for the Innogy Section. It

was subsequently agreed with the trustees to rectify this deficit with annual payments of

The payments to settle the deficit are charged to the participating companies on the basis of

£37.5 million, £36.3 million, £17.0 million and £17.0 million from 2020 to 2023. An

a contractual agreement. Above and beyond this, payments are regularly made to finance the

agreement was also reached with the trustees to draw forward the next valuation to

newly arising benefit obligations of active employees which increase the pension claims.

31 March 2021. This valuation was completed in December 2021. No financing deficit was

identified. Together with the trustees, the decision was then made not to undertake the

Provisions for defined benefit plans are determined using actuarial methods. We apply the

annual payments for 2022 and 2023 resulting from the previous valuation. A valuation was

following assumptions:

carried out for the section of the renewables business acquired from E.ON on 31 March 2020.

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 2021

31 Dec 2020

Germany

Foreign1

Germany

1.10

2.35

1.80

3.20

0.80

2.35

Foreign1

1.30

3.00

1.00, 1.60 and 1.75

2.20 and 3.10

1.00, 1.60 and 1.75

2.10 and 2.90

140

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Composition of plan assets (fair value)

31 Dec 2021

31 Dec 2020

€ million

Germany1

Equity instruments, exchange-traded funds

Interest-bearing instruments

Real estate

Mixed funds3

Alternative investments

Other4

1,784

5,430

663

7,938

Of which: Level 1
pursuant to
IFRS 13

1,754

609

2,387

Of which: Level 1
pursuant to
IFRS 13

108

419

143

101

771

Foreign2

496

4,146

1,478

386

626

7,132

Of which: Level 1
pursuant to
IFRS 13

1,449

324

542

Germany1

1,472

3,785

645

711

6,670

2,338

Of which: Level 1
pursuant to
IFRS 13

116

270

Foreign2

485

3,956

1,509

412

477

6,839

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

achieve consistently high returns, there is also investment in products which are more likely

pension commitments and the relation of these two items to each other, in order to determine

to offer relatively regular positive returns over time. This involves products with returns

the best possible investment strategy (Asset Liability Management Study). Using an optimi-

which fluctuate like those of bond investments, but which achieve an additional return over

sation process, portfolios are identified which can earn the best targeted results at a

the medium term, such as so-called absolute return products.

defined level of risk. One of these efficient 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

The focus of RWE’s strategic investment policy is on domestic and foreign government

context is to maintain the level of pension plan funding and ensure the full financing of the

bonds. In order to increase the average yield, corporate bonds with a higher yield are also

pension plans over time. To reduce financing costs and earn surplus returns, we also include

included in the portfolio. The ratio of equities in the portfolio is lower than that of bonds.

higher-risk investments in our portfolio. The capital investment focusses on government and

obligations as well as liquidity and risk matters. The goal of the investment strategy in this

Investment occurs in various regions. The investment position in equities is intended to

corporate bonds.

earn a risk premium over bond investments over the long term. Furthermore, in order to

141

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Pension provisions for pension commitments changed as follows:

Changes in pension provisions
€ million

Balance at 1 Jan 2021

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 2021

of which: domestic

of which: foreign

Present value of
pension commitments

Fair value of
plan assets

Capitalised surplus of
plan assets

17,201

13,509

172

171

170

– 782

– 4

458

– 727

16,545

9,844

6,701

149

503

474

1,129

– 702

– 5

15,070

7,938

7,132

269

459

456

Total

3,864

171

– 503

– 782

– 4

– 1,129

– 25

269

1,934

1,909

1 Of which: €1,092 million from initial and subsequent transfers to plan assets and €37 million in cash flows from operating activities.
2 Contained in cash flows from operating activities.

142

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

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 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 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

– 718

17,201

10,503

6,698

201

859

– 361

245

– 690

– 8

13,509

6,670

6,839

– 10

172

Total

3,446

148

– 859

– 17

1,435

– 106

– 1

– 245

– 28

3,864

3,833

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.

143

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

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 2021

31 Dec 2020

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

– 792

– 486

– 63

– 41

– 518

– 339

813

518

507

267

478

223

903

552

569

382

523

210

– 715

– 458

– 44

– 36

– 463

– 307

144

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The sensitivity analyses are based on the change of one assumption each, with all other

Domestic company pensions are subject to an obligation to review for adjustment every

assumptions remaining unchanged. Actual developments will probably be different than

three years pursuant to the Act on the Improvement of Company Pensions (Sec 16 of the

this. The methods of calculating the aforementioned sensitivities and for calculating the

German Company Pension Act (BetrAVG)). Additionally, some commitments grant annual

pension provisions are in agreement. The dependence of pension provisions on market

adjustments of pensions, which may exceed the adjustments in compliance with the legally

interest rates is limited by an opposite effect. The background of this is that the commit-

mandated adjustment obligation.

ments stemming from company pension plans are primarily covered by funds, and mostly

plan assets exhibit negative correlation with the market yields of fixed- interest securities.

Some domestic pension plans guarantee a certain pension level, taking into account the

Consequently, declines in market interest rates are typically reflected in an increase in plan

statutory pension (total retirement earnings schemes). As a result, future reductions in the

assets, whereas rising market interest rates are typically reflected in a reduction in plan assets.

statutory pension can result in higher pension payments by RWE.

The present value of pension obligations, less the fair value of the plan assets, equals the net

The weighted average duration of the pension obligations was 16 years in Germany

amount of funded and unfunded pension obligations.

(previous year: 16 years) and 16 years outside of Germany (previous year: 17 years).

As of the balance-sheet date, the recognised amount of pension provisions totalled

In fiscal 2022, RWE expects to make €65 million in payments for defined benefit plans of

€1,367 million for funded pension plans (previous year: €3,265 million) and €567 million

continuing operations (previous-year target: €240 million), as direct benefits and contribu-

for unfunded pension plans (previous year: €599 million).

tions to plan assets.

As in the previous year, a 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 2021

Additions

Unused amounts
released

Interest accretion

Amounts used

6,451

4,814

11,265

162

116

278

– 2

– 4

127

141

– 596

– 62

– 658

Balance at
31 Dec 2021

6,029

4,993

11,022

145

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Provisions for nuclear waste management are recognised in the full amount for the

missioning and dismantling work can be performed in time after the expiry of the operating

nuclear power plants Biblis A and B, Emsland and Gundremmingen A, B and C, as well as

permit. Dismantling operations essentially consist of dismantling and removal of the

Lingen and Mülheim-Kärlich. Provisions for waste disposal for the Dutch nuclear power plant

radioactive contamination from the facilities and structures, radiation protection, and

Borssele are included at a rate of 30 %, in line with RWE’s stake.

regulatory monitoring of the dismantling measures and residual operations.

Provisions for nuclear waste disposal are almost exclusively reported as non-current

We thus subdivide our provisions for nuclear waste management into the residual operation

provisions, and their settlement amount is discounted to the balance-sheet date. Based on

of nuclear power plants, the dismantling of nuclear power station facilities as well as the

the current state of planning, these provisions will essentially be used by the beginning of

cost of residual material processing and radioactive waste treatment facilities.

the 2040s. The discount rate calculated 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

Provisions for nuclear waste management
€ million

31 Dec 2021 31 Dec 2020

prices and productivity growth was 1.5 % (previous year: 1.5 %). As a result, the real discount

Residual operation

rate used for nuclear waste management purposes, which is the difference between the

Dismantling

discount rate and the escalation rate, amounted to – 1.5 % (previous year: – 1.5 %). An

increase (decrease) in this rate by 0.1 percentage point would reduce (increase) the present

Processing of residual material and waste management

value of the provision by roughly €40 million.

2,211

2,126

1,692

6,029

2,707

2,007

1,737

6,451

Excluding the interest accretion, additions to provisions for nuclear waste management are

Provisions for the residual operation of nuclear power station facilities cover all steps that

based on quantity-related increases in the provisions as well as updates of the cost estima-

must be taken largely independent of dismantling and disposal but are necessary to ensure

tes and amount to €162 million. Of the changes in provisions, €21 million was offset

that the assets are safe and in compliance with permits or are required by the authorities.

against the corresponding costs of nuclear power plants still in operation and the fuel

In addition to works monitoring and facility protection, these mainly include service, recurrent

elements. In the reporting period, we also used provisions of €245 million for the decom-

audits, maintenance, radiation and fire protection as well as infrastructural adjustments.

missioning of nuclear power plants. Decommissioning and dismantling costs had originally

been capitalised in a corresponding amount and reported under the cost of the respective

Provisions for the dismantling of nuclear power plant facilities include all work done to

nuclear power plants.

dismantle plants, parts of plants, systems and components as well as on buildings that must

be dismantled to comply with the Nuclear Energy Act. They also consider the conventio-

The provisions of the law on the reassignment of responsibility for nuclear waste disposal

nal dismantling of nuclear power plant facilities to fulfil legal or other obligations.

stipulate that accountability for the shutdown and dismantling of the assets in Germany

as well as for packaging radio active waste remains with the companies. The shutdown and

Provisions for residual material processing and waste management include the costs of

dismantling process encompasses all activities following the final termination of production

processing radioactive residual material for non-hazardous recycling and the costs of

by the nuclear power plant until the plant site is removed from the regulatory scope of the

treating radioactive waste produced during the plant’s service life and dismantling

Nuclear Energy Act. A request to decommission and dismantle the nuclear power plant will

operations. This includes the various processes for conditioning, proper packaging of the

be filed with the nuclear licensing authority during its operating period so that the decom-

low-level and intermediate-level radioactive waste in suitable containers and the transportati-

146

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

on of such waste to BGZ Gesellschaft für Zwischenlagerung mbH (BGZ), which has been

In terms of their contractual definition, provisions for nuclear waste management break

commissioned by the Federal government for intermediate storage. This item also contains

down as follows:

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.

Provisions for nuclear waste management
€ million

Provisions for nuclear obligations, not yet contractually defined

Commissioned by the plant operator, the internationally renowned company NIS Ingenieur-

Provisions for nuclear obligations, contractually defined

gesellschaft mbH, Alzenau, assesses the prospective costs of residual operation and

dismantling of the nuclear power plants on an annual basis. The costs are determined

specifically for each facility and take into consideration the current state of the art,

31 Dec 2021 31 Dec 2020

4,148

1,881

6,029

4,623

1,828

6,451

regulatory requirements and previous practical experience from ongoing and completed

The provision for obligations which are not yet contractually defined covers the costs of the

dismantling projects. Additionally, current developments are also incorporated into the cost

remaining operational phase of the operating plants, the costs of dismantling as well as the

calculations. They also include the cost of conditioning and packaging radioactive waste

residual material processing and waste treatment costs incurred in connection with waste

generated during dismantling operations and the transportation of such waste to BGZ.

produced as a result of shutdowns.

Further cost estimates for the disposal of radioactive waste are based on contracts with

foreign reprocessing companies and other disposal companies. Furthermore, the cost

Provisions for contractually defined nuclear obligations relate to all obligations the value

estimates are based on plans by internal and external experts, in particular GNS Gesell-

of which is specified in contracts under civil law. The obligations include the anticipated

schaft für Nuklear-Service mbH, (GNS) Essen.

residual costs of reprocessing 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 radioacti-

ve 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. The cost estimates are

based on internal planning and estimates and are largely backed by external expert opinions.

147

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

In discounting the amounts used in the coming 30 years, we have oriented ourselves

the real discount rate would increase the present value of the provision by around €140 mil-

towards the current market interest rates for risk-free cash investments. Since no market

lion, while an increase of 0.1 percentage point would reduce the present value by around

interest rates are available for later periods, a sustainable, long-term interest rate is used to

€130 million.

discount the amounts used after the next 30 years. The average discount rate was 2.1 %

(previous year: 2.0 %). The majority of the provisions still pertains to claims that are expected

Excluding the interest accretion, additions to provisions for mining damage amounted to

to materialise over the next 30 years. Based on the currently expected price and cost

€116 million in the reporting period. The reason for this was quantity-induced increases in

increases, the escalation rate was 1.5 % as in the previous year. The real discount rate

the obligatory volume and updates of the cost estimates, of which €21 million was capitalised

applied for mining purposes, which is the difference between the discount rate and the

in the item The interest accretion increased provisions for mining damage by €127 million, of

escalation rate, was thus 0.6 % (previous year: 0.5 %). A decline of 0.1 percentage point in

which €6 million was capitalised in the item 'property, plant and equipment'.

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 CO
certificates for renewable energies

emission allowances /

Miscellaneous other provisions

Balance at
1 Jan 2021

Additions

Unused amounts
released

Interest accretion

Changes in the scope of
consoli dation, currency
adjustments, transfers

Amounts used

Balance at
31 Dec 2021

990

642

1,490

1,136

718

223

1,332

736

7,345

708

425

159

2,095

435

3,954

– 25

– 64

– 77

– 165

– 92

– 4

– 27

– 41

– 495

– 15

– 9

– 105

– 9

– 138

– 40

175

– 17

186

– 574

– 9

– 350

– 2

– 13

– 4

– 1,321

– 324

– 2,597

1,136

610

1,479

1,198

647

223

2,099

789

8,255

148

RWE Annual Report 20211
To our investors

2
Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Provisions for staff-related obligations mainly consist of provisions for pre-retirement

(23) Financial liabilities

part-time work arrangements, severance, outstanding vacation and service jubilees and

performance-based pay components. Based on current estimates, we expect most of these

Financial liabilities

31 Dec 2021

31 Dec 2020

to be used from 2022 to 2025.

Provisions for restructuring obligations pertain mainly to measures for socially acceptable

Bonds payable1

payroll downsizing. We currently expect most of these to be used from 2022 to 2038. In so

doing, sums ear-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

Commerical paper

Bank debt

Other financial liabilities

socially acceptable payroll downsizing are signed by affected employees.

Collateral for trading activities

€ million

Non-
current

2,411

2,014

Miscellaneous other financial liabilities

2,373

Current

2,710

3,569

4,239

478

Provisions for purchase and sales obligations primarily relate to contingent losses from

6,798

10,996

pending transactions.

1 Including hybrid bonds classified as debt as per IFRS.

Non-
current

549

Current

1,528

1,874

3,951

716

448

1,247

From the current perspective, we expect that the majority of the provisions for the dis-

mantling of wind farms will be used from 2022 to 2046, and the provisions for other

The following overview shows the key data on the bonds of the RWE Group as of 31 Decem-

dismantling and retrofitting obligations will be used from 2022 to 2060.

ber 2021:

Bonds payable
Issuer

Outstanding
amount

RWE AG

€ 12 million

€ 282 million1

US$ 317 million1

€ 500 million

€ 750 million

€ 600 million

Bonds payable

1 Hybrid bonds classified as debt as per IFRS.

Carrying
amount
€ million

281

278

500

747

593

2,411

Coupon in %

Maturity

3.5

6.625

0.625

October 2037

April 2075

July 2075

June 2031

0.5 November 2028

1.0 November 2033

149

RWE Annual Report 20211
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Combined review
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Responsibility statement

4
Consolidated financial
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Notes

5
Further information

In June 2021, RWE issued a green corporate bond with a volume of €500 million and a

(25) Other liabilities

maturity of ten years. Based on a coupon of 0.625 % p.a. and an issue price of 99.711 %, the

yield-to-maturity amounts to 0.655 % p.a. In accordance with RWE’s guidelines for green

Other liabilities

31 Dec 2021

31 Dec 20201

bonds, the RWE Green Bond Framework, the proceeds from the issue may only be used for

the financing or refinancing of wind and solar projects.

RWE issued another green bond in November 2021. It consisted of two tranches, with a

volume of €750 million and a maturity of seven years and a volume of €600 million and a

maturity of twelve years, respectively. Based on a coupon of 0.5 % p. a. and an issue price of

99.808 %, the yield-to-maturity amounts to 0.528 % p. a. for the first tranche. The yield- to-

maturity is 1.077 % p. a. for the second tranche, with a coupon of 1.0 % and an issue price

of 99.138 %.

In the previous year, a hybrid bond issued by RWE AG which was previously classified as

debt pursuant to IAS 32 was cancelled on 4 September 2020. 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 2.75 % coupon and maturity ending

in April 2075.

€ million

Tax liabilities

Social security liabilities

Derivatives

Miscellaneous other liabilities

of which: financial debt

of which: non-financial debt

Non-
current

873

855

Current

226

76,119

906

Non-
current

554

800

1,729

77,271

1,355

961

768

76,677

594

640

715

Current

158

8,106

768

9,046

8,414

632

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.).

The increase in derivatives during the reporting period resulted from the significant price

rises for over-the-counter commodity derivatives for electricity and natural gas, which

€23 million of the financial liabilities are secured by mortgages (previous year: €31 million).

cannot be netted.

Other financial liabilities contain lease liabilities.

(24) Income tax liabilities

security institutions.

Income tax liabilities contain uncertain income tax items in the amount of €905 million

(previous year: €939 million). This item primarily includes income taxes for periods for which

Miscellaneous other liabilities contain €150 million in contract liabilities (previous year:

the tax authorities have not yet finalised a tax assessment and for the current year.

€221 million).

The principal component of social security liabilities are the amounts payable to social

Moreover, €63 million (previous year: €66 million) in miscellaneous other liabilities were

allocable to state investment subsidies primarily granted in connection with the construction

of wind farms.

150

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Combined review
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3
Responsibility statement

4
Consolidated financial
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Notes

5
Further information

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

• Equity instruments measured at fair value through other comprehensive income: the

attributable to RWE shareholders by the average number of shares outstanding; treasury

option to recognise changes in fair value directly in equity is exercised.

shares are not taken into account in this calculation.

• Financial assets measured at fair value through profit or loss: the contractual cash flows of

Earnings per share

2021

20201

or the option to recognise changes in the fair value of equity instruments in other compre-

a debt instrument do not solely consist of interest and principal on the outstanding capital

Net income for RWE AG shareholders

€ million

of which: from continuing operations

of which: from discontinued operations

721

1,051

864

187

Number of shares outstanding (weighted average)

in ‘000

676,220

637,286

hensive income is not exercised.

On the liabilities side, non-derivative financial instruments principally include liabilities

measured at amortised cost.

Basic and diluted earnings per share

of which: from continuing operations

of which: from discontinued operations

Dividend per share

€

1.07

0.902

1.65

1.36

0.29

0.85

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 develop-

ments and corporate business plan data. Current market interest rates corresponding to

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see commentary on pages 108 et seq.).

2 Dividend proposal for fiscal 2021, subject to the resolution of the Annual General Meeting on 28 April 2022.

the remaining maturity are used for discounting.

(27) Reporting on financial instruments

Derivative financial instruments are recognised at their fair values as of the balance-sheet

date, insofar as they fall under the scope of IFRS 9. Exchange-traded products are measu-

red using the published closing prices of the relevant exchange. Non-exchange traded

Financial instruments are divided into non-derivative and derivative. Non-derivative

products are measured on the basis of publicly available broker quotations or, if such

financial assets essentially include other non-current financial assets, accounts receivable,

quotations are not available, on generally accepted valuation methods. In doing so, we draw

marketable securities and cash and cash equivalents. Financial instruments are recognised

on prices on active markets as much as possible. If such prices are not available, company-

either at amortised cost or at fair value, depending on their classification. Financial instru-

specific planning estimates are used in the measurement process. These estimates

ments are recognised in the following categories:

encompass all of the market factors which other market participants would take into

account in the course of price determination. Assumptions pertaining to the energy sector

• Debt instruments measured at amortised cost: the contractual cash flows solely consist

and economy are made within the scope of a comprehensive process with the involvement

of interest and principal on the outstanding capital: there is an intention to hold the

of both in-house and external experts.

financial instrument until maturity.

151

RWE Annual Report 20211
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2
Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Measurement of the fair value of a group of financial assets and financial liabilities is

• Level 1: Measurement using (unadjusted) prices of identical financial instruments formed on

conducted on the basis of the net risk exposure per business partner.

active markets,

• Level 2: Measurement on the basis of input parameters which are not the prices from

The following overview presents the classifications of financial instruments measured at

Level 1, but which can be observed for the financial instrument either directly (i. e. as

fair value in the fair value hierarchy prescribed by IFRS 13. The individual levels of the fair

price) or indirectly (i. e. derived from prices),

value hierarchy are defined as follows:

• Level 3: Measurement using factors which cannot be observed on the basis of market data.

Fair value hierarchy
€ million

Other financial assets1

Derivatives (assets)

of which: used for hedging purposes

Securities

Derivatives (liabilities)

of which: used for hedging purposes

Total
31 Dec 2021

5,477

65,160

6,768

8,040

76,992

14,609

Level 1

Level 2

Level 3

Total
31 Dec 2020

Level 1

Level 2

Level 3

4,960

1,078

235

61,281

6,768

6,962

75,760

14,609

282

3,879

1,232

4,237

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

364

699

256

1 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

152

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Due to the higher number of price quotations on active markets, financial assets with a fair

number of price quotations, financial assets with a fair value of €13 million (previous year:

value of €16 million (previous year: €43 million) were reclassified from Level 2 to Level 1

€93 million) were reclassified from Level 1 to Level 2.

and €93 million (previous year: €0 million) to Level 3. Conversely, due to a drop in the

The development of the fair values of Level 3 financial instruments is presented in the

following table:

Level 3 financial instruments:
Development in 2021

€ million

Other financial assets

Derivatives (assets)

Derivatives (liabilities)

Level 3 financial instruments:
Development in 2020

€ million

Other financial assets1

Derivatives (assets)

Assets held for sale

Derivatives (liabilities)

Liabilities held for sale

Balance at
1 Jan 2021

Changes in the scope
of consolidation,
currency adjustments
and other

364

699

256

– 95

– 29

Balance at
1 Jan 2020

Changes in the scope
of consolidation,
currency adjustments
and other

350

665

577

– 52

– 9

– 8

– 4

Changes

Recognised in OCI

– 103

Changes

Recognised in OCI

Recognised in
profit or loss

3,466

1,190

Recognised in
profit or loss

– 85

– 313

With a
cash effect

– 286

– 185

With a
cash effect

Balance at
31 Dec 2021

282

3,879

1,232

Balance at
31 Dec 2020

364

699

256

1 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see commentary on page 95).

153

RWE Annual Report 20211
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Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

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 loss

€ million

Other operating income / expenses

Income from investments

Level 3 derivative financial instruments essentially consist of energy purchase and commo-

dity 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 particu-

lar. 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 €82 million (previous year: €95 million) or decline by

€82 million (previous year: €95 million).

Total
2021

2,276

2,297

Of which:
attributable to
financial instruments held at
the balance-sheet date

2,277

2,297

Total
2020

356

– 86

270

Of which:
attributable to
financial instruments held at
the balance-sheet date

852

– 85

767

154

RWE Annual Report 20211
To our investors

2
Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Financial assets and liabilities can be broken down into the measurement categories with

The carrying amounts of financial assets and liabilities within the scope of IFRS 7 basically

the following carrying amounts according to IFRS 9 in the year under review:

correspond to their fair values. The only deviations are for financial liabilities. The carrying

Carrying amounts by category
€ million

Financial assets measured at fair value through profit or loss

of which: obligatorily measured at fair value – continuing operations

Debt instruments measured at amortised cost1

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

Financial liabilities measured at amortised cost

of which: held for sale

1 Restated prior-year figure.

31 Dec 2021 31 Dec 2020

amounts to €16,419 million (previous year: €4,281 million). Of this, €2,460 million

amount of these is €16,385 million (previous year: €4,011 million), while the fair value

65,854

24,911

10,566

10,766

(previous year: €607 million) is related to Level 1 and €13,959 million (previous year:

€3,674 million) to Level 2 of the fair value hierarchy.

The following net results from financial instruments as per IFRS 7 were recognised on the

income statement, depending on the category:

1,236

1,338

Net gain / loss by category
€ million

2021

2020

Financial assets and liabilities measured at fair value through profit or loss

– 1,270

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

– 1,270

600

3,318

– 248

– 7

194

193

– 648

– 303

4,819

62,384

21,359

3,702

7,163

7,013

315

155

RWE Annual Report 20211
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2
Combined review
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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

In fiscal 2021, €194 million (previous year: €193 million) in income from dividends from

measurement of financial instruments at fair value.

these financial instruments was recognised, of which €0 million (previous year: €5 million)

The option to recognise changes in fair value in OCI is exercised for a portion of the invest-

their fair value at the derecognition date amounted to €782 million. The resulting loss

ments in equity instruments. These are strategic investments and other long-term invest-

amounted to €18 million in the previous year.

was attributable to equity instruments sold during the same year. In the previous year,

ments.

Fair value of equity instruments measured at
fair value through other comprehensive income

€ million

Nordsee One GmbH

E.ON SE

The following is an overview of the financial assets and financial liabilities which are netted

out in 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

31 Dec 2021

31 Dec 2020

for stock market transactions due on a daily basis.

4,802

120

3,582

The related amounts not set off include cash collateral received and pledged for over-the-

counter transactions as well as collateral pledged in advance for stock market transactions.

Netting of financial assets and financial liabilities
as of 31 Dec 2021

Gross amounts
recognised

Netting

Net amounts
recognised

Related amounts not set off

Net amount

€ million

Derivatives (assets)

Derivatives (liabilities)

69,985

69,714

Netting of financial assets and financial liabilities as
of 31 Dec 2020

Gross amounts
recognised

– 65,273

– 61,564

Netting

€ million

Derivatives (assets)

Derivatives (liabilities)

Financial
instruments

Cash collateral
received / pledged

4,712

8,150

– 1,107

– 4,039

– 7,004

673

Net amounts
recognised

Related amounts not set off

Net amount

Financial
instruments

Cash collateral
received / pledged

10,111

8,024

– 9,209

– 7,439

902

585

– 267

– 495

– 310

407

156

RWE Annual Report 2021

1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

As an energy producer with international operations, the RWE Group is exposed to market,

indicators such as the Value at Risk (VaR) and sensitivities, amongst other things. In addition, for

credit and liquidity risks in its ordinary business activity. We limit these risks via systematic,

the management of interest rate risk, a Cash Flow at Risk (CFaR) is determined.

groupwide risk management. The range of action, responsibilities and controls are defined

in binding internal directives.

Using the VaR method, RWE determines and monitors the maximum expected loss arising

from changes in market prices with a specific level of probability during specific periods.

Market risks stem from changes in exchange rates and share prices as well as interest

Historical price volatility is taken as a basis in the calculations. With the exception of the

rates and commodity prices, which can have an influence on business results.

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 % and a holding period of one year is

Due to the RWE Group’s international profile, currency management is a key issue. Fuels are

taken as a basis.

traded in British pounds and US dollars as well as in other currencies. In addition, RWE does

business in a number of currency areas. The companies of the RWE Group are required to

In respect of interest rate risks, RWE distinguishes between two risk categories: on the one

hedge their foreign currency risks via RWE AG. Foreign currency risks arising from the invol-

hand, increases in interest rates can result in declines in the prices of securities from the

vement in and the financing of the renewable energy business are hedged by RWE Renewa-

holdings of RWE. This pertains primarily to fixed-rate instruments. Starting from fiscal 2021,

bles International Participations B.V.

price risk is measured using sensitivity analysis in relation to an interest rate change of

100 basis points. As of the balance- sheet date, it amounted to €28.2 million (previous

Interest rate risks stem primarily from financial debt and the Group’s interest-bearing inves-

year: €2.5 million). On the other hand, financing costs also increase along with the level of

tments. We hedge against negative changes in value caused by unexpected interest-rate

interest rates. The sensitivity of interest expenses to increases in market interest rates is

movements using non-derivative and derivative financial instruments.

measured with the CFaR. As of 31 December 2021 this amounted to €2.0 million (previous

year: €18.6 million). RWE calculates the CFaR based on the assumption of the refinancing

Opportunities and risks from changes in the values of non-current securities are centrally

of maturing debt.

controlled by a professional fund management system operated by RWE AG.

The Group’s other financial transactions are recorded using centralised risk management

measured using sensitivity analysis, which shows the impact on the value of the position

software and monitored by RWE AG.

stemming from a 10 % change in the exchange rate. As of 31 December 2021, this sensiti-

Starting from fiscal 2021, risks related to financial positions in foreign currency are also

vity was €0.3 million (previous year: €0.4 million).

For commodity operations, risk management directives have been established by RWE AG’s

Controlling & Risk Management Department. These regulations stipulate that derivatives

Since fiscal 2021, we also measure the price risk of equities in RWE’s portfolio using sensiti-

may be used to hedge price risks. Furthermore, commodity derivatives may be traded, subject

vity analysis. As of the balance-sheet date, this analysis yielded the following results (before

to limits. Compliance with limits is monitored daily.

taxes): In the event of a 10 % rise in the relevant equity prices, equity would increase by

Risks stemming from fluctuations in commodity prices and financial market risks (foreign

In the event of a 10 % fall in the relevant equity prices, equity would decrease by €490 million

currency risks, interest rate risks, securities risks) are monitored and managed by RWE using

(previous year: €358 million) and income by €9 million (previous year: €0 million).

€490 million (previous year: €358 million) and income by €9 million (previous year: €0 million).

157

RWE Annual Report 20211
To our investors

2
Combined review
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3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The key internal control parameters for commodity positions at RWE Supply & Trading are

One of our most important instruments to limit market risk is the conclusion of hedging

the VaR for the trading business and the VaR for the pooled gas and liquefied natural gas

transactions. The instruments most commonly used are forwards and options with foreign

(LNG) business. Here, the maximum VaR is €50 million and €25 million, respectively. As of

currency, interest rate swaps, interest rate currency swaps, equity capital derivatives, and

31 December 2021, the VaR was €30.6 million in the trading business (previous year:

forwards, options, futures and swaps with commodities.

€25.0 million) and €14.9 million for the pooled gas and LNG business (previous year:

€6.7 million).

Maturities of derivatives related to interest rates, currencies, equity capital, indices and

commodities for the purpose of hedging are based on the maturities of the underlying

Additionally, stress tests are carried out on a monthly basis in relation to the trading and

transactions and are thus primarily short term and medium term in nature. Hedges of the

pooled LNG and gas business of RWE Supply & Trading to model the impact of commodity

foreign currency risks of foreign investments have maturities of up to ten years.

price changes on the earnings conditions and take risk-mitigating measures if necessary. In

these stress tests, market price curves are modified, and the commodity position is re-

All derivative financial instruments within the scope of IFRS 9 are recognised as assets or

valued on this basis. Historical scenarios of extreme prices and realistic, fictitious price

liabilities and are measured at fair value. When interpreting their positive and negative fair

scenarios are modelled. In the event that the stress tests exceed internal thresholds,

values, it should be taken into account that, with the exception of trading in commodities,

these scenarios are then analysed in detail in relation to their impact and probability,

these financial instruments are generally matched with underlying transactions that carry

and – if necessary – risk-mitigating measures are considered.

offsetting risks.

Commodity risks of the Group’s power generation companies belonging to the Coal / Nuclear

Hedge accounting pursuant to IFRS 9 is used primarily for mitigating currency risks from net

and Hydro / Biomass / Gas segments are managed by the Commodity Management

investments in foreign functional currencies, commodity market price risks, interest risks

Commitee (CMC) and hedged by the Supply & Trading segment on the basis of available

from non-current liabilities 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 concept. As a result, these positions are not included in the

In the previous year, fair value hedges were 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 relation to the hedged risk) are recorded at

VaR figures. Above and beyond open production positions which have not yet been

fair value with an effect on income.

transferred, the Group companies belonging to the Coal / Nuclear and Hydro / Biomass /

Gas segments are not allowed to maintain significant risk positions, 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 independently, in compliance with unbundling regulations.

158

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

In the previous year, RWE held the following instruments to hedge the fair value of commodity

RWE held the following instruments to hedge future cash flows relating to foreign currency risks:

price risks:

Fair value hedges
as of 31 Dec 2020

CO2 derivatives

Nominal volume (€ million)

Secured average price (€ / metric ton)

Maturity

1 – 6
months

7 – 12
months

> 12
months

5.57

Cash flow hedges
as of 31 Dec 2021

Currency forwards – purchases

Nominal volume (€ million)

Avg. EUR / USD exchange rate

Avg. EUR / GBP exchange rate

Avg. EUR / CAD exchange rate

Cash flow hedges are primarily used to hedge against interest risks from non-current

Avg. EUR / DKK exchange rate

liabilities as well as currency and price risks from sales and purchase transactions. Hedging

instruments consist of forwards, 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 other compre-

Avg. EUR / SGD exchange rate

Avg. EUR / CHF exchange rate

Currency forwards – sales

Maturity

1 – 6
months

7 – 12
months

> 12
months

850

1.17

0.86

1.60

1.59

1.10

377

1.19

0.86

1.48

1.60

686

1.17

0.89

1.65

7.44

1.62

hensive income until the underlying transaction is realised. The ineffective portion of

Nominal volume (€ million)

– 1,001

– 554

– 2,188

changes in value is recognised in profit or loss. When hedging commodities, underlying and

Avg. EUR / USD exchange rate

hedging transactions are based on the same price index. This generally does not result in

Avg. EUR / GBP exchange rate

ineffectiveness. When hedging foreign currency risks, ineffectiveness can result from the

difference in timing between the 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 recognised on the income statement or

is offset against the initial value recognition of an asset or a liability.

Avg. EUR / CAD exchange rate

Avg. EUR / DKK exchange rate

1.19

0.87

1.47

1.18

0.88

1.45

1.26

0.90

7.45

159

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

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

The commercial optimisation of the power plant portfolio is based on a dynamic hedging

1 – 6
months

7 – 12
months

> 12
months

strategy. Hedged items and hedging instruments are constantly adjusted based on changes

in market prices, market liquidity and the sales business with consumers. Commodity prices

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

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, the amount of the effective

portion is recorded under foreign currency translation adjustments in other comprehensive

income.

The forward and spot elements of the hedging instruments used in net investment hedges

are treated separately and only the value of the spot element is designated. In these cases,

the fair value change of the forward element (hedging costs) is recognised in other compre-

RWE held the following instruments to hedge future cash flows relating to interest risks:

hensive income to the extent that the fair value change relates to the hedged net invest-

Cash flow hedges
as of 31 Dec 2021

Interest swaps

Maturity

amortised over the duration of the hedging instrument using the straight-line method and

ment. Moreover, the fair value of the forward element as of the time of designation is

1 – 6
months

7 – 12
months

> 12
months

recognised in profit or loss.

Nominal volume (£ million)

Secured average interest rate (%)

950

1.62

1,155

1.82

Cash flow hedges
as of 31 Dec 2020

Interest swaps

Nominal volume (£ million)

Secured average interest rate (%)

Maturity

1 – 6
months

7 – 12
months

> 12
months

1,215

1.55

160

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

RWE held the following instruments to hedge net investments in foreign operations:

Net investment hedges
as of 31 Dec 2021

Currency forwards – purchases

Nominal volume (€ million)

Avg. EUR / GBP exchange rate

Currency forwards – sales

Nominal volume (€ million)

Avg. EUR / GBP exchange rate

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

0.84

– 702

0.86

– 557

0.86

Maturity

2,888

0.88

– 7,507

0.87

1 – 6
months

7 – 12
months

> 12
months

277

0.90

– 5,737

0.91

– 631

0.63

161

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

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 2021

€ million

Cash flow hedges

Interest risks

Foreign currency risks

Commodity price risks

Net investment hedges

Foreign currency risks

Nominal
amount

1,866

– 70

6,8901

Carrying amount

Fair value changes in the
current period

Recognised
ineffectiveness

Assets

Liabilities

6,242

14,146

– 93

– 7,899

327

– 386

1 The net nominal amount stated is made up of purchases in the amount of €7,733 million and sales in the amount of –€14,623 million.

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

729

2,4441

Carrying amount

Fair value changes in the
current period

Recognised
ineffectiveness

Assets

Liabilities

192

177

1,104

366

-90

614

122

3,020

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.

162

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
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

€ million

Assets

Liabilities

Assets

Liabilities

Changes in fair
value in the
reporting year

€ million

Cash flow hedges

Interest risks

Foreign currency risks

Commodity price risks

Net investment hedges

– 78

– 1,528

– 50

– 59

3,094

Commodity price
risks

231

192

Foreign currency risks

117

1,275

– 14

– 11

350

Cash flow hedges and net investment
hedges as of 31 Dec 2021

Changes in fair
value during the
current period

Reserve for
current hedges

Reserve for
terminated
hedges

€ million

Cash flow hedges

Interest risks

Foreign currency risks

Commodity price risks

Net investment hedges

Foreign currency risks

In the previous year, the carrying amounts of the hedged items for fair value hedges were

stated in the ‘other receivables and other assets’ balance-sheet item. Amounts realised from

other comprehensive income 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 other comprehensive income are recognised in the

items ‘revenue’ and 'cost of materials’, whereas any ineffectiveness is recognised in ‘other

– 68

– 4,973

– 1,567

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.

– 413

836

350

163

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

The reconciliation of the changes in the hedge reserve in relation to the various risk

categories of hedge accounting follows below:

Hedge reserve 2021

€ million

Balance at 1 Jan 2021

Cash flow hedges

Effective portion of changes in market value

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

Fair value changes of hedging costs

Amortisation of hedging costs

Balance at 31 Dec 2021

Hedge reserve 20201

€ million

Balance at 1 Jan 2020

Cash flow hedges

1,837

Effective portion of changes in market value

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

1 Some prior-year figures restated.

– 5,243

– 14

– 5,232

470

445

– 586

– 3

– 583

1,222

– 414

414

– 2,243

164

2,946

– 1,800

– 55

– 1,779

1,256

– 982

417

– 147

147

1,837

RWE Annual Report 2021

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 current system for determining reference interest rates (the

hedging relationships directly affected by IBOR reform. The reliefs primarily mean that the

so-called IBOR reform), the existing reference rates and methods for determining such were

uncertainties arising from the IBOR reform do not result in discontinuation of the hedging

replaced with alternative interest rates and methods. In the EU, the EONIA was discontinued

relationships. Hedge ineffectiveness continues to be recognised in the profit or loss.

on 3 January 2022, and in the United Kingdom the LIBOR was phased out after 31 Decem-

ber 2021.

At the time of the aforementioned contractual adjustments in January 2022, RWE also

applied the amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 – Interest Rate

With regard to the RWE Group, the IBOR reform impacts the accounting treatment of

Benchmark Reform - Phase 2, which were published in August 2020. These amendments

certain financial liabilities and hedging relationships which serve to reduce the interest rate

allow for other temporary reliefs for the accounting treatment of hedging relationships

risks associated with non-current liabilities. These hedging relationships are based on the

which are affected by the IBOR reform.

1-month GBP LIBOR and the 6-month GBP LIBOR. As of 31 December 2021, the transition

to alternative interest rates was not yet complete. The designated hedging instruments had

Credit risks. In the fields of finance and commodities, RWE primarily has credit relationships

a nominal volume of €1,318 million and a carrying amount of €47 million as of the repor-

with banks that have good creditworthiness and other trading partners with predominantly

ting date. The total carrying amount of the hedged financial liabilities was €1,413 million as

good creditworthiness. Furthermore, RWE has credit relationships primarily with banks and

of the reporting date.

other business partners with good creditworthiness within the scope of large-scale projects

such as the construction of wind farms. RWE reviews counterparty default risks before

RWE is managing the transition to the new benchmark rates by way of an interdisciplinary

contracts are concluded. RWE mitigates such risks by establishing limits which are adjusted

working group headed by the Finance & Credit Risk Department. Its focus is on supplemen-

during the business relationships if the creditworthiness of the business partners changes.

ting, amending and reassessing the relevant contracts and carrying out the technically

Counterparty risks are monitored constantly so that countermeasures can be initiated early

necessary system adjustments. With regard to the financial liabilities and derivatives

on. Furthermore, RWE is exposed to credit risks due to the possibility of customers failing to

designated in hedging relationships, RWE has initiated negotiations with the contractual

meet their payment obligations. We identify these risks by conducting regular analyses of the

partners to transition the interest rates previously based on the GBP LIBOR to the GBP

creditworthiness of our customers and initiate countermeasures if necessary.

SONIA plus a spread which offsets the difference between the two reference rates. The

amended credit contracts were concluded on 10 January 2022, with an effective transition

Due to the coronavirus crisis, the economic situation of many companies deteriorated. While

to SONIA as of 31 January 2022. As part of the transition from GBP LIBOR to SONIA plus a

the current economic recovery is leading to an improvement in their situation, RWE’s

spread, the hedging instruments which hedged the previous interest rate risk from the GBP

business partners, competitors and customers may continue to be impacted by the

LIBOR were also adjusted. The hedging relationships were adjusted on 10 January 2022,

consequences of the crisis, as well as by the very strong price developments seen on the

with effective transition as of 31 January 2022.

energy markets since the fourth quarter of 2021. RWE is thus carefully monitoring critical

branches of the economy and exercising greater caution when conducting new transactions

Starting from 1 January 2020, RWE applied the amendments in IFRS 9, IAS 39 and IFRS 7 –

or extending existing ones. If necessary, previously approved limits are being lowered.

Interest Rate Benchmark Reform, which were published in September 2019. The amend-

ments provide temporary relief from applying specific hedge accounting requirements to

165

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Amongst other things, RWE demands guarantees, cash collateral and other forms of

• Stage 1 – Expected 12-month credit losses: At initial recognition, financial assets are

security in order to mitigate credit risks. Furthermore, RWE takes out credit insurance policies

generally assigned to this stage – with the exception of those that have been purchased

to protect against defaults. Bank guarantees received as collateral are from financial

or originated credit impaired, which are thus considered separately. The level of impair-

institutions with the required good ratings. Collateral for credit insurance is pledged by insurers

ment results from the cash flows expected for the entire term of the financial instrument,

with an investment-grade rating.

multiplied by the probability of a default within 12 months from the reporting date. The

effective interest rate used for measurement is determined on the basis of the carrying

The maximum balance-sheet default risk is derived from the carrying amounts of the

amount before impairment (gross).

financial assets stated on the balance sheet. The default risks for derivatives correspond

• Stage 2 – Lifetime expected credit losses (gross): If the credit risk has risen significantly

to their positive fair values. Risks can also stem from financial guarantees and loan

between initial recognition and the reporting date, the financial instrument is assigned to

commitments which we have to fulfil vis-à-vis external creditors in the event of a default of

this stage. Unlike Stage 1, default events expected beyond the 12-month period from the

a certain debtor. As of 31 December 2021, these obligations amounted to €1,231 million

reporting date are also considered in calculating the impairment. The effective interest

(previous year: €417 million). As of 31 December 2021, default risks were balanced

rate used for measurement is still determined on the basis of the carrying amount before

against credit collateral, financial guarantees, bank guarantees and other collaterals

impairment (gross).

amounting to €10.1 billion (previous year: €3.6 billion). Of this, €0.6 billion relates to trade

• Stage 3 – Lifetime expected credit losses (net): If in addition to the criteria for Stage 2

receivables (previous year: €0.8 billion), €1.5 billion to derivatives used for hedging

there is an objective indication of an impairment, the financial asset is assigned to

purposes (previous year: €0.6 billion), and €8.0 billion to other derivatives (previous year:

Stage 3. The impairment is calculated analogously to Stage 2. In this case, however, the

€2.2 billion). There were no material defaults in fiscal 2021 or the previous year.

effective interest rate used for measurement is applied to the carrying amount after

In the RWE Group, the risk provision for financial assets is determined on the basis of expected

impairment (net).

credit losses. These are determined on the basis of the probability of default, loss given default

In the RWE Group, risk provisions are formed for financial instruments in the following

and the exposure at default. We determine the probability of default and loss given default

categories:

using historical data and forward-looking information. The exposure at default date for

financial assets is the gross carrying amount on the balance-sheet date. The expected

• debt instruments measured at amortised cost,

credit loss for financial assets determined on this basis corresponds to the difference

• debt instruments measured at fair value through other comprehensive income.

between the contractually agreed payments and the payments expected by RWE, discoun-

ted by the original effective interest rate. The assignment to one of the levels described

below influences the level of the expected losses and the effective interest income recognised.

166

RWE Annual Report 2021
1
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

For debt instruments for which there has been no significant rise in credit risk since initial

We draw conclusions about the potential default of a counterparty from information from

recognition, a risk provision is recognised in the amount of the expected 12-month credit

internal credit risk management. If internal or external information indicates that the

losses (Stage 1). In addition, a financial instrument is assigned to Stage 1 of the impairment

counterparty cannot fulfil its obligations, the associated receivables are classified as

model if the absolute credit risk is low on the balance-sheet date. The credit risk is classified

unrecoverable and assigned to Stage 3 of the impairment model. Examples of such

as low if the debtor’s internal or external rating is investment-grade. For trade accounts

information are:

receivable, the risk provision corresponds to the lifetime expected credit losses (Stage 2).

To determine whether a financial instrument is assigned to Stage 2 of the impairment

• The debtor has already committed a breach of contract by missing or delaying payments.

model, it must be determined whether the credit risk has increased significantly since initial

• Concessions already had to be made to the debtor.

recognition. To make this assessment, we consider quantitative and qualitative information

• An insolvency or another restructuring procedure is impending.

supported by our experience and assumptions regarding future developments. In so doing,

• The market for the financial asset is no longer active.

special importance is accorded to the sector in which the RWE Group’s debtors are active.

• A sale is only possible at a high discount, which reflects the debtor’s reduced creditwort-

• The debtor of the receivable has apparent financial difficulties.

Our experience is based on studies and data from financial analysts and government

hiness.

authorities, amongst others.

Special attention is paid to the following developments:

assumed if the contractually agreed payments are more than 90 days overdue and there is

A payment default and an associated assignment of the financial asset to Stage 3 is also

no information disproving the assumption of a payment default. Based on our experience,

• significant deterioration of the internal or external rating of the financial instrument,

we generally assume that this assumption does not apply to trade accounts receivable.

• unfavourable changes in risk indicators, e. g. credit spreads or debtor-related credit

default swaps,

A financial asset is depreciated if there are indications that the counterparty is in serious

• negative development of the debtor’s regulatory, technological or economic environment,

financial difficulty and the situation is unlikely to improve. We may also take legal recourse

• danger of an unfavourable development of business resulting in a significant reduction

and other measures in order to enforce the contractually agreed payments in the event

in operating income.

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.

167

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

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 2021

Remeasurement due to new measurement parameters

Redeemed or derecognised financial assets

Level transfer

Balance at 31 Dec 2021

Impairment of financial assets

€ million

Financial receivables

Balance at 1 Jan 2020

Remeasurement due to new measurement parameters

Level transfer

Balance at 31 Dec 2020

Stage 1 –
12-month
expected credit losses

Stage 2 –
lifetime
expected credit losses

Stage 3 –
lifetime
expected credit losses

– 2

– 1

– 2

Stage 1 –
12-month
expected credit losses

Stage 2 –
lifetime
expected credit losses

Stage 3 –
lifetime
expected credit losses

– 5

– 3

Total

– 2

– 3

Total

– 5

– 1

168

RWE Annual Report 20211
To our investors

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 2021

Addition

Redeemed / derecognised

Changes in the scope of consolidation

Balance at 31 Dec 2021

Risk provision for trade accounts receivable

€ million

Balance at 1 Jan 2020

Addition

Changes in the scope of consolidation

Balance at 31 Dec 2020

– 25

– 5

– 3

169

RWE Annual Report 2021

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 2021

€ 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 20201

€ million

Class 1 – 5: low risk

Class 6 – 9: medium risk

Class 10: high risk

Class 11: doubtful

Class 12: loss

1 Some prior-year figures restated.

Equivalent
to
S&P scale

AAA to BBB–

BB+ to BB–

B+ to B–

CCC to C

Equivalent
to
S&P scale

AAA to BBB–

BB+ to BB–

B+ to B–

CCC to C

Stage 2 –
lifetime
expected
credit losses

Stage 1 –
12-month
expected
credit losses

18,502

776

19,316

Stage 2 –
lifetime
expected
credit losses

Stage 1 –
12-month
expected
credit losses

9,000

9,078

170

Stage 3 –
lifetime
expected
credit losses

Trade accounts
receivable

6,330

345

138

2,779

153

6,861

26,227

Stage 3 –
lifetime
expected
credit losses

Trade accounts
receivable

Total

24,870

1,132

175

Total

11,821

223

104

3,068

12,200

RWE Annual Report 20211
To our investors

2
Combined review
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,

The volume of RWE AG’s credit line amounts to €5 billion. Its two tranches expire in Ap-

there is a risk that liquidity reserves will prove to be insufficient to meet financial obligations

ril 2022 (€2 billion) and April 2026 (€3 billion). The commercial paper programme allows for

in a timely manner. In 2022, liabilities owed to banks of €3.6 billion (previous year:

issuance up to a maximum amount of €5 billion (previous year: €5 billion). As of the balance-

€0.1 billion) are due. Above and beyond this, commercial paper in the amount of €2.7 billi-

sheet date, €2.7 billion of this programme was used (previous year: €0 billion). Above and

on matures in 2022 (previous year: €0 billion).

beyond this, RWE AG can finance itself using a €10 billion debt issuance programme; as of

the balance- sheet date, outstanding bonds from this programme amounted to €1.85 billion

As of 31 December 2021, holdings of cash and cash equivalents and current marketable

(previous year: €0 billion) at RWE AG. Accordingly, the RWE Group's medium- term liquidity

securities amounted to €13,865 million (previous year: €8,993 million).

risk can be classified as low.

Redemption and interest payments on
financial liabilities

€ million

Bonds payable 1

Commercial paper

Bank debt

Lease liabilities

Other financial liabilities

Derivative financial liabilities

Collateral for trading activities

Miscellaneous other financial liabilities

Financial liabilities falling under the scope of IFRS 7 are expected to result in the following

(undiscounted) payments in the coming years:

Redemption payments

Interest payments

2022

2023 to 2026

From 2027

2022

2023 to 2026

From 2027

562

281

273

441

222

1,849

1,733

1,061

649

532

157

127

102

197

252

498

128

Carrying amounts
31 Dec 2021

2,411

2,710

5,583

1,409

1,442

2,710

3,568

374

76,992

76,250

4,239

4,975

4,239

4,892

1 Including hybrid bonds classified as debt as per IFRS, taking into account the earliest possible call date.

171

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

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

Redemption payments

Interest payments

2021

2022 to 2025

From 2026

2021

2022 to 2025

From 2026

350

7,857

716

2,645

282

140

263

324

201

267

1,385

957

476

605

110

149

404

472

151

1 Including hybrid bonds classified as debt as per IFRS, taking into account the earliest possible call date.

Above and beyond this, as of 31 December 2021, there were financial guarantees for

purchase contracts amounted to €22.3 billion as of 31 December 2021 (previous year:

external creditors in the amount of €1,191 million (previous year: €364 million), which are

€23.6 billion), of which €0.3 billion is due within one year (previous year: €0.3 billion).

to be allocated to the first year of repayment. Additionally, Group companies have provided

loan commitments to third-party companies amounting to €40 million (previous year:

Gas purchases by the RWE Group are partially based on long-term take-or-pay contracts.

€53 million), which are callable in 2022.

The conditions in these contracts, which have terms up to 2036 in some cases, are renego-

tiated by the contractual partners at certain intervals, which may result in changes in the

Detailed information on the risks of the RWE Group and on the objectives and procedures

reported payment obligations. Calculation of the payment obligations resulting from the

of the risk management is presented on pages 70 et seqq. in the review of operations.

purchase contracts is based on parameters from the internal planning.

(28) Contingent assets, contingent liabilities and financial commitments

Furthermore, RWE has long-term financial commitments for purchases of electricity. As

As of 31 December 2021, the amount of contractual commitments totalled €5,668 mil-

of 31 December 2021, the minimum payment obligations stemming from the major

lion (previous year: €2,071 million). This mainly consisted of investment in property, plant

purchase contracts totalled €7.1 billion (previous year: €7.1 billion), of which €0.4 billion is

and equipment.

due within one year (previous year: €0.3 billion). Above and beyond this, there are also

long-term purchase and service contracts for uranium, conversion, enrichment and

We have made long-term contractual purchase commitments for supplies of fuels, inclu-

fabrication.

ding natural gas in particular. Payment obligations stemming from the major long-term

172

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

We bear legal and contractual liability from our membership in various associations

(29) Segment reporting

which exist in connection with power plant projects, profit- and loss-pooling agreements

RWE is divided into five segments, which are separated from each other based on functional

and for the provision of liability cover for nuclear risks, amongst others.

criteria.

On the basis of a mutual benefit agreement, RWE AG and other parent companies of

In the Offshore Wind segment, we report on our business in offshore wind, which is overseen

German nuclear power plant operators undertook to provide approximately €2,244 million

by RWE Renewables. The main production sites are located in the United Kingdom and

in funding to liable nuclear power plant operators to ensure that they are able to meet their

Germany. In addition to electricity generation, activities in this field also include the develop-

payment obligations in the event of nuclear damages. From 1 January 2022 onwards,

ment and realisation of projects to expand capacity.

RWE AG has a 36.927 % contractual share in the liability (37.299 % until 31 December

2021) plus 5 % for damage settlement costs.

Onshore Wind / Solar encompasses our activities with onshore wind, solar power and battery

As part of the Group restructuring that occurred in fiscal 2016, a large portion of the

ties. RWE Renewables has operating responsibility. Along with the USA, the main production

pension commitments which up to then had been reported at the holding level were

sites are located in the United Kingdom, Germany, Italy, Spain, Poland and the Netherlands,

storage. Here again, in addition to electricity generation, the focus is on expanding capaci-

transferred to former Group companies (former subsidiaries innogy SE, Essen, and affiliated

as well as in Australia in the field of solar power.

companies) by cancelling the performance obligation existing on an intra-group basis. The

guarantees remaining vis-à-vis external parties were cancelled. The Group is liable for the

Activities with run-of-river, pumped storage, biomass, and gas-fired power plants are

accrued claims of the active and former employees of these companies in the amount of

bundled in the Hydro / Biomass / Gas segment. It also contains the Dutch hard coal power

€5,875 million (previous year: €6,404 million).

stations Amer 9 and Eemshaven, which are increasingly co-firing biomass, and the company

RWE Technology International, which specialises in project management and engineering

RWE AG and its subsidiaries are involved in official, regulatory and antitrust proceedings,

services. This segment is the responsibility of RWE Generation, which has also been respon-

litigation and arbitration proceedings related to their operations and are affected by the

sible for formulating and implementing our hydrogen strategy since 2021. The 37.9 % stake

results of such. In some cases, out-of-court claims are also filed. However, RWE does not

in the Austrian energy utility KELAG is also reported in the Hydro / Biomass / Gas segment.

expect any material negative repercussions from these proceedings on the RWE Group’s

economic or financial position.

The Supply & Trading segment contains energy and commodities trading, the marketing and

hedging of the RWE Group’s electricity position and the gas midstream business. This

With the approval of the Senate, the Dutch Parliament passed an amendment of the Coal

segment is the responsibility of RWE Supply & Trading, which also supplies certain major

Phaseout Act, which limits the carbon dioxide emissions of power plants to 35% of the

industrial and commercial customers with electricity and natural gas. Additionally, gas storage

maximum possible level by the end of 2024. RWE will be entitled to compensation payments

facilities in Germany and the Czech Republic also belong to this segment.

for the economic disadvantages it will suffer. As foreseen in the Act, we expect to submit an

application for compensation in the upper triple-digit million range in a timely manner.

The Coal / Nuclear segment covers German electricity production using lignite and nuclear

power, as well as lignite mining operations in the Rhineland. It also includes the investment in

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To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

the Dutch power plant operator EPZ (30 %) and URANIT (50 %), which holds a 33 % stake in

‘Other, consolidation’ covers RWE AG, consolidation effects and the activities of other

Urenco, a uranium enrichment specialist. The aforementioned activities and investments

business areas which are not presented separately. These activities primarily include our

are the responsibility of the group company RWE Power.

non-controlling interests in the German transmission system operator Amprion and in E.ON;

the E.ON dividend is reported in the financial result.

Segment reporting
Divisions 2021
€ 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

– 4,874

688

808

1,496

636

116

105

474

1,110

973

2,324

361

2,685

– 145

403

258

382

1,683

1,404

1,316

5,361

6,677

418

313

731

700

294

19,518

23,850

5,214

– 10,986

758

24,732

– 10,982

24,608

721

– 106

– 1

769

– 107

1,524

302

232

1,237

2,761

833

2,891

3,430

911

4,116

5,027

661

228

872

889

130

259

24,761

2,185

353

285

1,465

959

3,650

3,021

3,689

Regions 2021

€ million

External revenue 1, 2, 3

Intangible assets and property, plant and equipment

Germany

9,081

4,941

Rest of Europe

North America

8,259

13,045

6,051

3,402

810

4,261

Other

325

219

RWE Group

24,526

25,868

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RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

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Consolidated financial
statements

Notes

5
Further information

Segment reporting
Divisions 20201
€ 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 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

138

385

523

171

756

1,154

1,059

3,144

4,203

283

338

561

621

655

153

9,789

2,778

12,567

496

– 57

539

13,042

– 6,803

– 6,796

– 25

123

124

– 25

830

382

13,424

1,589

261

306

1,138

704

2,727

3,149

2,106

854

3,075

3,929

234

325

1,097

559

127

183

– 3,457

13,896

1,823

356

401

1,463

1,801

3,286

3,276

– 4

2,285

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise renewable energy in the USA (see pages 108 et seq.).

Regions 2020

€ million

External revenue 1, 2, 3

Intangible assets and property, plant and equipment 4

Germany

3,988

5,714

Rest of Europe

North America

3,909

10,811

3,958

3,049

1,146

2,953

Other

687

273

RWE Group

13,688

22,800

1 Excluding natural gas tax / electricity tax.
2 Broken down by the region in which the service was provided.
3 Including state subsidies received which do not conform to IFRS 15 and refunds paid to state bodies, among other things from CfD contracts, amounting to €31 million in the UK, €19 million in Rest of Europe and €1 million in Other.
4 Some prior-year figures restated due to retroactive adjustments to the first-time consolidation of operations which RWE acquired from Nordex in 2020 (see page 95).

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Responsibility statement

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Consolidated financial
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Notes

5
Further information

External revenue by product in 2021

€ million

External revenue1

of which: electricity2

of which: gas

of which: other revenue

Offshore
Wind

Onshore
Wind / Solar

Hydro /
Biomass / Gas

688

2,324

2,107

1,315

877

217

438

Supply &
Trading

19,296

16,540

2,142

614

Other

Core business

23,627

20,212

2,142

1,273

Coal /
Nuclear

899

264

635

RWE Group

24,526

20,476

2,142

1,908

1 Excluding natural gas tax / electricity tax.
2 Including state subsidies received which do not conform to IFRS 15 and refunds paid to state bodies, among other things from CfD contracts, amounting to –€39 million in Offshore Wind and €2 million in Onshore Wind / Solar.

External revenue by product in 2020

€ million

External revenue1

of which: electricity2

of which: gas

of which: other revenue

Offshore
Wind

Onshore
Wind / Solar

Hydro /
Biomass / Gas

Supply &
Trading

Other

Core business

Coal /
Nuclear

RWE Group

332

1,855

1,676

179

1,056

684

367

9,597

8,775

529

293

12,849

11,468

534

847

839

233

606

13,688

11,701

534

1,453

Notes on segment data. The external revenue of the segments Offshore Wind and Onshore

ting positive and negative deviations (in so-called two-way contracts for difference) and

Wind / Solar contains state subsidies and refunds paid to state bodies for the sale of green

negative deviations (in so-called one-way contracts for difference) from a defined reference

electricity, including subsidies from contracts for differences, amounting to -€39 million

price that is agreed with state contractual partners or the subsidy mechanism counterparty.

(previous year: €0 million) and €2 million (previous year: €51 million), respectively, which do

We report revenue between the segments as RWE intra-group revenue. Internal supply of

not meet the definition of IFRS 15. These contracts for differences are used as a state subsi-

goods and services is settled at arm’s length conditions.

dy mechanism and essentially result in a fixed price for the electricity that is sold, by offset-

176

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Adjusted EBITDA is used for internal management. The following table presents the reconcilia-

tion of adjusted EBITDA to adjusted EBIT and income from continuing operations before tax:

Non-operating result
€ million

Disposal result

Reconciliation of income items
€ million

Adjusted EBITDA

2021

20201

Impact of the valuation of derivatives on earnings

3,650

3,286

Other

– Operating depreciation, amortisation and impairment losses

– 1,465

– 1,463

Non-operating result

2021

20201

– 503

– 168

– 650

1,886

– 2,003

– 104

Adjusted EBIT

+ Non-operating result

+ Financial result

2,185

– 650

– 13

1,823

– 104

– 454

Income from continuing operations before tax

1,522

1,265

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see pages 108 et seq.).

1 Some prior-year figures restated due to a retroactive change in the recognition of tax benefits to subsidise

renewable energy in the USA (see pages 108 et seq.).

(30) Notes to the cash flow statement

The cash flow statement classifies cash flows according to operating, investing and

financing activities. Cash and cash equivalents in the cash flow statement correspond to the

amount stated on the balance sheet. Cash and cash equivalents consist of cash on hand,

demand deposits and fixed-interest marketable securities with a maturity of three months

Income and expenses that are unusual from an economic perspective, or stem from

or less from the date of acquisition.

exceptional events, prejudice the assessment of operating activities. They are reclassified to

the non-operating result. In addition to proceeds from the disposal of shareholdings or

Among other things, cash flows from operating activities include:

non-current assets not necessary for operations, this item mainly covers effects from the

valuation of certain derivatives. These involve valuation effects which are only temporary

• cash flows from interest and dividends of €263 million (previous year: €281 million) and

and mainly arise because financial instruments to hedge price risks are reported at their fair

cash flows used for interest expenses of €284 million (previous year: €299 million),

value on the respective reporting date, while the hedged underlying transactions may only

• €163 million (previous year: -€72 million) in taxes on income paid (less refunds),

be recorded with an effect on income upon the realisation of such. A loss of €168 million is

• income from investments, corrected for items without an effect on cash flows, in particular

reported in the item ‘other’ (previous year: – €2,003 million). The 2020 result included

from accounting using the equity method, which amounted to €185 million (previous year:

impairment charges on power plants and opencast lignite mines amounting to €1.8 billion.

€323 million).

Impairments were recognised in the lignite business during the reporting period as well, in

the amount of €780 million. The compensation of €880 million paid to us in November

Cash flows from the acquisition and sale of consolidated subsidiaries and other business

2021 by the German Federal government for the phaseout of nuclear energy in Germany

units are included in cash flows from investing activities, while effects stemming from

had a positive effect.

exchange rate developments and other changes in value are shown separately. During the

fiscal year, sales prices in the amount of €619 million (previous year: €872 million) were

recognised for disposals resulting in a change of control. During the fiscal year, purchase

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RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

prices amounting to – €5 million (previous year: €270 million) were recognised for acquisi-

tions which also resulted in a change of control. The pre-payment of a purchase price in the

previous year, which was already reported in the cash flows from investing activities last

year, is not included in this figure, as there had been no change of control at that point in

time. As in the previous year, sales prices received and purchase prices paid were effected

exclusively in cash. In relation to this, cash and cash equivalents (disregarding assets held for

Balance-sheet items 2020
€ million

Non-current assets

Intangible assets

Property, plant and equipment

sale) were acquired in the amount of €52 million (previous year: €0 million) and were sold in

Other non-current assets

the amount of €39 million (previous year: €5 million).

With regard to subsidiaries or other business units of which control was gained or lost, the

amounts of assets and liabilities (with the exception of cash and cash equivalents) are

presented in the following, broken down by main groups:

Current assets

Non-current liabilities

Provisions

Balance-sheet items 2021
€ 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

Additions

Disposals

Financial liabilities

Other non-current liabilities

Current liabilities

2,073

951

1,003

119

786

119

638

Cash flows from financing activities of continuing operations include €575 million (previous

year: €492 million) which was distributed to RWE shareholders, and €155 million (previ-

451

1,238

ous year: €30 million) which was distributed to non-controlling shareholders. Furthermore,

cash flows from financing activities include purchases of €1 million (previous year: €485 million)

and sales in the amount of -€7 million (previous year: €562 million) of shares in subsidiaries

and other business units which did not lead to a change of control.

189

116

201

175

Additions

Disposals

541

395

133

131

120

1,357

584

Current liabilities

654

178

RWE Annual Report 2021

1
To our investors

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:

Development of financial liabilities

1 Jan 2021

€ million

Current financial liabilities

Non-current financial liabilities

Other items

1,247

3,951

Development of financial liabilities

1 Jan 2020

€ million

Current financial liabilities

Non-current financial liabilities

Other items

1,689

3,924

Increase /
repayment

9,535

2,862

– 10,026

Increase /
repayment

592

– 546

Changes in
the scope of
consolidation

– 1

– 138

Changes in
the scope of
consolidation

– 289

Currency
effects

Changes in
fair values

Other
changes

31 Dec 2021

– 206

241

148

273

– 118

10,996

6,798

Currency
effects

Changes in
fair values

– 183

– 276

Other
changes

– 234

– 93

31 Dec 2020

1,247

3,951

The amount stated in the ‘other items’ line item contains cash- effective changes resulting

(31) Related party disclosures

from derivative financial instruments and margin payments, which are recognised in cash

Within the framework of their ordinary business activities, RWE AG and its subsidiaries have

flows from financing activities in the cash flow statement and in financial liabilities in the

business relationships with numerous companies. These include associated companies

balance sheet.

and joint ventures, which are classified as related parties. In particular, this category

includes material investments of the RWE Group, which are accounted for using the equity

The item ‘other changes’ includes interest expenses which are reported in cash flows from

method.

operating activities.

Restrictions on the disposal of cash and cash equivalents amounted to €4 million (previous

year: €45 million).

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RWE Annual Report 20211
To our investors

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Combined review
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3
Responsibility statement

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Consolidated financial
statements

Notes

5
Further information

Business transactions were concluded with major associates and joint ventures, resulting in

Key management personnel (Executive and Supervisory Board members) received

the following items in RWE’s consolidated financial statements:

€11,673,000 in short-term compensation components for fiscal 2021 (previous year:

Key items from transactions with
associates and
joint ventures
€ million

Income

Expenses

Receivables

Liabilities

Associated companies

Joint ventures

amounted to €3,191,000 (previous year: €4,731,000) and the pension service cost

€8,357,000). Additionally, share-based payments within the framework of LTIP SPP

2021

2020

597

370

170

247

320

187

119

134

2021

140

2020

182

amounted to €0 (previous year: €595,000). Share-based payment was measured accor-

ding to IFRS 2 and service cost for pensions according to IAS 19. Provisions totalling

€11,334,000 (previous year: €32,959,000) were formed for obligations vis-à-vis key

management personnel.

The following information pertains to total remuneration pursuant to the guidelines of

German commercial law.

The key items from transactions with associates and joint ventures mainly stem from supply

€8,501,000). This contains share- based payments amounting to €4,417,000 (129,635

and service transactions. In addition to supply and service transactions, there are also

RWE performance shares) granted within the framework of the LTIP SPP. In the previous

financial links with joint ventures. During the reporting period, income of €1 million (previous

year, share-based payments amounting to €2,934,000 (111,070 RWE performance

In total, the remuneration of the Executive Board amounted to €12,234,000 (previous year:

year: €0 million) was recorded from interest-bearing loans to joint ventures. As of the

shares) were granted.

balance-sheet date, financial receivables accounted for €44 million of the receivables from

joint ventures (previous year: €42 million). All transactions were completed at arm’s length

Including remuneration from subsidiaries for the exercise of mandates, the Supervisory Board

conditions, i. e. on principle the conditions of these transactions did not differ from those

received total remuneration of €3,571,000 (previous year: €2,880,000) in fiscal 2021. The

with other enterprises. €173 million of the receivables (previous year: €124 million) and

employee representatives on the Supervisory Board have labour contracts with the

€266 million of the liabilities (previous year: €162 million) fall due within one year. Other obli-

respective Group companies. Remuneration occurs in accordance with the relevant

gations from executory contracts amounted to €114 million (previous year: €112 million).

contractual conditions.

Above and beyond this, the RWE Group did not execute any material transactions with

During the period under review, no loans or advances were granted to members of the

related companies or persons.

Executive Board. Two employee representatives on the Supervisory Board had employee

The members of the Executive Board and Supervisory Board of RWE AG are deemed to be

loans totalling €17,000.

key management personnel for the RWE Group, in respect of whom the following informati-

Former members of the Executive Board and their surviving dependants received

on on total compensation is to be reported pursuant to IAS 24.

€11,432,000 (previous year: €10,962,000), of which €678,000 came from subsidiaries

(previous year: €671,000). As of the balance-sheet date, €148,241,000 (previous year:

€145,620,000) were accrued for defined benefit obligations to former members of the

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RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

Executive Board and their surviving dependants. Of this, €6,405,000 was set aside at

(33) Application of the exemption rule pursuant to Sec. 264, Para. 3 and Sec. 264b of

subsidiaries (previous year: €6,925,000).

the German Commercial Code

In fiscal 2021, the following German subsidiaries made partial use of the exemption clause

Information on the members of the Executive and Supervisory Boards is presented on

pursuant to Sec. 264, Para. 3 and Sec. 264b of the German Commercial Code (HGB):

pages 220 et seqq. of the Notes.

(32) Auditors' fees

• BGE Beteiligungs-Gesellschaft für Energieunternehmen mbH, Essen

• GBV Zweiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen

The fees for audit services primarily contain the fees for the audit of the consolidated

• Kernkraftwerk Lingen Gesellschaft mit beschränkter Haftung, Lingen (Ems)

financial statements and for the audit of the financial statements of RWE AG and its subsidia-

• KMG Kernbrennstoff-Management Gesellschaft mit beschränkter Haftung, Essen

ries, along with the review of the interim statements. Other assurance services mainly

• Nordsee Windpark Beteiligungs GmbH, Essen

include fees for reviews related to statutory or court-ordered requirements. In particular,

• Rheinbraun Brennstoff GmbH, Cologne

the fees for tax services include compensation for consultation in the preparation of tax

• Rheinische Baustoffwerke GmbH, Bergheim

returns and other national and international tax-related matters as well as review of

• RV Rheinbraun Handel und Dienstleistungen GmbH, Cologne

resolutions of the tax authorities. Other services include compensation for consultation

• RWE Battery Solutions GmbH, Essen

related to M&A activity.

• RWE Generation Service GmbH, Essen

• RWE Renewables Beteiligungs GmbH, Dortmund

RWE recognised the following fees as expenses for the services rendered by the auditors of

• RWE Renewables Offshore HoldCo One GmbH, Essen

the consolidated financial statements, PricewaterhouseCoopers GmbH Wirtschaftsprü-

• RWE Renewables Offshore HoldCo Three GmbH, Essen

fungsgesellschaft (PwC) and companies belonging to PwC’s international network:

• RWE Renewables Offshore HoldCo Two GmbH, Essen

PwC network fees

2021

2020

• RWE Trading Services GmbH, Essen

• RWE Technology International GmbH, Essen

€ million

Audit services

Other assurance services

Tax services

Other services

1 Restated prior-year figure.

Total

12.5

0.5

0.3

0.7

14.0

Of which:
Germany

6.8

0.4

0.3

0.7

8.2

Total

10.7

1.2

0.31

2.5

14.71

Of which:
Germany

5.8

1.0

0.2

2.5

9.5

(34) Events after the balance-sheet date

In the period from 1 January 2022 until the completion of the consolidated financial

statements on 3 March 2022, the following significant events occurred:

RWE enters US offshore wind market. At the end of February 2022, we were successful in

an auction of seabed leases for offshore wind sites in the New York Bight. A joint venture bet-

ween RWE and National Grid Ventures secured an area for US$1.1 billion, on which about 3

GW of generation capacity can be built, which would be capable of producing enough

electricity to serve 1.1 million US homes. The auction included six lease sites, with bidders

being allowed to secure one each. Every successful bid conferred the right to develop a site

and participate in upcoming auctions of the conditions for purchasing the electricity in the

181

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To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Notes

5
Further information

states of New York and New Jersey. If the project progresses as planned, our offshore wind

Huge uncertainty after Russian attack on Ukraine. Russian troops marched into Ukraine

farm in the New York Bight will be commissioned during this decade.

at the end of February. This constitutes an invasion under international law, prompting

outrage and consternation around the globe. Many countries including the USA, EU

Wind joint venture with Northland Power launched. In January 2022, RWE and Northland

member states and the United Kingdom imposed economic sanctions on Russia. Uncer-

Power initiated a joint venture for the development of wind energy projects in the German

tainty concerning commodity deliveries from Russia to Europe has caused a significant

North Sea. We expect this cooperation to deliver substantial synergies, resulting in cost

increase in gas and electricity trading quotations. In some European countries, including

savings in the development, construction and operation of the assets. RWE owns 51 % and

Germany, governments are working on measures to reduce dependency on Russian oil and

our Canadian partner owns 49 % of the joint venture, which encompasses three offshore

gas imports. When the consolidated financial statements were prepared in early March

wind projects aiming to develop a total capacity of 1.3 GW. The sites of the future wind

2022, it was impossible to predict the development of the Ukraine conflict or its consequen-

farms are located north of the Island of Juist. Before forging the joint venture, we had

ces. Although RWE does not have business activities in Russia or Ukraine, further escalation

co-operated with Northland Power on two of the three projects. One project is focussed on a

of the conflict and discontinuation of supply relationships with Russian companies could

433 MW wind farm on a site officially called N-3.8, which we secured via a step-in right

have notable effects on our assets, liabilities, financial position and profit or loss. It is

following an invitation to tender in 2021 (see page 41). The other initiative was dedicated to

possible, for example, that Russian commodity suppliers will no longer be able to meet their

the construction and operation of a 420 MW wind farm, which we hope to build on the

obligations and that we will have to purchase commodities at high prices on the market. It

N-3.5 site. We also have a step-in right for this area, but have not exercised it yet. RWE

cannot be ruled out that contractual partners may become insolvent due to sanctions.

initially only held a 15 % share of both ventures and had originally developed the third joint

Additionally, changes in security prices due to a stock market crisis resulting from the

venture project alone. It is centred around a 480 MW wind farm at the N-3.6 site, for which

Ukraine conflict may have a significant impact on RWE’s financial assets and those of our

we also hold a step-in right which has not been made use of to date. The auctions for the

pension funds. More detailed information can be found in the chapter entitled ‘Development

sites N-3.5 and N-3.6 should be held in 2023. In the event that other companies are

of risks and opportunities’, which starts on page 70.

successful, we can exercise our step-in rights.

RWE once again successful in British capacity market auctions. The British capacity

market held another auction on 22 February, relating to the delivery period from 1 October

2025 to 30 September 2026. We secured a payment for all participating RWE power

stations, including two small new-builds. Altogether, these assets have a secured capacity of

6,647 MW. At £30.59 / kW per annum (plus inflation adjustment), the capacity payment

established in the bidding procedure was the highest such figure since the capacity market

auctions started in 2014. A total of 42.4 GW in generation capacity qualified for a capacity

payment at the auction. During the delivery period, they will receive remuneration for being

online and contributing to electricity supply.

182

RWE Annual Report 20211
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 AG.

Essen, 3 March 2022

The Executive Board

Krebber

Müller

Seeger

1 www.rwe.com/statement-of-compliance-2021

183

RWE Annual Report 2021
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 2021

I. Affiliated companies which are included in the consolidated financial statements

Shareholding in %

Equity

Net income / loss

Direct

Total

Aktivabedrijf Wind Nederland B.V., Geertruidenberg/Netherlands

Alte Haase Bergwerks-Verwaltungs-Gesellschaft mbH, Dortmund

Amrum-Offshore West GmbH, Essen

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

Baltic Trade and Invest Sp. z o.o., Słupsk/Poland

Belectric Canada Solar Inc., Vancouver/Canada

Belectric Photovoltaic India Private Limited, Mumbai/India

BELECTRIC Solar Power, S.L. en liquidación, Barcelona/Spain

BGE Beteiligungs-Gesellschaft für Energieunternehmen mbH, Essen

100

Big Star Solar, LLC, Wilmington/USA

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

Bright Arrow 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.

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

184

100

€ ’000

– 7,452

– 69,129

2,632

24,339

58,538

124,124

10,651

– 520

16,821

550

1,824

390

201

4,255

113,656

113,669

€ ’000

– 18,208

– 2,441

86,150

229

– 80

1,248

2,229

– 34

– 738

535

949

337

– 264

– 11,014

RWE Annual Report 20211
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

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

Conrad Solar Inc., Vancouver/Canada

DOTTO MORCONE S.r.l., Rome/Italy

Dromadda Beg Wind Farm Limited, Kilkenny/Ireland

Edgware Energy Limited, Swindon/United Kingdom

El Algodon Alto Wind Farm, LLC, Wilmington/USA

Electra Insurance Limited, Hamilton/Bermudas

Energy Resources Holding B.V., Geertruidenberg/Netherlands

Energy Resources Ventures B.V., Geertruidenberg/Netherlands

Extension Du Parc Eolien De L'Epine Marie Madeleine SAS, Clichy/France

Extension Du Parc Eolien Du Douiche SAS, Clichy/France

Farma Wiatrowa Barzowice Sp. z o.o., Warsaw/Poland

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

€ ’000

87,793

€ ’000

– 442

214,346

– 10,228

463

– 4,856

173,678

172,739

253,679

14,469

152

68,609

223,316

4,351

2,806

374

– 437

26,288

99,656

17,416

– 39

30,179

– 151

– 229

– 76

– 980

– 24,138

– 87,805

114

– 446

– 9,802

4,189

688

231

– 419

– 724

– 13,461

– 1,292

– 41

– 3

1,399

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

185

RWE Annual Report 20211
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

Farma Wiatrowa Rozdrazew 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 Castellano Manchega, S.L., Murcia/Spain

Generación Fotovoltaica De Alarcos, S.L.U., Barcelona/Spain

Generación Fotovoltaica Puerta del Sol, S.L.U., Murcia/Spain

GfV Gesellschaft für Vermögensverwaltung mbH, Dortmund

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

Kernkraftwerk Lingen Gesellschaft mit beschränkter Haftung, Lingen (Ems)

Kernkraftwerke Lippe-Ems Gesellschaft mit beschränkter Haftung, Lingen (Ems)

KMG Kernbrennstoff-Management Gesellschaft mit beschränkter Haftung, Essen

Direct

Total

100

€ ’000

– 414

102

14,565

6,997

8,209

10,868

17,585,771

– 21

656

€ ’000

– 7

– 63,829

855

1,303

1,640

– 56

579

– 17

126,158

– 7,685

92,929

69,851

164,320

162,302

253,464

– 9,065

40,947

20,034

432,269

696,225

– 786

6,325

– 179

– 2,076

– 10,029

– 6,255

17,047

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.

186

RWE Annual Report 20211
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

Knabs Ridge Wind Farm Limited, Swindon/United Kingdom

Las Vaguadas I Fotovoltaica S.L., Barcelona/Spain

Limondale Sun Farm Pty. Ltd., Melbourne/Australia

Little Cheyne Court Wind Farm Limited, Swindon/United Kingdom

MI-FONDS G50, Frankfurt am Main

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 Three Class B, LLC, Wilmington/USA

Panther Creek Three Holdco, LLC, Wilmington/USA

Panther Creek Wind Farm I&II, LLC, Wilmington/USA

Panther Creek Wind Farm Three, LLC, Wilmington/USA

Parc Eolien D'Allerey SAS, Clichy/France

Parc Eolien De Catillon-Fumechon SAS, Clichy/France

Parc Eolien De La Brie Nangissienne SAS, Clichy/France

Parc Eolien De La Butte Aux Chiens SAS, Clichy/France

Parc Eolien De La Voie Corette SAS, Clichy/France

Parc Eolien De Luçay-Le-Libre Et De Giroux SAS, Clichy/France

Parc Eolien De Martinpuich SAS, Clichy/France

Parc Eolien Des Grands Lazards SAS, Clichy/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.

Direct

Total

100

€ ’000

13,870

3,477

32,823

77,784

70,121

14,165

766

15,318

202,899

220,448

317,329

70,889

– 118

– 94

– 15

€ ’000

1,129

– 123

– 18,722

7,140

– 243

8,144

– 28

– 34,996

– 9,962

– 17,391

– 96

– 2

– 4

– 2

– 36

– 4

– 20

– 2

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

187

RWE Annual Report 20211
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

Parc Eolien Des Hauts-Bouleaux SAS, Clichy/France

Parc Eolien Des Nouvions SAS, Clichy/France

Parc Eolien Du Balinot SAS, Clichy/France

Parc Eolien Du Ban Saint-Jean SAS, Clichy/France

Parc Eolien Du Catesis SAS, Clichy/France

Parc Eolien Du Chemin De Chálons SAS, Clichy/France

Parc Eolien Du Chemin De Saint-Gilles SAS, Clichy/France

Parc Eolien Du Mirebalais SAS, Clichy/France

Parc Eolien Du Moulin Du Bocage SAS, Clichy/France

Parc Eolien Les Pierrots SAS, Clichy/France

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

Rampion Offshore Wind Limited, Coventry/United Kingdom

Rampion Renewables Limited, Coventry/United Kingdom

Renewables Solar Holding 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.

Direct

Total

100

€ ’000

– 113

– 164

– 27

– 14

– 633

224

– 51

179,821

21,525

153,861

80,726

126,858

409,862

1,251,676

1,038,964

43,839

€ ’000

– 37

– 61

– 2

– 25

– 4

– 9

– 2

– 302

– 300

– 616

13,277

– 2,580

3,062

3,253

– 331

14,416

– 516

– 19,884

129,641

390,537

38,816

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

188

RWE Annual Report 20211
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

Rheinbraun Brennstoff GmbH, Cologne

Rheinische Baustoffwerke GmbH, Bergheim

Rheinkraftwerk Albbruck-Dogern Aktiengesellschaft, Waldshut-Tiengen

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., Geertruidenberg/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

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

€ ’000

82,619

9,236

32,103

60,708

127,978

1,711

36,694

97,561

€ ’000

1,757

1,327

13,150

– 150,971

– 1,220

8,359,158

1,108,098

1,180

226

4,635

– 596

– 953,590

– 450,075

117,729

11,227

856

347,075

350,087

– 56,300

– 44

26,423

39,100

– 550,990

– 296,475

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

189

RWE Annual Report 20211
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 Generation NL Personeel B.V., Geertruidenberg/Netherlands

RWE Generation SE, Essen

RWE Generation Service GmbH, Essen

RWE Generation UK Holdings Limited, Swindon/United Kingdom

RWE Generation UK plc, Swindon/United Kingdom

RWE Hörup Windparkbetriebsgesellschaft mbH, Hörup

RWE indeland Windpark Eschweiler GmbH & Co. KG, Eschweiler

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 KL 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 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

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

€ ’000

15,327

270,659

3,066,711

1,632,056

45,822

398,948

568,737

1,598,287

1,811

€ ’000

1,106

8,850 1

198,692

27,517

4,385

10,568

11,076

– 6,916

– 43,501

– 17,927

8,386

74,464

94,357

578

– 31,305

2,854

– 3,235

137,286

37,286 1

– 338

– 14

– 387

– 5

2,109,457

72,248 1

1,608,434

– 154,642

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

190

RWE Annual Report 20211
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 Asset Management, LLC, Wilmington/USA

RWE Renewables Australia Pty. Ltd., Melbourne/Australia

RWE Renewables Benelux B.V., Geertruidenberg/Netherlands

RWE Renewables Beteiligungs GmbH, Dortmund

RWE Renewables Canada Holdings Inc., Vancouver/Canada

RWE Renewables Denmark A/S, Rødby/Denmark

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

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

€ ’000

281,468

269

€ ’000

2,937

289

– 44,190

– 1,708

8,950

– 1,266

1,342

209

1,241

791,489

– 14,998

– 5

57,600

1,109

– 8,666

– 8,667

– 25,993

270,757

162,287

– 5

– 377,113

4,215

10,379

11,322 2

350,070

– 8,536

393,034

244,043

– 2,645

– 1,418

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

191

RWE Annual Report 20211
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 Japan G.K., Tokyo/Japan

RWE Renewables Management UK Limited, Swindon/United Kingdom

RWE Renewables Offshore HoldCo One GmbH, Essen

RWE Renewables Offshore HoldCo Three GmbH, Essen

RWE Renewables Offshore HoldCo Two GmbH, Essen

RWE Renewables O&M, LLC, Wilmington/USA

RWE Renewables Operations Australia Pty Ltd, Melbourne/Australia

RWE Renewables Poland Sp. z o.o., Warsaw/Poland

RWE Renewables QSE, LLC, Wilmington/USA

RWE Renewables Services, LLC, Wilmington/USA

RWE Renewables Sweden AB, Malmö/Sweden

RWE Renewables UK Blyth Limited, Coventry/United Kingdom

RWE Renewables UK Dogger Bank South One Limited, Swindon/United Kingdom

RWE Renewables UK Dogger Bank South Two Limited, Swindon/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 Onshore 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 Scroby Sands Limited, Coventry/United Kingdom

Direct

Total

100

€ ’000

9,024

120,181

19,543

1,558

412,146

– 4,754

407,654

58,576

1,325

– 985

1,866,890

596,843

549,041

170,757

95,315

59,702

102,060

86,281

64,593

€ ’000

– 3,360

1,572

10,795

710

23,210

– 46,240

4,638

700

– 964

128,297

59,989

593

50,398

20,690

19,238

23,490

12,689

6,179

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.

192

RWE Annual Report 20211
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 UK Swindon Limited, Swindon/United Kingdom

RWE Renewables UK Wind Services Limited, Coventry/United Kingdom

RWE Renewables UK Zone Six Limited, Coventry/United Kingdom

RWE Renouvelables France SAS, Clichy/France

RWE Solar Development, LLC, Wilmington/USA

RWE Solar NC Lessee LLC, Wilmington/USA

RWE Solar NC Pledgor LLC, Wilmington/USA

RWE Solar Netherlands B.V., Geertruidenberg/Netherlands

RWE Solar PV, LLC, Wilmington/USA

RWE Sommerland Windparkbetriebsgesellschaft mbH, Sommerland

RWE Süderdeich Windparkbetriebsgesellschaft mbH, Süderdeich

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 Japan KK, Tokyo/Japan

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 Services GmbH, Essen

RWE Wind Karehamn AB, Malmö/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.

Direct

Total

€ ’000

100

2,366,891

39,212

111,747

269,466

14,396

2,516

– 238

64,885

106

47,311

255,599

446,778

6,483

14,557

11,108

15,788

2,521

5,735

33,670

100

€ ’000

84,707

13,152

– 5,872

– 15,214

– 393

– 238

– 6,258

17,311

– 8,131

– 937

– 1,677

3,861 1

375

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

193

RWE Annual Report 20211
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 Wind Onshore Deutschland GmbH, Hanover

RWE Wind Services Denmark A/S, Rødby/Denmark

RWE Windpark Bedburg A44n GmbH & Co. KG, Bedburg

RWE Windpark Bedburg GmbH & Co. KG, Bedburg

RWE Windpark Garzweiler GmbH & Co. KG, Essen

RWE Windpower Netherlands B.V., Geertruidenberg/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

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

Solarengo Portugal, SGPS, Unipessoal Lda., Cascais/Portugal

SRS EcoTherm GmbH, Salzbergen

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

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

€ ’000

80,111

8,941

12,086

59,713

33,301

8,271

11,894

– 2,040

– 4,781

20,028

– 433

5,924

– 369

9,709

21,497

8,699

4,655

8,115

7,554

13,090

731

€ ’000

5,207

– 66

7,721

889

3,511

5,540

– 8,442

– 2,628

– 143,866

– 17

– 2

– 218

– 14

4,304

– 1,297

– 4,319

128

162

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 20211
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

Triton Knoll HoldCo Limited, Swindon/United Kingdom

Triton Knoll Offshore Wind Farm Limited, Swindon/United Kingdom

Valencia Solar, LLC, Tucson/USA

West of the Pecos Holdco, LLC, Wilmington/USA

West of the Pecos Solar, LLC, Wilmington/USA

Wind Farm Deliceto s.r.l., Bolzano/Italy

Windpark Eekerpolder B.V., Geertruidenberg/Netherlands

Windpark Kattenberg B.V., Geertruidenberg/Netherlands

Windpark Nordsee Ost GmbH, Heligoland

Windpark Oostpolderdijk B.V., Geertruidenberg/Netherlands

Windpark Zuidwester B.V., Geertruidenberg/Netherlands

WKN Windkraft Nord GmbH & Co. Windpark Wönkhausen KG, Hanover

Direct

Total

100

€ ’000

98,705

– 150,791

10,623

65,527

109,492

25,525

1,824

1,155

256

– 47

8,164

2,977

€ ’000

666

1,045

– 7

– 339

1,767

2,021

390

– 17

– 584

779

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.

195

RWE Annual Report 20211
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

Agenzia Carboni S.r.l., Genoa/Italy

Alcamo II S.r.l., Milan/Italy

Alvarado Solar S.L., Barcelona/Spain

Anemos Ala Segarra, S.L., Reus/Spain

Ashwood Solar I, LLC, Wilmington/USA

Auzoberri Desarrollo, S.L.U., Barasoain/Spain

Azagra Energy Quel, S.L.U., Barasoain/Spain

Baron Winds II LLC, Chicago/USA

Baron Winds LLC, Chicago/USA

Belectric Inversiones Latinoamericana S.L., Barcelona/Spain

BELECTRIC JV GmbH, Kolitzheim

Belectric Mexico Fotovoltaica S.de R.L. de C.V., Bosques de las Lomas/Mexico

Blackbeard Solar, LLC, Wilmington/USA

Blackbriar Battery, LLC, Wilmington/USA

Blueberry Hills LLC, Chicago/USA

BO Baltic Offshore GmbH, Hamburg

Bowler Flats Energy Hub LLC, Chicago/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

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

224

– 4

233

382

115

– 26

573

– 11

– 29

– 11

– 1

– 2

– 9

– 20

– 2

– 13

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

196

RWE Annual Report 20211
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

Camster II Wind Farm Limited, Swindon/United Kingdom

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

Clavellinas Solar, S.L., Barcelona/Spain

Clinton Wind, LLC, Wilmington/USA

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

Dohema Offshore sp. z o.o., Główczyce/Poland

E & Z Industrie-Lösungen GmbH, Essen

Eko-En 1 Sp. z o.o., Warsaw/Poland

Eko-En 2 Sp. z o.o., Warsaw/Poland

Direct

Total

€ ’000

100

– 11

– 12

– 11

– 1,036

2,715

16,975

– 13

– 9

– 12

– 13

– 393

424

– 2

– 1,099

– 12

– 33

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.

197

RWE Annual Report 20211
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

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

Emisja Zero Sp. z o.o., Zielona Góra/Poland

Enchant Solar 4 Inc., Vancouver/Canada

Eólica Alta Anoia, S.L., Reus/Spain

Eólica La Conca, S.L., Reus/Spain

Eólica La Conca 2, S.L., Reus/Spain

Eólica La Conca 3, S.L., Reus/Spain

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 Des Nouvions SAS, Clichy/France

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

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.

198

100

422

401

– 4

– 78

– 107

– 22

– 13

– 8

– 5

– 2

– 119

– 118

RWE Annual Report 20211
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

GBV Dreiunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen

GBV Einunddreißigste Gesellschaft für Beteiligungsverwaltung mbH, Essen

GBV Siebte Gesellschaft für Beteiligungsverwaltung mbH, Essen

Geun Heung Offshore Wind Power Co., Ltd., Seoul/South Korea

Direct

100

Goldcup 29644 AB, Sundsvall/Sweden

Goldcup 29645 AB, Sundsvall/Sweden

Goldcup 29646 AB, Sundsvall/Sweden

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

Greenswitch Wind, LLC, Wilmington/USA

Haube Wind Sp. z o.o., Słupsk/Poland

Hickory Park Class B, LLC, Wilmington/USA

Hickory Park Holdco, LLC, Wilmington/USA

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

Janus Solar PV, 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.

199

Total

€ ’000

100

191

– 1,502

– 28

– 247

428

10,133

RWE Annual Report 20211
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

Jerez Fotovoltaica S.L., Barcelona/Spain

Jugondo Desarrollo, S.L.U., Barasoain/Spain

Kieswerk Kaarst GmbH & Co. KG, Bergheim

Kieswerk Kaarst Verwaltungs GmbH, Bergheim

La Casa Wind, LLC, Wilmington/USA

Lake Fork Wind Farm, LLC, Wilmington/USA

Lampasas Wind LLC, Chicago/USA

Las Vaguadas II Solar S.L., Barcelona/Spain

Lumbier Energy Judas, S.L.U., Barasoain/Spain

Mahanoy Mountain, LLC, Chicago/USA

Major Wind Farm, LLC, Wilmington/USA

March Road Solar, LLC, Wilmington/USA

Maricopa East Solar PV, LLC, Wilmington/USA

Maricopa East Solar PV 2, 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

Northern Orchard Solar PV, LLC, Wilmington/USA

Northern Orchard Solar PV 2, 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.

200

Total

100

€ ’000

1,185

3,454

358

202

€ ’000

– 8

– 2

1,254

– 7

– 2

– 33

– 1

RWE Annual Report 20211
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

Northern Orchard Solar PV 3, LLC, Wilmington/USA

Nouvions Poste de Raccordement SAS, Clichy/France

Oddeheia Wind DA, Oslo/Norway

Offshore-Windpark Delta Nordsee GmbH, Hamburg

Ohio Sunlight 1 LLC, Wilmington/USA

Olmunite Investments sp. z o.o., Główczyce/Poland

Oranje Wind Power B.V., Geertruidenberg/Netherlands

Oranje Wind Power C.V., Geertruidenberg/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 De Beg Ar C'hra SAS, Clichy/France

Parc Eolien De Canny SAS, Clichy/France

Parc Eolien de Dissay-sous-Courcillon SAS, Clichy/France

Parc Eolien De Foissy-Sur-Vanne SAS, Clichy/France

Parc Eolien de Froidmont-cohartille SAS, Clichy/France

Parc Eolien De Ganochaud SAS, Clichy/France

Parc Eolien De La Cabane Blanche SAS, Clichy/France

Parc Eolien De La Croix Blanche SAS, Clichy/France

Parc Eolien De La Jarrie-Audouin SAS, Clichy/France

Parc Eolien De La Plaine De Beaulieu SAS, Clichy/France

Parc Eolien de la Vallée de l’Eaulne SAS, Clichy/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.

100

– 4

493

– 2

209

– 2

– 3

– 4

– 2

– 3

– 2

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 20211
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

Parc Eolien De Langeron SAS, Clichy/France

Parc Eolien de Langonnet SAS, Clichy/France

Parc Eolien De L'Avre SAS, Clichy/France

Parc Eolien De Mesbrecourt-Richecourt SAS, Clichy/France

Parc Eolien de Morley SAS, Clichy/France

Parc Eolien De Nuisement Et Cheniers SAS, Clichy/France

Parc Eolien De Soudron SAS, Clichy/France

Parc Eolien de Viam SAS, Clichy/France

Parc Eolien De Villeneuve Minervois SAS, Clichy/France

Parc Eolien Des Ailes Du Gótinâis SAS, Clichy/France

Parc Eolien des Baumes SAS, Clichy/France

Parc Eolien des Cinq Poiriers SAS, Clichy/France

Parc Eolien des Milles Vents SAS, Clichy/France

Parc Eolien Des Raisinières SAS, Clichy/France

Parc Eolien D’Ormesnil SAS, Clichy/France

Parc Eolien Du Bocage SAS, Clichy/France

Parc Eolien Du Champ Madame SAS, Clichy/France

Parc Eolien Du Chemin Vert SAS, Clichy/France

Parc Eolien Du Mont Hellet SAS, Clichy/France

Parc Eolien Du Mont Herbé SAS, Clichy/France

Parc Eolien Du Moulin De Thiau SAS, Clichy/France

Parc Eolien Du Plateau De La Chapelle-Surchésy SAS, Clichy/France

Parc Eolien Du Ru Garnier SAS, Clichy/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.

100

– 3

– 2

– 91

– 14

– 2

– 3

– 2

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 20211
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

Parc Eolien 106 SAS, Clichy/France

Parc Eolien 107 SAS, Clichy/France

Parc Eolien 108 SAS, Clichy/France

Parc Eolien 111 SAS, Clichy/France

Parc Eolien 112 SAS, Clichy/France

Parc Eolien 113 SAS, Clichy/France

Parc Eolien 114 SAS, Clichy/France

Parc Eolien 115 SAS, Clichy/France

Parc Solaire de Canny SAS, Clichy/France

Parc Solaire de Gannat SAS, Clichy/France

Parc Solaire de l'Echineau SAS, Clichy/France

Parc Solaire de Pimorin SAS, Clichy/France

Parc Solaire de Vernusse SAS, Clichy/France

Parc Solaire des Pierrieres SAS, Clichy/France

Parc Solaire du Ban Saint Jean SAS, Clichy/France

Parc Ynni Cymunedol Alwen Cyfyngedig, Swindon/United Kingdom

Parque Eólico El Ópalo, S. de R.L. de C.V., Ciudad de México/Mexico

Pawnee Spirit Wind Farm, LLC, Wilmington/USA

Paz 'Éole SAS, Clichy/France

Pe Ell North LLC, Chicago/USA

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

46,563

45,834

– 2

– 5

– 285

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 20211
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

Pinckard Solar Member LLC, Wilmington/USA

Pinto Pass, LLC, Wilmington/USA

Pipkin Ranch Wind Farm, LLC, Wilmington/USA

Prairie Creek Wind, 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

R-Gen Renewables Limited, Altrincham/United Kingdom

Ribaforada Energy Ribaforada, S.L.U., Barasoain/Spain

Roadrunner Crossing Wind Farm, LLC, Wilmington/USA

Rose Rock Wind Farm, LLC, Wilmington/USA

Rouget Road Solar Farm, LLC, Lake Mary/USA

RWE & Turcas Dogalgaz Ithalat ve Ihracat A.S., Istanbul/Turkey

RWE AUSTRALIA PTY LTD, Brisbane/Australia

RWE Belgium BV, Brussels/Belgium

RWE Carbon Sourcing North America, 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

– 5

– 12

– 5

1,441

– 157

212

535

1,388

– 5

– 2

175

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 20211
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 Dhabi Union Energy LLC, Abu Dhabi/United Arab Emirates

RWE Dils Energie NV, Hasselt/Belgium

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 Development, LLC, Wilmington/USA

RWE Offshore Wind A/S, Rødby/Denmark

RWE Offshore Wind GmbH, Essen

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 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

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

– 99

2,118

10,985

2,660

– 106

3,950

6,759

– 319

7,108

– 1,918

250

– 4

235

– 27

– 1,065

– 215

943

– 823

– 2,036

100

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

205

RWE Annual Report 20211
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

RWE Renewables Deutschland GmbH, Schönefeld

RWE Renewables France SAS, Levallois-Perret/France

RWE Renewables Hellas Single Member S.A., Athens/Greece

RWE Renewables Japan Holdings K.K., Tokyo/Japan

RWE Renewables Korea LLC, Seoul/South Korea

RWE Renewables Land, LLC, Wilmington/USA

RWE Renewables Mexico, S. de R.L. de C.V., Ciudad de México/Mexico

RWE Renewables Offshore Development One GmbH, Essen

RWE Renewables Offshore Development Two GmbH, Essen

RWE Renewables Offshore HoldCo Four GmbH, Essen

RWE Renewables Services GmbH, Essen

RWE Renewables Services Mexico, S. de R.L. de C.V., Ciudad de México/Mexico

RWE Renewables Taiwan Ltd., Taipei City/Taiwan

RWE Renewables Trident Offshore GmbH, Essen

RWE Renewables UK Spareco Limited, Swindon/United Kingdom

RWE Slovak Holding B.V., Geertruidenberg/Netherlands

RWE Solar Poland Sp. z o.o., Warsaw/Poland

RWE Stallingborough Limited, Swindon/United Kingdom

RWE Supply & Trading (India) Private Limited, Mumbai/India

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 THOR 1 B.V., Geertruidenberg/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.

100

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

206

€ ’000

4,045

948

€ ’000

– 437

– 76

– 357

– 1,572

– 377

– 297

– 6

158

– 514

– 1

226

153

242

– 654

927

542

RWE Annual Report 20211
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 THOR 2 B.V., Geertruidenberg/Netherlands

RWE THOR 3 B.V., Geertruidenberg/Netherlands

RWE THOR 4 B.V., Geertruidenberg/Netherlands

RWE Trading Americas Inc., New York City/USA

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 Norway AS, Oslo/Norway

RWE Wind Transmission AB, Malmö/Sweden

RWE Windpark Bedburg A44n Verwaltungs GmbH, Bedburg

RWE Windpark Bedburg Verwaltungs GmbH, Bedburg

RWE Windpark Garzweiler Verwaltungs GmbH, Essen

RWE Windpark Papenhagen GmbH & Co. KG, Hanover

RWE Windpark Papenhagen Verwaltungs GmbH, Hanover

RWE Windparks Deutschland GmbH, Essen

RWEST NA Investments GmbH, Essen

RWEST PARTICIPAÇÕES, Rio de Janeiro/Brazil

RWEST PI Bras Limited, London/United Kingdom

RWEST PI FRE Holding LLC, New York City/USA

SB Retrofit, LLC, Dallas/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.

207

100

– 6,947

– 31

– 14

– 8

– 124

– 6

– 4

– 12

– 40,761

3,010

1,438

167

5,596

243

694

564

23,818

– 1,837

– 11

RWE Annual Report 20211
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

Scioto Solar LLC, Wilmington/USA

Seohae Offshore Wind Power Co., Ltd., Taean-gun/South Korea

Sergenite Investments sp. z o.o., Główczyce/Poland

Servanin Sp. z o.o., Warsaw/Poland

Sharco Wind sp. z o.o., Główczyce/Poland

Shay Solar, LLC, Wilmington/USA

Snow Shoe Wind Farm, LLC, Wilmington/USA

Solar PV Construction Poland sp. z.o.o., Warsaw/Poland

Sparta North, LLC, Wilmington/USA

Sparta South, LLC, Wilmington/USA

Stillwater Energy Storage, LLC, Wilmington/USA

Storage Facility 1 Ltd., Slough/United Kingdom

Sun Data GmbH (i.L.), Kolitzheim

Sunrise Energy Generation Pvt. Ltd., Mumbai/India

Sunrise Wind Holdings, LLC, Chicago/USA

Tafalla Energy Tafalla, S.L.U., Barasoain/Spain

TE Portfolio Financing One, LLC, Wilmington/USA

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

Tika Solar, S. de R.L. de C.V., Ciudad de México/Mexico

Tipton Wind, 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.

208

100

– 2

– 3

– 2

– 135

– 41

– 75

212

– 33

– 7

– 2

RWE Annual Report 20211
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

Valverde Wind Farm, LLC, Wilmington/USA

VDE Komplementär GmbH, Hanover

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

Vindkraftpark Brynhild AB, Uppsala/Sweden

Vortex Energy Deutschland GmbH, Kassel

Vortex Energy Windpark GmbH & Co. KG, Hanover

VSL Primus Sp. z o.o., Warsaw/Poland

Walker Road Solar Farm, LLC, Lake Mary/USA

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 Winterlingen-Alb GmbH & Co. KG, Hanover

WIT Ranch Wind Farm, LLC, Wilmington/USA

WR Graceland Solar, LLC, Wilmington/USA

Zielone Glówczyce Sp. z o.o., Główczyce/Poland

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.

209

100

665

1,185

606

3,300

4,397

4,900

– 17

– 2

– 135

– 265

– 2,177

3,350

– 503

4,192

– 277

RWE Annual Report 20211
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

III. Joint operations

Greater Gabbard Offshore Winds Limited, Reading/United Kingdom

N.V. Elektriciteits-Produktiemaatschappij Zuid-Nederland EPZ, Borssele/Netherlands

IV. Affiliated companies of joint operations

Enzee B.V., Borssele/Netherlands

V. Associated companies of joint operations

B.V. NEA, Arnhem/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.

Shareholding in %

Equity

Net income / loss

Direct

Total

€ ’000

1,090,232

93,082

€ ’000

102,399

10,335

Shareholding in %

Equity

Net income / loss

Direct

Total

100

€ ’000

506

€ ’000

406

Shareholding in %

Equity

Net income / loss

Direct

Total

€ ’000

74,611

€ ’000

1,512

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

210

RWE Annual Report 20211
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

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

Awel y Môr Offshore Wind Farm Limited, Swindon/United Kingdom

C-Power N.V., Ostend/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

Meton Energy S.A., Athens/Greece

RWE Venture Capital GmbH, Essen

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

60 4

514

75 4

€ ’000

31,598

€ ’000

1,779

1,073,377

138,320

14,871

286,106

140,100

– 30,155

252,278

– 3,679

432

17,212

33,535

70,416

– 473

29,287

– 10,341

46,189

– 19,610

– 457

– 410

4,697 2

2,112 2

147,383

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

211

RWE Annual Report 20211
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

VII. Associates accounted for using the equity method

Shareholding in %

Equity

Net income / loss

Amprion GmbH, Dortmund

Belectric Gulf Limited, Abu Dhabi/United Arab Emirates

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

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

RWE Renewables Technology Fund I GmbH & Co. KG, Dortmund

Schluchseewerk Aktiengesellschaft, Laufenburg (Baden)

Vela Wind Holdco, LLC, Wilmington/USA

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

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

212

Total

€ ’000

2,466,400

2,655

– 107

34,574

33,248

140,729

969,918

969,067

– 128

€ ’000

216,600

– 5,518

– 9

– 17,351

11,0972

6,647

109,841 2

110,063 2

– 9

276,350

– 14,337

4,881

47,706

1,791,179

131,320

14,619

70,575

149,560

5,395

4,212

– 7,188

143,505

18,235

945

2,809

– 478

13 5

106

784

754

RWE Annual Report 20211
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

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

Akita Yurihonjo Yojou Wind Energy K.K., Yurihonjo/Japan

Alfred Thiel-Gedächtnis-Unterstützungskasse GmbH, Essen

Ascent Energy LLC, Wilmington/USA

Bight Wind Holdings, LLC, Wilmington/USA

CARBON Climate Protection GmbH, Langenlois/Austria

CARBON Egypt Ltd. (under liquidation), Cairo/Egypt

Deutsche Gesellschaft für Wiederaufarbeitung von Kernbrennstoffen AG & Co. oHG, Essen

DOTI Management GmbH, Oldenburg

Dunkerque Eoliennes En Mer SAS, Montpellier/France

Fassi Coal Pty. Ltd., Rutherford/Australia

First River Energy LLC, Denver/USA

Five Estuaries Offshore Wind Farm Limited, Swindon/United Kingdom

Fond du Moulin SAS, Asnières-sur-Seine/France

Gemeinschaftswerk Hattingen Gesellschaft mit beschränkter Haftung, Essen

GfS Gesellschaft für Simulatorschulung mbH, Essen

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

London Array Limited, Tunbridge Wells/United Kingdom

Moravske Hidroelektrane d.o.o., Belgrade/Serbia

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

472

5,483

82,215

4,931

– 2,290

1,732

120

– 17

– 10,197

– 1,399

8,460

– 135

2,045

5,113

666

– 103

4,000

€ ’000

242

370

– 8,617

3,826

– 247

1,221

– 26

– 3,030

– 7,197

– 229

– 39

– 403

– 5

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 20211
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

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

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

Parc Eolien Des Monts Jumeaux SAS, Paris/France

Parc Eolien Du Coupru SAS, Paris/France

Parc Eolien Du Vilpion SAS, Paris/France

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 (GP) Ltd., Calgary/Canada

Versorium Energy LP, Calgary/Canada

Walden Renewables Development LLC, New York City/USA

Windesco Inc, Boston/USA

WINDTEST Grevenbroich GmbH, Grevenbroich

WP France 15 SAS, Puteaux/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.

Direct

Total

€ ’000

563

837

– 76

– 108

2,639

10,212

3,349

965

339

17,050

5,187

896

– 42

€ ’000

– 25

– 515

– 3

– 4

– 26

– 37

114

– 23

– 14,410

635

753

– 87

9,274

– 1,765

– 70

– 18

4 No control by virtue of company contract.
5 Significant influence via indirect investments.
6 Significant influence by virtue of company contract.

214

RWE Annual Report 20211
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

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

Energías Renovables de Ávila, S.A., Madrid/Spain

E.ON SE, Essen

Glenrothes Paper Limited, Glenrothes/United Kingdom

High-Tech Gründerfonds II GmbH & Co. KG, Bonn

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

Direct

Total

€ ’000

81,373

17,964

69,375

595

€ ’000

14,880

1,680

– 5,555

10,642,800

2,113,800

– 594

107,586

69,649

44,956

2,392

316

19,636

21,877

4,415

– 4

– 159

1,693

– 2,423

– 95,326

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.

215

RWE Annual Report 20211
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

IX. Other investments

Shareholding in %

Equity

Net income / loss

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

Umspannwerk Lübz GbR, Lübz

Versorgungskasse Energie (VVaG) i.L., Hanover

Versorium Energy Ltd., Calgary/Canada

Direct

Total

€ ’000

18,947

2,147

390

1,000

51,729

– 309

€ ’000

– 4,185

191

122

– 25

– 117

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

RWE Annual Report 20211
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

Changes in shareholding with change of control

Additions to affiliated companies included in the consolidated financial statements

Panther Creek Three Class B, LLC, Wilmington/USA

Panther Creek Three Holdco, LLC, Wilmington/USA

Rampion Offshore Wind Limited, Coventry/United Kingdom

RWE Generation Service GmbH, Essen

RWE Renewables Offshore HoldCo One GmbH, Essen

RWE Renewables Offshore HoldCo Three GmbH, Essen

RWE Renewables Offshore HoldCo Two GmbH, Essen

RWE Renewables UK Dogger Bank South One Limited, Swindon/United Kingdom

RWE Renewables UK Dogger Bank South Two Limited, Swindon/United Kingdom

Solarengo Portugal, SGPS, Unipessoal Lda., Cascais/Portugal

Additions to joint ventures accounted for using the equity method

Meton Energy S.A., Athens/Greece

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

Change

100

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

51 1

100

Change

– 75

Change of joint ventures accounted for using the equity method into affiliated companies included in the consolidated
financial statements

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

Rampion Renewables Limited, Coventry/United Kingdom

Change of affiliated companies included in the consolidated financial statements into associated companies accounted
for using the equity method

Vela Wind Holdco, LLC, Wilmington/USA

1 No control by virtue of company contract.

100

60 1

100

217

RWE Annual Report 20211
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

Changes in shareholding with change of control

Disposal of affiliated companies included in the consolidated financial statements

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

Change

Belectric France S.à.r.l., Vendres/France

BELECTRIC GmbH, Kolitzheim

Belectric Israel Ltd., Be’er Sheva/Israel

Belectric Italia s.r.l., Latina/Italy

Belectric Solar Ltd., Slough/United Kingdom

Centrale Hydroelectrique d'Oussiat S.A.S., Paris/France

Cranell Holdco, LLC, Wilmington/USA

Cranell Wind Farm, LLC, Wilmington/USA

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

Glen Kyllachy Wind Farm Limited, Swindon/United Kingdom

Inversiones Belectric Chile LTDA, Santiago de Chile/Chile

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

Raymond Holdco, LLC, Wilmington/USA

Raymond Wind Farm, LLC, Wilmington/USA

SAS Île de France S.A.S., Paris/France

Stella Holdco, LLC, Wilmington/USA

Stella Wind Farm, LLC, Wilmington/USA

West Raymond Holdco, LLC, Wilmington/USA

West Raymond Wind Farm, LLC, Wilmington/USA

218

100

– 100

– 74

– 100

RWE Annual Report 20211
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

Changes in shareholding with change of control

Disposal of associated companies accounted for using the equity method

ATBERG – Eólicas do Alto Tâmega e Barroso, Lda., Ribeira de Pena/Portugal

HIDROERG – Projectos Energéticos, Lda., Lisbon/Portugal

Changes in shareholding without change of control

Affiliated companies which are included in the consolidated financial statements

Parc Eolien Les Pierrots SAS, Clichy/France

RWE Windpark Bedburg A44n GmbH & Co. KG, Bedburg

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

Shareholding in %
31 Dec 2021

Shareholding in %
31 Dec 2020

100

Change

– 40

– 32

Change

– 40

– 49

219

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Boards (part of the Notes)

5
Further information

4.8 Boards (part of the Notes)

As of 3 March 2022

Supervisory Board

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

End of term: 2025

Other appointments:
• ProSiebenSat.1 Media SE1 until 5 May 2022 (Chairman)
• Siemens AG1

Frank Bsirske2

Isernhagen

Deputy Chairman until 15 September 2021

Ralf Sikorski2

Hanover

Deputy Chairman since 21 September 2021

Deputy Chairman of IG Bergbau, Chemie, Energie

Year of birth: 1961

Member since 1 July 2014

End of term: 2026

Other appointments:

• CHEMIE Pensionsfonds AG
• Lanxess AG1

• Lanxess Deutschland GmbH

• RAG AG
• RWE Generation SE3
• RWE Power AG3

Former Chairman of ver.di - Vereinte Dienstleistungsgewerkschaft

• KSBG Kommunale Verwaltungsgesellschaft GmbH

Year of birth: 1952

Member from 9 January 2001 to 15 September 2021

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

End of term: 2026

• 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.

220

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Boards (part of the Notes)

5
Further information

Sandra Bossemeyer2

Duisburg

Matthias Dürbaum2

Heimbach

Chairwoman of the Works Council of RWE AG

Chairman of the Works Council of the Hambach Opencast Mine, RWE Power AG

Representative of the disabled

Year of birth: 1965

Member since 20 April 2016

End of term: 2026

Martin Bröker2

Bochum

Head of Corporate IT & SAP at RWE AG

Year of birth: 1966

Member from 1 September 2018 to 15 September 2021

Dr. Hans Friedrich Bünting

Mülheim an der Ruhr

Independent Corporate Consultant

Year of birth: 1964

Member since 28 April 2021

End of term: 2025

Anja Dubbert2

Essen

Business Development Manager

Year of birth: 1987

Member since 30 September 2019

End of term: 2026

Ute Gerbaulet

Düsseldorf

General Partner at Dr. August Oetker KG

Year of birth: 1968

Member since 27 April 2017

End of term: 2024

Other appointments:

• Flaschenpost SE

- Dr. August Oetker Nahrungsmittel KG (Chairwoman)

- OEDIV Oetker Daten- und Informationsverarbeitung KG (Chairwoman)

- Oetker Digital GmbH (Chairwoman)

- Radeberger Gruppe KG

- NRW.Bank AöR

Prof. Dr.-Ing. Dr.-Ing. E. h. Hans-Peter Keitel

Essen

Member of the Works Council of RWE Supply & Trading GmbH

Former Chairman of the Executive Board of HOCHTIEF AG

Year of birth: 1979

Member from 27 September 2019 to 15 September 2021

Independent Corporate Consultant

Year of birth: 1947

Member since 18 April 2013

End of term: 2024

• 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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Mag. Dr. h. c. Monika Kircher

Krumpendorf, Austria

Independent Corporate Consultant

Year of birth: 1957

Member since 15 October 2016

End of term: 2025

Other appointments:
- Andritz AG1

- Kärntner Energieholding Beteiligungs GmbH (Chairwoman)

- KELAG-Kärntner Elektrizitäts AG

- Siemens AG Austria

Thomas Kufen

Essen

Mayor of the City of Essen

Year of birth: 1973
Court-appointed Member since 18 October 20214

Other appointments:

• Essener Versorgungs- und Verkehrsgesellschaft mbH (EVV) (Chairman)

• Stadtwerke Essen AG (Chairman)

- Advisory Board, Sparkasse Essen (Chairman)

- RAG Foundation (Member of the Board of Trustees)

Reiner van Limbeck2

Dinslaken

Chairman of the Works Council of the Essen Headquarters, RWE Generation SE

and RWE Technology International GmbH

Year of birth: 1965

Member since 15 September 2021

End of term: 2026

Other appointments:
• RWE Generation SE3

Harald Louis2

Jülich

Chairman of the General Works Council of RWE Power AG

Year of birth: 1967

Member since 20 April 2016

End of term: 2026

Other appointments:
• RWE Power AG3

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 from 4 January 2005 to 28 April 2021

• 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.
4 The AGM on 28 April 2022 will decide on Mr. Kufen‘s appointment to the Supervisory Board.

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Peter Ottmann

Nettetal

Former Managing Director of Verband der kommunalen RWE-Aktionäre GmbH

Attorney

Former Chief Administrative Officer of Viersen County

Year of birth: 1951

Member from 20 April 2016 to 28 April 2021

Dagmar Paasch2

Solingen

Other appointments:

• BDO AG Wirtschaftsprüfungsgesellschaft
• Hannover Rück SE1

• HDI Haftpflichtverband der Deutschen Industrie VVaG
• Talanx AG1

Dr. Wolfgang Schüssel

Vienna, Austria

Former Federal Chancellor of the Republic of Austria

Year of birth: 1945

Head of NRW Supply and Waste Management Division at ver.di Dienstleistungsgewerkschaft

Member from 1 March 2010 to 28 April 2021

Year of birth: 1974

Member from 15 September 2021

End of term: 2026

Other appointments:
• RWE Generation SE3

Günther Schartz

Wincheringen

Other appointments:

- Adenauer Stiftung (Chairman of the Board of Trustees)
- PJSC LUKOIL1

Dirk Schuhmacher2

Rommerskirchen

Chairman of the HW Grefrath Works Council, RWE Power AG

Year of birth: 1970

Former Chief Administrative Officer of the District of Trier-Saarburg

Member since 15 September 2021

Year of birth: 1962

Member from 20 April 2016 to 30 September 2021

Dr. Erhard Schipporeit

Hanover

Independent Corporate Consultant

Year of birth: 1949

Member since 20 April 2016

End of term: 2024

End of term: 2026

Ullrich Sierau

Dortmund

Independent Consultant for Companies, Administrations, Political Parties and

Civil Society Initiatives

Year of birth: 1956

Member since 20 April 2011

End of term: 2024

• 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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5
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Hauke Stars

Königstein

Dr. Andreas Wagner2

Grevenbroich

Member of the Executive Board of Volkswagen AG

Head of Drilling and Water Management, RWE Power AG

Year of birth: 1967

Member since 28 April 2021

End of term: 2025

Other appointments:

• Audi AG

• CARIAD SE

- Kühne + Nagel International AG

Helle Valentin

Birkeroed, Denmark

Managing Partner, IBM Consulting EMEA, IBM Corporation

Year of birth: 1967

Member since 28 April 2021

End of term: 2025

Other appointments:

- PFA Holding A / S, Denmark until 7 March 2022

- PFA Pension, Forsikringsaktieselskab, Denmark until 7 March 2022

- IBM Danmark ApS, Denmark

Year of birth: 1967

Member since 15 September 2021

End of term: 2026

Marion Weckes2

Dormagen

Officer of the Group Works Council of GEA Group AG

Year of birth: 1975

Member since 20 April 2016

End of term: 2026

Leonhard Zubrowski2

Lippetal

Chairman of the Group Works Council of RWE AG

Year of birth: 1961

Member from 1 July 2014 to 15 September 2021

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.

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Supervisory Board Committees

Executive Committee of the Supervisory Board

Dr. Werner Brandt (Chairman)

Ute Gerbaulet

Prof. Dr. Hans-Peter Keitel

Reiner van Limbeck

Dirk Schuhmacher

Ralf Sikorski

Mediation Committee in accordance with Section 27,

Paragraph 3 of the German Co-Determination Act

Dr. Werner Brandt (Chairman)

Thomas Kufen

Ralf Sikorski

Marion Weckes

Personnel Affairs Committee

Dr. Werner Brandt (Chairman)

Sandra Bossemeyer

Dr. Hans Friedrich Bünting

Harald Louis

Ralf Sikorski

Hauke Stars

Audit Committee

Dr. Erhard Schipporeit (Chairman)

Michael Bochinsky

Matthias Dürbaum

Mag. Dr. h. c. Monika Kircher

Dagmar Paasch

Ullrich Sierau

Nomination Committee

Dr. Werner Brandt (Chairman)

Prof. Dr. Hans-Peter Keitel

Hauke Stars

Strategy and Sustainability Committee

Dr. Werner Brandt (Chairman)

Michael Bochinsky

Dr. Hans Friedrich Bünting

Prof. Dr. Hans-Peter Keitel

Harald Louis

Dagmar Paasch

Ralf Sikorski

Helle Valentin

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Executive Board

Dr. Markus Krebber

Chief Executive Officer since 1 May 2021

Dr. Michael Müller

Chief Financial Officer since 1 May 2021

Member of the Executive Board of RWE AG since 1 October 2016,

Member of the Executive Board of RWE AG since 1 November 2020,

appointed until 30 June 2026

Chief Financial Officer to 30 April 2021

Offices:

• Group Communications & Public Affairs

• Energy Transition & Regulatory Affairs

• Legal, Compliance & Insurance

• Mergers & Acquisitions

• Strategy & Sustainability

• Corporate Transformation

Other appointments:
• RWE Generation SE2 (Chairman)
• RWE Power AG2
• RWE Renewables GmbH2 (Chairman)
• RWE Supply & Trading GmbH2

appointed until 31 October 2023

Managing Director and CFO of RWE Supply & Trading GmbH from 1 September 2016

to 30 April 2021 (posts held concurrently from 1 November 2020 to 30 April 2021)

Offices:

• Accounting

• Controlling & Risk Management

• Finance & Credit Risk

• Investor Relations

• Tax

Other appointments:

• Amprion GmbH
• RWE Generation SE2
• RWE Power AG2
• RWE Renewables GmbH2
• 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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Zvezdana Seeger

Dr. Rolf Martin Schmitz

Chief HR Officer and Labour Director since 1 November 2020

Chief Executive Officer of RWE AG from 15 October 2016 to 30 April 2021

Member of the Executive Board of RWE AG since 1 November 2020,

Member of the Executive Board of RWE AG from 1 May 2009 to 30 April 2021

appointed until 31 October 2023

Labour Director of RWE AG from 1 May 2017 to 31 October 2020

Offices:

• HR Services & Analytics

• Employee Relations

• People Management & Talent Attraction

• Group Information Technology

• Internal Audit & Security

Other appointments:

• Deutsche Kreditbank AG
• RWE Generation SE2
• RWE Pensionsfonds AG2 (Chairwoman)
• RWE Power AG2 (Chairwoman)
• RWE Supply & Trading GmbH2

- Kärntner Energieholding Beteilgungs GmbH

- KELAG-Kärntner Elektrizitäts-Aktiengesellschaft

• 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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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. 3a 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.

Audit Opinions

Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our audit has not led to any

We have audited the consolidated financial statements of RWE Aktiengesellschaft, Essen,

reservations relating to the legal compliance of the consolidated financial statements and

and its subsidiaries (the Group), which comprise the consolidated statement of financial

of the group management report.

position as at December 31, 2021, and the consolidated statement of comprehensive

income, consolidated income statement, consolidated statement of changes in equity and

Basis for the Audit Opinions

consolidated statement of cash flows for the financial year from January 1 to December 31,

We conducted our audit of the consolidated financial statements and of the group

2021, and notes to the consolidated financial statements, including a summary of

management report in accordance with § 317 HGB and the EU Audit Regulation

significant accounting policies. In addition, we have audited the group management report

(No. 537 / 2014, referred to subsequently as “EU Audit Regulation”) in compliance with

of RWE Aktiengesellschaft, which is combined with the Company’s management report, for

German Generally Accepted Standards for Financial Statement Audits promulgated by the

the financial year from January 1 to December 31, 2021.

Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). We performed

In our opinion, on the basis of the knowledge obtained in the audit,

International Standards on Auditing (ISAs). Our responsibilities under those requirements,

the audit of the consolidated financial statements in supplementary compliance with the

• the accompanying consolidated financial statements comply, in all material respects, with

of the Consolidated Financial Statements and of the Group Management Report” section of

the IFRSs as adopted by the EU, and the additional requirements of German commercial

our auditor’s report. We are independent of the group entities in accordance with the

law pursuant to § [Article] 315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: German

requirements of European law and German commercial and professional law, and we have

Commercial Code] and, in compliance with these requirements, give a true and fair view of

fulfilled our other German professional responsibilities in accordance with these

the assets, liabilities, and financial position of the Group as at December 31, 2021, and of

requirements. In addition, in accordance with Article 10 (2) point (f) of the EU Audit

principles and standards are further described in the “Auditor’s Responsibilities for the Audit

its financial performance for the financial year from January 1 to December 31, 2021, and

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Regulation, we declare that we have not provided non-audit services prohibited under

Goodwill is tested for impairment annually or when there are indications of impairment,

Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained

to determine any possible need for write-downs. The carrying amounts of the relevant

is sufficient and appropriate to provide a basis for our audit opinions on the consolidated

cash-generating units, including goodwill, are compared with the corresponding

financial statements and on the group management report.

recoverable amounts in the context of the impairment tests. The recoverable amount is

Key Audit Matters in the Audit of the Consolidated Financial Statements

tests are performed at the level of the cash-generating units or groups of cash-

Key audit matters are those matters that, in our professional judgment, were of most

generating units to which the respective goodwill is allocated. The measurements to

significance in our audit of the consolidated financial statements for the financial year from

calculate the fair value less costs of disposal carried out for the purposes of the

January 1 to December 31, 2021. These matters were addressed in the context of our audit

impairment tests are based on the present values of the future cash flows generally

of the consolidated financial statements as a whole, and in forming our audit opinion

derived from the planning projections for the next three years (medium-term plan)

thereon; we do not provide a separate audit opinion on these matters.

prepared by the executive directors and acknowledged by the supervisory board.

generally calculated on the basis of fair value less costs of disposal. The impairment

Expectations relating to future market developments and country-specific assumptions

In our view, the matters of most significance in our audit were as follows:

about the performance of macroeconomic indicators are also taken into account.

Recoverability of goodwill

Recoverability in the „Coal / Nuclear“ segment

Present values are calculated using discounted cash flow models. The discount rate

applied is the weighted average cost of capital for the relevant cash- generating unit.

The impairment test determined that no write-downs were necessary. The outcome of

these valuations is dependent to a large extent on the estimates made by the executive

Our presentation of these key audit matters has been structured in each case as follows:

directors of the future cash inflows of the cash-generating units, and on the respective

Matter and issue

Audit approach and findings

Reference to further information

discount rates, rates of growth and other assumptions employed. The measurement is

therefore subject to considerable uncertainty. Against this background and due to the

underlying complexity of the measurement, this matter was of particular significance in

the context of our audit.

Hereinafter we present the key audit matters:

As part of our audit, we, among other things, evaluated the method used for performing

Recoverability of goodwill

impairment tests and assessed the calculation of the weighted average cost of capital.

In addition, we assessed whether the future cash inflows underlying the measurements

In the consolidated financial statements of RWE Aktiengesellschaft, goodwill amounting

together with the weighted cost of capital used represent an appropriate basis for the

to €2.7 billion (1.9 % of consolidated total assets; previous year: €2.7 billion, or 4.4 % of

impairment tests overall. We evaluated the appropriateness of the future cash inflows

consolidated total assets) is reported under the balance sheet item “Intangible assets”.

used in the calculations, among other things, by comparing this data with the Group’s

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medium-term plan and by reconciling it against general and sector-specific market

expectations. In this context, we also assessed whether the costs of Group functions

coal, natural gas and CO2 certificate prices as well as the planned service lives. The
outcome of these valuations is dependent to a large extent on the estimates made by

were properly included in the respective cash-generating unit. With the knowledge

the executive directors of the future cash flows, and on the discount rates, rates of

that even relatively small changes in the discount rate applied can have material effects

growth and other assumptions employed. The measurement is therefore subject to

on the fair values less costs of disposal calculated in this way, we also focused our

considerable uncertainties, so that this matter was of particular significance in the

assessment on the parameters used to determine the discount rate applied, and

context of our audit.

evaluated the measurement model. Furthermore, we evaluated the sensitivity analyses

performed by the Company in order to assess any impairment risk (carrying amount

As part of our audit, we, among other things, evaluated the method used for testing the

higher than recoverable amount) in the event of a reasonably possible change in a

recoverability of property, plant and equipment and assessed the calculation of the

material assumption underlying the measurement. Overall, the measurement

weighted average cost of capital. In addition, we assessed whether the future cash

parameters and assumptions used by the executive directors are in line with our

inflows underlying the measurements together with the weighted cost of capital used

expectations and are also within the ranges considered by us to be reasonable.

represent an appropriate basis for testing recoverability overall. We assessed the

appropriateness of the future cash inflows used in the measurement by, inter alia,

The Company’s disclosures relating to goodwill are contained in the notes to the

comparing this data with the medium-term planning and reconciling it against general

financial statements in section “Notes to the Balance Sheet” in note “(10) Intangible

assets”.

and sector-specific market expectations with regard to electricity, coal, natural gas and
CO2 certificate prices and the planned service lives. Furthermore, on the basis of the
medium-term planning, we assessed the recoverability of the property, plant and

Recoverability in the „Coal / Nuclear“ segment

equipment based on the evidence provided to us. With the knowledge that even

In the consolidated financial statements of RWE Aktiengesellschaft open cast mines

relatively small changes in the discount rate applied can have material effects on the

(hereinafter referred to as “property, plant and equipment”) in the “Coal / Nuclear”

fair values calculated in this way, we also focused our assessment on the parameters

segment amounting to €0.9 billion were impaired due to the significant deterioration

used to determine the discount rate applied, and evaluated the measurement model.

on market conditions stemming from regulatory climate protection measures. The

Overall, the measurement parameters and assumptions used by the executive directors

recoverability of property, plant and equipment was tested on the basis of their fair

are in line with our expectations and are also within the ranges considered by us to be

values less costs of disposal that exceed their values in use. The fair values of the

reasonable.

respective property, plant and equipment are determined by the Company as the

present value of the future cash flows using discounted cash flow models. The budget

projections for the coming three years (medium-term planning) prepared by the

The Company’s disclosures relating to impairments of property, plant and equipment
are contained in the notes to the financial statements in section “Notes to the Income

executive directors and acknowledged by the supervisory board are used as a basis

Statement” in note “(5) Depreciation, amortization and impairment losses”.

and extrapolated on the basis of long-term assumptions with regard to electricity,

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Other Information

Responsibilities of the Executive Directors and the Supervisory Board for the

The executive directors are responsible for the other information.

Consolidated Financial Statements and the Group Management Report

The other information comprises

The executive directors are responsible for the preparation of the consolidated financial

statements that 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

• the statement on corporate governance pursuant to § 289f HGB and § 315d HGB

that the consolidated financial statements, in compliance with these requirements, give a

true and fair view of the assets, liabilities, financial position, and financial performance of the

• the separate non-financial group report pursuant to § 315b Abs. 3 HGB

Group. In addition the executive directors are responsible for such internal control as they

have determined necessary to enable the preparation of consolidated financial statements

• the annual report – excluding cross- references to external information – with the

that are free from material misstatement, whether due to fraud or error.

exception of the audited consolidated financial statements, the audited group

management report and our auditor’s report

In preparing the consolidated financial statements, the executive directors are responsible

for assessing the Group’s ability to continue as a going concern. They also have the

Our audit opinions on the consolidated financial statements and on the group management

responsibility for disclosing, as applicable, matters related to going concern. In addition, they

report do not cover the other information, and consequently we do not express an audit

are responsible for financial reporting based on the going concern basis of accounting

opinion or any other form of assurance conclusion thereon.

unless there is an intention to liquidate the Group or to cease operations, or there is no

realistic alternative but to do so.

In connection with our audit, our responsibility is to read the other information mentioned

above and, in so doing, to consider whether the other information

Furthermore, the executive directors are responsible for the preparation of the group

• is materially inconsistent with the consolidated financial statements, with the group

and is, in all material respects, consistent with the consolidated financial statements,

management report disclosures audited in terms of content or with our knowledge

complies with German legal requirements, and appropriately presents the opportunities

management report that, as a whole, provides an appropriate view of the Group’s position

obtained in the audit, or

and risks of future development. In addition, the executive directors are responsible for such

arrangements and measures (systems) as they have considered necessary to enable the

• otherwise appears to be materially misstated.

preparation of a group management report that is in accordance with the applicable

German legal requirements, and to be able to provide sufficient appropriate evidence for

If, based on the work we have performed, we conclude that there is a material misstatement

the assertions in the group management report.

of this other information, we are required to report that fact. We have nothing to report in

this regard.

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The supervisory board is responsible for overseeing the Group’s financial reporting process

detecting a material misstatement resulting from fraud is higher than for one resulting

for the preparation of the consolidated financial statements and of the group management

from error, as fraud may involve collusion, forgery, intentional omissions,

report.

misrepresentations, or the override of internal control.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of

• Obtain an understanding of internal control relevant to the audit of the consolidated

the Group Management Report

financial statements and of arrangements and measures (systems) relevant to the audit

Our objectives are to obtain reasonable assurance about whether the consolidated

of the group management report in order to design audit procedures that are

financial statements as a whole are free from material misstatement, whether due to fraud

appropriate in the circumstances, but not for the purpose of expressing an audit opinion

or error, and whether the group management report as a whole provides an appropriate

on the effectiveness of these systems.

view of the Group’s position and, in all material respects, is consistent with the consolidated

financial statements and the knowledge obtained in the audit, complies with the German

• Evaluate the appropriateness of accounting policies used by the executive directors and

legal requirements and appropriately presents the opportunities and risks of future

the reasonableness of estimates made by the executive directors and related disclosures.

development, as well as to issue an auditor’s report that includes our audit opinions on the

consolidated financial statements and on the group management report.

• Conclude on the appropriateness of the executive directors’ use of the going concern

basis of accounting and, based on the audit evidence obtained, whether a material

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

uncertainty exists related to events or conditions that may cast significant doubt on the

conducted in accordance with § 317 HGB and the EU Audit Regulation and in compliance

Group’s ability to continue as a going concern. If we conclude that a material uncertainty

with German Generally Accepted Standards for Financial Statement Audits promulgated

exists, we are required to draw attention in the auditor’s report to the related disclosures in

by the Institut der Wirtschaftsprüfer (IDW) and supplementary compliance with the ISAs

the consolidated financial statements and in the group management report or, if such

will always detect a material misstatement. Misstatements can arise from fraud or error

disclosures are inadequate, to modify our respective audit opinions. Our conclusions are

and are considered material if, individually or in the aggregate, they could reasonably

based on the audit evidence obtained up to the date of our auditor’s report. However,

be expected to influence the economic decisions of users taken on the basis of these

future events or conditions may cause the Group to cease to be able to continue as a

consolidated financial statements and this group management report.

going concern.

We exercise professional judgment and maintain professional skepticism throughout the

• Evaluate the overall presentation, structure and content of the consolidated financial

audit. We also

statements, including the disclosures, and whether the consolidated financial statements

present the underlying transactions and events in a manner that the consolidated

• Identify and assess the risks of material misstatement of the consolidated financial

financial statements give a true and fair view of the assets, liabilities, financial position and

statements and of the group management report, whether due to fraud or error, design

financial performance of the Group in compliance with IFRSs as adopted by the EU and

and perform audit procedures responsive to those risks, and obtain audit evidence that is

the additional requirements of German commercial law pursuant to § 315e Abs. 1 HGB.

sufficient and appropriate to provide a basis for our audit opinions. The risk of not

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• Obtain sufficient appropriate audit evidence regarding the financial information of

of the current period and are therefore the key audit matters. We describe these matters in

the entities or business activities within the Group to express audit opinions on the

our auditor’s report unless law or regulation precludes public disclosure about the matter.

consolidated financial statements and on the group management report. We are

responsible for the direction, supervision and performance of the group audit. We remain

Other legal and regulatory requirements

solely responsible for our audit opinions.

• Evaluate the consistency of the group management report with the consolidated financial

Statements and the Group Management Report Prepared for Publication Purposes in

statements, its conformity with German law, and the view of the Group’s position it

Accordance with § 317 Abs. 3a HGB

Report on the Assurance on the Electronic Rendering of the Consolidated Financial

provides.

Assurance Opinion

• Perform audit procedures on the prospective information presented by the executive

We have performed assurance work in accordance with § 317 Abs. 3a HGB to obtain

directors in the group management report. On the basis of sufficient appropriate audit

reasonable assurance as to whether the rendering of the consolidated financial statements

evidence we evaluate, in particular, the significant assumptions used by the executive

and the group management report (hereinafter the “ESEF documents”) contained in the

directors as a basis for the prospective information, and evaluate the proper derivation of

electronic file RWE_AG_KA_KLB_ESEF_2021-12-31.zip and prepared for publication

the prospective information from these assumptions. We do not express a separate audit

purposes complies in all material respects with the requirements of § 328 Abs. 1 HGB for the

opinion on the prospective information and on the assumptions used as a basis. There is a

electronic reporting format (“ESEF format”). In accordance with German legal requirements,

substantial unavoidable risk that future events will differ materially from the prospective

this assurance work extends only to the conversion of the information contained in the

information.

consolidated financial statements and the group management report into the ESEF format

and therefore relates neither to the information contained within these renderings nor to any

We communicate with those charged with governance regarding, among other matters,

other information contained in the electronic file identified above.

the planned scope and timing of the audit and significant audit findings, including any

significant deficiencies in internal control that we identify during our audit.

In our opinion, the rendering of the consolidated financial statements and the group

management report contained in the electronic file identified above and prepared for

We also provide those charged with governance with a statement that we have complied

publication purposes complies in all material respects with the requirements of § 328 Abs. 1

with the relevant independence requirements, and communicate with them all relationships

HGB for the electronic reporting format. Beyond this assurance opinion and our audit

and other matters that may reasonably be thought to bear on our independence, and where

opinion on the accompanying consolidated financial statements and the accompanying

applicable, the related safeguards.

group management report for the financial year from January 1 to December 31, 2021,

contained in the “Report on the Audit of the Consolidated Financial Statements and on the

From the matters communicated with those charged with governance, we determine those

Group Management Report” above, we do not express any assurance opinion on the

matters that were of most significance in the audit of the consolidated financial statements

information contained within these renderings or on the other information contained in the

electronic file identified above.

233

RWE Annual Report 20211
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 Assurance Opinion

to fraud or error. We exercise professional judgment and maintain professional skepticism

We conducted our assurance work on the rendering of the consolidated financial

throughout the assurance work. We also:

statements and the group management report contained in the electronic file identified

above in accordance with § 317 Abs. 3a HGB and the IDW Assurance Standard: Assurance

• Identify and assess the risks of material non-compliance with the requirements of

Work on the Electronic Rendering, of Financial Statements and Management Reports,

§ 328 Abs. 1 HGB, whether due to fraud or error, design and perform assurance

Prepared for Publication Purposes in Accordance with § 317 Abs. 3a HGB (IDW AsS 410

procedures responsive to those risks, and obtain assurance evidence that is sufficient and

(10.2021)) and the International Standard on Assurance Engagements 3000 (Revised).

appropriate to provide a basis for our assurance opinion.

Our responsibility in accordance therewith is further described in the “Group Auditor’s

Responsibilities for the Assurance Work on the ESEF Documents” section. Our audit firm

• Obtain an understanding of internal control relevant to the assurance work on the

applies the IDW Standard on Quality Management 1: Requirements for Quality

ESEF documents in order to design assurance procedures that are appropriate in the

Management in the Audit Firm (IDW QS 1).

circumstances, but not for the purpose of expressing an assurance opinion on the

effectiveness of these controls.

Responsibilities of the Executive Directors and the Supervisory Board for the ESEF

Documents

• Evaluate the technical validity of the ESEF documents, i. e., whether the electronic file

The executive directors of the Company are responsible for the preparation of the ESEF

containing the ESEF documents meets the requirements of the Delegated Regulation (EU)

documents including the electronic renderings of the consolidated financial statements and

2019 / 815 in the version in force at the date of the consolidated financial statements on

the group management report in accordance with § 328 Abs. 1 Satz 4 Nr. [number] 1 HGB

the technical specification for this electronic file.

and for the tagging of the consolidated financial statements in accordance with § 328 Abs.

1 Satz 4 Nr. 2 HGB.

• Evaluate whether the ESEF documents provide an XHTML rendering with content

equivalent to the audited consolidated financial statements and to the audited group

In addition, the executive directors of the Company are responsible for such internal control

management report.

as they have 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

• Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL)

electronic reporting format, whether due to fraud or error.

in accordance with the requirements of Articles 4 and 6 of the Delegated Regulation (EU)

2019 / 815, in the version in force at the date of the consolidated financial statements,

The supervisory board is responsible for overseeing the process for preparing the ESEF

enables an appropriate and complete machine-readable XBRL copy of the XHTML

documents as part of the financial reporting process.

rendering.

Group Auditor’s Responsibilities for the Assurance Work on the ESEF Documents

Further Information pursuant to Article 10 of the EU Audit Regulation

Our objective is to obtain reasonable assurance about whether the ESEF documents are

We were elected as group auditor by the annual general meeting on April 28, 2021. We

free from material non-compliance with the requirements of § 328 Abs. 1 HGB, whether due

were engaged by the supervisory board on April 28, 2021. We have been the group auditor

of RWE Aktiengesellschaft, Essen without interruption since the financial year 2001.

234

RWE Annual Report 20211
To our investors

2
Combined review
of operations

3
Responsibility statement

4
Consolidated financial
statements

Independent auditor’s report

5
Further information

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).

Reference to an other matter – use of the auditor‘s report

Our auditor’s report must always be read together with the audited consolidated

financial statements and the audited group management report well as the assured ESEF

documents. The consolidated financial statements and the group management report

converted to the ESEF format – including the versions to be published in the Federal Gazette

– are merely electronic renderings of the audited consolidated financial statements and the

audited group management report and do not take their place. In particular, the “Report on

the Assurance on the Electronic Rendering of the Consolidated Financial Statements and

the Group Management Report Prepared for Publication Purposes in Accordance with

§ 317 Abs. 3a HGB” and our assurance opinion contained therein are to be used solely

together with the assured ESEF documents made available in electronic form.

German Public Auditor responsible for the engagement

The German Public Auditor responsible for the engagement is Aissata Touré.

Essen, March 4, 2022

PricewaterhouseCoopers GmbH

Wirtschaftsprüfungsgesellschaft

(sgd. Markus Dittmann)

(sgd. Aissata Touré)

Wirtschaftsprüfer

Wirtschaftsprüferin

(German Public Auditor)

235

RWE Annual Report 20211
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 2021 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 PricewaterhouseCoopers

GmbH Wirtschaftsprüfungsgesellschaft.

The auditor at PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft

responsible for RWE is Ms. Aissata Touré. Ms. Touré performed this function for the first time.

236

RWE Annual Report 2021“The most beautiful aspect of
recultivation is experiencing nature
reborn in all its diversity.”

Gregor Eßer, Director of the Recultivation Research Centre, RWE Power

Further
information

5.1 Five-year overview

5.2

Imprint

5.3 Financial calendar

238

239

240

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 assets (+) / net debt (–)

Workforce at the end of the year2

CO2 emissions of our power stations

€ million

€

€ million

million metric tons

2021

24,526

3,650

2,185

1,522

721

1.07

7,274

4,562

38,863

103,446

16,996

28,306

97,007

142,309

11.9

360

18,246

80.9

2020

13,688

3,286

1,823

1,265

1,051

1.65

4,125

1,132

34,418

27,224

17,706

27,435

16,501

61,642

28.7

– 4,432

19,498

67.0

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

335

0.54

4,611

3,439

18,595

61,513

14,257

20,007

45,844

80,108

17.8

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

– 19,339

– 20,227

17,748

118.0

59,547

131.8

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.

238

RWE Annual Report 20211
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 5179-5619

Fax

+49 201 5179-420042

Internet www.rwe.com/ir

E-mail

invest@rwe.com

Corporate Communications

Phone +49 201 5179-5009

E-mail communications@rwe.com

For annual reports, interim reports, interim statements and further information on RWE,

please visit us online at www.rwe.com/en.

RWE is a member of DIRK – the German Investor Relations Association.

This document was published on 15 March 2022. 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.

Typesetting and production

MPM Corporate Communication Solutions, Mainz, Germany

www.mpm.de

Translation

Olu Taylor, Geretsried, Germany

Proofreading

Nicola Thackeray, Swindon, UK

Photography

André Laaks, Essen, Germany

RWE Mediendatenbank

239

RWE Annual Report 2021Financial calendar 2022 / 2023

28 April 2022

29 April 2022

03 May 2022

12 May 2022

Virtual 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

21 March 2023

Annual report for fiscal 2022

04 May 2023

05 May 2023

09 May 2023

11 May 2023

Annual General Meeting

Ex-dividend date

Dividend payment

Interim statement on the first quarter of 2023

10 August 2023

Interim report on the first half of 2023

14 November 2023

Interim statement on the first three quarters of 2023

The Annual General Meeting and all events concerning the publication of our financial reports are broadcast live on the internet and recorded.
We will keep recordings on our website for at least twelve months.