We intend to significantly expand our renewables capacity. Nevertheless, in 2015 we will still generate about 80 percent of our electricity from fossil and nuclear fuels, although there will be a shift in our energy mix, with coal’s share declining and natural gas’s share increasing slightly.

 

Some fuels will remain relatively abundant for the foreseeable future. The latest studies estimate that nuclear fuel will last 200 more years. Hard coal reserves are expected to last even longer: 600 years. In conjunction with carbon capture and storage technology, coal can remain a viable generation resource well into the future. And with coal production rising, prices are likely to remain fairly stable going forward.

 

In response to rising global demand for natural gas, in 2007 we enhanced our natural gas supply chain by:

 

• concluding long-term supply contracts with gas producers
• expanding our own production portfolio
• diversifying our supply sources and pathways.
  

E.ON Ruhrgas in Germany procured 25.5 percent of its natural gas from Russia in 2007. We have long-term contracts with Gazprom, a major Russian natural gas producer, for 24 billion cubic meters of gas annually through 2036. That’s equal to about one third of E.ON Ruhrgas’s current total gas procurement.

In addition to upstream business, we are also investing heavily in gas infrastructure. We are opening transport routes and sources, helping us to contribute to security of supply in Germany and Europe. One important gas infrastructure project is the Nord Stream Pipeline. This offshore transport route will be capable of transporting around 55 billion cubic meters of natural gas every year from Russia to Germany via the Baltic Sea from 2011 onwards. Both E.ON and its Nord Stream project partners have high levels of technical expertise in the construction and operating of pipelines. On top of that, the project is supported by a well-known international advisory firm already well-versed in the realization of maritime infrastructure projects.

In addition to our activities on the upstream side, we are making substantial investments in gas networks in order to create new transport pathways and tap new supply sources. A large share of these expenditures will go to Nord Stream, a submarine pipeline across the Baltic Sea. The pipeline, which is expected to enter service in 2010, will transport up to 25.5 billion cubic meters of natural gas annually from Russia to Germany.

To better respond to seasonal fluctuations in consumption, we store large quantities of natural gas. We operate eleven underground storage facilities in Germany with a total working gas capacity of 5.1 billion cubic meters, giving us the country’s largest gas storage infrastructure. Other storage facilities are in planning or under construction, like the Etzel, Epe or Bierwang storage facilities in Germany. On top of that, other storage projects include seven fields in Upper Austria, Zsana in Hungary and Holford facility in the U.K.