The biggest production input in our business is fuel. At year end 2007, our installed generating capacity was:

• 36 percent coal
• 29 percent natural gas and oil
• 21 percent nuclear
• 14 percent renewables.

This gives us a broad and balanced energy mix. This resource diversity enables us to optimally meet all kinds of load, from baseload to peak load, while at the same time providing electricity at competitive prices and meeting our emission-reduction target. Our energy mix represents our generation resource mix and doesn’t include our activities on the natural gas market.

In late 2007, we adjusted our generation and gas strategy to better enable us to help tackle climate change. It is our aim to generate 18 percent of our energy from renewable sources by 2015. By 2030 50 percent of our energy mix should be generated using carbon-free renewable and nuclear energy sources. The other 50 percent should come exclusively from low-emission generation. The central objectives of our generation strategy are security of supply, cost-effectiveness and environmental friendliness.

To reach our carbon-reduction targets, we’re making substantial investments in renewables. We’re also enhancing the thermal efficiency of our fossil fuel-fired generating units, developing carbon capture and storage technologies, and continuing to support nuclear power. In addition, we’re increasing our investments in research, development and demonstration projects.

All generation resources have advantages and disadvantages. We believe that they all have a role to play as we strive to achieve a balance between security of supply, cost-effectiveness as well as environmental and climate friendliness. It would be irresponsible to reject a generation resource, at least before it is clear how it can be reliably replaced, as is the case with nuclear power. Nuclear power has the important advantage that it produces no CO2 emissions in the generation process. Its availability factor is also the highest in our generation portfolio. Coal has the advantage that there are several hundred years of reserves remaining. But coal is also a significant source of greenhouse-gas emissions (at least until carbon capture and storage becomes commercially viable on a large scale). Wind power results in no emissions but is too intermittent to serve as a source of baseload electricity.