Fossil fuels will continue to dominate power generation in most countries well into the future. After oil, which is mainly used in transportation and space heating, coal and natural gas will remain the most important energy sources. Together, these two fossil fuels account for more than half of our energy mix today.

Coal consumption will increase dramatically as emerging countries like India and China add coal-fired generating capacity. Most of these power plants are not up to the same standards as our newly built power plants.

 

Coal is the most important fuel in our energy mix. At year end 2008, we had an attributable generating capacity of 22.7 GW. The thermal efficiency of hard coal-fired generating units must be improved in order to minimize this fuel's negative impact on the environment. That's why we plan to build the world's first coal-fired generating unit with a thermal efficiency of more than 50 percent. We expect this unit to enter service in 2014. We're also spurring the development of low-emission coal-fired generating units. Our commitment to innovation strengthens our competitive position and helps us maintain our position as a technology pacesetter.

 

Lignite-fired generating units are also used, and have a comparatively low level of thermal efficiency, emitting large amounts of carbon dioxide. Lignite is of little significance in the E.ON portfolio. At year end 2008, we had 2.7 GW of lignite-fired generating capacity which represents only a small part of the generation portfolio.

Climate-friendly natural gas is a key ingredient in our energy mix. Natural gas has a comparatively low carbon content. Compared with other fossil fuels, the combustion of natural gas results in the lowest greenhouse gas (GHG) emissions. GHG emissions resulting from the transport of natural gas are also much lower than previously thought. A study by the Wuppertal Institute for Climate, Environment and Energy has shown that natural gas imported to the European Union from as far away as Russia still has, on balance, a favorable carbon footprint.

 

Despite the CO^₂ advantages of gas-fired generation, we do not expect to significantly increase the share of natural gas in our energy mix between now and 2015. This is because it is more suited to covering peak and mid load than baseload. Instead we aim to promote the use of natural gas as a vehicle fuel more heavily. E.ON Ruhrgas is committed to expanding the network of gas stations which stock natural gas. Incentive schemes will also be launched to encourage the use of natural gas as a fuel and for natural gas to be considered more in automotive production.