Capex Data
E.ON plans to invest a total of about €25.3 billion over the next three years, thereby significantly increasing its capital expenditures. At €22.4 billion, the clear focus is on investments in fixed assets, in particular to help further improve security of supply in E.ON's markets.
The €11.4 billion of investments in fixed assets will be used to modernize existing and construct new power plants. In Germany, construction has begun on new generating units in Datteln and Irsching. E.ON also plans to build a new 1,100 megawatt (MW) hardcoal-fired generating unit at Staudinger power station; a requirement for this investment, however, is a stable energy policy and regulatory environment. Also planned for Germany is a hard-coal-fired test unit with a thermal efficiency of more than 50 percent.
Construction continues on an 800 MW combined-cycle gas turbine in Italy, a 1,100 MW coal-fired power plant in the Netherlands, and several coal-fired and gas-fired power plants in Eastern Europe. A 1,200 MW gas-fired plant and a 1,600 MW coal-fired plant are planned for the United Kingdom. In Northern Europe, E.ON intends to boost the performance of existing power plants and build a new gas-fired combined heat-and-power plant. The focus of power generation investments in the United States is the completion of Trimble County 2 coal-fired generating unit. Along with new largescale power plants, E.ON's plans include several wind power projects – particularly offshore wind farms in the United Kingdom, Germany, and Northern Europe – and a biomass power plant.
E.ON plans to invest a total of €5.7 billion groupwide to modernize and expand its power networks. Here, a key focus is on enhancing the company's networks in Germany, in part due to the connection of additional wind power facilities. Despite the considerable reduction in network fees E.ON is permitted to charge in Germany, the company will continue to invest in its power networks in order to enhance security of supply.
A total of about €4.0 billion is earmarked for the maintenance and expansion of E.ON's natural gas supply infrastructure. Here, the focus is on extending existing and building new gas pipelines, increasing storage capacity, tapping gas fields in the North Sea, and constructing an LNG terminal.
E.ON plans to invest a total of about €2.9 billion to acquire shareholdings, of which the majority reflects the shareholding in Yushno Russkoye gas field in western Siberia.
In addition to its planned shareholding investments, E.ON continues to systematically pursue the acquisition of Endesa, a Spanish energy utility.
Future Plans
E.ON is committed to developing new markets over the long term. The company's prime focus is on Russia and Italy, which their long-term analyses have identified as highly promising markets.
Focus on Russia
Russia is already Western Europe's leading supplier of natural gas, accounting for around 30 percent of the region's natural gas imports - and the significance of the country's gas deposits to Western Europe's economies will increase further in future. This being the case, E.ON's long-standing partnership with Gazprom puts the company in a very strong position - a position E.ON are endeavoring to further improve by deepening the cooperative relationship.
A Memorandum of Understanding signed with Gazprom in July 2004 could potentially clear the way for E.ON to acquire a stake in the West Siberian Yuhsno Russkoye gas field. [AB1] E.ON are also negotiating with Gazprom on the North European Gas Pipeline (NEGP) project. Such a pipeline would enable E.ON to procure additional gas volumes from Russia for the markets of Western Europe. It would also reduce Western Europe's dependence on currently available gas transport routes.
The MoU may furthermore serve as a springboard for entry into the rapidly growing Russian energy market. The country's electric generation infrastructure is overdue for massive upgrades, which could open up major opportunities for E.ON.
Italy has strong potential for growth
Italy - Europe's fifth-largest electricity market and its third-largest gas market - also offers excellent opportunities for E.ON. The company already have a good starting position, with shareholdings in a number of gas distribution companies in northern Italy. The country is heavily dependent on electricity imports and therefore offers strong growth potential in the electricity generation and supply sectors. E.ON want to double their share of the Italian gas end-customer market to ten percent.