Energy Wholesale: Energy trading and electricity generation

We are the UK's second largest electricity generator, contributing 10% of Great Britain's generating capacity through our portfolio of power stations across the UK. These also include combined heat and power (CHP) plants providing electricity and steam to large industrial customers and our extensive portfolio of onshore and offshore wind schemes, together with one hydroelectric plant. Our Energy Wholesale business has the capacity to generate up to 10,762 megawatts (MW) of electricity.

Electricity Generation (to Grid), TWh

	2006
Coal	21.5
Gas PS	13.1
Gas CHP	2.4
Oil	0.8
Renewable	0.7

Includes data from all wholly and partially owned assets including combined heat and power (CHP).

PS = Power Stations.

Petcoke co-fired at Ratcliffe is included in Coal figure.

Energy Wholesale will be at the centre of our challenge of providing secure supplies of 'clean' energy that our customers can afford.

We are already sourcing an increasing proportion of our electricity from renewables. In 2006, our renewables capacity was 253MW for wind and hydroelectric generation. We have 18 onshore and two offshore wind schemes and have the capacity to burn biomass (plant-derived organic matter) at three of our power stations; in 2006 co-firing of biomass at Kingsnorth and Ironbridge generated 217GWh of electricity.

We are also building the UK's largest dedicated biomass plant in Scotland, one of the UK's largest offshore wind farms at Robin Rigg in the Solway Firth and are part of the consortium building a 1,000 MW offshore wind farm - the London Array - in the Thames estuary, which will be one of the world's largest offshore wind farms.

But we are looking to the long term. What will the energy industry look like in 2030, for example? We are developing scenarios to cover a number of factors, including the demand for energy, the level of carbon emissions and what we may need to do to reduce them further. Will coal and gas still be available and affordable?

Developing scenarios to tackle these issues will shape our long-term strategy.

We actively trade in the gas and electricity markets, as well as in renewable obligation certificates and carbon dioxide (CO₂) allowances. Our Trading team is the 'commercial hub' for all our energy transactions.

E.ON UK and the UK gas market

Gas storage is a huge issue for the UK and we are helping to meet the urgent need for new facilities by developing an underground gas storage facility in Cheshire.

Our parent company has been an active player in the UK gas market for several years through E.ON Ruhrgas, which is now involved in the expansion of the existing UK gas pipeline that brings gas to the UK from Zeebrugge, Belgium. E.ON has also helped to build a new pipeline from Balgzand in the Netherlands to Bacton in the UK, which came on stream in 2006. In addition, E.ON Gastransport is promoting expansion and new construction in the upstream German pipeline system to help eliminate bottlenecks and to expand gas delivery capacity to the UK.