We accept the science of climate change and recognise the impact our business has.

Through our own initiatives, and in partnership with Government and other stakeholders, we are working to reduce this impact. Since 1990 we have reduced the carbon intensity of emissions from our power stations by over 20% and have committed to reduce this by another 10% on 2005 levels by 2012. In 2006 the electricity supplied to our retail customers accounted for the emission of 29.5 million tonnes of CO₂ with a further 17.6 million tonnes released from the gas we supplied. By changing the way we think about energy, we have focussed our efforts on lowering our operational carbon intensity, increasing our energy efficiency activity and reducing the amount of energy we use for our offices and business travel. Climate change is the focus of our 2006 Corporate Social Responsibility (CSR) Review. Further details are available in the main CSR Report.

Diversity of supply

To ensure security of supply we believe that it is essential that the UK has a varied energy mix. Our aim is therefore to maintain and develop a diverse generation portfolio involving a range of different technologies and energy sources. We are currently researching and trialling a number of new technologies which are lower carbon and renewable generation options.

Currently our electricity is generated from: Coal: 61%, Gas: 37% and Renewables 2%

• We operate a number of high efficiency combined cycle gas turbine power stations and combined heat and power plants.
• We own the largest hydro electric power station in England and Wales.
• We own three coal-fired power stations of which two (Kingsnorth and Ironbridge) will be closed by the end of 2015.We aim to invest in newer, more efficient coal-fired power stations, such as a proposal to develop the UK’s first clean coal-fired power station at our Killingholme site and a supercritical coal plant at Kingsnorth.
• We own 20 wind farms in UK with around 197 MW capacity.
• Currently we co-fire biomass at two of our power stations and are building a 40MW dedicated biomass plant in Scotland.

Electricity Generation

CO₂ emissions from our generation plant totalled 27.6 million tonnes in 2006, down from 28.4 million tonnes the previous year. In the next 10 years the E.ON Group will be investing £3bn in innovative projects including renewable technologies such as wind farm development and wave power projects, building the UK’s largest biomass fired power station and investing in cleaner more efficient gas fired power stations.

Renewable Energy

• We have invested over £200m in renewable generation over the last five years.
• We have around 1,300MW of wind farm schemes in development. This includes the largest investment planned for wind farm generation in the UK. The 180MW Robin Rigg offshore wind farm is due to start operating in the spring of 2009 and we are also partners in one of the worlds largest offshore wind farms, London Array.
• We plan to build one of the world’s largest tidal power plants off the west coast enough to generate up to 8MW of electricity, capable of producing enough power for 5,000 homes.
• We are building the largest biomass fired power station in UK at Lockerbie with a generation capacity of 40MW and it is due to start operating at the end of 2007. Carbon emissions from this power station are considered to be carbon neutral as carbon is stored in plant matter during growth and is then released through the combustion process therefore creating a more stable carbon cycle.

Improving efficiency

Not all of the electricity generated by power stations makes it to the end user. Power stations themselves use some of the power to process the fuel and supporting infrastructure. A small percentage gets lost through the transmission and distribution networks. Our network losses are 5.4% which is better than the UK average of 6.5%.

• Gas power stations are typically more efficient than coal and we have a number of new gas fired power stations being planned.
• We are investing in natural gas pipelines and storage to help ensure security of supply.
• A robust network is vital to delivering energy policy requirements effectively. We are in the process of investing £1.2bn up to 2010 to refurbish and renew our distribution network. With the future integration of more renewable and microgeneration technologies we will need to see a more flexible two-way system rather then the one-way system currently in place
• We are planning to replace our Kingsnorth coal fired power station with two new carbon capture ready supercritical units.
• The new generation of coal-fired power stations will be more efficient than existing ones, with efficiencies of around 45% and more.
• Combining improved efficiency with carbon capture and storage makes clean coal an attractive option for reducing CO₂ emissions, although the technology for delivering this is still at an early stage.

New technologies

• We work with a network of key specialist research establishments, the Government and academia to develop new technology options.
• We are investing in new technologies and have committed to spending over £50million to fund research through the creation of the Energy Technologies Institute with the Government and the energy industry to research new technologies.
• Power Technology – our centre of scientific and engineering excellence, is closely involved in academic and research projects concentrating on examining how new technologies can be applied in the fight against climate change.
• We are also looking at fuel cells, demand efficiency, smart meters and home CHP units.
• Our E-locator programme – E.ON low carbon advanced technology options – researches and explores such things as cleaner fossil fuel generation, Integrated Gasification Combined Cycle (IGCC), Carbon Capture and Storage (CCS), oxyfuel firing and micro CHP.