In 2007, a new division of E.ON was established: Climate   & Renewables. It's role is to co-ordinate and develop all renewable energy activities across the E.ON Group, as well as managing international climate protection projects.

The new business already operates around 1,000 megawatts (MW) of renewable projects across the world and plans to invest a further £2.5bn globally on some of the 6,000MW of projects it currently has in development.

In the UK, we've taken a leading role in the development of wind power since 1991, when we invested in our first wind farm, and now operate a portfolio of 21 onshore and offshore wind farms plus the UK's largest biomass power station.

We made significant progress on our offshore wind projects in 2007, with construction at Robin Rigg now under way. This 60 turbine, 180MW project, in the Solway Firth, will generate enough energy to power nearly 120,000 homes. The Government has also given full planning consent and approval for transmission work associated with the 1,000MW London Array wind farm. However, in 2008, Shell announced its decision to look at disposing of its shareholding in London Array. Together with remaining JV partner, Danish company DONG Energy, E.ON is now reviewing the implications of Shell's decision for the scheme, which, if built, would produce enough clean, renewable power to supply a quarter of Greater London homes.

We also made significant progress in preparing our planning submission documents for the proposed Humber Gateway wind farm - a 300MW offshore wind farm off the coast of East of Yorkshire.

In September, we completed the construction of our 19th onshore wind farm the nine-turbine 180MW Stag's Holt installation in Cambridgeshire. We also received planning consent for an additional 50MW of onshore wind schemes across the UK. The three schemes that were granted consent were at Butterwick Moor in Sedgefield, Haswell Moor in Easington and Great Eppleton in Sunderland.

There has been a significant move forward on biomass developments in the UK and the submission of our planning application for Blackburn Meadows - a 25MW wood-fired biomass energy plant in Sheffield - has also progressed.

We recognise that more needs to be done over the next decade to achieve the ambitious targets set by the EU for renewable energy by 2020. We will be fully involved in this process to put us at the forefront in investing greater resources in renewable technologies.

Renewable Generation Capacity (MW)

		2006	2007
Biomass		0	44
Hydro		56	56
Wind		197	215

Wind and Hydro capacity are dedicated and include all wholly and partially owned assets
Rheidol hydroelectric power station has a maximum capacity of 56MW but is operated at a nominal capacity of 49-50MW
We also have the capability to co-fire the biomass with coal. This gives a further theoretical capacity of around 410MW
315 is the maximum dedicated renewable electricity generation capacity. Please note that Rheidol hydroelectric power station nominally runs below maximum capacity
Steven's Croft 44MW biomass station build completed December 2007

The Renewables Obligation

The Renewables Obligation (RO) is a Government mechanism to encourage investment in renewable energy. It encourages suppliers to source increasing percentages of the electricity they sell (6.7% in 2006/07, rising to 15.4% by 2015/16 and then remaining at 15.4% until 2027) from renewables. Renewable obligation certificates (ROCs) are issued to suppliers by generating companies to prove that the electricity bought has come from renewable sources. Each ROC represents one megawatt hour (MWh) of electricity generated from renewable sources. Supply companies that fail to present Ofgem with ROCs covering the full amount of their renewables obligation must make a balancing payment.

In compliance period 5 (April 2006 to March 2007) we:

• had a total RO of 3,394,110 MWh
• surrendered 1,472,978 ROCs, of which:
  • 424,849 were from our own assets
  • 1,048,129 were purchased through contracts and trading
  • 320,389 were from biomass co-fired with fossil fuels (from a combination of our own assets and trades)

This means that we achieved a 43.40% level of compliance with the RO in compliance period 5.

In compliance period 5 (April 2006 to March 2007) all supply companies in the UK:

• had a total RO of 21,629,676 MWh
• surrendered 14,612,654 ROCs
• 1,928,590 were from biomass co-fired with fossil fuels

The overall level of compliance by all supply companies was 67.56%.

Please see the Ofgem 2006-07 RO Report for more details on the Renewables Obligation.

Annual Report

Share of Renewable Obligation Certificates Presented (%)

Company (Supplier Group)		Precentage of total number of certificates presented
SSE		21.57
EDF Energy		23.80
British Gas		13.57
Scottish Power		11.58
RWE Npower		11.53
E.ON UK		10.07
British Energy Direct		5.39
Others (15 companies)		2.36
Total 100%		100