Meet the CEO

• Q: What does CR mean for RWE npower?

  A: In its simplest form, I believe our responsibility is to deliver affordable and reliable energy to our customers with the least impact on the environment possible. That means addressing all sorts of issues – from leading the development of cleaner energy technology to identifying and protecting vulnerable customers, from looking after the wellbeing of our employees to carefully managing our power station emissions.

• Q: Isn’t it just a 'nice to have'?

  A: Not at all. If we’re going to continue to be a successful business, we need to be a sustainable one. Responding to environmental challenges, providing solutions to our customers’ energy needs, building strong relationships with our stakeholders and the communities in which we operate – CR is integral to a sustainable business model. We won’t succeed without it.

• Q: People often think that CR doesn’t have much impact on big business decisions. Is that true?

  A: No, that’s not true. Our activities impact on society in many different ways. So developing a robust understanding of these impacts and our stakeholders’ perspectives is a fundamental part of our decision making process. Apart from anything else, it’s good business sense; if we don’t consider how our decisions affect society, we’ll lose touch with our customers and be unable to build a strong business.

• Q: Everyone has an opinion on what energy companies should be doing: how do you balance different interests?

  A: There’s no doubt that ours is a complicated industry. Creating affordable, secure, low-carbon energy inevitably requires the right balance between large-scale investment decisions and social and environmental challenges.
  I think the key to managing these trade-offs is to have an open and honest dialogue with our stakeholders. This gives us the information we need to strike the right balance.

• Q: What are your views about the huge increase in the amount of media attention the energy industry has received during 2008?

  A: I cannot remember a time when energy and the impact that energy companies have on society was such a hot topic in the media and in political and public consciousness. But I believe that the heightened interest in our industry is a positive development, as it brings key issues to the fore and puts much needed conversations high on the political agenda.
  
  Most importantly, it has heightened the fact that the UK urgently needs to take some crucial decisions if our energy future is to be secured.

• Q: Energy companies make big profits – how can you justify that in the context of rising energy bills?

  A: Retail price rises are driven by a number of factors, most notably the price of gas which more than doubled during 2008 compared with early 2007. We have to add to this the effects of the huge increase in the wholesale cost of coal, and the higher cost of carbon caused by environmental regulation. We have also faced increased regulated transmission and distribution costs and increasing energy efficiency and fuel poverty obligations.
  
  What we clearly have not seen is the company looking for a larger percentage of revenue as profit.
  
  In our case, I also think our financial returns should be viewed alongside our investment programmes. As older power stations close, we’re investing in new cleaner power stations, and these cost substantial sums of money to build. To put it in context, our new power station at Staythorpe alone will cost more than our entire UK profit in 2008 and we expect to invest more in new power stations and infrastructure than our total cash flow every year for the next ten years.

• Q: You increased energy prices twice during 2008 – when will we see the cost of bills coming down?

  A: Along with other energy companies, we did have to increase our prices during 2008, as a result of massive increases in wholesale prices which made our residential prices unsustainable. We believe it is important to protect our customers from the volatility of the wholesale energy markets, so only a portion of the huge increases in global coal, oil and gas prices was fed through to our customers. We keep our prices under constant review and in March 2009 we were able to pass on savings by reducing our electricity prices.

• Q: What are you doing to help people who are having difficulties paying their bills?

  A: We’re very aware of the impact that changing energy prices can have on our customers, which is why we continue to do everything we can to help our customers use less energy and budget more. That is why we’re spending around £400 million over the next three years to help our customers use less energy through free or subsidised energy efficiency measures and we’re also investing around £50 million in social programmes for vulnerable customers.
  
  Our Health Through Warmth and Spreading Warmth programmes are both designed to target those most in need of help, and we’re working in partnership with housing associations and social landlords across the UK to make social housing more energy efficient.
  
  The global economic slow down is putting even more pressure on everybody, including our customers. We would urge anyone struggling to pay their bills to contact us as soon as possible.

• Q: Given the economic slowdown, can we expect to see more people in fuel poverty in the future?

  A: Ultimately, people who struggle with fuel bills will struggle with other essential items too, because they are not just victims of fuel poverty, they are victims of poverty. I strongly believe that people need long-term sustainable help – to increase their income, help with money management and help with improving their health. Of course, we will continue to do our part with our programmes designed to target those most in need of help, but if it is to be in any way meaningful, this type of holistic overall help must be led by Government.
  
  Throughout 2008 we ran focus groups with vulnerable customers. We discovered that they want to be in control of their spending and don’t want to be reliant on handouts. They also believe that the size of their energy bills is out of their control. It is vital that we provide the information to help these groups and develop a well crafted support package that will help them to help themselves on a sustainable basis.

• Q: There’s been a lot in the news about oil and gas supplies running low. Are the lights going to go out?

  A: I don’t think the lights will go out. But at the same time they’re not going to stay on on their own. In total the UK is likely to need between 25-40GW of new generating capacity by 2020, equivalent to between 30-50% of today’s existing capacity. It also needs to maintain a varied generation mix to protect against possible risks in the future. This is why we are planning new-build investments which could amount to around £1 billion each year over the next 10 years, and why we continue to develop a range of possibilities for power generation over and above gas, including cleaner coal, and renewables. We are also developing options for new nuclear power stations which would represent many billions of pounds more investment again. These measures will help us avoid capacity shortages and provide a diverse generating portfolio for the future.

• Q: Does RWE npower have a role in tackling climate change?

  A: Absolutely. Of all the single issues we face as an industry, there’s no doubt that climate change is the biggest. The sharp increase in environmental awareness, regulation and the expectations of our customers means that it’s dominating the power industry’s attention and rightly so. I believe we have two roles to play. Like all energy generators, we are a significant emitter of CO₂. So our first role is to reduce the emissions produced by energy generation. Our investments to date have put us on track to cut the carbon intensity of the electricity we generate by 33% by 2015 from 2000 levels. We’re actively researching renewable energy sources and new technologies like Carbon Capture and Storage. We’ve also committed to reducing the CO₂ emissions from our non-generation assets.
  
  Our second role is to help our customers reduce their carbon footprint, particularly by developing products and services like smart metering and microgeneration technology to help them reduce their energy consumption – and in 2008 we restructured our retail business to enable us to leverage the expertise we have in this area, by creating an Energy Services division.
  
  So we have two really important roles, but we can’t fix the problem on our own. Government needs to implement a long-term energy policy framework for the industry. At a time when awareness of climate change is higher than ever but energy demand is still increasing, everyone - businesses, customers and the public - has a part to play.

• Q: What are your plans for investing in nuclear power?

  A: With climate change such a priority, and secure and affordable energy requiring a diverse mix of power generation, new nuclear build is a key part of our commitment to meet the UK’s energy needs, alongside coal, gas and renewables.  As part of our ambitions, we have secured options to buy land at two sites for possible new nuclear generation on the West Cumbrian coast.
  
  Our nuclear joint venture with E.ON UK has secured sites at Wylfa, on Anglesey, and at Oldbury, in Gloucestershire, which were sold for nuclear development by the Nuclear Decommissioning Authority.  Our aim is to deliver at least 6GW of new nuclear build, with the first station coming on line at around the end of the next decade.
  
  As with all of our developments, our approach to nuclear is guided by a commitment to safety, care for the environment and delivering cost effective energy to the UK.

• Q: Will renewable sources really be able to generate enough energy in the future?

  A: In the short term, renewable energy won’t fill the anticipated energy gap resulting from the closure of coal and oil fired power stations. However, what’s clear is that it’s an absolutely essential part of the UK’s electricity generation portfolio, particularly as we move to a low carbon economy. In the UK, RWE npower renewables has nearly half a gigawatt of wind and hydro generation in their portfolio, and increased offshore wind generation will be central to the UK’s ability to reach its renewables targets set for 2015.
  
  In the longer term, a lot will depend on the success of emergent technology like marine renewables. But for new technologies and offshore wind projects to really get going, we need a planning regime which allows new sites to be developed much faster.

• Q: What aspect of CR are you most proud of in 2008?

  A: There’s so much that we can be proud of, even though there’s no mistaking that 2008 has been a challenging year for us. One thing that I am particularly proud of is receiving the prestigious CommunityMark from Business in the Community, in recognition of the real and positive changes our long-term investment in the community has made. We were the only utility business, amongst 21 other companies in the UK, to receive the award.
  
  I was also pleased that the results of our employee pulse survey, undertaken during the year, showed that 80% of respondents believe that RWE npower is a socially responsible company. Corporate Responsibility is integral to a sustainable business model and a major part of our success depends on us operating in a responsible manner. In order to be successful, our people need to understand and be on board with our vision, which is why I’m delighted that so many of our employees recognise our commitment to CR.