Meet the CEO
- What are your priorities for 2010
There are three priorities for 2010 which are crucial to our business. These are:
playing our role in the move to a low carbon economy through investment in clean generation
improving our customer experience and providing a high quality service
as a trusted partner, working with our employees and the communities around our business operations.
We have already committed to invest billions of pounds in the UK over the next ten years in cleaner generation and upgrading existing power stations. This does not include our future investment in further low carbon technology, for example, new nuclear power.
Our success depends upon our ability to respond to the changing market as well as our customers’ changing needs and deliver the highest quality service. That includes selling our products responsibly, protecting the most vulnerable members of society and helping our customers use energy more efficiently and reduce their bills.
Finally, I want to build on and strengthen our relationships with all of our stakeholders, so we will continue to work with and invest in the communities around our operations so that we maintain and develop the partnerships with all of our stakeholders. - What are your aspirations for RWE npower?
I believe we should aspire to be a company that is:
a trusted partner for our shareholders
an employer of choice for our people
the energy company of choice for our customers and the communities we serve
a company that our competitors admire based on the performance we deliver.
Ensuring that we put responsible business practice at the heart of everything we do is vital in helping us achieve these goals. In spite of the current economic climate and the need to examine our expenditure in every area, now more than ever before I am committed to maximise the impact that our CR programme has. For example, I plan to build on our employee volunteering activities, as this is an ideal way to strengthen the relationships we have developed with our community partners. - How much will CR impact on the decisions you make?
Our activities impact on society and the environment in many different ways and we need to have a robust understanding of these impacts. We also need to understand our stakeholders’ perspectives, which may be different to ours. This means that when we make decisions we consider social environmental and ethical issues and the concerns of our stakeholders just as much as we consider commercial factors. In addition, we proactively participate in activities that have a benefit to the environment and wider society.
Doing business responsibly is at the heart of everything we do, and clearly this makes good business sense. If we don’t consider how our decisions affect society or the environment – or lose touch with our customers – we won’t be able to gain the trust of both the communities we serve as well as our employees, and build a strong business.
We face some difficult challenges in developing a sustainable business. We need to work collaboratively with Government and our customers so that we can respond to environmental challenges and provide solutions to the UK’s energy needs. For me, building strong relationships with our stakeholders and the communities in which we operate is integral to a sustainable business model. We won’t succeed without it. - You have said that improving customer service is one of your key priorities for 2010. What does that mean?
Improving customer service is a key part of our strategy. Around 6.7 million homes and business accounts rely on us every day for their energy and our success depends upon our ability to respond to customers’ needs and deliver the highest quality service. That is why we recently published our Customer Service Charter, which clearly describes our commitment to our customers and the actions we will take to provide a high quality customer service.
The charter explains how we will listen to our customers and act on their feedback so that we can improve our service. We have a range of channels for gathering this information and I have recently established a Customer Council, which is a forum for consumer groups, our customers and other key stakeholders to discuss our customer service performance with our senior management team. This feedback will help us to decide where to focus our effort in providing a high quality service and what products and services should be developed to meet our customers’ needs.
We continue to invest in training our people, systems and procedures to improve the quality of our customer service. We are investing more than £200 million in an integrated billing system which I believe will transform the way that we interact with our customers. This will become fully operational in 2011. We will ensure fair pricing, easy to understand bills and discounts and are also committed to working with customers to help them reduce their carbon footprint and their energy bills. - How will you ensure fair pricing?
We understand the effect that changing energy prices have on customers’ daily lives and we aim to protect our customers for as long as possible against cost pressures, whilst keeping our prices competitive. In March 2010 we announced an average reduction of 7% on our domestic gas prices for approximately 2 million standard domestic gas customers. We always aim to offer competitive prices to our customers and we have lowered our gas prices even though our profits halved in 2009.
We believe that it is important to protect our customers from the volatility of the wholesale energy market through the effective purchasing and hedging of our wholesale costs and risks and we do everything we can to help our customers use less energy and budget more. But retail prices are driven by a number of factors, not just wholesale prices.
Like other energy suppliers, we are facing substantial increases in distribution and environmental costs as well as increasing energy efficiency and fuel poverty obligations. In addition, we are planning investments amounting to billions of pounds over the next ten years to build a new generation of cleaner and more efficient power stations to ensure secure supplies of energy to our customers. This figure excludes future investment in new nuclear.
It is important for our customers to know how we have worked out their energy bills, so we provide clear and easy to understand bills approved by the Plain English Campaign. We also offer three different ways to pay and give our customers advice on the best option for them. Finally, our Energy Debate website aims to help our customers understand the complexities of the energy industry and discusses the issues that affect us all, from energy bills to energy efficiency. - How has RWE npower responded to calls from Ofgem for energy companies to do more for vulnerable customers?
We are absolutely committed to helping vulnerable, low-income customers. Back in 2008 we committed to spend approximately £50 million over the following three years on initiatives to help those susceptible to fuel poverty.
In 2009 the energy regulator Ofgem published a report on energy suppliers’ social obligations. The report commented upon our increased assistance for vulnerable households. During the year, we contributed over £18 million through our social obligations.
Our Health Through Warmth scheme and Spreading Warmth programme 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.
I would urge anybody who is struggling to pay their bills to contact us as soon as possible, as there are many ways we can help customers who are having difficulties with their bills. - We hear a lot in the media about security of supply – are the lights going to go out?
Over the next few years, a large number of the UK’s existing coal, oil and nuclear power stations are due to close as they reach the end of their operational lives or are unable to achieve the latest environmental standards. In total, the UK is likely to need 15-25GW of new generating capacity by 2020. We have a big part to play in making this happen.
If major investments are not put in place soon, then I believe that there is a chance that this may happen. In order to ensure that we do have enough energy in the future, we must fill the energy gap and fill it quickly, and this will require substantial amounts of investment.
I believe the UK needs a diverse mix of energy generation to reduce CO2 while maintaining affordable and secure supplies. It is essential we are not reliant on one source. Through our new-build programme we will develop a diverse generation portfolio and our strategy is to move to a more environmentally sustainable mix of power stations including increasing amounts of renewable energy. I believe that new nuclear power stations will play a vital role in creating a low carbon economy for the UK. So, in 2009 we announced that new nuclear build would also be a key part of our commitment to meeting the UK’s challenging but necessary carbon reduction targets and ensuring a secure energy supply in the future. - The CR Report states that the new-build investments you have planned could amount to billions of pounds worth of investments over the next ten years. Given the current economic situation, can this really be delivered?
Estimates vary, but something in the order of £200 billion will be required to transform our energy infrastructure over the next 20 years in order to ensure an affordable, reliable and low-carbon energy supply in the future. At RWE npower we have already committed to investing billions of pounds over the next ten years on our new-build investment programme.
Timing is absolutely critical. In order to ensure security of supply in 2020 and hit greenhouse gas targets, the investment phase needs to start now and investors need to be found quickly. For this to happen I believe we need to move from debate to action. We need Government to set the framework for future investment in the UK and ensure that the consequences of that investment plan for both industry and the public is clear. We must strive to earn the trust of our customers through clear direction and communication and by providing the tools to help them in the transition to a secure, low carbon economy. - Are you still planning to invest in new coal-fired power stations and carbon capture and storage (CCS) technologies?
In 2009 we announced that, due to the economic climate, we would not be submitting an application to build new supercritical coal plants at Tilbury in Essex and Blyth in Northumberland.
Nevertheless, I do believe that new, more efficient coal-fired generation should have a role to play in a low carbon economy alongside gas, nuclear power and increasing amounts of renewable energy as part of a diverse energy mix. The decisive lever is the further development of technologies for coal use.
A new generation of coal-fired power stations would be much cleaner and more efficient than existing stations, but we recognise that we also need to progress CCS technology in order for coal to play a huge role meeting future energy demand, without contributing to climate change.
We have a major CCS research and development programme underway in the UK and abroad to evaluate and test CCS technology. We already have an operational CO2 research facility at Didcot Power Station. In addition, our plans to build the UK’s biggest Carbon Capture Pilot Plant connected to a working power station at Aberthaw Power Station in South Wales will help us to achieve our goal to move from laboratory testing conditions to industrial scale operations. At 3MW, the plant will be at least eight times the size of existing ‘post-combustion’ projects in the UK and will be capable of testing the process on emissions from a full-scale working power station.
We will also continue to work with Government and discuss future opportunities in relation to CCS technologies, as we are keen to be involved in the end-to-end demonstration of CCS, including the transport and storage elements. -
The Government has clearly signalled a role for new nuclear power in the UK’s future energy infrastructure. How has RWE npower responded to this?
Building new nuclear power stations is a key part of our commitment to meeting the UK’s energy needs and to reducing carbon dioxide intensity.
I see nuclear being an important element of the transition to a low carbon economy as part of a broad mix of investment. Our nuclear investment programme will be over and above our plans to invest £10 billion over the next ten years in other forms of low CO2 power generation.
In 2009 we took a huge step forward in realising our ambitions when we formed a joint venture company with E.ON UK, Horizon Nuclear Power, which will aim to develop around 6GW of new nuclear capacity in the UK.
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. - What benefits will the roll-out of smart metering bring?
Smart meters have an important role to play in a low carbon economy. By showing meaningful data at a glance, smart meters have the power to change the way consumers use and think about energy.
They will also improve the quality of our customer service, as there’s no need for us to estimate bills, less need for personal visits by meter readers, and fewer bill queries to deal with.
Smart meters will be very important for ensuring customers take personal responsibility for changing behaviour, reducing emissions and cutting costs.
We fully support the Government’s intention to mandate the roll-out of smart metering to all residential customers for gas and electricity by 2020. However, there must be a managed and coordinated implementation model in place, with clear standardisation, so we will continue to participate fully in the ongoing discussions with Ofgem on this industry programme. - What do you see as RWE npower’s role in tackling climate change?
Climate change, along with security of supply, is clearly the most important challenge that we face as an industry and we need to act now. As a significant emitter of CO2 we are committed to developing plans to minimise emissions in the future. We have two roles to play. Like all energy generators, 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. In the short-term we are increasing generation efficiency, co-firing biomass and, through RWE npower renewables, investing in renewable capacity. In the medium-term we will invest in lower carbon generating plant, primarily through our new gas-fired power stations at Staythorpe and Pembroke and new renewables. Our strategy in the longer term is to be at the forefront of new nuclear power station investments.
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. For example, we have installed Passive Infra Red (PIR) movement detectors and low energy equipment at a number of sites, and are trialling Voltage Optimisation, which reduces energy consumption through reducing the voltage at a site.
Our second role is to help our customers use less energy by being more energy efficient and by developing products and services such as smart metering and microgeneration technology.
But we cannot fix the problem on our own. Government, businesses, customers and the public all have a part to play.
- RWE npower has a number of community investment programmes – isn’t it all just PR?
No it is not. We take our responsibilities to the communities in which we operate very seriously. Our community programme aims to give something back to the communities we serve. We know that our employees are proud to support these programmes and it is important in maintaining trust with all of our stakeholders.
Our community involvement programme focuses on the three areas where we think we can make the biggest difference; improving health, protecting the environment and enhancing education. In each of these areas, many of our projects are run in partnership with other organisations, charities and community groups. These long-term partnerships give us more scope to impact the community in a positive and sustainable way, while benefiting the business by enhancing our reputation.
I am very proud that in 2009 we were reaccredited with the CommunityMark from Business in the Community (BitC). This national standard aims to highlight and recognise companies which deliver sustainable, long-term community programmes.
In 2010 we will continue to focus our investment on grass roots community investment programmes that help us to earn trust in the community and build partnerships with stakeholders.
