Collaborating to build innovative Generations

Dr Nina Skorupska Director, Technology Services RWE

Presentation to the Engineering Professors’ Council Annual Congress, 26th March 2007 Content

„ Introduction to RWE npower

„ History of the power industry

„ Exciting times!

„ The people agenda

„ Shortage, what shortage?

„ Addressing the issue

„ Educational engagement

„ Industry wide action

2 RWE npower

RWE npower is a leading integrated UK energy company

Generation and „ Over 8,000MWRenewables of generation „ ElectricityRetail and gas retail business, capacity in the UK around 6.5 million customer accounts „ 17 wind farms with a total capacity of more than 390MW „ Domestic green energy product, „ 14 hydro sites in the UK npower Juice, has over 50,000 customers „ Strong in-house operations and engineering capability „ RWE Power International

3 Generation and Renewables Fossil fuel plants -

Didcot A Coal

Tilbury B Aberthaw Coal Coal

4 Generation and Renewables Fossil fuel plants - Gas (Combined cycle and open cycle)

Little Barford CCGT Great Yarmouth B CCGT CCGT

Didcot A Coal

Tilbury B Aberthaw Coal Coal

Cowes 5 OCGT Generation and Renewables Fossil fuel plants - Oil

Little Barford CCGT Great Yarmouth Didcot B CCGT CCGT

Didcot A Coal Littlebrook Oil

Tilbury B Aberthaw Coal Coal

Cowes Fawley 6 OCGT Oil Generation and Renewables Cogen

• 16 cogeneration plants on customer sites with 2,000MW of total energy capacity • Supplies power and heat to industrial customers as diverse as universities and refineries Rhodia Chirex BASF Rhodia Whitehaven Conoco Phillips

Lancaster University Lindsey Oil Refinery

SCA Tawd Mill Huntsman Tioxide Bridgewater Paper Millenium Chemicals

Whitegate Refinery Rhodia Oldbury

Georgia Pacific Aylesford Newsprint Dow Corning 7

ESSO Renewables business

„ RWE npower, is one of the UK’s leading renewables developer and operator, in the wind, hydro and biofuel generating sectors „ Operates c340MW of onshore wind and 60MW of offshore wind over 18 sites „ Through pioneering green domestic electricity product “Juice” (first non-premium product of its type in the UK market), npower renewables set up the npower juice fund, which provides support to the development of emerging marine renewables technologies (wave and tidal stream) „ Through the juice fund we have invested £1million recently in 7 marine projects in the UK „ We are also the UK’s most recognised green energy supplier with about 54,000 juice 8 customers RWE npower’s heritage

Pre-1990 1990 2000 May 2002

Central Electricity Generating Board Innogy became part of the RWE Group of (CEGB) Companies and was re-named RWE npower in August 2004.

9 Power generation has experienced challenging days in the UK

Power Price £/MWh NETA Strong 50 Fundamentals

45

40 Short run marginal cost Distressed Generators 35 Competition and “” Enron collapse, 30 Price cap withdrawal of US IPPs

25

20

15

1990 1992 1994 1996 1998 2000 2002 2004 2006

Privatisation 10 Sector has Moved from Oligopoly1 at Privatisation in April 1990

30

25

20

15

Capaci t y (GW) 10

5

0

Nuclear Electric National Power Po w erGen Sco t t i sh Po w er Hydro-El ect ri c Ot hers

1) Oligopoly: A market condition in which sellers are so few that the actions of any one of them will materially affect price and 11 have a measurable impact on competitors. Healthy prices led to many new entrants

28 UK generators in 2001

Good spreads

British Energy Innogy Powergen AES EdF SPO AEP BNFL SSE Mission TXU ETOL International Power Saltend Cogeneration Barking Power Coryton Energy Entergy Rocksavage Power NRG Total FinaElf BP Enfield Energy Centre Corby Power South Coast Power Alcan Derwent Power Lakeland Power 12 … and is now consolidating in hands of the “Big VI”

12

10

8

6

Capaci t y (GW) 4

2

0

British Energy RWE npower E.ON UK Sco t t i sh Po w er SSE EdF Energy Cent ri ca Ot hers I PPs

13 Exciting times

„ Climate protection high profile debate

„ Large Combustion Plant Directive

„ Government‘s Energy Review - published in July 2006

„ Security of gas supply

„ Recent publication of the Stern Report

14 More progress on reducing carbon dioxide emissions!

Carbon emissions by Sector and the 2050 goal 180

160 Goal 140 Services 120

100 Residential

80 Industry 60 Transport 40

Millions Carbon of tonnes of and 20 Refineries

0

0 0 1990 2000 201 2020 203 2040 2050 15 Growing demand for energy

End use of energy by sector of the Economy in 2004 Compared with 30 Years ago, we use nearly TWICE

Other as much energy in 13% Domestic transport and over 20% 30% more in heating our homes

Industry and powering our 21% appliances!

Transport 36%

16 “To“To quench quench the the world’s world’s thirst thirst for for energyenergy requires requires a a cumulative cumulative investmentinvestment in in energy-supply energy-supply infrastructureinfrastructure ofof overover $20,000$20,000 billionbillion in in real real terms terms over over 2005- 2005- 2030”2030”

0707 November November 2006 2006 L Londonondon

17 Fundamentals indicate over the short, medium and long-term, we need to build NEW POWER STATIONS!

100 25%

90

80 20% Renewables 70 CHP Pumped Storage 60 15% Interconnectors Oil 50 OCGT Nuclear 40 10% Coal (opted-out)

Capacity, GW Capacity, Coal (opted-in) Capacity Margin Capacity 30 CCGT Peak Demand 20 5% Capacity Margin 10

0 0%

9 013 015 01 2005 2007 2009 2011 2 2 2017 2 18 Outcome of the changes and challenges on the `people’ agenda 6000 „ Peak energy investment in 1970’s resulted in strong5000 recruitment of a then young, and now ageing workforce 4000 „ University support declined 3000 „ Throughout 1990’s privatised industries downsized2000 and took on few graduates New buildNew (MW) 1000 „ Now seeing significant infrastructure renewal in electricity,0 water, railways and demand for skilled resource1966 is increasing 1970 1974 1978 1982 1986 1990 1994 1998 2002 CCGT Coal Oil

19 UK market review resource issues

UK wide Scotland & the North LCPD upgrades Peterhead CCS/EOR project New thermal North Sea spend New Nuclear BP Grangemouth upgrades Offshore wind Glasgow Airport rail link ASCRs Renewables SCRs Drakelow CCGT Bacton interconnector Gas storage projects South Wales Refinery upgrades/expansion Port Talbot CCGT plant Milford Haven CCGT 1,500MW Pembroke CCGT 2GW London & South East Uskmouth CCGT 800MW Wembley Stadium New LNG terminal Heathrow T5 and upgrades Refinery upgrades/expansion Stanstead expansion Gatwick expansion South England Olympics Langage CCGT 800MW London new build civil Marchwood CCGT 800MW The cross rail link AWE Aldermaston Isle of Grain phase II LNG CHP/ plants Isle of Grain CCGT Chemical plant upgrades Felixtowe port expansion Aircraft carrier new build 20

(2006) RWE npower’s generation business – age profile

Under 18 18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+ 21 Shortage, what shortage?

„ 35% of companies do not expect to be able to recruit sufficient technical staff this year. Senior engineers are the most difficult to find – IET

„ 45% increase in engineering graduate recruitment in 2006

„ 20% did not recruit desired number of graduates – AGR

„ “The power sector faces an acute shortage of engineers” - DTI

22 Where will the future engineers come from?

„ Drop in A-level maths students

„ Number of engineering and technology graduates remaining static

„ Fewer than half of engineering graduates take up jobs as engineers

„ Concerns identified over the long- term pipeline of young talent going from schools onto university engineering courses and subsequently into engineering firms – Royal Academy of Engineering 23 STEM A-level stats

70000

60000

50000

40000

2005 Totals 1996 totals

30000

20000

10000

0 24 Biology Chemistry Physics Other Sciences Maths Choosing to study STEM A-levels

„ In 2004

– 55,500 students were awarded GCSE in Physics

– 49,000 students studying Chemistry

„ Science less likely than Maths and English to be seen as necessary for a good job

„ Students lack understanding about SET careers. Large majority see engineering in terms of working with machinery

„ 80% of students in Year 9 already have an interest in working in a specific area and consider option choices appropriate for 25 that area What are we doing to address shortages - medium term?

„ Increase graduate intake

„ November 2006 - Launch of npower graduate recruitment campaign at Science Museum

„ Broad exposure in graduate recruitment publications and web sites

„ npower graduate website re branded – new style recently launched

„ 2006 Careers fairs complete

„ 500 applications received so far – twelve weeks into campaign 26 What we’re doing to address shortages - long term? Power Days Free Power resources station guided tours Education organisations Education Cricket

Work Experience Sponsorships

Links with www.npower.com/ local schools education

Staff Staff volunteering development 27 Enthuse

„ Targeted at Year 9 (ages 13 -14)

„ Aim to increase interest/curiosity about engineering and science

„ enthuse will be an activity day

– Practical activities

– Teamwork and Problem solving

– Excitement and competition

„ Learn By Design – Primary developer (including design and delivery) – Power Days

„ Days would be delivered with the assistance of npower Graduates and Apprentices 28 Enthuse pilot day

„ Morning Q1: Are you interested in a career in engineering?

Yes 23% No 77%

„ Afternoon Q1: Are you now interested in a career in engineering?

Yes 47% No 53%

29 Enthuse pilot day „ Morning Q2: Do you think you know enough about engineering to consider it as a career?

Yes 4% No 96%

„ Afternoon Q2: After what you've experienced today, do you think you know more about engineering to consider it as a career?

Yes 96% No 4% 30 Enthuse pilot day

„ Morning Q3: Do you think your science lessons are relevant to your everyday life?

Yes 60% No 40%

„ Afternoon Q3: Do you now think your science lessons are relevant to your everyday life?

Yes 82% No 18% 31 “Shape the future”

„ Influencing the influencers

„ Teacher experience days – hosted by industry

„ Supported by government funding

„ Littlebrook was one of the first in the UK

„ 15 teachers visited – reaching over 3000 students

„ Excellent feedback from Teachers, RAE and Education Business Partner

„ Next event at Didcot power station in March

„ Potential to influence is enormous 32 Science Engineering Ambassadors

„ Supported by SETNET, The Science, Engineering, Technology and Mathematics Network that promotes Science Technology Engineering and Mathematics (STEM) awareness, especially among young people

„ SEA scheme underpins promotion of STEM subjects

„ 2006 graduates encouraged to become SEAs

„ SETNET will deliver bespoke training to npower in January and February 2007

„ npower has been instrumental in encouraging IMechE and IET to include reference to education engagement as contributing towards competence E.

33 Industry wide action

„ Major problem for Power Generating Industry

„ Can’t be solved by one company alone

„ All need to engage – lots of great work already being done throughout industry in this field

„ Need close links with educational institutions

„ All need to be ambassadors for engineering and power industry

34 Collaborating to build innovative Generations

Dr Nina Skorupska Director, Technology Services RWE npower