E.ON SE - Non-deal Green Bond Framework Roadshow - July 2019 - eon
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E.ON SE – Non-deal Green
Bond Framework Roadshow
July 2019
Disclaimer
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E.ON Green Bond Framework presentation
Dr. Marc Spieker
Chief Financial Officer
Member of the Board of Management of E.ON SE since January 2017
Finance, Investor Relations, Mergers & Acquisitions and Participation
Management, Risk Management, Accounting & Controlling, Tax
Dr. Thomas König
Chief Operating Officer – Networks
Member of the Board of Management of E.ON SE since 2018
Energy Networks, Procurement, Consulting
3
Overview
E.ON - Enabling a sustainable energy future
Green bond framework
Eligible projects
From integrated utility to a focused energy company
Integrated utility E.ON today Future E.ON
• Coverage of the entire energy • Portfolio focused on the new • Focus on networks and
value chain energy world customer solutions
• Dedicated to support the • Unique downstream position
energy transition to make the energy world
cleaner, smarter, and more
sustainable
Energy
Energy Networks Energy Networks Networks
Customer Solutions Customer Solutions Customer
Renewables Renewables Solutions
Upstream
Global Commodities Uniper innogy acquisition /
spin-off RWE asset swap
Convent. Generation
Indicative visualization of EBIT distribution; E.ON today / Future 5
E.ON excluding non-core nuclear energy production, fading out by
2021/2022
E.ON is set up to cope with the energy mega trends and make the
energy transition a success
Energy Networks Customer Solutions
Holistic system
provider
Infrastructure ecosystem
Decentral, connected multi-layer
infrastructure
More (semi-) autonomous local energy
systems
6
Future E.ON with increased footprint in sustainable businesses1
Sweden E.ON2
innogy3 Increased green impact:
• Increased size after the
closing of the innogy
transaction
UK • Additional assets will greatly
enlarge E.ON’s customer
Germany solutions and energy
networks businesses
CEE • Future E.ON will have
NL/BE significantly more eligible
green projects
Southern Europe 1. Without any potential antitrust remedies 7
2. Energy Networks and Customer Solutions business, based on E.ON Facts and Figures 2019
3. Grid & Infrastructure and Retail business, based on innogy Factbook 2018,
Clear commitment to sustainability
The E.ON Board is committed to E.ON is supporter of the 10 principles of the
UN Sustainable Development Goals UN Global Compact
our commitment to the
1.-2. Human rights
3.-6. Labour
7.-9. Environment
10. Anti-corruption
Signatory since 2005
8
E.ON‘s sustainability efforts are well acknowledged
Result: AA Management B
Text 1
4 Text 1
Sector average: C
Overall ESG Score = 81 (Leader Overall ESG Score: 3.2
Text 2
1 Group) Text 1 Sub Sector Average Multiutilities: 2.8
Relative Position 11 out of 192 Industry Average Utilities: 2.7
E.ON is index member, i.e. one of E.ON ranks 4th in the Green Utilities
Text 3
1 120 most advanced companies in Text 1
2 Report from “Energy Intelligence (EI)
Europe + Eurozone Group”
Rating: „C+“ E.ON ranks 6th out of 30
Text 1 Text 1
3
9
Note: All ratings as per June 2019
E.ON’s Green Bond Framework
Project Evaluation & Management of
Use of Proceeds
Selection Proceeds
Reporting External Verification
+
• Finance and/or • Project selection based • E.ON will strive to • Allocation and Impact
refinance Eligible Green on Eligibility Criteria maintain a Portfolio reporting after a year
Projects in the following • Initial Portfolio with matching or exceeding following issuance of
eligible categories: projects no older than 3 outstanding Green the applicable Green
years Bonds Bond
• Green Bond Committee: • Projects will be added • Renewal on an annual
Renewable energy on an on-going basis basis until the Green
− Sustainability Bond proceeds are fully
• Pending full allocation,
Energy efficiency − Energy Networks unallocated proceeds to allocated
− Customer Solutions be held in treasury
Clean transportation − Group Finance liquidity portfolio
E.ON’s Green Bond Framework is aligned with the ICMA Green Bond Principles 20181
and Eligible Green Projects are aligned with draft EU taxonomy 10
1 https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/Use of Proceeds: A clear focus on the energy transition
Potential impact
ICMA GBP Category1 Eligible Green Projects Eligibility to Green Bond UN SDG
indicators
Direct connections of renewable energy production and storage units to the • Capacity and
100%
grid2 production of
Renewable energy production and storage units including: Renewables connected
Renewable Energy - Wind to grid or generated
- Solar (PV) 100% • Added Renewables
- Biomass/ biomethane Capacity
- Power-to-x3 • CO2 emissions avoided
Energy efficient replacements in the grid including: Applying the renewable
- Energiewende / smart grid investments energy feed-in ratio4 of
- Investments to decrease / minimize grid losses E.ON’s fully consolidated • Smart grid components
- Energy efficient street lighting with LED grid businesses installed
• Energy consumption
Smart meters 100%
Energy Efficiency savings by clients
Integrated on-site business and city energy solutions including: • % of energy efficiency
- Combined heat and power, district heating achieved
- Geothermal, solarthermal, power-to-heat 100% • CO2 emissions avoided
- Biomass / biomethane and storage
- LED lighting
Clean • Number of EV’s
Electric vehicle charging stations and related infrastructure 100%
Transportation charging points
1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/
2. In terms of renewable energy and energy efficiency grid projects renewable energy refers to energy from wind, solar (PV), biomass/ biomethane, landfill and sewage gas, hydro and power-to-x3
3. Power-to-X refers to various technologies for storage or other use of surplus electricity in times of oversupply from volatile renewable energies infeed such as solar energy, wind energy and hydropower. Power-to-X technologies enable sector coupling and
reduce curtailment of renewable energies increasing the share of renewables in the energy mix 11
4. The feed-in ratio is defined as energy feed-in from renewables divided by all decentral energy feed-in of E.ON’s fully consolidated grid businessesEnergy Networks Eligible Projects
E.ON is one of the greenest distribution grid operators in Europe
84 TWh
Feed-in Power E.ON Networks
45 GW from RES1
connected
RES Capacity
Green project volume
Grid connections of renewables
Increasing efficiency & smart grid
Initial green project volume > €1,252 bn
1 RES = Renewable Energy Source 13
2 2017 / 2018 renewable energy and energy efficiency projectsE.ON’s Energy Networks are the backbone of the Energiewende
Today, ⅓ of German
RES-capacity is connected
Energiewende takes place in local
to E.ON’s networks: distribution networks
TSO Today, 118 GW of RES are installed
in Germany
32% E.ON RES avoided CO2-emissions of 141
Other 62% Mio. t in 2018
DSOs
14Integration of renewables will remain a stable key driver
of our investment strategy
Expansion of renewables at E.ON Networks in Germany
[GW]
+44%
~55
~400.000 RES-facilities connected
over the last 15 years
38
33 3 Investment in RES-integration of
4
12
> €200 m each year
11
9 23 RES-capacity in our networks
1 1 18
7
grows constantly by >2 GW p. a
2005 2015 2018 Forecast
2025
Wind PV1 Other
15
1 PV = PhotovoltaicIncreasing renewable capacities south of Berlin required
expansion of our high voltage grid
Project example:
Project: Fläming
DSO1: E.dis
Cable length: 27 km
RES target: 640 MW
Finalisation: 2018
Grid connections renewables
(Germany)
Total green
project volume2 ~€350 m
1 DSO = Distribution System Operator
2 Total green project volume for RES connections in Germany in 2017 & 2018 16Digital assets become the new standard to integrate renewables
and maximize network efficiency
Project example:
Project: Smart Substations
DSO: E.ON’s four German
DSOs
Target: 100% smart
substations
Energy efficiency grid capex
(Germany)
Total green
project volume 1
Project volume1 ~€300 m
~€66 m
1 Total green project volume for energy efficient replacement capex in Germany in 2017 & 2018 17E.ON connected one of Europe’s biggest onshore wind cluster in
Sweden to the power grids
Project example:
Project: Nysäter
Grid length: 140 km
Renewables Capacity: 1.200 MW
Grid connections renewables
(Europe, outside Germany)
Total green
project volume1 ~€35 m
1 Total green project volume international RES connections in 2017 & 2018 18ACON is a project with the aim to foster a sustainable electricity
system in Czech Republic and Slovakia
Project example:
Project: ACON
• Modernization and reinforcement of
existing interconnections in Czech
Republic and Slovakia
• Foster Smart grid technologies
• Co-funded by the EU
Energy efficiency grid capex
(Europe, outside Germany)
Total green
project volume1 ~€600 m
1 Total green project volume for international energy 19
efficient replacement capex in 2017 & 2018Customer Solutions Eligible Projects
City Energy Solutions: Högbytorp, Heat Solution of the future
• Integrated material and energy recovery
• A unique, efficient and sustainable way,
generating:
electricity, heat, biogas and bio-
fertiliser from waste products
Annual production Facts
Electricity ✓ Total investment: €265 mn
165 GWh
✓ Total annual production
Heating of energy: 650 GWh
Biogas
425 GWh
60 GWh ✓ Total annual production of
bio-fertiliser: 60 000 tonnes 21B2B solutions: Overview of technologies
Combined heat E.ON and Audi are building a solar energy park on the
and power (CHP) roofs of two of Audi’s logistics centers in Hungary,
covering about 160,000 m2
Fuel Cell It will have a peak output of 12 MW
E.ON will build and operate the park, which will
consist of 35,000 solar cells and have an annual
Biomass / boilers output of more than 9.5 GWh of electricity
Photovoltaic / E.ON installed a 10 MW lithium-ion battery at
battery Blackburn Meadows, a facility near Sheffield
The project offers sub-second responses to keep
LED UK’s national grid stable by balancing power supply
and demand in real-time to maintain a safe frequency
The Blackburn Meadows batteries help making more
HVAC1 / heat
pumps efficient use of renewable energy sources
22
1 HVAC: Heating, ventilation and air conditioningClean transportation: Freedom to drive electric
– from Trondheim to Rome
We are building one of the largest charging
networks across Europe together with
partners
23Summary
E.ON has a clear focus on the transition to the new energy world,
making it cleaner, smarter, and more sustainable
We strive to implement Green Bonds in our funding mix going
forward with an estimated volume of €0.5 – 1.0 bn annually
Inaugural Green Bond to be expected
For all relevant information: eon.com/greenbond
eon.com/sustainability 24APPENDIX
Use of proceeds: A clear focus on the energy transition
Renewable
energy • Grid connections of renewable energy production and storage units
• Renewable production and storage units
• Grid replacements to increase flexibility and efficiency supporting the energy
Energy
transition, as well as smart grid investments1
efficiency
• Smart meters
• Integrated on-site and city energy solutions
Clean
transporta- • Development and construction of electric vehicle charging stations and
tion related infrastructure
1Replacement investments and/or expenditures applying the renewable energy feed-in ratio (energy feed-in from renewables / all decentral energy feed-in) of E.ON’s fully 26
consolidated grid businessesSecond Party Opinion on E.ON Green Bond Framework
Sustainalytics has reviewed E.ON’s Green Bond Framework and issued a Second Party Opinion
Use of Proceeds
• E.ON’s investments in the Eligible Categories will contribute to positive
environmental and climate goals
✓
• Methodology to define eligible investments in grid replacements:
“Sustainalytics views favourably this methodology, and considers it to
directly link the green bond proceeds to positive environmental impacts”
Process for Project Evaluation and Selection
• “in line with market practice”
✓
Management of Proceeds
• “in line with market practice”
✓
External Review
• “in line with market practice”
✓
Sustainalytics views E.ON’s Framework as credible, impactful and aligned with the ICMA Green Bond Principles
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