4

The current STEAG Strategy House

The MissionSTEAGEfficient and reliable energy production at

national and international level

Develop a sustainable business in Germany

Optimise existing power plants

•extendruntimes

•increasecostefficiency

•consolidateanddevelopexpertise

•improvetechnicaland organisational flexibility

Achieve targeted growth in Germany

•increasedecentralisedproduction, develop CHP and district heat

•expandonshorewindand use opportunities in the conventional energy sector

•establishpartnershipswith public utilities

Run high-yield international projects as an IPP•developprojectsinfocus

countries and be opportunity driven as appropriate*

•developtheEuropeanonshorewind portfolio

•buildinternationalmarketintelligence

•increaseprojectdevelopmenteffectiveness

Promote trade

•developB&Oas a commodity trading house

•internationaliseB&O

Achieve high-yield growth abroad

Significantly expand the renewables sector

Expand services

•growbydevelopingservices at home and abroad

•expandtherangeofmunicipal and industri-al services

•developtherangeofinternal services wi-thin the STEAG Group

TARG

ETS

EMPH

ASI

S/IN

ITIA

TIVE

Graphics from the STEAG Company Report, 3/2016 *commercialprojectsinnon-focuscountries

Closure aid for the German coal industry authorised under EU law

million €

2011 2012 2013 2014 2015 2016

62 %

2017

76 %

2019**

41 %

51 % 48 %54 %

* according to Council Decision 2010/787/EU ** As from 2019 depreciations resulting from the closure of the last mines and additional costs for closed production units may be distributed over several years. Estimate for 2019.

2,000

1,500

1,000

500

0

Article 3*: closure aid (reduction of current production) Article4*:aidtocoverexceptionalcosts (not related to current production, inherited liabilities)

2018

74 %

100 %

36 %

5

Kapitel 1 Rahmenbedingungen

Abandoned RAG mines

Source: RAG

RhineRuhr

Lippe

Saar

Ruhr coalfield

Saar coalfield

Ibbenbueren

Adaptation in the German coal industry

manpower (in thousand) production (mtce)

140

120

100

80

60

40

20

01990

130.3

71.0

2000 2010 2015

9.6 6.4

58.1

24.234.3

13.2

Number of RAG coal-mining easements Area covered

728 5,283 km2

Number of RAG non-coal easements Area covered

51138 km2

Mine openings within the remit of RAG 7,348

Area covered by shallow and near-surface mine workings

285 km2

Remediation and securement sites as at 2015 52

4

6

8

10

12

14

16

18

Trends in unemployment rates for the Ruhr area compared with NRW and Germany overall

Source: RVR, 2016

18

16

14

12

10

8

6

4

Ruhr areaNRW

1991 2001 20111993 20031995 20051997 20071999 2009 20152013

Germany

Unemployment rates (BfA), on a September basis

percent

6

Source: IT.NRW 2016 (regionalised GDP figures for the Ruhr area only available to 2014); own calculations

Nominal GDP growth rates for the given period

percent

Development in GDP growth in the Ruhr area set against that of NRW and Germany overall

1998/1991 2005/1998 2014/2005

35

30

25

20

15

10

5

0Ruhr area NRW

(excl.Ruhrarea)Germany (excl.NRW)

7


Consumption structure of the German coal market 2015

Total coal sales: 57,7 mtce

of which from indigenous production: 6,4 mtce (= 11 %)

steel industry:17.5 mtce

67.4 %30.3 %

2.3 %

heat market:1.3 mtce

power stations:38.9 mtce

Primary energy consumption in Germany 2015

mtce

160

140

120

100

80

60

40

20

0

Total: 454 mtce, incl. electricity exchange balance of approx. − 6 mtce resp. − 1.4 % of PEC

oil gas coal lignite renewables nuclear others*

Source: AGEB, 3/2016

1.8 %8

* esp. non-biogenic waste

34

7.5 %

57

12.5 %

54

11.8 %

58

12.7 %

96

21.1 %

154

33.9 %

8

Market shares of indigenous and imported coal in Germany

mtce

70

60

50

40

30

20

10

0

imported coal indigenous coal

2000

69

46 %

54 %

2005

62

58 %

42 %

2015

58

11 %

2010

59

77 %

23 %

89 %

Germany‘s reliance on energy imports 2015

100 %

98 %

90 %

89 %

69 %

2 %

0 %

uranium

oil

gas

coal

renewables

lignite

PEC total

Sources: AGEB, 3/2016; own calculations

German coal market: consumption of indigenous and imported coal

9


capacity production

photovoltaics

wind

others*

gas

coal

biomass and hydro

lignite

nuclear

610 TWh(net)

202 GW(net)

Power station capacity and electricity production in Germany 2015

8 %

14 %

14 %

7 %

10 %

5 %

5 %

10 %

18 %

11 %

24 %

14 %

6 %

12 %20 %

22 %

Sources: BDEW, 4/2016 and 8/2016 (preliminary)

* oil, non-biogenic waste, landfill/sewage/mine gas, pumped storage etc.

10

The German Energy Plan: targets and timeframes

The German Energy Plan: New “target architecture”/systematic approach for the target system

Reduction of GHG emissions compared to 1990

Reduction of PEC compared to 2008

competitiveness

security of supply

Reduction of electricity consumptioncompared to 2008

40 % 18 %

35 %

2,1 %/a

18 %

14 %k. A.

35 %

55 % 30 %

50 %

70 % 45 %

65 %

80 %

40 %55 %

70 %80 %

60 %

80 %

20 %

10 %

50 %

25 %

28 % 14 %

33 %8 %

100 %

3 %

Sources: Energy Transition Progress Report, 12/2014; UBA, 2/2016; AGEB, 3/2016

Own graph based on the Energy Transition Progress Report, 12/2014

*specific target for traffic: 1 mill. e-cars by 2020

reduction by increase in

2020203020402050

10 %20 %

10 %

20 %=>

renewables‘ share of gross

final energy consumption

2015 (preliminary)2020203020402050

renewables‘ share of gross

electricity consumption

phase-out nuclear until 2022

reduction greenhouse gas emissionscompared to 1990

energy policy objectives(identical importance)

climative objectives extension renewable energies

energy efficiency increase/energy consumption reduction

• electricity consumption from RE • heat from RE • RE in the traffic area = extension of RE share in total energy consumption to

• electricity consumption • heat• traffic energy productivity PEC

core objectives with sectoral control objectives(with concrete targets until 2020)

11


Sources: BP 6/2016; own calculations GVSt

Global CO2-emissions

CO2-emissions 2015: 33.5 bn t CO2

Increase since 1990 (reference year for Kyoto Agreement): 53.9 %, annual average: 1.7 %

31.3 %27.3 %

16.4 %

4.4 %

8.2 %6.6 % 3.6 %

2.2 %

China

USA

Russia IndiaJapan

Germany

EUexcl.Germany

rest ofworld

Scenario settings developed by transmission system operators for domestic power generation capacities in 2030

GW

180

160

140

120

100

80

60

40

20

0

Source: Federal Network Agency, 2016

Reference year 2014

Scenario A 2030

Scenario B 2030

Scenario C 2030

89.0

147.0157.4

171.9

11.014.723.2

26.1

conventional (total) of which coal renewables

64.869.078.5

105.7

Installed generation capacity in Germany 2014 and future outlook (scenarios)

12

Sources: * Federal Statistical Office (2013); ** based on SOEPv.29 gender pay gap

Pay equity – factors underlying the wage gap between men and women

25

20

15

10

5

0

25

20

15

10

5

02010* 2011**

unexplained

other factors

managementrole/jobdemands

occupation/sector

volume of employment

education/experience

unexplained

other factors

position held

company size

sector

occupation

volume of employment

experience

education

Wage differential in percent – analysis of changing trends

2.3

6.75

Source: Federal Health Ministry , 2016

Transition from level of care to degrees of care

OldCare levels based

on time factor

NewDegrees of care based

on the degree of independence

When classifying persons with physical restrictions the ground rule “+1” applies

When classifying persons with restricted daily living skills the ground rule “+2”

+1

+2

Significant impairment of independence or faculties2

Severe impairment of independence or faculties3

Most serious impairment of independence or faculties4

Most serious impairment of independence or faculties with special requirements placed on nursing care

5

1 Degree of care 1 only applies to newly assessed persons0

1

2

3

13

Kapitel 2 Recht, soziale Sicherung und Umweltfragen

Accident trendsaccidents (total per million hours worked)

Total for coal industry: down 81.85 % since 2001

Sources: DGUV; RAG

Sources: DRV KBS; Bundesanzeiger 2015

* total of the contributions to pension, health, unemployment and long-term care insurance (sharesofemployersandemployees)inpercentofthesalarysubjecttosocialinsurancecontributions

Development of the total social insurance contribution*

45

40

35

30

25

20

15

10

5

02011

19.9

15.5

3.02.0

2005

19.5

14.2

6.5

1.8

2012

19.6

15.5

3.02.0

2013

18.9

15.5

3.02.1

2014

18.9

15.5

3.02.1

2016

18.7

15.7

3.02.35

2015

18.7

15.4

3.02.35

1 only units under mining-authority supervision

2001

35

30

25

20

15

10

5

0

underground

trade and industry total

coal industry total1

2015

pension insurance

unemployment insurance

health insurance (average)

long-term care insurance (average)

14

Mercury levels in air, water bodies and foodstuffs

Air concentration levels

Water bodies, suspended matter

Air quality standard set by the World Health Organisation (WHO)/benchmark for assessing the health impact of long-terminhalativeexposure,asdefinedbytheFederal/Land Working Group on Immission Protection (LAI)

50 ng/m3 air

Maximumallowableconcentration(MAC)0,07 µg/l

Nationwide background measurements taken by the Federal Environment Agency (UBA)

1 to 2 ng/m3 air

Water-body sampling pointsMAC levels met

Deposition (mercury in dust precipitation)

Foodstuffs and fish

Water bodies, bream

TA Luft Air Quality Value

1 µg/(m2 · d)

Commission Regulation EC 1881/2006 Fish products in general

0,5 mg/kg fish (wet weight)

When assessing water quality an EQS is applied in the case of mercury

20 µg/kg fish (wet weight)

Measurements taken by the Land Agency for Nature, Environment and Consumer Protection of North Rhine-Westphalia (LANUV)

0,03 µg/(m2 · d)

Foodstuffs control tests

met

Water-body sampling points ExceedsEQS

Certain predatory fish1,0 mg/kg fish (wet weight) met

15

Kapitel 2 Recht, soziale Sicherung und Umweltfragen

Germany recorded a total mercury deposition of 6 t in 2013 (0.09% from the median)

Global mercury emissions in 2013

t

15,000

10,000

5,000

0

anthropogenic Hg emissions natural and historical Hg emissions

lower value median upper value

Sources: UNEP Global Mercury Assessment, 2013; own calculations

fluctuation range

Electricity generation from mine gas

GWh

1,600

1,400

1,200

1,000

800

600

400

200

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20152014

NRWSaar

16

Price trends: Brent crude (IPE) and crude OPEC basket

Sources: IPE; OPEC

US$/bbl

150

120

90

60

30

02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015 2016 2013 2014

Brent crude price (IPE)OPEC basket price

Price trends: steam coal free north-west Europe and free German border

Sources: IHS McCloskey Coal Report, 1/2000 to 7/2016; BAFA, third-country coal prices by quarter

€/t tce

150

100

50

00

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015 2016 2013 2014

BAFA (quarterly) free German borderMCIS €/tce free north-west Europe

17

Kapitel 3 Internationale Energie- und Rohstoffmärkte

Price trends: premium coking coal fob Australia and USA

Sources: IHS McCloskey Coal Report, 4/2010 to 9/2016

US$/t

350

300

250

200

150

100

5050

100

150

200

250

300

350

2010 2011 2012 201620152014 2013

0

5

10

15

20

World primary energy consumption by energy source

Sources: World Energy Council Germany, 2016; BP Statistical Review 2016; DOE-EIA-IEO 2016; own calculations

20

15

10

5

0

bn tce

oil

coal

gas

nuclearhydro

wind/solarbiomass/gas

2000

22 %

14.0

2015

29 %

20.0

2014

29 %

19.7

1980

26 %

10.4

1990

25 %

12.6

2010

27 %

18.2

Australian coking coal (Queensland)US coking coal (east coast)

18

0

5000

10000

15000

20000

25000

0

2

4

6

8

10

12

World net electricity generation by energy sources

Population trends by region

Sources: World Energy Council Germany, 2016; IEA World Energy Outlook 2015; BP Statistical Review 2016; own calculations

Source: World Population Prospects: The 2015 Revision, New York, United Nations

25,000

20,000

15,000

10,000

5,000

0

12

10

8

6

4

2

02050

2015

2100

TWh

bn

20302015

oil

Africa

coal

Asia

Europe

OzeaniaNorth AmericaLatin America

world

gas

nuclear

38 %38 %

57 %

20 %

9 %

7 %

6 %

40 %

59 %

16 %

10 %

41 %

55 %

25 %

41 %

44 %

39 %

41 %

15,250

8,5

24,040

11,2

23,536

8,316

10,804

7,3

21,408

9,7

2000 201419901980 2010

hydro

wind/solar

biomass/gas

19


0

30

60

90

120

150

Coal production by source country in EU-28

Source: EURACOAL

140

120

100

80

60

40

20

0

mt

20142010 2015

Czech Republic

UK

Poland

132.9

10 %

6 %2 %

2 %

4 %3 %

1 %1 %9 %

14 %

59 %

7 %8 %

11 %

69 %

7 %8 %9 %

72 %

105.7100.3

RomaniaBulgariaSpain

Germany

20

German coal imports 2014/2015 incl. coke

0

10

20

30

40

50

Source: Federal Statistical Office, survey according to the Energy Statistics Act, 6/2016

50

40

30

20

10

0

mtce

*mainly from Poland2015 2015 2015 20152014

coal, total steam coal coking coal coke

2014 2014 2014

EU*

USA

Canada

South Africa

Russia

Colombia

Australia

others

3.5 2.9

9.110.5

31.432.0

43.446.0

3 %

15 %

3 %

17 %

5 %

32 %

11 %

14 %

21


World coal production and consumption 2015

others

Sources: VDKi; IEA; BP ; DOE-EIA; WEC; specific national statistics

production: 6,009 mtce consumption: 5,702 mtce

North-America

Central and South America

EU-28Central-Asia

China

Indonesia

Australia

Japan

India

750 682

86 33

Africa

216150

86247

446303

3,039 3,168

579 764

124 93

32269

36129

164

22

0

200

400

600

800

1000

Seaborne steam coal exports by supply countries

Sources: VDKi 2015; DOE-EIA 2015 ; own calculations

900

800

700

600

500

400

300

200

100

0

mt

2010 2015* *estimate2013 2014201220092008 2011

Australia 24 %

USA 3 %South Africa 9 %

Russia 14 %

Colombia 9 %

Indonesia 38 %

others 3 %−42 %

−4.6 %

−6.6 %

−0.5 %

+5.3 %

−2.6 %−24.1 %

+4.5 %

632658

713739

826863 878

838

shares in global market 2015change

Price trends: Capesize-sea freight rates to Europe

Sources: IHS McCloskey Coal Report, 1/2004 to 8/2016

US$/t

60

50

40

30

20

10

0

Hampton Roads (USA)

2004 2005 2006 2007 2008 2009 2010 2011 2012 201620152013 2014

Puerto Bolivar (Colombia)Richards Bay (South Africa)

23


German mining machinery production

7,000

6,000

5,000

4,000

3,000

2,000

1,000

02005 2006 2007 2008 2009 2010 2011 2012

total production in mill. € ofwhichexportedin2015:94%

2013 20152014

Source: VDMA, 2015; 2015 value is an estimate on first nine months basis

german coal industry sites saar coalfield ruhr coalfield

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