May 26th, 2016

The Solar Future NL 2016

Introductory Remarks
Paul Nillesen
The Solar Future NL 2016

How to lose half a trillion

Major European utilities have lost 60% of their value in a decade
Market Cap Development of key European Energy Producers
Peak value (since 2006) vs. April 2016
106 bn
17 bn

-84%
158 bn

20 bn
56 bn
7 bn

95 bn
59 bn
15 bn
6 bn

400bn
market
cap
gone in
less
than a
decade

-87%

33 bn
38 bn

-87%

-65%

-37%

-56%

29 bn
11 bn

-63%

53 bn
39 bn

Peak

-27%

Apr. 2016

5mln per hour

for a decade

Source: Thomson Reuters, Strategy& analysis

Strategy& | PwC

Coal is the winner in current market conditions

Projected gas margins show no sign of improvement up to 2020
Negative gas
margins since
2011

Gas and Coal Power Generation Margins

Clean Spark Spread and Clean Dark Spread EUR/MWh1)

12
Strategy& Projection
Based on forwards

10
8

Coal margin (40%)

6
4
2
0
2010
-2

2011

2012

2013

-4

2014

2015

2016

2017

2018

2019

Gas Margin (58%)

2020

Gas Margin (50%)

-6
Note: 1) Annual average, corrected for CO2 prices.
Source: Thomson Reuters, Strategy& analysis

Strategy& | PwC

Coal has become 50% cheaper in 5 years time

Gas has become cheaper, but coal even more so
Dutch Gas and Coal Prices
Monthly Fuel Prices, Indexed Jan 2010 = 100

250

Gas = 2010
Coal = -50%

200

150

Gas (TTF)

100

50

Coal (ARA)

0
2010

2011

2012

2013

2014

2015

2016

Source: Thomson Reuters, Strategy& analysis

Strategy& | PwC