Superb market prospects

Environmental Energy Turnover of the MVV Energie Group and Incineration Volume
	2004/2005	2003/2004	% change

Electricity turnover (including secondary distributors) in kWh million	204	82	+149

Steam turnover¹ in kWh million	973	893	+9

Incinerated waste in tonnes 000s	619	519	+19

¹previous year's figure adjusted

The market prospects for our environmental energy segment have improved significantly as a result of the entry into force of the Technical Guidelines for the Disposal of Municipal Solid Waste (TASi) as of 1 June 2005. These guidelines, which are applicable across the whole country, state that municipal waste may only be disposed of at waste dumps following prior thermal or biological treatment. It is already apparent that the incineration capacities available for commercial waste in Germany will not be sufficient.

Our non-recyclable waste incineration plants in Mannheim, Offenbach and Leuna currently have an incineration capacity of 900,000 tonnes per annum. As one of the market leaders in the incineration of non-recyclable waste, our group of companies is already superbly positioned. We intend to exploit the growth opportunities in this market.

Within the framework of the strategic realignment and modernisation of the organisational structure of our group of companies, we have pooled our nonrecyclable waste incineration activities, the related power plant business and our biomass activities at MVV Umwelt GmbH, a wholly-owned subsidiary of MVV Energie AG founded during the year under report to act as the operating management company, thus combining the previously separate segments of waste-to-energy plants and renewable energies.

The concentration of our activities in the disposal and power plant businesses enables us to pool competencies and longstanding experience, to simplify control procedures and to exploit synergies, such as those concerning the procurement of waste and wood.

The smaller-scale energy generation plants based on biomass, such as the biomass heating plants which we use for decentralised utility supply concepts, are to remain at our value-added services segment. Within the framework of our value-driven focusing strategy, we have parted company with the wind farm business of our subsidiary eternegy GmbH, Mannheim, which in the previous year was included in the renewable energies segment. During the year under report, MVV Energie AG sold projects for new wind farms in Germany, Poland and France.