Strategy and Planned Investments74 The foundation for our targeted growth strategy is an inte- grated business model that creates value through vertical integration along the entire value chain, horizontal integration between power and gas, and regional integration of European markets. Our presence in all of Europe's main energy markets gives us an outstanding market position and the world's most geo- graphically diversified generation portfolio. Although our bid for Endesa wasn't successful, the agreement we reached with Enel and Acciona will significantly strengthen our posi- tion across Europe. E.ON is superbly positioned to meet the new challenges of its changing European market environment. We're well on the way towards realizing our vision of becoming the world's leading power and gas company. European Market and Competition The environment for E.ON's strategy is influenced mainly by the following factors: · Europe's energy markets are becoming more integrated as an EU-wide internal market for energy begins to take shape. · Competition is increasing as markets become more liberalized. · EU and national governments are enacting climate- protection measures which aim to reduce CO2 emis- sions, particularly in the power generation industry. · Energy companies are expected to ensure security of supply in an environment of increasingly scarce primary energy sources and scarcity at other links of the value chain, including generation equipment, engineering per- sonnel, and sites suitable for building new power plants. · A number of countries in and on the periphery of Europe are becoming attractive growth markets. Our strategy for the future contains our endorsement of open and integrated energy markets and our active support of the EU's energy-policy agenda. In Germany, the measures we've taken include the expansion of power and gas cross- border transfer capacity, an initiative to deliver greater transparency on the availability of our generation fleet, and the creation of E WIE EINFACH ("E as in Easy"), our new nation- wide power and gas retail subsidiary, which sends a clear signal for more competition in Germany's retail market. Our presence in all the major European energy markets enables us to benefit substantially from Europe's ongoing market lib- eralization. We're also combining some operations in order to seize opportunities created by the integration of European energy markets. A noteworthy example of this is our new Energy Trading market unit which brings together the trading operations formerly carried out by a number of our organiza- tional entities across Europe. Power Generation Europe will need to add generating capacity in the years ahead to ensure that it maintains a secure and reliable supply of electricity. During this process, we'll invest to maintain and grow our generation portfolio in order to cement and expand our market position, while at the same time setting new standards for energy efficiency and environmental protection. Security of Supply +++ Climate Protection +++ Growth E.ON invests in state-of-the-art generation technology. Datteln 4 is a state-of-the-art coal-fired generating unit we're building about 15 miles north of Dortmund in west-central Germany. As with all our new power plants, Datteln 4 incorporates the best available technology and practices. In fact, Datteln 4 and two other E.ON power plants--Maasvlakte 3 in the Netherlands and Staudinger 6 in Germany--will have the same design, which will reduce costs substantially. And all three will have a high thermal efficiency (about 46 percent), enabling them to emit roughly 20 percent less CO2 than a typical coal-fired plant.