Exclusive: Germany's RWE bets big on wind and solar in corporate overhaul

Thu Dec 3, 2015 12:15pm EST
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By Tom Käckenhoff, Christoph Steitz and Vera Eckert

DUESSELDORF, Germany (Reuters) - RWE could triple investments in wind and solar power in a big expansion of its renewables business, its CEO told Reuters, days after the company announced it would break itself up to cope with a crisis in conventional energy generation.

Germany's second-largest utility unveiled the major overhaul on Tuesday; it plans to hive off its healthiest divisions - renewables, grids and retail - into a separately listed entity.

The aim is to shield them from a crisis that has beset its conventional energy production business, stemming from the German government's decision to close nuclear plants by 2022 and a slump in wholesale power prices that has hit the profitability of its coal and gas-fired plants.

In his first interview after the announcement of the restructuring plan - welcomed by investors as a smart move - Chief Executive Peter Terium said on Thursday that investments in renewable energy could triple to 1 billion euros ($1.1 billion) per year.

Terium, who took over as RWE boss in 2012, did not specify a timeframe for the increase, and said the group would not seek expansion at any price.

"We won't burn money. It's about being profitable."

A latecomer to renewables, RWE is trying to catch up with rivals in what is currently the strongest-growing part of an otherwise shrinking power generation industry, where solar and wind power is fast replacing coal and gas-fired plants.

RWE made 8 percent of its core earnings (EBITDA) from renewables last year, compared with 18 percent at larger German peer E.ON, for example.   Continued...

Peter Terium, CEO of German power supplier RWE reacts during the annual shareholders meeting in Essen April 23, 2015.REUTERS/Ina Fassbender