14 Aug 2020, 14:27
Alex Dziadosz

German utilities' renewables transformation is gathering pace

Tagesspiegel Background

Major German energy companies are making “rapid progress” with their green energy transition thanks to renewables becoming clear profit-makers that are attractive to investors, Jakob Schlandt writes in Tagesspiegel. Despite the fact that energy giant RWE is publicly perceived as a traditional coal and nuclear company, its renewables section is expanding fast, particularly after the takeover of its old competitor E.ON’s renewables assets at the beginning of July, Schlandt writes. Out of a 1.8 billion euro gross profit declared on Thursday, just 300 million came from coal and nuclear power, while offshore wind generated 585 million euros and onshore and solar power another 273 million euros, he adds. The rest came from a mix of gas, hydropower, biomass, trade and transport. “Even the coal phase-out law in Germany – publicly highly controversial and affecting RWE's lignite and hard coal power plants – is little more than a footnote to an already expiring business,” he writes. 

Renewables also overtook fossil fuels in profit contribution at the EnBW energy firm, Schlandt writes. Even Uniper, which “corresponds most closely to the image of the classic fossil energy company” and which recently opened the coal-fired Datteln 4 power station, is aiming for climate neutrality by 2035. The increasing profitability of renewables has been reflected in share prices, with European utilities now outperforming the overall market on the MSCI Europe index. New opportunities such as green hydrogen could provide further opportunities down the line. “Overall, what many did not consider possible years ago is now happening: the restructuring of the energy giants is in full swing. The decarbonisation of the energy sector is strategically accepted by them and integrated into long-term business models,” Schlandt concludes.

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