RWE cuts losses / "Good bad diesel"
RWE AG’s second-quarter loss narrowed by 22 percent after an improved performance in the German utility’s power plant business and cost cuts, reports Tino Andresen for Bloomberg. The Essen-based company reduced its adjusted net loss to 259 million euros in the three months through June, based on Bloomberg calculations using first-quarter and first-half numbers. “RWE’s management has delivered a strong first-half performance in a challenging environment,” analysts at Jefferies Group LLC including Ahmed Farman said in a note to clients, according to the article. “It appears to be managing the pressure in the generation business well through self-help measures and the group’s new corporate strategy is on track.”
Read the article in English here.
Read RWE’s report here.
The growth of renewables, while slowed, continues throughout Europe and is putting pressure on the price of electricity, Frank-Thomas Wenzel writes in Frankfurter Rundschau. What could happen is a stronger reduction of overcapacity, such as the large-scale closure of power stations. Wenzel likens the current situation to a poker game in which players wait in anticipation for the other to fold first and shut down power plants. Some in the industry suspect a coordinated action could take place following the next federal elections, with the backing of the government, that would result in power plant closures.
Handelsblatt Global Edition
German energy group E.ON is bracing for more bad news as its Uniper division, which comprises the company’s fossil fuel assets and is being spun off in September, is widely expected to report a loss in the billions on August 22, Jürgen Flauger writes in Handelsblatt Global Edition. E.ON posted its own major half-year loss on Wednesday and, as a result, both companies will start their new separated existence badly weakened. Flauger points out, however, that minus the write-downs and the burden of fossil fuel assets, E.ON — which will focus on renewable energy — is profitable.
Find the article in English (behind paywall) here.
Frankfurter Allgemeine Zeitung
E.ON’s path to a new energy age is paved in red ink, Helmut Bünder writes in Frankfurter Allgemeine Zeitung. E.ON’s initial public offering of its conventional energy unit Uniper in September could decide whether the company continues to bleed. Uniper write-downs have cost E.ON billions and without a capital increase it cannot afford its mandatory payments to the state-administered fund to finance nuclear waste storage. The company is also facing more troubles due to low interest rates, which are forcing it to increase its pension provisions.
Deutsche Umwelthilfe (DUH)
The Deutsche Umwelthilfe (DUH) environmental protection association has blasted the German environment ministry’s decision to put on hold “blue badge” plans that would facilitate diesel car bans in cities. “Despite 10,400 premature deaths and several hundred thousand illnesses caused by the toxic diesel exhaust nitrogen dioxide, car manufacturers have once again prevailed on the issue of air pollution by dictating its policies to the federal government,” the organisation said, adding that the decision came as no surprise. The Deutsche Umwelthilfe accuses the German government of “systematically preventing the disclosure of the auto manufacturer’s fraudulent activity” since the Volkswagen emissions scandal in the U.S. came to light in September 2015.
Read the Deutsche Umwelthilfe press release in German here.
Find background in the CLEW dossier The energy transition and Germany’s transport sector.
Frankfurter Allgemeine Zeitung
The German environment ministry’s move to stop plans to make it easier to ban diesel cars from cities is a good thing, Carsten Knop writes in Frankfurter Allgemeine Zeitung. Knop argues that the “blue badge” plan would force nearly all existing diesel cars off city roads. He points out that while diesel cars emit nitrogen dioxide, they also emit far less carbon dioxide that gasoline-powered cars. The different objectives must be more reasonably weighed against one another than they were in the debate about manipulated emissions, he adds.
Swedish energy group Vattenfall has acquired a wind development project consisting of up to 79 turbines in the German North Sea. Currently under development, the Global Tech II wind project is located some 85 kilometres north of the island of Borkum and will cover an area of 47 square kilometres. The company said the acquisition was in line with its plans to “extensively expand its renewable energy production in the coming years.” The company added that it considered the new German tender system beneficial to wind energy development as it was more cost efficient.
Read Vattenfall’s press release in English here.