RWE reports profit drop / Which target date for 100% renewables?
RWE says it will ‘only just’ meet 2015 earnings forecast
German utility RWE on Thursday said it would just manage to meet its 1.1-1.3 billion-euro adjusted net income forecast for 2015, after a 29 percent drop in adjusted, after-tax income in the first nine months of the year. This fell to 545 million euros from 763 million a year ago, it said. Low prices for conventional electricity had reduced profit margins for power generation, it said.
The renewables division, however, improved significantly, with operating profits at RWE Innogy rising by 251 million euros to 280 million euros on the year after the commissioning of new wind farms. According to CEO Peter Terium: “Innogy’s success is both an inspiration and a goal for our other innovative business models.”
Read an article about the results on Reuters here.
“Confidence has vanished”
Chances are not good that the energy giants can return to health, writes Karl-Heinz Büschemann in Süddeutsche Zeitung. “There is one possibility to avoid the huge catastrophe looming and to even find a way forward. Both companies need new management,” argues Büschemann. Shareholders have lost trust in the companies’ current CEOs, and they are in conflict with the government – partly thanks to E.ON’s obvious attempt to evade its responsibilities for nuclear decommissioning. “But now, both sides have to find a common way. That is not possible in mutual distrust,” he writes.
Read the CLEW dossier on the utilities’ fight for survival here.
Find the CLEW factsheet “Securing utility payments for the nuclear clean-up” here.
“Nuclear fission releases energy”
E.ON’s record loss is “ultimate proof” the company’s imminent split is an emergency measure, writes Jürgen Flauger in a commentary for Handelsblatt. “Utility E.ON finds itself in an existential crisis in its current form. But this is why the new strategy is not only brave, but also right. (CEO) Teyssen has to stop the downward spiral which would probably result in the bankruptcy of the entire company. This is why the split can only be the first step toward averting the crisis,” writes Flauger. Even the fact that E.ON will have to keep the nuclear plants, contrary to original plans, might be beneficial, argues Flauger. “The utility keeps the ultimate poison pill. Normally, the focussed company would have been a candidate for asset stripping by financial investors. Grids and renewables are currently very popular with them. But who would want to take on the nuclear risks?” he asks.
Find an entry on E.ON's results in yesterday's News Digest here.
The reported interest of utility Steag in buying Vattenfall’s lignite operations is politically motivated and does not fit into a modern energy policy, argues Frank-Thomas Wenzel in a commentary for the Frankfurter Rundschau. Steag “is controlled by a handful of western German municipalities, all of which suffer from serious financial problems. How does that fit together?” asks Wenzel. He says because the powerful mining union IG BCE is worried about thousands of jobs, it seems to have used its excellent political network to arrange a deal to save lignite mining in East Germany, writes Wenzel. But lignite is inefficient and harms the climate. “Politicians and the union must find a way to exit brown coal,” he says.
“100 percent stress”
Germany’s Green party is facing a fight over renewable energy goals at its convention next week, reports Michael Bauchmüller in the Süddeutsche Zeitung. Before the parliamentary election in 2013, party members made 100 percent renewable power by 2030 a top priority, he writes. Party leaders want to stick to this goal. But Robert Habeck, Schleswig-Holstein’s energy transition minister, and some other high-ranking members want to drop the target, which even renewables lobbyists consider unrealistic. They want to focus more on the transport and heating sectors. The party might have to face a “tug of war about their own visions – an area where green delegates can be very sensitive,” writes Bauchmüller.
Find a CLEW interview with Habeck here.
“’The Plan’ for 100 percent renewable energy”
Germany should be able to fulfil almost its entire energy needs using renewable energy by the year 2050, using current technology and without endangering security of supply, according to a Greenpeace energy concept called ‘The Plan’. Updated from an earlier concept first published in 2007 and revised again in 2009, the plan is based on a power market model developed by the BET Office for Energy Economy and Technical Planning in Aachen, which involves shutting down the last nuclear power plant in 2018, the last lignite coal-fuelled power station in 2030 and the last hard coal station in 2040. While the future of electricity generation is in offshore and onshore wind power, as well as photovoltaics, the group said, more efforts are needed in the transport and heating sectors, it noted.
Read the press release in German here.