Energy company: Green growth: RWE increases goals

2023-11-28 18:46:16

Energy company Green growth: RWE increases goals

The energy giant RWE is significantly pushing ahead with the expansion of its green electricity generation. photo

© Fabian Strauch/dpa

The energy giant RWE wants to significantly expand its green electricity generation: by 2030, 55 billion euros should flow into wind turbines, battery storage, PV systems and hydrogen-capable gas power plants.

The one focused on renewable energy and energy trading The RWE Group wants to accelerate its growth and has set significantly higher goals for the current decade. The Essen-based group announced at a capital market day in London that they want to invest 55 billion euros net worldwide between 2024 and 2030.

The green generation capacity is to be expanded from the current 35 to more than 65 gigawatts. For comparison: Large coal-fired power plants such as Datteln 4 have a capacity of over one gigawatt.

The stock market honors the announcements

RWE is thus updating its “Growing Green” growth strategy. The group presented it for the first time in November 2021. At that time, the company announced that it wanted to invest a total of 50 billion euros gross by 2030. Green generation capacity should be expanded to 50 gigawatts by 2030.

The investments now announced in London are intended to significantly increase profits: CEO Markus Krebber expects an annual increase in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of an average of 14 percent. By 2030 the value is expected to be more than nine billion euros. For comparison: For the current year, the group is targeting an adjusted Ebitda of 7.1 to 7.7 billion euros.

Shareholders should also benefit from the growth. The dividend is expected to increase by 5 to 10 percent annually. The group announced that the dividend target for the 2024 financial year is 1.10 euros. For the current year, the owners should receive a dividend of one euro per share. The stock market honored the new targets: in the afternoon, RWE shares were around 2.5 percent above the previous day’s value.

According to Krebber, the 55 billion euros should flow into renewable energies, storage technologies, flexible generation and hydrogen projects by 2030. For example, the group wants to increase its solar capacity from 3.9 gigawatts to 16 gigawatts. An increase from the current 3.3 gigawatts to 10 gigawatts is planned for offshore wind power projects. The group also wants to significantly expand its battery storage: from the current 0.5 gigawatts to 6 gigawatts. RWE is “the pacemaker of the energy transition,” said Krebber.

RWE is sticking to the coal phase-out

RWE wants to invest more than half of the 55 billion euros in Europe by 2030. In Germany alone it is expected to be around eleven billion euros, 20 percent more than previously planned. In addition to Europe, the USA is another focus of investments.

Krebber confirmed the plans to build hydrogen-capable gas power plants with at least three gigawatts of output in Germany by the end of 2030. “However, unfortunately there is still a lack of a regulatory framework that enables these investments,” he said. RWE is “desperately waiting” for this. “If the framework is right, we can also imagine significantly increasing our expansion targets here.”

According to previous information, the systems are to be built primarily at existing coal-fired power plant locations. They are intended to provide electricity when wind and solar generation is not sufficient. According to Krebber, the planning and construction of such power plants takes “five or six years”.

RWE is sticking to the coal phase-out agreed with the federal government and the state of North Rhine-Westphalia by 2030, but is not ruling out subsequent reserve operation of the coal-fired power plants on behalf of the federal government. There is a clear contract, said Krebber. “We have promised coal-fired power generation by 2030.” The systems would then be shut down.

“If the federal government comes to the realization that it needs it for longer, it will have to keep it in reserve itself. We can continue to operate it, but then at the expense of the federal government. From an economic point of view, these are their investments, no longer ours.” The CEO emphasized that there is a clear roadmap for RWE.

dpa