The RWE Group is accelerating its restructuring in the direction of renewable energies and is thus preparing itself for a possibly quicker exit from coal.

With a new strategy known as “Growing Green”, the Essen-based electricity giant intends to invest a total of 50 billion euros in its core business beyond coal and nuclear energy, which will expire at the end of 2022, by 2030.

Helmut Bünder

Business correspondent in Düsseldorf.

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The focus is on wind power, photovoltaics, storage and hydrogen.

But this also includes the generation of energy from gas-fired power plants in order to secure the supply when the sun is not shining and the wind is not blowing.

To this end, the pace of the expansion of renewable energies is being increased.

If RWE previously wanted to increase its green electricity capacity by an average of 1.5 gigawatts per year, the group is now aiming for 2.5 gigawatts each year, 70 percent more.

For comparison: the annually planned expansion corresponds to the output of two to three large coal-fired power plants.

The aim is to increase the capacity for the production of green electricity to fifty gigawatts.

"We also trust in the intention of the federal government to significantly advance the expansion of renewables by accelerating the process," said CEO Markus Krebber.

Green hydrogen

In investment planning, carbon dioxide-free “green” hydrogen also plays an important role: by the end of the decade, the company's own electrolysis capacities with an output of two gigawatts are to be created.

RWE is aiming for the same increase in capacity for its gas-fired power plants.

In the long term, the existing systems with a capacity of 14 gigawatts are also to be converted to climate-neutral fuels such as green hydrogen.

As a result of the group restructuring, the adjusted operating profit (Ebitda) from the core business, which also includes international energy trading, is expected to rise to five billion euros by 2030, probably twice as much as in the current financial year.

RWE is thus forecasting an increase in operating profit from its core business by an average of 9 percent per year.

The plans were well received by the stock market. The share rose by almost 3 percent, also because RWE was already forecasting an operating result that was around 200 million euros higher for 2022. The dividend of 90 cents per share planned for the current financial year should also form the lower limit in the coming years. In the long term, the distribution will amount to 50 to 60 percent of the adjusted net result. The investment program is to be financed "by far the greater part" from current income. RWE is able to finance its green growth green, said CFO Michael Müller. "Our growth program is value-adding and sustainable."

Krebber does not rule out an early exit from coal-fired power generation.

However, this is a challenge beyond RWE, because the expansion of renewable energies, power grids, storage and secure power from gas-fired power plants must be given a considerable boost everywhere.

The coal commission had set the year 2038 for the end of the coal flow, the traffic light coalition is considering the year 2030.

Activist shareholders put pressure on

Investors are also putting pressure on them.

The activist shareholder Enkraft is calling for the RWE lignite activities to be spun off as quickly as possible.

“At RWE, the coal phase-out began long ago.

It can be possible to pull him forward if the consistent expansion of the new technologies is actually massively accelerated, ”said Krebber.

One focus of RWE's investments are wind power plants on the open sea. This offshore capacity is to increase from 2.4 to 8 gigawatts. In addition to Europe, the Group is looking at North America and some Asian markets. In the case of onshore wind power and solar power, whose capacity is to increase from 7 to 20 gigawatts, half of the investments are planned in Europe and half in North America.

RWE sees particular potential in photovoltaics, where capacity is to be increased from one to 8 gigawatts.

Of the total budget, 10 to 15 billion euros are planned for investments in Germany.

Seven new offices will be opened in Germany for the regionally based business with onshore wind power and solar energy, and 200 employees will be hired for project development.

Krebber emphasized that RWE would also significantly expand the trade in green energy sources and the range of “tailor-made energy solutions” for major customers.

RWE also wants to start importing hydrogen to supply industry in Europe.