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HomeGermanyGermany's RWE Raises Green Spending Target to $60 Bln by 2030

Germany’s RWE Raises Green Spending Target to $60 Bln by 2030

Germany’s biggest power producer RWE (RWEG.DE) will raise investment in green energy technologies to 55 billion euros ($60 billion) over the next seven years, it said on Tuesday, seeking to become one of the world’s largest renewables groups.

RWE struck a different tone to its larger rival Enel (ENEI.MI), which last week took a more cautious stance on renewables projects in the wake of inflation and supply chain issues that have gripped the sector.

None of RWE’s offshore wind projects are facing economic difficulties, Chief Executive Markus Krebber said at the group’s capital markets day, in a comment aimed at addressing investor concerns after related writedowns by BP (BP.L)Orsted (ORSTED.CO) and Equinor (EQNR.OL).

The group raised its target for the internal rate of return on future projects to 8% from the 6% guidance provided two years ago.

“We ensured that we had a very deep dive of our offshore portfolio after what happened,” Krebber said. “We can confirm again that we don’t have any problems with anything that is under construction, under development.”

However, Krebber said the company would no longer pursue offshore projects in markets deemed too risky, singling out Italy and Taiwan, where the risk-return profile no longer meets RWE’s criteria.

‘BACK TO BASICS’

RWE’s newest net cash investment target equates to an annual spending average of 7.9 billion euros in renewable energy, batteries, flexible generation and hydrogen projects, up from an average of 6.7 billion euros for the 2021-2023 period.

Green capacity is expected to nearly double to more than 65 gigawatts (GW) in 2030 from 35 GW now, with most of the investment in Europe and the United States. In terms of technology, more than half will be directed at onshore and offshore wind, the company said.

Shares in RWE were up 2.7% by 1454 GMT, the best performer on Germany’s blue-chip DAX index (.GDAXI).

Analysts at Goldman Sachs said RWE’s released roadmap was a “strong ‘back to basics’ plan that rests on higher returns … accelerating investments … and which, in turn, should result in stronger – and well above consensus – profits”.

Source : Reuters

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