Berlin (Dow Jones) – The environmental organization Greenpeace sees the Essen energy supplier RWE because of rising CO2 prices and the nuclear phase-out difficult years ago. After the billion-dollar deal with Eon, RWE now has a green power portfolio, but has “no solid economic basis – not even at its headquarters in Germany”, according to the brief analysis by Hamburg energy analyst Steffen Bukold. The group clearly rejected this.
The Greenpeace study criticizes that there is “little substance” behind the change in strategy from a lignite giant to an international eco-company. With 89 million tons of CO2 per year, RWE remains the largest polluter in Europe. At 792 grams per kilowatt hour, the specific emissions in Germany are almost twice as high as the average. The share of wind, solar, hydropower and biomass in the RWE electricity mix is only 21 percent, and the financial ceiling remains “thin”.
However, the slow growth in renewables is dangerous: because the CO2 prices in the European emissions trading system (ETS) rose to an all-time high of over 40 euros per ton at the beginning of 2021. In addition, the EU is now aiming for significantly stricter climate protection targets for 2030. Group boss Rolf Martin Schmitz emphasized, however, that the rising CO2 prices are not a problem for the group because of the long-term hedging transactions. “Because we are hedged against the market until 2030,” said Schmitz. Thanks to the most recent capital increase in August, the equity ratio is now 29.1 percent according to the annual report.
Greenpeace also warns of increasingly tough international competition with oil multinationals such as BP and Shell, which are also entering the market with offshore systems. They used their market power “to a previously unseen extent and achieved high profits in trade – at the expense of the competition”. RWE is also internationally “a mere medium-sized newcomer who can become a takeover candidate at any time”.
When asked, CFO Markus Krebber confirmed that the marine wind farm business had also become “more attractive” for new players. However, RWE is world number 2 in the offshore market after the Danish giant Orsted and has a head start. In addition, the group secured the largest share of 3 gigawatts in the most recent offshore tender from the English crown, in which BP and Total were also involved. “In the auction process, we also paid the lowest average price, which shows that we understand the deal.” Regarding the takeover speculation, Krebber said that the company was conducting such discussions “with our investors and analysts and less with Greenpeace”. CEO Schmitz added: “I find that very funny, because you are both a bankruptcy candidate and a takeover candidate.”
On the other hand, Greenpeace climate expert Karsten Smid declared: “The company will only find a place in the new energy world if it cuts its massive CO2 emissions much faster than before and quickly draws a line under lignite.”
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(END) Dow Jones Newswires
March 16, 2021 06:51 ET (10:51 GMT)