August 14, 2020 Read More →

RWE targeting renewables, hydrogen for future growth opportunities

S&P Global Market Intelligence ($):

It still owns one of Europe’s largest coal power fleets and ranks among the continent’s biggest carbon emitters, but on RWE AG’s half-year earnings call, the focus was squarely on renewable energy. Through its green power unit, RWE Renewables GmbH, the company is chasing more capacity development and portfolio acquisitions across technologies, CFO Markus Krebber told analysts and journalists Aug. 13.

With a planned acquisition from Nordex SE, RWE will add 2.7 GW of onshore wind and solar assets to its growing renewables development pipeline. The deal comprises largely French capacity, at 1.9 GW, as well as projects in Spain, Sweden and Poland.

RWE is targeting 13 GW of renewables by 2022, increasing its footprint from 8.7 GW in 2019. A large slice of that growth in Europe and the U.S. will come from offshore wind — a market in which the company wants to be the global number two, behind Ørsted A/S.

In Krebber’s eyes, investable renewables pipelines are set to become harder to come by as market interest in green power grows, driven in part by deep-pocketed fossil fuel players like BP PLC, which recently committed to a 50-GW capacity target for renewables by 2030. Capital deployment and capacity targets in the renewables space will exceed the number of available projects in the coming years, Krebber said. This is despite growing demand for clean power and green hydrogen — the latter being underpinned by a 40-GW electrolysis target for 2030 set by the European Commission — but the increasing competition is not concerning, he added: “Rather, it’s a confirmation of our chosen strategy.”

Policy frameworks for European and German hydrogen development have buoyed RWE’s own plans for the segment, which include both the supply of renewables for green hydrogen production and logistical and storage projects for the fuel, which could be coupled with existing gas infrastructure and trading expertise, Krebber said.

“Hydrogen is the great hope for the decarbonization of the industrial sector. It has enormous potential for the energy transition, and for RWE as well,” the CFO said. In June, the company announced plans to supply steel maker Thyssenkrupp Steel Europe AG with green hydrogen for its furnaces, pending regulatory support on pipeline investments.

[Camilla Naschert]

More ($): Largely spared by pandemic, RWE zooms in on renewables, hydrogen ambitions

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