The World's #1 Renewable Energy Network for News, Information, and Companies.

Major European Utility Set for Dramatic Renewable Energy Transformation

One of Europe's largest utilities is on the cusp of reportedly transforming its business from being a centralised energy provider into a decentralized energy provider.

According to energycollective.com, the board of Germany's RWE (FWB: RWE) agreed last month on the momentous change in strategy and the move is now being evaluated within the company at large as well as investors.

A recent strategy paper gives further credence to the decision, as it proclaimed, "The massive erosion of wholesale prices caused by the growth of German photovoltaics constitutes a serious problem for RWE which may even threaten the company's survival.”

RWE confirmed to website Energy Post that the new strategy has been discussed within the company and with investors.

According to the documents, RWE wants to depart from its traditional developer and ownership roles of centralized power plants and instead help use its expertise to help manage and integrate renewables into the grid.

"The guiding principle is ‘from volume to value' with technologies ranging from large-scale offshore wind and hydro to onshore wind or photovoltaic. But we will no longer pursue volume or percentage targets in renewables. We will rather leverage our skill set by taking a ‘capital-light' approach. Based on funds sourced largely from third parties, we will position ourselves as a project enabler and operator, and [as a] system integrator of renewables," read the documents published by Energy Post.

"Developing an innovative and profitable prosumer business model is a challenge we also need to address successfully, as we see a billion-euro market emerging alongside our traditional value chain."

RWE's share price has lost one-third of its value over the last three years due to the European energy transition and the company now looks to be addressing the possibility of further shrinkage in the most dramatic way possible.

Meanwhile chairman of the supervisor board at RWE Innogy, Dr Fritz Vahrenholt, told Power Engineering International midweek that despite reports in the German press, "there is no RWE strategy to transform its business completely to renewables. The last target for renewables was 25 percent of the capacity (not production) in 2025. Today 95 percent of the power is conventional. But because of the devastation of the market many of the power stations are out of money.”

"RWE is shifting their activities to sales, trading and decentralized power."

Handelsblatt appears to back up his contention that there will remain a proportion of the business dedicated to conventional power, even if RWE Chief Executive Peter Terium wants no further investments in fossil-fuelled powered plants, according to the German daily.

"In 2020, conventional forms of power generation should contribute no more than one fifth of the operating result”, according to Mr. Terium's plans, the article says. He also wants to develop new business models for decentralized power distribution, Handelsblatt reports.

This article was originally published on Power Engineering International and was republished with permission.

RELATED ARTICLES

Intersolar Europe 2015: Spirits Up, Stats Down

William P. Hirshman, Contributor Intersolar Europe, billed at the world’s leading exhibition for the solar industry, is indeed big. But Intersolar Europe 2015, one of five Intersolar-branded gatherings around the globe each year, was not as large as the an...
US Capitol

Republicans and Democrats Back Bill to Level the Playing Field for Renewable Energy

Vince Font, Contributing Editor U.S. Senators Chris Coons and Jerry Moran are leading a bipartisan effort to reintroduce tax code legislation aimed at leveling the playing field for renewable energy investment. The Master Limited Partnerships Parity Act w...
Solar thermal desalination

Solar Thermal Desalination Now Underway in Water-hungry California

Susan Kraemer, Correspondent Regional droughts are being exacerbated by climate change, which is mostly caused by what is tasked with bailing them out — fossil fuels. Israel, Australia, and now southern California have all turned to expensive energy-gu...
Memo pad on table

IRS Issues Solar Tax Equity Memo Stating the Obvious

David Burton and Richard Page, Akin Gump On Friday, the IRS issued a heavily redacted Chief Counsel Advice (“CCA”) memorandum, that addresses the intersection of solar investment tax credit partnership flip transactions and the wind production tax credit part...
Diarmaid Williams is based in PennWell’s UK office and holds the position of International Digital Editor for Power Engineering International and Cogeneration & On-site Power Production web sites. Prior to joining Pennwell, Diarmaid was Deputy Ed...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 3
1505REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

CanWEA Winter Solstice Fundraising Dinner

CanWEA Winter Solstice Fundraising Dinner December 1, 2015 Toronto, Ontario

CanWEA Annual Conference and Exhibition

The annual CanWEA Conference & Exhibition has helped companies marke...

COMPANY BLOGS

More Middle-Class Massachusetts Residents Are Going Solar

Massachusetts is known for the Pilgrims, Boston cream pie and its excell...

Harnessing Emotions

Think about how you interact with your prospects. Are you going from the...

The Industry 5: A Round Up of Top Solar Stories From February

February saw several big stories in the solar industry. From record-brea...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS