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RWE’s renewable energy portfolio continues to grow

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The transformation of RWE is continuing at a fast pace. During 1H2021, the company invested €1.8 billion gross in new wind farms and solar plants as well as battery projects. That is twice as much as in the same period in 2021. The company currently has projects amounting to 3.9 GW under construction, which will be commissioned by the end of 2022. Thus, the portfolio will grow from 9.3 GW today to more than 13 GW by the end of 2022. In addition, it has started construction on the 1.4 GW offshore wind farm Sofia off the British coast, which is scheduled for completion in 4Q2026.

Financially, the 1H2021 was also very good. On the back of an exceptionally high earnings contribution by Supply & Trading, RWE has significantly increased its outlook for fiscal 2021.

The company is forging ahead with state-of-the-art technologies such as floating offshore, floating solar and storage. As one of the key players in setting up the hydrogen economy, it is working with partners on more than 30 projects along the value chain.

Another important element in the transformation of RWE is the rigorous phaseout of coal. The company’s last two hard coal-fired power stations in Germany have been decommissioned. For lignite, the first wave of decommissioning is in progress: at the end of 2020, three more units in the Rhenish region will be taken off the grid. As a consequence of the phaseout of coal, RWE will have to cut over 3000 jobs by the end of 2022 alone. This will be done in a socially responsible way and in close consultation with the social partners.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) of RWE Group in 1H2021 was on the previous year’s level, at €1751 million (1H2020: €1833 million). The same applies to adjusted EBIT, at €1042 million (1H2020: €1113 million). Adjusted net income was up y/y, at €870 million (1H2020: €816 million).

For fiscal 2021, the company now expects to achieve adjusted EBITDA of between €3 billion and €3.4 billion at group level, which is €350 million higher than forecast in March 2021. In the core business, adjusted EBITDA is expected to be between €2.15 billion and €2.55 billion. The range for adjusted EBIT was raised to €1.5 billion to €1.9 billion. RWE now expects its adjusted net income to be between €1.05 billion and €1.4 billion, an increase of €300 million. The dividend statement is confirmed: for the current financial year, the company still aims to increase the dividend to €0.90 per share.

In its core business with the Offshore Wind, Onshore Wind/Solar, Hydro/Biomass/Gas and Supply & Trading segments, RWE achieved adjusted EBITDA of €1206 million in 1H2021. The figure for the same period last year was €1523 million.

Offshore Wind

Adjusted EBITDA in the Offshore Wind segment was €459 million for the 1H2021, compared to €585 million for the same period in 2020. This was because wind volumes were much lower in Northern and Central Europe than the very high level witnessed a year before. For the current year, RWE expects adjusted EBITDA of between €1050 million and €1250 million for this segment.

Onshore Wind/Solar

In 1H2021, the Onshore Wind/Solar segment recorded adjusted EBITDA of minus €42 million, compared to €299 million in the same period in 2020. The extreme cold snap in Texas, US led to an earnings shortfall of approximately €400 million. Additional burdens resulted from below-average wind conditions at onshore wind farm locations in Northern and Central Europe.

Book gains from the sale of RWE’s shares in three US onshore wind farms and earnings contributions from new plants had a positive effect. For the current year, RWE expects adjusted EBITDA of between €50 million and €250 million for this segment.

Hydro/Biomass/Gas

With adjusted EBITDA of €297 million, business in the Hydro/Biomass/Gas segment was below 2020’s level of €324 million. The wood pellet production business in the US, which was sold in mid-2020, stopped contributing to earnings. In addition, earnings from electricity produced using biomass in the Netherlands fluctuate during the year. However, RWE expects to achieve higher income from biomass usage for the year as a whole. Adjusted EBITDA for this segment should lie in a range between €500 million and €600 million.

 

 

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Read the article online at: https://www.energyglobal.com/special-reports/13082021/rwes-renewable-energy-portfolio-continues-to-grow/

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