RWE to cut investment amid renewables uncertainty, reports lower profit

Germany’s largest energy company, RWE, will cut investment by a fifth to around 35 billion euros (CZK 875 billion) by the end of the decade. It cited global uncertainty over the returns on solar, hydrogen and gas power plant projects. The company said this in a statement today, alongside its results for last year.

The world’s second-largest developer of offshore wind farms has also raised its required returns on new investments. They must now yield at least 8.5 percent, up from 8 percent.

„Given the greater uncertainty in the investment environment, we have raised the requirements for future investments. As a result of stricter risk management and higher return expectations, we will invest less by 2030 than we originally planned,“ said CEO Markus Krebber.

RWE’s operating profit fell by more than a quarter last year to around 5.7 billion euros. Analysts had expected an even steeper decline, however. According to the forecast from the management team led by RWE CEO, operating profit this year could range from 4.55 billion to 5.15 billion euros.

Like other companies in the sector, RWE is facing a more challenging global investment environment for renewable energy projects. Investors have been critical of the company’s approach to capital allocation for some time, Reuters reported.