RWE to become carbon-neutral by 2040
German utilities giant RWE has unveiled a new strategy to transform itself into a carbon-neutral company by 2040 by funnelling billions into renewables projects, decommissioning existing coal-fired plants and backing carbon capture and storage technology.
RWE has already slashed its carbon emissions by more than 30% over a six-year period since 2012 – a decline of more than 60 million metric tonnes of carbon. The new carbon-neutral goal would see an additional 70% reduction on existing levels achieved by 2030, leaving a 10-year window to remove the remainder.
“This presents RWE with a huge task,” the company’s chief executive Rolf Martin Schmitz said. “But we have a very clear idea of how to achieve our goal: We will phase out fossil energy sources both consistently and responsibly. We will make huge investments in wind and solar power as well as in high-capacity storage technologies.
“The new RWE is and will remain one of the major players in the electricity generation business.”
RWE has announced that it will decommission its last coal-fired power station in the UK, before taking coal-fired plants in Germany offline, following the recommendations of the Commission for Structural Change. With the Dutch Government also targeting a coal phase-out by 2030, RWE will convert its plants in Eemshaven and Amer to biomass. Alongside biomass, RWE will target green gas and storage technology for its large-scale plants.
The company will also commit €1.5bn annually in net capital expenditure on onshore and offshore wind technology and solar photovoltaic and storage solutions. Total investment could increase to between €2bn and €3bn per annum based on project partnerships.
In March 2018, RWE and E.ON agreed on a deal that would see RWE will receive E.ON’s renewables business, plus Innogy’s renewables and gas storage businesses. The renewable portfolios of these two companies will be used to turn RWE Renewables into a “global player made in Germany” with an installed capacity of more than 9GW of renewables.
Added to this are further assets with a combined capacity of 2.6GW under construction.
RWE has also estimated than just 20% of EBITDA (adjusted earnings before interest, taxes, depreciation and amortisation) will come from its conventional business. In comparison, around 60% will be earned from the renewables business, with energy trading accounting for 10%. The remaining 10% will come from financial investments, including Amprion, Kelag and E.ON.
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