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Energy giant RWE lists first losses in 60 years

Germany's second-biggest power supplier, RWE, unveiled on Tuesday losses of almost €2.8 billion - its first full-year loss in more than 60 years as it grapples with the crisis in conventional electricity generation.

Published: 4 March 2014 08:29 CET

Energy giant RWE lists first losses in 60 years

Photo: DPA

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And RWE warned its earnings would deteriorate further this year.

The power giant said in a statement that write-downs on its conventional power plants pushed it into net loss of €2.757 billion in 2013.

Underlying or operating profit fell by 8.3 percent to €5.881 billion while revenues edged up 1.6 percent to €54.07 billion.

"The difficult earnings situation in conventional electricity generation in Europe is clearly reflected in our 2013 results," the statement said.

"This is attributable to impairment losses of some €4.8 billion, which we had to recognise for the full year, mainly in respect of our power plant fleet."

RWE has been hit hard by the energy transition currently underway in Europe. Its fossil fuel activities are making losses and it is slashing jobs as a result.

Adjusted for one-off charges, RWE's so-called "recurrent" net profit fell by 5.8 percent to 2.3 billion euros in 2013.

Looking ahead, RWE said earnings will decline again this year.

"As announced in November 2013, we expect to experience a further substantial decrease in earnings in 2014," RWE said.

It said it is pencilling in operating result of €4.5-€4.9 billion and recurrent net profit of €1.3-€1.5 billion.

SEE ALSO: Solar energy jobs halve in two years

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'No longer pushing the burden into future': German govt approves more ambitious climate targets

German environment minister Svenja Schulze holding up the country's new emissions targets at a press conference on Wednesday. Photo: picture alliance/dpa | Kay Nietfeld

“We are setting the framework for the next years and decades,” said Environment Minister Svenja Schulze, adding that the reform was a “fair offer to the younger generations” as it “no longer pushes the burden into the future”.

In a sensational ruling last month, Germany’s Constitutional Court said the current climate protection law threatened to “irreversibly offload major emission reduction burdens” onto the period after 2030, thereby “violating the freedoms” of future generations.

READ ALSO: ‘Exclamation mark for climate protection’: How Germany is reacting to top court’s landmark ruling

Already under electoral pressure from the Green Party, which currently leads opinion polls ahead of September’s general election, the ruling left-right coalition has since moved quickly to tighten the law.

Under the new targets approved by Chancellor Angela Merkel’s cabinet on Wednesday, the government expects to slash emissions by 65 percent by 2030 compared to 1990 levels, going further than the current 55 percent reduction target

The cut will reach 88 percent by 2040, with the goal of bringing Germany to carbon neutrality by 2045, five years earlier than previously expected. Schulze added that Germany would also now aim to record negative emissions from 2050 onwards, by absorbing more greenhouse gases than it produced.

“We are talking about nothing less than a doubling of the tempo when it comes to climate protection,” she said.

“That is a huge task, but I am optimistic,” she said, adding that the government planned to see the law through parliament before September’s elections.

Yet critics argued that even the more stringent targets did not go far enough.

Speaking to public broadcaster ARD, Green Party leader and would-be Merkel successor Annalena Baerbock urged the government to “not just name targets, but also measures with which we can reach these targets”.

In a stunt in the early hours of Wednesday morning, Greenpeace Germany projected an image onto the wall of Merkel’s office which showed the words “right to a future, climate protection now!” against a background of flames.

The group has called for further measures such as an exit from coal by 2030 and a ban on combustion engines from 2025.

Germany currently aims to phase out coal power by 2038 at the latest, though Schulze claimed Wednesday that this date could be brought forward with a sufficient expansion of renewable energies.

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