Germany’s leading utility company, RWE, has announced a $10.9 billion (10 billion euros) reduction in its investment program for low-carbon energy projects. This move comes amid growing uncertainties surrounding renewable energy policies and profitability.
RWE’s ongoing renewable energy projects, which total more than 12 gigawatts (GW), are progressing as planned, according to CEO Markus Krebber. However, the company is adjusting its strategy due to challenges such as regulatory uncertainties, supply chain constraints, geopolitical risks, and rising interest rates.
In response to these higher costs and risks, RWE has raised the required return on new projects from an average of 8% to more than 8.5%. As a result, the company will reduce its investments in the coming years compared to earlier plans.
RWE now projects a net investment of $38.1 billion (35 billion euros) for the 2025 to 2030 period, a decrease of approximately $10.9 billion (10 billion euros) from previous expectations.
CEO Krebber explained, “Given the increased uncertainties in the investment environment, we have adjusted our expectations for future investments. We will invest less than originally planned through 2030 due to stricter risk management and higher return requirements.”
In November, RWE had already indicated concerns about the risks to offshore wind projects in the U.S. following the results of the U.S. elections. This uncertainty could delay the company’s offshore wind project on the U.S. East Coast, which is waiting on necessary permits.
RWE also expressed disappointment at the slower-than-expected development of the green hydrogen sector in Europe, which could impact its goal of expanding electrolyser capacity.
Despite these challenges, RWE recently secured a significant deal to supply green hydrogen to France’s TotalEnergies. The 15-year agreement, starting in 2030, is one of the largest global contracts for green hydrogen to date.
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