Britain's largest power generator slashes renewables investment over Trump energy fears
Britain's largest power generator is to slash investment in green energy amid uncertainty generated by Donald Trump's cutbacks to net zero policies.
RWE, which produces about 15pc of the UK's power, warned its profits would be lower than expected this year and will cut planned investments by €10bn (£8.4bn) over the next five years.
The German company said it was currently 'impossible to predict' what changes in US energy policy would mean for the global expansion of low carbon energy. RWE is the world's second largest developer of offshore wind farms.
About half of RWE's installed renewable capacity is based in the United States, where Mr Trump has taken aim at offshore wind technology, an area where the company is exposed through early-stage projects.
RWE said it expected its 2025 net income to be between €1.3bn and €1.8bn, down from €2.3bn last year.
Markus Krebber, the chief executive of RWE, said: 'Given greater uncertainties, it is all the more important that we are even more cautious.'
The move underlines the impact of rising geopolitical risks, supply chain constraints and lower returns across the industry.
Denmark's Orsted has decided to cut its 2030 investment program by 25pc, as it grapples with rising costs and supply chain issues. BP has also sold off its wind assets and announced it will refocus largely on oil and gas.
RWE's UK gas-fired power stations have a capacity of about seven gigawatts – enough for 7m to 8m homes – with long-term plans to convert them to run on green hydrogen or fit them with carbon capture and storage (CCS).
However, investment in these plants may now face delays.
This year RWE announced plans to retrofit its Staythorpe Power Station near Newark, Nottinghamshire, with CCS technology, enabling the capture of up to 3.7m tonnes of CO2 annually, equivalent to removing 800,000 petrol cars from the road.
The scheme would run alongside three other CCS initiatives located at its existing power stations in Pembroke and Great Yarmouth, in addition to a potential new-build generating plant in Stallingbrough, also equipped with carbon capture technology.
RWE still has a long way to go on decarbonisation, with coal the source of about 30pc of all the power it generated worldwide last year.
It has seven power stations in the Rhenish mining region to the west of Cologne, with a capacity of about six gigawatts – enough for several million homes – that burn the fuel on a huge scale.
These were responsible for much of the 75m tonnes of CO2 emitted by RWE last year.
The impact of RWE's investment slowdown on UK decarbonisation projects remains uncertain but the company is also under pressure from some investors to spend more on share buybacks.
Brokerage Morningstar and investor Enkraft, a long-time critic of RWE's strategy, both urged the group to expand the share buyback programme as a way to raise value.
'RWE lacks the credibility to generate the targeted returns with its investments. When this trust is restored, investors will also make capital available to RWE,' Enkraft said.
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