All chips on green: RWE to spend €50B on renewables pivot by 2030

An RWE solar farm. The German utility wants to ramp up spending on fresh renewables through this decade as it pivots its strategy into clean power. Source: RWE AG

Ramping up its renewables ambitions, German utility RWE AG is upping spending and capacity targets by 2030, it said during its Nov. 15 capital markets day.

With exits from coal and nuclear power generation moving into view, the business will spend €50 billion over the course of this decade to grow offshore and onshore wind, solar, batteries, flexible generation and hydrogen capacity, it announced.

The renewables fleet will thereby double to 50 GW by 2030 in key markets Europe, North America and Asia-Pacific. New capacity will be added more rapidly, from currently 1.5 GW per year to 2.5 GW per year through the 2020s.

The pivot will boost financial performance, RWE projected. EBITDA in the core business, which excludes coal and nuclear, will more than double to €5 billion per year by 2030.

"Glasgow was an urgent call to do more, now," CEO Markus Krebber told journalists during a press conference on the day. "But the gap between plans and implementation is still way too large," he said.

Germany remains one of Europe's laggards on exiting coal, with the last closures currently planned for 2038. A faster timetable, as desired by the incoming government, can only be delivered by growing the renewables fleet faster, Krebber said. To facilitate grid stability, RWE also wants to invest in a further 2 GW of gas-fired generation, backed up with technology that will allow it to switch to hydrogen in the future.

"Hydrogen is key for the decarbonization of industry," Krebber said at the press conference. To that end, RWE is eyeing 2 GW of installed electrolyzer capacity by the end of the decade, with the first project set to be developed in Germany. RWE also wants to develop further partnerships in project development and ramp up trading of the green fuel alongside natural gas as soon as it becomes a global commodity.

The largest part of the investment program will come from cash flows from operating activities, RWE said. With low debt and solid credit metrics, RWE has sufficient financial headroom. "Our new strategy not only paints a clear picture of how our company will develop between now and 2030; it also shows that we are financially strong and will be financing our green growth with green funds," CFO Michael Müller said in a Nov. 15 statement.

To support the swift growth of renewables capacity, RWE wants to hire up to 1,000 new workers in the coming three years, from project leaders to engineers and technicians. With most utilities and developers on expansion drives, parts of the industry are already struggling to fill certain positions. Asked about challenges in building this talent pipeline, Krebber said, "These are interesting areas of work," with young people motivated to apply by the purpose as well as attractive salaries. Yet, he acknowledged the increasing demand across the industry for this talent will mean RWE will have to put in effort to recruit people.