The Energiewende continues to impact on Germany’s traditional electricity generators, with RWE announcing a 45 percent decline in full-year profit following a slump in power prices.

Bloomberg reports that recurrent net income, the measure used to calculate dividends, dropped to 1.28 billion euros ($1.38 billion) in 2014 from 2.31 billion euros a year earlier, according to the company report.
Peter Terium
The ongoing expansion of renewable energy has led to a collapse in wholesale electricity prices and a sustained attack on the profitability of coal, gas and nuclear power generators.

The “crisis in conventional power generation continues,” RWE Chief Executive Officer Peter Terium said in a statement. “We will focus once more on growth opportunities in the future, but without losing sight of the need for strict financial discipline.”

Operating profit from conventional power generation fell 29 per cent to 979 million euros. RWE, which achieved cost savings of 1.4 billion euros in the three years to 2014, lifted its cumulative savings target to 2 billion euros by 2017 from 1.5 billion euros by 2016. Savings reached 400 million euros last year, 250 million euros more than envisaged, it said.

RWE met its goal of financing capital expenditure and dividend payments entirely with cash flows from operations a year earlier than planned, it said.

The supervisory board of RWE last week extended Terium’s contract until 2021 to ensure “long-term continuity and reliability” as the company contends with sliding prices and surging debt.

Meanwhile rival utility E.ON is scheduled to report its annual results tomorrow.