HomeCoal FiredRWE chief says coal exit would threaten Germany's energy security

RWE chief says coal exit would threaten Germany’s energy security

RWE appears to be caught in Germany‘s climate-change politics this week, with shares in the firm dropping by almost 4 per cent yesterday despite the utility’s announcement of a rise in profits.

According to its Q3 results announced on Tuesday, the firm’s power supply and energy trading business turned a profit of €201m ($235m) in the first nine months of this year, a rebound from 2016’s deep losses, while overall earnings rose by 9.3 per cent to €4.18bn. à‚ 

However, the utility’s continuing operation of coal-fired power plants has raised concerns as Chancellor Angela Merkel attempts to form a coalition government that would include the Green Party. As Thursday’s deadline approaches, talks between the political parties have stalled over multiple issues including the amount of coal-fired power capacity to be decommissioned by 2020 in order to meet emissions targets.

While Merkel’s conservative CDU/CSU alliance and the FDP have proposed a plan to shut down up to 5 GW in coal-fired power capacity by 2020, the Greens say 8-10 GW must be taken offline. The conservatives and FDP say shutting down more than 5 GW would threaten Germany’s security of supply.

During RWE’s results call on Tuesday, CFO Markus Krebber (pictured) agreed with the conservatives, saying: “Exiting coal in the short term would make it impossible to continue ensuring security of supply. Replacing it in the short term with gas is unrealistic, if only for reasons related to planning, approval and construction periods.”

“Focusing on climate protection goals alone is not enough and will lead to fatal misallocations,” he added, noting that use of coal-fired power is predicted to decline anyway in the coming years.

For itself, RWE plans to shut down over 3 GW of brown coal-based power capacity over the next 12 years. The firm has also de-mothballed three gas-fired power plants since September in advance of the coming winter.