RWE chief executive Peter Terium has not ruled out splitting the business in the same manner as rival E.ON as wholesale power prices continue to drop.
The company’s cost cutting measures are failing to make a sufficient impact on a $28.5bn net debt, with Terium telling reporters, “The case X has not yet occurred but at power prices of 28 euros ($31) per megawatt hour (MWh) things are slowly getting exciting. It’s becoming harder to just cut more costs.”
Reuters reports that German wholesale power prices have nearly halved since early 2012 and currently trade at 29.35 euros per MWh, squeezing margins at the group’s gas and coal-fired power plants to the point where it becomes more economical to simply shut them down.
An added burden on utilities is the German government’s insistence on them paying for the country’s nuclear phase-out.
Berlin has tasked a commission with presenting ideas on how to safeguard the up to 80 billion euros in funds by the end of January, with a public trust being one option under discussion.
RWE spokesperson Sabine Jeschke confirmed to Power Engineering International Mr Terium had ‘referred to a statement that he made earlier this year, when he said, that he cannot fully rule out a split of the business if conventional generation/power prices further deteriorate in the future. Yesterday he said that the case is not yet there, but confirmed his statement in general of power prices decreasing even further.’
Meanwhile RWE Turkey chief Markus Enke said the company is interested in renewables in Turkey (mainly solar and wind) and will look into all opportunities which might include Enerjisa, a Turkish joint venture of E.ON and Sabanci Holding.