Britain’s largest power generator, RWE, has announced a significant reduction in its green energy investments, citing growing uncertainty surrounding US energy policy under former President Donald Trump’s net-zero policy cutbacks.
The German multinational, which provides around 15% of the UK’s electricity, has warned that its profits for the year are expected to fall below projections. In response to these challenges, RWE plans to slash planned investments by €10 billion (£8.4 billion) over the next five years.
The company emphasized that, due to the unpredictability of changes in US energy policies, it is currently “impossible to predict” the implications for the global expansion of low-carbon energy. RWE, the second-largest developer of offshore wind farms worldwide, faces significant exposure in the US market, particularly in early-stage offshore wind projects.
Approximately half of RWE’s installed renewable capacity is located in the United States, where former President Trump has actively targeted offshore wind technologies. This has heightened concerns for the company’s ongoing projects in the region.
RWE has revised its net income forecast for 2025, expecting it to range between €1.3 billion and €1.8 billion, a significant drop from €2.3 billion in 2024.
Markus Krebber, CEO of RWE, commented: “Given greater uncertainties, it is all the more important that we are even more cautious.” This decision highlights the mounting challenges posed by geopolitical risks, supply chain disruptions, and lower-than-expected returns across the energy sector.
In addition to RWE, Denmark’s Orsted has announced a 25% reduction in its 2030 investment program, impacted by rising costs and supply chain constraints. BP has similarly shifted its focus, selling off wind assets and refocusing on oil and gas.
RWE’s gas-fired power stations in the UK, which currently have a capacity of approximately seven gigawatts—enough to power 7 million to 8 million homes—have long-term plans to transition to green hydrogen or incorporate carbon capture and storage (CCS) technologies. However, these plans may now face delays due to the investment cutbacks.
RWE had previously unveiled a plan to retrofit its Staythorpe Power Station in Nottinghamshire with CCS technology, aiming to capture up to 3.7 million tonnes of CO2 annually—equivalent to removing 800,000 petrol cars from UK roads. This project would complement three other CCS initiatives at RWE’s existing power stations in Pembroke and Great Yarmouth, as well as a potential new plant in Stallingbrough.
Despite these efforts, RWE’s transition to cleaner energy remains a work in progress, as coal still accounted for 30% of the company’s global power generation last year. RWE’s seven coal-burning power stations in the Rhenish mining region near Cologne contribute significantly to its carbon footprint, emitting 75 million tonnes of CO2 last year.
The slowdown in RWE’s investments raises questions about the impact on the UK’s decarbonization efforts, especially as the company faces mounting pressure from investors to increase shareholder value. Both brokerage Morningstar and activist investor Enkraft have called for the expansion of RWE’s share buyback program, urging the company to prioritize raising value for shareholders.
“RWE lacks the credibility to generate the targeted returns with its investments. Once this trust is restored, investors will also make capital available to RWE,” Enkraft stated.
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