German energy company RWE continues to rely on US wind power

RWE CEO Markus Krebber remains committed to the US renewable energy market despite headwinds from US President Donald Trump. "Conditions remain good, especially due to the high demand for electricity in the US," the manager said at a virtual press conference on Thursday. The German energy supplier expects the expansion of onshore renewable energy in the US to continue.

After taking office in January, Trump targeted offshore wind energy in particular and opposed new projects. RWE responded by temporarily halting its offshore activities in the US. In Austria, RWE holds a significant stake in the Carinthian state utility Kelag.

US tariffs cause uncertainty

However, the tariffs introduced by Trump have caused uncertainty, Krebber admitted. The pace of investment is slowing. "When this will resolve remains to be seen." For new projects, the necessary purchases must be covered entirely in the USA – or suppliers or buyers must be found who are willing to assume a large portion of the tariff risk. CFO Michael Müller explained that ongoing projects will continue to be driven forward with investments. RWE invested €1.4 billion in the USA in the first half of the year. For the full year, it will likely be slightly less than €3 billion. The money is flowing primarily into projects for which the company had already made construction decisions last year or earlier.

Krebber pointed out that key aspects of future investment conditions are now emerging in the US. Tax incentives for renewable energy expansion are set to expire in the coming years. The so-called safe harbor regime applies in this context. "If investments have been initiated at a certain point in time, the investment conditions then in effect for the respective project continue to apply." RWE is currently awaiting further clarification regarding future new investments. These are expected in the coming weeks.

Forecast confirmed despite losses

RWE also presented figures for the first half of the year on Thursday. Despite losses, the group confirmed its forecasts for the full year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell from €2.9 billion to €2.1 billion from January to the end of June. This was due, among other things, to lower trading business and losses in green electricity production due to poorer wind conditions. The Offshore Wind division generated only €643 million in adjusted EBITDA for the first half of the year, compared to €828 million a year earlier.

Meanwhile, the expansion of the portfolio is progressing: Of the 11.2 gigawatts of plants currently under construction, RWE will commission more than three gigawatts in the second half of the year. RWE reiterated its forecast for full-year adjusted EBITDA of between €4.55 billion and €5.15 billion. Adjusted net income is expected to reach €1.3 billion and €1.8 billion. The figures did not spark any excitement on the market. The share price temporarily lost almost four percent.

APA/Reuters