RWE was hit twice by extreme weather events in 2021: In the USA it was the cold of the century, in the Rhineland the flood disaster. CEO Markus Krebber sees a need for action.
After considerable financial losses due to the cold of the century in the USA and the flood disaster in western Germany, the energy company RWE wants to protect its business more strongly against such extreme weather events.
“We have to deal with the fact that these weather effects occur more frequently,” said CEO Markus Krebber on Thursday when the half-year figures for Germany’s largest electricity producer were presented.
As a result of the flooding in the Rhineland, the RWE open-cast lignite mine in Inden, among other things, was full. An employee of an RWE partner company was killed. Krebber put the amount of damage at 35 million euros. In the meantime, however, the systems have returned to normal and the power supply to the power plants has also been restored. The damage is mainly attributable to repair work. Meter-high mud ran into the open pit.
The damage to RWE from the cold of the century in Texas at the beginning of this year is significantly higher. As a result of winter storms and freezing rain, the Group’s wind turbines in Texas temporarily failed in February. RWE therefore had to buy in electricity at extremely high prices at short notice. This had led to losses of 400 million euros.
RWE was hit by such weather phenomena twice within a year. “That’s a point where you start thinking,” said Krebber. The company has to be prepared for “the fact that these weather effects occur more frequently”. It is not only necessary to protect the systems, but also to safeguard against an electricity delivery obligation, “which cannot be fulfilled due to weather effects and which causes high economic damage”.
RWE benefited from a strong result in energy trading in the first half of the year. The problems in Texas, however, led to losses in the business with wind turbines on land and in solar energy. The adjusted operating profit (Ebitda) of 1.75 billion euros was therefore below the previous year’s level of 1.8 billion euros. On balance, however, RWE’s adjusted 870 million euros earned more than in the previous year, when 816 million euros had been achieved. Because of the strong energy trading, RWE had already raised its forecast at the end of July.
According to its own assessment, RWE has made further progress in converting electricity generation to renewable energies. In the first six months of 2021, the power producer invested 1.8 billion euros in new wind and solar systems as well as battery projects. That is twice as much as in the same period last year.
At the moment, however, electricity production at RWE is still heavily influenced by lignite and gas. As a result of the recovery in the economy and the relatively cool winter, the conventional power plants were running significantly more than in the same period last year, said Krebber. RWE generated almost 50 percent more electricity with lignite than in the first half of 2020, with gas the plus was more than 30 percent.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
