Renewables investments 'paying off' for RWE as wind peps up earnings

RWE claimed its growing investments in renewables are ”paying off” as improved wind conditions and new renewables capacity boosted its performance in a first quarter when earnings from other segments dipped sharply.

RWE reported first quarter adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of €1.7bn ($1.8bn), down from €2.3bn in the same quarter last year, while adjusted net income was €0.8bn, down from €1.3bn a year ago.

RWE said the overall reduction was mainly due to an “expected” dip in income from the company’s Flexible Generation business segment, which includes gas, biomass and hydro.

The decline was offset by significant increases in earnings from the Offshore Wind and the Onshore Wind/Solar business segments, according to RWE’s CFO Michael Müller.

Adjusted Ebitda for Offshore Wind amounted to €548m, up 16% on the year, due largely to improved wind conditions compared to last year.

Adjusted Ebitda for Onshore Wind/Solar was €341m, more than up 38% higher than in the first quarter last year. RWE said this was mainly due to the commissioning of new capacity but also helped by the recognition of the business activities of Con Edison Clean Energy Businesses in the US over the quarter and improved wind conditions at the European onshore sites.

'Paying off'

“This shows that our investments are paying off. In the first three months of the year, 42% of our electricity generation came from renewable sources - and we are continuing to invest massively,” Müller said.

RWE also reported net investments of €2.3bn in the first quarter of 2024, underpinning continuing portfolio expansion.

Around €1bn was attributable to the acquisition of three offshore wind development projects from Vattenfall off the east coast of the UK.

RWE also reported that investments in the construction of new wind and solar power plants were more than double those made in the first quarter last year.

RWE is currently building plants with a total capacity of 8.3GW.

These include the offshore wind projects Sofia off the UK coast with 1.4GW and Thor in Denmark with 1.1GW.

RWE claimed to be "driving forward" with the expansion of onshore wind and solar energy and the construction of new batteries with more than 100 projects under construction in Europe and the US.

RWE reported that its operating income pf €552m from its Flexible Generation segment were 53% down after "exceptionally high" margins in the same quarter last year.

The company confirmed its outlook for 2024 but admitted that it expects to close at the lower end of the forecast Ebitda and net income ranges as "electricity prices have dropped significantly since November 2023."