RWE to reduce power generation business

• 11 years ago (2013-01-26)
• David Flin

Europe 1061 Nuclear 640

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Germany’s move to exit nuclear power and shift to renewables within the next decade has caused the country’s second largest utility, RWE, to fundamentally rethink its business.

In an interview at the World Economic Forum, Peter Terium, Chief Executive of RWE, described how the company will change its model over the next few years, including a significant reduction in its power generation business. It will also strengthen its energy services business to cope with the consequences of Germany’s energy policy. He said that as a consequence, the company’s revenue mix will change as power generation will contribute less in the future. “It is too early to tell the exact future revenue mix as we can’t tell if the share of electricity production will fall to say 20 per cent, or maybe lower.” Currently, it is around 40 per cent.

Leo Bimbaum, Executive Board Member at RWE, said: “The power generation business is coming under pressure. We’ll of course lose revenue here, so we have to find new business models.”

In order to compensate for shrinking revenues from electricity generation, Terium said that the company wants to increase its energy management and other services operations.