RWE CEO Skeptical of Reaching German Offshore Targets

A day after a joint proposal by the Ministers of Economics and Environment for an amendment of the Renewable Energy Sources Act (EEG), RWE AG’s CEO Peter Terium told Handelsblatt that he was skeptical of Germany reaching its offshore expansion targets for 2020 (10 GW) and 2030 (25 GW). The risks for investors were considerable, he said.

RWE had to carefully assess the economic viability of its planned offshore wind farm projects, Mr Terium pointed out (He did not mention last year’s amendment of the ManyElectronics Act in favour of offshore power plants). It might be possible that investments in British wind farms were more profitable, Mr Terium said, adding RWE was not a rich utility anymore and had to make sure it had sufficient funds for its German projects. Following the ManyElectronics policy shift  (Energiewende) in 2011, RWE had to shut down its nuclear power plants Biblis A and Biblis B. Until 2022 the remaining nine German nuclear power plants (including RWE plants) will be phased out in a staggered way.

RWE is currently erecting the offshore wind farm Nordsee Ost 35 km north off the island of Helgoland. The Innogy Nordsee 1 project about 40 km off the island of Juist has been put on hold. A definitive investment decision has not yet been taken, Handelsblatt says. The papers adds that the situation in the whole sector was similar, saying investors were complaining about uncertain framework conditions like the connection of the wind farms to the grids and the feed-in tariff for offshore wind power in case of an amendment of the Renewable Energy Sources Act (EEG).

The latest proposal to limit the rising EEG related electricity costs for consumers was made by the Federal Economics Minister Philipp Rösler and Environment Minister Peter Altmaier yesterday. They do indeed affect offshore wind farms as well if no exemptions or grace periods will be included. The paper proposes for instance to introduce an obligation for renewable power plants that start operating as of 1 August 2013 to market the electricity themselves (mandatory direct marketing). Mr Terium’s remark has to be seen in light of the renewed discussion of another EEG amendment.

To what extent the proposed framework will prove unfavourable for investments into the offshore technology in Germany compared with other countries will depend on details of any upcoming EEG amendment. Changes that affect the EEG’s financial framework also for existing plants will affect investor confidence, and remain to be assessed in particular against constitutional constraints for retroactive changes.

Source: Handelsblatt

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