Boss of German power group RWE warns of ‘horror scenario’

Posted: April 20, 2016 by oldbrew in Energy, ideology, Uncertainty
Tags: , ,

Bumpy road ahead?[image credit: RWE]

Bumpy road ahead?[image credit: RWE]


Pursuit of short-sighted energy policies is leading Germany on a dangerous path, as DW.COM reports from the AGM of major company RWE (aka ‘npower’ in the UK). Turning a blind eye to the possibility of future reliance on renewables won’t end well, says the CEO. Will any top politicians listen to the advice?

German power group RWE endures a bruising shareholders’ meeting. Still heavily involved with coal, the energy company has caught the brunt of activists and market changes. But its CEO has fought back, making the case for non-renewable energy sources.

The hobbled RWE, Germany’s second-largest energy company, had to answer to the anger of protesters and stockholders alike during its annual general meeting on Wednesday. Environmental activists from Greenpeace and Fossil Free stormed the stage at the start of the meeting. “Your time is over,” they chanted, in response to the company’s continued generation of coal power.

“I don’t have a problem with such protests,” said RWE chief executive Peter Terium once police and security officers removed the demonstrators. “I also have children who are of an age when they are interested in protesting.” But the company’s economic concerns will be much harder to brush off.”We are in a difficult financial situation,” Terium told shareholders.

Conventional energy companies are suffering under plummeting electricity prices and growing competition from subsidized renewable energy sources. RWE lost $193 million (170 million euros) last year alone. At the meeting, Terium confirmed reports that RWE would suspend its 2015 dividend payments to ordinary shareholders, assuring that it was necessary to get the company back on track and that board’s decision was difficult but unanimous.”Exceptional times require exceptional measures,” he said.

Among those shareholders are largely cash-strapped local governments near RWE’s base in the northwestern German city of Essen. Government representatives were expected to reluctantly accept the decision. RWE is now scrambling to restructure more in line with the times. Last month, it announced its plan to cut 2,000 jobs over the next two years as it moves away from nuclear and coal power generation. And earlier this month, RWE split its operations into renewable and conventional energy groups.

‘A horror scenario’

But Terium too came to cause a stir, warning politicians that the turmoil facing conventional energy companies could have devastating effects. “We can’t afford further massive losses in our power station business in the long run,” he said.

The German government committed itself in 2011 to the phase-out of nuclear power and further promotion of renewable energy sources, as part of its policy of Energiewende, or energy transformation.

He raised the prospect of a future without any conventional power generation to back up renewable energy of rather shallow, and sometimes variable capacity. “That’s a horror scenario, and not just for the whole energy industry, but for Germany and for Europe as a whole,” he said. “We don’t have much time,” he added.

Source: German power group RWE endures a bruising shareholders′ meeting | Business | DW.COM | 20.04.2016

Comments
  1. E.M.Smith says:

    They will not be believed until blackouts are a monthly thing. Then it will force political change and a few years to fix.

    We already saw this movie in California under Democrat Grey “out” Davis. The only California Governor to ever be recalled and tossed out of office.

    Germany will be worse as they are destroying the generator capacity (not just selling them off as was in California). So longer years to fix after broken.

    Hopefully Britain can watch and learn prior to plant demolition… Maybe they ought to just mothball a few plants for a few years so folks can “learn faster” about outages…

  2. John Silver says:

    What power companies must do is to shut down all power generating for a while and then ask the people:
    Are you happy now?

  3. oldbrew says:

    GREEN ENERGY IS A COMPLETE FLOP, AS THE WORLD IS BEGINNING TO REALIZE
    http://americanelephant.wordpress.com/2016/04/20/green-energy-is-a-complete-flop-as-the-world-is-beginning-to-realize/

    Without coal AND nuclear Germany will be in serious trouble one day, unless the penny drops with its leaders.

  4. c777 says:

    Too many people influencing policy who do not understand what IT is actually is all about.
    That is the classic prelude to a disaster, I agree with @E.M Smith above, the lights have to go out first before sanity returns.
    The ensuing backlash against the Green loons will be the “fun bit”

  5. Petrossa says:

    the only horror scenario is see is charging the equivalent of currently used fossil fuel driven transport using the old and decrepit electric infrastructure in 90% of Europe. Since many years i have a small diesel generator installed in the so France because in when it gets cold or hot transformers, cables, fuses explode as soon as everyone turns on their heating/airconditioning. The brownouts are part of life. It’s absurd to believe that adding charging the majority of transport to that infrastructure will ever work out.
    Look at Germany. They put their renewables in the north, but their biggest consumers are in the south. After they found out that you need the infrastructure to transport that variable energy costs billions of dollars and many years to adapt they just dumped their surplus on the European grid.
    Leading to negative energy prices when the renewables overproduced and very expensive prices when they didn’t work at all.
    In the end electricity became much more expensive and co2 output rose exponentially due to the installation of brown coal powerplants.
    Not that co2 has anything to do with anything else but a greener world, but that’s what they wanted to obtain. Less co2 and free energy.
    Now they have 3 fold more expensive energy and way more co2 output.

  6. Oldmank says:

    Some recent news that links also to another thread: http://www.powermag.com/blog/has-ivanpah-slammed-the-door-on-concentrated-solar/

    There is something very wrong in the industry–across the board where gen plant is concerned, mainly design wise. I have learnt over the past two decades that design is many times optimised for sales pitch and not for performance. Subsidy is no excuse for under-performance.

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