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

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