RWE, the Essen-based energy company, has announced plans to slash its investment budget for new projects over the next five years by €10bn, reducing the total planned expenditure from €45bn to €35bn between 2025 and 2030. This decision comes despite a relatively strong performance in 2024, where operating earnings before interest, taxes, depreciation, and amortization fell by just over 25% to around €5.7bn better than the €5.5bn forecasted by analysts.
Chief Executive Markus Krebber explained that while 2024 delivered better-than-expected results, the outlook for the coming years remains challenging due to multiple headwinds. These include ongoing regulatory uncertainties, persistent supply chain bottlenecks, geopolitical risks, and higher interest rates, which together necessitate a more cautious approach to capital expenditure. Additionally, the return requirement for new projects has been increased from 8% to 8.5% to ensure sufficient profitability amid the uncertain economic environment.
In 2024, RWE invested €10bn in renewable energy projects including wind farms, solar power plants, battery storage systems, and electrolyzers, helping to achieve a record high in renewable electricity production of almost 50 terawatt hours. Despite these achievements, the company expects tougher market conditions to persist, prompting the significant reduction in its future investment plans.
RWE operates green power plants primarily in the USA, the UK, Germany, and the Netherlands, and continues to navigate a rapidly evolving energy landscape.
