RWE renewables hit by Spain reforms

GERMANY: RWE Innogy, the German utility's renewables division, saw its profit contract in the first half of the year, as it was hit by the slashing of subsidies in Spain.

RWE has 460MW of wind capacity in Spain
RWE has 460MW of wind capacity in Spain

The business's operating profit came in at EUR 81 million, a slump of 26% compared with the same period last year.

While other factors also played a part, RWE said that the removal of subsidies to renewable energy projects in Spain has "imposed a huge burden" on the company. The company operates 460MW of wind capacity in the country.

However, the commissioning of new wind capacity had a positive impact on profit, the company said, highlighting the gradual commissioning of the Gwynt y Mor offshore wind farm in the UK.

RWE said that its renewables capital expenditure for 2014 to 2016 will total around EUR 1 billion. It will focus this spending on the construction of onshore and offshore wind farms.

In Germany, the Netherlands and Poland, generation of RWE's wind developments in the first six months was higher than in the same period in 2013, whereas in the UK, Spain and Italy, it was lower. This was largely due to wind levels, the company said.

RWE had previously said that it expected its renewables division to close 2014 moderately up year on year. But now it anticipates a significant decline in earnings, again partly due to the adverse Spanish regulatory environment.

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