RWE renewables profits fall

GERMANY: RWE saw operating profits from its renewables division fall in 2014 due to lower generation and regulatory changes.

RWE has developed the Gwynt y Mor offshore project in UK waters
RWE has developed the Gwynt y Mor offshore project in UK waters

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The renewables business banked €186 million last year, down 8% on the previous year. RWE said that a reduction of green subsidies in Spain and lower generation due to lower wind speeds across Europe led to the fall.

This drop off in profit was despite an earlier prediction by the company that profits from the division would be "moderately above" the previous year.

Capital expenditure on renewable energy fell in 2014 to €723 million, down from €1.1 billion in 2013. The funds were largely spent on building onshore and offshore wind farms. The largest of these projects are two offshore wind farms, Gwynt y Mor (576MW), off the north coast of Wales, and Nordsee Ost (295MW) near Heligoland in the German North Sea.

The company said it intends to continue investing in renewables, with up to €1 billion earmarked this year. But RWE said it will finance new projects by reducing its stakes in existing facilities without relinquishing the majority or the operational lead.

"The advantage is that this will enable us to initiate a larger number of undertakings, making our renewables portfolio both broader and less risky," the German utility said.

RWE said that it expects profits from the renewables division to be "significantly higher" this year than in 2013. This will largely be down to the start of commercial operations at Gwynt y Mor and Nordsee Ost. On top of this, the negative effect of impairments recognised in 2014 are not expected to recur.

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