Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
German Utilities Hammered in Market Favoring Renewables
German Utilities Hammered in Market Favoring Renewables
By Tino AndresenAugust 12, 2013
<snip>
RWE AG and EON SE are getting hurt by falling power prices and a shrinking market share this year. They’re set to report second-quarter earnings this week just as RBC Capital Markets said both may need to raise capital.
“Lower earnings for RWE and EON have knock-on implications for the balance sheet of both companies,” John Musk, an analyst at RBC Capital in London, said last week. “The market has yet to factor in the longer-term earnings impact of German power prices,” which have dropped about 27 percent in a year.
Across Europe and some of the U.S., utilities that a decade ago dominated markets now struggle to cope with lower prices exacerbated by subsidized renewables that don’t pay fuel costs. The pain is most acute in Germany, which led the world installing solar farms and has the largest offshore wind plans. Clean energy also has preference over fossil fuels in European wholesale markets, a job killer at traditional utilities.
EON of Dusseldorf and Essen-based RWE are considering halting coal and gas plants with capacity exceeding 20,000 megawatts and can supply 21 cities the size of Cologne, risking some of the combined workforce of more than 10,000.
“A significant part of our business model is now facing new challenges...
By Tino AndresenAugust 12, 2013
<snip>
RWE AG and EON SE are getting hurt by falling power prices and a shrinking market share this year. They’re set to report second-quarter earnings this week just as RBC Capital Markets said both may need to raise capital.
“Lower earnings for RWE and EON have knock-on implications for the balance sheet of both companies,” John Musk, an analyst at RBC Capital in London, said last week. “The market has yet to factor in the longer-term earnings impact of German power prices,” which have dropped about 27 percent in a year.
Across Europe and some of the U.S., utilities that a decade ago dominated markets now struggle to cope with lower prices exacerbated by subsidized renewables that don’t pay fuel costs. The pain is most acute in Germany, which led the world installing solar farms and has the largest offshore wind plans. Clean energy also has preference over fossil fuels in European wholesale markets, a job killer at traditional utilities.
EON of Dusseldorf and Essen-based RWE are considering halting coal and gas plants with capacity exceeding 20,000 megawatts and can supply 21 cities the size of Cologne, risking some of the combined workforce of more than 10,000.
“A significant part of our business model is now facing new challenges...
http://www.businessweek.com/news/2013-08-11/german-utilities-hammered-in-market-favoring-renewables-energy
3 replies
= new reply since forum marked as read
= new reply since forum marked as read
