Profits fall, but EnBW sticks to RE
German utility EnBW expects continued difficulties for its generation, trading and renewables units for the remainder of the year, but pledges to continue its strategy of building up its fledgling renewables business.
"Our aim is to play an active and significant role in helping to structure the Energiewende,” says chief executive Frank Mastiaux as the company presented a 69% plunge in first-half profits to €190.5m ($253.2m).
Although revenues from renewables rose 8.5% to €185.4m in the first half of 2013, the unit remains a sliver within EnBW's wider business, with the generation and trading divisions contributing €2.5bn of revenue.
Germany's third largest energy utility invested €99.7m in renwables in the first half, or 27% of overall investment, mainly in its Baltic 2 offshore wind project.
EnBW points to the risk of a possible reduction of feed-in tariff (FIT) payments for wind in the context of a reform of Germany’s renewable energy legislation.
Environment minister Peter Altmaier and economics minister Philipp Rösler earlier this year failed to push such a FIT cut through due to the resistance of Germany’s powerful states. But both pledged to try again to overhaul the renewables legislation after federal elections on 22 September..
Last month EnBW said it wants to spend €3.5bn on wind power alone by 2020 in order to triple its share of renewable energies from today’s 12% to 40%.
But continued large costs due to Germany’s phasing out of nuclear power will continue to weigh heavily on the company’s results and restrict its ability to invest.
"Due to new statutory requirements, especially in the nuclear energy area, we were faced with absorbing a high level of charges that negatively impacted Group net profit to a significant extent,” chief financial officer Thomas Kusterer says.
Lower prices and spreads in electricity production, as well as costs from the full auctioning of CO2 emissions allowances since the start of 2013, also pushed down earnings.
EnBW is majority owned by the state of Baden-Württemberg and regional municipalities.