RWE profits down again amid 'crisis'

Profits at German utility RWE were hammered again in the first quarter of 2014, as the company bemoaned a “crisis in conventional electricity generation”.

RWE’s operating profits fell by 18.4% to €1.91bn ($2.62bn) in the January to March period compared to the same period last year. Its net profit fell 27% to €995m.

The utility has spent the last year issuing dire warnings over the challenges it faces in a fast-changing German power industry, where wind and solar are taking an inexorably larger share of generation.

Renewables accounted for a record 27% of German consumption in Q1, it emerged last week.

RWE was also hurt by a mild winter that drove down sales volumes in its supply business, with total production down by almost 17% year-on-year.

However, those same windy, warm and sunny conditions also helped RWE’s own renewables operation, RWE Innogy.

Innogy delivered an operating profit of €97m, up 9% year-on-year, thanks to a “substantial rise” in wind output that offset the decline in income caused by reduced Spanish subsidies.

RWE is currently in the process of significantly upping its own renewables capacity by building big offshore wind farms at Gwynt y Mor in the UK and Nordsee Ost in Germany.

Yesterday fellow German utility giant E.ON said renewable energy was one of the few areas of its business to show growth in the first quarter.