RWE refocuses Innogy RE unit
Innogy, the renewables arm of ailing German utility RWE, has embraced a significantly altered business model that will in future see it rely more on partnerships and new revenue streams, including maintaining wind farms owned by other companies.
Amid a broader “streamlining” of the company’s business, it will also change the name of npower renewables – its UK subsidiary – to Innogy UK.
The name change is “about clarity and focus”, rather than any negative connotations the word “npower” might conjure in the public’s mind after months of bad publicity for the UK’s electricity utilities, says Julia Lynch Williams, managing director for Innogy UK.
Over the past two months RWE abandoned its plans for its 1.2GW Round 3 Atlantic Array offshore wind farm; shrank its Triton Knoll and Galloper projects; saw its proposed Nun Wood onshore wind project rejected by the UK’s Secretary of State for Communities; and announced a major staff reduction at Innogy.
Yet Paul Coffey, Innogy’s chief operating officer, insists that “renewables is still of strong interest for RWE”.
“It’s a growth business for us – in fact it’s one of the most significant growth businesses for the group going forward.”
The biggest change Innogy is undertaking across Europe is a shift from the build-own-operate model it embraced upon its establishment six years ago to something more akin to a project developer.
“RWE used to be a company that wanted to own 100% of pretty much everything it was involved in,” says Coffey. “Or at the very least the majority owner so we’d have control.”
“Well, we don’t think those ambitions are especially realistic going forward,” he says. “We need to make our money go further. So we’ll be changing that position to allow other investors to come in and join us.”
Those investors will include other utilities, green-minded municipalities, and even RWE’s own employees in some cases.
“We’ve learned a lot in recent years about the difficulties of bringing people on to share projects with us, and we think we’ve developed some good and helpful approaches to make that more successful,” Coffey says.
In another big change, Innogy also intends to become a significant provider of services to the European renewables sector.
The “outstanding” O&M operations the company has built up, particularly in the UK, would in the past have been used exclusively in-house.
“In future we want to offer those services to the market,” says Coffey.