German power giant RWE has announced a significant scaling back of its €55bn renewable energy investment strategy, marking a pivotal shift in response to Donald Trump’s potential return to the US presidency. The company, amongst Europe’s largest power producers, has faced mounting pressure from shareholders, including activist investor Elliott, to curtail its ambitious green energy expansion.
The decision follows RWE’s substantial $7bn acquisition of Con Edison Clean Energy Business last year, which established a considerable solar and wind project portfolio in the US. Trump’s campaign promises to eliminate offshore wind projects and dismantle Biden’s Inflation Reduction Act subsidies have created uncertainty in the renewable energy sector.
RWE’s strategic retreat includes reducing net investments in green projects to €7bn for 2025-26, down from €10bn in 2024. The company has opted to initiate a share buyback programme worth €1.5bn over 18 months, a move that sparked a 7 per cent surge in its share price, elevating the Essen-based group’s market capitalisation to €24bn.
Chief Financial Officer Michael Müller acknowledged that the company’s original €55bn renewable investment target by 2030 may face delays. The shift in strategy has garnered positive reactions from investors and analysts who had previously questioned RWE’s aggressive renewable energy expansion despite uncertain returns.
Benedikt Kormaier of Enkraft Capital, a minor stakeholder in RWE, praised the decision, noting it as a prudent response to materialising risks in the US market and hydrogen sector. The company’s adjusted earnings before interest, taxes, depreciation and amortisation reached €4bn in the first nine months of the year, showing a decline from €5.7bn in the corresponding period of 2023.
The strategic pivot reflects growing concerns about the future of renewable energy investments under a potential Trump presidency, with other industry players like Siemens Energy expressing similar apprehensions about the fate of US offshore wind projects and associated tax credits.
|||
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.