Restructuring for RWE, cost cutting for offshoot Innogy

RWE has started the new year with a new setup in its generation business. “We want to reposition our portfolio effectively in a changing market environment. This is why we decided last year to make our electricity generation companies more flexible, while aligning them more closely to their respective energy sources,” explained Rolf Martin Schmitz, chairman and chief executive of RWE AG.

RWE’s gas, hard coal, hydroelectric  and biomass generation business is now  within RWE Generation SE. Roger Miesen, previously responsible for gas, hard coal and biomass generation, will head the business. Tom Glover has responsibility for the commercial optimisation of the power plant fleet as managing director of RWE Supply & Trading GmbH.

Electricity production from lignite and the strategic management of nuclear energy moved to RWE Power on 1 January, headed by Frank Weigand. 

Meanwhile Innogy has stressed “financial discipline” in a new year statement. The company, spun out from RWE, which still owns 78% of Innogy shares, has seen the unexpected departure of chief executive Peter Terium.

The statement said that in 2018-2020 investment would focus on renewables, grid and retail – although in the UK the company’s retail arm, Npower, is to be merged with SSE’s retail business. Innogy added that “The Executive Board is convinced that the areas of e-mobility, broadband and solar provide attractive growth opportunities.”

But the company signalled tight financial discipline and a cost-cutting exercise. It said growth opportunities were “subject to the company’s strict investment framework and funding capacity” and promised to  review project funding “by assessing all options regarding ownership and financing structure in order to maximise value for the company and its shareholders.”

A major review of spending across all segments for the potential to deliver further cost reductions is under way and more information is expected at the company’s results presentation on 12 March.

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