* Group's power output seen sharply lower this year
* Brown coal generation in 2012 was boosted by a new plant
* Old, CO2-intensive capacity has now been phased out
By Vera Eckert
ESSEN, Germany, March 5 The modernisation of
German utility group RWE's brown-coal-fired power
plants makes it unlikely that Europe's biggest carbon dioxide
emitter will this year repeat its 179.8 million-tonne CO2 output
in 2012, RWE said on Tuesday.
RWE's huge demand for CO2 certificates factors in the EU's
mandatory carbon trading scheme (ETS), which requires that power
generators cover their output with emissions allowances.
"We will see lower CO2 output because we should have lower
brown-coal-to-power output this year, looking from today's point
of view," chief financial officer Bernhard Guenther told a news
conference on the release of 2012 group results.
He added the RWE group overall needed to buy relatively more
certificates for 2013, as the ETS stipulates that formerly
allocated certificates must be bought at an auction from 2013
Much of this had been bought ahead some 12 to 18 months ago
at higher CO2 prices than they were currently, he said.
By the same token, RWE had been able to sell in advance much
of 2013 power output at more lucrative prices than today's.
Nevertheless, the earnings loss arising from the ETS and
Dutch and British CO2 taxes was expected to amount to 1.2
billion euros this year, as 45 percent of its total capacity is
based on CO2-intensive coal.
"This (CO2) leaves its mark on your profit and loss
account," Guenther said.
RWE expects total 2013 earnings before interest, taxes,
depreciation and amortisation (EBITDA) of 9 billion euros.
CO2 prices in the EU have lost 45 percent of their value in
the past 12 months <0#CFI2:> due to the global economic slowdown
and little progress by nations to cut climate-harming emissions,
which helps big emitters.
But power revenues have fallen as wholesale price in the
German core market are currently near eight-year lows, due to
overcapacity and an unhindered expansion of renewable energy,
where operators are heavily subsidised.
The special effect boosting RWE's CO2 output last year was a
new brown-coal block of 2,100 megawatts (MW) at Neurath.
This began producing last summer while not all of the 16 old
150 MW blocks it is replacing were closed, helping to push up
group CO2 output up 11 percent year-on-year. The
old units were shut down by the end of December.
RWE is also still reeling from the enforced closure of its
Biblis nuclear units of 2,525 MW in 2011 in Germany's
quicker-than-planned nuclear exit, triggered by the Fukushima
disaster in Japan in 2011. Nuclear energy is virtually CO2-free.
Power production by the group rose 10 percent last year to
227.1 billion kilowatt hours (kWh) but 2013 output was forecast
to be sharply lower.
The group's shortage of carbon permits last year widened by
29 percent to 58.4 million tonnes, the annual report
showed. It had been allocated 121.4 million
tonnes of CO2 permits for free, 4.8 million more than in 2011.
(Editing by James Jukwey)