LONDON/FRANKFURT (Reuters) - RWE denied on Thursday a report saying the German power firm would face nearly 1 billion euros ($1.1 billion) of losses related to its coal-fired power plants this year.
The think tank Carbon Tracker Initiative reported that four in five coal plants in the European Union were unprofitable and utilities faced losses of nearly 6.6 billion euros this year.
It said RWE faced the biggest losses, calculated at 975 million euros, equal to 6% of its market capitalization.
“The numbers and assumptions do not stand up to the facts. They are wrong and cannot form the basis for a serious assessment,” an RWE spokesman said.
RWE does not break out profit figures just for its coal-fired power plants, which fall under two divisions: European Power and Lignite & Nuclear. The units are expected to post a combined core profit of 550-750 million euros for 2019.
“If plants were not covering their cash costs we would not run them,” the spokesman said.
Several EU countries plan to phase out coal to comply with international emissions-reduction targets. Some, such as Poland, still rely on coal for most of their power generation.
Carbon Tracker Initiative said Greece’s main utility, Public Power Corp (PPC), could lose 596 million euros from its coal plants this year.
A PPC spokesperson said the number was much higher than the company’s estimate, but gave no figure. Greek Energy Minister Kostis Hatzidakis was quoted as saying the loss was seen at 300 million euros this year, up from 200 million last year.
Many coal plant operators say coal will be needed for decades to provide stable energy supplies because renewable energy is intermittent. But falling costs of renewable energy and cheaper natural gas are creating competitive alternatives.
Many coal plants would also need to install expensive technology to meet stricter EU air quality standards from 2021, while rising carbon permit prices would also increase costs, the Carbon Tracker Initiative report said.
The think tank said it had analyzed the operating economics of every coal plant in the EU.
It found hard coal generation, which has the highest carbon content, had fallen 39% this year.
The report said 84% of lignite generation, which also has a high carbon content, and 76% of hard coal generation was unprofitable, resulting in losses of 3.54 billion and 3.03 billion euros, respectively.
Across the EU, 79% of coal plants were running at a loss, it said.
“EU coal generators are haemorrhaging cash because they cannot compete with cheap renewables and gas and this will only get worse. Policymakers and investors should prepare to phase out coal by 2030 at the latest,” said Carbon Tracker’s Matt Gray, co-author of the report.
Coal plants that remain profitable include subsidized plants in Poland, efficient units in Germany and the Netherlands, and some plants in Italy, the Czech Republic and Slovenia, which benefit from high wholesale power prices, the report said.
Reporting by Nina Chestney and Christoph Steitz; Additional reporting by Angeliki Koutantou; Editing by Mark Potter, Edmund Blair and Dale Hudson
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