FRANKFURT/DUESSELDORF (Reuters) - RWE (RWEG.DE), Germany’s No.2 utility, is looking for new ways to boost its renewable power business, including partnerships with investors, according to an internal document seen by Reuters on Tuesday.
RWE plans to “develop new partnership models with financial investors” to fund renewable projects, according to the document.
Its technological focus has been on wind power, which is better suited to larger utilities due to its plant-sized parks and requires large investments.
RWE, along with other German utilities E.ON (EONGn.DE) and EnBW (EBKG.DE), has been hit hard by a steep drop in wholesale power prices and a boom in renewables, which has driven conventional power plants into loss-making territory.
RWE, which is scheduled to report nine-month results on November 14, could not immediately be reached for comment.
RWE’s “business of renewable energy will provide stable value contributions and remain the only area for growth investments”, the document says.
The company will draw on capital from third parties largely through what it calls a “capital light” approach that reduces the burden on its own balance sheet, the document says.
Renewables account for just 4 percent of RWE’s core earnings, compared with 12 percent at E.ON.
As a response to falling returns, RWE has been slashing investments, closing power plants and cutting jobs to turn its business around and lower a 35 billion euro ($48.2 billion) debt pile.
The group needs to cut more costs as earnings are set to drop dramatically, RWE Chief Executive Peter Terium was quoted as saying in a newspaper.
RWE will have to save more than the already planned 500 million euros at its power generation unit and will also need to reorganize its electricity sales business, Terium said, according to the paper.
($1 = 0.7262 euros)
Reporting by Christoph Steitz and Tom Kaeckenhoff; editing by Jane Baird