RWE CEO holds low electricity prices responsible for potential energy insecurity

During his speech, CEO Juergen Grossman identified the sharp decline in the number of coal-fired power plants in Germany in the past year as a growing source of worry.

“We cannot afford to make the mistake of considering climate protection in isolation. Economic efficiency and security of supply are equally important”, he argued.

Many of the abandoned plants – including the DONG Energy plant in Lubmin, GdF Suez’s Stade plant, E.ON plant in Kiel – which were previously in the pipeline met with political and local opposition due to the environmental effects entailed by dirty coal, as well a general lack of funding from banks and other stakeholders.

In response, RWE commissioned the European School of Management & Technology (ESMT) to investigate the European electricity wholesale markets. The study found that market prices for electricity were lower in Germany than in other EU member states such as France or Austria and that, crucially, prices in Germany “did not offer sufficient incentives for investment in new power plants”.

“This stresses the need for greater predictability for investments in low-carbon technology such as CCS. The EU Emission Trading Scheme (ETS) helps reduce emissions, but it is about time that industry acknowledges that the present ETS will not drive technological change at the speed and scale required. It is about time we admit that the emperor has no clothes,” said Eivind Hoff, director of Bellona Europa.

“If utilities are serious about their concern for future investments, the best way is to start an honest discussion about regulatory certainty to drive the massive investments that will be needed for the transition to a zero-carbon, and ultimately carbon-negative, power supply”, he added.