RWE AG : INTERVIEW : RWE Eyes Unsubsidized Solar Power Production in South Europe
07/02/2012| 10:21am US/Eastern
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By Jan Hromadko
RWE AG (RWE.XE) intends to produce unsubsidized electricity from photovoltaic solar power plants in southern Europe by building facilities on sites of large industrial or commercial customers, the chief executive of the German utility's renewable energies unit told Dow Jones Newswires.
The move to solar energy signals a shift of paradigm from RWE's previous management. Chief Executive Juergen Grossmann--who handed over to Dutchman Peter Terium Sunday--notoriously said earlier this year that investing in solar energy in Germany is "as economic as growing pineapple in Alaska".
"We are planning to enter photovoltaic solar energy via the business-to-business segment," said Hans Buenting, CEO the renewables unit RWE Innogy.
Mr. Buenting said that RWE is interested in building solar farms, possibly in combination with other forms of renewable energies, on sites of business customers like supermarkets, which usually have high power consumption.
The power would then be sold directly to the customer, without feeding the electricity into the public power networks, said Mr. Buenting--who took charge of RWE Innogy Sunday, having acted as its finance chief since February 2008.
"This is a business model that only works in countries were solar energy already is at grid parity level, such as Spain or Italy," said Mr. Buenting.
He added, however, that it is crucial for RWE to find financially sound customers, because the company is looking for long-term partnerships.
"For us it is particularly important that we are acquiring dependable customers because we need to plan for the long-term," he said, adding that an insolvency of a customer during the operation of the solar power facility would be the last thing an operator would want.
RWE is one of Europe's largest emitters of carbon dioxide, but has been working hard over the past few years to improve its CO2 footprint by increasingly investing in renewable energies.
A recent shift in priorities saw RWE pursue a photovoltaic solar power plant in Morocco, part of the Sahara desert solar energy initiative Desertec. Mr. Buenting said that RWE is planning the construction of a 100-megawatt power plant which will combined onshore wind and solar to produce "green" electricity free of any subsidies.
"Surfers know that there are excellent wind conditions in Morocco and of course there's also a lot of sun," said Mr. Buenting
He added that RWE expects to make a final investment decision for this project next year, but declined to provide more details such as names of potential partners.
RWE is also mulling solar energy in Germany, acknowledging that component prices for this technology have fallen much more sharply in recent years than anyone at RWE had expected.
In Germany, RWE is now planning to build large utility-scale solar farms in partnership with municipal utilities.
Write to Jan Hromadko at jan.hromadko@dowjones.com
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