German Power Giant RWE Risks Becoming “Largest Bankruptcy In German Business History”!

Germany’s “Energiewende” (transition to renewable energies) is threatening to cause widespread economic havoc.

Not only have almost every major solar manufacturing company in Germany gone bankrupt, leaving economic blight in its wake, now traditional power giants, which hire tens of thousands of skilled workers, are threatened by bankruptcy.

Today German flagship daily Frankfurter Allgemeine Zeitung (FAZ) reports here that the country’s largest power company, RWE, now faces bankruptcy in the wake of the post Fukushima Energiewende, where the German government forced the immediate shutdown of nuclear power plants in a panicked reaction to the Japanese disaster.

For RWE this meant an immediate shutdown of some 25% of its assets. The FAZ writes that since Fukushima, RWE has lost a whopping 70% of its value.

The situation is hardly better at competitor E On, whose share price has fallen 58% since Fukushima.

The title of the FAZ article is “The last days of RWE” and writes that “Germany’s largest power producer has become a bankruptcy candidate“.

Currently RWE has “45 billion euros in long-term liabilities, 8 times its equity“, the FAZ reports.

The FAZ also writes that its British subsidiary company, which represents more than 20% of the company’s sales, is bleeding money as missteps resulted in hundreds of thousands of customers running from the power giant.

Another huge problem are that conventional power plants are losing money due to an oversupply from wind and solar power. The FAZ writes:

The rash installation of wind and solar power has led to an oversupply on the power market, with the wholesale price per megawatt-hour of electricity dropping by one half since Fukushima. The RWE management is thus implementing one savings plan after the another. Even the urgently needed investments in wind and solar energy have been slashed.”

The massive financial woes of the power giant could end up being “the largest bankruptcy in German business history“, reports the FAZ.

But in the end RWE is a power company that is to big to fail, and so the FAZ writes that if push comes to shove, the state will have to intervene and bail out the company. Otherwise there would be “chaos on the power market“. Once again the lowly consumers would be asked to reach ever deeper into their pockets.

That’s how the socialist system works in Europe: Socialize the pain, privatize the profits.

 

55 responses to “German Power Giant RWE Risks Becoming “Largest Bankruptcy In German Business History”!”

  1. Bernd Felsche

    Not sure how any German government can bail out RWE without raising the ire of the EU.

    The willingness of German industrial giants kow-tow-ing to political masters; to abide by arbitrary rules without challenging them with hard facts; in the courts, in the media and through their employees can only be a reflection of the lack of technical competence and confidence amongst those in the board rooms.

    1. A C Osborn

      Well said sir!

    2. DirkH

      Well RWE was a state-owned company still in the 70ies. They never arose as a competitive industry leader but got privatized as a gargantuan state-fed company. So who would expect them to survive business shakeups.

      Similarly for EON, they stem from the public utility Bayernwerk IIRC.

    3. stan stendera

      +1776

  2. Politisk vändning i England och Tyskland - Stockholmsinitiativet - Klimatupplysningen

    […] För ett par veckor sedan så röstade Tysklands riksdag igenom ett förslag om att sätta ett tak på subventionerna till vindkraften. Statens finanser har tydligen sina gränser även i Angelika Merkels värld. Ja, man planerar t.o.m. att minska produktionen från vind med 6000 megawatt till 2019. Ändå kommer subventionerna att kosta hissnande $ 1 100 miljarder. De tyska konsumenterna får betala 39 cent per kilowattimme, jämfört med 10,4 cent för amerikanarna. Även energibolagen går knackigt. (se även här) […]

  3. John

    My Swedish is not so good, so I used G-translate:

    A couple of weeks ago, Germany’s parliament voted through a proposal to put a cap on subsidies for wind power. Government finances apparently has its limits even in Mrs Merkel’s world. Yes, planning inclusive to reduce production from wind by 6000 megawatts by 2019. Nevertheless, the subsidies cost a staggering $ 1100 billion. German consumers pay 39 cents per kilowatt hour, compared to 10.4 cents for the Americans. While energy companies is shaky

    1. DirkH

      Germans pay 25.6 Eurocents / kWh.
      As to Americans, go to California to pay about as much to PG&E.
      A third area with similar prices is Melbourne.
      All three of these areas are ruled by Left-Green Madmen (to which Merkel belongs – she turned the CDU into a left-green party.)

      1. stan stendera

        From my vantage point in America I simply do not understand how Mrs. Merkel survives. She has flooded Germany with Muslims who are raping German women. She spearheaded the shift to so called renewable energy which threatens to bankrupt the German economy. She is from the former East Germany and, indeed, seems to has worked for the notorious East German police. I rest my case.

        1. stan stendera

          Drat. has =have. I need to go to my eye vet.

        2. WP

          From my next door view in the Swiss Alps, I could not agree more. To hold on to power, she also crushed her former loyal allies, the Fdp, without blinking, adopted a Socialist agenda, minimum wages etc., formed a grand coalition, in effect gagging opposition, a construct not unlike the system educated her, the old Gdr. Now I stop here for the reasons why the Germans accept, for the time being, such a mutilated idea of democracy – too far off topic…

        3. DirkH

          stan stendera 16. July 2016 at 4:43 AM | Permalink | Reply
          “From my vantage point in America I simply do not understand how Mrs. Merkel survives.”

          Look to youtube for Stefan Molyneux and Black Pigeon Speaks, for their remarks about how women vote. Women vote for the welfare state, they invite foreign male invaders, they don’t defend nations.

          SPD and CDU are both 20% parties (the bavarian sister party CSU adds another 10%). So, their voters, which we call “Gutmenschen” (Goodmen) in German, are at this time mostly women who want more social transfers – the higher the social transfers the easier it becomes for them to maintain their standard of living independent of a husband’s income.

          1. stan stendera

            It is a fact that Obama won both elections because of the vote of women. If the female numbers had reversed in either election he would have not won.

          2. yonason

            @stan stendera

            Obama won, as do many Democrats, by massive voter fraud.
            https://obamavoterfraud.blogspot.com/

            http://www.americanthinker.com/articles/2012/12/how_chicago_and_obama_globalized_voter_id_fraud.html

            They are scum of the earth. No wonder Greenies love ’em.

  4. sod

    “Nevertheless, the subsidies cost a staggering $ 1100 billion. ”

    No, they do not. Please stop making up these kind of numbers.

    even the conservative “WiWo” is having doubts:

    http://www.wiwo.de/technologie/green/1-billion-wo-sich-altmaier-bei-der-energiewende-verrechnet/13545494.html

    “German consumers pay 39 cents per kilowatt hour, compared to 10.4 cents for the Americans.”

    yeah, but the american household is also using 3 times the amount of a german one. So basically we pay the same price.

    http://shrinkthatfootprint.com/wp-content/uploads/2013/02/household1.gif

    1. JustAnOldGuy

      Brilliant! And you know you could achieve the same ‘economy’ in your food budget, sod. Just leave about 3/4 of the groceries you buy at the store. It’s hard to believe that paying more for less is a good thing but it must be true otherwise there’d be no point in bragging about it. Of course there is a historical precedent for this sort of behavior in European history. I’m thinking of the Flagellants who scourged themselves to defeat the plague. Renewables are to energy what whips are to bacteria. In other words – if you’ll pardon a New World expression – they’re doodely poop.

      1. yonason

        “doodely poop” – JustAnOldGuy

        You have distilled sod down to his/her/it’s essence.

      2. sod

        ” It’s hard to believe that paying more for less is a good thing but it must be true otherwise there’d be no point in bragging about it. ”

        We are talking about electricity. you do not have any advantage of using more of it.

        The same is true for gasoline. American cars use more of it, but what is the advantage?

        Basically we are living on the same level of lifestyle, but the american one consumes much more energy.

        The main reason is wasting energy.

        and this is of course linked to the price of gas and electricity (when the price is higher, you waste less).

        1. DirkH

          “We are talking about electricity. you do not have any advantage of using more of it. ”

          Sod, there’s 3 computers running here in my lair at the moment. I could do stuff on one but I derive a nonzero marginal use value from running several of them.

          Also I have two lamps on. I could still see with one of them but the lighting’s better with two.

          I know, I sound silly, because I try to talk to you as if you had an ounce of sense.

        2. JustAnOldGuy

          I’m little late in replying but I’ll go ahead anyway. Regarding using more electricity. There is a definite advantage in using more of it. It is doing more in my household. I put it to work keeping things cold, making things warm, washing and drying clothes, cleaning dishes and utensils conducting ‘international’ debates, and, at this point I can afford to keep it busy without careful calculations about how much month will be left at the end of my money. I’ve got about 3 month’s worth of food in my freezer, another week’s worth in my fridge and about 2 month’s worth that I’ve canned in my pantry. I’m not extravagant in my consumption of it. My thermostat is set to cool at 75F and heat at 68F. If I leave a room I ‘outen’ the lights. My location requires air conditioning in the summer and heat in the winter if I want to stay healthy and comfortable. As far as gasoline goes (pun intended), yes we use more of it than Germany. We also have several states that are significantly larger than the entire country of Germany. For example my daughter and granddaughter also live in the USA, some 3,000 miles away from me. Do you have any relatives in Germany that are 3,000 miles away? So yeah, we use a lot of it cause we quite often have to go very far fairly quickly. I will say that I admire Europe’s rail system but on the whole I do like turning my car key better than checking timetables when I want to go somewhere on impulse. My wife likes turning her car key, too, because we sometimes go in opposite directions. When my daughter lived with us she also had her own car. Right now gas is under $2 a gallon just down the street. My home has a living room, a dinning room, a sunroom, a kitchen, a den/laundry room, 2 1/2 baths, and a two-car garage. My electric bill last month was $189 and the air conditioning ran all the time (it was 90F most days). And I do have some disposable income left. Guess what, I’m not even at the median income for this country. But I’m very comfortable because I have access to cheap, abundant energy.

    2. Tinsmith from Mars

      “yeah, but the american household is also using 3 times the amount of a german one. So basically we pay the same price.”

      I don’t mean to insult you, but your statement is insulting to anyone who has a brain endowed with basic functionality.

      We don’t pay the same price. What this means is that the Americans get three times as much KWh for the same cost.

    3. AndyG55

      ““German consumers pay 39 cents per kilowatt hour, compared to 10.4 cents for the Americans.”

      PLUS the government subsidies that can’t be spent on other USEFUL government infrastructure.

      I know that you are an IDIOT, but even you must realise that tax also comes from the consumer.

      They are paying far more than 39c/kwh

      Currently the green energy levy costs around €56 million every day. Image what USEFUL things that could be spent on

      And of course , there are the some 800,000 German homes have been disconnected from the grid – victims of what is euphemistically called “fuel poverty”.

      Back to chopping wood from the forests..

      And still Germany’s CO2 emissions CONTINUE TO CLIMB

      https://stopthesethings.com/2016/03/26/germans-face-wind-powered-economic-nightmare-ebillions-squandered-on-subsidies-as-co2-emissions-rise/

    4. AndyG55

      “yeah, but the american household is also using 3 times the amount of a german one. So basically we pay the same price.”

      What an incredibly moronic statement !!

    5. AndyG55
    6. DirkH

      ““German consumers pay 39 cents per kilowatt hour, compared to 10.4 cents for the Americans.”

      yeah, but the american household is also using 3 times the amount of a german one. So basically we pay the same price.”

      sod, you don’t even know that we pay 25 or 26 cents a kWh in Germany? Numbers really are NOT your thing, right?

      1. sod

        “sod, you don’t even know that we pay 25 or 26 cents a kWh in Germany? Numbers really are NOT your thing, right?”

        I was using the bogus number given to me.

        1. DirkH

          So you repeat any number without checking it.
          Maybe you should start THINKING about what people tell you. Like you warmunist demigods.

      2. PA
    7. stan stendera

      My God, I make what I think is a cogent comment and you follow up with this drivel. Thanks, sod, for making my comment look brilliant.

    8. David Johnson

      I am now convinced that Pierre created you in order to generate traffic on this site. No real person could be as stupid as you are!!!

    9. Beware of Geeks Bearing GIFs

      Seriously? Seriously?!?! You wrote this:

      “yeah, but the american household is also using 3 times the amount of a german one. So basically we pay the same price”

      I know you are totally engineeringly illiterate as you’ve so often proved time and time again on here, but this is really scraping that green barrel of burnt offerings.

      This is why the ideology you so blindly worship will ultimately fail because it’s supported by bien pensants such as yourself.

      In years gone by, we can all go back to this post, including you, and we can all have a great laugh at the big joke that was renewables and its blind followers, because of the vacuous emotive responses of the believers such as yourself.

      Maybe one day they’ll make a TV comedy out of it, who knows…

  5. DICK R

    The ecolunatics were allowed to get their way ,this is the result .

  6. mwhite

    “But in the end RWE is a power company that is to big to fail, and so the FAZ writes that if push comes to shove, the state will have to intervene and bail out the company.”

    But the problems that are causing yjr collapse need to be sorted out or it’ll go bust again.

  7. ed ferreira

    socialize the pain privatize the profits is the definition of fascism, not socialism. fascism is the regime where the government works hand in hand with the big money against the people. in nineteen eighty-four, of course, one can call fascism socialism, as much as believe that four plus four equals five.

    1. DirkH

      Socialism and fascism are similar organisational principles to achieve the same goal. Mussolini, the inventor of fascism, learned his trade as a socialist.
      Whether you call the top dogs in the Totalitarian state a Comrade Director, or a CEO, does that really matter that much to you? That’s just a title.

      1. yonason

        Mussolini may have coined the term “Fascism,” added some ideas of his own and tied up a some loose ends, but he got a LOT of his material from those American “Progressives” that Hillary and the other Democrats love to praise.
        http://ray-dox.blogspot.com/2006/05/american-roots-of-fascism-american.html
        Otherwise yes.

    2. yonason

      I disagree, but only slightly. Socialism may not preach that outright, but it always ends up there, so it’s a distinction without a difference, IMO. Otherwise, yeah.

  8. DirkH

    “But in the end RWE is a power company that is to big to fail, and so the FAZ writes that if push comes to shove, the state will have to intervene and bail out the company. Otherwise there would be “chaos on the power market“.”

    a) Germany has no power market. It had one, it got destroyed by the ruling CDU.
    b) The CDU is headed by an ex DDR citizen, Merkel, who probably was propaganda secretary in the FDJ (she denies this). Whether Merkel destroyed the German power market for deeply held Marxist beliefs or out of the stupidity to think she were a person capable of successful central planning we will never know.

    The destruction though has all the hallmarks of typical Marxist operations.

  9. John F. Hultquist

    On this site, about 16 months ago [2015/03/30], I wrote:
    Germany is currently on a path for base load power to be government provided.

    Had I the money and the talent, perhaps I could have made a fortune on this call.

  10. Jan_Vermeer

    Thanks for the heads-up Pierre. I am an RWE customer for electricity and natural gas through it’s Dutch subsidiary Essent (“Essent = 100% RWE”)
    Planning to stop Nuclear after Fukushima, the Energiewende are some of the more questionable German governement decisions from the last few years.

    Here is an insight in my costs for electricity

    Alle recalculated per kwH , amounts Euro

    Essent / RWE price = 0,064621
    Energy Tax = 0,1192
    My tax credit for the
    Energy tax = -0,0436
    Tax for Storage
    of Sustainable Energy = 0,0036
    subtotal = 0,189214 per kwH

    value Added Tax 21% = 0,039735
    Total = 0,228948 euro per kwH

    So we pay taxes over taxes and the governement gets away with it.

  11. Jan_Vermeer

    The above is excluding the Network costs by the way (0,055034 including VAT ) , if you add those to it: total cost : 28,3983 euro cents per kwH

    1. DirkH

      About 2 cents more than here in Germany.

  12. German Power Giant RWE Risks Becoming “Largest Bankruptcy In German Business History” | NOT A LOT OF PEOPLE KNOW THAT
  13. sod

    The new EIA report is out, and this is, what it says about the USA:

    https://assets.rbl.ms/6865711/980x.jpg

    Remember, this is a very conservative source, that was basically always wrong about renewables in the past (their future projected output and price drop of renewables was often reached 20 years before the date they projected).

    This page gives a nice overview, but also a link to the full report, in case you prefer that.

    http://www.ecowatch.com/renewable-energy-surpass-coal-and-nuclear-power-1917658952.html

    And Mother Jones has a good explanation of why fossil fuels might still be there at high levels in 2040 and a way to fight that:

    http://www.motherjones.com/politics/2016/07/fossil-fuels-increasing-climate-change

    (i think their approach is too pessimistic, as they take the EIA numbers at face value)

    The bottom line for RWE is: The future belongs to renewables, so splitting their business might be a good move. The nuclear/ coal branch has a high chance of going bankrupt, but the reason are not evil greens but simply bad business decisions taken in the past.

    1. DirkH

      “The nuclear/ coal branch has a high chance of going bankrupt, but the reason are not evil greens but simply bad business decisions taken in the past.”

      Well of course, continuing to run nuclear and coal in a regime of left-green madmen of the Greens, SPD and CDU is lunacy. They should have dived headlong into subsidy fraud – that’s the ticket in German Leech Socialism.

    2. DirkH

      “And Mother Jones has a good explanation of why fossil fuels might still be there ”

      Well won’t click the link because MJ; but OBVIOUSLY it will be there: Because solar and wind are just decoration that never made ANY fossil infrastructure redundant – after all 100% baseload has to be provided.

    3. David Walker

      Sententious, technically illiterate drivel, just like all the rest of your “contributions”.

      1. AndyG55

        “Sententious, technically illiterate drivel”

        Yep, we can be pretty sure that is what sob aims for in all his posts.

    4. PA

      And Mother Jones has a good explanation of why fossil fuels might still be there at high levels in 2040 and a way to fight that…

      Why fight fossil fuels? They’re cheap and produce CO2 which we need more of. That is win/win.

      The CSIRO study that claimed 11% more plant growth from 1982 to 2010 due to CO2 grossly underestimated the increase. If you look at areas like Lake Victoria where there was a decrease, the Tanzanians during the study period deforested 27+% of their forest acreage and burned it as firewood. If not for CO2 enhanced growth they might have denuded half their forest land.

      Renewable energy is a dirty, expensive, resource-intensive, unreliable way to produce power that no one in their right mind would use except in special circumstances. Windmill/Solar production pollution is killing 100s of thousands of Chinese, yet producing only a few percent of the worlds energy.

      Unless we raise the CO2 level to 500-600 PPM (1000 PPM would be better) the drastic reduction in land cover from conversion to urban/agricultural/biomass use is going to doom all your soft and furry little animals.

  14. Svend Ferdinandsen

    You can not compare the bankruptcy of a production company and that of a finance company.
    The first one still has the machinery, where the latter is just paper.
    The power the company produces is of some value, even if it takes some time to realize it after it is “closed”.
    If some banks looses money, they have not been as smart as they say they are, and they better learn it the hard way.
    I know a lot of ordinary peoble will be affected, but then compensate those, and not the cullprits.

    1. DirkH

      “The power the company produces is of some value, even if it takes some time to realize it after it is “closed”.”

      It most definitely has VALUE but it cannot be SOLD at a reasonable price under the German system. Because it is a parody of a market with artifically distorted prices.

      So it has NO USE to produce anything of value. What is useful in such a system is, what the Rulers WANT you to produce. If they want you to produce horse buggies – produce horse buggies.

      The SPD-CDU have made the production of base load power a ruinous business. That’s the decision of their voters. I don’t care. When blackouts become frequent here I’ll buy battery banks to keep some LED lighting and computers on. This just shifts the priorities more to leaving this madhouse. With the UK we have one more non-EU country to escape to.

      More will emerge.

  15. What the

    Who is the brain-dead sod?

    1. yonason

      There are varying opinions on that.

      Some say he’s a creation of Pierre, who denies it convincingly.

      Others elaborate equally convincingly that he’s the village idiot.

      I’ve wondered at times if he’s not an activist designed computer algorithm, which recently has been reprogrammed to be a lot more assertive, a lot more annoying, far less amusing, but just as wrong as ever.

      But, whoever he/she/it is, he always falls back on activist literature, when he’s not just making bald faced assertions that are invariably wrong.

      1. Analitik

        sod is not a creation of Pierre unless Pierre likes to waste his time posting the same drivel under the same name on US, UK and Australian sites as well as here.

        sod represents the global Marxist, green, renewables, general lobby. I have even seen renewables proponents who have some level of technical knowledge correct sod on some of his inaccuracies.

        1. yonason

          Another vote for “the village idiot.” 🙂