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.