Major Slice of RWE's $47 Billion Power Investment Going International

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Researched by Industrial Info Resources (Sugar Land, Texas)--Germany's power utility RWE AG (Essen, Germany) is planning to invest $47 billion through 2013 with the majority going into expanding its international project base and the remainder to increase the efficiency of plants in Germany, where the company's main focus will remain. Cartel legislation restricts project growth opportunities in Germany, and RWE will conduct a cost-cutting plan in the country with a target of cuts amounting to $942 million by the end of 2008.

The company is looking to earn 40%-50% of operating profits in international markets by 2012. The international operations will supply 36% of the overall profits in 2008. For related information, see September 13, 2007, article - RWE Investing $13.5 Billion in Projects, Calls for Stable Energy Policy.

Russia and Turkey are major investment destinations for RWE, which is also looking at nuclear power projects in Bulgaria and Romania. The company is studying the prospects of joining with Sweden's Vattenfall to bid for the United Kingdom's nuclear power company British Energy.

The company's activity in the international renewables sector is marked by the award by RWE Innogy of a $157 million contract to Siemens (NYSE:SI) (Munich, Germany) for 33 2.3-megawatt(MW) wind turbines for windfarm projects in Suwalki and Tychowo in Poland that are scheduled for operation in the third quarter of 2009. The contract also covers the erection and commissioning of the plants. Eighteen SWT 2.3-93 turbines will installed at Suwalki and 15 at Tychowo. The two companies have agreed on a five-year service contract for the windfarms. The local company in the projects is Polish Energy Partners.

RWE has signed for another 200 MW of wind projects in the same areas. When these come into operation, the German company will have about 280 MW of installed windpower in Poland. Both RWE and Siemens see Poland as an important windpower market. The Polish Wind Energy Association estimates that more than 13,000 MW of wind power could be installed by 2020 compared with the current 300 MW fed into the national grid.

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