RWE Doubles Down on Capital Spending as U.S. Renewable Momentum Picks Up

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Researched by Industrial Info Resources (Sugar Land, Texas)--It may be based in Europe, but RWE AG (Essen, Germany) was not immune to the effects of Winter Storm Uri in the U.S. Combined with weaker-than-average winds across Europe, these factors nearly halved the multinational energy company's profits from the same quarter in 2020. Nonetheless, RWE nearly doubled its capital spending year over year, as it expects demand for renewable-energy services--on which it has focused much of its recent acquisitions and development--to continue its growth, especially in North America. Industrial Info is tracking nearly US$35 billion worth of active RWE projects worldwide, including US$8.4 billion in the U.S.

Click on the image at right for a heat map from Industrial Info's Geolocator tool, detailing RWE's active U.S.-based projects.

RWE invested 1.04 billion euros (US$1.26 billion) in the first three months of 2021, nearly double the amount from the same period in 2020. About 963 million euros (US$1.16 billion) went toward new windfarms, solar plants and battery storage. RWE says it will "maintain this pace and invest much more during the current financial year than in 2020," although it did not offer full-year specifics.

Among the U.S.-based projects RWE is preparing for construction later this year is the US$320 million Broken Spoke Solar Farm in Camilla, Georgia, which is expected to generate 40 megawatts (MW) from 650,000 photovoltaic (PV) panels. The company also is considering the proposed Willowbrook Solar Plant near Mowrystown, Ohio, which would generate 150 MW from thin-film PV modules, although this project would not kick off until first-quarter 2022, at the earliest. Subscribers Industrial Info's Global Market Intelligence (GMI) Power Project Database can read detailed project reports for the Broken Spoke and Willowbrook.

"In the first quarter, we have taken investment decisions relating to 700 MW, mostly for projects in North America," said Michael Muller, the chief financial officer of RWE, in a recent quarterly earnings-related conference call. "More than half of this is based on solar, partly with co-located storage. Another project is the Blackjack Creek onshore windfarm, with a capacity of 240 megawatts, located in Texas. Construction work has already started in the first quarter and is due to finish at the end of the year."

Site preparation began in March on the US$250 million Blackjack Creek Windfarm near Beeville, Texas. It is set to be completed in the fourth quarter, when it is expected to generate 240 MW from 50 turbines manufactured by Nordex SE (Hamburg, Germany). Fagen Incorporated (Granite Falls, Minnesota) is serving as the balance-of-plant (BOP) contractor. Subscribers can learn more details in Industrial Info's project report.

Among RWE's other wind-energy projects in development is the two-phase Baron Windfarm in Steuben County, New York, where construction is set to begin in the third quarter and take about a year to complete. The US$203 million Phase I is expected to generate 127 MW from 30 Vestas turbines, while an estimated US$184 million Phase II would generate 76 MW from 18 Vestas turbines. Spread across the towns of Hornell, Cohocton, Dansville, Fremont and Wayland, the project is managed by Innogy Renewables, which RWE acquired last year in an asset swap with rival E.ON SE (Düsseldorf, Germany). Subscribers can learn more details in Industrial Info's project reports for Phase I and Phase II.

Muller acknowledged that February's Winter Storm Uri, which caused days-long power outages across Texas, resulted in a US$483 million loss in its Onshore Wind/Solar division, and that its wind business suffered from weaker-than-normal wind conditions in the first quarter. However, he said these losses were partly offset by "farm downs" at three of its existing windfarms in Texas, in which RWE sold equity stakes to outside investors prior to construction.

One proposed project is at the center of an intense debate over the future of offshore wind: the Aqua Ventus Offshore Windfarm near Monhegan Island, Maine, which is designed to generate 500 MW from 42 turbines. RWE is developing the project in conjunction with University of Maine. Although the project is planned for U.S. federal waters, an 11-MW demonstration project is underway in Maine's state territorial waters, which are closer to the shore line. Subscribers can read more in Industrial Info's project reports for the windfarm and its demonstration.

Participants in Maine's fishing industry, such as its famed lobster fishermen, have expressed concerns that wind-energy development in state waters could severely disrupt their business. According to NBC's Maine affiliate, lawmakers in the state legislature are considering two competing bills: One would ban any projects in state waters, and the other would impose a 10-year moratorium on wind-energy development in state waters, but keep the Aqua Ventus demonstration project operational. Maine's Governor Janet Mills (D) supports the latter proposal.

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