INTERVIEW: RWE sees tailwinds from Germany's 2030 green energy plan

RWE anticipates strong, supportive tailwinds from Germany's latest green energy reforms, but has warned of overreliance on the market to bring forward investments facing rising costs, Katja Wuenschel, the head of its onshore wind and solar unit, said.

Germany needs to install four turbines a day to reach its target of 115 GW onshore wind capacity by 2030, Wuenschel said.

"New projects are facing rising investment costs, but we need to do everything to make the RES build out happen," Wuenschel said in an interview July 28.

For its part, RWE plans to invest Eur15 billion ($15.30 billion) by 2030 in German wind, solar, battery storage, flexible generation and hydrogen assets.

"That means that even though we are currently in a high price market environment, we still need auction mechanisms to reach long-term ambitious targets in the different markets," she said.

RWE has 565 MW onshore wind capacity in Germany, but plans to expand this significantly after the country approved a reform of the EEG law targeting an 80% share of renewables in the power mix by 2030.

German wind revival

"Germany needs to pick up the pace," Wuenschel said, saying the EEG reform and a target to dedicate 2% of available land space to onshore wind was "major step ahead."

Further steps on the planning and permitting side should to be taken over the next months, with classification of renewables as "of overriding public interest" set to provide new impetus, overcoming permitting issues that saw onshore wind growth grind to a halt in 2019.

Annual growth is now slowly recovering with sector association BWE estimating up to 3 GW of additions this year.

However, about 7 GW annual net growth is required to meet 2030 targets while first-generation turbines are reaching the end of their 20-year support contracts.

"The challenge now is to manage the complex updated planning procedures as fast as possible," Wuenschel said.

Like all developers, RWE relies on local community cooperation to advance wind farm development.

"We have already successfully implemented numerous wind farms with the participation of municipalities, municipal companies and citizens," Wuenschel said.

For utility-scale solar, meanwhile, the EEG has improved framework conditions with the extension of eligible sites for auction now including 500 m corridors along motorways and railways.

Wuenschel called for better access to low-grade agricultural land for solar projects.

Growing green

To strengthen local presence, RWE, which has its roots in the Rhenish mining region of North-Rhine Westphalia, has opened seven new offices with 200 vacancies for project developers across Germany.

"Our aim is clear: RWE wants to realize every possible project in the renewable sector in Germany," Wuenschel said.

RWE's global Growing Green strategy targets some Eur50 billion gross investment to reach a 50 GW green energy portfolio across Europe, North America and the Asia-Pacific region.

Solar capacity is set to grow from 700 MW by end-June to 8 GW, said Wuenschel, whose portfolio covers the EMEA region.

Most of RWE's onshore wind capacity is currently in the US with 4.13 GW installed on a pro rata basis stemming from its asset swap with E.ON.

In Europe, the UK leads RWE's onshore wind capacity with the Netherlands, Poland, Italy, France and Sweden other significant markets.

Capture prices for European wind and solar projects in the five biggest markets have hit record highs in the first half of 2022.

Germany's daily onshore wind capture price values averaged around Eur184/MWh in H1 while solar capture prices averaged around Eur177/MWh, according to S&P Global Commodity Insights data.

RWE'S installed green capacity:

(MW* by end-June 2022)

Source: RWE (*pro rata)