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Created before Nov 2016
Last update: 2020-06-22 00:00:00
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|Sectors||Biomass Electric Power Generation, Coal Electric Power Generation, Coal Mining, Commodities Trading, Nuclear Electric Power Generation, Solar Electric Power Generation, Wind Electric Power Generation|
listed on Düsseldorf Stock Exchange & Frankfurt Stock Exchange
RWE's shareholder structure can be viewed here.
RWE is a large German energy company, founded in 1898, and is active in the generation, trading, transmission and supply of electricity and gas. It has a generation capacity of about 41 gigawatt (in 2020), of which 26.5% comes from coal power plants (lignite 21% and hard coal 5.5%). The coal share of power production of RWE is 30% (25% lignite and 5% hard coal). RWE's coal power plants are located in Germany, the United Kingdom and the Netherlands. RWE’s lignite is mainly mined from their own open-cast mines in North-Rhine Westphalia. Besides coal, RWE’s generation capacity consists of 35% gas, 7% nuclear, 25% renewables and 6% pumped storage and batteries.
What must happen
Banks should avoid providing financial services to RWE, as coal-fired power stations represent 30% of its electricity generation and the total operating capacity of its coal plants is about 11GW. RWE’s annual coal production is 84.8 million metric tons. RWE also continues to invest in new coal power and plans to keep its coal power stations operational till 2038. By doing so, RWE fails to align its business model with the goals set in the Paris Climate Agreement. (See also the Principles for Paris-aligned Financial Institutions).
Why this profile?
RWE is Europe's biggest single emitter of CO2 and therefore contributes to the acceleration of climate change. It is also threatening a socially just energy transition in one of Europe's most important economies.
Social and human rights impacts
Lignite open pit mines have swallowed entire villages and RWE has resettled 41,000 people since the 1940s. The villages are mostly resettled a few kilometers further including houses, churches and cemeteries. The Garzweiler mine - although in operation since 2006 - has caused the resettlement of six villages and the expansion threatens the existence of 12 villages that are home to 7,600 residents. Demolition of the first four villages (Unterwestrich, Oberwestrich, Kuckum and Beverath) is scheduled to begin in 2023. A number of villagers have formed an alliance under the name of 'Menschenrecht vor Bergrecht' and is resisting RWE's claim on their land in court. In addition, the villages of Mannheim and Morschenich will be resettled before 2022 and 2024, respectively, to make space for the Hambach open-cast mine which has already resettled four villages.
Environmental and climate impacts
RWE is Europe's biggest single emitter of CO2 with 69 megaton of CO2 emissions in 2020 and therefore contributes to the acceleration of climate change. In 2020 gas accounted for 35% of RWE’s generation capacity, followed by renewables (25%), lignite (21%) and hard coal (5.5%). In addition nuclear had a share of 7% and 6% of pumped storage and batteries. Besides the burning of gas, hard coal and lignite, RWE is involved in mining lignite which is the dirtiest of fossil fuels. RWE mines about 90-95 million tons of lignite each year in its three open cast mines in North-Rhine Westphalia: Garzweiler 30-35 million tons; Hambach 40 million tons and Inden 20 million tons. The company also runs several lignite power plants of which are among Europe's most polluting power plants.
In November 2015 Saúl Luciano Lliuya, a Peruvian farmer and mountain guide, filed a lawsuit against RWE with the help of Germanwatch. RWE's enormous emissions threaten Raúls family, property and a large part of his home city of Huaraz.
Since 2015 the Hambach mine has become a focus of the activist alliance Ende Gelände who use civil disobedience to stop the lignite mining. RWE's Hambach mine threatens the 12,000 year old Hambacher forest, home to an oak-hornbeam woodland and 142 species of birds, 10 species of baths and rare animals protected under EU law, such as the middle spotted woodpecker, the spring frog or the dormouse. Today only 10% of the original forest is left and RWE plans to clear 70ha a year to enable their Hambach mine to expand. Activists have occupied the forest and try to stop the clearance by means of tree houses.
RWE cancels plans for BoAplus project at Niederaussem site
In a press release, RWE has stated that it will focus on electricity generation from renewable energy sources. Consequently, the company will no longer invest in new built of coal-fired power stations. Plans for the BOAplus project, a lignite power station at the company’s site in Niederaussem in Germany, have been cancelled.
Germany's coal phase-out date of 2038 comes to early according to RWE
Germany's coal commission recommends that the country should phase-out coal by 2038, with fixed reductions in power-plant capacity by 2022 and 2030. These targets are clearly not in line with the 1.5 degree target of the Paris Climate Agreement. RWE however, says the 2038 end date is too early for the company.
RWE's controversial Hambach coal mine faces protest
RWE announced to clearcut the forest to enlarge the Hambach mine despite the negotiations happening in the coal commission for a coal phase out. The Hambach forest is occupied by activists that are resisting the clearcutting of trees and living in different villages of tree houses. Environmental NGOs declared that clearcutting the forest during coal-phase out negotations would endanger their participation in the coal commission. After the regional higher court announced to decide on the legal challenge of BUND to suspend the clearcutting season for enlargening the Hambach mine, RWE agreed yesterday to a standstill agreement until the verdict is out meaning that RWE is not allowed to clearcut the forest until Oct 14. But despite doing so RWE took advantage of the unclear situation in the previous days to destroy the ground structures of the occupation, sweeping the ground of the forest like a kitchen floor from everything that activists needs for daily subsistence.
Between 2014 and 2017 33 financial institutions loaned a total of USD 5.510 billion and provided a total of USD 3.055 billion in underwriting services to RWE. These are specified below.
In April 2019 RWE signed a EUR 5 billion credit facility with a consortium of 27 banks, including BNP Paribas and Société Générale (RWE press release).
In January 2020 RWE issued EUR 750 million in bonds (Cbonds.com). Banks involved were Banco Santander, Credit Agricole CIB, ING, LBBW, Société Générale and UniCredit. See below for more details.
The following banks are holding shares and/or bonds in RWE (February 2020): Crédit Agricole, JP Morgan Chase, Deutsche Bank, UBS, DZ Bank, BNP Paribas, Santander, Société Générale, Intesa Sanpaolo, HSBS, Skandinaviska Enskilda Banken, Credit Suisse, Nordea, Danske Bank, DNB, Goldman Sachs, Morgan Stanley, KBC Group and TB Bank. For more details see Annex II on page 36-39 of the Fool's Gold report 2020.