German utility group RWE will not exit UK

London -German utility RWE is still comfortable investing in Britain despite the possibility of a hard Brexit when the country leaves the EU next March, says a senior executive at the company.

RWE Generation UK is the United Kingdom’s second-largest electricity generator, producing more than 10% of that country’s power.

It operates the largest fleet of gas-fired power plants in Britain, along with coal and biomass plants, and employs up to 1,600 people in the UK.

Britain is due to leave the EU on March 29, 2019, yet little about the process is clear.

There is so far no full exit deal, rivals to Prime Minister Theresa May are circling and some legislators are pushing for a second referendum.

"A hard Brexit is not good for companies on a macroeconomic level, with the possibility of economic downturn," Tom Glover, chief commercial officer at RWE Generation, said on the sidelines of the Bloomberg NEF Future of Energy Summit.

"There is operational risk from a hard Brexit, but we are still comfortable [about] investing money in the UK," said Glover. RWE was at present investing about £100m a year in Britain.

The company would like more detail from the government when it delivers its autumn budget statement later this month on carbon price plans after Brexit, Glover said.

Britain is a member of the EU’s emissions trading system (EU ETS), which charges the EU’s factories and power plants for every tonne of carbon dioxide they emit. Prices of what are known as EU carbon permits have rallied to about €21 a tonne, making it more expensive to burn fossil fuels.

However, it is not clear whether Britain will have to leave the EU ETS due to Brexit, and whether it will set up its own carbon market and link to the EU one.

In March 2018, German utility E.ON and rival RWE announced a major asset swap in which RWE’s networks and renewables business Innogy will be broken up and its assets split between E.ON and RWE.

Glover said RWE would get wind-power assets from Innogy and E.ON, becoming the world’s second-biggest offshore wind player and Europe’s third-biggest renewables player.

RWE was still working on its long-term renewables strategy. It would commit at least €1.5bn a year to renewables investment. "Exactly how and where that will be deployed will be detailed in the strategy next year … probably in the first quarter of next year," Glover said.

Reuters