German power supplier RWE warns of 'horror scenario' for sector
The head of Germany's biggest power supplier RWE warned Wednesday of a "horror scenario" for the electricity sector as anti-coal protestors disrupted the group's annual shareholder meeting.
"We are in a difficult financial situation," RWE's chief executive Peter Terium told the meeting.
"And we can't afford further massive losses in our power station business in the long run. We don't have much time," he said.
"I don't want to cry wolf here, but if the low electricity price level becomes established for the longer term, the result will be economic collapse for conventional power generation," Terium said.
"No-one will then provide investment to ensure that there is sufficient back-up capacity in place for renewables. Security of supply in Germany would be in extreme danger.
"That's a horror scenario, and not just for the energy industry, but for Germany and for Europe as a whole," Terium warned.
Wholesale electricity prices are currently very low in Europe and competition from renewable energy sources, which receive subsidies, have pushed the conventional power generation actitivies of groups such as RWE deep into the red.
RWE notched up a year-end loss of 170 million euros ($193 million) and was forced to make writedowns on its coal-fired power plants.
As a result, RWE has decided to suspend its dividend payment to ordinary shareholders for 2015.
The municipal authorities in the Ruhr region where RWE is based hold a combined share of 24 percent in the company.
They therefore pocket a significant sum from the dividend payout. They had initially indicated they might not approve of management's actions in a traditional vote at the shareholder meeting.
"I know that the dividend proposal is not in line with your expectations. But exceptional times require exceptional measures," he said.
RWE is splitting its activities into two separate companies with conventional power generation on the one hand and renewables on the other.
Environmentalist activist groups Greenpeace and Fossil Free disrupted the start of the meeting, shouting protests as official proceedings began.
© 2016 AFP