German gas storage facilities are only 70 percent full, and the largest one is only one-third full. Will we make it safely through the winter nevertheless?
The levels are low for this time of year but they are not any cause for concern. RWE’s storage facilities are 91 percent full, and in other European countries the levels are also high. That’s enough for a normal winter.
How will gas prices develop going forward?
The gas market continues to expect no supply to come from Russia and that this winter will be an averagely cold one. Gas prices on the wholesale market are likely to remain stable at around €30 per megawatt hour, which means we have come back to a more normal level after the record prices seen in 2022 (over €300 per MWh). But they are still higher than before the energy crisis.
Germany gets one third of its gas from Norway, which makes the country as important to us as Russia used to be. Is that risky?
Norway is an important and reliable partner. But it is important to also have alternatives, and not depend on one supply. At the same time it is important to protect the critical infrastructure, the pipelines.
Will the Nord Stream pipelines ever become operational again? Saxony’s Minister President Kretschmer is calling for talks with Russia.
Russia first has to stop its attacks; reliable peace and safety guarantees for Ukraine have to be in place before economic topics can be addressed. At the end of the day, it’s a political issue.
Minister Reiche is about to present the monitoring report on the energy transition. The report on security of supply has just been published. What are your hopes in this regard?
When it comes to the monitoring report it’s good that there are pauses to take stock and to see if the current targets and measures need to be fine-tuned. Regarding security of supply, we need gas-fired power stations when the wind isn’t blowing and the sun isn’t shining. We expect swift clarity around how the federal government intends to incentivise construction. Ideally, it would immediately publish an invitation to bid for ten gigawatts in a competitive process by which the cheapest bidder is awarded the tender. We expect this security of supply to cost around 0.2 cents per kilowatt hour, that’s less than one percent of the electricity price. We have to start building quickly – also to enable the coal exit. RWE plans to build three gigawatts of gas units at current coal locations in North Rhine-Westphalia (NRW).
Hasn’t the exit from coal in NRW by 2030 been an illusion for some time now?
We will stop producing lignite in NRW on 31 March 2030. That is what we agreed with the federal government and the state. Starting in 2026, the politicians will review the situation. If they then think that lignite is still necessary as a reserve, we will be available. But in that case the government must organise the reserve as well as pay for the necessary CO2 certificates. We will then only operate the plants on behalf of the government in return for reimbursement of the costs.
Would continued operation be possible?
We have made our plans with a view to shutting the plants down in 2030. A reserve would be possible for a further three years. That’s what we assured the politicians and it was part of the exit 2030 contract.
What would that mean for the workforce?
We currently have around 6,000 people still working in lignite. By 2030 that number will sink to around 2,000. For our workforce it is important to be able to plan. Should politicians decide that a reserve is necessary after 2030, we would have to see whether our plans need to be changed.
Energy Minister Katherina Reiche recently took part in a meeting of the European Nuclear Alliance. Is nuclear power an option again for Germany after all?
As a child I would look across the Rhine and see how vehemently opponents and supporters were demonstrating in Kalkar. For any technology there has to be social acceptance. I don’t see that in Germany to a sufficient extent for the billions that would be necessary to invest in nuclear power. We are through with the topic of nuclear power in Germany. Our German nuclear power stations are being dismantled.
Is RWE watching how nuclear power is developing?
We look at all existing and new technologies in electricity generation. That includes the development of fusion technology and the small modular reactors being planned in the US. Whether investment is possible in the coming decades in Germany is a question of social acceptance and prevailing political conditions.
In the past there were concerns about an electricity gap. How much electricity do we need in Germany going forward?
We need a reality check regarding expected electricity demand. It is overestimated in the current expansion targets for the network and renewables. Electricity demand from industry is significantly below forecasts, much less hydrogen will be produced by electricity than expected. The plans to expand the network and green electricity should align with that. The energy transition must become more efficient.
In the US, Trump has terminated subsidies for offshore wind farms. Does RWE plan to invest there?
We are currently building plants in the US amounting to $6 billion – onshore wind farms, solar plants, storage facilities. The only thing we have put on ice is the plans for our offshore wind farm that is to supply electricity for the city of New York. We hadn’t made the investment decision yet. We are awaiting further developments. The sites have been leased until 2060.
Is the US still attractive to RWE?
Yes, especially in the US electricity demand is showing a very dynamic trend. The US, Germany and the UK are our three largest markets. And we plan to keep it that way.
You studied in Pennsylvania yourself. How do you see the US under Trump, who is rebuilding the country as an autocracy?
The US is and will remain a great country. The mid-term elections next year are likely to decide how things will be going forward. Will voters put limits on Trump or will they support the direction he is taking?
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