How the current crisis could both frustrate and accelerate Europe’s green energy goals

Alison Savas


Europe is facing an unprecedented energy crisis and by virtue of being one of Europe’s biggest energy providers, RWE is right in the middle.

Winter is coming

While the post covid rebound in late 2021 delivered the first hints of supply pressures, the ongoing conflict between Russia and Ukraine has set up a pinch point as Europe scrambles to ensure sufficient gas stores before the northern winter.

In Antipodes' latest podcast episode, I spoke with Dr Michael Muller, RWE’s CFO (RWE AG).

Dr Muller explains how the challenges of the next three months are just the beginning.

It will be a critical situation not only into the winter, through the winter, but potentially also for the next winters to come because to be very clear if you look at Europe, especially Germany, import capacities will probably take until 25/26 until they are ramped up in a way that they could fully replace Russian flows.

The Antipodes view is that, while it will certainly be challenging, Europe can muddle through the winter. And RWE plays a key role in achieving this patchwork solution and in the bigger context of safeguarding Europe’s energy supplies over the medium and long term.

While the longer-term solution is to build out renewables and reduce the dependency on Russian gas, RWE feels a responsibility to help support the economy through the current energy crisis. This may mean more emissions in the near-term but using today’s higher cash flows to accelerate their investment in renewables will bring down CO2 in the years ahead. Dr Muller is quick to point out

At RWE, to be very clear we haven't changed our strategies, so our strategy is really to exit coal as quick as possible, be carbon neutral by 2040 and build out renewables. 

Let's start with the very end

At Antipodes, we take a forward-looking view to decarbonisation and ESG and our view is that utilities that are investing in renewables should not be screened out because these companies are some of the most important pivot points to decarbonising economies. And really that's how we think about RWE.

While RWE currently generates some electricity from lignite, the company expects that by 2030 almost all of its EBITDA will come from renewable generation.

From an industry perspective Dr Muller puts it that

It doesn't help if we now penalise companies that currently have high CO2 emissions because those are the companies we need to invest in and we need to transform.

RWE’s view is that you need to ‘think from the very end’. The goal is to be carbon neutral. But as the Russian war with Ukraine has shown us, sometimes detours are needed on the path to going green. 

You can listen to the full interview with Dr Michael Muller in our latest podcast. 

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Alison Savas
Investment Director

In almost two decades of investing in equities based in Sydney and Singapore, Alison has worked through various market cycles and navigated major market events. Alison is an investment director at Antipodes and a member of the senior investment...

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