Energy company RWE's share price up amid coal exit debate and climate protests
S眉ddeutsche Zeitung
German coal plant and lignite mine operator RWE has seen its share price increase by almost 40 percent since October 2018, Victor Gojdka reports in S眉ddeutsche Zeitung. The increase came despite the fact that analysts don鈥檛 expect a strong performance from the company this year, Gojdka writes; and during a period of intense focus on the company鈥檚 coal operations, including protests to save the Hambach Forest from RWE鈥檚 plans to expand a lignite mine, and the formal recommendation from Germany鈥檚 coal commission that the country quit coal entirely by 2038. But shares have likely risen for a few reasons, writes Gojdka. First, investors are hoping for large compensation payments for power plants shut down during Germany鈥檚 coal exit. Second, they are expecting a deal with the German utility E.ON to go through. That agreement would make RWE the third largest renewable energy supplier in Europe. Under the deal announced in early 2018, RWE would take over E.ON鈥檚 renewable energy production assets while E.ON would take on RWE鈥檚 retail trade and become a major power distributor.
In 2018, RWE was subject to heavy criticism by environmental NGOs and climate activists for its plan to cut down the Hambach Forest to expand one of its lignite mines. The final, undecided details of Germany鈥檚 plan to exit coal-fired power generation, such as compensation payments and a clear phase-out timetable for individual power plants, will strongly influence the company鈥檚 business.
