October 1, 2018 / 12:19 PM / in 19 days

RWE still comfortable investing in UK despite prospect of 'hard' Brexit - executive

LONDON (Reuters) - German utility RWE (RWEG.DE) is still comfortable investing in Britain despite the possibility of a “hard” Brexit when the country leaves the European Union next March, a senior executive at the company told Reuters on Monday.

RWE Generation UK is the country’s second-largest electricity generator, producing more than 10 percent of Britain’s power.

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

Britain is due to leave the European Union 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 lawmakers are pushing for a second referendum.

“A ‘hard’ Brexit is not good for companies on a macro-economic 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 investing money in the UK,” he said, adding that RWE invests around 100 million pounds ($130 million) a year in Britain currently.

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.

Currently Britain is a member of the EU’s emissions trading system, which charges the EU’s factories and power plants for every tonne of carbon dioxide they emit.

Prices of so-called EU carbon permits have rallied to around 21 euros ($24) 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 this year, German utility E.ON (EONGn.DE) and rival RWE announced a major asset swap. Under the deal, RWE’s networks and renewables business Innogy (IGY.DE) will be broken up and its assets split between E.ON and RWE.

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

RWE is still working on its long-term renewables strategy, which will commit at least 1.5 billion euros 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 added.

Reporting by Nina Chestney; Editing by Jan Harvey

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