Germany's largest power producer RWE joined larger peer E.ON in posting forecast-beating results for the first quarter thanks to a colder winter. Ivor Bennett looks how the country's big utilities are coping with the new focus on renewables.
Many of us may not have liked it - but the cold winter has been good for some. Germany's largest power provider for example. Rising gas sales helped RWE post forecast-beating results for the first quarter, although operating profit still declined by 5.1 percent. Larger peer E.ON saw a similar boost last week - but it too is dealing with a changing environment, as are their investors, says CCLA's James Bevan. (SOUNDBITE) (English) JAMES BEVAN, CHIEF INVESTMENT OFFICER, CCLA, SAYING: "The traditional energy companies have all benefited from both bad weather but also low-energy costs over all making coal competitive relative to more traditional hydrocarbons such as crude oil. That said, I do believe that the implied and expected carbon tax system going forward is going to be extremely painful for the traditional hydrocarbon companies." Germany also gives renewable energy companies priority access to the power grid. That's meant a lot of adjustments. In March RWE warned that up to 45 percent of its conventional power stations were not making any money. As a result it sold its oil and gas unit DEA to Russian tycoon Mikhail Fridman. That helped reduce net debt by over 4 billion euros but it still owes nearly 28 billion. (SOUNDBITE) (English) JAMES BEVAN, CHIEF INVESTMENT OFFICER, CCLA, SAYING: "Pure play coal, tar sands, are both I think historic industries, they don't have a real role in portfolios going forward. In contrast, I see many oil companies now coming to the table with much more responsible and reflective expectations of how they will deploy capital." All this just six months before a global climate change summit in Paris. G7 ministers, including U.S. Energy Secretary Ernest Moniz, have been meeting to prepare. (SOUNDBITE) (English) U.S. SECRETARY OF ENERGY, ERNEST MONIZ, SAYING: "I don't want to be crazily optimistic but I do think that we are going in the right direction." There's no escaping change for Germany's traditional utilities. Berlin has also made climate a key issue of its G7 presidency.