Following the recent US election results, where Donald Trump secured victory, German energy giant RWE has announced adjustments to its investment strategy in offshore wind projects in the U.S., citing an increase in regulatory and political risks. Trump’s win has created concerns over potential delays in securing permits for offshore wind initiatives, particularly affecting RWE’s East Coast project, which could now face setbacks due to the shifting political climate.

In response, RWE has opted to redirect part of its capital allocation and launched a €1.5 billion share buyback program. This strategic decision comes as the company reassesses the risk-return profile of its U.S. offshore wind investments, concluding that increased uncertainty warrants a more cautious capital allocation.

Markus Krebber, CEO of RWE AG, explained, “We are committed to delivering strong returns for our shareholders and adapting to changing market conditions. If certain investment areas show increased risks, we will shift our capital accordingly.” Krebber emphasized that despite the current challenges in the U.S. offshore wind market and delays in Europe’s hydrogen economy, RWE remains focused on its long-term commitment to expanding its clean energy portfolio, both in Europe and the United States.

Financial performance and capital reallocation

RWE’s decision to repurchase shares aligns with its solid financial performance over the first three quarters of 2024. The company reported an adjusted EBITDA of €3.98 billion and an adjusted net income of €1.64 billion, supported by continued investments in renewable capacity. In the first nine months, RWE invested €6.9 billion, with most of it allocated to offshore wind projects in the North Sea and new solar and wind farms across Europe and the U.S. The company’s green power generation has grown to a record 36 terawatt hours, marking a 14% year-on-year increase.

Shift away from volatile segments

While RWE is prioritizing offshore wind and onshore wind/solar projects, it is actively reducing its reliance on segments with higher volatility and risk, such as Flexible Generation and Supply & Trading. The adjusted EBITDA for Flexible Generation dropped from €2.4 billion in 2023 to €1.4 billion in 2024, while the Supply & Trading segment recorded a decrease from €1.3 billion to €465 million. This reduction aligns with RWE’s commitment to building a stable, sustainable energy portfolio that aligns with its “Growing Green” strategy.

2024 Outlook 

RWE has slightly raised its earnings expectations for the full year, now anticipating an adjusted EBITDA between €5.2 billion and €5.8 billion. The company also confirmed its dividend target of €1.10 per share, underscoring its confidence in its financial position and commitment to shareholder value.