News from the bedside is not encouraging.
A surge in [German] solar and wind capacity undercut the profitability of its power plants and triggered nearly 5 billion euros in write-downs. The company said on Tuesday it had swung to a net loss of 2.76 billion euros from a profit of 1.31 billion a year earlier, its first net loss since 1949.This is one of the companies the UK government is increasingly beating up on for supposed overpricing, while simultaneously passing round the hat for vast investments towards its demented dirigiste energy plans. Perhaps someone in Whitehall will realise that the three components in this puzzle - pressure on revenues, expectations of huge capital investments, and a sickly balance sheet - do not readily snap together into a neat jig-saw.
It won't just be HMG's plans that feel the draught as the door opens for RWE to be wheeled away to intensive care. As with its German sibling Eon, RWE's share register is dominated by Stadtwerke, who rely on the hitherto healthy dividends for provision of municipal services. In mighty Essen for example (home to both RWE and Eon-Ruhrgas) the city elders are being forced to contemplate savings such as closing large chunks of the tram network as dividend income falls.
'Utility death spiral' is one of the more dramatic descriptions of what's going on. This, Ed Davey and Ed Miliband, is the real world. You can probably persist with your delusional energy policies for a little while longer. Maybe till after the Election.