The company’s restructuring plans are in line with Germany’s commitment to phase out the use of nuclear power.
RWE would sell 10% of the new company’s share capital in an initial public offering in late 2016 to increase capital. However, RWE will remain the majority shareholder of the new company.
The renewables division of the new company will have a portfolio with an electricity generation capacity of more than 3.5GW and will focus on wind power generation.
The subsidiary’s grid business will possess a 550,000-long distribution network, while the retail business will serve over 23 million customers in twelve European markets.
RWE’s new subsidiary will employ close to 40,000 staff members of the RWE Group’s nearly 60,000 employees.
It is expected to generate over €40bn in external revenue and €4bn in EBITDA., based on the pro-forma figures for 2015.
The parent company will, however, continue to focus on conventional power generation and energy trading. It will remain the majority shareholder of the new subsidiary for a long term.
RWE CEO Peter Terium said: "The Group’s restructuring is our response to the transformation of the European energy landscape.
"The new subsidiary will have its own access to the capital market and improve our growth prospects. At the same time, we are convinced that conventional power generation will remain an irreplaceable partner for renewable energy for decades to come. Our conventional power stations are the backup for renewables."
Meanwhile, the European Commission has approved RWE’s plans to convert its Lynemouth power plant in the UK to biomass from coal.
The approval follows confirmation that the conversion of the Lynemouth coal-fired power plant to biomass has passed EU state aid approval.
The Commission also found that the project will help in meeting EU environmental and energy goals.
The 420MW Lynemouth power station is capable of producing enough electricity to meet the needs of over 450.000 households.
Image: RWE’s new subsidiary will focus on wind power generation. Photo: courtesy of dan / FreeDigitalPhotos.net.
