RWE Aktiengesellschaft (ETR:RWE) used its latest conference call to review 2025 performance and outline its investment and earnings targets for 2026 through 2031, highlighting a EUR 35 billion net investment plan, a higher dividend growth ambition, and a strategy centered on U.S. power generation and German flexible capacity.
2025 results hit the upper end of guidance
CEO Markus Krebber said RWE “delivered again” in 2025 despite what he described as a challenging operating backdrop that includes geopolitical tensions, evolving energy policies, and supply chain and tariff uncertainty. The company reported adjusted EBITDA of EUR 5.1 billion, reaching “the upper end of our guidance,” and adjusted net income of EUR 1.8 billion, or EUR 2.5 per share.
RWE’s leverage ratio ended 2025 at 2.1, which management said was below its guidance range and reflected, among other factors, cash inflow from the Apollo partnership related to Amprion.
Strategic milestones: capacity additions, FIDs, auctions, and partnerships
Management said RWE added 2.8 gigawatts (GW) of new capacity in 2025, “mostly in the U.S.,” and has more than 10 GW under construction across technologies and regions. In the UK’s Auction Round Seven (AR7), RWE was awarded 6.9 GW of gross capacity, supported by 20-year inflation-adjusted contracts for difference (CfDs) starting at 91.2 GBP/MWh, which management described as providing long-term secured cash flows.
Krebber said investment decisions taken in 2025 were made at attractive returns, with a weighted average internal rate of return (IRR) of 9.8% for 2025 final investment decisions (FIDs), weighted by capital expenditure.
RWE also highlighted progress on shareholder returns. The company’s EUR 1.5 billion share buyback program is “well underway,” with 34 million shares repurchased at an average price of EUR 36, and management said the program will be finalized by June.
Partnership activity was another focal point. RWE said it sold a 49% stake in the Danish Thor and German North Sea Cluster offshore wind projects to Norges Bank Investment Management, partnered with Apollo to secure funding for its 25.1% stake in Amprion, and continued its partnership with Masdar for Dogger Bank South, which has now secured CfDs in AR7. In January 2026, RWE announced a partnership with KKR for the Norfolk Vanguard East and West projects in a 50/50 joint venture, including a project financing structure intended to generate positive cash flows during construction.
2026-2031 plan: EUR 35 billion net investment and 12% annual EPS growth target
Looking ahead, RWE framed its strategy around what management called strong demand tailwinds from electrification, data centers, and AI-driven growth. Krebber cited International Energy Agency expectations of net load growth above 10% through 2030 in Europe and the U.S., and said this underpins investment needs across renewables, battery storage, and flexible gas generation.
For 2026-2031, RWE plans EUR 35 billion of net investment, targeting an average IRR of more than 8.5% and “exceptional EPS growth of 12% annually until 2031.” Management’s target for 2031 adjusted earnings per share is around EUR 4.4, alongside an adjusted operating cash flow target of EUR 7.5 billion.
RWE said it will add 25 GW of net capacity through the program, with offshore wind net cash investments reduced versus prior plans due to partnering and project-level financing, while U.S. power generation investment increases due to market attractiveness. Management emphasized flexibility in capital allocation and said share buybacks remain an option depending on market conditions and investment returns.
On balance sheet policy, management reiterated it plans to maintain discipline, aiming to stay at the lower end of its leverage range of 3.0 to 3.5 times net debt to adjusted EBITDA. During Q&A, management said its plan is “clearly based on 3.0 leverage,” while noting that higher leverage could be possible but that the company prefers a conservative posture given geopolitical uncertainty.
Investment focus areas: U.S. growth, German flexibility, disciplined offshore, and onshore renewables
U.S. power generation. RWE plans around EUR 17 billion net investment in the U.S. from 2026 to 2031, adding 9 GW of net capacity and including the first megawatts of peaking gas capacity by the end of the decade. Management pointed to strong demand growth, PPA demand at “attractive price levels,” and regulatory clarity around safe harbor tax credits through the end of the decade. The company said projects will only proceed to FID if federal permits are in place, tariff risks are mitigated, offtake is secured, and tax credits are safe-harbored.
In Q&A, RWE said U.S. gas investment through 2031 is “low,” less than 10% of the EUR 17 billion (described as “a bit north of EUR 1 billion”), with management focusing on peakers and engines rather than CCGTs. RWE said it does not intend to build gas into the merchant market, instead bundling gas with renewables and batteries to sell a more stable profile to customers, targeting contracted arrangements similar to renewables (10-15 years-plus), with an “average target” of 75% of value contracted.
Müller also provided an approximate mix for the 9 GW U.S. addition: roughly 5 GW solar, 2 GW onshore wind, and 2 GW batteries.
German flexible generation. RWE plans around EUR 9 billion net investment in German flexible generation between 2026 and 2031, adding 6 GW of net capacity. The company cited a Federal Network Agency study identifying a need for 22-36 GW of additional firm and flexible capacity and said the government plans to introduce a capacity market in phases, including auctions for 12 GW of new assets expected by late summer with commercial operation by 2031 at the latest.
RWE said it has 3 GW of “ready-to-build” gas projects with 2.7 GW of secured turbines, plus battery projects (1.6 GW under construction and 2 GW in advanced development with secured grid connections and COD until 2030). Management said its plan incorporates 3 GW of new gas build for the first tranche of German auctions, and does not include additional contributions from a future capacity market for existing capacity.
Offshore wind. RWE said its offshore program remains “well underway” with 3.1 GW under construction, including the Sofia project in the UK, which it expects to sell down at a later stage. Management said major projects are within budget and on schedule. Offshore net cash investment is expected to be around EUR 2 billion net through 2031, with partnerships and project finance covering much of the spending, and RWE targets adding 5 GW net offshore capacity by 2031.
Müller outlined offshore EBITDA expectations, assuming 2026 adjusted EBITDA of EUR 1.55 billion to EUR 2.05 billion, supported by Sofia’s commissioning in September and full earnings contribution. Further CODs are expected in 2027, including Nordsee Cluster A and Thor. RWE also noted Oranje Wind (2028) and Nordsee Cluster B (2029). By 2031, offshore adjusted EBITDA is targeted at EUR 2.15 billion to EUR 2.65 billion, while noting that some UK assets will phase out of the ROC system by then, which reduces margins in the target.
Onshore wind and solar outside the U.S. RWE said it will invest EUR 7 billion net and add 5 GW of net capacity through 2031 in onshore wind and solar outside the U.S., focusing on markets with attractive growth and offtake regimes and exiting markets that do not meet its requirements. Müller said onshore wind and solar EBITDA growth is driven mainly by organic growth plus contributions from the U.S. build-and-transfer business, targeting 2031 EBITDA of EUR 4.2 billion to EUR 4.8 billion, implying an 18% CAGR from 2026 to 2031 for that segment.
Additional upside opportunities: data center sites and market variables
RWE also discussed the potential to create value from “idle infrastructure” and grid connections amid rising data center demand. Krebber said RWE owns more than 30 potential locations in European core markets with idle infrastructure, with 10 sites in advanced development and more than 3 GW of repurposed grid connections secured or applied for. Management said any upside from these initiatives would be “on top of our earnings guidance” and emphasized it would be conservative in disclosures due to competitive sensitivity.
In response to analyst questions on return assumptions, management said it maintains prudent planning and uses 8.5% as the hurdle rate aligned with cost of capital, while noting upside could come particularly from U.S. projects and German gas plants. RWE estimated that about one-third to 40% of the EUR 35 billion capex plan is committed, with the remainder more open, particularly later-year U.S. projects and German flexible generation investments. Management also described “unproductive capex” (spend not yet contributing to earnings) as roughly EUR 9 billion to EUR 10 billion in the later years of the plan.
On near-term market conditions, Müller said commodity prices in the front month increased substantially since early March, which is an upside for the generation fleet, but noted the trading business had the weakest start into the year. Management attributed the trading weakness to positioning based on an outlook that included expectations around LNG supply and more conservative assumptions on CO2 and power prices, while also noting that open offshore positions in 2026 largely relate to pre-COD income from Sofia, Thor, and North Sea Cluster, which RWE typically does not hedge during commissioning due to production variability.
About RWE Aktiengesellschaft (ETR:RWE)
RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources in Germany, the United Kingdom, rest of Europe, North America, and internationally. It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear. The company generates wind, hydro, solar, nuclear, gas, and biomass electricity. It also trades in electricity, gas, and energy commodities; operates gas storage facilities; and engages in battery storage activities.
