March 21st, 2024 | 06:45 CET
Energy in transition: RWE, Kraken Energy, and Plug Power in focus
The energy sector remains in flux. RWE was able to double its adjusted EBITDA. CEO Markus Krebber, who has been in office since 2021, is doing everything he can to make the energy giant fit for renewable energies. Under the term "Phaseout Technologies," he aims to bid farewell to nuclear energy and fossil fuels. However, nuclear energy is a low-carbon and adequate supply for many industrialized nations. There are 93 reactors in the USA alone, which account for 20% of the national energy supply. This is reason enough for Kraken Energy to explore uranium deposits in the US in order to establish the shortest possible supply chains. The US is also a pioneer in hydrogen technologies. Plug Power can, therefore, look forward to a considerable amount of government funding and is becoming a job engine...
time to read: 6 minutes
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Author:
Juliane Zielonka
ISIN:
RWE AG INH O.N. | DE0007037129 , KRAKEN ENERGY CORP | CA50075X1024 , PLUG POWER INC. DL-_01 | US72919P2020
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"[...] We can convert buses and trucks to be completely climate neutral. In doing so, we take a modular and incremental approach. That means we can work with all current vehicle types and respond to new technology and innovation [...]" Dirk Graszt, CEO, Clean Logistics SE
Author
Juliane Zielonka
Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.
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RWE exceeds expectations: Adjusted EBITDA for 2023 reaches EUR 8.4 billion
According to the annual earnings report, RWE recorded a rise in profits last year due to increased revenues in the renewable energy sector. Markus Krebber has been CEO of the energy company since 2021. He has been instrumental in driving forward the ambitious switch to renewable energies such as wind, solar and hydrogen. These forms of energy now account for around 3/4 of RWE's adjusted EBITDA. On Thursday, RWE announced an adjusted EBITDA of EUR 8.4 billion for 2023, more than double the EUR 3.7 billion in 2021.
With a green project pipeline of over 100 GW, RWE aims to add at least 30 GW of installed green power capacity by 2030. Total investment in new renewable energy projects rose to EUR 11 billion last year, compared to EUR 4.4 billion in 2022, a significant amount of which came from RWE's acquisition of Con Edison Clean Energy in the US for EUR 6.3 billion.
In addition, further investments have been made directly in new wind and solar energy projects, as well as battery storage facilities in Europe and the US. Nevertheless, RWE is forecasting a decline in earnings this year due to lower wholesale prices.
"While we are constantly looking at how we can best allocate our capital," said RWE CEO Markus Krebber in an analyst call on the annual results,* "please do not expect us to change course from one day to the next based on short-term developments." According to one trader, there were likely hopes of a clear buyback announcement. "Instead, that was rather rejected*." Investors were also put off by the cautious statements on developments in the European economy.
Revenues from the coal and nuclear energy business have declined due to the phasing out of fossil fuels. The Company also announced that its nuclear and coal business will operate under the name "Phaseout Technologies" starting this year. The dividend target remains at EUR 1.00 per share for the 2023 financial year .
Kraken Energy focuses on exploration of promising uranium deposits in the US
Around 10% of the world's electricity is generated from uranium in nuclear power plants, corresponding to around 2500 TWh per year. Worldwide, 401 nuclear reactors with a total capacity of around 390,000 megawatts are in operation in 32 countries. Around 60 more reactors are under construction, and around 100 more are being planned internationally. The leading nuclear nations are the US (93 nuclear power plants), France (56 nuclear power plants), China (54 nuclear power plants) and Russia (37 nuclear power plants). In the US, the 93 nuclear power plants generate 20% of the electricity for the entire country. France obtains around 70% of its electricity from uranium. Many entrepreneurs have experienced the value of seamless supply chains during the COVID-19 pandemic. Globally, Australia is the undisputed leader with 28% of uranium production, followed by Canada with 10% and the US with around 1%. Given the high number of nuclear power plants in the US, it makes sense to harness uranium deposits directly on site or in the immediate vicinity.
The Kraken Energy Corporation is a young energy company specializing in precious uranium deposits in the US. The Company has four high-grade uranium exploration projects in its portfolio, including the Apex Uranium Mine, which is responsible for over 50% of the total uranium production in Nevada.
The Company has now commenced drilling at the Harts Point Uranium property in San Juan County, Utah. The Phase I drilling program will test the uranium-bearing rocks of the Chinle Formation. It will drill from two platforms to a depth of up to 1,000 meters and cover a strike length of 5 km. CEO Matthew Schwab expresses confidence in the project's progress. He emphasizes the proximity to historic uranium production sites and the existing infrastructure that ideally positions the property to discover high-grade uranium deposits.
The Harts Point Uranium property is located in a world-class uranium jurisdiction in the heart of the Colorado Plateau. Since the 1950s, this region has produced over 590 million pounds of U3O8 at a concentration of 0.2 to 0.4% U3O8. The property includes 324 lode mining claims on Bureau of Land Management (BLM) land, covering 2,622 acres. The uranium deposits on the property are tabular sandstone and range from 2 to 13 meters thick, 100 to 3,048 meters long, and 31 to 427 meters wide.
Various historic mines in the vicinity of the Harts Point property have previously produced significant quantities of uranium. In addition, the property benefits from excellent infrastructure, located approximately 64 km north of the White Mesa uranium processing plant, and is accessible from the town of Monticello, Utah.
Demand for uranium is expected to increase by approximately 160% over the next few decades. Geopolitical tensions are causing nuclear power plant operators to reduce their dependence on Russia and China. It is an ideal time for Kraken Energy Corporation to advance its exploration business.
Plug Power receives USD 75.7 million in funding from the US Department of Energy for two hydrogen projects
Plug Power will receive USD 75.7 million from the US Department of Energy for two projects to increase the production of hydrogen and hydrogen equipment. The payment is part of the Department's "Clean Hydrogen Manufacturing, Recycling and Electrolysis" program, which will award a total of USD 90.4 million to three clean hydrogen companies. Senator Chuck Schumer emphasizes the importance of this funding for promoting clean energy technologies in the US. Additionally, this initiative will create a significant number of new jobs in the renewable energy sector.
Plug Power plans to use the funds to automate processes at its proton exchange membrane (PEM) stack manufacturing facility in Rochester, New York. Another portion of the funding will also automate the production of membrane electrode assemblies (MEAs). In addition, the costs for heavy fuel cell systems are to be reduced. CEO Andy Marsh emphasizes that the funding will have "a profound impact" on the Company's manufacturing capabilities in fuel cells and electrolyser membrane electrode assemblies (MEAs) and stacks.
Plug Power released its quarterly results on March 1. The Company reported a loss of USD 1.08 per share. The net margin is -153.57%, and the return on equity is -38.09%. Sales for the first quarter amounted to USD 222.20 million compared to the targeted USD 234.21 million. In the same quarter of the previous year, the Company's loss per share amounted to USD 0.38. Sales increased by 0.7%.
Three equity analysts have a "Sell" rating on the stock, fifteen have a "Hold" rating, and seven analysts have a "Buy" rating on the stock according to Marketbeat.
Three energy companies with three different focuses: renewable energy, nuclear energy, and clean hydrogen. As one of Europe's leading energy suppliers, RWE has undergone a significant transformation in recent years under the leadership of CEO Kebber and is increasingly focusing on renewable energies such as wind, solar and hydrogen. The massive increase in adjusted EBITDA to EUR 8.4 billion in 2023 demonstrates the effectiveness of this strategy. Targeted investments in new projects and acquisitions, such as Con Edison Clean Energy in the US, are strengthening RWE's energy mix. Kraken Energy, on the other hand, is focusing on exploring promising uranium deposits in the US to meet the growing demand for uranium and enable short supply chains. The Company is positioning itself as a valuable player in the global nuclear industry and is focusing on high-grade uranium deposits, particularly in Utah in the US. Plug Power can look forward to government subsidies. The fresh funds will enable the Company to expand its production capacities and drive forward automation processes, which will reduce costs and increase capacities. Analyst assessments of the Plug Power share are mixed. Investors are now spoilt for choice between adding to their portfolio with commodities or investing directly in energy suppliers.
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