CONSULTING

market capital for renewable energy while winding down conventional operations”. 206 In
May 2016, Moody’s downgraded RWE, as its “generation fleet is primarily fixed-cost in nature, with
over half of output represented by lignite and nuclear, making it exposed to movements in
wholesale power prices as RWE's hedges roll off” as well as concerns over the risks associated with
nuclear liabilities and political expose to its coal and lignite generation. 207 RWE shares lost about
85 percent of their value since they peaked in January 2008 (see Figure 21).
Figure 21: RWE (DE) Share Price Development 2006–2016
RWE (DE) Share Price Development Since 2006
(in %)
100
Share Price
as of 2 January 2006:
€62.50
7 January 2008: €100.26
15 April 2010: €67.68
Share Price
as of 4 July 2016:
€14.84
50
0
-50
Percentage Change Since 2006
-100
Source: Yahoo Finance, July 2016 208
Vattenfall, which owns significant capacity in Sweden and Germany, is also suffering and its outlook
according to Moody’s and S&P is negative. This is in part due to lower fuel prices, but also, to
exposure to carbon pricing, given its ownership, although it is trying to sell it, of significant lignite
capacity in Germany and uncertainty over nuclear decommissioning policy also in Germany. 209
The fragility of the European utilities and the impacts of nuclear construction are extremely
pronounced in Finland with the impact of Olkiluoto on Teollisuuden Voima Oyj (TVO). The reactor
should have been completed in 2009, but is now scheduled for completion in 2018 and has
experienced a considerable cost over-run (see Finland section in Annex 1 for further details). As
206 Nikki Houston, “RWE’s Supervisory Board Approves Company’s Split”, Wall Street Journal,
11 December 2015, see http://www.wsj.com/articles/rwes-supervisory-board-approves-companys-split-1449840584,
accessed 1 July 2016.
207 Moody’s, “Moody's downgrades RWE to Baa3/P-3; stable outlook”, 13 May 2016.
208 Data extracted from Yahoo Finance refers to RWE’s share value performance on the Frankfurt Stock
Market (RWE.F). Percentage change is calculated on the basis of the closing price on 2 January 2006.
209 Moody’s, “Moody's confirms Vattenfall's A3 rating; negative outlook”, 13 May 2016.
Mycle Schneider, Antony Froggatt et al. 66 World Nuclear Industry Status Report 2016