(MENAFN- AFP) RWE, Germany's second-biggest power supplier, expects earnings to stabilise from next year after a difficult time in 2014, its chief executive Peter Terium said on Wednesday.
"We do not expect the dramatic trends of recent years to continue to quite the same extent," he said, referring to growth of renewable energy.
On a wider front, the global energy sector is in a state of upheaval owing largely to the shale energy boom in North America which has driven down the price of coal.
"Based on what we know now, we expect our net income to largely stabilise, although at a lower level than in previous years," Terium told shareholders at the group's annual meeting.
Last year, RWE ran up its first net loss for more than 60 years, turning in a loss of 2.8 billion euros ($3.9 billion) as a result of heavy writedowns on its conventional coal and gas-fired power stations.
That is due to the switch in Europe to renewable sources of energy.
However, several European power suppliers have been forced to make huge writedowns for investment in capacity which had not allowed for the sudden impact of shale energy.
Subsidising of solar energy "is driving gas- and coal-fired power stations out of the market. The result is a fundamental change in the electricity generation market. The market design no longer suits conventional power stations," Terium said.
"We are going through a difficult stage right now. Our balance sheet is weighed down by heavy debts. Because we invested billions in new gas- and coal-fired power stations," he explained.
Earlier this week, a court in Hamburg ordered that a nuclear fuel rod tax imposed on Germany's power suppliers must be reimbursed until its compatability with European and domestic law is established.
German tax authorities must repay more than 2.2 billion euros ($3.0 billion) in levies to the country's five biggest power suppliers until Germany's Constitutional Court and the European Court of Justice reach a final ruling on the controversial tax, Hamburg's Finance Court said.
Power utilities will also not need to pay the tax until the decision is handed down.
The companies believe that the levy on new nuclear fuel rods violates the German constitution and European Union rules.
Terium said the ruling would not have an immediate impact on RWE's earnings.
"This has no impact on our result, as the tax will continue to affect it until the Federal Constitutional Court or the European Court of Justice have passed judgement on the matter. We do not expect this to happen this year," the chief executive said.
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