RWE targets gas-fired power plants in $20 billion US expansion

By Christoph Steitz and Tom Käckenhoff

ESSEN, Germany, March 12 (Reuters) - Germany's largest power producer, RWE RWEG.DE, said on Thursday it would expand more aggressively in the United States, a market where data centres have significantly fuelled power demand, by investing in new gas-fired power plants.

The move marks a major push by Germany's biggest utility into a market where the rapid construction of data centres, as well as the need to modernise ageing power infrastructure, has fuelled a boom in generation assets and network equipment.

This is mainly driven by big tech firms, so-called hyperscalers, which are planning to spend $600 billion this year on artificial intelligence, a technology that needs substantial power supply and has also benefited German industrial peers.

US IS RWE'S MOST IMPORTANT GROWTH MARKET

"The United States remains our most important growth market, not least due to the rapidly growing demand for electricity," RWE said in its annual report, adding that more gas-fired power plants would ensure round-the-clock supply.

"A decisive factor, particularly for industrial companies and data centres."

Overall, the United States, where RWE already has 13 gigawatts (GW) of installed solar, wind and battery storage capacity, will account for 17 billion euros ($20 billion), or nearly half, of its planned spending by 2031.

Installed U.S. capacity is expected to increase to 22 GW as a result, the company said, also releasing full-year results that showed core profit fell 10% to 5.1 billion euros, still beating the 4.9 billion poll.

RWE said it was developing a 5 GW pipeline of gas-fired power plant projects in the United States, targeting Texas as well as Midwestern states, adding that more than 3 GW would be realised by 2035.

Shares in the company, which have risen nearly a fifth year-to-date, were set to open 1.1% lower in pre-market trade, with traders citing a slight cut in the group's outlook for 2027 core profit.

($1=0.8643 euros)