As Markus Krebber geared up to take on the top job at RWE, the German energy giant was getting a harsh lesson on the challenges of energy supply in the 21st century.
With temperatures as low as minus 14C gripping Texas in February and households cranking up their heating, gas plants, wind turbines and even a nuclear power facility shut down as pipes and infrastructure froze.
Electricity outages spread, the grid was “seconds away” from an uncontrolled blackout affecting 26m customers, and computers controlling the system went haywire. Regulators intervened to briefly push electricity prices up to $9,000 per megawatt hour to try to encourage extra supplies.
RWE, which had about 80pc of its wind power capacity in Texas knocked out by the storm, had to buy power at that price to fulfil its supply obligations, resulting in a major hit to its bottom line.
“The unfortunate thing in Texas that nobody had foreseen was that the entire conventional infrastructure actually broke down,” says Krebber, 47, who became chief executive in July after nearly five years as finance chief. “We maybe need to factor more extreme weather events in our risk management.”
Extreme events or not, the weather plays an increasingly influential role in the fortunes of the electricity generation giant and its 20,000 employees as it shifts from fossil fuels and nuclear and pushes further into wind and solar power.
Based in Essen and worth almost €22bn (£19bn) on the Frankfurt stock exchange, RWE took on rival E.ON’s renewable operations in 2016 as part of a major asset swap, turning it into Europe’s third-largest renewable power generator.
Krebber finds himself in charge heading into winter at a time of record gas and power prices in much of Europe and the UK amid a gas supply crunch, with businesses forced to curb output and consumers braced for higher bills.