RWE’s Welsh Solar Setback Fails to Dampen Record Share Price Momentum

RWE’s stock touched a fresh 52-week high of €60.86 on Wednesday, even as the German utility grapples with regulatory headwinds in Britain and quietly shelves a major solar project in Wales. The 99.9 MW “Butterfly” solar development has been scrapped after grid connection proved unfeasible, underscoring the infrastructure bottlenecks that continue to plague the UK’s energy transition.

The cancellation comes as RWE navigates a broader debate over London’s electricity market reforms. Proposals to decouple gas and electricity prices have weighed on sentiment across the sector, with Jefferies estimating that a roughly £5 per megawatt-hour price shift could shave 2-3% off net profits for affected generators — including RWE, SSE, Centrica and Ørsted. Bernstein Research, however, has pushed back against the bearish narrative, arguing the market’s reaction looks overdone. While the reforms may cap upside, the analyst sees no material downside risk.

Yet for every setback in Britain, RWE appears to have a compensating victory elsewhere. The company emerged as the biggest winner in the UK’s seventh Contracts for Difference auction, securing 6.9 GW of offshore wind capacity from a record 8.4 GW allocation. The projects — Norfolk Vanguard East and West, two Dogger Bank South developments, and Awel y Môr — carry a strike price of £91.20/MWh. Final investment decisions on the Vanguard projects are expected by summer 2026, with Vanguard West slated for commissioning in 2029 and Vanguard East a year later.

UBS responded by lifting its price target on RWE from €55 to €65, maintaining a “Buy” rating. The analyst trimmed the 2026 EBITDA forecast by 3% but raised estimates for 2028-2030 by as much as 8% to reflect the new capacity. Barclays also remains bullish, keeping an “Overweight” rating with a €66 target. Analyst Peter Crampton expects Germany’s Kraftwerksstrategie — a 12 GW tender for hydrogen-ready power plants — to be unveiled by the end of the second quarter. RWE CEO Markus Krebber has publicly stated the company aims to secure up to 3 GW in the initial rounds.

Should investors sell immediately? Or is it worth buying Rwe?

The share buyback programme continues to provide a floor for the stock. During the week of March 30 to April 2, RWE repurchased nearly 290,000 shares on Xetra, while the following week saw 357,000 shares bought back. Since the third tranche launched in December 2025, the company has accumulated over 7.3 million shares. The €1.5 billion programme runs until June 2026.

Management has held firm on its full-year guidance, targeting adjusted operating earnings of up to €5.8 billion for 2026. The broader investment plan — €35 billion through 2031 — remains intact, with grid subsidiary Amprion alone spending a record €7.3 billion this year. A strategic focus on US gas-fired power plants, designed to backstop energy-intensive AI data centres, adds another growth vector.

The next major catalyst arrives on May 13, when RWE publishes its first-quarter results. Investors will be watching for signs that US projects are ramping without significant cost overruns — a key test for the company’s ambitious growth trajectory. Before that, the virtual annual general meeting on April 30 will put the 2025 dividend to a shareholder vote, with plans to raise the payout to €1.32 per share for 2026, targeting 10% annual growth.

Since the start of the year, RWE shares have gained nearly 30%. The May quarterly report will need to validate that rally with operational substance.