Major German utility RWE has outlined plans to invest €1.5 billion per year in clean energy capacity.

The company recently won regulatory approval for a complex merger and asset swap with rival E.On, and says that it will implement an ambitious CO2 reduction plan alongside investments in renewables and energy storage.

Dr. Rolf Martin Schmitz, CEO of RWE AG, said that the “new RWE” had become “one of the world’s leading renewable energy companies”. The company will put “all its energy” into strengthening its position, he added.

RWE says it will become carbon neutral by 2040 through a new, three-stage CO2 reduction plan. It is planning investments in wind energy, photovoltaics, biomass and energy storage, as well as gas fired power plants using ‘green’ gas.

“This presents RWE with a huge task. But we have a very clear idea of how to achieve our goal: We will phase out fossil energy sources both consistently and responsibly,” said Rolf Martin Schmitz, CEO of RWE AG. “We will make huge investments in wind and solar power as well as in high-capacity storage technologies. The new RWE is and will remain one of the major players in the electricity generation business.”

RWE’s planned renewables investments of €1.5 billion per year have the potential to increase to between €2 and €3 billion euros per annum through project partnerships, it added. The company is aiming to build a geographically and technologically diversified portfolio.

In the UK, RWE will decommission its last coal-fired power station, while in Germany, its coal-fired capacity will be taken off-line gradually. It is in the process of converting two coal-fired power plants in the Netherlands – Eemshaven and Amer – to fire biomass.

Following the merger deal with E.On, RWE owns 9 GW of capacity, with a further 2.6 GW under construction.