RWE Says German Electricity Demand May Drop Up to 5%

By Lars Paulsson

Jan. 23 (Bloomberg) -- RWE AG, Germany’s second-biggest utility, expects domestic power demand to decline by as much as 5 percent this year as industrial companies curb output due to the contraction in Europe’s biggest economy.

“Power demand will decrease, but less than industrial production,” the Essen-based company said in a report published yesterday.

The company said German industrial output was expected to fall by 5 percent this year, citing Rheinisch-Westfaelisches Institut fuer Wirtschaftsforschung, a research and policy group.

Energy demand is declining as manufacturers of products from steel and chemicals to autos curb production as the global crisis reduces orders for products. Germany’s economy may contract by as much as 2.25 percent this year, only showing the first signs of recovery in the second half of the year, according to a report published yesterday by the Economy ministry.

To contact the reporter on this story: Lars Paulsson in London at lpaulsson@bloomberg.net