Utility RWE AG (RWE.XE) Thursday reiterated that its earnings will come under severe pressure over the next few years as low electricity prices across Europe erode the profitability of its power plants, the company's core business.

Chief Executive Peter Terium told shareholders at the company's annual general meeting that forward power prices for deliver in 2014 and 2015 are around 12 euros ($15.7) per megawatt-hour lower than one year ago.

He added that power prices have fallen mainly as a result of the rapid expansion of renewable energies that has eroded the utilization rates of large fossil-fueled power plants. Additionally, muted electricity demand across an ailing European economy has put further downward pressure on power prices.

"As a consequence, significant parts of our conventional power plant fleet are losing money," Mr. Terium said.

While 2013 earnings are expected to remain more or less flat, Mr. Terium said that "it will be virtually impossible to maintain this earnings level after 2013."

Like other European utilities, RWE sells much of its annual power production several years ahead to lock in generation margins. Most of its 2013 was sold in the past two to three years at prices far above present market prices.

RWE has previously pledged to respond to the increasingly difficult trading conditions on Europe 's energy markets by cutting costs, reducing investment and selling assets.

For this year, the company expects earnings before interest, taxes, depreciation and amortization to amount to around EUR9 billion, just below the EUR9.3 billion recorded in 2012.

Operating profit is expected to come in at EUR5.9 billion after EUR6.4 billion in 2012.

Recurrent after-tax profit, the earnings figure that determines RWE's annual dividend payout, is expected to remain mostly unchanged from the 2012 level of around EUR2.5 billion.

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