RWE has launched a subsidiary for renewable energy, grids and retail.

With the temporary name of RWE International SE, the new firm has started operating in Germany and internationally today.

The energy firm expects the subsidiary to generate annual revenues of around €40 billion (£31.6bn) and employ 40,000 people.

RWE’S CEO Peter Terium will also head the new subsidiary.

The permanent name and branding of the new subsidiary is expected to be announced this summer while the initial public offerings (IPO) should take place by the end of 2016.

Mr Terium said: “We will be fast, decentralised, innovative and close to our customers. During this time of far-reaching transformation in our sector, we do not intend to simply keep up with the competition. We want to take a pioneering role and shape the energy market of the future.”