E.ON, a major investor-owned energy supplier with 35 million customers, has announced it will split the company up; with the new entity focusing on renewables.
“We are convinced that it’s necessary to respond to dramatically altered global energy markets, technical innovation, and more diverse customer expectations with a bold new beginning,” said E.ON SE CEO Johannes Teyssen.
E.ON states it will place a strong emphasis on expanding its wind business in Europe and in other selected markets; plus it will also strengthen its solar business.
E.ON currently owns approximately 61 GW generation capacity. At the end of 2013, the company had around 12% renewables, with much of that coming from hydro. During 2013, E.ON invested just over EUR 1 billion in renewables, more than in any other generation technology. This year it planned to invest about EUR 1.3 billion in renewable energy.
At the end of 2013, E.ON was one of the world’s top ten wind farm operators; with approximately 4 GW of onshore wind capacity. It currently has more than 60 MW of PV capacity in Europe and 20 MW in the United States.
While its renewables arm appears to be humming along, E.ON’s fossil fuel based power generation activities have met with trouble given the challenging conditions in Europe..
Gas-fired power generation in particular has proved to be a tough gig for the company. It says even the most technologically advanced combined-cycle gas turbines (CCGTs) in E.ON’s fleet are often “barely profitable” to operate as a result of low wholesale power prices, overcapacity in the generation market and persistently low carbon prices.
As part of the transition, E.ON is selling off its Spain and Portugal operations to Australian energy infrastructure investor Macquarie for €2.5bn.
E.ON’s 62,000 employees aren’t under any threat – around 40,000 employees will stay with the parent company, while the remaining 20,000 will work in the new, yet to be named firm that will have its headquarters in Germany’s Rhine-Ruhr region.
E.ON was formed in June 2000 by the merger of VEBA and VIAG, two of Germany’s largest industrial groups.
The company expects to carry out the spinoff after approval at the E.ON Shareholders Meeting in 2016.
