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E.ON and RWE report losses in fossil power generation as they turn to renewables

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PV Magazine

E.ON's PV power plant on the Pellworm Island in Germany E.ON

E.ON’s PV power plant on the Pellworm Island in Germany
E.ON

German energy giant E.ON today announced a net annual loss of EUR 7 billion. Yesterday, rival company RWE reported a 45% decrease in its fossil fuel businesses but a more-than-double revenue increase in its renewable sector.

The largest German utility E.ON SE reported today its biggest annual net loss of €7 billion ($7.7 billion) in 2015, indicating a 121% decrease from €3.2 billion ($3.47 billion) in 2014. The company is expecting that future profit, dividends and cash flows will continue to decline further due to the worsening conditions of the power sector.

“Our numbers reflect the far-reaching structural transformation that our industry is experiencing, and that continues unabated in the current year,” E.ON chief executive Johannes Teyssen said in a statement. “The general economic environment and the situation in our industry have deteriorated significantly.”

Earlier this year the company announced a spin off of its fossil-fuel plants into a separate company called Uniper that will be listed in the second half of this year. E.ON itself will focus on the renewable energy sector, including solar PV and wind.

RWE AG, E.ON’s closest competitor, yesterday announced that the profitability of its nuclear, coal and gas energy plants decreased by 45% over the past year, falling to €543 million ($596 million). At the same time, its operating profit in the renewable energy sector more than doubled to €493 million ($541 million) in 2015 from €186 million ($204 million) in 2014.

Last year, the company added about 1 GW of new wind farm capacity worldwide, including the 295 MW Nordsee Ost and 576 MW Gwynt y Mor offshore wind farms.

“Renewables are increasingly becoming a main pillar of our business. Besides the operational business, our entire focus in 2016 will be on restructuring the group to lay the foundations for further growth,” RWE CEO Peter Terium said in a statement.

To date, all of Germany’s four major energy providers have written down the value of their power stations as a result of the government’s move towards renewables and the collapse in wholesale energy prices, which are at their lowest level since 2002, Bloomberg reports.

Source: PV Magazine. Reproduced with permission.

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