As Germany seemingly turns into an incubator for renewables and energy storage, the countries traditional utilities E.ON and RWE have woken up to a different reality which forces them to dramatically change their business models. A regretful Johannes Teyssen, E.ON chief executive talks about “phantom pains” after the Uniper spin-off.
The man at the helm at E.ON said the company should have shifted away from coal- and gas power much sooner, but did not anticipate the speed of change in Germany’s energy sector. “We should have been more conservative and not try to ride the cycle to the end,” he told the Financial Times this week.
A triple-whammy of surging wind and solar capacity, which curtails run-time hours for fossil plants, the politically-motivated nuclear phase-out and a general oversupply of energy in Europe amid sluggish demand – has made burning fossil fuels less and less lucrative.
E.ON, as well rival RWE, chose to invest in new gas and coal-fired capacity or cling on to existing plants– assets which they now have to write down. A misjudgement of the impact of the Energiewende policy, some say.
Splitting E.ON by shifting its conventional power plant business into a new company, Uniper, now feels “like body parts have been removed,” Teyseen said, alluding to recurring “phantom pains”. Yet change is the only way forward, he is convinced, stressing “it’s a question of what’s in the best interests of your customers, employees, the institution … not if you like something or it’s fun.”