Bleeding To Death…Germany’s Largest Power Company E.ON Loses Whopping $7.8 Billion…Collapse Accelerates

E.on, Germany’s largest electric power producer, announced that it had lost over 7 billion euros in the 3rd quarter, reports Germany’s flagship news magazine Spiegel here.

The loss stems from the writing down of the value of coal and gas power generation assets by billions of euros due to the steep drop in wholesale electricity prices. The write-offs were necessary in light of the dismal future the fossil industry faces. Plainly said: Germany’s Energiewende, transition to renewable energies, which mandates power companies buy up solar, wind and other green energies at exorbitant prices, and even when they are not needed, continues to rapidly erode the German base-power production.

Tens of thousands of once high-paying industrial jobs are now in serious jeopardy.

“Squeezed out” by massively subsidized green energy

With mandated green energies, the European power market is seeing a huge oversupply of power on the market that has wholesale prices far too low to cover generation costs.

Spiegel writes:

The company’s gas and coal power plants are hardly earning money due to the plummeted power exchange prices. Through the [massively subsidized] green energies, the conventional power plants are being squeezed out of the market throughout the branch. The price at the Leipzig EEX power exchange has halved over the past 4 years.”

Aren’t government subsidies and market meddling wonderful?

The hemorrhaging is far from over. Spiegel also reports that “E.on had a record 3.2 billion Euro loss in 2014“. Germany’s No. 2 power producer, RWE, is also reeling. Bloomberg here writes:

Germany’s shift to renewable energy is hurting utilities from EON to RWE AG as margins get squeezed at traditional coal and gas-fired plants because green power gets priority access to the grid. EON, the third-worst performer in Germany’s DAX stock index this year, is responding by spinning off its fossil-fuel plants into a separate company. RWE in 2013 had its first annual loss since 1949.”

Poor, working class getting hit hard

The tragedy of this mandated oversupply is that low wholesale prices, which at times are even negative, are not getting passed along to the consumers. Rather next year German consumers will see new record-high electricity prices. Already poor households are reeling and electricity is becoming a luxury for the affluent only.

The media reports that the Düsseldorf-based power producer will be spinning off its “entire power plant business” in the form of a new company called Uniper at the end of the year. It is reported that E.on itself will focus on “renewable energies and sales”.

It’s a real pity. Germany’s power companies used to be solid, high tech companies that delivered the most stable and efficient power in the world. Now they are literally being gutted alive before our very eyes. The country is setting itself up for some terrible times, and doing so fast.

Industrial base, social fabric in collpase

One could easily argue that Germany, under the leadership of Angela Merkel and her CDU government, is now witnessing an uncontrolled collapse as millions of refugees flood into the country, power prices spiral out of control, conventional power companies collapse, the industrial base moves abroad, and auto-giant VW faces a death by litigation and fanatic environmental standards. Expect volatile social conditions to spread soon unless sense returns.

49 responses to “Bleeding To Death…Germany’s Largest Power Company E.ON Loses Whopping $7.8 Billion…Collapse Accelerates”

  1. Bjorn Ramstad

    “If I wanted Germany to fail,
    I would start with Energy”

    That’s an old one, which is coming up as real.

    1. Bon

      An old one that remains true Bjorn. True in Germany, America, the United Kingdom and Australia, in fact true in all countries.

  2. DirkH

    The CDU under Merkel has become a bastard mixture of SPD and Greens, and amplified their respective wrecking strategies. The CDU even picked up the No-Border-No-Nation idea from the Black Bloc. It is as if the CDU wants to become the BETTER SPD, Greens, and Black Bloc. Quite amazing.

    1. Stephen Richards

      That seems to be how all euro countries are going,Look at UK. They never had such a thing as a progressive conservative but now they have and their PM is fighting to join the idiots of the EU

  3. Ben Palmer

    “Some sense” will not return under the actual government and there is no alternative in view, since there is no political party that shows signs of common sense.

  4. Don B

    Germany and the UK are sliding into the abyss, hand in hand.

    On a mild November day…
    “National Grid has issued an urgent request for energy companies to make more power available after multiple breakdowns at UK power stations.

    “It has asked energy companies to supply an extra 500 megawatts (MW) between 4.30pm and 6pm on Wednesday, a period when power demand surges, with some people still at work and others arriving home and turning the lights on.”

    https://notalotofpeopleknowthat.wordpress.com/2015/11/04/grid-issues-urgent-call-for-extra-power/

    1. Jeremy Poynton

      Yes – and the cost of that backup energy was 30 (thirty) times higher than the standard cost. Madness.

  5. sod

    Who did stop EON from participating in the renewable energy business again?

    1. DirkH

      So sod says, companies that produce a needed good should switch to subsidy-driven production of overpriced, inferior goods. sod, is your real name Maduro? He did the same thing, with cattle farming. Now Venezuela is a beef importer!

    2. Arsten

      What makes you think E.ON doesn’t participate?

      The subsidies from their solar and wind projects, however, are not enough to cover the operating losses at fossil fuel sites, which they are required to keep running. It’s why they are spinning off those businesses.

      When E.ON posts a huge profit next year (sans subsidiary fossil fuel company) that they got out of subsidies, what will you say then? That green is “profitable” when industry is heavily paid from the public purse….or will you leave that last part off, as well as the history that led them there?

  6. German Power Industry Facing Meltdown Because Of Subsidised Renewables | NOT A LOT OF PEOPLE KNOW THAT
  7. N E

    Once a powerhouse of the European economy, has now become the madhouse basket case ruined by Green leftists.

  8. ClimateOtter

    Where’s sod? I want to see a ‘positive’ spin on this. Tens of thousands possibly out of work and possibly quite a few freezing to death this coming winter, think of the CO2 savings!

    1. DirkH

      Any reduction in standard of living is good for the planet. The more people die, the better for the planet. Humans are a cancer. The remaining GOOD humans will drive their Teslas over the graves of the evil humans. sod is one of them. To become a GOOD human you must want wind turbines and love Polar Bears.

  9. Mikky

    Politics and market forces will eventually sort out this mess, anything that can keep the lights on when the wind stops blowing and the sun has gone to bed will become VERY valuable. Fossil fuels will eventually rule Germany again, if the no-nuke policy continues.

    1. Stephen Richards

      Not after a great deal of pain and a civil war with the muslims

  10. oeman50

    So what is keeping EON and RWE from walking away from unprofitable assets? Are they required by regulations to prop up the grid at a loss, even though it is economic suicide?

    1. Colorado Wellington

      That’s what the spinoff means. Walking away. It’s madness.

    2. Stephen Richards

      They are starting to walk away but they have moral responsibilities as well some legal.

  11. German Power Industry Facing Meltdown Because Of Subsidised Renewables | Gaia Gazette
  12. DennisA

    Fossil fuel industry must ‘implode’ to avoid climate disaster, says top scientist Schellnhuber:

    http://www.theguardian.com/environment/2015/jul/10/fossil-fuel-industry-must-implode-to-avoid-climate-disaster-says-top-scientist

    I think he looks like Mr Burns from the Simpsons. I expect he is wringing his hands in jubilation at what is happening.

    You can get him in Lego! http://tinyurl.com/plgw64h

  13. sod

    These companies have a huge problem. They seriously underestimated alternative power sources. They would have been in a perfect position, to make the most use (and money) from wind and solar. But they made false business decisions.

    They stuck to technologies, that are no longer viable. Nuclear is too expensive. We see that at the Hinkley plant in Britain, which produce subsidised electricity in the far future at a higher price than what is paid to solar and wind today.

    The only “cheap” nuclear is build in China and India under dubiuous conditions (Korea had massive problems with bad material being used for building reactors)and with foreign investors avoiding liabilty for accidents.

    http://www.catchnews.com/environment-news/who-will-be-liable-for-an-indian-fukushima-nobody-it-seems-1447177275.html

    1. David Johnson

      No you fool, they seriously underestimated the huge subsidies given to renewables and the obscene distortion this would make to the energy market. Do you and your ilk enjoy killing poor people?

    2. lemiere jacques

      that are no longer viable… well so stop forcing people to buy wind or solar energy for a while… then we ll see what is really viable.

  14. MikeW

    The question now for Germany is whether the rational productive people will regain control and restore the economy to prosperity, or will the turmoil produced by socialist policies spiral down into fascism.

  15. Lars Silen

    I simply don’t understand why the power companies hawen’t shut the konventionalism power plants down for a few days for “service”. Som people could then wake up.

    1. sod

      The power companies have long time contracts. They do this, and they will be out of business immediately. We do not need those companies at all.

      In the past, they were important. There was need for a big company, to work on huge coal mines which would feed multiple coal plants. Size was an advantage. That is simply no longer the case. The best power system would be many small companies and a regional production of electricity, combined with huge grids for support.

      The local backup power would come from gas plants, which also provide heat in winter.

      What is happening today is simple. We see a business model fail. And the companies are kept alive by the state who fears their collapse (loss of jobs, part of the companies are in state ownership, fear of foreign takeover).
      Those are all reasons with certain merits to them, but the reason is not that we can not live without the big power companies. If they go bancrupt, someone will take over the plants that we still need and the rest will be closed. It would not be such a big deal!

  16. Bleeding To Death…Germany’s Largest Power Company E.ON Loses Whopping $7.8 Billion…Collapse Accelerates   from | wchildblog

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  17. chris moffatt

    “Through the [massively subsidized] green energies, the conventional power plants are being squeezed out of the market throughout the branch”

    The intent could not be more obvious. Reread “the limits to growth”. The only question now is when, if ever, people in the West will rebel.

    1. sod

      ““Through the [massively subsidized] green energies, the conventional power plants are being squeezed out of the market throughout the branch””

      Can you explain to me, what the “massive subsidy” is to onshore wind today in Germany? and to rooftop solar?

      Will you compare it to the future numbers of the nuclear Hinkley plant in the UK?

      1. Pethefin

        As always, Sod’s free of facts, loaded with ideological BS.

  18. Duepmann

    be shure, people in the west will not rebell, we are after a very intense daily brainwash for years now beleaving in wind voltaik and biogas. polls showing 80% beleaver are real.
    It will end up in catastrophy
    – loosing the power-intense industrie
    – focussing on the wrong desihn-approach power-saving instead of features
    – blackouts
    Germans seem to follow frequently the wrong prophets.
    Duepmann, Germany

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  20. Mervyn

    The German people in the past were considered to be highly innovative and inventive, certainly very efficient and intelligent. So … this Energiewende … what went wrong for the German authorities to go down the pathway of madness?

    1. DirkH

      “The German people in the past were considered to be highly innovative and inventive, certainly very efficient and intelligent.”

      That is still true for technologists and developers. At the same time, another segment of German society was well known for producing mad philosophies, ideologies and BS science, Hegel, Kant, Marx, Schopenhauer, Horkheimer, Markuse, Adorno.

      ” So … this Energiewende … what went wrong for the German authorities to go down the pathway of madness?”

      70 years of brainwashing and guilt cult. Developers have immersed themselves into the mad system and tinker with tiny subdomains trying to survive (with diminishing returns).

      The current leadership can best be described as Maoist totalitarians. Very similar to USA, mountains of regulations suffocate innovation, and preserve the dominance of lethargic huge zombie corporations.

      Just smile and wave and wait for the next collapse. This Leviathan is moribund and next to impossible to feed and gives us nothing in return.

  21. Dick Cobus

    It is an accounting entry. They are writing off an asset, like coal. Not necessary a loss. Makes company look bad. However, Ontario Canada, Hydro One also in big debt doing same thing while selling shares to insiders.

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  24. damon

    No problem. Germany will become just like all the countries from which all the ‘asylum seekers’ fled. They’ll be right at home.

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