E.on, Europe’s largest power company, lost almost 7 billion euros last year (2015). A year earlier it lost 3.2 billion euros.
The German power giant was hit not only by low prices on the electricity exchanges, but the losses were also due to significant “impairment charges” as the company writes down the value of its conventional coal and gas power plant assets.
“Difficult times” says E.on Chairman of the Board and CEO Johannes Teyssen Source : E.ON SE
That sort of thing happens when a power company is forced by law to buy haphazard, money-losing solar and wind energy at exorbitant prices and sell it at a loss on the power exchanges. There’s no turnaround in sight.
What we are witnessing is the collapse of Germany’s power industry – thanks to the Energiewende (transition to green energies).
E.on CEO Johannes Teyssen spoke of “difficult times” at a press conference on Wednesday morning. Over the past two years the Essen-Germany-based company has lost over 10 billion euros!
‘The general economic environment and the situation in our industry have deteriorated significantly,’ Chief Executive Officer Johannes Teyssen told reporters on Wednesday in Essen.”
Unsurprisingly the massive losses stemmed in large part from the area of power generation, where sales fell 34%. The operation of gas-fired power plants is no longer profitable due to the low prices on the energy exchanges.
Worse, the low prices from excessive production are not even making their way to the consumers. Although generated power is sold at low prices on the exchange markets due to surplus production from wind and sun, consumers are getting no benefit. German consumers are now paying near record prices for electricity (approx. €0.29/kw-h). Often coal-fired power plants run idle as well. experts have warned that the Energiewende may cost German consumers a trillion euros.
Share prices of Eon have also taken a terrible beating. In early 2008 the price for a share stood near 50 euros. Today a share stands at a measly 8 euros.
Spiegel here calls the losses at Eon “dramatic”.
Already in 2013 The Economist warned of an impending disaster for Germany’s energy sector.