German Power Sector In Massive Trauma As Electricity Giant EON Set To Post Colossal €12.4 BILLION Loss!

The ‘Energiewende’ (transition to green energies) risks leading to a complete meltdown of Germany’s power generation sector.

The latest news is that German electricity giant Eon expects to post a massive 12.4 billion euro loss for the year 2016, NTV news site writes here. Careful not to link the loss to Germany’s failing renewable energy bid, NTV blames it on Eon subsidiary Uniper and its write-downs for “spun-off nuclear power plant business” and the “strongly fallen wholesale power prices“.

Photo: Eon

Eon share prices plummeted from €7.57 a share earlier this weak to €6.98 by early Thursday morning, before clawing back up to €7.15 in Friday trading.

The figure is only a preliminary estimate, and the final figure will be released on March 15. But the Handelsblatt writes that the loss could even be higher: “It’s going to be even higher,” say those within the company.

The Handelsblatt reports that “at least 1000 jobs” are planned to be slashed by Eon in an effort to get the cost situation under control.

Massive financial trauma

Just days ago NTZ wrote here that another of Germany’s major power producers, RWE, also posted staggering losses of 5.7 billion euros.

Eon’s latest loss comes in the wake of a 7-billion euro loss the German power giant posted a year earlier, in 2015.

Once steady makers of profits and providers of solid, high-paying technical and engineering jobs, Germany’s traditional power industry has been bleeding profusely since the Energiewende (transition to renewable energies) has really took hold. Jobs have been lost by the thousands.

The German power grid used to be considered as one of the most stable worldwide, providing low-cost and reliable electricity to consumers, but has since deteriorated due to distorted market conditions and the wildly fluctuating wind and solar power that is required to be fed in.

 

42 responses to “German Power Sector In Massive Trauma As Electricity Giant EON Set To Post Colossal €12.4 BILLION Loss!”

  1. Curious George

    Let’s collect money to buy soup for hungry OEN and RWE directors.

  2. Harry Dale Huffman

    Why should there be “strongly fallen wholesale power prices”?

    1. SebastianH

      Because P Gosselin likes strong language. That’s why is is exaggerating everything …

      Careful not to link the loss to Germany’s failing renewable energy bid

      Another example of suggestive reporting. Maybe he should wait for the final numbers to be able to exactly attribute each amount to its cause.

      Those energy companies apparently didn’t save up enough money for the decommissioning of their nuclear power plants and had to strike a deal with the government. The tax payer will have to pay the rest. And the households will have to pay through their electricity bills for the record losses. Looks like nuclear power wasn’t priced correctly to begin with … it’s a sad story that might happen in other countries too once their nuclear reactors reach end of life. We’ll see :/

      1. Posa

        The nuclear industry had no reason to build a premature plant decommissioning into their rate structure. Closing German nuclear plants is an irrational policy, that runs counter to the stated aims of CO2 reduction.

      2. oeman50

        You have no idea of what you are talking about. Utilities get paid when they sell power. When they cannot sell power due to the preference given to wind and solar, they do not get paid for the debt service and the fixed O&M costs. They do not get paid for running the fossil plants in standby, because they are not producing power, even though they have the mandate to supply reliable power.

        And when the government says the nuclear plants have to shut down before their lifetime because of all the tsunamis in Germany, you do not have time to save up decommissioning costs, the premature shutdowns could not have been predicted.

        1. AndyG55

          I hope they are holding off decommissioning the nuclear plants.

          Surely at some stage a policy based on REALITY rather than baseless fear will prevail !!

          1. Posa

            No. Sorry. The world and specifically Germany needs a strong dose of “tough love”… give the people what they want… go Green 100%… and then see what happens.

          2. AndyG55

            What I actually meant is not knock them down, like that have the coal fired plants in South Australia.

            Yes, let the tough love wake people up, but keeping those nuclear plants so they can be restarted in a few years, would be advantageous.

        2. SebastianH

          Since the electricity market is a market this should prevent them from selling below price (including fixed costs). Can you name the current share of the fix costs in the price of a kWh of a coal fired power plant? Nuclear power is rarely shut down for wind and solar.

          Most of the nuclear power plants do 40+ years of electricity production. One should expect them to be able to save enough money for decommissioning that takes another 25 years or longer.

    2. SebastianH

      Because P Gosselin likes strong language. That’s why is is exaggerating everything …

      Careful not to link the loss to Germany’s failing renewable energy bid

      Another example of suggestive reporting. Maybe he should wait for the final numbers to be able to exactly attribute each amount to its cause.

      1. Posa

        Fossil fuel plants must be run continuously as back up supply because green power supplies are unpredictable and intermittent. The German utilities must absorb these prohibitive costs which generally are not offset by revenues. Furthermore, utilities are also forced to buy unneeded power supplies from green energy producers at wholesale prices…

        Obviously these practices have a crushing effect on public utility finances…

        I have long maintained that Germany must now serve the world as a Cautionary Tale and object lesson for their tragically ludicrous green energy policies.

        Give the people what they want: let them live with a 100% green power grid that’s outrageously expensive and prone to chronic brownouts and blackouts and grid instability without backup supplies. Let EON go bankrupt and close their electric generating facilities. Germans no longer understand reason; perhaps they’ll understand “Freeze in the dark means” in a more direct, sensuous form of pedagogy.

        The world can profit from this costly lesson.

        1. AndyG55

          If you look at the BP energy forecasts for 2035

          https://s19.postimg.org/5s9gfu3g3/energy_mix_2035.jpg

          .. you can do some quick calculation.

          Oil is forecast to grow by some 20%
          Gas by nearly 50%
          and Coal by nearly 19%

          They do show “renewables” expanding, but quite frankly, I think countries are running out of “other people’s money” and this will most likely not eventuate.

          1. sod

            “If you look at the BP energy forecasts for 2035

            ..

            Oil is forecast to grow by some 20%
            Gas by nearly 50%
            and Coal by nearly 19%”

            So the BP forecast sees oil winning big? SURPRISE! Their stocks would tank the very moment they say otherwise! This is company promotion material!

            The BP outlook at best is a most negative scenario for renewables (“renewables will at the very least outperfornm what ever BP says they will do”).

            In the real world renewables mostly hit the 20xx target from the BP or EIA by the time the report gets released and not in the year when they are supposed to do so…

            ““The report this year [2015] predicts that by 2040, the U. S. will have added only 48 gigawatts of solar generating capacity. The Solar Energy Industries Association (SEIA) expects that the industry will add half of that by the end of 2016. “ ”

            http://www.resilience.org/stories/2016-03-14/renewable-energy-growth-blows-eia-forecasts-out-of-the-water-again/

          2. AndyG55

            Pretty sure BP would know far more about REALITY than some propaganda based run-of-the-mill AGW scam-artists.

            Other people’s money has nearly run out, sob.

            People want THEIR money back.

            Wind and solar CANNOT exist without preying on other people’s money.

        2. SebastianH

          I suppose you don’t know who is running those big windfarms and solarfarms then …

          1. AndyG55

            Oil is forecast to grow by some 20%
            Gas by nearly 50%
            and Coal by nearly 19%

            Once the subsidies on wind and solar disappear, they will also

            There is only so much of “other people’s money” even the far-left totalitarian socialists, like you, can access.

          2. AndyG55

            Even someone as dumb, gullible and naïve as seb, must know that wind and solar only exist because of political whims and market distortions such as ridiculous feed-in tariffs and mandates, huge subsidies etc etc.

            He will never admit it on this site, because he is paid as a shill, but he must know what would happen to wind and solar in an open market place. The irregularity of supply would mean they would just disappear, leaving disabled and rotting infrastructure polluting the landscape.

            He will LIE to himself as much as his lack of self-integrity will allow… ie… always.

          3. SebastianH

            Would you freely admit that nuclear power plants only exist because massive subsidies were paid out and some of the risks are taken over by the goverments? Would you freely admit that coal mines received massive subsidies over the decades? This was the case in Germany and yes, renewables are subsidized too. So is Diesel fuel and so is running your car with natural gas and so is improving the insulation of your house, etc …

            Everything that people (and/or politicians in a representative democracy) want or is deemed desirable gets subsidized. Staying at home with your newborn child is subsidized too. Do you consider everything that is subsidized to be a bad thing? It’s often not economical to do at first sight … but has Germany had any problems with this practice in the past? No.

            The goal of subsidizing renewables is to finance the learning curve and development through increased production until it reaches a point where it is cheap enough to be economical. It would be pointless to do something like that if nobody would expect that to be the case some time in the future. In your opinion this can never happen and it’s ok to have such an opinion … but don’t expect others to have it too.

          4. AndyG55

            Nuclear plant were taken out by the political agenda

            Even you must know that !!

            The rest of your post takes us all back to that FANTASY LAND your feeble mind exists in !!.

            Stop DENYING that wind and solar will collapse as soon as feed-in mandates, payment for non-supply, and massive subsidies that will NEVER be returned within their lifetime are removed

            Again we see that DENIAL of REALITY is all seb has to fall back on.

          5. AndyG55

            “Would you freely admit that coal mines received massive subsidies over the decades”

            No, tax incentives and allowable deductions are NOT subsidies. Your anti-human leftist ignorance shines through yet again.

            And tax deductions have been paid out many times over by coal mining… wind and solar will be fortunate to ever break even.

            Your whole country has been built be coal, gas and nuclear.

            Wind and solar have BUILT NOTHING.. they are not capable of building anything.

            Wind and solar cannot even be used to make more wind and solar, that is how pathetic it is. !

            The use of fossil fuels will continue to grow by large amounts over the next decades…

            … and there is absolutely NOTHING you and your feeble anti-CO2 scam can do about it. 🙂

          6. SebastianH

            That’s just plain wrong …

          7. AndyG55

            That just plain RIGHT !!

            You really have to STOP LYING to yourself, seb.

            It will cause you even more mental issues than you have now.

          8. AndyG55

            Even someone as DUMB and GULLIBLE as you must realise that wind and solar are nothing but a money sink. !

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  4. DirkH

    sod and sebastian still not understanding the inevitable failure of all government price fixing?
    People who refuse to study ANY history are called morons. You are morons.
    This all goes like communist schemes always go. The CDU is a communist party opposed to the free market. The C in CDU stands for communism.
    This goes down like clockwork. It will also lead to the final destruction of the CDU and the other communist parties currently populating the Bundestag. Sometimes that takes one or two generations though.
    The commitment to energy communism started in 1999 under SPD+Greens. We are 18 years in.
    It will get worse before it gets better. The good part is: The communist parties will lose all reputation and will be the rightful target of scorn. Let’s fling shit at them.

    1. sod

      “This all goes like communist schemes always go. The CDU is a communist party opposed to the free market. The C in CDU stands for communism.”

      why are you posting such garbage on a blog, that is trying to provide informations about Germany to people outside of Germany?

      This is total rubbish and can not even be named “fake news”, because it is such obvious garbage!

      1. AndyG55

        “why are you posting such garbage on a blog,”

        We have asked that about you, many, many times !!!

        But you still keep doing it. !

        Sob is the epitome of GIGO !!!

    2. SebastianH

      I’ll ask again: what is wrong with you? Are you leaning so far to the right that you see everything else as communism?

      And now parties are going to fail because of a higher than (EU) average electricity prices despite a booming economy? And who should replace them / take over? The populist parties with no solutions? You are a dreamer.

  5. AndyG55

    OT. but I love it when this sort of thing happens.

    A more deserved scam could hardly be found.

    https://notalotofpeopleknowthat.wordpress.com/2017/03/10/solar-industry-objects-to-paying-rates/#comments

    With any luck, the next massive rate increases will be on wind businesses. 🙂

  6. Don from OZ

    Posa you have beaten me to the punch
    ‘let them live with a 100% green power grid that’s outrageously expensive and prone to chronic brownouts and blackouts and grid instability without backup supplies. Let EON go bankrupt and close their electric generating facilities. Germans no longer understand reason; perhaps they’ll understand “Freeze in the dark means” in a more direct, sensuous form of pedagogy.’
    South Australia already has wind and solar AND the highest tariffs in Australia.
    The government (State) sold off all Electricity assets to private enterprise so can’t rightfully whinge about the end result but they are. They also expect to be bailed out of their predicament and maintain it is not there fault.
    Meanwhile other States are encouraging ‘renewables’. One silly young politician speaking at the commencement of a wind tower installation said If the Germans can do it so can we’. We have dumb pollies here too

    1. Gyro

      SA had the highest prices as soon as it joined the AEM, prior to renewables.

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  9. Svend Ferdinandsen

    Lay off 1000 to save 12billion. Does that mean they start from the top layers? Else it gives no meaning.

  10. SebastianH

    And now we have the real numbers (and reasons) for the record loss at E.ON:

    http://www.eon.com/de/ueber-uns/publikationen/geschaeftsbericht.html

    http://www.eon.com/content/dam/eon-com/ueber-uns/publications/EON_Geschaeftsbericht_2016.pdf

    Write offs because of Uniper and decomissioning of nuclear power plants. EBIT was 3.1 billion €.

    You also wrote about RWE before and their “Geschäftsbericht” tells the same story: http://www.rwe.com/web/cms/de/110822/rwe/investor-relations/berichte/

    Multi-billion EBIT and huge write offs …

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