The announcement supports Germany’s fervent efforts to integrate an increasing amount of renewables, commonly known as ‘Energiewende’.
E.ON is reported to be Germany’s first utility to announce a split into two companies to adjust to the sweeping changes triggered in the sector by the country’s focus on renewables.
E.ON will focus on renewable energy generation, while its subsidiary, Uniper, concentrates on conventional energy. [E.ON UK begins energy storage pilot for industrial customers]
According to the Financial Times, Eon had a window of one month after a company annual general meeting in June to mount a legal challenge to the spin-off.
The utility said this week that “no legal action had been taken, paving the way for it to list Uniper in two months’ time.”
Johannes Teyssen, E.ON’s chief executive, commented: “We have convinced our shareholders that the transformation of Eon is the right response to the challenges and opportunities of the new energy world.”
He added that the listing of Uniper will “pave the way to becoming an “independent company with a focused strategy capable of making full use of its strengths in the classical energy business.”
Responding to market challenges
[quote] Power generated by E.ON from coal and natural gas is said to have been “squeezed out of the market by heavily subsidised wind and solar.” The result was a plunging wholesale price of electricity over the past few years, which has made many of its fossil fuel plants uneconomic. [E.ON and Siemens partner for improved German smart metering]
E.ON reported its biggest annual loss in 2015, after taking a €8.8bn writedown, following which, its share price halved over the past five years.
A decision was thus taken by E.ON to divide itself into two, with conventional power generation assets and energy trading division grouped in Uniper, while renewables, networks and customer solutions businesses remains with Eon.
Uniper, short for ‘Unique Performance’, operates generating assets in Germany, the UK, Sweden, the Benelux countries and France. It also has five power stations in Russia. Its total installed power capacity is 40 gigawatts, and it has 14,000 employees. It also trades power products, liquefied natural gas and coal.
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