About Us | Newsletter Twitter   Facebook   LinkedIn   RSS  
GERMAN UTILITIES
02 December 2014 | by Gabor Chodkowski-Gyurics

E.ON spins off its coal, natural gas and nuclear energy business

E.ON spins off its coal, natural gas and nuclear energy business
German utility E.ON, one of the biggest public utility companies in Europe and the world's largest investor-owned energy service provider, announced on December 1 that it will spin off its coal, natural gas and nuclear energy business to a new company, beginning in 2016, and focus on renewable energy and power grid development.

The spin-off will take place in the second half of 2016 and the new company will earmark €4.5 billion in reserves for the purpose of phasing out its nuclear power assets.

About 40,000 of employees would remain with the parent group, while the remaining 20,000 would join the new company. There will be no layoffs. E.ON, which has €31 billion in net debt, said it would dispose of its minority stake in the new company over the medium term to bolster its finances.

RADICAL MOVE

This radical restructuring is the company’s adaptation to Germany’s policy of decommissioning its nuclear power plants by 2022, while at the same time reducing CO2 emissions by 40 percent.

E.ON chief executive Johannes Teyssen said that as the gap between conventional and unconventional energy sources widens, it becomes increasingly difficult to manage both under a single, broad business model.

“From an investor perspective, the spin-off would be desirable as it would give E.ON two clear-cut business models that are easier to assess than the conglomerate," said Thomas Deser, senior fund manager at Union Investment, E.ON's seventh-largest shareholder.

E.ON’s spinning off its fossil fuel business appears to have been anticipated by financial institutions like the Bank of England. In early December, The Guardian revealed the bank’s plan for an enquiry into whether climate change could cause problems for financial institutions holding fossil fuel-related assets.

The governor of the Bank of England made a reference to an upcoming bank’s enquiry into how “oil and gas reserves may be considered unburnable if global temperatures increases are to be limited to 2 degrees Celsius,” in a letter sent to the UK’s parliament’s environmental audit committee.

The enquiry would serve to highlight “the costs and benefits of tomorrow to inform the investment and credit decisions of today,” the governor wrote in the letter.



keywords EU Germany E.ON


ZAMKNIJ [×]

Ta witryna używa plików cookie. Kontynuując przeglądanie strony wyrażasz zgodę na używanie plików cookie zgodnie z aktualnymi ustawieniami przeglądarki.