Batteries

Published on March 20th, 2015 | by Jake Richardson

7

E.ON To Divest From Fossil–Nuke Spinoff By 2018

March 20th, 2015 by  

Germany utility companies E.ON and RWE are now investing heavily in renewable energy, as we’ve previously reported. E.ON operates in about 30 countries and has tens of millions of customers. The company operates six nuclear power plants in Germany, and has about a 30% share of the London Array wind power project. In 2011, it had about 80,000 employees worldwide and is one of the largest investor-owned companies in the world.

Berliner_Dom_-_Berlin_Cathedral_(2012)

We’ve recently reported that E.ON would spin off the part of its company focused on fossil fuels and nuclear power, and create a new company for that side of the business. Now, it has been leaked that E.ON is planning to divest its stake in that new company by 2018. According to Bloomberg, “EON will sell 51 percent of its stake in the new publicly listed company, including an offer of stocks to its existing shareholders, in the second half of 2016 and then divest the remaining stake by 2018, the person said, asking not to be named because the information isn’t public.”

RWE was founded over 100 years ago in Germany. It deals in lignite, hard coal, gas, nuclear power, renewables and pumped storage. In 2006, it had well over 60,000 employees. RWE is reportedly going to invest one billion euros in renewable energy in the next three years.

Although it might seem shocking that two enormous energy companies that heavily emphasize nuclear and fossil fuels would take an aggressive pro-renewable energy stance, Germany is trying to get away from these old and perhaps someday outdated fuel sources.

Some areas in Germany are already close to full, clean, renewable energy production. Germany wants to get to 100% renewables by 2050.

Some might say it can’t be done that quickly; others say it will be sooner. We might expect the rate of change for the future to be similar to what we have observed in the past, with a smooth pace. Perhaps this is because we have a concept of the average in mind, as in an average rate of change. Rates of change can vary though, and can be different from the average over an entire period.

It isn’t easy to say that huge utility companies investing large amounts of money in renewables is a sign of an increase in the rate change, because nothing has been nailed down quantitatively. But it does hint very strongly that a faster shift is approaching.

Increased energy storage might be something that accelerates the rate of change because previously the lack of competitive energy storage had been a physical limit that also appeared to create hesitancy in accepting solar and wind as permanent solutions. But that has also been changing fast.

Of course, fossil fuels will run out eventually, so they too should have some “range anxiety,” but for some reason, they don’t for many people, including investors.

Image Credit: Dipsey, Wiki Commons





Check out our new 93-page EV report, based on over 2,000 surveys collected from EV drivers in 49 of 50 US states, 26 European countries, and 9 Canadian provinces.

Tags: , ,


About the Author

Hello, I have been writing online for some time, and enjoy the outdoors. If you like, you can follow me on Google Plus.



  • Will E

    fossil is expensive, renewable is cheap. even with tons of fossil leftovers, Solar and Wind will take over fast, the energy market itself will change the game, as you see with Eon and RWE Germany, more to follow.

    • Coley

      The thing that puzzles me is, who is going to buy or invest in these plants that they are selling off? surely, when two major players in the FF generating industry seek to divest themselves of their FF plants it send a strong signal that they consider there is no future in FF generation?

      • Bob_Wallace

        I suspect that E.On is moving their outdated resources into a separate company with the expectation that they will be able to let that company go bankrupt down the road without destroying their renewable assets.

        I don’t know how bankruptcy law works in Germany but in the US I think it’s the case if you separate failing assets before it is commonly recognized that they are failing you can get away with that strategy. Wait until they are clearly failing and you lose the protection of calling them two separate corporations.

        Other companies are going to be looking for a “greater fool” to buy up their plants and mines. One of the big mine owners in Kentucky (?) bought up a bunch of other mines and closed them in order to keep the price of his coal higher. He’s just postponing the pain.

        • Coley

          Aye, true enough but, as I explain above, they are playing a game that leaves them with the profit and the taxpayer the pain, measures need to be taken to ensure the polluter can’t offload their responsibilities, and if these measures include a degree of compensation to close down and clean up,then surely it’s a quicker and cleaner way to hasten their demise?
          Rather then encourage them to invest time and resources in fiddling the system?

      • Ronald Brakels

        Last year the New South Wales state government in Australia sold a 2 gigawatt coal power station for apparently zero dollars to a power company. The state government seems to have given it away so it wouldn’t have to pay the cost of cleaning up the site. The power company got a free power plant that they are likely to keep operating for two more years but may operate for seven years for nothing and there is a good chance that tax payers will end up footing the clean up bill anyway as that sort of thing seems to happen a lot for some strange reason: http://reneweconomy.com.au/2014/the-2000mw-coal-generator-the-nsw-government-sold-for-0-59474

        • Coley

          Aye, followed your link, who were the developers at “Barrangoo south”?
          If it fits in with the game being played here in the UK then the power generator/ mine operator goes bust, is “rescued”by a company,usually closely associated with the company going tits up, who then ( usually with the help of govt subsidies) take over the responsibilities of the bankrupt company who usually have oodles of prime development land, do a bit remediation then laugh all the way to the bank at our expense.

Back to Top ↑