Eon wants to negotiate the continued operation of Isar 2 – economy

Leonhard Birnbaum, 55, has only been CEO of the energy company Eon since April last year. His almost one and a half years in this top position have been turbulent so far – and it will certainly remain so. He has now been in the energy industry for more than 25 years and has never experienced a situation like this, Birnbaum said on Wednesday. It is an “absolutely unique energy crisis”, and Birnbaum added: “Our top priority is to maintain security of supply”. It is about securing affordable energy for the people of Europe. The Eon boss then made a personal announcement: “I promise here that Eon and I personally will do everything in this extraordinary situation.”

The situation is indeed difficult. As one of the largest energy companies in Europe, Eon has been hit by the energy crisis. On the one hand, prices are rising and gas could soon become scarce. On the other hand, Eon continues to work on the energy transition. That, according to Birnbaum, is the only way to reduce the one-sided dependency on energy suppliers like Russia.

The group is ready for talks about the Isar 2 nuclear power plant

Eon has long focused on renewable energy and grids, no longer on conventional power generation such as coal or gas. However, the Isar 2 nuclear power plant in Bavaria still belongs to the group (via the Preussenelektra subsidiary). This is supposed to be finally switched off in December. In view of the energy crisis and the special problems in Bavaria, however, discussions are now being held about its continued operation.

At the beginning of the Ukraine war, the federal government spoke out clearly against extending the service lives of nuclear power plants in Germany, said Eon CFO Marc Spieker. “Should the federal government come to a reassessment of the situation as part of the ongoing stress test, we are ready to talk,” he added. Birnbaum emphasized that there were no concrete plans and no calculations as to what continued operation would mean economically. So far, decommissioning and dismantling have been assumed, other framework conditions are not known. Now it’s politics’ turn.

Birnbaum is critical of demands from politicians to introduce a so-called excess profit tax for the energy sector. Such a request is “politically understandable”, especially when you look at the situation at some large oil and gas companies. These had recently reported very high profits. But a blanket taxation of all energy companies is wrong. “We have to deal with the high prices and the strong price fluctuations only Difficulties, we Do not have upside down. I resist generalization,” emphasized Birnbaum, with a view to possible advantages for his own group.

In the first half of 2022, high energy prices even depressed Eon’s profits. The operating result fell by 15 percent to 4.1 billion euros, the bottom line profit fell by a fifth to 1.4 billion euros. The company is sticking to its forecast for the year as a whole. Eon also has a 15.5 percent stake in the Nord Stream 1 gas pipeline, which has been making headlines for months due to the reduced delivery volumes from Russia to Germany. The supplier has now written off the value of the stake by around 700 million euros, but wants to hold on to the commitment.

“Eon is part of the future,” said the CEO. Despite the crisis, four billion euros were invested in the energy transition in 2022, and 15 percent of all renewable energies in Europe are already connected to Eon networks. Eon’s energy networks are the backbone of the energy transition. “Without us, green electricity will not reach customers,” says Birnbaum. At the same time, there is now a high demand, especially from private households, for solar systems and heat pumps. All of this shows that the group’s strategy is correct.

Plea for gas savings

Birnbaum did not want to speculate on Wednesday about the extent of further price increases for gas and electricity. In North Rhine-Westphalia, for example, the group has increased gas prices by 40 percent and electricity prices for private households have risen by 17 percent, although this is compensated for by the elimination of the EEG surcharge.

Eon supports the EU’s gas emergency plan and advocates further savings. If every household in Germany saves 15 percent of its gas consumption, that corresponds to the private gas needs of Hesse. The group also welcomes the federal government’s help for the gas importer Uniper because it avoids “a domino effect”. Uniper was part of the Eon Group until 2016, but has been independent since then.