Eon boss has trouble with district heating and complains about the nuclear phase-out
Leonard Birnbaum gets enthusiastic when he talks about this power plant. It is “one of the safest, most productive and best systems in the world,” says the CEO of the power grid group eon. In its 35 years of operation, the power plant has even been recognized ten times as the most productive of its kind in the world: “World champion technology made in Germany”. But April 15 is the end; then Eon’s Isar 2 nuclear reactor will be shut down and nuclear phase-out in Germany will be complete.
Actually, the last nuclear power plants should have gone offline at the turn of the year, but due to the energy crisis, three reactors will continue to run until mid-April. He doesn’t want to reopen the debate about the nuclear phase-out, said Birnbaum on Wednesday at the presentation of Eon’s annual figures in Essen. But he thinks switching off in the middle of the energy crisis “personally is a mistake”. It is technically possible to have Isar 2 continue to be produced, but there is no evidence that the federal government is reconsidering its decision.
The end of the reactor in Lower Bavaria may hurt Birnbaum, who has a doctorate in engineering, but the plant is not important for the Dax group and its almost 70,000 employees. Isar 2 is more of a remnant from an earlier time. Because unlike the Essen rival RWE, Eon does not earn its money by generating electricity, but by distributing it. The company is one of the largest distribution system operators in Europe, owning 1.6 million kilometers of electricity and gas lines in nine countries. The division contributed 5.5 billion euros to the operating profit last year. The lay overall at 8.1 billion eurosan increase of two percent compared to 2021.
District heating has become drastically more expensive
In addition, Eon sells electricity and gas to consumers, if they have to energy but do some shopping yourself first. The Essen-based company has 14 million customers in Germany. The company is also one of the largest providers of district heating. Houses are then not heated with a boiler in the basement, but with hot water that is supplied through pipes from a power plant. There have recently been massive complaints about Eon: customers had to make high additional payments because the group had increased prices. The Federal Consumer Association (vzbv) considers this to be illegal and is planning a model lawsuit so that customers can get their money back. On Wednesday – matching Eon’s balance sheet presentation – the organization called those affected toto get in touch with her with her bills.
CEO Birnbaum said he was relaxed about the process because the formulas used to determine the price were transparent and hadn’t provoked any debates for years. However, because of the “dislocations” in the energy markets in 2022, these formulas sometimes led to “hard-to-digest results” for consumers, admitted the manager, who has led Eon for two years. A company spokesman added that Eon is now looking for individual solutions. So increases could be deferred and stretched.
Eon’s electricity and gas customers can expect price cuts in some cases, but the group will have to increase prices in some cases – if consumers have so far been spared increases. Birnbaum criticized “opportunistic low-cost providers” who had made high profits in times of low energy prices and were then no longer able to deliver when electricity and gas became more expensive. Eon included more than a million customers in the basic service throughout Europe during the crisis – low-cost providers “threw these consumers at the company’s feet,” said Birnbaum.
Eon wants to invest more
In the coming years, the group intends to further increase its investments. Birnbaum announced that it intends to spend around 33 billion euros by 2027; previously, 27 billion euros were planned by 2026. The majority – 26 billion euros – is to flow into the expansion of the power grids. This is necessary in order to be able to transport the electricity from all the planned wind and solar power plants. The group wants to put seven billion euros into the consumer business. It’s about charging stations for electric cars or solar systems for homeowners.
However, Birnbaum demanded that politicians had to improve the conditions for investments in the power grid. Approval procedures took too long. In addition, the fees that network operators collect are regulated by the state – and so far have not reflected that the rapidly rising interest rates have increased construction costs, the manager complained.