In the media: E.ON and the age of dinosaurs, climate action ready for government approval
S眉ddeutsche Zeitung
鈥淭he end of dinosaurs鈥�
In the end, the large dinosaurs who had ruled the world disappeared 鈥� Germany鈥檚 big energy companies face a similar fate, writes Markus Balser in the S眉ddeutsche Zeitung. E.ON鈥檚 announcement to split up the company's renewables and fossil fuels assets, shows how the nuclear phase-out and the energy transition in Germany have cornered utilities, but E.ON is only the harbinger of things to come, Balser says. The other three big utilities will face similar cuts and shrinkage, he predicts.
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Reuters
鈥淩WE does not plan a split like E.ON鈥�
Highly indebted utility RWE does not want to part with company assets, Reuters Deutschland reports, citing a company spokesman. Unlike E.ON, the management at RWE believes it will be able to get back on its feet as a whole by introducing 鈥渋mprovements鈥� to the company.
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Rheinische Post
鈥淓.ON is not an example for the sector鈥�
Utilitiy RWE will not be able to do what E.ON has done, Antje H枚ning says in a editorial for the Rheinische Post. Communal shareholders would not let RWE be split up, she writes. E.ON has parted with all its difficult businesses, be it nuclear power or Russian gas, but now it is questionable whether the new 鈥渂ad bank鈥� company will be strong enough to cope with a nuclear and coal phase-out or whether it will ask the taxpayer for money in the end.
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Frankfurter Allgemeine Zeitung (FAZ)
鈥淓scape into the future鈥�
E.ON is bearing the consequences of a 鈥渘ot rationally plannable鈥� energy policy in Germany, Werner Sturbeck writes in an opinion piece for the FAZ. But E.ON faces just as much trouble abroad: the company's partner for power station construction in Brazil is insolvent, Russia鈥檚 currency is weak and Turkey is failing to stand tall as an emerging economy, he says. E.ON's move is unprecedented in Germany and it is difficult to predict how the core company's focus on renewables will pan out, since the renewables sector is largely dependent on political decisions, Sturbeck says. The spin-off, focused on听 conventional power, stands a chance because country's power mix contains 50% renewables, conventional power stations will have to provide the rest - and this will be reflected in comfortable prices, the author writes.
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Zeit Online
鈥淓.ON鈥檚 radical exit is risky鈥�
E.ON CEO Teyssen is strongly promoting its spin-off that will operate coal and nuclear power stations 鈥� but the question remains, who will invest in this new company, Marlies Uken asks in Zeit Online: If one cannot earn money with conventional energy in the future, why should banks, investment funds or other companies invest in E.ON鈥檚 business? Teyssen argued that capacity markets and a revitalised market for emission allowances would improve conditions. But whether this really happens depends on political decisions, Uken says.
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Wall Street Jounal
鈥淟ights at E.ON remain faint鈥�
In a Heard on the Street column, Thao Hua writes that even though the split-up of E.ON鈥檚 separate business strengths has raised its profile, investors should not expect this to solve their problems on the German energy markets. The move will indeed 鈥渟urgically remove its troubled parts,鈥� such as coal and nuclear operations. But the core business, focused on renewables, will face risks, such as dependence on renewables subsidies and the fact that green energy accounted for only 7% of the company鈥檚 2013 Ebitda, Hua says.
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Reuters Breakingviews
"E.ON's 'bad power' spinoff offers little upside"
In a Breakingviews column, Olaf Storbeck writes that the E.ON will have to work hard to make the spin-off of its riskier assets tempting for investors. He says that the unit containing nuclear and fossil-fuel technologies represents about a third of the group鈥檚 Ebitda, worth around 鈧�10 billion, and will take over assets in Brazil and Russia, which although that could be interesting for emerging markets investors, will also pose currency risk. The spin-off will need a 鈥済enerous dividend鈥� to lure investors, he says.
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Die Welt
鈥淭he end of the energy giants鈥�
Until now, the purely ecologically driven energy transition could always rely on financially strong 鈥減ower giants鈥� to provide back-up if the Energiewende experiment failed, Danel Wetzel comments in Die Welt. This is over now, he says, and with the split-up of E.ON the security net is gone. All of those who wanted 鈥渃itizen鈥檚 energy,鈥� are now close to seeing their dreams come true but it also means: 鈥淕ermans are home alone with the Energiewende.鈥�
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Spiegel Online
鈥淔ears of an atomic bad bank鈥�
Germany鈥檚 opposition Green Party accused E.ON of putting the assets of its seven nuclear power plants, slated for shut-down as part of Germany鈥檚 transition to a green economy, into a 鈥渂ad bank,鈥� while the German government said it assumes E.ON has put enough reserves aside to deal with the costs of the nuclear exit. E.ON鈥檚 CEO denied the accusations, but the worry is that taxpayers may have to foot the bill if the new company goes bust, the paper writes.
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taz
鈥淛unk for the taxpayer鈥�
Should E.ON鈥檚 spin-off company containing its hefty nuclear energy assets 鈥� and liabilities - go bust, politicians need to act now to prevent taxpayers from shouldering the burden, comments Bernward Janzing in the taz. For one thing, the company needs to name a realistic price for clean-up costs resulting from Germany鈥檚 nuclear power exit, he says. At the moment, companies have put aside reserves of 鈧�35 billion, which he says is a low-ball figure. Second, those reserves must be put in a trust, rather than remain at the discretion of the power companies, he writes.
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Bloomberg
鈥淓.ON split to fortify German green energy transformation鈥�
Bloomberg鈥檚 Stefan Nicola writes that E.ON鈥檚 decision to spin off fossil fuel operations is a 鈥渨atershed moment鈥� in the country鈥檚 green energy transition, and the 鈥渃ulmination of a push to wind, solar and other alternative energy forms.鈥� The article cites Deputy Environment Minister Jochen Flasbarth as saying that the decision is a 鈥減iece of the puzzle鈥� that has seen renewables take an ever-stronger role in the energy mix.
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Forbes
鈥淚s E.ON鈥檚 big split the future of utilities?鈥�
Forbes contributor Michael Kanellos calls E.On鈥檚 move to break up its old and new energy businesses 鈥渁 living lab for viewing the future of the energy industry.鈥� He points out arguments that fossil fuel assets may gain value as they are no longer shackled by efficiency issues and can sell power across Europe. He cites the possibility that renewables may 鈥減rove to be too intermittent鈥� and the demand for the few remaining centralized power plants could then grow. On the other hand, renewables could gain as they become 鈥渃heaper and more reliable.鈥�
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RenewEconomy.com
鈥淓.On dumps conventional generation to focus on renewables鈥�
Giles Parkinson in the Australian clean energy news website, RenewEconomy.com, writes that E.ON is 鈥渄ivesting its fossil fuel interests before investors divest themselves of it.鈥� He notes that the move follows other companies鈥� efforts to restructure in the face of the changing global energy market, and Australian energy companies will have to face the question of 鈥渉ow long they can continue to marry the 鈥榦ld and the new鈥櫶� in the same organisation.鈥�
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S眉ddeutsche.de / dpa
鈥淕overnment comes to an agreement on the climate protection package鈥�
Tomorrow the German cabinet will decide on the Climate Action Programme but government sources have already confirmed that an agreement has been reached between the ministers that Germany will cut 25 to 30 million tonnes CO2 by reducing energy consumption and some 22 million tonnes will be saved by the power sector, the dpa reports. The operators of Germany鈥檚 500 power plants will be entitled to decide for themselves which stations they use less to reduce emissions 鈥� a law obliging them to CO2 reductions will be presented in 2015, the news agency writes.
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The Christian Science Monitor
鈥淔irst nuclear, now coal: Germany eyes expanded energy transition鈥�
In a feature covering the debate over shutting down Germany鈥檚 coal-fired power plants, Nick Cunningham of the The Christian Science Monitor writes that the country is 鈥渁lready charting an impressive path forward with renewable energy.鈥� The article covers the coal exit, but also the broad scope of the Energiewende.
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