E.ON rejects fossil branch and fully commits to solar and wind energy

German energy giant E.ON has decided to divest its gas, nuclear and coal-fired power stations and make them an independent company. E.ON says that due to the German energy policy it is forced to fully invest in solar and wind energy.

E.ON announced its rigorous plans Monday. Its coal, gas and nuclear power plants in Germany, which together represent a value of 4.5 billion euros, will be transferred to a new company. This component is to be listed on the stock exchange in two years’ time. E.ON will reduce its share in this new energy company in the following years. The new company would employ 20,000 people, approximately one third of its workforce. The company also sells loss-making parts in Spain and Portugal, and is also considering listing its activities in Italy.

The move to divest conventional power generation technologies is necessitated by the Energiewende, according to Germany’s largest utility company. In addition, German politicians are pushing for an accelerated expansion of the production of green energy by wind turbines and solar energy, partly as a result of the decision to close the nuclear power plants. Coal-fired power stations are also becoming less profitable in Germany and companies such as E.ON are also suffering from the still low economic growth in Europe.

With a slimmed-down and modernized company, E.ON also wants to focus fully on the development of renewable energy, its distribution network and additional services that it can provide to customers in the coming years. The announced split will result in a significant loss this year, according to E.ON.