E.on splits to focus on renewables

GERMANY: E.on is set to focus its efforts on renewable energy, after announcing it will spin off its conventional power business as an independent company.

CEO Johannes Teyssen said the aims of the divisions are "fundamentally different"

In the future the German utility will solely work in three core fields, renewable energy development, distribution networks and customer solutions.

The company's conventional generation, global energy trading, and exploration and production businesses will be combined in a new, independent company. A majority of this will be spun off to E.on shareholders.

E.on said it will increase its investments for the next year by about €500 million compared to the previously planned 2015 investment of €4.3 billion. The company said it will place a particular emphasis on expanding its wind business in Europe and in "other selected target markets".

Explaining the thinking behind the split, CEO Johannes Teyssen said: "E.on will tap the growth potential created by the transformation of the energy world. Alongside it we're going to create a solid, independent company that will safeguard security of supply for the transformation.

"These two missions are so fundamentally different that two separate, distinctly focused companies offer the best prospects for the future," E.on CEO Johannes Teyssen said.

About 40,000 employees will be assigned to the newly re-focussed E.on, while the conventional-power spin off will take on around 20,000 workers.

E.on will now take legal steps to combine the spin-off businesses into a corporation, and expects to execute the split after approval at its shareholders meeting in 2016.

The company operates around 4GW of onshore wind worldwide. It also has an offshore wind portfolio of more than 1.1GW, and an offshore pipeline of around 3GW, according to WPO Intelligence, the offshore data and research division of Windpower Monthly.