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Teyssen – E.ON should have changed strategy sooner

The chief executive of E.ON says the company ought to have reduced its focus on coal and gas-fired power generation much earlier, but didn’t foresee the rate of change in the sector.

Johannes Teyssen told the Financial Times, “We should have been more conservative and not try to ride the cycle to the end.”

“We placed too much emphasis for too long on conventional generation”, he said adding that E.ON had opted to invest in new gas and coal-fired plants which it has now been forced to write down, misjudging the impact of Energiewende.

“We didn’t see the radical nature of the change and the speed of that change,” he says. “It’s partially human ࢀ” you should be cautious but very often you get overconfident.”

Teyssen is leading the corporate re-structuring of the firm, which at the start of this year hived off its conventional power-plant business into a new company, Uniper. Last year it reported the biggest loss in its history.
Johannes Teyssen
Referring to the decision to split the company in two he said, “It’s like body parts have been removed. Sometimes you get this phantom pain. I love a lot of the businesses that Uniper is running, so it hurts a bit. But it’s a question of what’s in the best interests of your customers, employees, the institutionࢀ‰ࢀ¦à¢€â€°not if you like something or it’s fun.”

Mr Teyssen does not regret embarking on the path of remoulding Eon. “The worst thing is if management stays put and tries to shy away from action,” he said.

Last month the German government ruled that the country’s utilities would foot a €23bn bill for their share of the cost of storing Germany’s nuclear waste. Although it was much bigger than it had provisioned for, the issue has been overshadowing the sector and worrying investors for months.

Teyssen welcomed the clarity of the ruling and perceives the burden of decommissioning the company’s nuclear plants in a positive light.

“We’re talking three nuclear power stations for six years,” he says. “That’s operationally meaningless: we had 300 power stations.”

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