German power generation business, E.ON (FWB: EOAN), is entering the European small scale gas combined heat and power (CHP) market at just the right time, according to the director of Edinburgh-based energy consultancy,Delta-ee.

Michael Brown, Director at the consultancy says the company is correct to enter the European market for CHP systems under 1MWe,

Delta-ee’s projections see annual deployment of around 1.5 – 2.0 GWe for CHP projects in the 0.4 – 5.0 MWe size, and up to 1.5 GWe for projects in the 10 – 400kWe size by 2020.
E.ON has recently struck a partnership with METRO Cash & Carry to distribute energy under which it will install gas-fired small scale CHP units at two Metro Cash & Carry wholesale stores in Germany, as well as two more in Russia.

“If E.on is to compete effectively, it’s going to have to be great at what many utilities are traditionally not always great at – being very customer-oriented and knowing their customers really well,” Brown told Gas to Power Journal. “It will also need to ensure it can keep its transaction costs or its project acquisition costs down at levels which the other smaller players have [already] achieved.”

Brown pointed out that E.ON will have a competitive advantage in some areas due to its role as a major gas supplier and electricity trader.

“Acquiring one or more existing players might also be an effective strategy. [Still], we reckon this is a growth market over the medium-term so there’s room for new entrants like E.ON without necessarily driving out existing players.”

E.ON has recently created a new company called E.ON Connecting Energies to handle distributed energy solutions, energy efficiency, and renewables.

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