The German drive to increase renewables’ share of its energy mix is continuing to negatively impact on the country’s biggest utility.
The company posted a 20 per cent fall in profit midweek as the market continued to reduce wholesale power prices. Profit fell from €1.9bn ($2.5bn) in the first half of 2013 to €1.5bn in the first half of this year.
In a statement E.ON (FWB: EOAN) cited the expansion of clean energy as causative in the decline of price for baseload power.
CEO Johannes Teyssen has called for a UK-style capacity market to enable producers to have predictable revenue in exchange for ensuring security of supply.
As profits have slumped in its home market, E.ON has looked for growth abroad, focusing on ventures in Brazil and Turkey. Bloomberg reports, however, that the first-half figures showed that earnings before interest, tax, depreciation and amortisation in countries outside the EU had fallen by 26 per cent, or €81m. Ebitda at E.ON’s Russia unit was 24 per cent below the prior-year level.
On a positive note, cost savings programmes such as removing layers of management had a positive impact on earnings.
In addition, earnings from Eon’s fossil fuel power generation businesses in Italy and Spain rose in the first half, while ebitda from renewables increased by 7 per cent to €870m.
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