German energy giant Eon has denied that focusing on renewables and hiving off its traditional energy operations will lumber taxpayers with the bill for nuclear waste management.
Eon, Germany’s largest energy utility, has presented its reorganisation as a far-sighted reaction to Berlin’s ambition to be a world leader in renewable energy – and to exit nuclear power by 2022.
"We are the first to follow decisively the lessons of a changed energy world," said Johannes Teysen, Eon chief executive, in a nod to chancellor Angela Merkel's post-Fukushima decision to reverse her plan to extend the life of nuclear power plants.
He said the Eon reorganisation was based on the belief that the days of classic, integrated and broad-based energy utilities were numbered. Its plans to split off and float its fossil fuel, nuclear and gas operations forced federal environment minister Barbara Hendricks on the offensive yesterday. She insisted that the cost of providing safe storage for toxic nuclear waste would remain with those who created it.
“Even in the case of a corporate split, the energy industry will, of course, remain responsible,” she said. “Nationalising the risks after decades of nuclear plant profits is out of the question.”
Earlier this year Eon and other utilities proposed setting up a €35 billion public foundation to manage Germany’s inactive nuclear power plants when they go off the grid. Eon has set aside €14.6 billion, mostly in the form of holdings in the company itself, to finance its nuclear waste bills.
The plan for a nuclear waste foundation was dismissed at the time by the government but Green Party politicians have warned that Eon’s reorganisation is another attempt to create a multi-billion risk for taxpayers.
Green Party environment spokeswoman Bärbel Höhn said she feared Eon was “creating a bad bank for its seven nuclear plants, which the taxpayer will have to save”.
With turnover in 2013 of €122 billion, Eon is one of the world’s top-10 energy companies with 35 million customers and 62,000 employees in Europe and North America. The company was created in 2000 through the merger and privatisation of two public energy utilities, Veba and Veag.
As well as seven nuclear plants, two of which are already off the grid, it operates 12 coal- and two lignite-burning energy plants, and 12 gas power stations.
Green energy already contributes over a third of Eon’s existing energy mix, with one fifth from nuclear and 42 per cent from fossil fuels. As part of the shake-up, the Düsseldorf-based utility will shed 5,000 jobs.
While financial markets welcomed the news, analysts described it as a belated attempt by a bloated company to correct business mistakes of the last decade that saw the company post a loss for the first time in six decades last year.
