EnBW warns nuclear moratorium to hit profits

Germany’s third biggest electricity supplier EnBW has warned of dramatically reduced profits for this year in the wake of the moratorium on the country’s nuclear power plants.

EnBW warns nuclear moratorium to hit profits
Photo: DPA

The firm’s operating profit is likely to be down 25 percent on the €1.9 billion profit from last year, warned EnBW’s chief finance officer Thomas Kusterer at the general meeting on Tuesday. Until now EnBW had only predicted a 15-percent drop in profits.

Yet the 25-percent reduction in profits assumes that the Philippsburg 1 nuclear power station will be used again once the current three-month moratorium is lifted. Profits could be hit even harder if this is not deemed possible – as anti-nuclear power campaigners who say it is too old to be put back into service, suggest.

CEO Hans-Peter Villis said the reduced profit prognosis was prompting him to strengthen a current savings plan. Costs will now have to be reduced by a mid-triple-digit million figure over the next two years he said.

And in a warning to politicians, he said, “Every unplanned closure of our power stations and every further burden from energy policy will limit our room for investment.”

Yet EnBW will also double its activities in renewable energy over the next decade, he said, increasing its investment to around €8 billion. But Villis said this would only happen if what he called the company’s ‘investment capabilities’ were not limited by the national energy policy framework.

EnBW was Germany’s most nuclear-reliant power generator, with 51 percent of its energy nuclear-based – until the moratorium last month which invoked the immediate shut down of Germany’s seven oldest nuclear power plants, a safety check of the rest and a review of nuclear policy.

It was only generating 10.5 percent of its energy from renewable sources last year.

“We stand by our power stations and we are convinced that our facilities are safe,” said Villis, adding that the accelerated change in the German energy generation system demanded by politicians and the public would present a difficult challenge to the firm.

Greenpeace demonstrated within the general meeting, and later criticised the four big German energy providers of hindering a switch over to renewable sources.

“The energy giants are simply moving their centres of gravity backwards and forwards, now back to fossil fuels, and then later perhaps back to nuclear,” said Karsten Smid, the protest group’s nuclear expert.

He said the investments made by EON, RWE, Vattenfall and EnBWE into renewable energy were way behind the targets set by politicians.

The Institute for Ecological Economic Research released a study showing that the big four energy firms planned to put between 13 and 20 percent of their investments into renewables.

“But this is not going to be enough to meet the renewable share of the electricity mix of 35 percent which the government is aiming for by 2020,” said Bernd Hirschl, main author of the study.


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German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.