E.On Warns of More Gas-plant Closures in Core European Markets

Germany’s E.ON does not see any recovery for its gas division in Europe, as its traditional generation business is suffering from ‘low capacity utilization and excessively low wholesale prices.’

That is the message of the company, which also warned that more of its gas-powered plants could soon close. 

In a letter to shareholders released on Tuesday, E.ON’s chief executive Johannes Teyssen wrote that closures are unavoidable unless a drastic change in the business environment.

‘We recently decided to mothball our gas-fired plant in Malženice, Slovakia, which entered just two years ago. These kinds of decisions are never easy. But from a business standpoint we had no choice. Unless the business environment of the energy industry in our core European markets changes tangibly, other plant closures will be unavoidable,’ wrote Teyssen.

The German company also published first-half financial results, reporting a 15% yearly decline in EBITDA and a 42% slump in underlying net income.

E.ON’s renewable assets increased in the same period. The company recently inaugurated the world’s largest offshore wind farm. Its first solar farms in the United States entered service.

‘The years ahead will be demanding, but also decisive years for our company’s transformation. E.ON is becoming leaner, more decentralized, and even more international,’ explained Teyssen.