There are worrying parallels between the current E.ON split into two separate companies and the finance industry’s spinning off of risky assets into bad banks in the aftermath of the financial crisis, writes Markus Balser in a commentary for Süddeutsche Zeitung. “The next industry is offloading what it perceives as too risky… the public’s distrust is justified,” writes Balser. He argues that it remains totally unclear how the new company called “Uniper”, which will inherit E.ON’s fossil and nuclear activities, is meant to survive economically. “Yet again, colourful brochures are printed and risks relabelled as opportunities. And yet again, it will probably become expensive for tax payers,” concludes Balser.
E.ON announced details this week of its split into two companies, one focused on renewables, power grids and energy services and the other, to be called Uniper, on conventional power.
See the commentary in German here.
“The Uniper Experiment”
The E.ON split is an experiment whose outcome is yet unclear, writes Helmut Bünder in a commentary for the Frankfurter Allgemeine Zeitung. “E.ON offloads practically all its big risks into the spin-off. Focussing on two very different divisions, old-style power plants on one hand and a decentralised new energy world on the other, certainly brings opportunities. Perhaps it is the only way out of the crisis,” writes Bünder.
“Slalom into risk”
The planned levy on old coal-fired power plants is hasty and comes with big legal risks, writes former economy minister Wolfgang Clement in a guest column for Handelsblatt. The levy would be the beginning of the end of brown coal in Germany, which is the cheapest energy source and requires neither imports nor subsidies, according to Clement. “As long as there are no sufficient technologies to store renewable energy, the simultaneous exit from nuclear and coal is at least an absurdity,” writes Clement, who argues the recently approved rules for fracking are far too strict. Germany should abandon the aim of reducing CO2 emissions by 40 percent by 2020 and instead switch to the EU’s timetable of 2030. “This wouldn’t cost Germany anything – except a few headlines,” concludes Clement.
Clement used to be a member of Gabriel's Social Democrats (SPD). He left the party in 2008 after a quarrel over energy policy, in which he opposed the exit from nuclear and coal.
“Climate fee for coal-fired power stations is counterproductive”
The proposed levy on old coal-fired power stations is “inefficient, drives up costs and offers few investment incentives,” according to Karen Pittel, director of the Ifo Center for Energy, Climate and Exhaustible Resources. The levy would not help to lower emissions, but rather further erode European emissions trading, which is undermined by market interventions, warned Pittel at the start of a workshop on the potential comeback of coal, according to a brief press release. Pittel also argued that the levy threatened to increase the costs of the Energiewende without providing investment incentives for surplus capacities. According to CESifo, Pittel’s statement is not based on a new study but on her personal assessment of the proposal.
See the press release in English here.
Ministry for Economic Affairs and Energy