Key readings: Utilities and the energy transition
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Description:
EnBW is one of the four German energy giants with 5,5 million customers. It is based in Baden-Württemberg, Germany’s south-westernmost federal state and is the only energy company that is almost fully owned by the state, with both municipalities and the regional government owning almost half of the company. In the most recent issue of its strategy paper EnBW 2020, the company outlines how profits from conventional power stations will dwindle over the next years and how EnBW will direct investment towards renewable energy and energy services.
Description:
E.ON even took energy experts by surprise when it announced in November 2014 that the management had decided to split the company in two separate entities in 2016. The “New Company” will be endowed with the power plants, energy trading and exploration, whilst the main E.ON will retain distribution, energy services and renewable energy. In the paper which E.ON prepared for investors, the company explains the strategic direction of both future companies.
Description:
Likewise, RWE, Germany’s number two, is keen to present itself as a valuable investment in its capital market presentation. Management expects that in the mid-term, revenue from power stations and gas trading will almost evaporate but maintains that income from regulated businesses such as its distribution network will remain stable. From 2014 to 2016, only less than two billion euros will be invested in new large-scale projects, including green energy. Overall, investment shrinks by two thirds over five years. RWE also explains how it plans to grow in smart energy services.
Description:
The green agenda of Vattenfall is an interesting read, because it shows that the company has in fact a very green agenda, promising to cut greenhouse gas emissions by a third between 2010 and 2020. This is, however, at odds with its German power generation, which is based mostly on lignite. Hence, Vattenfall seeks to sell its German assets.
Description:
This report, commissioned by the French government, provides an economic overview of the European power market and the fundamental forces that are at work, such as investment in renewable energy, and links this to the historical legacies. Even though the focus is not specifically on the large utilities, the paper explains the background of their crisis well. Also, it makes clear the situation in Germany has to be seen in a wider European context.
Description:
In their yearly report on the German energy markets, the federal competition authority Bundeskartellamt and the electricity grid regulator Bundesnetzagentur take a close look at the state of competition. Last year, they reported falling market shares for the Big Four and argue that their oligopoly has been weakened and that competition is getting ever stronger.
Description:
The study shows that the contribution of German citizens to the country’s energy transformation is almost four times as big as the energy providers’. Residents operate almost half of the installed bio and solar energy plants and even more than half of the installed wind energy. Hence, citizens’ energy makes a significant contribution to market diversity
Description:
The government-owned development bank KfW argues in this research paper that the Big Four energy companies in Germany are under severe stress due to the energy transition in Germany and other developments, but also have the chance to find new business opportunities. Interesting graphs are included.
Date:
Wednesday, 18 February, 2015 - 00:00