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German utility EON SE ramped up investments by 20% in the first nine months of the year to help drive the energy transition.
Author of the article:
Bloomberg News
Eva Brendel
Published Nov 14, 2024 • 1 minute read
(Bloomberg) — German utility EON SE ramped up investments by 20% in the first nine months of the year to help drive the energy transition.
Spending rose to €4.7 billion ($5 billion) from January through September, the company said Thursday in an earnings release. In March, EON announced total investments of about €42 billion through 2028, with the bulk of that destined for German projects and improvements to networks and infrastructure.
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As one of Europe’s largest distribution-grid operators, EON plays a key role in the economy’s electrification. The continent aims to be climate-neutral by the middle of the century, an endeavor that requires a huge build-out of grids so that millions of clean-energy generators can be connected.
The majority of the investments in the period were spent on EON’s Energy Networks division, focusing on expansions, modernizations and digitization of the grids.
Adjusted earnings before interest, taxes, depreciation and amortization for the first nine months fell 14% to €6.7 billion, after one-time positive effects from a year earlier weren’t repeated. EON still expects full-year profit of €8.8 billion to €9 billion.
One uncertainty for the utility is a pending court case on the German energy regulator’s decision on grid returns, which will impact EON’s earnings. Grid operators have criticized the investor returns for new energy networks that were introduced at the beginning of the year, saying they were too low.
Read: RWE Plans €1.5 Billion Buyback as US Risks Cloud Investments
EON’s increase in spending differs from other German energy companies, including Uniper SE and RWE AG. The power producers both said they have to delay or potentially cut investments in the coming years, citing slower progress in the hydrogen industry in Europe.
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