Which Energy Supplier Could Be Abandoning Fossil Fuels for Renewable Energy?
It’s renewable energy time again here at Love Energy Savings, with the news that one of the UK’s more prominent energy suppliers could be looking to ditch fossil fuels in favour of more renewable sources.
The Germany based Big Six member has decided to split its operations into two, with the arm remaining as E.ON putting the crux of its efforts into power distribution, customer solutions and renewable energy.
This move may be confusing for many, so in true LES style we have looked to outline exactly what this could mean for the energy supplier and the industry as a whole.
E.ON At a Glance
- One of the Big Six energy suppliers.
- 33 million energy customers, 5.3 of these are from the UK.
- E.ON is German and based and run.
- The energy supplier has made its name investing in fossil fuels as well as hydro, wind and nuclear. E.ON also buys its gas from Russia.
- Third largest home energy suppliers on the market.
- E.ON have lots of assets in the North Sea and also invest in power stations in the UK, many of these burn fossil fuels making their latest move all the more interesting.
How Will The Division Work?
With E.ON being a German company, it isn’t really surprising to see them looking to adopt a heavily renewables based business model. The European economic heavyweights have shown the way for some time when it comes to green energy initiatives and it doesn’t take a genius to see that the energy companies that crack renewables will have the more sustainable businesses going forward, fossil fuels will run out whether energy firms like or not.
This surge in green energy policies and the troubles being faced by power plants across the country has led E.ON to split its company into two clear divisions. The E.ON that remains will be ditching coal, gas, nuclear and hydro power stations as well as its fossil fuels division and any of its endeavours in the North Sea (so, oil).
This will leave E.ON with renewables, energy and power distribution and its customer facing department. They will focus on future proof energy sources such as solar, wind, smart grids and customer service, an area they fare much better in than other Big Six entities. E.ON has funded this by selling on its Spanish and Portuguese divisions for in excess of 2.5billion euros and around 40,000 employees will be entirely focused on their renewable energy initiatives.
I’m An E.ON Customer, Will I Be Getting Green Energy?
From what we can work out, no. E.ON will still be buying its energy from the wholesale market and potentially from the new company that has resulted from this move. It is very likely that the supplier will have a renewable package pretty soon though, so watch this space on that one. It is likely to be some time before you find energy companies dealing solely in renewables but what is refreshing to see from E.ON is the level of commitment and investment.
Massive Boost for Renewable Energy…
This move in undeniably a huge one for renewable energy, which really is the future of securing energy dependency. As one of the European energy heavyweights, E.ON’s decision to attack green energy is set to give the sector the boost it needs and the hope will surely be that other energy suppliers follow suit. RWE (the energy firm that runs npower) are already rumoured to be pondering such a move, which would mean that two of the Big Six would be German-run renewables companies.
E.ON have already invested in offshore wind farms here in the UK due to their obvious lack of surrounding ocean and they have confirmed plans to make smart meters and big consideration going forward.
Why Have E.ON Done This?
On the face of it, this looks like a master stroke by the energy supplier as it looks to repaint its image as a smarter, cleaner and environmentally concerned provider. It also takes all of the debt away from its “new company”, the arm which will still be dealing in all of its fossil fuels. In a press conference, the powers that be at E.ON admitted that they weren’t quite sure which division of the company would fare the best, so it does look to be somewhat of a gamble.
The coal and gas based E.ON may be changing names but it is not going anywhere and has just rubber stamped plans to build a coal plant in Turkey. Ultimately, what E.ON have done is ensure that they are no longer competing against themselves.
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