The role of energy companies is changing

The role of energy companies is changing

Johannes teyssen probably can't hear the word energiewende anymore. For the eon manager, it means work. Teyssen, head of germany's biggest energy group, has a difficult mission ahead of him: to set the company up so that it will still be making decent profits in a few years' time. Even the competition has to. RWE, enbw, vattenfall – all have the same task to master: earning money without nuclear power. Its end was sealed in this country by the energy turnaround.

But what strategies can an energy giant like eon, which still operates more nuclear power plants in germany than any of its competitors, use to earn money in the post-nuclear age?? "Decentralized energy solutions will play an important role", says stefan vogg, chairman of the management board of eon vertrieb deutschland gmbh, based in munich. The most important change is that "in tomorrow's energy world, the customer will be both a consumer and a producer of energy.

Consumers have been able to generate, store and feed energy back into the grid themselves. According to vogg, an english term has already become established for this: the "prosumer" – a mix of producer and comsumer.

Investing in renewables

No more profitable nuclear power plants and customers who are becoming more and more active themselves – what is left for an energy company?? "Eon will "make money" in various fields, says roland schilhab, company spokesman for eon vertrieb germany. It is not the case that up to now we have only been able to offer electricity from conventional energy sources. In the meantime, eon is one of the world's market leaders in renewable energies, offering, for example, 3000 megawatts from hydropower and almost 4000 megawatts of installed capacity for wind turbines.

Eon currently operates six offshore wind farms, including germany's first offshore wind farm, alpha ventus. "Eon's strategy is to become "cleaner" better energy' convincing employees, customers and investors", teyssen, the group's CEO, said recently in a press release.

No one at eon any longer doubts that the future belongs to renewable energies. "We have also been selling photovoltaic systems since the end of 2010", reports sales spokesman schilhab. Eon works together with regional craftsmen and is less a trader than a provider of solar concepts.

But what if today's customers no longer need a large energy company in times of decentralization?? Schilhab sees limits here. Not everyone will be able or willing to intervene in energy generation for a long time to come. "If you live in a rented house, for example, you can hardly put a mini power plant in the basement because you don't own it", schilhab gives an example. Industrial companies also often shy away from the risk of operating their own power plant with high investments. "For customers like these, energy suppliers will still be needed", schilhab is convinced. In addition, even decentralized generation units had to be managed. "What do customers do if their own or a decentrally operated system fails??", asks the eon spokesman. "There must be an alternative." Schilhab's chief executive stefan vogg calls it the transition from a pure energy supplier to an energy manager.

The supply of electricity and gas will continue to dominate the business for some time to come, he says. However, eon expects that from 2020 onwards, the contours of an integrated energy system comprising centralized generation, decentralized solutions and intelligent networking and consumption control will gradually emerge. "The world of sales is getting more interesting. Customers have new needs and we have new offers", says schilhab.

Future market for electromobility

One of these offerings is smart meters and energy efficiency solutions. But eon is also doing everything it can to open up new fields of business in distributed generation. An example are mini cogeneration plants. Eon has already installed around 300 such small cogeneration plants across germany. The aim is to increase the number significantly.

Eon sees an important future market in electromobility, after all. It's a matter of making the electric car appealing to people, says schilhab. Eon wants to offer customers everything from a single source: from charging stations to eco-electricity and from installation and maintenance to brokering electric vehicles. The latter is already running with the car rental company sixt as a partner.

If eon uses its decades of expertise in energy supply, its broad customer base and its coarse, the group could still be making profits in ten years. The declining core business of the german energy giants – electricity generation in centralized large-scale power plants – will nevertheless make itself felt. Group CEO teyssen expects a much leaner structure. "I'm convinced that our market share in germany will decline inevitably and sustainably", teyssen said in an interview with "zeit". In a more decentralized energy world, it is not possible for eon to maintain its market share. According to eon, it currently accounts for just under 15 percent of electricity generation.

 

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