As of: February 27, 2024, 4:55 a.m
By: Lars-Eric Nievelstein
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Germany is driving forward the energy transition.
The Eon boss warns of massive price increases.
Nevertheless, he also sees opportunities.
Berlin – Only at the beginning of the year Leonard Birnbaum, CEO of the energy giant Eon, had predicted an increase in electricity prices.
Just a few weeks later, the two energy companies EnBW from Karlsruhe and EWE from Oldenburg announced that they actually wanted to increase their prices.
On average, this was an increase of up to six percent.
However, it doesn't stop there - Birnbaum now warned of significantly higher costs if the government doesn't act.
Eon boss: “We can’t continue to tell the story of the zero-cost energy transition”
According to Birnbaum, there are a number of reasons for further price increases.
For example, the costs of financing investments increase with the key interest rate, and at the same time the country needs even more green electricity systems.
The currently “strongly growing” green electricity production, in turn, requires integration with the power grid.
This requires faster and more intelligent expansion of the networks, and the necessary reserve capacities must also be available.
“We were always told that the sun didn’t send an invoice, so everything was free,” the Eon boss told the
Süddeutsche Zeitung
.
But at Eon it was always clear that things would turn out differently.
Eon boss warns of rising prices – energy transition will not happen at “zero tariff” © IMAGO / Funke Photo Services
All of these factors could now ensure that prices continue to rise.
“If politicians don’t take countermeasures, it can’t be ruled out,” warned Birnbaum.
The energy-intensive industry is currently being hit particularly hard - electricity costs here were already rather high before the crisis compared to other countries.
“Politicians cannot continue to tell the story of the zero-cost energy transition.”
The expansion of wind energy is not efficient enough
Birnbaum identified a further problem as a certain lack of planning in the construction of wind turbines.
“The wind farm developer simply builds where the wind blows properly and then says to Eon, for example: 'Connect it to the grid.'” Then Eon is obliged to comply, “however sensible that may be .” The problem is that many energy companies have built a lot of wind turbines in the north of Germany, where there tends to be more wind.
But as soon as this creates more energy than Schleswig-Holstein, for example, can consume, problems arise.
Because diverting the electricity southwards overloads the networks, network bottlenecks are a possible consequence.
In such a case - as happened with TransnetBW in January, for example - it may happen that the network operators ask citizens to save electricity.
“If the wind turbines have to be curtailed because the grid is overloaded, the investor receives compensation,” explained Birnbaum.
In the end, the network operators pass on the costs to the consumers, while the investor has no risk.
“These are false incentives.” Instead, there should be more wind turbines in Bavaria and Baden-Württemberg.
Wind turbines would have to be built where it is cheaper in terms of network technology.
“The sooner countermeasures are taken, the cheaper it can be,” said the Eon boss.
Eon boss sees opportunities for the energy transition
Nevertheless, he also sees a positive side.
The current development is forcing “all of us” to think about alternatives where the paths could be “easier and more economical”.
The ruling of the Federal Constitutional Court is also an opportunity.
The expansion of renewable energies, for example, could be controlled regionally; wind and solar systems would have to be located where the electricity is needed - or where there are enough networks.
Ultimately, this leads to important cost reductions.
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The Federal Network Agency also sees potential for expansion.
Germany has made great progress in photovoltaics.
However, when it comes to wind on land, the agency is not yet where it actually wants to be.
Klaus Müller, President of the Federal Network Agency, said: “What makes me optimistic is that significantly more approvals will be issued in 2023.
This will pay off in increasing numbers of new additions.”
Gain momentum instead of discussing
Finally, the Eon boss advises more movement when it comes to expanding the infrastructure.
“We're constantly standing on the scales, weighing ourselves and setting more strenuous weight loss goals instead of just starting to exercise,” he complained.
“If we all pull together, we can do this.
We need to gain momentum.”
Eon recently claimed a leadership role in the energy transition.
This is not only shown by the new slogan “It's on us”, but Birnbaum announced at the E-World energy trade fair in Essen that the energy transition would not be possible without Eon.
Eon operates almost 700,000 kilometers of the 1.9 million kilometers of electricity network.