Energy policy: Eon boss wants more competition in the expansion of renewables

The head of Germany’s largest electricity supplier Eon, Leonhard Birnbaum, is calling for a fundamentally different way of thinking about energy policy from the future federal government. “Price and quantity risks must not be passed on entirely to electricity customers in the long term,” said the manager of the financial news agency dpa-AFX and the German Press Agency in Essen. He advocated that investors in wind and solar systems, for example, bear the financial risks of forced shutdowns in the event of grid overload themselves in the future.

So far, the system operators have received compensation for so-called curtailments, which is passed on to all electricity customers via the network fees. “If it were the investor’s problem if the network operator had to regulate it and he didn’t get any compensation for it, then he would think three times about whether he was really building his system where there is already a regular supply of electricity,” said Birnbaum . In principle, market signals must reach investors.

Eon boss: Investment incentives are set incorrectly

The energy manager pleaded with politicians to limit themselves to a few goals when restructuring the energy industry and to keep them flexible. “We currently have an expansion target for solar, an expansion target for onshore wind power, an expansion target for offshore wind power. We have goals for what we should do on the grid, how many electric cars we want to sell and so on. Such goals will In case of doubt, investment incentives are not provided using excessive resources and massive subsidies – namely only in order to achieve the targets and not according to the actual needs.

Basically, politics should act less detail-driven and instead more regulatory and through the market. “This change of direction must take place, no matter who is in government.” When it comes to expanding renewable capacity, one could also say: “The only thing that really interests us is our goal of getting the renewable share of electricity generation to 80 percent in 2030. And whether that will ultimately be 110 gigawatts Solar or 90 – who cares?”

Birnbaum: Artificial intelligence can improve system operations

Birnbaum also spoke out in favor of relying more on artificial intelligence. “We know that we can operate our system much better with artificial intelligence than without it.” In general, it is important to rely more on innovation. Ten years ago, no one was talking about the topic of artificial intelligence. There will also be plenty of innovation in the energy industry in the future, “and it will surprise us.”

In Birnbaum’s opinion, the key to a successful energy transition that is affordable for customers is extensive electrification of those areas in which oil and gas are still consumed today. “Electrification has two main advantages. It allows energy use to be made green and efficiency to be increased.” For example, an electric car can run in an environmentally friendly manner using green electricity. Since electric motors are much more economical, the overall energy use is significantly reduced compared to combustion vehicles.

Eon boss: Electrification could lead to falling electricity costs

Electrification would initially result in higher costs, for example due to the necessary expansion of the power grid. However, these would be passed on to more consumers or higher consumption quantities. “As a result, electricity prices can remain constant or even fall in the long term – depending on how successful the electrification is.” As a customer you then pay more overall for electricity. “But this is more than compensated for by the reduced energy costs, because you no longer need gas for heating or petrol for your car.”

Birnbaum expects clear differences in the approach of the failed traffic light government and a potential new Union-led government under Chancellor Friedrich Merz. Growth and competitiveness should be the core issues for the next government. Regardless of the outcome of the election, he is looking forward to a “stable government that will hopefully push forward as much reform as possible.”

Eon has around 47 million customers in Europe

The energy giant, headquartered in Essen, has around twelve million electricity and two million natural gas customers in Germany, and a total of around 47 million customers across Europe. Eon is also the largest electricity distribution network operator in Germany: at 32 percent, almost a third of the distribution network belongs to the group. All power grid levels below the transmission grid are referred to as the distribution network. The distribution network plays an important role in Germany’s energy conversion towards climate neutrality: almost all wind and solar systems feed their electricity into the distribution network. Eon is also one of the largest charging station operators.