EON Seen Raising Investments by €11 Billion Through 2030
(Bloomberg) -- German power utility EON SE is likely to increase spending by about €11 billion ($12.9 billion) by the end of the decade as the country makes grid investments more attractive, according to a report from Bernstein.
As one of Europe’s largest grid operators, EON plays a key role in supporting the expansion of renewable power. Following calls from the company and its peers — which rely on regulated assets for much of their income — Germany has proposed changes that would boost returns for investors in the network.
“The German regulatory framework is clearly improving,” Deepa Venkateswaran and Rory Graham-Watson, analysts at Bernstein, said in the report. “The company will increase its capital allocation due to an improving allowed-returns picture.”
A spokeswoman for EON said it’s too early to comment on any additional investments as the regulatory framework hasn’t yet been determined. Further spending requires a coherent, sustainable regulatory environment, which current drafts “fall well short of,” she said.
Germany must upgrade and expand its grid if it’s to cope with projected growth in renewables generation. Operators’ returns have become a point of debate in recent years, with many arguing they’re insufficient to spur the work required. The proposed regulatory reforms would take effect in 2029.
EON has said it plans to invest a total of €43 billion between 2024 and 2028. The company has indicated it could have as much as €10 billion more to spend “under the right conditions” as that period closes out.
(Updates with company comment in fourth paragraph.)
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