Eon warns energy crisis not over yet as it ramps up renewable spending
There is still a risk that gas prices could rise this winter despite the recent calming across energy markets, Eon warned today.
While the energy supplier said markets were stabilising, it encouraged homes and businesses to put in place plans to save power and gas this winter in case of future spikes.
“There are still very large sources of uncertainty on both the supply and demand sides, with corresponding risks regarding the future development of wholesale prices,” the firm said in its half-year earnings presentation this morning.
The warnings followed chief executive Leonhard Birnbaum backing the group’s green energy transition plans and the general shift away from oil and gas supplies.
“The energy transition is becoming more tangible with every passing day, and the demand for our sustainable energy solutions and our infrastructure is increasing. We are therefore in an environment that presents us with a lot of work, but also offers tremendous growth potential,” he said.
Eon confirmed it has ramped up green investments, spending around €2.4bn on infrastructure in the first half of 2023 — up 36 per cent from a year earlier — while reaffirming its full-year investment plan of roughly €5.8bn.
This came alongside robust top line figures, with group pre-tax earnings of €5.7bn for the first half of the year, up from €4.1bn in the previous 12 months.
It also hiked its full-year forecast for gross earnings from €8.6bn to €8.8bn, while raising expected annual net income from €2.7bn to €2.9bn.
Eon also confirmed prices on wholesale markets will be passed on to customers with power and gas price reductions for millions of customers later this summer
Birnbaum said: “The historically high power and gas procurement costs were a big challenge for us last year. Now we see that wholesale markets are calming down again. As announced, this will enable us to again lower prices for millions of power and gas customers.”
Eon is the second largest supplier in the UK supplying over five million household customers.
It anticipates the price cap, currently set at £2,074 per year by regulator Ofgem, will fall to £1,861 per year in October, reflecting falling gas prices this year, but will not decline much further over the coming 12-15 months.