E.On Set to Push Back on ‘Damaging’ Energy Policy Short-termism of the UK

Photo via The Energyst

Michael Lewis, the boss of E.On, has called out the “damaging” short-termist energy policy of the United Kingdom as the group is getting ready to concentrate on the household supply market via a £38bn deal with RWE.

The chief executive of the German energy giant urged the Government of the United Kingdom to reconsider making use of energy efficiency measures to slash hundreds of pounds off bills, in favour of a temporary cap on energy price.

After a public debate that was held late last week regarding countering short-termism in business, he stated: “This is a far more sustainable policy which politicians should consider embracing.”

The energy giant which is based in Frankfurt is hoping to finalise a major asset swap deal with RWE in which E.On will acquire the parent company of Npower, Innogy, in exchange for the energy generation assets of the firm.

It is still not clear whether E.On will be able to lay any claim to Npower which is anticipated to merge with the supply business of SSE as a separately listed company, which is pending regulatory approval later in 2018.

Lewis also said that he would continue to push for the Government to reconsider its clampdown on onshore wind power, even as he gets ready to hand over the renewable energy business of the group to RWE.

He stated: “The UK’s clampdown on support for onshore wind could be seen as an example of damaging short termist policy. We continue to engage with Government on future plans to facilitate, if not subsidise, onshore wind in the future.”

Lewis continued: “Economically it makes sense that the lowest cost options for decarbonising the energy system are not ruled out. Where there is local support for onshore wind, we believe the Government should provide a viable route to market which is likely to be at a level comparable with subsidy-free.

“However this same approach is needed in other areas; for example, as a country we also need to bring the energy efficiency of homes up to the level that is right for the 21st century, and which could save many hundreds of pounds off the annual energy bill.”

Speaking at a The Economist event that was held in London, Lewis said that long-term policy had proved to be crucial in helping transform E.On from a coal-fired behemoth to the majority owner of the London Array, the largest operational offshore wind project in the world.

He stated: “Policy and business have to be in line; there has to be an implicit partnership or an explicit partnership. It’s really important to say; it wasn’t a foregone conclusion, back in 2008, that we would have delivered all of this growth in renewable energy or that we would have brought the cost down so far.”