FRANKFURT (Reuters) -E.ON, Europe’s largest operator of energy grids, on Wednesday called on Germany’s energy regulator to raise future returns on grid investments, warning Europe’s top economy risked falling behind in its efforts to build out power infrastructure.
The group also posted first-half adjusted core profit of 5.5 billion euros ($6.43 billion), an increase of 13% year-on-year, and kept its outlook for 2025, still expecting adjusted earnings before interest, tax, depreciation and amortisation of 9.6 billion to 9.8 billion euros.
“While other countries are creating targeted regulatory incentives, Germany risks falling behind,” E.ON Chief Executive Leonhard Birnbaum said, still confirming a plan that foresees investments of 43 billion euros in the 2024-2028 period.
“We therefore urge the Federal Network Agency to take network operators’ factual arguments seriously and facilitate the investments needed for the energy transition, security of supply, and affordability, rather than hinder them.”
Energy grid operators depend on fixed rates of return set by regulators, and have warned that it will be tough to attract investors unless the caps on them will be raised.
The German regulator currently allows pre-tax write-off rates of return on equity employed of 7% on new infrastructure and 5% for existing infrastructure pre-tax, compared to 7%-9% elsewhere in Europe.
($1 = 0.8559 euros)
(Reporting by Christoph Steitz, Editing by Miranda Murray)