E.on boss Leonhard Birnbaum: Energy transition in Germany is “particularly expensive” and cumbersome

Enlarge image

E.on boss Leonhard Birnbaum at the company headquarters in Essen

Photo: Rolf Vennenbernd / picture alliance/dpa

The head of Germany's largest energy supplier E.on, Leonhard Birnbaum, has warned of escalating costs and problems with the energy transition. This takes place worldwide. "But Germany makes it particularly expensive, particularly bureaucratic and particularly complicated," said Birnbaum on Thursday evening in Essen. The Republic must “get the system costs under control.”

The 56-year-old is alluding to the fact that electricity has become cheaper again in the wholesale market - where suppliers like E.on buy the energy for their customers - compared to the crisis year of 2022. However, network fees for electricity consumers are rising sharply, especially this year at .

One trigger for this was that the federal government withdrew an originally planned billion-dollar subsidy for network fees after the Federal Constitutional Court's budget ruling. Another reason is that network operators like E.on are investing billions to equip the electricity system in Germany for more and more renewable energies, heat pumps and electric cars. But in the meantime, companies have to repeatedly shut down wind farms - especially in northern and eastern Germany - in exchange for compensation because the capacity of the current network is not sufficient to direct the electricity to the south and west. In return, coal-fired power plants, for example, have to step in there. This so-called redispatch costs several billion euros per year.

The federal government should ask itself “whether the expansion of renewables needs to be managed regionally and what appropriate funding could look like,” said E.on boss Birnbaum. “The energy transition will only succeed if the energy arrives where it is needed and the costs of the entire system do not go through the roof.” Acceptance of the new energy world would suffer as a result, says the engineer.

»Capacity problem with electricity«

The US state of Texas approaches this problem in a fairly radical way: There, operators of wind and solar parks do not receive any compensation if the local grid capacity is not sufficient to transport the electricity. This gives companies an incentive to expand renewable energies where they are “network-friendly”. One solution, for example, is to combine wind and solar parks directly with battery storage. The green electricity can then be fed into the grid at different times.

Birnbaum is very concerned about how Germany will secure its electricity supply after the nuclear phase-out and the planned coal phase-out. “Our country has an electricity capacity problem,” warned the E.on boss. The answer "couldn't seriously be: We as a Federal Republic are relying entirely on coal again." Germany urgently needs a so-called capacity market - i.e. a system that pays companies a price if, for example, they have power plants available. The operators would compete for this price in auctions in order to keep costs as low as possible.

more on the subject

• Electricity prices: Why network fees are rising so sharply - and what could be done about itBy Benedikt Müller-Arnold

• Major energy transition project: This is how much Germany's power supply is changingBy Benedikt Müller-Arnold, Klaas Neumann and Patrick Stotz

The federal government is currently negotiating a so-called power plant strategy. Corresponding key points stipulate that dozens of new gas power plants will be built in the coming years, which will generate climate-friendly hydrogen in the future. However, the financing of the strategy in particular was recently controversial within the traffic light coalition.

Germany will not be able to achieve the energy transition "if legislators and administration continue to act so passionately and sluggishly - or not to act," criticized Birnbaum. The Republic cannot afford that.

note