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By Christoph Steitz, Tom Käckenhoff and Vera Eckert
FRANKFURT, Jan 19 (Reuters) - E.ON, Europe's No.
1 operator of energy networks, has recently absorbed hundreds of
thousands of customers across the continent who ended up without
a provider after record prices forced several smaller rivals to
collapse, its CEO said.
While this is just a tiny share given the group's 50 million
customer base in Europe, it indicates how the current price
spikes, caused by a mix of growing demand and higher fossil-fuel
costs, have become a headache for energy retailers.
"We have taken over several hundreds of thousands of
customers in Britain, Germany and the Czech Republic," Chief
Executive Leonhard Birnbaum told Reuters. "This is placing a
great burden on us currently."
Birnbaum said the unexpected inflow of customers was a
problem because the group needed to procure energy for them at
current market prices, which have eased in recent days but are
still up nearly fourfold in some cases from last year.
In Britain, where E.ON is the second-biggest retailer after
Centrica's British Gas, more than 20 energy firms have
exited the market since September, unable to cope with the price
rise that they cannot fully pass on to customers.
While it's a smaller number in E.ON's home market Germany,
some local players have also defaulted, which Birnbaum said
required tougher regulation for new market entrants that do not
have the resources to handle a volatile market.
"The energy market is not a market that is suitable for
speculation on the retail side," Birnbaum said, adding that
E.ON's retail business was well positioned and therefore had
fared better than others during the crisis.
"However we are paying for having to take on customers of
those that have acted uneconomically. We don't want that to
become an annual thing. Something needs to happen."
Birnbaum he said he was optimistic that the tough British
retail market, where E.ON recently took over former rival
npower, would benefit from market changes regulator Ofgem
considers due to the crisis.
E.ON transferred virtually all of its generation assets to
RWE as part of a landmark transaction that closed in
2020, but still operates Isar 2, one of three German nuclear
power plants that will be phased out by the end of 2022.
Once Isar 2 goes offline, E.ON's nuclear division,
PreussenElektra, will focus on decommissioning, which Birnbaum
said will not weigh on profit as costs will be borne out of the
company's provisions.
(Reporting by Christoph Steitz, Tom Kaeckenhoff and Vera
Eckert; editing by David Evans)
