Declaring first half 2013 results, German utility E.ON blamed a decline in European wholesale power prices and the boom in renewable energy for a 42% fall in earnings as capacity utilisation in its fossil power generation business declined.
E.ON stated once again that it would consider shutting or mothballing fossil power plants in Europe in response to what it describes as "interventionist" energy policies and regulations that subsidise and prioritise renewable energy.
E.On’s first half EBITDA fell by 15 % year-on-year to €5.7 billion, and underlying net income by 42 % to €1.9 billion. The results were in line with expectations, said CEO Dr Johannes Teyssen.

He told shareholders: "Much will depend on future policy decisions, which largely can’t be foreseen. A sober view of the situation indicates that, at least for 2013 and 2014, no recovery is in sight." 
Weak demand linked to recession in Europe has caused wholesale power prices to fall. Meanwhile, the prioritisation of solar and wind energy in the grid has reduced demand for coal and gas power generation outside peak load periods, with the result that some plants must operate at a loss or face closure.
"These adverse factors will continue and, according to our analysis, may actually get worse," Mr Teyssen said. "That’s why I announced at the start of the year that we [intend to] . . . cut costs and enhance efficiency . . . Increasingly, however, we also must consider closing and mothballing some assets." 

E.ON is even considering dismantling some European power plants that have been mothballed because of poor profitability and relocating them to faster-growing emerging markets such as Turkey, according to a report in The Wall Street Journal. A strong candidate for such a move would be the company’s 430 MW Malzenice combined-cycle gas turbine power plant in, Slovakia. If E.ON’s calculations prove that a move is economically viable, the plant could be moved to Turkey, which is a more attractive market with stronger energy-demand growth.
E.ON is not the only company considering drastic measures. Swedish utility Vattenfall has hinted that it is considering the sale of its power business in continental Europe while RWE has warned that it may have to shut down a fifth of its power plant capacity.