March 12 - Germany's biggest utility plans to halve its dividend for 2013 and shut more than a quarter of its power plants. As Hayley Platt reports its in response to a surprise rise in renewables across Europe.
Half the 2013 dividend at E.ON is going much the same way as its coal. And Germany's biggest utility company is also planning to shut more than a quarter of its power plants It's already axed thousands of jobs and sold off billions of euros worth of assets to try and reduce its 32 billion euro debt pile. It says a surprise surge in renewable energy - particular solar and wind power - is fuelling its problems. Andy Houston is an energy analyst with Poyry Management Consulting. SOUNDBITE: Andy Houston, Senior Principal, Poyry Management Consulting, saying (English): "I think it changes the playing field for the more traditional big players. So if they've traditionally made their money from thermal generation and that's getting squeezed so obviously these companies are big players in renewables so they're not just on one side of the fence. But inevitably their market place is changing and they're having to adapt." EO.N sees this year's earnings - before tax and exceptions - somewhere between 8.0-8.6 billion euros. That's 14 percent down on the previous year. It's not the only big energy firm suffering. France's GDF Suez recently booked a 15-billion euro charge on its power assets while last month German rival RWE posted its first net loss since 1949. Europe and Germany in particular are heavily reliant on energy supplies from Russia. But fixed prices agreed years ago and weaker demand in Europe have hurt big some of the big suppliers. Events in Ukraine haven't helped although the impact of the crisis should be short term. SOUNDBITE: Andy Houston, Senior Principal, Poyry Management Consulting, saying (English): "I think if one looks long term Europe has the potential to be less dependent on Ukraine than it has in the past. We've got the north stream pipeline bypassing the Ukraine. Ultimately Russia makes a lot of money from exports so it's got a good incentive to keep the gas flowing." Expansion outside Europe - particularly emerging markets - could be the answer. E.ON's already invested 10 billion euros in Turkey, Brazil and Russia. But three years after Germany vowed to wean itself off nuclear power E.ON's clearly struggling to adapt. The value of its shares has fallen by 54 percent over the last four years.