BERLIN—German utility E.On was hit hard last year by the German government’s decision to shut down nuclear power plants, the company said Wednesday as it announced a net loss of €1.9 billion ($2.5 billion) for 2011.
The atomic reactors’ shutdowns, combined with Japan’s Fukushima nuclear disaster and a new tax on nuclear fuel are the reasons for the loss, Germany’s biggest power supplier said.
Chancellor Angela Merkel’s government decided in the wake of Japan’s nuclear disaster in March 2011 to immediately shut down eight of the country’s 17 nuclear reactors, and phase out the rest earlier than planned, with the last set to go offline in 2022.
Lower earnings in its power generation unit and declining margins in the natural gas business also contributed to E.On’s net loss, which comes after a €6.3 billion profit in 2010, it said.
Despite the loss, E.On said sales were up by 22 per cent from €93 billion to €113 billion and that the company was now “past the worst.”
The company provided no immediate breakdown for fourth-quarter figures.
“For 2012, we expect to post an earnings increase that will continue in subsequent years,” the firm’s chief executive officer Johannes Teyssen said
E.On expects a profit this year of up to €2.7 billion.
The company plans to grow by expanding its operations outside Europe, with new power plants in Brazil and Russia, and by boosting its onshore wind farm operations in the U.S., where E.On said it is the fifth-largest player.
In Europe, the company said it would continue to increase its investments in renewable energies, forecast to top €1.6 billion in 2012 alone, with a strong focus on offshore wind farms.
E.On’s main rival, RWE AG, has also seen its earnings decline last year amid Germany’s accelerated exit from nuclear power.
Before the German government’s decision last year, nuclear power generated a little more than 20 per cent of Germany’s electricity —about the same as in the U.S. The Berlin government plans to replace it by switching to renewable sources such as solar and wind power, whose power generation surpassed that of nuclear reactors for the first time last year.
By 2020, Germany expects to get 35 per cent of its electricity needs from renewable sources, and 80 per cent by 2050.