Germany's E.ON to invest $30.4B for energy transition up to 2026

By Ebru Sengul Cevrioglu

IZMIR (AA) - German energy group E.ON will invest roughly €27 billion ($30.4 billion) through 2026 for the company's energy transition, it announced on Tuesday.

Out of the total amount, around €22 billion will go towards expanding its energy networks and the remaining €5 billion towards accelerating the growth of its customer solutions business.

The company intends to increase adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in its core business by about 4% annually to around €7.8 billion in 2026.

It also aims to increase its dividend by up to 5% annually through the 2026 financial year and its earnings per share by 8 to 10% annually.

For the 2021 financial year, the company plans to propose a dividend of €0.49 per share.

The company’s five-year investment plan was announced a week after the release of a plan from another German energy company, RWE, which said it will invest around €50 billion in its core business by 2030.

With its new strategy "Growing Green," RWE said it will spend an average of €5 billion gross each year for offshore and onshore wind, solar, batteries, flexible generation and hydrogen.

- E.ON to integrate 35 to 40 GW of additional renewables capacity

E.ON board member responsible for energy networks, Thomas Konig, said over the next five years alone, E.ON's networks will integrate 35 to 40 gigawatts of additional renewables capacity.

This plan comes amid the decarbonization of Europe's economies, and according to E.ON CEO Leonhard Birnbaum, places the energy industry at the threshold of a key decade of growth.

"Having roughly 50 million customers in Europe and the continent's biggest distribution network – which is the backbone of this transition – positions E.ON superbly to seize this opportunity," Birnbaum said.

"Each of those new facilities takes Europe another step toward its Paris Agreement targets. In addition, we will see millions of heat pumps as well as batteries and eMobility," Konig said.