The German utility company, E.ON, looks set to cut 11,000 jobs as the German government continues with plans to shut down nuclear plants in the wake of the Fukushima disaster.
E.ON has announced that the German government’s decision to close its nuclear plants as a result of the events earlier this year in Japan will lead to the loss of 11,000 jobs.
Only a few weeks ago E.ON increased its business electricity prices and last week Utility Exchange reported that E.ON had announced an increase in domestic gas prices of 18.1% and electricity prices of 11.4%.
E.ON is Germany’s biggest utility provider and has for the first time in ten years reported its first quarterly loss of €1.49bn. The news comes close on the back of RWE, another German utility company and owner of npower, announcing a loss of €229m. These announcements are obviously causing concern in Germany over the cost of shutting down its nuclear power plants by 2022 and doubling its renewable energy output to make up the shortfall.
Nuclear plants in Germany generated 23% of its total energy use last year but its renewable energy output has increased from 17% to 35%. Only last year the German Chancellor, Angela Merkel announced that the life of German nuclear plants would be extended into the 2030s but the Japanese earthquake and subsequent problems with the Fukushima nuclear plant resulted in a U-turn.
Those who are opposed to the closure of the nuclear plants argue that it will cost billions of euros and result in even higher energy prices in Germany. It will also mean the Germany will move from being a net exporter of energy to a net importer and more reliable on other countries for its energy. Furthermore, they argue that renewable energy is not as reliable as nuclear power and therefore the country will face the threat of more blackouts which will damage the country’s industry.
E.ON announced that its net profit forecast had been reduced by 30% and that results in 2012-2014 would be much lower than 2010 because of the changes to the power generation industry.