GERMAN energy firm E.On yesterday narrowed its full-year earnings forecast, after posting a 19 per cent decline in earnings for the first nine months of the year.
The integrated energy firm, which supplies power across Western Europe, blamed government support for renewables over conventional forms of energy for the decline. An increase in renewables has led to overcapacity, bringing down wholesale prices.
E.On now predicts full-year earnings between €9.2bn (£7.7bn) and €9.3bn, from previous guidance of €9.2bn to €9.8bn. “It simply isn't acceptable that renewables receive guaranteed, risk-free compensation but that conventional capacity – essential for ensuring a reliable power supply – is barely able to cover its costs,” said chief executive Johannes Teyssen.
French energy firm GDF Suez posted a 6.5 per cent drop in nine-month earnings, which it similarly attributed to a challenging market.