March 22, 2018 / 4:44 PM / a year ago

E.ON CEO seeks innovation to scale up new energy business

ESSEN, Germany (Reuters) - Germany’s top utility E.ON (EONGn.DE), fresh from agreeing an asset swap with rival RWE (RWEG.DE), will seek to overcome a decade of losses by focussing on growth in innovative areas, its chief executive said on Thursday.

FILE PHOTO: RWE AG CEO Johannes Teyssen arrives for a joint news conference of utilities E.On and RWE after unveiling plans for an asset swap deal which will break up RWE's Innogy unit in Essen, Germany March 13, 2018. REUTERS/Wolfgang Rattay

“We still have to prove that we can scale up new businesses and deliver growth for innovation,” CEO Johannes Teyssen said at a conference organised by his company in Essen.

“On the whole, we in Germany have not yet managed to be innovation drivers for the broader industry,” he said.

The meeting explored plans for future digitised electricity markets aimed at private households, companies, municipalities and cities in Germany, E.ON’s core market.

The asset swap is aimed at setting E.ON on a customer-focused growth path after the transaction is cleared next year.

The company will then integrate the distribution networks and retail customer business of rival Innogy (IGY.DE), which is to be carved up among E.ON and RWE.

The transaction will bring E.ON’s customer base to 50 million and a total 37 billion euros ($45.5 billion) worth of regulated grid assets.

Karsten Wildberger, a member of E.ON’s management board, told reporters on the sidelines that E.ON saw profitability in areas such as predictive maintenance on energy networks, of which it will own 1.5 million km, and the provision of cooling and heat to companies and municipalities.

Energy contracting for business customers, which helps them cut costs and improve their carbon footprint, had a turnover in 2017 of 1 billion euros, up 60 percent from 2016, he said.

E.ON will also emphasise growth in electric mobility, where Innogy brings expertise in fast-charging networks, he said.

Wildberger said E.ON’s reach across Europe meant it could transfer experience gained in the more highly developed end-customer markets, such as Sweden and Britain, into Germany.

However, Germany will introduce smart meters available to small industry next year at the earliest, due to a protracted regulatory course.

Smart meters for small households are still years away.

Reporting by Vera Eckert; Editing by Dale Hudson

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