E.ON: Energy crisis is not over, but the energy transition is gathering pace in Czechia

According to E.ON Chief Financial Officer Marc Spieker, the energy crisis in Europe has not yet come to an end. In his view, the situation could worsen in the second half of the year compared with current conditions on energy markets. He said so when presenting the company’s financial results for the first quarter of this year. E.ON sees major opportunities in the development of renewable energy sources, a view shared by virtually all energy giants operating in Europe.

As E.ON states in its presentation on its overall business outlook for 2023, it considers this possibility – namely that the energy crisis is not yet over – to be its baseline scenario.

“The crisis is not over yet,” Spieker said about the energy market and its projected further development. “Compared with current market conditions, our models indicate that the situation could deteriorate further during the remainder of this year.”

As we reported earlier this week, energy commodity prices have generally declined since the beginning of this year. However, they remain well above the levels to which we had become accustomed in recent years, and are unlikely to return to those levels in the foreseeable future.

According to many energy experts, the winter season of 2023/2024 will be the most critical period for the EU from an energy security perspective. One of the key indicators will be natural gas storage levels, which the EU has managed to keep at a very good level, partly thanks to the exceptionally warm winter. A comparison of current storage levels with previous years can be seen in the chart below.

Energy transition

For the EU, its ability to meet its plans for the development of renewable energy sources will also be crucial to future energy market developments. According to Spieker, the energy transition is gathering pace. Similar information is also coming from Czechia.

Czech energy giant ČEZ also presented its first-quarter results this week. Martin Novák, the group’s chief financial officer, emphasised during the presentation the need to invest in new energy sources, including those that will replace existing ones (i.e. not only renewables).

Based on the overview of projects approved and supported by the Modernisation Fund this year, ČEZ plans massive investments in new generation capacity in the coming years, particularly in the Ústí nad Labem Region.