Germany's E.ON banks on U.S. in renewables expansion
By Christoph Steitz BERLIN (Reuters) - Germany's E.ON plans to expand its solar and wind business in the United States, an executive said, as the utility strives to bolster its renewable energy operations ahead of a planned spin-off of its ailing fossil-fuel power plants. E.ON took markets by surprise last year when it announced it would split in two, spinning off its fossil-fuel-based power plants, energy trading unit and oil and gas activities into a separate unit, Uniper, in 2016. The move, a drastic response to an ongoing crisis in Europe's power sector, will raise the profile of E.ON's renewables business, which accounted for 10 percent of core profit last year and has 4.5 gigawatts (GW) of mostly wind capacity. "We have around 10 GW of pipeline projects and that's split between North America (about 60 percent) and Europe (about 40 percent)," Michael Lewis, chief operating officer of E.ON Climate & Renewables, told Reuters in an interview. About 1 GW was in solar in the United States, he added. By focusing on North America, E.ON is acting on President Barack Obama's pledge to promote renewables in a bid to fight climate change, seen as a key initiative ahead of global climate talks in Paris in December. "If we want to achieve global climate targets, then the U.S. has to take a key role and Obama is doing that now with the clean energy initiative that he has set up," Lewis, who will take over as the unit's CEO from January, said. He said E.ON would maintain its geographical focus on Europe and North America for now, but added the group was keeping a close eye on fast-growing renewable markets such as India as well as China, which he described as "difficult". E.ON, which has spent about 10 billion euros ($11.5 billion) on renewable since 2007, plans to invest roughly 1 billion euros on renewables a year. But Lewis said the group would be very careful about investments, pressured by 29.3 billion euros in debt and the sector's ongoing problems. "I want to be crystal clear. We have a very strong capital discipline within the E.ON group and we will not invest to meet some arbitrary target we've made up," he said. ($1 = 0.8698 euros) (Editing by Maria Sheahan and Dale Hudson)
