Michael Baumgärtner, CFO at EnBW power plants, on the challenges of the energy turnaround

Michael Baumgartner, CFO at EnBW power plants, is very worried about the highly volatile situation in the energy industry. The margins have halved within 3-4 years. At the same time it was expected that large investments are made - in pump storage plants or modern gas power plants. But this was not so easy. Energy providers need partners for the investments and it only counts how risky or low-risk the project is.

Power plants are currently calculated at 40 years, reckoned from the former graduate of the University of Pforzheim. However, the policy change is currently day-to-day: new decisions, legislative changes. A power plant that can only be turned on at peak times or in periods of low wind and sun is simply not profitable. But the system operator must ensure security of supply and thus hast to obtain the balancing energy. The price for balancing energy has dropped significantly and can no longer cover the cost of capital. Therefore, according to Baumgartner, the current energy market sets no incentives for new investment.

The CFO calls for policy intervention. Investments in the necessary infrastructure must be profitable for the operator, otherwise they are not implemented. When asked why it had taken so long to set renewable energy, he admits that EnBW has switched a tick too late. But EnBW has not only the largest hydropower share among the major suppliers in Germany, now it engages even in large offshore wind farms. "I think the way in the direction of renewable energy is absolutely right," said Baumgartner. But with today's "market design" the objectives of the energy transition are unreachable.