Andreas Schell has been the CEO of EnBW since 15 November 2022. After his first months at the company, the editorial team interviewed him to find out what insights he has gained and talk about EnBW’s plans.
Mr. Schell, shortly before the announcement that you would take over as CEO of EnBW, a new political and economic era dawned with the war in Ukraine. What are the consequences for the energy industry in Germany?
The war between Russia and Ukraine marks a historic turning point – for all of us, but above all for the Ukrainians, who are defending their freedom and ours in Europe with their lives.
The war has also had a lasting impact on politics and the global economy. The energy industry in particular has fundamentally changed within a very short space of time. We may have eliminated dependencies at an unimagined pace, but in order to maintain this situation and keep costs under control, the domestic energy industry must diversify and increase capacity. And it must do so as quickly and sustainably as possible. There is no way around the rapid expansion of renewable energy capacity.
What does this mean for EnBW?
With our transformation, we have a very good starting position – and as the last integrated energy company, we also have a particular responsibility. Because we can and will be an important part of the solution. Our high level of technical expertise and our positioning along the entire value chain are strengths that we are now using to good advantage.
Does this mean that the crisis also represents an opportunity?
With regard to the energy industry, definitely. The era of reliable and affordable energy supplies from Russia came to an abrupt end with the war in Ukraine. In this situation, security of supply and affordability initially took precedence. We have made sure of both for our 5.5 million customers – with expanded sources of supply and an increased commitment to LNG, but also with a great deal of flexibility, such as the extended operation of Neckarwestheim nuclear power plant. For our customers, we have absorbed prices to the best of our ability and have always remained below the market average when making adjustments.
In conjunction with politicians, we have thus played a major part in averting an energy crisis. However, the past year has also clearly shown us that the energy transition must happen much faster if we are to meet our energy needs and achieve our climate targets.
How exactly can a faster transition happen?
Germany has shown that a faster pace is possible with the construction of the LNG terminals. At EnBW, we are helping to maintain the momentum by consistently investing our profits in the energy transition. Our prudent planning, risks that have not materialized and our integrated setup have stabilized our earnings in the past year beyond expectations. This bolsters our investment power and therefore also our ambitions.
At the same time, the regulatory reorganization of the energy market must not be allowed to slow this momentum. Europe and Germany need a market-oriented energy market structure. We must be attractive to investors because it is the only way we can pull off the major feat of decarbonization.
What form is the financing set to take?
Further restructuring measures will cost the energy industry a lot of money. We are therefore pleased that we as a company have the right financial strength as a basis. Partnerships are also an important aspect. Together with bp, for example, we are developing two offshore wind farms in the Irish Sea and recently secured the contract for a further 2.9 GW wind farm off the coast of Scotland.
Do you already have a precise plan?
Yes. EnBW is already a driving force behind the energy transition. And we will remain so by taking an even more consistent approach to phasing out coal and expanding renewable capacity. In concrete terms, we are planning a future without coal from 2028. Three fuel switch projects are paving the way here. This involves switching our coal power plants to run on more climate friendly natural gas for a while and eventually on climate-neutral gases and hydrogen. Using such flexible power plants allows us to ensure that power remains instantly available in the future. We are no longer planning to remove the remaining four coal power plants from the grid or transfer them to the grid reserve by 2035 as initially intended, but by 2028. This will ensure that we maintain security of supply. Our path toward climate neutrality in 2035 is being scientifically certified by the Science Based Targets initiative (SBTi). We can thus make sure that we play a major part in achieving the 1.5 °C target set out in the Paris Agreement across all three scopes with concrete and reliable reduction targets. At the same time, we are ramping up our investment in renewables. In 2022, we made investment decisions for important large-scale projects. The He Dreiht offshore wind farm in the North Sea – one of Europe’s largest energy transition projects – will commence operations in 2025. We have expanded our offshore wind project pipeline to a total of around 6 GW. With an output of 500 MW, the new solar cluster in Brandenburg will cut annual carbon emissions by around 325,000 metric tons. In the field of e-mobility, we have considerably bolstered our position as Germany’s largest e-mobility provider following the expansion of the EnBW HyperNetwork to over 400,000 charging points in 17 European countries. And the work goes on. In total, we will invest €14 billion net across all three segments between 2021 and 2025.
A strong plan. You have been in your role since mid-November 2022, what insights have you gained into the company thus far?
I have gained many insights during visits to numerous EnBW sites. As a result of the numerous personal encounters with colleagues, I settled in at the company very quickly – and am impressed every day anew. Our employees are closely connected to the company and we have a very high level of technological expertise in a number of areas, which is critical to the energy transition. EnBW is clearly on the right path.
Where do EnBW’s strengths lie and where is there a need for action?
At 41.7%, our share of generation capacity from renewable energy sources is already good, while the pipeline of existing and new projects is very good. I have already outlined how we can further accelerate the expansion. In this regard, we will also make greater use of the opportunities presented by digitalization. We must also further reduce complexity within the company and thus further strengthen EnBW’s resilience. Our planned early phaseout of coal in 2028 represents an important step in increasing the pace of our transformation. But we still need to do better in certain areas. We are therefore now thinking beyond the 2025 strategy and are currently working on our 2030 strategy. It is also clear that the foundation that will allow us to master all the challenges ahead of us is a strong team. And we have that. I would like to say a big thankyou to all my colleagues for their commitment over the past year, which has not been easy for many. I look forward to the shared journey that lies ahead of us.