(Refiled to correct two typographical errors)
* E.ON to close 13 GW of plants, Enel to mothball 8 GW
* European power industry crisis to persist
* E.ON cuts dividend to 0.60 euros/share, from 1.1 euros
* Enel cuts dividend to 0.13 euros from 0.15 euros/share
* Enel, E.ON expect core profits to fall further
By Christoph Steitz and Stephen Jewkes
DUESSELDORF, Germany/MILAN, March 12 E.ON
and Enel, two of Europe's largest power
utilities, are to shut more plants and cut costs, they announced
on Wednesday, joining rivals in warning that the industry crisis
will weigh on profits for years to come.
Utilities across Europe have been taken by surprise by a
surge in output from renewable energy sources, mainly solar and
wind, making many gas and coal-fired thermal plants redundant
and leading to a collapse in wholesale power prices.
E.ON, Germany's largest utility, cut its dividend to 0.60
euros ($0.83) per share for 2013, down from 1.10 euros, and said
it will shut down 13 gigawatts (GW) of plant, equivalent to
about 13 nuclear plants and more than a quarter of its entire
Meanwhile Italy's biggest utility Enel, which owns over 92
percent of Spanish group Endesa, said it would mothball
8 GW of capacity in its home market and Spain, and cut its
dividend to 0.13 euros per share from the 0.15 euros paid for
So far some 50 GW of gas-fired capacity in Europe has been
closed or mothballed by 10 of the continent's biggest utilities
in response to weak demand and the rise of renewable energy.
"Our conventional power plants are operating for fewer and
fewer hours," E.ON's chief executive Johannes Teyssen told
reporters on Wednesday.
"As a result, we, but also more and more other energy
companies, are decommissioning conventional power plants before
the end of their ... operating life," he said.
The crisis caused French group GDF Suez to book a
15 billion-euro charge on its power business last week, while
German rival RWE earlier this month posted its first
net loss since 1949.
E.ON said it expected earnings before interest, tax,
depreciation and amortisation (EBITDA) of 8.0-8.6 billion euros
($11-$11.9 billion) this year, marking the third consecutive
year of falling profits.
In its new 2014-2018 business plan, Enel said it expected
core earnings before interest, tax, depreciation and
amortisation (EBITDA) to fall back to 15.5 billion euros, having
risen in 2013 to 17 billion euros from 15.8 billion in 2012.
One way for Europe's utilities to escape relatively weak
energy demand on the continent is to expand abroad, a strategy
pursued by both E.ON and Enel, with the latter planning to
invest 25.7 billion euros in 2014-18, of which 57 percent will
go to growth markets while also ploughing 6 billion euros
into green energy unit Enel Green Power.
"Emerging markets have become the key drivers of global
economic growth ... In mature markets the conventional model is
under siege from distributed generation," Enel's chief executive
Fulvio Conti said.
The shift of focus to emergency markets and green energy is
expected to take core earnings to 18 billion euros by the end of
the five-year plan, Conti told analysts.
E.ON, too, is expanding abroad, mainly in Turkey, Brazil and
Russia, where it has invested nearly 10 billion euros in recent
years, but has warned of currency headwinds in these markets,
caused by political uncertainty and a massive outflow of
investor money and markets outside Europe still account for just
6 percent of its core profit.
Enel stock was up 0.6 percent at 3.84 euros by 1150 GMT,
when E.ON was up 0.22 percent at 13.455 euros and the Stoxx
Europe 600 utilities sector index was down 0.11 percent.
(Editing by Greg Mahlich)