Friday, September 20, 2013

Discovering Energy in Essen!

Last, but certainly not least - our final day of meetings was held in Essen, Germany. At around 6 a.m., we all hopped aboard trains heading to the nation’s energy capital.


We had two incredible meetings lined up with Germany’s top two energy and utilities companies, E.ON and RWE. These two companies also lead globally as the #7 and #12 electric utilities companies, respectively.



When it comes to energy, Germany is in a particularly unique predicament. The German government has rolled out progressive energy policies, commonly called Energiewende, which virtually phase out all nuclear and coal energy production. The policies have set extremely aggressive goals such as reducing greenhouse gas emissions by 80% (against its 1990 Kyoto Protocol figures). These measures have led E.ON and RWE to begin closing down older and brand new nuclear power plants alike. Some foreshadow that these strict policies will lead to a new green Industrial Revolution with Germany innovating and leading the way. These policies are in part attributable to Japan’s Fukushima Daiichi nuclear crisis. In its wake, companies such as E.ON and RWE find many of their product offerings, technologies and business models turned upside down. Consequently, energy giants E.ON and RWE are currently rethinking how they will replace more than 70% of their energy and revenue-generating portfolios with renewable energy solutions. What an incredible challenge for them and what an incredible opportunity for us MBA students to discuss this timely situation and potential strategies directly with them.


Upon arrival at E.ON, we were greeted by our host Mr. Brian Lonn, a former GSM student who now works on E.ON’s Asset Strategy team as the Energy Yield Coordinator. We also met with representatives from the Country Strategy, Asset Strategy and Country Sales divisions. Collectively, they presented a thorough overview of Germany’s energy policy, E.ON, and E.ON 2.0…the new business strategy. We learned about conventional vs renewable energy, Electro mobility (E-Mobility), Combined Heat and Power units (CHPs), wind farm operations and maintenance management (for 3,000 turbines), and strong new potential markets. In addition, we learned about the levelized cost of energy (LCoE), which represents the lifetime cost of the yield of energy. This is used in project benchmarking. Formula: LCoE = All Costs / Energy Produced The important take-away from LCoE is simply to reduce costs by making more energy and machine efficiency is, therefore, always key!

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After gaining these fascinating insights, our gracious host and his manager Mrs. Grundt accompanied us to lunch in E.ON’s delightful cafĂ©.


Departing from E.ON by train, we traveled to downtown Essen where we met with Mr. Klapdor at the RWE headquarters.

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Our RWE host, Mr. Klapdor, leads the Future House Project which is an innovative study where converted homes become self-sufficient energy producers. These homes not only power themselves comfortably via Solar Panels (even in freezing conditions) but they also power an electric car and most are able to sell excess energy back to the power grid and make a profit by doing so. To learn more about the future according to RWE, check out their Visions of Living 2030 short movie. Here is the link: http://universalhome.de/start.html.

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