Germany's E.ON dials up spending to $57 billion in energy grid expansion

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/ESSEN, Germany, Feb 25 (Reuters) - E.ON, Europe's largest operator of energy networks, is raising spending to 48 billion euros ($57 billion) by 2030, it said on Wednesday, in a push to expand and protect grids and prepare them for a build-out of data centres across the continent.

Grid operators are rushing to spend more money on their assets, faced with rising demands on power infrastructure, including renewables, storage and an expected surge in electricity demand to power artificial intelligence projects.

Recent grid outages have also highlighted the need to secure what is seen as the backbone of power supply, efforts that are becoming more challenging as networks grow and full protection is virtually impossible.

"The energy system is becoming larger, more decentralized, and more complex, and we are ensuring that it remains secure, affordable, and resilient for our customers," CEO Leonhard Birnbaum said.

E.ON AIMS TO SPEND 48 BILLION EURO INVESTMENT BY 2030

The new investment plan, running from 2026 to 2030, compares with a 43 billion euro programme over the 2024 to 2028 period, and highlights E.ON's efforts to pump more money into regulated networks to boost its asset base and profits.

Around 40 billion euros of that will flow into the 1.6 million kilometres of energy networks E.ON operates across Europe, it said, reflecting a "heightened threat landscape for critical infrastructure" and demands placed on the grid by data centres.

E.ON said the updated investment programme was contingent on adequate returns set by Germany's energy regulator.

Utility stocks have been among the beneficiaries of an AI-related boom, along with expectations that a surge in data centres needed to power the technology will also drive demand for power and related infrastructure, including grids.

Year-to-date, E.ON shares have gained more than 16%, outperforming the broader sector index as well as European stocks overall.

The company, Germany's biggest energy firm, also recommended increasing its dividend for 2025 by 4% to 0.57 euros per share, in line with the average analyst forecast in an LSEG poll.

Frankfurt-listed shares in the group were down 2% at 0731 GMT due to what a local trader said was a "conservative outlook", which foresees core profit of 9.4 billion to 9.6 billion euros in 2026, down from 9.8 billion last year.

Analysts in a poll provided by the company expect core profit of 9.5 billion euros in 2026.

($1 = 0.8477 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff, Editing by Linda Pasquini and Shri Navaratnam)