E.ON Romania: We are on right track towards a sustainable future

Where does ESG compliance rank among the company's priorities? How would you sum up your ESG strategy?

Our business has always been closely interconnected with environmental, social, and governance issues. By the E.ON's Group commitment, adopted in June 2018, we want all our actions to be done with great responsibility, complying with the environment and the natural resources, but also contributing by sustainable development to a safe future for both: our customers, as well as for employees, business partners or other interested parties.

In November 2021, we updated our strategy and set up three priorities: sustainability, digitization, and growth. Sustainability is more than an opportunity for us, it is our business, and we are fully committed to a green and sustainable future. Therefore, at the Group level, we have been already promoting and implementing ESG actions for many years, these initiatives being now more clearly highlighted to have visibility among investors, banks, and in general among all interested parties.

For the company, ESG policies are already an integral part of the strategy, the decision-making process, the planning, but also of the reporting processes, both long-term and short-term. Every decision and action we take, whether it's about using resources efficiently, reducing greenhouse gas emissions, or supporting innovation and sustainable solutions, contributes to mitigating the impact of climate change and adapting to these changes.

Moreover, since 2019, the E.ON Romania Group has published the Sustainability Report every year, according to the GRI (Global Reporting Initiative) standards, proving the company's continuous commitment to monitor and evaluate its sustainability performance and to improve it constantly. Transparently and consistently, by these reports, the achievements, objectives, and commitments in the environmental, economic, and social fields are communicated.

What investments did the company make last year and has done this year in projects with a societal impact?

E.ON is one of the largest contributors to the state and local budgets in Romania, with the total value of contributions exceeding RON 1.8 billion (around €370 million) last year, 80% more than the previous year. During these 17 years of its presence in Romania, the amounts transferred by E.ON as taxes and fees are around RON 14 billion (over €3 billion). Last year, the acquisition value of the Group companies exceeded RON 1.14 billion (over €231 million). The amount does not include the value of the electricity and natural gas acquisition intended for the approximately 3.4 million Romanian customers.

The investments made by the E.ON Romania Group during 2022, for RON 654 million (about €133 million), focused on the extension and modernization of natural gas and electricity grids, to meet the needs of the energy transition, to increase the capacity of the networks to connect new sources of renewable energy, as well as to boost the services digitization. All this contributes to a greener future by reducing the impact on the environment, and also to better customer service.

As an example, in 2022 we connected around 3,700 prosumers to the grid, more than double compared with 2021. This year, in the first eight months only, we connected to the grid more than 6,400 prosumers, about 70% more compared to the whole year 2022. Thus, by the end of the year, we expect to have around 17,000 prosumers in our distribution grid.

A project we are proud of is 20HyGrid, a first in Romania which aims to demonstrate that, from a technical point of view, it is possible and safe to add hydrogen, in proportion to 20% of the volume, in the distribution grids and existing natural gas utilization facilities in Romania.

In Romania, the distribution grids require investments of tens of billions of euros in the medium and long term to adequately meet the needs of the energy transition. We still want to invest even more than we have done so far, and this year's budget is clear proof of this promise. We have budgeted a record investment plan of over €176 million (RON 872 million) both from our sources and European funds, 30% higher than those achieved last year. Also, these planned investments are the largest in the last 18 years, since entering the Romanian market, and thus we reach total investments in grids of around €1.6 billion.

Last but not least, the social responsibility campaigns and activities are a priority for us, the amounts invested in such initiatives reaching almost €18 million. These aimed at improving the culture of safety among the public, adults and children, energy efficiency and lighting conditions in schools, promoting sustainable actions, but also supporting the disadvantaged and those affected by the war at the country's borders. The projects had around 550,000 beneficiaries, and E.ON employees gave more than 15,000 volunteer hours to the community.

I would exemplify this with a project very dear to us, "Energy Lessons", which aims for the little ones to learn the rules of safe use of different forms of energy. With the help of the E.ON volunteers, we reached almost 24,000 students from over 600 educational institutions. The "Give the Light" campaign is an initiative that started in 2015, and since then we have provided energy to 71 institutions and more than 3,300 needy families.

We are very proud of the strategic partnerships to support the organizations that implement projects for the benefit of the community. Between 2005 and 2022, we invested €9 million in the "Together for Safety" partnership concluded with I.G.S.U. During this time, we have been able to implement several extraordinary initiatives and, by joining forces, we have given people the information they need to be able to prevent dangerous situations.

Another example is the Partnership for Sustainability in the Via Transilvanica project, which brought us close to hundreds of local communities crossed by this ecotourism route to which we contributed with the rehabilitation of 200 kilometers. We continue to get involved, as support is needed for the maintenance of the route that crosses Romania from Putna to Drobeta Turnu Severin.

Could you detail E.ON Romania's sustainability goals for the next period?

A key component of the sustainability strategy that E.ON pursues is to be climate-neutral by 2040. More than 70% of all greenhouse gas emissions in the atmosphere are energy-related. Therefore, we focus on providing solutions to decarbonize the energy world. We plan to reduce Scope 1 and 2 emissions by 71% by 2030 (compared to 2019), in line with the goals of the Paris Agreement, through further improvements to our gas and electricity grids and increasing the efficiency of our buildings and the car fleet.

A significant part of Scope 1 and 2 greenhouse gas emissions is represented by the technological consumption of the distribution grids. By allocating important investment resources, we managed to reduce the technological consumption of the natural gas grid in 2022 by 57% compared to 2012, respectively by 41% compared to 2012 for the electricity area. Our plans also include a 21% reduction of Scope 3 emissions by 2030 (compared to 2019) through energy efficiency solutions, electrification for customers, and an increased focus on renewables. Our biodiversity strategy also includes the building of approximately 1,200 hectares of green corridors along 370 km of high-voltage overhead power lines crossing forest land.

What obstacles are encountered in implementing ESG plans?

When we talk about the challenges on the road to implementing ESG goals, it would be much more appropriate to look at them from the perspective of "how can we convert them into real and tangible benefits". For example, attracting the necessary funding to implement these goals is an opportunity. The European funds can considerably support sustainable investments, and in our case, we already have the goal of attracting as many EU funds as possible for the modernization of the grids. We have invested €2.1 billion since we entered the Romanian market and we plan to invest another €2.2 billion by 2030, more precisely €700 million from European funds, to which will be added approximately €1.5 billion from our sources.

However, I would not like to leave out the fact that, for sustainable development, a stable, predictable, and transparent legislative framework is necessary. If further developments in the energy market require changes, these changes must be analyzed before implementation, based on reasoned and open dialogue.

Reducing energy consumption is a priority for many people these days, not only for environmental reasons but also from the financial point of view. How can Romanians save on energy and gas bills? How can a company like E.ON help to raise awareness for energy-saving practices?

When we talk about sustainability, we think, first of all, about saving resources, and the current context encourages an efficient consumption of resources and energy. All the solutions we have developed - photovoltaic generation, heat pumps, charging stations, condensing boilers, and cooling solutions - under the umbrella of "Future Energy Home" - have been designed to increase comfort and energy independence, to reduce carbon emissions and to make efficient the energy consumption, therefore lower bills. We are on the right track towards a sustainable future, and the strong growth of interest in our energy efficiency solutions, which are tailored to the needs of our clients, confirms our strategy.

For companies and municipalities, we have reached over 300 completed PV projects in Romania. The total production of photovoltaic energy is over 68 GWh/year, with a reduction in CO2 emissions of approximately 18,500 tons each year.

The demand for E.ON Solar Home – our turnkey PV generation solution for residential customers – has grown strongly. We have exceeded 1,000 PV systems installed in 2022 up to today. Our clients choose E.ON for the quality of the solutions, the equipment, and the services we offer, including after-sales.

Since 2018, we have been involved in building the infrastructure and the solutions for the development of sustainable transport.

At the same time, E.ON also took seriously its role in educating its customers about the efficient use of energy sources. We constantly run campaigns telling people how important it is to change their energy consumption behavior. Thus, in addition to the use of high-performance equipment that helps us reduce energy consumption and that requires investment on our part, there are other seemingly insignificant things that, once applied, bring long-term benefits. The correct setting and usage of the washing machine, the tumble dryer or the boiler, venting the radiators, or using the lid on the pot when cooking are some of the things that are easy to apply, but we sometimes forget and that need to be reminded of from time to time. We also have an educational platform for the consumers the "Power Station", on the company's website, where we explain the most important topics related to prices, reducing consumption, and energy efficiency.

In conclusion, I would reiterate the fact that sustainability is our business and that we are fully committed to the path of energy transition, supporting the 3.4 million customers with quality services and energy efficiency solutions, so that together we build a green and sustainable future.