Encouraged by our article series “Europe can do better” with the Handelsblatt, which has already inspired 8 Dutch CEOs to contribute to the “Het financial Dagblad”, the “Budapester Zeitung” now publishes a series of articles based on the speeches of the panellists, which were created within the framework of the discussion “The Future ‘Made in CEE'” organised by Network Digital and United Europe in Budapest on 31 October (the summary can be be find here). The series begins with an article by Dr. Johannes Teyssen, CEO of E.ON SE and member of United Europe, who is committed to “a strong, unified Europe”.
I’ve been an avowed European for decades. Emotionally as well as rationally. I wouldn’t want to go back to a Europe that no longer has the freedoms and freedom of movement afforded by open borders, a common currency, and shared values and convictions. Then there are the many economic advantages such as free trade and lower transaction costs. Advantages from which everyone in the European Union benefits.
Brexit, a tragedy in so many ways, now seems inevitable. And it makes one thing abundantly clear: a united Europe can’t be taken for granted. It needs people who don’t look on in silence when, in many countries, the criticism of Europe grows louder on the political fringe. It needs people who act in the interests of Europe when Europe’s strengths are in danger.
A glance at Eastern Europe in particular demonstrates what Europe can do for people. The EU’s two waves of eastern expansion in 2004 and 2007 placed Central and Eastern European countries where they’d always been and where they belong: at the heart of Europe.
Since the collapse of the Iron Curtain, countries in Central and Eastern Europe have written an unparalleled success story. A story that has improved people’s lives there, and enriched Europe as a whole. Economic growth in Eastern Europe is consistently stronger than in the West and, increasingly, is benefiting ordinary citizens. Although wages are lower than in the West, the gap has narrowed considerably. Unemployment rates in Hungary, the Czech Republic, and Poland are currently among Europe’s lowest. Central and Eastern European countries have achieved great things, and I have the highest respect for them.
At E.ON, we’re very proud to be part of this success story. Our operations in Hungary, Romania, Slovakia, and the Czech Republic date back several decades. Since 1990, we’ve made substantial investments in Hungary’s power and gas sectors, as has innogy, which is now part of the E.ON Group. In doing so, we’ve made a significant contribution to the economic upturn in the region. Moreover, we feel just as at home in these countries as we do in Germany or Sweden.
Central and Eastern European countries are superbly positioned to continue writing their success story and to play an even more prominent role in Europe and the world. They have extremely talented people and outstanding technologies. But, above all, they have a proven willingness to change and are thus ideally prepared for the transformation phase in which we currently find ourselves: the 21st century is the first century in which the primary fuel will be electricity. Everything that can be electrified will be electrified. And everything that can be digitalized will be digitalized.
What will make all that possible? As usual, technology. Technology has always unlocked new worlds, propelled progress, and improved people’s lives. And that’s what will happen again here. Our entire world will be interconnected and electrified. Energy sources and energy consumption will change. Transport too will gradually convert to electricity. Electrical, digital, interconnected environments will emerge everywhere.
In times like these, anyone who wants not only to survive but also to set the tone must be accustomed to change. That’s precisely why I’m convinced that the people of Central and Eastern Europe can serve as an example to all of us. My many visits to these countries have shown me repeatedly that their people have learned how to embrace change. Over the past 30 years, change has been omnipresent in this core region of Europe and has improved many people’s lives. In western Europe, change is often accompanied by anxiety, caution, and reluctance. History shapes us, in both the East and West. And I believe that history has made countries such as Hungary, the Czech Republic, and Slovakia more aware of the advantages of change: they embrace new things and adapt to new circumstances faster. Consequently, I also believe that these countries in particular have a great opportunity to become pacesetters in digitalization, an opportunity that they should seize with confidence.
E.ON has to embrace change as well. After all, we’re at a key turning point in our company’s history. The innogy takeover equips us for an energy world already undergoing profound change. The energy market is reinventing itself. It’s becoming greener, more decentralized, and more digital. At E.ON, we’ve not only adapted to this change. Together with our customers in 14 European countries and Turkey, we’ve played a decisive role in shaping it. The integration of innogy will ideally position us to continue this leadership role, especially in Central and Eastern European countries.
We’re going to make our energy networks and solutions smarter, enabling households, businesses, communities, and entire cities to be more efficient. We’re also going to help them to reduce their carbon emissions. Energy networks will become the Internet of energy, connecting people and thus continually opening up new horizons. Our energy networks are the platform for a myriad of ideas and solutions, for our customers and our commercial partners. As green and agile as possible. That’s our guiding principle.
Looking ahead, the energy industry is facing three main challenges:
First, the digital age’s appetite for energy will become increasingly voracious. Digitalization comes at a cost. If the Internet were a country, it would have the sixth largest energy consumption of all nations in the world. And this trend will just continue. Therefore, we’re going to need more green electricity.
Second, the digital age’s main prerequisite is reliable electricity supply. For example, a company whose entire production process is digitally controlled requires precision. Yet the output of green energy fluctuates considerably and is thus anything but reliable. The challenges this creates will be tackled by digital solutions. Digital control systems will make it possible to connect customers’ electronic devices—those that consume electricity, as well as those that store it—to balance out fluctuations and ensure reliable energy supply. And it goes without saying here that customer data needs to be protected at all times.
Third, the complexity of the new energy world can’t be managed by power lines and transformer stations alone. Distribution networks must become more intelligent and responsive. They must become smart grids. When there’s not enough electricity available, smart-grid technology can coordinate the output of numerous small, distributed generating units and deliver it to the grid like the output of a big power station. When there’s too much electricity, smart-home technology can use that surplus to charge electric vehicles or power water heaters. Going forward, network control centers will be able to use this flexibility more and more effectively to utilize as much green energy as possible. Distribution networks are becoming digitalized, automated, and self-learning. Ultimately, this will create an Internet of energy.
We can only overcome the challenges of the digital, electrified world by working together. It will require the collaboration of countries, research institutions, industry, and policymakers. I encourage everyone to be as open-minded as possible toward new technologies. And to be more willing to take risks. After all, every valuable change is accompanied by risk. I also advocate a policy and regulatory environment that fosters change, that doesn’t try to micro-manage, and that creates incentives for investments in intelligent technology.
If the European Union wants to hold its own against other economic regions, it needs to harness and interconnect the capabilities of every member state. If we want to be successful and effective, we need to concentrate on our strengths rather than our weaknesses. Europe’s diversity is a source of immense potential. But we need to have the confidence to utilize it. Together, for a strong and self-assured Europe.
The text appeared in the “Budapester Zeitung” on 13th December, you can find the original version as a PDF in German here.