A warm welcome to our annual results press conference of E.ON SE here in Essen. Good morning, good morning to our CEO Leonhard Birnbaum and Marc Spieker, our CFO, as always with us. In the first part of this conference we're going to give you an overview of the business development of E.ON, and then afterwards we will be available for any questions that you may have. I would also like to extend our quarterly welcome to the journalists who are joining us online. For those who are here at this very special place, I'd like to explain a few words. To your left you will find the emergency exit just in case an alarm will ring. We're at the new E.ON testing lab. That's where E.ON is testing the future of e-mobility and the energy transition on an area of 10,000 sq m .
This testing lab is certainly unique in Europe. In order to give our virtual guests an impression of the testing lab, we've prepared a short video for you.
Welcome to the E.ON testing lab. On 10,000 sq m of size we are testing all our relevant products on safety and functionality.
We are standing in front of the PV and battery area, where we have 16 households that we can simulate with an overall virtualized PV capacity of 240 kW. Each system is tested for safety, efficiency, and functionality. If these tests are successful, we start with the integration into our energy management system and doing first tests regarding the data quality. Afterwards we hand over the systems to our colleagues in the integration area.
In our integration area now everything comes together. We have heating, PV, battery, AC charging, but also DC, bidirectional charging, which is here tested and just in our energy management system combined and ready for our customers.
As E.ON operates in Europe from Italy to Norway, we test the solutions at minus 40 degrees up until plus 50 degrees.
Two other big topics for us are load management so that we do not stress our environment and all the infrastructure. Another point would be heavy duty charging so that we can also have solutions for trucks and buses and so on.
Now with this I would like to pass the floor to you, Leonhard Birnbaum, our CEO.
Good morning. I'm here with Marc Spieker. Today, still as the CFO, you will have heard yesterday he will also present the Q1 numbers as the CFO and do the annual general meeting as the CFO and then switch to his new role. Apart from all the other good numbers and news we have to publish today, I'm also proud that we have found an excellent internal solution, the successor to Patrick Lammers, who will leave us in May. Marc, I look forward to working with you in a new constellation. With Nadia Jakobi we have also found a great internal successor, so much on personnel matters. Now let's come to today's real subject. I think it's great not to be in our headquarters for a change, but at a facility where you actually see what the energy transition means.
You will have seen I always claimed those were eight family homes over there in the street to my left there, but it's actually 16 as I've just heard. It doesn't look like it, but from a network perspective it is actually houses. We can simulate everything there and we can simulate the interaction of PV plus battery plus heat pump plus e-mobility with consumer profiles and offer and production profiles integrated in our network system. This is what we can analyze. And this is what we will have to do not 8 or 16 times, but million times. So this is a great facility, I think, and it's just great to be able to present our results here and also give an outlook on growth, because here you see what we're talking about and what we then deliver on a million scale across Germany and Europe going forward.
The test lab is for me also a symbol of leadership in the digitalized transition. So leading in the energy transition means, as we do today, developing technological standards and using the technical standards that make decarbonization happen. Our challenge is not always to do an intelligent thing once or discover it once, but do it on a large scale, a million times. And this is the real challenge, and to do that in a reliable way as well, a million times. Apart from the technological side, we also have to make sure, being leaders in the transition, that we take account of political and societal matters, policy matters. It's up to us to make a contribution to ensure that this transition actually happens in a positive way. And at E.ON, as you have seen today, we have prepared ourselves to demonstrate this particular leadership.
In the last few years we have really undergone fundamental transformation. Sometimes it's not been without difficulties, but now we have, I believe, really consistently repositioned the group to be able to make a significant contribution to the energy transition in Europe and to be an integral part of the European energy transition. And that's why we said that both externally and internally we want to position ourselves differently, visibly. We want to be somebody who actively shapes the transition. We want to be a playmaker and not just somebody who prepares the playground and lets others then use that playground. And this is what's being expected of us increasingly. This leadership, this proactive ambition is also reflected in the billions of investments which we've announced for the period of the next five years. I'll come to that in a minute.
But first of all, the business year 2023, it's been a very strong business year. EUR 9.4 million EBITDA, EUR 3.1 billion adjusted net income, well above the values of 2022 and also well above the guidance which we had given for 2023, EUR 1.3 billion above the EBITDA of the 2022 values and EUR 700 million above the guidance. So very good results, very good results. So a prerequisite is our employees' enormous dedication. We have this year not seen any other crisis. The winter of 2023 was a mild winter with relatively calm markets, and you've seen that in the dropping prices. But the market environment was nevertheless uncertain, volatile, and a challenge. The good result was achieved thanks to the positive market developments. This was reflected in one of the effects, which Mr. Spieker will come to in a minute.
But across the board, in all segments, in all markets, there have been always better improvements than what we had achieved, expected. So the whole E.ON team performed extremely well, and a big thank you to all of my colleagues for their hard work. At the same time, with the good numbers, we have also delivered good results elsewhere. We have improved customer satisfaction significantly across all markets, measured in the so-called Net Promoter Score, roughly 20 percentage points. That's a considerable increase compared to 2022. So not just good numbers, but also good operational work. At the same time and that's my second point, not only are our results good. But we have not achieved these results by optimizing short-term. At the same time, we invested in the future.
Long-term, we have increased our investment significantly compared to 2022, EUR 6.4 last year, EUR 7.4, EUR 7 the year before.
So EUR 1.2 billion of additional investment. And we didn't achieve those by just doing an M&A transaction here or there or adding one major project. EUR 1.7 billion of additional investments means for us thousands of construction sites, thousands of customer projects on top. And this, I believe, is an indicator of the huge performance of this organization. Last year we have achieved 500,000 of new connections last year, 525,000 new connections across all markets. Almost 400,000 of those are renewable energy stations. And now in 15 years we have managed to make one million connections of renewable plants. We celebrated that last October with Mr. Müller from BNetzA for the next 1 million. And I've discussed this with Mr. König yesterday. We will need roughly three years. So at the end of 2025 we will have achieved the second million of renewable plants in the E.ON network.
I'm convinced that there is no one out there in the world who already has more renewable plants integrated in their network and is doing so at the pace that we are doing it at. So we're doing all we can to improve and develop the network infrastructure as quickly as possible for us to be able to do that in future as well, in tandem with the increase of solar and wind and charging infrastructure. And what's also positive is that we can see here and there that we are already very effective. One example is a high voltage line from Friesburg to Wedding. It's only eight kilometers, but in terms of permits it doesn't really matter whether it's eight kilometers or 15 or 20. We've managed to do this in four years compared to what we have done in the past or what we've seen in the past.
That's a considerable acceleration effect. Up until now it has taken us roughly 10 years, if all went well, with the approvals and everything. And now four years, that's a significant progress. And at the same time we are also becoming more digital. We couldn't deal with the high number of connections if we weren't doing this in a digital way. We can't hire so many employees to do this manually. So we have to become more and more digital and more automated. Otherwise we can't cope. With a number of operators we have already a portal for network connection audits. So you don't really need an engineer anymore on our side. So this audit can be done fully digitally. And then as a customer you receive a non-binding quote. And the first time an engineer looks at it is then afterwards.
This makes it much more quicker to do pre-inquiries. In the network we have invested EUR 5 billion in customer solutions. That's our biggest share of investments, set EUR 700 million. That's the growth business in energy infrastructure solutions. That's the area that takes care of the heat energy. Mr. Spieker is going to comment on the segments in a minute because we are positioning ourselves differently from this year onwards. Just a few examples include projects like the cooling unit with which we've been supplying Heidelberg University Hospital since last autumn, and also the Messe Berlin, the trade fair in Berlin, where we are supplying cold energy and heat. And we will be doing so by 2025. And also Messe Köln, where we will do something similar over the coming years.
Sustainable customer solutions like these offer our business attractive growth and earnings potential in addition to the network business.
We will therefore report, as I just said, our EIS business as a separate segment effective from the financial year 2024 onwards. Ladies and gentlemen, something completely different. We're also convinced, despite all the positive things I have to report today, that we need a new narrative for the energy transition. The new study of our E.ON Foundation confirms our gut feeling that the support for the energy transition and climate protection is waning. We ask, do you expect higher prices, lower prices, more security of supply? And what we are hearing, both in the East and the West, in the country and in the city there's a majority saying no, more so in the East than in the West, but in the country more than in cities. Leipzig has a more positive approach to the climate change than rural areas in the West.
You cannot simplify it and say it's an East-West thing. If we don't want to lose people, we have to be honest. We have to say very clearly that the transformation in the years ahead will cost a lot of money. All in all, this will pay off if you take into account that primary energy consumption overall needs to be reduced. We need to invest on the electricity side and the EUR 42 billion which we are spending and what the TSOs are spending and the distribution network operators are spending, all of that needs to be earned back. It's about finding the right balance between the resilience of the system, affordability, but also functionality of the system.
And that's why we need a new, positive, emotionally compelling decarbonization narrative, because we cannot shape this huge energy transition project in the long term without having the majority of the people on board in a democracy like ours. That's why we need to work on this. We cannot take it as a given that the majority find everything great what's being done in this area. So we believe that investing in the energy transition offers a significant potential for growth and opportunity if we get it right. And the energy transition can become a job and economic engine. At E.ON, it's the case. Last year we had a staff buildup, net staff buildup of 3,000 employees. It was actually more, but we had some fluctuation and the demographic changes hitting us as well. So it was net 3,000 additional jobs which we created.
Over the next years we want to keep growing and keep building up personnel. But we are building up less staff compared to our investments. So we'll become much more efficient. So our sector is growing. Intending something does not mean it's always good, well done. There are too many hurdles and we're too slow as well. And that's why the focus of policymakers and regulation now needs to be on becoming faster so we get ahead of the wave. Although, Ned, regulation procedures, planning procedures need to be reduced, incentives need to be created in order to ensure that infrastructure is there before it's actually needed, not when there is a bottleneck. Bottleneck or congestion is expensive and that needs to be avoided. Infrastructure that avoids bottlenecks is much more cheaper than building once there is a challenge. So what are the challenges we have to tackle?
The first challenge is we need to limit overall system costs. There are many ways to achieve this. One possibility is to synchronize the renewable expansion with the network expansion and to make the former dependent on the latter. We cannot just add and increase congestion. We need to synchronize the two. We've been demanding this for some time, but we believe that the bills we've seen, given the congestion, have provided us with a good argument. We need to make sure that the high costs that only deliver marginal benefits are avoided. It's always EUR 1 billion we spend here, EUR 1 billion there. We need to reduce the customer's bill to what is absolutely needed. The second challenge is to ensure that there's a suitable environment for private sector investment. We have to mobilize private capital for the energy transition.
The sums we're talking about are too large for us to be able to rely on state funding only. So we need to be attractive to private capital. Investments in innovation and digitization must also pay off. Both are critical to the success of the energy transition, as I just mentioned, commenting on the street over here. And the third challenge is to be cost-efficient and technology-neutral in incentivizing sufficient dispatchable generating capacity. We urgently need this to tackle this in order to ensure lasting system stability and manage the coal phase out. The German government's power plant strategy is only the first step in this direction, although it's not entirely clear yet. What we really need is a technology-neutral capacity market to put more liquidity into the market and thus also ensure the affordability of energy people for people.
What we cannot afford is a number of different tools that are standing each other's way on a regulatory level. So we need to provide incentive for flexibility in the system to be able to provide stable network operation. The fourth challenge is to reduce bureaucracy at all levels. Yesterday a new act was announced. I believe that I will only believe in the reduction of red tape when I see it. I have seen many attempts over the last half year. I don't know whether the act that was approved yesterday will be enough to reduce last six months' red tape. Less is more. We are dysfunctional when it comes to this here. At E.ON we see ourselves in a responsible position. We need to raise our voice when it comes to these matters.
As the biggest distribution system operator in Europe, we are systemically relevant for the success of the energy transition. Our strategy banks on growth. Now I'm coming to our outlook, of course. At E.ON we are increasing our investment to EUR 42 billion. You need to see this in context. So when I was at my first annual press conference, as this was 10 years before I took over as CEO or 10 days before I took over as CEO, we had a plan for EUR 22 billion. Within three years we've gone up to EUR 42 billion. We've created the prerequisites for this to be possible operationally. That is a remarkable leap, I think. It also shows the great work, and I'm repeating myself here, the great work being done by all colleagues.
So doubling this figure in three years, it's a real achievement. And what this means for all our numbers, the details of last year and our outlook for 2024, and how the EUR 42 billion will be reflected in our outlook up to 2028 is what Marc Spieker is going to say to you or talk to you about.
Thank you very much, Leo. And good morning to all of you online and today here in this hall. As you've just heard, E.ON looks back on a strong financial year 2023. We grew in almost all of our European markets, and the outlook for the future is also very promising. Our network business, today more than ever, is the focus of attention for policymakers, the public, our customers, and investors. It's clearly a growth business. Our energy networks are systemically relevant.
We've once again proven that we can successfully and especially cost-efficiently expand, modernize, and digitalize them. We expect our business with sustainable customer and energy infrastructure solutions to generate significant earnings growth in the years to come. The necessary decarbonization, energy and climate targets, and the rising demand for our solutions are giving us additional tailwind. Now I'd like to talk about E.ON's performance in the financial year of 2023. Group adjusted EBITDA of EUR 9.4 billion was EUR 1.3 billion above the prior year and also above our original forecast. We owe these strong results primarily to our operating performance and our investments in the energy transition in Germany and in other European countries. In addition, one-off effects had a significant positive impact in 2023.
And if you look at the figures for 2024, you'll be able to see that these effects will not be repeated in the current financial year. Now let's take a look at the network business, whose adjusted EBITDA increased by EUR 1.2 billion to EUR 6.6 billion and again made the largest contribution to our earnings. Higher investments in our growing infrastructure were a key driver of this positive development. We invested in the network infrastructure, and we also continually connected new producers and consumers to our networks. And in doing so, we ensure that the energy transition is propelled for our customers as well. Last year we also benefited from the recovery of the market environment and in the network business. This led to a significant reduction in costs for redispatch in Germany.
These effects are temporary in nature and will be passed through to customers in network fees in the years ahead. Our customer solutions business also delivered a positive performance in 2023. Adjusted EBITDA rose by EUR 1.1 billion year-over-year to EUR 2.8 billion. Now I would like to briefly talk about the fourth quarter. As announced, we passed lower wholesale prices through to our customers. As anticipated, this adversely impacted our earnings in the fourth quarter. Nevertheless, customer solutions' full-year earnings were significantly higher. The further stabilization of price levels on wholesale markets was one of the contributing factors. We also benefited from one-off effects in the customer solutions business, in particular non-recurring effects associated with regulation in the United Kingdom, which had a significant positive impact on our earnings in 2022. We had a negative impact, and we received a compensation for that in 2023.
2024 will be normal again. What does this operating earnings performance mean for our adjusted group net income? We concluded the financial year 2023 by delivering an adjusted group net income of EUR 3.1 billion, which was about EUR 340 million above the prior year. Ladies and gentlemen, growth needs a strong foundation. With this, I would like to address our balance sheet. Our financial position is good and offers scope for additional investments. Our economic net debt, our debt factor at the end of the year, was at a comfortable 4.0 despite a slight increase in economic net debt. That's well below the allowable target figure of 5.0. During the last year, we increased our investments by about 35% to EUR 6.4 billion, which is EUR 300 million above our forecast, which we adjusted in November.
This demonstrates that our operating performance enables us to further accelerate our investments in the energy transition. If you look at the forecast for 2024, we will continue to do this in the future. EUR 5.2 billion in 2023 invested in 2023 was devoted to the expansion, modernization, and digitalization of our energy distribution networks. We increased customer solutions investments to EUR 1.1 billion, of which most, about EUR 700 million, went towards our Energy Infrastructure Solutions business. Ladies and gentlemen, we'll continue on our growth path in the years ahead. Across Europe, there are massive expansion plans for renewable facilities which need to be connected to the grid. Millions of customers who would like to install heat pumps, residential electricity storage systems, and charging stations. This will require massive investment in the network infrastructure.
Efficient, sustainable, decentralized energy solutions are just as essential for Europe's future energy system. That's why our customers need a strong partner. Growth opportunities for all our segments are immense. Our solid financial foundation enables us again to significantly increase our investments for the next five years. We plan to invest EUR 42 billion in energy networks and energy infrastructure solutions from 2024 through 2028, around 70% of which will be in Germany. EUR 34 billion will go towards the expansion, modernization, and digitalization at our energy networks. As a result, our power grid infrastructure is set to grow by an average of 10% annually through 2028. We are investing around EUR 5 billion at the energy infrastructure solutions segment, our growth business that provides solutions for industries, cities, and municipalities.
We will invest another EUR 2.5 billion in our segment energy retail, including our energy sales business, especially in digitalization projects as well as smart energy products for residential customers. All these segments still have considerable growth potential. We are sustainable. More than 95% of our planned investments are to comply with the EU taxonomy. We aim to cover more than 50% of our annual financing needs with green bonds. Our issuance volume makes E.ON one of the largest green bond issuers in Germany and even in the whole of Europe. This underlines our claim to be the playmaker of the energy transition in Europe amongst our customers and the capital market. These massive investments are how E.ON is assuming responsibility for the future.
But for this, we need the right financial and regulatory environment, one that makes it possible to earn a return that can be considered sustainable by our investors. We would like to do even more, both for E.ON and for the energy transition. Policymakers and regulators still need to do their part so that our company can do its part. Ladies and gentlemen, I'll now turn briefly to E.ON's outlook. Based on our current planning, we expect to record an adjusted group EBITDA of EUR 8.8 billion-9.0 billion in 2024. As already mentioned, we expect our results to normalize because one-off effects from the prior year won't repeat. We expect our adjusted group net income to be in a range of EUR 2.8 billion-3.0 billion. In the medium term, E.ON will continue the green growth story it has begun. This is reflected in our targets for 2028.
We want to achieve an adjusted group EBITDA of over EUR 11 billion and earnings per share of around EUR 1.25. Our efforts on the investment side are fundamental to this growth. We'll also achieve additional operational improvements, in part by increasingly digitizing our processes and products. The management board and the supervisory board are proposing an increased dividend of EUR 0.53 per share for the financial year of 2023. This is the ninth consecutive dividend increase and is in line with our target of increasing the dividend by up to 5% annually through 2028. Ladies and gentlemen, we look back on a successful financial year from which E.ON once again emerged stronger. I'm proud we are proud that we are keeping our promises and, at the same time, taking our operating and financial ambitions to the next level.
Our massive investments underscore our commitment to being the playmaker of Europe's energy transition. That's all from me for this morning. Thank you very much for your interest. With that, I'll hand things back to Lars Rosumek for your questions.
Thank you, Mark. Thank you, Leo. We now come to our round of questions. You here in the room have the opportunity to ask the questions. Please use the button in front of you. Press that button if you want to ask a question. The colleagues who have joined us online, please raise your hand on Teams as you usually do. I will then call you up. It would be nice if you could switch on your camera so we can ensure by the way, this is something that is being broadcast. If you're not happy with showing your face, then you can keep the camera off, of course. The first question comes from the room here. I would have said, well, as usual, Ms. Höning
Thank you. I have three questions. One, I would like to know power and gas prices.
How are they developing, you said, for major customers? Or you have passed on the price reductions to your customers. What's next? And then my second question, I thought the CFO was greater than everything else. Why do you want to become the COO in sales now? And my third question is, will Nord Stream 1 be repaired?
Mark. Shall we start? Shall I start?
Okay, Ms. Hoenig, the energy transition depends on the customer. And all the energy infrastructure you see back there is what our customers have, the private residential customers, the commercial customers, and industrial customers. And I can't think of a more exciting job than growing the business for our customers, with our customers. Speculating about my successor is your prerogative as a journalist. I look forward to cooperating with Leo going forward. He's our CEO. He's doing a top job.
I can't think of anything nicer than continuing this collaboration with him.
Okay, Nord Stream 1, your third question. You all know that as a shareholder, we have rights and obligations on that body, and we represent ourselves there. But on all detailed questions concerning the business and the operation, please understand you would need to turn to the Nord Stream pipeline operator. We can put you in contact with those people if you want to. And power and gas prices, well, last year, we gave a clear commitment that if the wholesale prices allow us to do so, then we would pass on these reductions as quickly as possible to our customers, which is what we did in the autumn. Millions of standard electricity customers had their prices reduced.
When you look at the wholesale prices from today's perspective, we believe that for the standard supply, there won't be any further reductions going in the near future. As you know, our portfolio in Germany, 14 million customers, they don't all have the same contract. So there, too, this year, there will be an adjustment here or there for special contracts. But as far as the bulk of the customers is concerned, we have lived up to our promise. And our commitment continues for the future as well. So if wholesale prices are low, we will pass on these reductions as far as possible.
Thank you, Mark. I'm just going through the list here. We have a few questions here in the room. Christoph Steitz from Reuters, then Ms. Becker from the Börsen Zeitung, Jonas Jansen from FAZ. And on the chat, we have Petra Sorge from Bloomberg.
So let me start with Mr. Steitz, please.
Yes, I have a question about the additional balance sheet headroom which you mentioned. You have EUR 5 billion-EUR 10 billion which you can spend, basically. Can you say where this would be coming from? Is this money you would collect from investors or money you would generate through asset sales? Or how would the EUR 5 billion-EUR 10 billion be financed if they were to be used? Thank you.
Okay, in order to finance our investment program and to retain this headroom, we need internal financing. So to a significant extent, the cash flow we generate from our investment in the regulated business and the infrastructure business needs to be paid into ensure growth going forward. And this is the discussions we're having with policymakers and regulators.
We need to have a business that's ready for further growth, the growth we are expecting as part of the energy transition. Thank you, Mr. Steitz.
Then Jonas, sorry, Annette Becker from Börsen-Zeitung.
I have three questions, if I may. One, the investments which you are increasing yet again. Mr. Birnbaum has said you've doubled them in three years. Can you say how much of this increase is down to the inflation effect? Because this year, in the last few years, we've seen considerable inflation. And then my second question is about the operational results. We've seen it on a slide, +16%. But the two segments, 22% and 66%, what happened in corporates for that to only turn out to be 16% in the end? And then I have a question about the power grid infrastructure.
You said up until 2028, the infrastructure is to grow by 10% on average per year. Can that be broken down to the operational results which you plan to grow as well on a year-by-year basis?
Okay, let me start with the investments. Yes, we've looked at that, of course. How much of the additional money was more euros for the same number of transformers and kilometers of line? And the effect is about 25% is inflation. And 75% of the increase is more kilometers, more transformer stations, more digital stations, et cetera, et cetera. So that is, in fact, an increase not just on the money side, but also on the side of the physical assets we are building. And the other two questions, I think, are for you.
I would have bet that nuclear would not be mentioned by us, but rather than one of you or somebody who has joined us online. But that's the reason. In 2022, we still had EUR 1 billion of operational or EBIT contribution from nuclear. And that was switched off the last power plant, is that two, in April. And this is why this segment has developed, as you said, the 10% earnings growth on the regulated asset side, the regulated asset base. This is something that will have to be translated into growth on the earnings side as well. What you're seeing to some extent there is that particularly the German regulator has responded to the changed interest environment. So for new assets, you have seen the proposal of the regulator. The return on investment complies with the current market. But that doesn't apply to existing assets as yet.
Since we need to finance our existing assets as well, so over the next five years, our financing costs will be compensated by operational cost increases as well. Under the bottom line, it's still an attractive growth of 6%, still attractive to our investors, something I'm happy to point out yet again.
Thank you, Ms. Becker. Jonas Jansen from FAZ.
Hello. I would ask about the investments as well. You exceeded yourself in your forecast, EUR 300 million. I would like to know how broad the range is. You're looking ahead quite a bit. So what kind of outliers would you permit for yourselves? And you're saying yourself, if the regulators don't catch up with what they're doing, we need to see how much we can actually invest. So is there a range? And what direction would this go in, this EUR 42 billion?
Is this the number if everything stays as it is? And if something if nothing changes, or if something changes, where would we be?
So what do we do during the course of the year? What we do is we allow plus 10% to all of our companies based on what we want to achieve. So if we don't get a permit, for example, or if we run into difficulties with building plants or there are delays or whatever, then still we would be able to control our investment planning. But this year, we allowed it to develop. And to our surprise, it worked everywhere. We didn't see any problems and delivered beyond our guidelines. If we were to tell every company and ask them, what is your problem? Then we would take these difficulties into account.
We want to make sure that we always have enough in the pipeline to be able to really deliver. Now, looking ahead, every two years, there is a network development plan for the transmission system operators, which was published last year as well. And this agreed network development plan there now is a development plan for the distribution system operators. And this is now being aligned until the end of April. And these plans account or take into account the current forecast, political targets, market developments, and all of that. And based on that, we derive our investment. And we, as E.ON, look at it to see what this network development plan means for our company. If there are any major changes to the assumptions or circumstances, then, of course, our investment planning changes as well. That's clear.
But we have also seen that on the power side, we are behind the wave. The power side will grow in any case. The question is, will it be +9%, +10%, or +11%? I don't want to speculate here now. But we have seen a significant acceleration of that increase. More and more aggressive targets means that there is a need to invest in infrastructure even faster. And this is what you are seeing in our investment plans.
The next one on the list is Petra Sorge from Bloomberg on our stream. Good morning, Ms. Sorge.
Hello, can you hear me?
Yes, we can.
Great. Okay, in your report, you referred to the risks and also the decommission of the gas networks because these are to be repurposed for hydrogen. What is your outlook here for the various countries?
The federal regulator in Germany, BNetzA, has started a consultation process here on that decommissioning process. Would you be interested in this at an early stage or later stage? And what's this in terms of risk compared with other countries? And maybe you can also comment on, I mean, digitalization is a big topic for you, whether these targets can be met, or do you have other workarounds to avoid expansion, to use existing networks with more capacity? And my third question is charging columns. There is a problem there in that they are not being synchronized between the network operators and car manufacturers. So do you intend to wait for a standardization from the regulator side, or will whether or should the industry itself aim for standardization? Are you in talks with the car manufacturers? So bidirectional charging, what's the future there? Thank you.
Okay, let me start with the last one. Last year, I was in Brussels as a president of Eurelectric. I talked to the president of ACEA, that's the European Automobile Association. So we both went to his conference and our conference. And we said, we are responsible for ensuring that OEMs on the automotive side and the energy side together make sure that the energy transition does work on the mobility side as well, both for e-mobility, so vehicles, and also e-trucks, so lorries, electrical lorries. So yes, too, yes, there is more work to be done. But we have a common understanding that we need to pull in the same direction rather than doing finger-pointing. These were very positive talks and very positive cooperation that's being developed there. And that will be then broken down nationally as well. Now, the digitalization of networks, this comes up again, again.
Of course, digitalization allows us to use the existing assets in a much better way. And to be very clear, if we do not fully digitalize our networks, then in future, we will not be able to control them anymore. We won't have the people, and we won't have control over them anymore. So full digitalization of the networks, of the grids, is a prerequisite for us being able to fulfill our task. And this comes with efficiency improvements as well. It allows high utilization rates for our assets. But no matter how much we digitize, that doesn't change the fact that we need more assets and more transformer substations. So the belief that digitalization will prevent additional copper, additional aluminum being installed, it's just not going to happen. You see this with a number of connections. Connections are not digital. Connections are physical. It's a copper cable.
The better you control it, the fewer connections you have. But there is a huge buildup. That's a physical increase as well. We are very much interested in using every efficiency there is. We have so much potential. We don't want anything that's not efficient. The last point, gas networks. Let me put this in perspective. We have more than 80% of gas networks growing at a rate of 10%, as Mr. Spieker just said. We've got gas networks that are stagnating. If you look at this over a period of five years into the future, it's relevant, but not decisive. That's one. Two, the decision on the future of the gas network will be decided over the next few years. There are areas in which we are talking about decommissioning and removing pipelines.
There are areas where we're talking about repurposing them for hydrogen. This will be decided over the coming years. In total, it's a shrinking business. And for that reason, we need different regulation there, as we clearly said. That pays dividend to the character for the power side. We have to ensure massive growth. So removing the system should be as cost-effectively as possible for consumers. So if we need to actually physically remove all the lines in the cities, that will cost EUR billions, which we'll have to pay for someone in the end. This is a way this is an example that shows where the future can be efficient or less efficient. We will have to talk to the regulator about this going forward.
We have some additional questions here from the room.
Catiana Krapp from Handelsblatt, Björn Finke from Hildegard Hoben from E&M from ZfK, and Lennart Wagner from DPA. So that would be the order. Catiana Krapp from Handelsblatt will be the first speaker.
In early February, you announced that the increase in grid access fees would not be passed on to the customers. And you also announced that the rates would not increase. That means that the increase in grid access fees would not be passed on.
Well, those that have risen can't just simply be passed on because we have existing contracts. However, at some stage, all suppliers will have to pass on these costs to their customers. Sales structures cannot act as cushions for many, many years. At some stage, when contracts will be prolonged, that is, in two or three years from now, these costs will have to be passed through to our customers.
Mr. Finke from Süddeutsche Zeitung,
thank you very much. I have a question concerning the second challenge that you mentioned in your speech. That's the return on investment. The Federal Network Agency raised interest rates for new investments. And you said that this would also be desirable for existing infrastructure. Could you tell us what amounts are at stake? And will this also have an impact on consumers?
Well, please bear with us that we are not able to provide you with all the details and the rates of return at a press conference. But you can surely assume that we are discussing this with the Federal Network Agency. What is important is to make clear that the energy transition in Germany will only be possible with private capital, not only with domestic capital, but we will require to collect this capital across the globe. People are willing to invest.
It will be successful if the rates of return are sufficient. And that's the problem. You can't just simply go out and collect bonds in the amount of EUR 2 or 3 or 4 billion for many years, with a maturity or a term of many, many years. The capital market doesn't make this possible. That's why existing infrastructure, existing assets have to be renewed after 35 years of service. And that's what we require. That's what we are demanding. We want a remuneration model for existing infrastructure and assets which enable us to mobilize the money required in the capital market.
Mr. Meier, Energate,
You just mentioned the number of connections of renewables to the grid. And I know that this is one of the bottlenecks in the system. What are your expectations? How is E.ON performing in this regard? Second question. Many people in Germany are saying that an electricity zone split will become quite probable. How are you responding to this as a distribution system operator?
We, as E.ON, we as an industry, are against an electricity zone split. It will be associated with many, many disadvantages for Germany. I can provide you with some position papers from BDEW. The result is that we are totally against this. It is demanded at European level time and again. But it will be detrimental to Germany. Germany should not do this. I don't think that such a split would solve the problems either. Now, with regard to network connections and how we're performing in this regard, of course, this depends on the individual regions. Sometimes we may be overrun by a wave, meaning that waiting times will increase.
But on average, we are at about 50 days for a grid connection. And I would also like to mention that the applications for connections have increased tenfold. And that's why it's sometimes quite difficult to mobilize the right people, the right team to come to terms with such a local wave. Overall, we're doing well. But of course, some customers still have the right to be dissatisfied with our speed. We're doing the best we can.
Thank you. Mr. Thorben from Deutsche Presse Agentur, DPA
A question concerning prices. Wholesale prices have declined since the beginning of the year. And will there be further cost cuts for residential customers? And a question concerning your narrative, Mr. Birnbaum. You mentioned or demanded a new emotional narrative. What would the main parameters or characteristics of this narrative be? Who is supposed to tell or publish this narrative or push the narrative forward?
A brief answer, which will probably not be sufficient. First of all, we have to be honest. People want to see that what they are observing is in line with what people are telling them. The narrative also has to show a balance between sustainability, affordability, and benefit. Up to now, we've had a narrative that was the quicker we are green, the quicker things get better. That just won't work. I'm demanding a balanced narrative. We have a lot of advantages associated with the energy transition. But we also have to name the costs. With regard to electricity prices, I'll pass the floor to my future COO Commercial. Now, we're going to stick with the commitment that we gave you last year.
As soon as we have the necessary leeway, we will pass on lower wholesale prices to our customers. And you just heard that those areas where grid access fees have risen, we will not pass this on to the customers. We'll have to see or look at the individual case. And as soon as we have the leeway to do so, we will pass on the reduction of costs to our customers.
Mr. Wetzel from Die Welt, microphone, please.
Mr. Birnbaum, you suggested that the expansion of renewables should be synchronized with the expansion of the grid. But the Federal Court of Auditors has come to the conclusion that the grid expansion is lagging six years behind. Do you think it's necessary to change the targets? And does that mean that a coal phase-out is no longer realistic by 2030?
Well, we don't have grid congestions or bottlenecks everywhere. In some areas, it's not a problem to add infrastructure. However, we shouldn't only do this in those areas where we have congestions. Now, whether an expansion of just simply expanding the grid in order to reach the targets, but without having any benefits in terms of the energy transition and without creating any benefits for the customers either, is something that is quite critical. Projects should be built and developed at the right places so that customers really have a benefit. The coal phase-out for 2030, well, that's something we should discuss in two years from now when we know what the power plant strategy will be and what the momentum will be. But we, as E.ON, are not really involved in this business.
Artjom Maksimenko from ZfK
I have a question concerning the base rates for customers. The grid access fees have risen. You will pass them on. Could you tell us when you will do that? The second question relates to gas sales or consumption. During the procurement crisis, each kWh saved was celebrated. Now, the situation has normalized. Would you like to see a cold winter with better sales? Or would you like people to save energy?
Well, we want a strong location for industry in Germany. That's what we're interested in. If this is also associated with higher sales, then that's fine. We are, of course, in favor of energy efficiency. In the short term, we are very interested in Germany performing well in the economic arena. Now, we have a clear commitment. If possible, we pass on reductions. But it's not only wholesale prices for commodities, but also grid access fees that play an important role.
So for the basic supply rates, we are not going to make any adjustments. And as Leonhard Birnbaum said, grid access fees cannot be disassociated from our rates. But we will look at that. When necessary, we will also take a look at the wholesale prices and at the overall impact for our customer rates.
Thank you very much. Ms. Wegner from DPA,
thank you. And I would like to refer to the figures and the medium-term forecast that you gave us. Now, if I compare the old investment plan with the new one, we see a difference of EUR 9 billion from EUR 33 billion to EUR 42 billion. The adjusted net income, however, should rise at a lower rate compared to this other figure. What is the reason for that? Is it the fact that the momentum is going to wane towards the end of the century?
No, it's not that the momentum is going to wane. It's just that CapEx planning was calculated until 2028. If you look at the period beyond five years, you have to make a lot of corrections. Also, in terms of regulation, there may be many changes. But Mr. Spieker described that financing costs are rising, which will eventually also have an impact on our financial results. And that's why, adjusted for one-off effects, we nevertheless see a good increase. We had a very strong starting year with one-off effects. If you exclude these, you nevertheless see a decent growth in the area of EBITDA and adjusted net income. But however, higher financing costs have to be compensated for at some stage. Now, we do have some questions in the room. And one other question in the chat.
Now, considering time, I of course would like to give you an opportunity to ask your question. But after this list, I would like to close the round. Christoph Steitz from Reuters, then Ulf Meinke from WAZ. On the stream, we have Ms. Eckert from Reuters and Antje Höning. And afterwards, I would like to close this round. Christoph Steitz from Reuters, please.
Yes, I have to come back to Nord Stream. I know that's not a great topic for you. But it would be good if you could say what your attitude is to this asset. Because you are a shareholder in this pipeline. And the operating company has now made claims against the insurance company. And it would be interesting for you to say if you could support these claims or to what extent you still view or what perspective you have on that asset.
Everything has been said about Nord Stream, really. Strategically, you know this goes back to 20 years ago. Ruhrgas invested at the time. We now have the shares. And we assume our rights and obligations as we have as shareholders. But again, everything to do with operations and operational matters, please turn to Nord Stream, the company itself. We'll be happy to provide you with the context. We, as shareholders, cannot comment on that.
Then Mr. Meinke from WAZ, please.
Yes, it's wonderful. Thank you. I would like to know more about your German end-user business. I heard 14 billion customers is what you have at the moment. Million is what you have. Has this company been a number been stable, 14 million? Or does that include a lot of fluctuation? And what rate does the basic supply what percentage do the basic supply rates have there? So 14 million.
Or that is exclusive of the municipal shareholdings. They're on top. OK. And then the second question about being honest. Prices, does it also mean that the prices won't return to a pre-crisis level? And that's another question I have. And then thirdly, you talked about the energy crisis a few times. You said we are in an energy crisis. Would you say the energy crisis is now over?
OK. So 14 million are E.ON customers, not shareholder customers. So our companies, either our regional units or the E.ON Bayern Gesellschaft in Munich. So relatively stable numbers, with some fluctuation up and down, of course, but relatively stable. Secondly, the energy crisis. Let me start with that. It depends on the customer group you look at.
So even after the reduction in wholesale prices for industrial customers, particularly energy-intensive customers who are exempt to a certain extent here and there, for them, on a net basis, energy prices have increased because they were fully hit by the increasing infrastructure prices. So net, they're looking at a doubling of their prices. So for them to say the energy crisis is over, that's not possible. Talk to the CEOs of those companies if you want. It's clear that there still is some pressure there. We are not back to the pre-crisis level and can tick everything off and continue as before. And secondly, we are seeing on the residential customer side, there is a reduction because part of the energy bill with the EEG levy is now down to taxpayers. But there is the infrastructure price increase as well. So the bottom line, it's neutral.
But the truth is, for them, the prices have increased as well. But it's a taxpayer that bears that part. And if we increase or build little more infrastructure, then the cost price increases disproportionately. So we're now dependent on international gas markets. And we were not that much dependent on the international gas markets before. But we no longer have the pipeline gas from Russia. We're dependent on international LNG gas markets. So we're dependent on economic developments in China, for example, something we did not have in the past. Prices, customers, I think I mentioned I'll cover that. Does that answer your question?
Oh, yeah, basic supply customers. Sorry, I don't know that off the top of my head. But we will provide you with that number.
OK. And then on stream, Ms. Eckert from Reuters. Good morning, Ms. Eckert.
Can you hear us?
Yeah, yes, we can hear you. Yes. OK.
You mentioned the Belgian capacity market in your speech. What's so exciting about that market? Not everyone's an expert there. Could you maybe comment on what's so exciting there and how it works in Belgium?
No, in my speech, I only said we need, in the long run, a capacity market. Because quite clearly, in a world where we only have renewables and where we don't have coal-fired power anymore, we don't have the old reserve power plants to ensure system stability. And that's why we need a capacity market that ensures a security of supply, even in the green future. In a different context, I previously said that you can learn from others in Europe what this market could look like. And one example you could look at is the Belgian market. Why?
Because it has already been discussed intensively with the EU Commission. For that reason, we don't need to have the same discussions and basically do what others have already talked about or at least built on that. Or you could look at the UK market, which hasn't been discussed with the EU Commission. Therefore, the Belgian market is probably the better example. I did not say we would have to replicate that fully. But we do need a capacity market, no question about that. Ms. Eckert, thank you. Then the first and last question from Ms. Honing.
Yes, on the 1st of April, the VAT for gas will increase to 90% again. Will you pass that on directly?
VAT, yeah, we have to pay that. And we'll pass that on, yes. Then thank you to all of you. Thank you for coming here today.
Thank you to Leonhard and Marc. If you want, for the guests who are here today, we have prepared a snack. And it would be great if you would have time to stay around for a chat. And for those of you who have joined us online, thank you for joining us. And all the best from us here in Essen.