The ambitious German shift away from fossil fuels has claimed its first major victim. E.On, in the form we know it, is no more…

Germany’s largest utility this week revealed plans for a restructuring that may show how other utilities could react to the country’s move to renewables, including wind. German utilities have long moaned about low demand and priority grid access for renewables.

Now, we don’t have much sympathy. Utilities may occupy a vital position given they sell us the fuel we need for light, heat and cooking, but they are also businesses that need to respond to market changes. Most German utilities haven’t been quick enough.

This is why E.On’s strategy is so interesting.

The firm plans to split into a renewables-only business retaining the E.On name, with a main focus on wind and a lesser focus on solar; and a fossil fuels operation that will become a separate publicly-listed company. The two arms will employ 40,000 people and 20,000 people respectively. These are all clear signs that the utility is putting wind at the very heart of its future plans. It is big news.

The firm will spend the next year-and-a-half setting up this new structure, and is planning to spin off the new fossil fuels company after the 2016 shareholders meeting in April 2016.

It is partly funding the change with the €2.5bn of energy assets in Spain and Portugal to Australia’s Macquarie Group and Wren House, which is part of Kuwait’s sovereign wealth fund. This gives E.On the added benefit of being able to exit the paralysed Spanish wind market; and it is also considering the sale of assets in Italy.

But let’s not think this is all about E.On being progressive. It is protecting its business.

With this announcement, E.On also announced that it expected to incur an additional €4.5bn of impairment charges in 2014 due to changes in the European energy market. This refers to pressure from renewables on traditional sources. It makes sense to split the firm to insulate the renewables arm from the losses in fossil fuels.

It also means the main business can focus on wind, solar and distribution networks; and the fossil fuels arm can focus on making E.On a major player in natural gas. In such a fast-changing energy market it is tough to have one management team focused on both.

The new structure enables E.On to increase investments in 2015 by some €500m, up to €4.8bn. Johannes Teyssen, chief executive at E.On, has said creating two companies with distinct profiles and missions was “the best way to secure our employees’ jobs”.

And herein lies the point. The company is seeking to mitigate the impact of the problems it is experiencing due to energy shifts in Germany, and this should protect its planned investments in wind.

E.On as we know it may not exist after 2016, but a greener version will be taking its place.