Image copyright Getty Images

German energy firm E.On has said its annual net losses more than doubled in 2015 to €7bn (£5.4bn) after it wrote down the value of its loss making power plants by €8.8bn.

The energy firm blamed record low wholesale electricity prices.

E.On also reported a 9% fall in underlying earnings at its UK supply business to £267m, from £294m in 2014.

The company said the fall in UK earnings was the result of its 3.5% cut in gas prices in January 2015.

In addition, it also pointed to "keen competition in the marketplace".

E.On reduced its standard gas price in the UK again by an average of 5.1% from 1 February amid the latest round of tariff cuts in the industry.

E.On is one of the "big six" energy companies in the UK, where it supplies electricity and gas to about five million customers.

Price slump

In its home market of Germany, E.On said the government's move towards renewable energy hurt profits.

It is the second year consecutive year that E.On has reported a loss. In 2014, the energy firm reported a loss of €3.16bn.

On Tuesday, rival German energy firm RWE reported annual losses of €637m (£493m) blaming the collapse in commodity prices and, in particular, the continuing depression in the price of coal that has caused German wholesale electricity prices to plummet,

All four of Germany's main large energy firms have written down the value of their power plants as a result of the slump in electricity prices. Wholesale electricity prices are at their lowest level since 2002.

Industry 'transformation'

E.On is in the process of hiving off its more traditional forms of power generation, in particular coal-fired power generation, into a separate company called Uniper.

Uniper is expected to be listed on the German stock exchange some time during the second half of this year.

E.On itself will focus on what it calls the "new energy world" of renewable energy, including solar and wind energy.

"Our numbers reflect the far-reaching structural transformation that our industry is experiencing and that continues unabated in the current year," E.On's chief executive Johannes Teyssen said in a statement.

E.On warned that future profits, dividends and cash flows were expected to decline further to reflect worsening conditions in the power sector.