* E.ON net loss more than doubles to 7 bln euros
* Points to 8.8 bln euros in writedowns
* Also flags lower dividends, profits in future
* Shares down 0.7 pct (Recasts, adds CFO comments on dividend, updates shares)
By Christoph Steitz and Tom Käckenhoff
ESSEN, Germany, March 9 (Reuters) - E.ON, Germany's largest utility, posted a record loss for the second year in a row following asset writedowns totalling more than half its market value and prepared investors for lower payouts as it conserves cash to fund future growth.
Germany's traditional power companies such as E.ON and rival RWE have been hammered by the effects of a surge in renewable energy, plunging wholesale electricity prices and the country's plans to abandon nuclear power.
"Our future dividend policy must reflect the current market environment," Chief Financial Officer Michael Sen told reporters on Wednesday.
"The 0.50 euros per share we will pay for 2015 doesn't (reflect it)."
E.ON said it will update markets on its future dividend policy at the end of April, along with giving financial details on the planned listing of its struggling power plant business and energy trading activities.
E.ON, in the process of spinning off its power generation and energy trading business into a new publicly traded company called Uniper, said its net loss more than doubled to 7 billion euros ($7.7 billion) in 2015, from 3.16 billion euros in 2014.
Analysts had, on average, expected a net loss of 6.48 billion euros.
"It's all about the outlook. And since it's not great, investors are concerned that dividends will fall, too," a trader said.
Shares in E.ON were down 0.7 percent at 1130 GMT and have lost more than 40 percent of their value over the past 12 months.
As a response to the crisis in its industry, E.ON wants to spin off its energy trading and most of its power generation, to focus on renewables, networks and services.
E.ON also warned future profits and cash flows were expected to decline further amid worsening conditions in the power sector.
"The course ahead will be tougher and longer than anticipated," Chief Executive Johannes Teyssen said.
E.ON blamed 8.8 billion euros in writedowns on its power plants, most of which have slid into loss as they no longer run the hours necessary to turn a profit, being increasingly replaced by solar and wind power.
The group said its earnings before interest, tax, depreciation and amortisation (EBITDA) could decline by more than a fifth this year to between 6 and 6.5 billion euros.
This outlook will have to be adjusted following the listing of Uniper, expected for the second half of the year, E.ON said, adding it would be significantly lower as a result. ($1 = 0.9108 euros) (Additional reporting by Daniela Pegna and Vera Eckert; Editing by Keith Weir)