E.ON says reaches deal to keep Irsching plant open

IRSCHING, Germany (Reuters) – Germany’s top utility E.ON said it reached a deal with regulators and grid operators to keep open its modern but unprofitable Irsching gas-fired power station in Bavaria, providing reserve power to stabilise the grid.

The agreement with the German network regulator Bundesnetzagentur and power grid TenneT ensures the Irsching blocks 4 and 5 will remain operational over the next three years, E.ON said, adding it would be paid based on Irsching’s contributions to the grid.

E.ON Chief Executive Johannes Teyssen said the owners of Irsching would receive a double-digit million euro amount per block per year.

Irsching 4 is fully owned by E.ON while Irsching 5 is also part-owned by local utilities Mainova , N-Ergie and HSE.

Sources close to the talks had told Reuters on Thursday that Irsching had looked set to remain open.

E.ON had said it could close the plant because of high gas buying-in prices and low wholesale power prices, while the energy network regulator believes the plant is crucial to the stability of the power grid in the industry-heavy region.

The deal could be a precedent for how Germany ensures the survival of conventional power, whose profitability has been hit by a boom in subsidised renewable energy as the country phases out nuclear power.

E.ON has put the cost of operating the three year-old Irsching 5, which has 846 megawatts (MW) of capacity, at 100 million euros a year. Under energy laws, it is not allowed to unilaterally shut the plant. Block 4, with 550 MW capacity in 2011, has also seen its profitability fall.

(Reporting by Jens Hack, Tom Kaeckenhoff and Christoph Steitz; editing by Keiron Henderson)

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