(Bloomberg) — EON SE, Germany’s biggest utility, filed to
temporarily close two unprofitable gas-fired power plants used
to ensure the country has enough supply to meet peaks in demand.
The plants “have no prospect of operating profitably when
the current contract with the network operator expires in March
2016,” EON said Monday in a statement.
Germany is paying some plants to guarantee stable power
supply as the country increases reliance on volatile generation
sources such as solar and wind. Grid operator Tennet TSO GmbH
pays a share of the fixed costs at the Irsching 4 and 5 plants
in Bavaria as part of a 2013 deal in which EON agreed to make
the facilities available for generation for three years.
EON had to give a year’s notice before shutting Irsching,
leaving it with a deadline this month for a decision. The grid
regulator, Bundesnetzagentur, can reject final decommissioning
plans to keep the plants available as reserve generators if they
are deemed necessary for the operation of the entire system.
“EON has applied for a temporary closure of Irsching. Only
if a final shut down is intended, a regulatory interdiction by
the Bundesnetzagentur will be needed,” Fiete Wulff, a spokesman
for the grid regulator, said Monday by e-mail.
Tennet can prohibit the shutdowns by declaring the units to
be system-relevant, which means Irsching 4 and 5 would be
subject to the provisions of the German Ordinance on Reserve
Power Plants.
Legal Action
Irsching owners “have to consider legal action” if plant
shutdowns are opposed, EON and its other owners said in the
statement. “It would be better for all sides to find a
regulatory framework that covers the actual costs of maintaining
the units as reserve capacity and dispatching them to stabilize
the network. This would mean amending the Ordinance on Reserve
Power Plants to cover the costs of newer, technologically
advanced power plants.”
The 550-megawatt Irsching 4, wholly owned by EON, began
operating in 2011. The 846-megawatt Irsching 5, which started up
the previous year, is 25 percent owned by Nuremberg-based N-Ergie AG, 16 percent by Mainova AG in Frankfurt and 9 percent by
HSE AG, a Darmstadt, Germany-based power supplier.
Gas-fed plants are struggling to compete with renewables
and coal-fired facilities in Germany. The difference between the
cost of the fuel and the price paid for the power generated, the
so-called spark spread, for the month ahead was minus 16.03
euros ($17.42) a megawatt-hour on Monday.
The decision puts pressure on Bavaria’s state government,
which has called for Irsching to continue operating. Germany is
considering splitting its electricity market into two zones,
Spiegel reported this month, as Bavaria blocks links to
transport renewable power from northern Germany. Splitting the
market would probably increase prices in the southern state.
EON fell 0.5 percent to 13.95 euros at 4:37 p.m. in
Frankfurt.
To contact the reporters on this story:
Tino Andresen in Dusseldorf at
tandresen1@bloomberg.net;
Weixin Zha in Frankfurt at
wzha2@bloomberg.net;
Stefan Nicola in Berlin at
snicola2@bloomberg.net
To contact the editors responsible for this story:
Will Kennedy at
wkennedy3@bloomberg.net
Lars Paulsson, Dan Weeks