16 july 2013

[The following article was translated from the Süddeutsche Zeitung by a 4C signatory.]

Power industry wants to shut down power plants

by Markus Bakker, Süddeutsche Zeitung, July 16, 2013

Is Germany threatened by a bottleneck in its power supply? Because of the boom in green energy, companies are considering removing dozens of power plants from the grid. They complain of huge losses. Even nuclear power plants could be shut down prematurely. New trouble looms because the government has legal means to force companies to keep the plants in operation.

Germany's power companies may face new political troubles after the conflict over the accelerated nuclear phase-out. Considerations that are currently circulating in the headquarters of the German energy industry trigger serious concerns in Berlin. According to information of the Süddeutsche Zeitung energy companies and municipal utilities are currently checking the cost-efficiency of dozens of their power plants. That might endanger supply security, because many of the reactors could be shut down.

Only very few companies talk openly about the plans yet. But internal discussions point in a clear direction: of the roughly 90,000 megawatts of conventional power capacity in Germany 20 percent might be up for discussion, according to a board member of one of the suppliers. In plain language, dozens of coal and gas power plants might be switched off temporarily or permanently. And even nuclear power plants could prematurely go off the grid, according to industry sources.

The trouble for these companies is that due to the ongoing boom in green energy their power plants are connected to the grid less and less often. The increase in electricity supply lets electricity prices drop so far that their operation is no longer worthwhile. The production costs are higher than the retail prices. More and more often, energy companies and municipal utilities have to put in money [ie, make losses, rather than earning any]. Operators have repeatedly demanded of the government that they be paid for the provision of capacity itself - so far in vain.

Municipality utilities complain about losses

Officially, only 15 decommissioning applications have been received by the competent Federal Network Agency to mid-July. But that is probably just the beginning. Germany's largest energy company Eon had decided to shut down eleven power plants in Europe - several of them in Germany – by 2015. Eon will also take the community power plant in Kiel off the grid by the end of 2015, announced a spokesman. "We are closely monitoring the situation in other power plants," it said.

Also at the Essen group RWE power plants with a total capacity of several thousand megawatts will be evaluated based on their profits. Decisions have not yet been made, it said. The atmosphere at the recent meeting of RWE Power subsidiary was "tense" and marked by Existenz-angst [maybe just leave in German, funny word in this context, and very vague] said a works council member. The Karlsruhe EnBW group had announced the end for four coal-fired power plant units. Municipal utilities also complain of losses.

Grid operators and regulators are alarmed by these scenarios. In the battle against power outages, in many parts of the country they can hardly do without power plants to offset troughs in renewable energy generation. "In southern Germany, we will not accept any more closures," a spokeswoman for the responsible Federal Network Agency in Bonn announced on Monday. The decision on the operation or shutdown of power plants is a business decision, said the Federal Ministry of Economics. However, the government had the ability to require by law that plants remain operational when the supply security is in danger.

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