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E.ON puts German natural gas-fired electricity plants in cold reserve

13 Nov 2012 17:11:53 | edem


E.ON is considering closing conventional electricity plants because of a challenging market environment in which natural gas-fired plants "have become barely profitable to operate" in Europe, Germany's utility said in its third-quarter results on Tuesday.

The 415MW Irsching 3 gas-fired unit, commissioned in 1974, has run on only nine days so far this year, Teyssen said.

E.ON will put this plant as well as the 622MW gas-fired Staudinger 4 in cold reserve, Teyssen said. These plants are part of the 2.5GW winter reserve, which was contracted by the grid operators for this and the coming winter (see EDEM 5 November 2012), Teyssen confirmed.

As a result of the challenging market environment, E.ON is also putting its 1.1GW hard coal plant project Staudinger 6 "on ice" and it will not be "further pursued", said Teyssen.

Meanwhile, the utility's new 845MW Irsching 5 gas-fired plant in Germany has run fewer than 1,600 hours so far this year, E.ON's CEO Johannes Teyssen said in a press conference on Tuesday.Last year the plant, which was commissioned in 2010, produced about 4,000 hours of electricity over the whole of 2011, which is considered normal, he added.

In addition, E.ON said it will put the planned 300MW expansion of its pumped storage German hydro plant in Waldeck on hold (see 23 December 2011).

In Scandinavia, E.ON wants to focus on its business in Sweden and Denmark after deciding to sell its Finnish assets in October (see EDEM 25 October 2012).

E.ON produced 190.5TWh of electricity in the first nine months of this year - 7.2TWh lower than a year ago.

The decline was driven by the loss of nuclear power capacity in Germany, lower availability of its Oskarshamn nuclear plant in Sweden and "generally lower demand in Europe", E.ON said. On the other hand, positive impact came from the commissioning of new gas-fired plants in the UK and Germany as well as increased utilisation of coal plants in the UK, France and Spain.

About 90% of the utility's own power generation in central Europe for 2014 is now hedged at an average price of €53.00/MWh. This compares to a price of €55.00/MWh and €56.00/MWh for 2013 and 2012.

Even though earnings before interest and taxes rose 65% to €6.1bn in the first nine months from €3.7bn a year ago, E.ON has put its 2013 forecast and the guidance for 2015 under review.

"Considering the substantial economic uncertainties and the structural changes in the energy industry, E.ON's previous 2013 forecast no longer seems achievable," it said in the report. MD

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