Delays likely for 800MW Dutch coal plant

A 777MW coal-fired power plant in the Netherlands that was previously expected on line by the end of the month could be facing delays into February, a spokesman for RWE’s Dutch subsidiary Essent said on Tuesday.

Eemscentrale A, which was originally due to commission in the middle of last year, has now reached its final testing stages, the spokesman confirmed. But he added:“We still strive to begin commercial operation at the end of this month, but it may take some time, as all tests need to be passed,” which leaves the door open for the possibility of further delays.

Pushing back the start of commercial operation into February would exert a bullish influence on the near-curve of the Dutch electricity market, should the capacity have been priced in by traders as available. Since any delay would feed into the first weeks of February, this could lend support to the front month product, particularly if it is coupled with any changes in weather forecasts in favour of colder temperatures.

Rolling Dutch front month products have been weak since late November, ICIS figures show, as the winter has progressed with little in the way of demand-boosting temperatures while soft neighbouring markets, such as German power, have also weighed in.

The front month traded a number of times at €40.30/MWh on Tuesday morning, approaching the lowest single transaction on February ‘15 Baseload seen this year, on 7 January, when it changed hands at €40.00/MWh before support emerged.

With an abundance of selling and the consequent adoption of short positions this year so far, the influence of any emerging bullish driver could be magnified.

But any upside from the Eemscentrale A delay is unlikely to affect longer term contracts, as falling gas prices continue to weigh down the Dutch forward curve, preventing any bullish direction.

The capacity accounts for only half of the soon-to-be-complete facility. The other half of the plant, the 777MW Eemscentrale B, is now expected on line between May and June, the spokesman said. This means a slight delay is on the cards since the most recent estimate was for May this year (see EDEM 12 December 2014).

Last year, both units of the plant were pushed back six months from their initial targets.

Yet the Dutch grid will not be left devoid of new coal-fired generation in the short term. The giant 1,070MW coal-fired Maasvlakte 3 power plant, owned by E.ON, is expected to begin powering the grid on 24 January, according to REMIT data. Abigail Beall