FAZ: RWE Announces Shut-Down of Power Plants in Germany and The Netherlands

After the announcement of E.ON to shut down power plants in Europe with a total capacity of 11,000 MW by 2015, the second largest German energy supplier is likely to follow. RWE plans to close plants with a total capacity of 3.100 MW in Germany and the Netherlands, with further cuts under consideration, as newspaper Frankfurter Allgemeine Zeitung (FAZ) reports.

Various parts of the German energy industry face difficulties because of the electricity market prices, mainly due to the increased production of renewable energies leading to lower electricity wholesale prices. RWE’s profits from conventional power plants were reduced by 42% in the first half of 2013 compared to the previous year, while E.On’s EBITDA fell by 15% to EUR 5.7 billion. RWE’s EBITDA instead rose by 9% to 5.5 billion, a development influenced by a payment from supplier Gazprom, against whom RWE had obtained an arbitral award, and by an increased gas turnover (increasing by 17% to 194.2 kWh) due to the long winter.

The difficult situation is further illustrated by the production figures of RWE: electricity production declined by 1.2% t0 111.3 billion kWh, turnover by 4% to 135.9 billion kWh.

Plans to shut down conventional plants needed to balance intermittent renewable energy electricity generation have been discussed for some time. At the end of 2012, an amendment was introduced to the German Energy Act (EnWG) making a notification of the Federal Network Agency (BNetzA) prior to the closure obligatory for plants with a capacity of more the 10 MW. Should the plant be deemed system relevant, i. e. should the closure lead to a substantial threat for electricity supply by the transmission network operator and the BNetzA and a continuation of power production be both legally and technically possible, the closure is prohibited according to Sec. 13a, para. 2 EnWG.

While the criteria are high, a spokeswoman of the Federal Network Agency already a month ago declared that the Agency would not accept further shut downs in Southern Germany.

Sources: FAZ, FAZ, RWE press release

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