RWE Generation plans to shut down a further three coal-fired power plants in Germany by 2017 if market conditions do not change. In addition to the 1 000 MW of plant that will be taken offline, RWE has also announced that it is terminating supply contracts for 470 MW of capacity at the end of 2014.
RWE intends to take the 110 MW Goldenbergwerk lignite power plant in Hürth off the grid in the third quarter of 2015, followed by Unit C of the Westfalen hard coal power plant (285 MW) in Hamm early in 2016. If market conditions do not change, the part of Unit K fuelled by hard coal in the Gersteinwerk plant in Werne (610 MW) will cease to operate in the first quarter of 2017, when an extensive overhaul is scheduled. The planned upgrade work would no longer be justifiable from an investment perspective under the current economic conditions, according to RWE.
RWE says it has already informed the network operators and the Federal Network Agency about these measures. It expects staff cuts to affect around 180 of the 640 employees at the three stations.
The closures bring the generating capacity of power stations that RWE is either totally or partially taking offline in Germany and the Netherland, or is no longer utilising on account of the difficult market conditions to around 9 000 MW..
"Conventional power generation is losing ground - not just at RWE. Figures from the Federal Network Agency indicate that, up to 2018, more secured power station capacity will have to be taken offline than is added through capital investment. This does not bode well for security of supply, to which wind and solar can make little contribution" says Peter Terium, CEO of RWE AG.
He expressed his support for a market design which compensates companies that keep secured generation capacity on tap. "With a capacity market that is non-discriminatory and open to all technologies, Germany could create an economically feasible basis to continue to operate indispensable generation facilities - and thus supplement the expansion of renewable energy."
The mild winter and the resulting low demand for heating, together with the continuing low level of prices on the electricity markets, led to a significant decline in RWE's earnings for the first half of 2014. Compared to the first half of 2013, EBITDA fell by 32 % to EUR 3.4 billion, while the operating result was down 40 % to EUR 2.3 billion.
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