Europe’s Gas Power Plant Carnage Intensifies

Another 1.2 GW of gas-fired generation has been idled in Germany as utilities scramble to rein losses that are pegged to falling wholesale electricity prices and a surge in renewable power generation.

Norwegian power company Statkraft put into “wet reserve” the 800-MW Knapsack 1 and 417-MW Herdecke power plants, both commissioned in 2007. That means both plants could be restarted in a relatively short time if needed.

Statkraft in March mothballed the 1962-built 510-MW Robert Frank gas-fired power plant in Landesbergen into cold reserve, saying it could not justify keeping a reserve unit in the portfolio while the company’s more efficient power plants in Knapsack and Herdecke were “hardly running.” Last year, it closed the 450-MW Emden gas-fired power plant.

Even as it underscored the significance of capacity markets in the long term and lamented “stranded investments in the billions,” Statkraft this June officially inaugurated its second combined cycle gas turbine (CCGT) power plant at the site in Hurth-Knapsack.

“During a several week long down-time the operational readiness can be reduced in many ways in order to minimize operating and maintenance costs. The power plants Knapsack I and II are still bidding on the spot market and are fully operational and functional within 16 hours,” a Statkraft spokesperson told POWERnews.

“The ‘Energiewende’ depends on a set-up that ensures the operation of flexible and low emission generation capacity. The closure of our gas-fired power plants and the growing market share of coal-fired generation clearly demonstrate that we are off track. A system is needed that supports the most efficient, environmental-friendly, and flexible solutions to balance the system. The most efficient mix of technology, be it gas-fired generation or storage, demand side management, cable connections to large reservoirs or a mix of all must be determined in a market yet to be created,” said Dr. Jürgen Tzschoppe, Statkraft’s senior vice president of continental energy.

Statkraft’s plants were idled barely a week after Europe’s third-largest power provider RWE announced it would take offline 3.1 GW of natural gas and coal power plants in Germany and the Netherlands, citing a “continuing boom in solar energy.” These include four gas-fired units (for a total 1.2 GW) by mid-2014: Gersteinwerk F and G (355 MW each) as well as the Weisweiler G and H gas turbines (270 MW each). The Emsland B and C gas steam turbines (360 MW each) will be summer mothballed in 2014. Meanwhile, the company is assessing 10 GW of capacity in Europe for potential closure.

Germany’s largest power supplier E.ON has already mothballed its 300-MW Tavazzano 8 power plant in Italy and expects to mothball its 2011-inaugurated 418-MW CCGT plant—which cost $526 million to build—in Malzenice, Slovakia, at the end of this year. The company is also considering mothballing 575-MW of gas-fired capacity in France in 2014. Those closures will add 1.3 GW to the 6.4 GW E.ON has already taken offline since November 2012. At least 3.3 GW more are expected to be taken offline by 2015.

E.ON last week revealed a 22% fall in net profits compared to a year ago, attributing weakened earnings on frail demand across Europe. “In particular, E.ON’s power generation business in Europe is suffering from low-capacity utilization and low wholesale prices as a result of the continent’s economic crisis and interventionist energy policies and regulations,” the company said.

For more on Germany’s power generation fuel conflicts, see “Germany’s Energy Transition Experiment” in POWER’s May 2013 issue.

Sources: POWER, Statkraft, RWE, E.ON

Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)