Farmer Blocks E.ON's New Coal-Fired Plant in Germany

Researched by Industrial Info Resources (Sugar Land, Texas)--A farmer has brought German energy giant E.ON's (OTC:EONGY) (Dusseldorf, Germany) plans for a new 1,050-megawatt (MW) coal-fired plant to a halt following a successful court battle.

The Higher Administrative Court for the state of North Rhine-Westphalia could now order Germany's largest utility to stop construction of the plant in Datteln in northern Germany. The court claimed that the plan submitted by the local authorities of Datteln did not comply with conditions laid out by the state parliament for the use of renewable energy. The news will come as a severe blow to E.ON, as the 1.2 billion euro ($1.74 billion) plant is almost complete and was scheduled to start operation in 2011.

The court also highlighted issues about the location of the plant and how it would affect the local population. E.ON has refused to comment on the decision so far.

E.ON is still awaiting the go-ahead to build Staudinger 6, the 1,100-MW unit at the massive Staudinger power plant at Hainburg in southwest Germany. The company wants to decommission the first three units that were built in the late 1960s. Opposition to the new unit is strong, and E.ON has been quoted as saying it will not go ahead the project if the level of public protest remains.

E.ON is not the only energy company in Germany having trouble getting new coal-fired plants built. At the moment, Swedish power company Vattenfall AB (Stockholm) has taken the German government to an international arbitration court regarding environmental restrictions at the company's 1,645-MW coal-fired plant being built in Moorburg, near Hamburg. The restrictions and delays, Vattenfall claimed, could cost the company up to 1.4 billion euros ($2 billion). In 2007, RWE AG (OTC:RWEOY) (Essen, Germany) was forced to abandon plans to build a 2 billion euro ($2.9 billion) hard-coal-fired plant consisting of two 800-MW generation units in Ensdorf, after local citizens voted against a change in the land use for the site.

The anti-coal lobby poses a serious problem to all energy companies as Germany plans to close all of the country's 17 nuclear plants, which currently account for a quarter of the country's power, by 2021. Coal-fired plants are seen by most energy companies as the cheapest and fastest method of filling the massive power shortfall expected.

Datteln already has three power plant blocks, but these are coming to the end of their life. Datteln 4, the planned 1050-MW unit, is intended to replace these blocks, and construction of the unit got under way in 2007. The hard-coal-fired plant is designed to be 45% efficient, and E.ON has stated that the new plant will improve the environmental rating of the region by more than 20%. Hitachi Power Europe GmbH (Duisburg, Germany), a subsidiary of Hitachi Limited (NYSE:HIT) (Tokyo, Japan), was contracted to build utility steam generators for the new power plant as part of a four-generator order worth 1.2 billion euros ($1.74 billion). Hitachi said the plant's 45% efficiency rating placed it 5 percentage points higher than average coal-fired plant efficiencies currently being built, and up to 10% more efficient than most existing European coal-fired power plants.

Financing for coal-fired plants in Germany is also getting hard to come by, following the announcement a few weeks ago that the construction of an 823-MW coal-fired plant at Ingelheimer Aue near Mainz, Germany, will soon come a halt unless further financing can be secured. Barclays plc (NYSE:BCS) (London), one of the key backers for the project, is understood to have withdrawn. For additional information, see August 25, 2009, news article - Banks Pull Funding For German Coal-Fired Power Plant.

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