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Released March 13, 2015 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - E.ON AG's (PINK:EONGY) (Dusseldorf, Germany) new state-of-the-art gas-fired plant in Irsching Germany is facing shut down as it struggles to make a profit.
The gloomy outlook for the plant comes in the same week that the company, Europe's largest utility, reported its biggest ever annual loss.
"The economic prospects of the Irsching gas-fired power plant are extremely critical," explained Dr. Adrian Schaffranietz, Political Affairs and Corporate Communications Officer with E.ON. Speaking to Power Engineering International, he added: "The changed energy policy environment has marginalised its position in the market to a point where it can hardly recoup its costs. With the market situation having deteriorated further over the last few years, the plant's continued operation after the end of the present contractual arrangement is at risk."
The company is considering mothballing the plant in 2016 after an arrangement brokered in 2013 with the government, grid operator and regulator to keep it running comes to an end. The original 151-megawatt (MW) Unit 1 and 312 MW Unit 2 were shut down in 2006 and 2012 respectively. Unit 3 is used only to maintain grid stability. Unit 5, consisting of two smaller gas turbines and one steam turbine, has a capacity of 860 MW of electricity with a claimed efficiency rating of 58%. It was commissioned in 2010. The most recent addition was Unit 4, also called the Ulrich Hartmann plant. It is a combined-cycle gas turbine (CCGT) power plant with a generating capacity of 570 MW and a world-highest claimed efficiency rating of 60.4%. It as commissioned in July 2011.
High gas prices in recent years has made it expensive for utilities to run gas-fired plants. This has resulted that many operators returning older coal-fired plants to service to take advantage of low coal prices.
This week, E.ON reported a net loss of 3.2 billion ($3.4 billion) for 2014, compared with a net profit of 2.14 billion ($2.27 billion) a year earlier. The loss was attributed to impairment charges of 5.4 billion related to power plants and assets located in the U.K, Italy and Sweden.
In November Industrial Info reported that the company planned to split its company into two in order to capitalise on the rise of renewable energy. The main business will now focus on renewables, distribution networks, and customer solutions. A new independent company, made up of its conventional generation, global energy trading, and exploration and production businesses, will be set up in 2016. For additional information, see December 3, 2014, article - E.ON Goes Green, Splits Company in Two.
CEO Johannes Teyssen highlighted the importance of the new company structure this week. "Large-scale assets for supplying power and gas will continue to be essential in the future if countries intend for their industrial base to remain viable. Starting in 2016, the New Company will play a leading role in ensuring supply security. Under our future setup, the two companies will offer custom-tailored solutions to their respective target groups and will be based on business models that will appeal to different investor interests. 2015 will mark the transition to a new chapter for E.ON".
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
The gloomy outlook for the plant comes in the same week that the company, Europe's largest utility, reported its biggest ever annual loss.
"The economic prospects of the Irsching gas-fired power plant are extremely critical," explained Dr. Adrian Schaffranietz, Political Affairs and Corporate Communications Officer with E.ON. Speaking to Power Engineering International, he added: "The changed energy policy environment has marginalised its position in the market to a point where it can hardly recoup its costs. With the market situation having deteriorated further over the last few years, the plant's continued operation after the end of the present contractual arrangement is at risk."
The company is considering mothballing the plant in 2016 after an arrangement brokered in 2013 with the government, grid operator and regulator to keep it running comes to an end. The original 151-megawatt (MW) Unit 1 and 312 MW Unit 2 were shut down in 2006 and 2012 respectively. Unit 3 is used only to maintain grid stability. Unit 5, consisting of two smaller gas turbines and one steam turbine, has a capacity of 860 MW of electricity with a claimed efficiency rating of 58%. It was commissioned in 2010. The most recent addition was Unit 4, also called the Ulrich Hartmann plant. It is a combined-cycle gas turbine (CCGT) power plant with a generating capacity of 570 MW and a world-highest claimed efficiency rating of 60.4%. It as commissioned in July 2011.
High gas prices in recent years has made it expensive for utilities to run gas-fired plants. This has resulted that many operators returning older coal-fired plants to service to take advantage of low coal prices.
This week, E.ON reported a net loss of 3.2 billion ($3.4 billion) for 2014, compared with a net profit of 2.14 billion ($2.27 billion) a year earlier. The loss was attributed to impairment charges of 5.4 billion related to power plants and assets located in the U.K, Italy and Sweden.
In November Industrial Info reported that the company planned to split its company into two in order to capitalise on the rise of renewable energy. The main business will now focus on renewables, distribution networks, and customer solutions. A new independent company, made up of its conventional generation, global energy trading, and exploration and production businesses, will be set up in 2016. For additional information, see December 3, 2014, article - E.ON Goes Green, Splits Company in Two.
CEO Johannes Teyssen highlighted the importance of the new company structure this week. "Large-scale assets for supplying power and gas will continue to be essential in the future if countries intend for their industrial base to remain viable. Starting in 2016, the New Company will play a leading role in ensuring supply security. Under our future setup, the two companies will offer custom-tailored solutions to their respective target groups and will be based on business models that will appeal to different investor interests. 2015 will mark the transition to a new chapter for E.ON".
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
