EnBW Shutting Karlsruhe Gas-Fired Plant in Germany

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Low electricity prices continue to plague German utility companies, as Energie Baden-Württemberg AG (EnBW) (FWB:EBK) (Karlsruhe, Germany) became the latest player to announce the closure of a gas-fired power plant.

The company said that it is planning to shut the RDK 4S combined-cycle gas turbine (CCGT) unit at its Karlsruhe plant in the southwest of the country because it is "not economically feasible." Two other coal-fired units at the site--RDK 7 and RDK 8--which also are used for district heating will not be affected by the decommissioning. RDK 4S has a generating capacity of 363 megawatts (MW) and EnBW said that decommissioning will take place as soon as is legally possible.

It stated: "Due to the persistently low current price level, conventional power plants in Germany are under strong economic pressure. EnBW therefore regularly checks its entire conventional power plant economy for profitability and has already announced six decommissioning blocks in Marbach, Walheim and Heilbronn (blocks 5 and 6) due to lack of economic efficiency." The decision of the EnBW Board of Management is still subject to the approval of the EnBW Supervisory Board and the Supervisory Board of Stadtwerke Karlsruhe, which have a share of ownership of 25%in RDK 4S.

The company then will inform the Federal Network Agency and the transmission network operator TransnetBW of the planned decommissioning, in order to ensure it poses no risk to the security of supply in the region.

EnBW, alongside fellow German utilities RWE AG (FWB:RWE) (Essen, Germany) and E.ON SE (FWB:EONGY) (Dusseldorf, Germany), have been suffering from low electricity prices in the country in recent years. Cheap coal has allowed utilities to keep their coal-fired plants burning, while shuttering cleaner gas-fired plants because they are more expensive to run. Last year, E.ON was forced to close two modern gas-fired plants in Irsching, claiming they were too expensive to run. For additional information, see April 2, 2015, article--E.ON Shutting 'Unprofitable' German Gas-Fired Plants.

Earlier this month Industrial Info reported that RWE had posted a 13% drop in earnings for the first nine months of 2016, blaming collapsing conventional power prices and a major shift to renewables. For additional information, see November 15, 2016, article--RWE Results Dragged Down by Low Energy Prices.

EnBW, RWE, E.ON and Sweden's Vattenfall AB (Stockholm) also are facing a huge financial burden from Germany's 2011 exit from nuclear power. They recently agreed with the government to pay 23.6 billion euro ($26 billion) into a fund that will deal with the country's nuclear waste. For additional information, see November 12, 2016, article--Germany Agrees $26 Billion Nuclear Waste Fund.

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