Statkraft Shutting German Gas-Fired Plant

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - Falling electricity demand and the high price of gas in Germany has forced Norway's energy utility, Statkraft AS (Oslo, Norway), to close its 510-megawatt (MW) Robert Frank gas-fired plant in Lower Saxony.

The company said that the plant has now been placed in 'cold reserve' with job reductions expected to be announced. A biomass pant located on the same Landesbergen site will remain operational.

"In our view, gas-to-power still is the most efficient and environmentally-friendly technology for complementing the production of renewable energy in Germany," said Asbjørn Grundt, Executive Vice President Market Operations and IT. "However, in the current market situation it is not economically viable to operate older gas-fired power plants, let alone invest in new generation capacities."

Statkraft claimed that the decision will not affect it's more efficient and modern gas-fired plants, Knapsack I and Herdecke. The company still expects to commission its ultra-modern combined cycle gas and steam turbine power plant Knapsack II in the second quarter of 2013.

"Unfortunately, the market perspectives for gas-to-power in Germany have continued to deteriorate over the past twelve months," explains Dr. Jürgen Tzschoppe, Senior Vice President Continental Energy at Statkraft. "Based on the current market status, it is not possible to operate the plant economically. And we cannot justify keeping a reserve unit in the portfolio while the efficient power plants in Knapsack and Herdecke are hardly running. The plant is a cheap reserve in comparison to other technologies but we don't get any compensation for keeping such a reserve alive." TenneT, the transmission system operator, recently classified the Robert Frank power station as 'non-system relevant'.

High gas price prices in Europe coupled with the low cost of coal imports, particularly from the US, has seen a resurgence in the use of coal-fired power plants over the past year. Both Germany and the U.K. have recorded a much higher percentages of electricity coming from coal-fired plants, with a corresponding drop-off in amount of electricity coming from gas-fired plants. For additional information, see February 1, 2013, article - Gas-fired Power Slump in Germany.

Last May, Germany's largest energy company, E.ON AG (PINK:EONGY) (Dusseldorf, Germany), threatened to close some gas-fired plants due to falling demand and high running costs. It is considering closing Irsching 3 in Bavaria and Staudinger 4 in Hesse, which have a combined capacity of 1,037 MW, as well as Franken 1 in Nuremberg, which has a capacity of 383 MW. For additional information, see May 22, 2012, article - E.ON Contemplates Closure of Three German Gas-Fired Plants.

Tzschoppe said: "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".

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