German energy giants pull plug on conventional power

Aug 18, 2013 by Mathilde Richter
Traffic passes in front of the new Neurath lignit coal-fired RWE power station on September 11, 2012 at Grevenbroich near Aachen, southern Germany. RWE is shutting six domestic plants and rival E.ON is threatening to relocate to Turkey as the sector tots up the cost of the government's energy policy turnaround.

German power company RWE is shutting six domestic plants and rival E.ON is threatening to relocate to Turkey as the sector tots up the cost of the government's energy policy turnaround.

Ever since Chancellor Angela Merkel announced a phase-out of nuclear energy over the next decade and pledged to generate as much as 80 percent of the country's electricity from by 2050, big question marks have been hanging over the future of coal and gas-fired plants in Germany.

Merkel, seeking a third term in general elections on September 22, is a staunch supporter of this hugely popular policy move.

But the turnaround is depriving utilities, including market leaders RWE and E.ON, of massive profits from their atomic plants and turning their gas and coal-fired stations into loss-makers as they are sidelined by rival .

Last week, the two biggest players in the German sector unveiled steep drops in profits, and "many of our plants are operating at a loss," complained RWE's finance chief Bernhard Guenther.

Indeed, RWE announced that it would shut down a number of plants—representing combined capacity of 4,300 —in both Germany and the Netherlands. And more could follow, Guenther warned.

The networks agency that oversees such closures has received 15 such applications since the end of 2012, according to a spokeswoman.

It was not immediately clear whether RWE's plants were part of the number, but Norway's Statkraft for one has also announced plans to pull the plug on two sites in Germany.

Lightning fills the sky above a wind farm near Jacobsdorf, eastern Germany in May 2013. With political clout firmly behind renewables, priority is given in the national power grid to so-called "clean" electricity.

With political clout firmly behind renewables, priority is given in the to so-called "clean" electricity, which means that all power generated from or is pumped into the grid, while that produced by coal and gas-fired plants is used simply to make up for any shortfalls.

Following the boom of solar power in recent years, nourished by generous subsidies, the capacity of renewable sources of energy is such that, if the wind is blowing and the sun is shining, Germany can actually do without its conventional power plants.

In the period from April to June, a number of RWE's plants were operating at less than 10 percent of capacity, said finance chief Guenther.

And with wholesale electricity prices at the current lows in Europe, that means substantial losses. That was the case with gas-fired plants until recently, but coal-fired generators are now barely profitable as well, he said.

Before reaching a deal in April, E.ON fought for months with the regional authorities over the fate of its gas plant in Irsching in Bavaria, which came online in 2010, but is merely just ticking over.

E.ON finally conceded to the requests of the authorities to keep it up and running, but only in return for payment.

The networks agency has warned that it is loath to approve many closures in the south of Germany.

Horses graze in front of the new Neurath lignit coal-fired RWE power station on September 11, 2012 at Grevenbroich. RWE has announced that it will shut down a number of plants—representing combined capacity of 4,300 megawatts—in both Germany and the Netherlands

Generation from renewables is dependent on the weather and conventional generation must make up for any shortfalls. But operators want compensation.

At the moment, E.ON's plants "are working for nothing," raged chief executive Johannes Teyssen last week, who is eyeing other closure scenarios and a possible relocation to Turkey where the group already has a solid presence.

But an industry source told AFP that "I think it's more a threat. It would be very, very complicated and I'd be surprised if they were seriously considering such a move."

Such sabre-rattling is certainly the norm in any pre-election period. But the sector is expecting a massive re-think by the future government about the modalities of the energy turnaround.

"All the problems are known and identified. There won't be any respite for the incoming government," said Hildegard Mueller, president of the sector's BDEW federation.

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Tom_Andersen
2.3 / 5 (15) Aug 18, 2013
What the author and most readers don't understand about this story is that these large generators are pulling out solely for contract reasons - gas, coal and nuclear electricity is still needed.

They are essentially threatening to shut down all German industry.

When they turn off a German plant, and switch on one in Turkey, the price they get for the same power consumed in Germany goes from $30/MWh to $120 - $300/MWh.

Calling the program 'hugely popular' is a bit funny.

http://www.theaus...94405337
Tom_Andersen
2.1 / 5 (14) Aug 18, 2013
Shutting down multiple GW of thermal power will make market prices skyrocket at times of low wind and clouds. These companies are saying that they will not play nice any more. They are going to make a lot of money.
Eikka
2.5 / 5 (11) Aug 18, 2013
all power generated from wind turbines or solar panels is pumped into the grid, while that produced by coal and gas-fired plants is used simply to make up for any shortfalls.


The situation is much more severe than the wording of the article leads you to believe.

The coal and gas fired powerplants aren't simply used to make up for the occasional "shortfall". The wind and solar generation capacity is more often NOT producing, and the conventional power is producing the vast majority of the time, except when the windmills and solar panels happen to turn on in which case everyone else scrambles to turn off so they can give way to the political superstar renewable energy. The renewables are totally dependent on the conventional capacity or the grid would fail

Wind energy in Germany has a peak output that is four times its mean output, which means that a great deal of the energy comes in big power surges, and adjusting to these surges is costly to the conventional power producers
Eikka
2.5 / 5 (11) Aug 18, 2013
the capacity of renewable sources of energy is such that, if the wind is blowing and the sun is shining, Germany can actually do without its conventional power plants.


For two, three hours at a time, and after that the conventional power must jump back in to make the other 78% of the energy needed on the grid.

To increase the portion of renewable energy in the system any further, Germany would actually have to start producing more renewable power than what they can consume, and export the surplus below cost just so someone would take it, exactly like Denmark is doing.
CC100
1.4 / 5 (18) Aug 18, 2013
The US Government's own National Research Council has found that windmills and solar projects reduce greenhouse gas emissions to such an insignificant extent that they are not worth subsidizing. It has been adequately demonstrated by world history that the windmill fad has been a global economic and environmental disaster, killing birds and bats by the millions, lowering property values, and causing great physical and mental suffering to those unfortunate enough to live near windmill projects.

Barack Obama has now pushed his empty green symbolism to a vulgar, Orwellian extreme by ordered the construction of the largest US Government owned windmill farm to provide the electricity needed to build newer and better hydrogen bombs. The Pantex Renewable Energy Project is currently under construction on 1,500 acres of government-owned land in the Texas panhandle.


david_king
2.1 / 5 (14) Aug 18, 2013
I'm sure Germany and Spain didn't stumble into this problem without giving it some consideration. After all Denmark has been down this road 2 decades ago and they know what happens when the wind stops. Pumped storage hydropower is the clear long-term answer for most of Europe. It currently boasts efficiency above 80%. Of course Denmark, Benelux and the Netherlands are altitude-challenged.
TheGhostofOtto1923
2.9 / 5 (8) Aug 18, 2013
killing birds and bats by the millions
This is a lie. Look it up and then never repeat it again.
lowering property values...great mental and emotional and physical suffering and deformity
You mean as much as living near an airport? Or a freeway? Or (shudder) teenagers?

Geez I do hope LENR works out or germans might freeze soon-
Shakescene21
2.6 / 5 (11) Aug 18, 2013
The US Government's own National Research Council has found that windmills and solar projects reduce greenhouse gas emissions to such an insignificant extent that they are not worth subsidizing.



Wrong... The National Research Council is not a U.S. Government Agency. NRC receives some money from the US Government but it gladly accepts money from almost anyone. Its researchers are private academics, scientists, and engineers. The NRC provides ADVICE to the U.S. Government from non-government sources. This advice is the opinion of non-government people and in no way is government policy.
Newbeak
not rated yet Aug 18, 2013
MicroCHP is big in Germany,so that takes some of the load off wind/solar: http://en.wikiped...neration
antialias_physorg
3.4 / 5 (5) Aug 18, 2013
is a staunch supporter of this hugely popular policy move.

She is so 'staunch' in her support that not 3 months before Fukushima she had announced that the (already put down in law by the previous green-socialdemocratic government) phase-out of nuclear would be reversed.

Of course she quickly changed that after Fukushima happened. But if anything then Mekel and her party are the sort to wait out an opposing government and then reinstate big-business-friendly laws the second they can. She's no enviro-friendly politician. Not by a long shot.

$30/MWh to $120 - $300/MWh.

What complete bunk. Germany is in an european net. Energy is bought and sold all the time accross borders here. Where the powerplants are located is pretty immaterial.

...except for the taxes these big companies pay. But that isn't much, since they've all figured out how not to pay any and get a load of subisides on top. Those subsidies are being taken away so they 'threaten' a move.

dogbert
1.3 / 5 (12) Aug 18, 2013
Eventually, the Chicken Little, PC fantasies will fail when the utilities which build and energize the grids get tired of making PC fantasies look viable. If they stop playing ball even for a few hours, the grids fail.
kochevnik
2 / 5 (4) Aug 18, 2013
@CC100 What energy conglomerate do YOU work for?
Eikka
1.6 / 5 (7) Aug 19, 2013
I'm sure Germany and Spain didn't stumble into this problem without giving it some consideration.


There isn't a singular "Germany" that considers the issue; there's all sorts of interest groups who are trying to gain something and are trying to toss the hot potato to someone else.

The political parties don't understand technology - all they see is: green energy gets me votes - let's promise to build more windmills. The RE industry doesn't care about the problems because they just make and sell the equipment. The investors and owners don't care as long as they're getting the subsidies, and the individual politicians are running under the hope that someone else will solve all the issues before they become real issues, or if not then they can always push the issues onto their opposition and blame them.

People just seem to be of the mind that if you build them, the problems solve themselves eventually - meanwhile let's help ourselves to some taxpayer money.
TheGhostofOtto1923
1 / 5 (3) Aug 19, 2013
Where the power plants are located is pretty immaterial
-which is why the rich euro nations are willing to have those dirty dangerous power plants built farther east in their poorer counterpart nations. Who after all need the money and are incidentally closer to the fuel sources. Win-win-win.
DistortedSignature
not rated yet Aug 19, 2013
So I'm curious about this aspect. Given the fact that the Fukushima incident scared most of the public into thinking that nuclear energy is dangerous across all instances, will there ever be a resurgence? Should there be acceptance?

I feel like only investing in variable renewable energy (i.e. solar & wind) isn't the complete solution when you'll need that base line supply that coal, gas, or nuclear can provide (hydro as well, but that's geographically limited).

Will the Fukushima event need to be forgotten for acceptance? Is this compareable to the Chernobyl disaster? From my understanding, the meltdown was a lot worse than Fukushima (not sure about the long term effects) and people's opinion were to improve the safety of nuclear energy production as opposed to removing it all together. But that was before the internet as well, so there's probably a social aspect intertwined to this.

Anyone care to chime in their thoughts? (Or lambast me for inaccurate assumptions)
Jimbaloid
not rated yet Aug 19, 2013
At the moment, E.ON's plants "are working for nothing,"


Never mind, they'll just make up any short fall from UK customers...

http://www.mirror...-2162723
antialias_physorg
3 / 5 (2) Aug 19, 2013
Given the fact that the Fukushima incident scared most of the public into thinking that nuclear energy is dangerous across all instances, will there ever be a resurgence?

In germany? Unlikely. The public's stance against nuclear here dates much further back than Fukushima (and even further back than Chernobyl).
when you'll need that base line supply

Or a storage solution. Wind, hydro and solar are easily capable of supplying the total energy needs. If you add a storage solution into the mix then you're good.

Is this compareable to the Chernobyl disaster?

It took a long time after Chernobyl to get the CDU (of which Merkel is a member) from power. Remember chancellor Kohl? Yeah. We were stuck with him for 16 years (hard to get rid of him after unification and all that). So the social-democrats and the greens then came to power and put a nuclear phaseout into law (a very popular move) - which Merkel then tried to overturn again.
DistortedSignature
not rated yet Aug 19, 2013
Or a storage solution. Wind, hydro and solar are easily capable of supplying the total energy needs. If you add a storage solution into the mix then you're good.


I completely agree on that aspect and would allow them to have the on demand capability to not rely on coal or gas. Would there be some sort of tipping point with nuclear technology (e.g. It'd be nonsensical) not to invest in this) that will come about before storing electricity on a large scale becomes feasible?

It might even be silly to consider these questions since policy and implementation are not always correlated to safety, efficiency, or feasibility with things like you mentioned (i.e. politics and public opinion).

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