EnBW Wants to Shut Down Unprofitable Power Plant Units with Total Output of 686 MW in Southern Germany

EnBW AG has informed the Federal Network Agency (BNetzA) and the four German transmission operators (TSOs) of its intention to shut down four power plant units with a total output of 668 MW at its power plant locations in Marbach and Walheim in Southern Germany. The TSOs will now have to conduct a system security review as to whether and when the power plant units can be shut down or are deemed “system-relevant” for the security of supply

EnBW explains the move as follows:

“Rapid structural change in the energy sector forms the background to this decision. Especially as a result of the marked additional construction of renewable energy sources, numerous fossil plant are exposed to great commercial and financial pressure, and frequently continue to be operated solely as “marginal power plants”. This is resulting in a drastic fall in revenue. ….” “For this reason, the heating oil-fired co-generation unit III and gas turbine III at the Marbach site and hard coal power stations 1 and 2 in Walheim are to be shut down at the earliest legally possible date.”

Pursuant to the Renewable Energy Sources Act (EEG) renewable energy has to be purchased and transmitted with priority by the grid operators, who also mainly sell the electricity via the European Energy Exchange EEX (with the exception of directly marketed renewable energy). In June the four transmission system operators only averaged 27.63 EUR/MWh for the sale of renewable energy as prices for electricity had fallen so low. As EnBW’s announcement shows the growing amount of fluctuating renewable energy has rendered many conventional power plants economically unattractive. At the same time they are much needed to balance the grids. Hence a discussion about a new “market design” providing incentives for conventional power plants has been going on in Germany for some time. 

Section 13a para. 1 stipulates that operators of plants generating or storing electricity with a rated power of 10 MW or more are required to inform the responsible transmission operator and BNetzA at least twelve months prior to a preliminary or permanent closure of power plants or parts thereof.  According to Section 13a para. 2 a permanent closure of  plants generating or storing electricity with a rated output of 50 MW or more (all of the four EnBW power plant units belong in this category) is prohibited after the expiry of the period set out in Section 13a para. 1 if

  • the responsible TSO declares the plant “system-relevant”;
  • BNetzA approved this assessment;
  • and it is technically and legally possible to continue operations.

A plant is deemed “system-relevant” if it is sufficiently likely that a permanent closure would lead to a substantial danger for or an interference with the safety or reliability of the electricity supply system and cannot be overcome by other suitable measures.

As EnBW pointed out it will now have to be established if the four power plant units can be shut down. If deemed system-relevant their further operation will be remunerated pursuant to the Reservekraftwerksverordnung (ResKV; Ordinance on Reserve Power Plants), which the government recently approved. ResKV further specifies the above mentioned provisions on the postponement of power plant shutdowns. According to Section 6 para. 1 sent. 1 to 3 ResKV, the  costs incurred by the continued operation are reimbursed. Reimbursements will not be made for costs that would also have arisen in the event of a shutdown and for opportunity costs. The individual reimbursements will be have to be contractually agreed based on the individual costs of the power plant in question. They have to be approved by BNetzA. For more information please see Section 6 ResKV.

EnBW also mentioned that it was “in discussions with the Federal Network Agency concerning the relatively new and flexibly deployable RDK 4 gas and steam turbine power plant in Karlsruhe”. “RDK 4 is currently hardly being utilised, and is consequently also unable to cover its full costs. As far as potential changes to market design are concerned, the potential of a later recommissioning is to be left open. EnBW aims to shut down the plant on a short-term and provisional basis as a consequence”, EnBW said.

In April, before the entry into force of the Reseverkraftwerksverordnung, EnBW’s rival, E.ON had agreed with Tennet TSO GmbH not to close down the highly efficient but presently unprofitable gas-fired power plant units Irsching 4 and 5 near Ingolstadt within the next three years.

Source: EnBW

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