- Power plant capacity of ~1,000 megawatts are to be shut down
- A further 470 megawatts of supply contracts will not be renewed
- New market design required – providers of supply security must be paid for that service
RWE Generation plans to shut down further power plants with a capacity of a total of 1,000 megawatts (MW). This means in detail, that 110 MW of the Goldenbergwerk lignite power plant in Hürth, will be removed from the grid in the third quarter of 2015. At the beginning of 2016 Unit C of the Westfalen hard coal power plant in Hamm will follow (285 MW). The network operators and the Federal Network Agency have already been informed about these measures. If market conditions do not change, the part of Unit K fuelled by hard coal in the Gersteinwerk plant in Werne (610 MW) will cease to operate in the first quarter of 2017, when an extensive overhaul is scheduled which would no longer be justifiable from an investment perspective under the current economic conditions. The gas turbines at this “combined unit” (110 MW) would continue to operate. A total of 640 employees are employed at the three stations. Staff cuts affecting around 180 employees in connection with the capacity measures announced are expected. The company wants to deal with the necessary HR measures associated with the power plant shutdowns in a socially acceptable manner.
In addition, further supply contracts amounting to around 470 MW will be terminated at the end of this year. RWE Generation continues to keep its power plants and supply contracts under review and will close or mothball units, and terminate contracts, that are not profitable to retain.
The ongoing expansion of renewable energy is increasingly leading to reductions in the utilisation of conventional power plants. At the same time, wholesale prices for electricity have been in freefall for some time, and are now at only around 3.5 cent per kilowatt hour. The price has thus almost halved in the past three years. In view of this, RWE Generation has decided since 2013 to reduce capacity now by around 9,000 MW in Germany and the Netherlands. In the UK, RWE’s generating capacity will have been reduced by around 5,000 MW by the end of March 2015 due to environmental regulatory requirements.
This trend on the continental European market shows how necessary it is to properly pay providers of supply security for that service. It is therefore a welcome development that the political discussion about a new market design is starting to gain traction. The market should be designed in such a way that security of supply can be guaranteed at affordable costs, in a market-oriented manner, with no restrictions on technology and no discrimination. Only in this way can electricity supply for Germany as an industrial location remain affordable and reliable. These requirements are met by the “decentralised capacity market” developed by the BDEW and VKU.
RWE Generation SE
Head of Communication & Policy
T +49 201 12 22088
RWE Generation SE
T +49 201 12 23984