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German utilities losing money on coal, gas, and nuclear plants

graph-solar-upflag_germanyGerman energy giants pull plug on coal, nuclear The Local,  18 Aug 2013   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 renewables 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 22nd, 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 renewable sources of energy.

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 Günther.

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

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.”

August 19, 2013 - Posted by | business and costs, Germany

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