nuclear-news

Coal fired energy ‘s decline in Germany, and Europe generally

we still occasionally see rubbish published around the place that there are all these coal fired power plants about to begin operation in Germany. The Carbon Tracker report points out that since 2008 there were more than 100 new coal plants announced that have not been built. Once you take into account closures, not just openings, since 2000 there has been a new reduction of 19 gigawatts of coal capacity.

The reality that blogosphere and the conservative press don’t seem to have caught up with is that with wholesale power prices stuck at low levels, construction of a new coal fired power station is a licence to haemorrhage money.  

The circumstances surrounding this European utility decline look eerily familiar to the situation here in Australia. Electricity demand has stagnated, while solar PV in particular has taken off. 

Could this be AGL and EnergyAustralia’s horrible fate?, Climate Spectator TRISTAN EDIS 5 JUN, “……………….A report released by the Carbon Tracker Initiative has collated a huge array of data which provides a striking summary of how Europe’s conventional power utilities have been thrown into financial turmoil since 2008 due to being squeezed at one end by improved energy productivity and at the other end by growing use of renewable energy.

As the chart below [in original article] illustrates the stock market value of the EU’s largest 5 power generators has plunged by over 100 billion euros (or 37% of their value) between 2008 to 2013. The other big utility in the chart below that has beaten the trend has been Enel which moved into renewables….

This hasn’t been simply a function of a broader economic downturn in Europe. By contrast with the plunge in these utilities’ stock value Germany’s stock market increased 18% over the same period with a major divergence emerging in performance…..

at the same time as electricity demand was stagnating, renewable energy was being pushed into the system driven by governments’ responding to public concern about climate change and a future industrial opportunity. The chart below [in original article] illustrates that while power demand has stagnated, renewables gained 10% market share from nuclear and fossil fuel generators………

we still occasionally see rubbish published around the place that there are all these coal fired power plants about to begin operation in Germany. The Carbon Tracker report points out that since 2008 there were more than 100 new coal plants announced that have not been built. Once you take into account closures, not just openings, since 2000 there has been a new reduction of 19 gigawatts of coal capacity.

The reality that blogosphere and the conservative press don’t seem to have caught up with is that with wholesale power prices stuck at low levels, construction of a new coal fired power station is a licence to haemorrhage money.

As a illustration the report analyses the financials of one of the most recently constructed German coal fired power stations – the 1640MW Moorburg plant which cost €3 billion to construct (incidentally, another carbon capture and storage project that never eventuated). It finds that even if it achieved 80% utilisation and assumed a modest ongoing carbon price€12 in 2020 and €27 in 2030 and beyond, the project would return a negative NPV (at 10% discount rate) of €3.3 billion.

The circumstances surrounding this European utility decline look eerily familiar to the situation here in Australia. Electricity demand has stagnated, while solar PV in particular has taken off. Meanwhile the major generator-retailers have chosen to get deeper into coal while betting and lobbying against further growth in renewables on the expectation the Abbott Government would abolish the Renewable Energy Target. In the end the Abbott Government baulked at making any cuts to support for rooftop solar. And while the target for large-scale renewables has been cut back, the sector has still managed to salvage enough of a market to make further substantive inroads into the wholesale electricity market. http://www.businessspectator.com.au/article/2015/6/5/energy-markets/could-be-agl-and-energyaustralias-horrible-fate

June 6, 2015 - Posted by Christina Macpherson | climate change, Germany