E.ON Avoids Shuttering Ultramodern German Combined Cycle Units Despite Profit Concerns

Germany slips into capacity payments

E.ON Avoids Shuttering Ultramodern German Combined Cycle Units Despite Profit Concerns :: POWER Magazine:

E.ON had said the highly efficient combined cycle units were unprofitable because, while Europe’s wholesale power prices had fallen by 50% since 2009, low-cost coal imports and low carbon trading prices had squeezed profit margins of power plants burning much pricier natural gas to near zero. An agreement reached between E.ON, Germany’s Federal Network Agency, and the local network operator Tennet TSO this April ensures, however, that E.ON will receive “acceptable compensation” for its fixed costs of the two units. Tennet said the units were needed to enable support of tremendous renewables growth in the country and for redispatch measures, if necessary.

Picture from source article

Germany’s Federal Network Agency recently ordered that fixed costs should be paid to power plants that are operated more than 10% of the time on demand of transmission operators. A paradigm market design in Germany was still necessary, as E.ON CEO Johannes Teyssen said in a statement, particularly one that provides acceptable compensation for maintaining technologically advanced, climate-friendly generating capacity. Germany is still “too fixated on megawatts,” installing wind turbine after wind turbine and solar panel after solar panel “in the belief that by doing so it has already transformed its energy system,” he added.

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