February 11, 2013 / 2:25 PM / 5 years ago

UPDATE 1-EnBW says reviewing conventional power plants

* Reviews all conventional power plants

* Has already sold 500 mln euros of assets (Adds details, background)

KARLSRUHE, Germany, Feb 11 (Reuters) - Germany’s No. 3 utility EnBW is reviewing all of its gas and coal plants, signalling it may mothball sites in response to low electricity prices and high costs for natural gas.

“The economic viability of conventional power plants has drastically deteriorated in recent months. We have no choice but to review every single location,” EnBW Chief Executive Frank Mastiaux told reporters on Monday.

EnBW operates 6,986 megawatts (MW) of conventional power plants, accounting for more than half of the company’s total capacity.

Utilities say high natural gas costs, mostly tied to oil prices, combined with low power prices make gas plants an unprofitable business.

Complicating the picture, renewables are the government’s preferred form of energy to be fed into the power network, forcing utilities to cut output from conventional plants at times of abundant wind or sunshine.

Peer RWE in January said it might idle more power plants after having idled about 5,320 megawatts (MW) of capacity in Germany and the Netherlands.

EnBW has been dealt a massive blow, along with larger rivals E.ON and RWE, by Germany’s decision in 2011 to end all nuclear power generation by 2022 and immediately shut 40 percent, including two of the company’s reactors.

Operators that lost nuclear plants in the enforced immediate shutdown have had to buy extra power to meet delivery obligations.

Mastiaux, who took the helm at the group on Oct. 1, also said the group aimed to complete its asset sale programme by 2014. EnBW is planning to sell 1.5 billion euros ($2 billion) of assets, 500 million of which have been realised already.

The company is considering selling its gas grid unit TerraNets BW, which it jointly holds with Italy’s Eni, as well as its stake in local utility MVV Energie AG, sources familiar with the matter have told Reuters.

$1 = 0.7474 euros Reporting by Christoph Steitz; Editing by Mark Potter

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