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German regulator warns of Europe power shortages
February 19, 2008 / 11:10 AM / 10 years ago

German regulator warns of Europe power shortages

ESSEN, Germany, Feb 19 (Reuters) - Europe risks power shortages if it does not press ahead with new power station projects to replace and add to ageing generation capacity, German energy regulator Matthias Kurth said on Tuesday.

Coal-to-power projects were being cancelled because operators feared tougher emissions rules or because citizens did not want polluting plants in their neighbourhood, while rising prices of materials and labour added to delays, he said.

“The EU needs an overall strategy to deal with blocked decision-making, protests and the CO2 question,” he said at a conference during the E-World trade fair.

“The investment jam will be poison for competition...how can we bring prices down if a tightness scenario is developing,” he said, alluding to CO2 avoidance costs and high energy prices.

Germany had planned to replace 20,000 megawatts of ageing power station capacity up to 2012 alone, but his authority only had knowledge of projects underway for 7,000 MW, Kurth said.

On Monday, E.ON EONG.DE Chief Executive Wulf Bernotat said a 1,100 MW plant at Staudinger in Hesse state might not be built if local politicians and residents remain opposed. RWE (RWEG.DE) last year had to shelve its planned Ensdorf coal plant in the Saarland state after a local vote threw it out.

Evonik [RUHR.UL] in January said it would put off plans for a 750 MW coal plant at Herne due to rising CO2 costs.

Kurth said that French nuclear supply sometimes broke down in the summer, when rivers dried up and could not provide enough cooling water, and Germany had to export power there.

Italian power blackouts in recent years had shown the need to bump up capacity across the region, Kurth said.

“This is a far more gripping problem than the separation of production and distribution which the European Commission (EC) is set upon as a remedy for all problems with competition,” he said.

Kurth supported a Franco-German plan as an alternative to EC proposals to break up big integrated utilities, which is also supported by another six EU member countries.

Known as the third option, the plan aims at getting around a strict splitting of generation and transport businesses, while suggesting independent operations and full transparency.

EU energy ministers are due to debate the rival proposals on Feb. 28 and Kurth described the third option as far-reaching.

“If there is no compromise, there could be years of delays to any solution,” he said. (Reporting by Vera Eckert, editing by Anthony Barker)

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