April 25, 2013 / 4:31 PM / 5 years ago

E.ON's Irsching plant in Bavaria to stay open - sources

* To be kept running as a reserve power plant - sources

* E.ON, grid operator, regulator decline to comment

FRANKFURT, April 25 (Reuters) - E.ON’s modern but unprofitable Irsching gas-fired power station in Bavaria, southern Germany, looks set to remain open as a reserve power plant under a deal hammered out with regulators and politicians, sources close to the talks said.

E.ON had said it could close the plant because of high gas buying-in prices and low wholesale power prices. But the energy network regulator believes the plant is crucial to the stability of the power grid in the industry-heavy region.

The deal, which would see the plant guaranteed income as a back-up source of electricity, could be a precedent for how Germany ensures the survival of conventional power, whose profitability has been hit by a boom in subsidised renewable energy as the country phases out nuclear power.

“Ongoing operations (for Irsching) have been secured,” one of the sources said on Thursday.

E.ON, power grid firm TenneT and the energy network regulator, the Bundesnetzagentur, declined to comment, as did other shareholders in one of the Irsching blocks.

But E.ON sent around invitations for an event at the plant on Friday, involving Bavarian state premier Horst Seehofer and E.ON Chief Executive Johannes Teyssen, without giving details.

Bavaria state’s chancellery did not respond immediately when approached for a comment.

Last week, the Bundesnetzagentur said it aimed to help keep Irsching’s units open.

E.ON has put the cost of operating the three year-old Irsching 5, which has 846 MW of capacity, at 100 million euros ($130 million) a year. Under energy laws, it is not allowed to unilaterally shut the plant.

Block 4, with 550 megawatts (MW) capacity in 2011, has also seen its profitability wobble.

A huge E.ON nuclear reactor nearby at Grafenrheinfeld is slated to shut in 2015 under the nuclear exit law.

The talks to keep Irsching open are focused on the methods of funding it as a reserve plant, which will determine how much will have to be paid out by TenneT and how much will be recovered by a charge borne by consumers.

$1 = 0.7695 euros Reporting by Tom Kaeckenhoff, Vera Eckert and Jens Hack; Editing by Mark Potter

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