Germany opens third auction for payouts to shut hard coal-fired plants

FRANKFURT, March 3 (Reuters) - Germany’s energy regulator has opened a third bidding round for operators of hard coal-fired power stations to compete for compensation to close their capacity, part of the country’s shift towards carbon-free power.

Germany has decided to abandon coal by 2038 and achieve a mostly carbon-free energy system by 2050.

A spokesman for Bonn-based regulator Bundesnetzagentur said bids should be submitted by April 30 to close capacity totalling 2,481 megawatts (MW) that would go offline by the end of 2022.

The regulator’s website showed the maximum price per megawatt of shuttered capacity would be 155,000 euros ($186,883).

In the auction, operators declare the price at which they would be prepared to shut their plants in return for funds to offset some of their financial losses.

The winners are not only determined by price but also by the relationship between expected costs resulting CO2 reductions.

A second round, which opened on Jan. 4 to decommission 1,500 MW of capacity and which also set a maximum price of 155,000 euros/MW, has closed with results due out in coming weeks, the spokesman said.

After the first bidding round, which opened in September, the regulator closed 4,788 MW of coal-fired capacity on Jan 1.

The average payment for operators in that round was set at 66,259 euros/MW after bids ranging between 6,047 euros/MW and 150,000 euros/MW.

The auctions will continue in coming years but, after 2027, hard coal plants can be ordered to shut without compensation.

$1 = 0.8294 euros Reporting by Vera Eckert; Editing by Edmund Blair