Germany extends run times for coal-fired power plants to boost supply

Genreal view of electricity pylons and power lines leading from the Uniper coal power plant in Hanau, Germany, early morning November 23, 2016. REUTERS/Kai Pfaffenbach/File Photo
  • Two schemes aim at burning coal and spare tight gas
  • Sizeable hard coal-to-power plants may run into early 2024
  • Brown coal plants may run to June 30, 2023
  • Both schemes only valid while gas remains short

FRANKFURT, Sept 28 (Reuters) - Germany's cabinet on Wednesday passed two decrees to prolong the operation of sizeable hard coal-fired power generation plants up to March 31, 2024, and to bring back idled brown coal capacity up to June 30, 2023, to boost supply.

The economy ministry in a press release spoke of the two related reserve schemes, called network reserve and supply reserve, as "important for preparing for the coming winter".

"The additional use of coal in electricity is meant to reduce gas usage and help save gas," it said.

Russia has cut gas exports dramatically, leaving manufacturing industries struggling with tight supply and threatening shipments to households heating with gas in the coming cold months.

Prior to Wednesday's decision, operators including Steag and Uniper (UN01.DE) and RWE (RWEG.DE) had demanded legal clarity to plan for continued operations and reactivate idled assets.

The network reserve decree extends market operations for mainly hard coal fired plants, whose reinstatement in the market was already made possible in July as the Ukraine crisis unfolded further, but it was deemed too short by some operators as it would have ended on April 30, 2023.

They may now operate up to March 31, 2024, as long as the stage two alarm phase of a three-tier emergency gas plan enforced on June 23 stays in place, or if stage three, emergency, is triggered, the ministry said.

The second decree applies to 1.9 gigawatts (GW) of power capacity fired with domestically mined brown coal and currently retired in a back-scheme.

The capacity may return to the market from Oct. 1 or later until for the time being June 30, 2023, also provided that stage two or three of the gas emergency apply.

The decree allows operations by RWE's Niederaussem E and F and Neurath C (just under 300 MW each), and the units Jaenschwalde E and F (500 MW each) operated by Leag, owned by Czech investor EPH and private equity group PPF Investments.

Electricity prices are sky-high but, under the workings of the wholesale market, offering generation volumes is not identical with guaranteed sales.

Reporting by Vera Eckert, editing by David Evans

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Senior power correspondent for Germany with more than 30 years experience and focused on deregulated energy markets for power and gas, companies, networks, exchanges, renewables, policy, storage, future transport and hydrogen. A German native who has studied and worked in the United States and Britain.