Record efficiency CCGT plants in Germany ‘to close’

In what is continuing to be a tough market for gas-fired power generation in Europe, the owners of the Irsching 4 and 5 power stations have announced their closure, due to the lack of economic prospects for the plants. 

The plants’ ownership consortium, which consists of E.ON, HSE, Mainova and N-ERGIE, has notified the German Federal Network Agency and the network operator TenneT of plans to shut down the two combined cycle gas turbines (CCGTs). The consortium says the decisions were made because the two plants have no prospect of operating profitably after the current contract with the network operator expires in March 2016.

The plan is to take the units offline in April 2016. The 846 MW Irsching 5 entered service in 2010 and has a near 60% fuel-efficiency. The 550 MW Irsching 4 began operating a year later, and has broken the 60% efficiency level.

The contract between the plant owners and the network operator classifies costs according to whether the units operate to supply merchant power or whether they are dispatched by the network operator. Due to increases in renewables feed-in and low wholesale power prices the units can no longer supply merchant power profitably, say the owners. Rather than operating at a loss, they have made the decision to shut the units down.

The owners say that Irsching 4 and 5 supplied no merchant power at all in 2014 and were only dispatched when they were needed to stabilise the network in southern Germany in response to temporary fluctuations. The remuneration for temporary dispatch only just covers operational costs, they say.

Should TenneT oppose the shutdowns by declaring the units crucial for a reliable power supply, the owners would consider legal action as they believe the remuneration from such ordinance is not profitable for new plants – rather it was designed for older plants that are fully amortised.

The owners have made clear that the action they are taking is a last resort, and that they would prefer to work with all parties to find a regulatory framework to support newly built plants in Germany to provide dispatchable power.