Bloomberg News

RWE Sees Little Demand for Virtual Power Plant, Sells Its Stake

February 01, 2006

RWE AG (RWE), the largest power producer in Germany, sold its stake in a so-called virtual power plant, saying it had seen little demand for the product.

The virtual-power-plant project sold generating capacity to customers, so they could order electricity when they wanted it, as if they owned a power plant. RWE sold the capacity to produce 200 megawatts for delivery in the period from 2007 to 2009. It had planned to sell some 300 megawatts. It found no buyers for a second period, from 2010 to 2012, RWE said.

``Demand demonstrated that the product is generally accepted from customers, but also showed the insecurity of the market relating to longer term delivery periods,'' the Essen-based company said today in a faxed statement. ``There's currently great insecurity about the regulatory and fundamental framework in the longer term.''

The price for the power was tied to an index for hard-coal prices and to the price of allowances to emit carbon dioxide, RWE said. Energie Baden-Wuerttemberg AG, Germany's fourth-largest utility, offers a similar product, although its customers can buy stakes in a virtual power station for 15 years or 30 years.

To contact the reporter on this story: Peter Dinkloh in Frankfurt at pdinkloh@bloomberg.net.

To contact the editor responsible for this story: Tim Coulter in London at tcoulter@bloomberg.net.


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