Bloomberg News

EON Plans to Run Irsching-5 Gas-Fired Power Plant Until March

December 07, 2012

Dec. 7 (Bloomberg) - EON SE will keep its Irsching-5 gas- fired power plant in Germany running until March, during which time it will seek a way to maintain operations at the unprofitable 860-megawatt generator.

One solution may be to use the two-year-old facility only during periods of insufficient generation capacity when the plant’s owners would be compensated for its operation, EON said today in an e-mailed statement.

Germany’s renewable energy boom is cutting running times at stations fueled by natural gas, which accounted for 14 percent of the country’s output last year, and some operators are losing money by keeping them online. The clean spark spread, a measure of profitability at plants burning the fuel based on gas, power and emissions prices for next year, fell to a record minus 13.10 euros ($16.95) a megawatt hour yesterday. The spread has been negative since Jan. 3.

“Even state-of-the-art gas-fired power plants cannot be operated profitably,” Daniel Seidenspinner, an analyst at B. Metzler Seel Sohn & Co. KGaA, said by phone from Frankfurt. “It highlights the huge change of the energy landscape.”

EON, Germany’s biggest utility, owns 50.2 percent of the power plant in the southern state of Bavaria. The three other shareholders said in a Nov. 27 letter to State Premier Horst Seehofer and Bundesnetzagentur, the federal grid regulator, that the plant does not cover its own operating costs and should run only during times of peak demand.

“For this plant the economic situation has worsened so that a temporary halt is necessary,” the companies said in their letter obtained by Bloomberg News. N-Ergie, a utility based in Nuremberg, Germany, owns about 25 percent of the plant. Mainova in Frankfurt holds about 16 percent. HSE, a Darmstadt, Germany-based power supplier, owns about 9 percent.

To contact the reporters on this story: Julia Mengewein in Frankfurt at jmengewein@bloomberg.net; Tino Andresen in Dusseldorf at tandresen1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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