Germany awards coal closure compensation to 4.8 GW to shut 2021

London — Germany's first coal plant closure auction was oversubscribed with 11 bids awarded compensation for the closure of a total 4.788 GW of capacity, regulator BNetzA said Dec. 1.

Total compensation came to Eur317 million ($164 million), the regulator said, giving a volume-weighted average of Eur66,259/MW, well below the maximum allowed bid price of Eur165,000/MW.

Individual bids ranged from 800 MW to 3.6 MW with prices ranging from Eur6,047/MW to Eur150,000/MW. Compensation was awarded on a pay-as-bid basis.

Successful bidders included Vattenfall's 1.6-GW Hamburg-Moorburg plant and RWE's 764 MW Westfalen coal plant, both high-efficiency assets commissioned just five years ago.

Other awardees included RWE's 794-MW Ibbenbuerren plant, Uniper's 875-MW Heyden and Steag's 370-MW Walsum 9 with coal plants in Southern Germany excluded from the auction. (see table)

Awardees may no longer sell output from Jan. 1, 2021, BNetzA said.

System relevance checks next

Vattenfall CEO Anna Borg that the decision would enable the Swedish utility to phase out Moorburg earlier than previously planned.

"Against the background of the German coal phase-out law, we have been looking at several alternatives for Moorburg, including change of fuel and divestment of the plant. Now we will progress with the planning for the early closure of the plant," Vattenfall's head of Germany Tuomo Hatakka added in a statement.

In a next step, German transmission system operators will decide by early March 2021 on the systemic importance of Moorburg, it said.

If Moorburg is not classified as system relevant, the firing of coal will be stopped at the latest on July 1, 2021, according to Vattenfall.

If Moorburg is classified as relevant by the regional transmission system operator and federal grid regulator BNetzA confirms the assessment, the power plant will have to be kept in reserve for a period to be determined, the statement said.

The next auction for coal closure compensation will be held in January, BNetzA added.

GERMAN COAL CLOSURE COMPENSATION AUCTION AWARDS

Source: BNetzA