Germany’s Biggest Energy Company Considers Fleeing Europe

German utility E.ON is considering dismantling some European power plants that have been mothballed because of poor profitability and relocating them to faster-growing emerging markets such as Turkey, people familiar with the matter told The Wall Street Journal Wednesday. The radical idea underscores the dire situation facing many utilities in Europe, where the combination of weak energy demand caused by the economic crisis and the rapid expansion of renewable energy is undermining the conventional power-generation business. --Hendrik Varnholt and Jan Hromadko, The Wall Street Journal, 25 July 2013

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German operators of coal and gas power plants are sounding the alarm: the operation of many power plants is no longer profitable as a result of the green energy transition. Dozens of plants could be closed down, the industry warns. Of approximately 90,000 megawatts of conventional power capacity in Germany up to 20 percent could be shut down, the newspaper quoted the CEO of a utility. In the worst case scenario, Germany would face blackouts. --Reuters, 16 July 2013 Because of the booming green energy, many conventional power plants in Germany are no longer economic to operate. Some utilities are threatening to shut down their power plants. But even when a plant can no longer be operated profitably, utilities cannot simply take such a plant off the grid. At the end of last year, the German Parliament put a stop to that. The Network Agency may order that it must be kept in operation for up to two years. For this, the power company has the right to a "fair compensation" by the network operator, which will be included in the electricity prices and be paid by the consumers. --Frankfurter Allgemeine Zeitung, 16 July 2013

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The boss of one of Britain’s biggest energy companies has warned that the Government’s new plan to stave off the growing threat of blackouts could increase the risk of the lights going out. Under the plan announced this month, the owners of mothballed power plants would be offered lucrative subsidies to rush them back into action during times of peak demand. But Keith Anderson, the chief corporate officer of Scottish Power, said that energy companies could deliberately mothball plants that they would otherwise have kept open to make them eligible for the payments. This would cut Britain’s precariously thin spare generating margin even further. --Tim Webb, The Times, 25 July 2013 German coal-fired power plants have been operating in full swing in the first half of 2013. Lignite and hard coal power plants and gas plants delivered 12.4 percent more power in the first half years, according to figures by the Federal Association of German Electricity Association. As a result, German greenhouse gas emissions will rise again in 2013, just as they did in 2012. Already in 2012 lignite and hard coal power plants had emitted approximately four percent more CO2. The data for the first half year now show that this trend will significantly worsen. --Der Westen, 23 July 2013 Exxon Mobil Corp., Bayer AG and Linde AG are among companies at risk of having to repay billions of euros in German aid as Chancellor Angela Merkel clashes with Europe’s antitrust regulator over rebates to companies that use the most energy. A total of 1,691 companies or units are benefiting from power fee waivers worth about 4 billion euros ($5.3 billion) this year, according to data from German authorities. While the European Commission is examining whether the waivers constitute illegal state aid, Merkel said they’re key to safeguarding the competitiveness of Europe’s biggest economy. --Stefan Nicola & Naomi Kresge, Bloomberg, 17 July 2013 ScottishPower has reignited the row over who is to blame for rising energy bills after reporting the costs of government energy efficiency schemes had more than doubled since last year. Analysts warned that suppliers were likely to increase prices by a “high single digits” percentage before winter, due to rising costs from the schemes as well as wind farm subsidies, the new carbon tax and network upgrade costs. --Emily Gosden,The Daily Telegraph, 25 July 2013 Diplomats from several EU states have accused Germany of using threats, intimidation and blackmail to sideline green cars legislation in an unprecedented display of hubris within the Brussels’ corridors of power. EurActiv has heard allegations that the German Chancellor, Angela Merkel, used what one diplomat called “nasty pressure” against EU countries to stall debate on new regulations aimed at limiting car emissions to 95 grams of CO2 per km by 2020. EurActiv understands that the UK also agreed to support Germany’s manoeuvre, after a quid-pro-quo was offered of German quiescence in the stymieing of a planned vote on the UK’s budgetary rebate at the summit. --EurActiv, 22 July 2013

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