(Updates with regulator comment from sixth paragraph.)
Jan. 14 (Bloomberg) -- RWE AG, Germany’s second-biggest utility, got permission from grid operator Amprion GmbH to mothball seven unprofitable gas-fired power plants in Germany amid an oversupply of electricity.
RWE is allowed to idle the units, with a combined capacity of 2,327 megawatts, because they are not vital to Germany’s power supply or grid stability, Andreas Preuss, spokesman for Amprion, said in an e-mail from Dortmund today. A thousand megawatts can power around 2 million European homes.
“We are not planning to shut the plants, but to mothball them until market conditions improve,” Lothar Lambertz, RWE spokesman, said by phone from Essen Jan. 10. The company did not respond to requests for comment by e-mail and phone today.
Utilities are struggling to make profits from some power plants as falling demand and an increase in renewable energy production led to an electricity oversupply. Gas-fired plants have been targeted for closing because they have higher fuel costs than those burning coal.
German 2015 power, a European benchmark, fell 18 percent in the past 12 months to 36.10 euros ($49) a megawatt-hour today, according to broker data compiled by Bloomberg. German gas plants lose about 20 euros for each megawatt-hour of electricity they generate, according to the clean-spark spread, a measure of profitability based on the year-ahead price of power, natural gas and carbon compiled by Bloomberg.
Utilities in Germany have asked to shut or mothball 41 power-generation units with a combined capacity of 11 gigawatts, Jennifer Rendla, a spokeswoman for the German grid regulator Bundesnetzagentur, said by phone from Bonn. The regulator has decided that 16 of these units are not vital for keeping the lights on in Europe’s biggest economy, so may be halted, she said.
Those 16 plants have a total capacity of 5,092 megawatts and are mainly located north of the river Main, she said, without revealing more details.
RWE wants to mothball two topping gas turbines at its Weisweiler plant, each with a capacity of 270 megawatts, and two steam turbines, with capacity of 355 megawatts each, at its Gersteinwerk facility, it said in August. Another turbine in Gersteinwerk has already been running in reserve mode since 2012, Lambertz said.
At its Emsland site, the company wants to mothball two 359- megawatt steam turbines over the summer months, when power demand is typically lower. The units will only run from Oct. 1 through March 31, according to data on the company’s website. All of the plants are located in northern Germany.
Bundesnetzagentur forced Karlsruhe-based EnBW Energie Baden-Wuerttemberg AG, Germany’s third-largest electricity generator, to keep its unprofitable power plants in the country’s south open, saying on Jan. 6 they were needed to prevent supply disruptions.
EnBW must keep the four coal, oil and gas-burning units at Walheim and Marbach, with a total capacity of 668 megawatts, online for at least two years, starting from when it filed for permission to close the plants in July, the regulator said.
Dusseldorf-based EON SE, Germany’s biggest utility, has filed to close its 415-megawatt Irsching-3 and 622-megawatt Staudinger-4 gas plants, according to data from Bundesnetzagentur. Grid operator Tennet TSO GmbH has not yet decided whether those plants are needed, Ulrike Hoerchens, spokeswoman for Bayreuth-based Tennet said by phone.
EON, RWE and Stockholm-based Vattenfall AB have plans to shutter more than 16 gigawatts of unprofitable generating capacity in central-west Europe in the four years through 2015, company filings show.
All plans to idle or shut down power plants in Germany require approval from local grid operators. In the case that they raise an objection, Bundesnetzagentur may rule that plants must remain open. Under German law, operators get compensation from the grid operator when they keep unprofitable plants open to secure power grid stability.
--Editors: James Herron, Rob Verdonck