Engie to Close More Dutch CCGTs

By January 1 2017, Engie Netherlands will close down two of its five 364-MW units in its gas-fired power plants in Eemshaven. Later in 2017 or begin 2018, it will also close down a third unit and also a 436-MW gas-fired unit in its plant in Lelystad.

Together, the closures amount to 54% of all Engie's gas-fired generating capacity in the Netherlands. Engie announced plans to close some plants last year, but so far only the IJssel plant in Harculo is out of operation. The closure of the two units in Eemshaven on January 1 is final: the units that stop working at the end of 2017 will be mothballed. The existing 80-MW-plant in Bergum is only operating at peak demand moments.

The Eemshaven plant was built in 1996. Despite its relatively modernity, high flexibility and high efficiency, Engie does not expect structural change in the market to justify a mothballing. "We decided on a definitive shut down of two units instead of a temporary mothballing, because mothballing is very expensive, without any revenues," says Engie-spokesman Michael Verheul. The energy company is going to examine whether it is possible to move the installations to other countries.

The closure is motivated by lower electricity demand in the Netherlands, itself caused by the aftermath of the economic crisis and the relatively low price of coal. From 2010 to 2014 the share of natural gas in electricity generation in the Netherlands fell, from 62% to 18%. The coal price has bounced back but Engie doesn't see this as a long term trend.

Engie is not the only electricity producer in the Netherlands to be troubled by an excess production capacity. Several other gas fuelled power plants already have been taken out of operation.

"I'm very surprised that Engie took this decision now and didn't wait until November," says MP Stientje van Veldhoven, representing D66 in the Dutch Lower House. "All being normal in November the House of Representatives will vote on our proposal to phase out the Dutch coal fuelled power plants by legal obligation. Economy minister Henk Kamp (VVD) announced today the decision will include a time path. Only then will it be possible to see whether gas fuelled plants still have a business case in the Netherlands."

Koen Mortelmans