German Uniper to Mothball Irsching-4,&5
The owners of the state-of-the-art gas-fired power plant, the 846-MW Irsching 5 plant, has notified German networks regulator BNetzA and grid operator TenneT for the third time that the unit is slated to be mothballed, its operator Uniper said April 26.
The owners – Uniper (50.2%), N-ergie (25.2%), Mainova (15.6%) and Entega (9%) – see no way to ensure the plant’s commercial viability into early 2019 and are therefore announcing the temporary closure of the plant from May 2019 through the end of September 2020.
Alongside this – and for the same reasons – sole owner Uniper is to close 561-MW Irsching 4, for the same period. "High-efficiency, state-of-the-art gas-fired power plants such as Irsching 4 and 5 are well suited to dampen volatile fluctuations in electricity generated by wind and solar on short notice. That is what makes them ideal partners for renewable forms of energy and significant contributors in achieving climate goals. However, this back-up function, which every electricity customer in Germany can rely on, is not being adequately compensated," Uniper said in its statement.
Rather than provide power at below-cost, as the law effectively obliges the plants to, as they can only supply power when renewable generation fails, Uniper has decided to halt operations. But it also called on Germany's new government to "establish the sort of parameters in the energy market that will allow flexible and high-efficiency gas-fired power plants to continue playing a role alongside renewable forms of energy. Ancillary services, whose importance will continue to grow in the coming years, must be compensated in a manner commensurate with the services they provide." Irsching 4 operates at 60.4% efficiency and Irsching 5 at 59.7% efficiency.
BNetzA is expected shortly to tender for up to 1.2 gigawatts of new back-up generation capacity, which is open to any form of technology. Uniper's action therefore may be seen as flexing its muscle as operator of these two key gas-fired power plants in southern Germany, a region heavily reliant on nuclear; all nuclear units in Germany are required by law to close by 2023. Uniper CEO Klaus Schafer said March 8 that his company would consider participating in the tender, once it could study its details, and might even selectively invest in additional gas-fired capacity.
Credit ratings bump
Ratings agency S&P said April 27 that it has elevated Uniper’s business risk profile thanks to higher power prices in Germany and the Nordics, as well as cost savings, renegotiations of gas contracts and the successful sale of the Russian gasfield Yuzhno Russkoye in late 2017. Uniper CFO Christopher Delbruck said “Uniper has worked hard from the first day of independence to significantly reduce debt and costs. We also implemented the announced divestments swiftly and significantly strengthened our financial ratios. We are pleased that we can now reap the benefits of this hard work and that we have achieved our targeted comfortable investment-grade rating." Uniper’s rating has risen from BBB- with positive outlook to BBB with stable outlook.