Uniper to Restore Gas Power Early Amid Low Prices

Two units at the Irsching gas-fired power plant in southern Germany are due to return to operation this October, one year earlier than anticipated, their operator Uniper said on May 28, attributing its decision to low gas prices.

The 561-MW Irsching-4 and Irsching-5 combined-cycle gas units were mothballed in April 2016 because of high gas and low power prices. Uniper and their other owners filed last year a temporary closure application until the end of September 2021, stating that there were "still no suitable framework conditions for highly efficient gas-fired power plants to continue operating economically beyond autumn 2020."

The owners of Irsching-5, which comprise Uniper, N-Ergie, Mainova and Entega, have now decided to resume generation on October 1 instead, Uniper said, because of "improved market prices – in particular lower gas prices – which should make it possible to operate the highly efficient gas power plant economically." Uniper, the sole owner of Irsching-4, is restoring that unit for the same reason, it said.

Gas prices have plunged historic lows in Europe, weighed down by excess global LNG supply and lower demand as a result of Covid-19 lockdowns.

 "We have always said that we would constantly monitor whether economic market developments allow a return of the Irsching power plants. As things stand, it may be possible to obtain slightly improved margins in the foreseeable future through market operation of these plants," Uniper COO David Bryson said.

Bryson called on the German government to follow the recommendations of the coal commission and, after finalising conditions for a coal phase-out, "enshrine the provision of a continuous power supply in German law."

German plant operators have been pushing for the introduction of a UK-style long-term capacity renumeration system to encourage investment, but the government has opposed the scheme.

"Above all, the system of drawing on very different reserves is not forward-looking, as it focuses largely on older existing plants," Bryson said. 

N-Ergie chairman Josef Hasler noted that Irsching-5's recommissioning would not earn it any profit. "Rather, we hope that the losses that our power plant has been making for years will be reduced," he said.