Commodities

Sweden's Vattenfall weighs options for Moorburg coal-fired plant in Germany

Credit: REUTERS/AXEL SCHMIDT

Germany's exit from hard-coal-fired power generation has prompted Swedish utility Vattenfall to speed up thinking about options for its modern coal plant at Hamburg Moorburg to minimise losses, Chief Executive Magnus Hall said.

By Vera Eckert and Tom Käckenhoff

ESSEN, Germany, Feb 12 (Reuters) - Germany's exit from hard-coal-fired power generation has prompted Swedish utility Vattenfall to speed up thinking about options for its modern coal plant at Hamburg Moorburg to minimise losses, Chief Executive Magnus Hall said.

"The options include a possible fuel change to gas or biomass, or selling the plant," Hall said in an interview with Reuters, adding there were parties who had shown interest.

"We would also welcome it if compensation for the decommissioning of hard-coal plants was extended beyond 2026," he added. This is currently not planned.

Vattenfall has never been happy with the 1.6 gigawatt (GW) plant, that was conceived in 2007, opened in 2015, cost 2.8 billion euros ($3.05 billion) and supplies two-thirds of the port town's electricity needs.

Despite it being new and energy-efficient, environmentalists and politicians rowed over carbon emissions and, due to its river location, over its impact on fish. There were also technical problems with novel steels.

The latest threat comes from Berlin's decision this year to exit coal as an energy source by 2038.

This entails generous payments to domestic lignite mining and burning regions to aide the structural change and safeguard employment.

Shortly after that decision, the government also issued plans for a less generous regime applying to plants burning imported hard coal, including Moorburg .

These have to compete with peers in auctions for degressive compensation payments up to 2026, after which no compensation will be paid and plants can be ordered to close.

"We need a regime that does better justice to relatively new plants. We want to talk to the government about this," Hall said.

"It seems a little unfair that we get a more severe treatment for being the last ones to invest."

Moorburg also has to keep going because nearby nuclear reactor Brokdorf EONGn.DE will be shut at the end of 2021.

Hall also said that he hoped for progress this year in a billion euros damages claim over the closure of two German nuclear plants in 2011 at an international settlement court in Washington, D.C..

He stressed that Vattenfall's operative business in Germany was going well.

Vattenfall has 3.9 million retail customers in Germany, out of a total 10.2 million.

It is active in heat provision, wholesale energy trading, forward selling of renewable power, pumped storage plants, electric mobility and offshore wind, as well as ventures to decarbonise the steel industry.

($1 = 0.9166 euros)

(Editing by Riham Alkousaa and Nick Macfie)

((vera.eckert@thomsonreuters.com; +49 69 7565 1228; Reuters Messaging: vera.eckert.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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