Potential shutdown of modern coal plant sparks debate over Hamburg's electricity supply

The possibility that energy company Vattenfall could close down its newest and largest coal-fired power station in Germany has sparked a debate about whether that would negatively affect local electricity supply, Jens Meyer-Wellmann, Martin Kopp and Heiner Schmidt write in the Hamburger Abendblatt. The Moorburg coal plant in Hamburg has a capacity of 1.6 gigawatts. Although it only started operating in 2015, the company now says it is unprofitable and has put the plant up in Germany’s first tender to provide shut-down premiums for hard coal-fired power plants under the country’s coal exit plan. If successful, Moorburg would shut down by mid-2021.

While it is “far from clear” that Vattenfall will win the tender, it is also possible that Germany’s Federal Network Agency (Bundesnetzagentur) could determine that Moorburg is “systemically relevant” (systemrelevant), meaning that it would need to continue running, the authors write. The paper says that “industry and economic authorities” have concerns about the impact on energy supply if Moorburg were shut down. Environmental authorities, however, are more relaxed, pointing out that the plant has already been running below capacity. A spokesman for The Greens' Senator Jens Kerstan told the paper that the “difficult market situation for coal-fired electricity” would make the plant unprofitable regardless of the results of the tender. “Even if Moorburg does not receive a shutdown bonus at the 2020 auction, the group will have to ask whether it has to pull the cord from an economic point of view,” as there already is an oversupply on the countrywide power exchange. However, local metal, petrochemical and chemical industries said that they wanted assurances that they would have reliable energy supplies, given the prospect of the plant’s shutdown.

Many coal power plants have become unprofitable given low wholesale prices for electricity and rising prices for CO2 emissions. Moorburg had already been struggling with local opposition and accusations that it is outdated. Vattenfall is aiming to stop the use of fossil fuels, including coal, by 2030. Germany’s hard-coal phase-out tenders aim to take some 4 gigawatts of capacity off the grid by offering utilities a bid for how much they are willing to take to stop operations. The results will be announced in December. The country aims to end the use of coal by no later than 2038.