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Germany: PV makes coal power unprofitable

With the increase in installed photovoltaic capacity, the cost effectiveness of coal-fired power plants is decreasing. The outlook for coal, with the further development of emissions trading, will become even worse.

Photovoltaics is said to destroy the economics of coal power plants.

Eifeler Presse Agentur

Germany’s four major energy suppliers blame photovoltaics for the fact that their coal-fired power plants can no longer operate profitably. Meanwhile, it seems photovoltaic systems feed the most energy into the grid at noon, reports Germany’s Manager Magazin online. During this time, the electricity is more expensive due to higher demand and, until now, coal power has always profited from this.

"Photovoltaics destroys the economics of coal power plants," stated MD of the Association of Coal Importers, Erich Schmitz. Given the increasing amounts of green electricity from the wind and sun, it is questionable whether investment in new coal plants by energy companies Eon, RWE, Vattenfall and EnBW will pay off, since the plants must be turned off if there is enough green energy being fed into the grid.

Uncertainty exists for the energy companies, said the report, because they are all building new power plants – RWE in Hamm; Eon in Datteln; EnBW in Karlsruhe; and GDF Suez in Wilhelmshaven – worth a total of 8.5 gigawatts. And, if the energy companies have to start bidding for emissions certificates for their power plants in 2013, profitability will further deteriorate. Then lignite-fired power plants could become more lucrative, since the cost needed to produce one unit of electricity is said to be less than for coal.

Coal-fired plants could then be used to compensate for any fluctuations in the supply of wind and solar power. "A constant up and down of the power does not work well," said a spokesperson for Vattenfall. Additionally, it takes hours, to start again from scratch.

Schmitz added that fast-supplied electricity must be compensated at a significantly higher rate in the future. Additionally, the power plants should automatically receive remuneration, regardless of if they deliver power, he continued, otherwise many would have to shut down.

Translated by Becky Stuart.