First network reserve capacity contracts in Germany signed
• TransnetBW and EnBW draw up – with the cooperation of the German Federal Network Agency (BNetzA) – regulations for the system-relevant power plant units in Marbach and Walheim
• EnBW examining the non-reimbursement of the required capital costs
Karlsruhe. Following many months of negotiations, EnBW Energie Baden-Württemberg AG and the transmission network operator TransnetBW have now signed the first network reserve capacity contracts in Germany for the power plant units in Marbach and Walheim, which have been classified as being relevant to the system. The contracts are valid initially until 31 March 2018, and regulate the deployment of the power plants and the reimbursement of costs for their maintenance and operation. These power plants have been managed under the deployment regime of TransnetBW since July 2014. The contracts have been approved by the German Federal Network Agency (BNetzA) and will serve as model contract templates for future reserve power plant contracts.
EnBW notified TransnetBW, as the responsible operator of the transmission network, and BNetzA on 5 July 2013 that it intended to decommission the power plant units Walheim 1 and 2 and Marbach II and III with a total output of 668 megawatts. At the end of 2013, the regulatory authority rejected the decommissioning plans after they were challenged by the operator of the transmission network and classified the power plant units as being relevant to the system. This means that for reasons of security of supply, these power plant units are not permitted to be decommissioned for an initial period of at least 24 months. The four power plant units have thus been managed as reserve power plants under the deployment regime of TransnetBW since 6 July 2014. As a result, TransnetBW is exclusively responsible for deciding when the power plants are started up to avoid critical shortages in the supply of electricity. In return, as the power plant operator, EnBW has a right to receive “adequate compensation” for costs incurred due to the maintenance and operation of the power plants from the operator of the transmission network.
The network reserve capacity contracts now contain agreements on the costs for the establishment and maintenance of operational readiness (such as personnel, repairs), as well as for the electricity generation expenses (utilisation-dependent costs such as fuel and CO2). On the other hand, any reimbursement of capital costs was fundamentally rejected by BNetzA and TransnetBW. EnBW will now comprehensively examine the decision not to reimburse the relevant costs.
EnBW views the results of the intensive and constructive discussions as being largely satisfactory. Nevertheless, there is a regulatory loophole in the law regarding the full reimbursement of costs. There is still a need for further clarification in this area.
The background to the conclusion of these reserve power plant contracts was the Ordinance on Reserve Power Plants (Reservekraftwerksverordnung) that was passed in June 2013. The legal regulations stipulate that a power plant operator is required to notify the German Federal Network Agency and the responsible transmission network operator at least twelve months in advance about any intended decommissioning of power plants. During this twelve-month period, the power plant remains in normal operation and participates in market activities. Once the notification has been received, the transmission network operator and BNetzA investigate whether the power plant is relevant to the system and is thus still required to guarantee the security of supply. In the case of a system-relevant power plant, a network reserve capacity contract is to be agreed that regulates the future deployment of the power plant and the reimbursement of costs incurred by the power plant operator.