EnBW plans to decommission two hard coal units at Heilbronn site

Karlsruhe. As the result of feasibility studies of its conventional power plant park, EnBW is planning to decommission two power station units with a total output of 250 megawatts at its Heilbronn location. These comprise the hard coal units HLB 5 and HLB 6. Both units were connected to the grid in the mid-1960s (1965/66) and deliver an output of 125 megawatts respectively. The third power plant unit at this site, HLB 7, is not affected by the current decommissioning decision, although it is regularly and continuously subject to feasibility studies, as is the case with the Group's entire conventional generation portfolio. District heating supplies at the site remain secured, and its training centre is also unaffected.

The decision by the EnBW Board of Management to decommission units HLB 5 and 6 is still subject to Supervisory Board approval. As soon as the requisite Supervisory Board resolutions have been passed, EnBW will notify the transmission system operator and the Federal Network Agency (BNetzA) of the decommissioning at the earliest possible statutory date. The transmission system operator will then examine whether and when the power station units can be decommissioned from a system-security perspective. If HLB 5 and 6 are decommissioned, around 80 employees (including staff with multi-site responsibilities) will be affected, for whom appropriate redundancy and other social measures will be arranged. To this end, the company plans to soon enter into discussions with the relevant social partners.

Rapid structural change in the energy sector forms the background to this decision. Especially as a result of the marked additional construction of renewable energy sources, numerous fossil plants are subject to strong commercial and financial pressure, and frequently continue to be operated solely as "marginal power plants". This is resulting in a drastic revenue declines. The power plants that are impacted are far from being able to fully cover their costs given today's electricity market prices, and cannot be operated on a commercially feasible basis.

EnBW currently generates total output of around 4,290 MW from conventional power plants located in Baden-Württemberg. In addition, the state-of-the-art RDK 8 hard coal power plant in Karlsruhe with around 900 MW is currently in the commissioning stage. In Mannheim, a further hard coal power plant in which EnBW has invested is under construction (GKM 9). As a consequence, EnBW's conventional power plant park continues to make an important contribution to securing supplies in Baden-Württemberg, also after the planned shutdowns.

Along with the massive expansion of renewable energies – whose share in EnBW's energy mix is set to more than triple by 2020 – EnBW remains committed as part of its strategic reorientation to providing secured output from conventional power plants with a focus on Baden-Württemberg. At least for a certain transitional period, the secure and highly efficient operation of the conventional generating park remains an important element of the "Engine room of the Energiewende" and a guarantee of supply security.

Back in July 2013, EnBW notified the transmission system operator and the Federal Network Agency of its plans to decommission a total of four power station units at its Marbach and Walheim sites, with a total output of 668 megawatts. In December 2013, EnBW received notification from the German Federal Network Agency that its application to close four power plant units in Marbach and Walheim had been declined. These power plant units are "system-relevant", according to the Federal Network Agency's findings. For this reason, they must continue to be operated until at least July 2016. EnBW has appealed against this ruling at the Düsseldorf Higher Regional Court in order to assert its legal position (EnBW press release of January 20, 2014). Irrespective of this, EnBW will continue to conduct its constructive discussions with the Federal Network Agency concerning the transfer of plants to the reserve power plant regime, of course.

Background:

German Reserve Power Plant Directive (ResKV)

The amended German Energy Industry Act (EnWG) and the German Reserve Power Plant Directive (ResKV) make provision whereby final closures must be announced at least 12 months in advance to the relevant transmission system operator (TSO) and the Federal Network Agency. In the next step, the TSO then examines the power plants' system relevance, and determines the duration of potential system relevance in coordination with the Federal Network Agency. Power plants can only be decommissioned once they are no longer system-relevant. System-relevant power plants can be included in the network reserve of the German Reserve Power Plant Directive with corresponding payment until they are shut down.

Merit Order:

Generating electricity in power plants is critically affected by economic efficiency factors that are reflected in the so-called Merit Order. The Merit Order is an order determined by variable costs, essentially fuel and CO2 costs, and sets out which power plants are deployed from which price level. Renewable generation is preferentially deployed in this context, followed by plants with the lowest variable costs. Power plants are then added until the requisite output is covered. The last power plant traded on the market ("marginal power plant") consequently determines the electricity price level with its variable costs. This gives rise to the following deployment sequence: generating plants in the renewable energies area followed by nuclear power plants, brown coal power plants, hard coal power plants, gas and finally oil-fired power plants. If sufficient wind is blowing and the sun is shining at a given time during the day, power plants with higher variable costs in the Merit Order are replaced, and idle as a consequence.