Bloomberg: Europe Gas Carnage Shown by EON Closing 3-Year-Old Plant
Three years ago, Germany’s largest utility spent 400 million euros ($523 million) building a natural gas-fired power station. Later this month, the company may close the plant because it’s losing so much money.
EON SE’s Irsching-5 in Bavaria last year operated less than 25 percent of the time as slumping power prices made burning natural gas unprofitable by record margins. As Europe’s weak economy holds back electricity demand, cheaper coal, requirements to buy renewable energy and the collapsing cost of carbon permits are undercutting gas-fired plants.
The pattern is repeated throughout Europe as utilities including France’s GDF Suez SA and Centrica Plc mothball gas plants. The impact is both environmental and commercial. Switching to coal increases emissions, while it lowers profit for gas plants, which generate almost a quarter of European power, and shrinks the market for suppliers led by OAO Gazprom. MORE