11/02/2016STEAG registers five hard coal fired power plant units for closure

Federal Network Agency has been notified // Essential step to secure the competitiveness of the company

Essen. The changes to the market environment brought about by energy policy and the persistently low electricity price level are leading to a situation in which many large-scale conventional power plants in Germany can no longer operate cost-effectively. At the start of September, STEAG had already announced the necessity to close down a number of units with the associated loss of a considerable number of jobs. Today, as required by law, the impending closure of five power plant units, three of which are in North Rhine-Westphalia and two in the Saarland, was registered with the Federal Network Agency.

Following consultation with the transmission system operator, the Federal Network Agency now has to decide the extent to which any of those power plant units are relevant to grid operations or whether the registered units can be taken off line. In the latter case, the STEAG Group will close down around 40 percent of its installed hard coal capacity, just under 2,500 MW, in Germany. The power plant units West 1 and 2 in Voerde and Herne 3 in North Rhine-Westphalia, and Weiher and Bexbach in the Saarland, are scheduled for advance decommissioning before the end of 2017.

STEAG, which has been able to keep its power plant portfolio on the market for a long time by optimizing the cost and revenue structure at an early stage, is now responding with this decision to the drastic deterioration in the market situation. “This is a hard and sad step to take, but it is unavoidable if the commercial viability of STEAG is to be preserved,” says Joachim Rumstadt, Chairman of the Board of Management of STEAG GmbH, explaining the reason for the decision to shut down those power plants which no longer produce a positive contribution margin. “With our STEAG 2022 program, we are responding to the changes in the national and international market environments. By increasing efficiency and taking action within the portfolio combined with growth projects, we intend to improve our earnings and so create scope for further investments.”

“In the wake of the closures, many hundreds of jobs will be lost at the STEAG Group,” as Ralf Melis, Chairman of the General Works Council at STEAG, points out. “Together with the STEAG management and the IGBCE, we have already established a severance program and a framework agreement on reconciliation of interests, with the aim of making the reduction in job numbers socially responsible and avoiding compulsory redundancies.”

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Bettina Feldgen
Head of Corporate
+49 201 801 4253