German energy giants pull plug on conventional power
Source: The West Australian, 18 August 2013
German power company RWE is shutting six domestic plants and rival E.ON is threatening to relocate to Turkey as the sector tots up the cost of the government's energy policy turnaround.
Ever since Chancellor Angela Merkel announced a phase-out of nuclear energy over the next decade and pledged to generate as much as 80 percent of the country's electricity from renewables by 2050, big question marks have been hanging over the future of coal and gas-fired plants in Germany.
Merkel, seeking a third term in general elections on September 22, is a staunch supporter of this hugely popular policy move. But the turnaround is depriving utilities, including market leaders RWE and E.ON, of massive profits from their atomic plants and turning their gas and coal-fired stations into loss-makers as they are sidelined by rival renewable sources of energy.
Last week, the two biggest players in the German sector unveiled steep drops in profits, and "many of our plants are operating at a loss," complained RWE's finance chief Bernhard Guenther.
Indeed, RWE announced that it would shut down a number of plants -- representing combined capacity of 4,300 megawatts -- in both Germany and the Netherlands. And more could follow, Guenther warned.
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