Germany initiates new generation of coal-fired new builds

A new generation of hard coal-fired power plants has been initiated in Germany with the activation of the 725 MW Walsum facility in Dortmund.

Steag GmbH started Germany’s first new power plant fuelled by hard coal in eight years, allowing the generator and energy trader to take advantage of near record-low coal prices that have widened profit margins.

Walsum coal
While electricity output commenced this week, the plant will begin commercial operations later in the year following “optimization works and testing,” according to an email statement.

It marks the start of Germany’s biggest new-build program for hard coal stations since its liberalization in 1998. Ten new hard-coal power stations, or 7,985 MW, are scheduled to start producing electricity in the next two years, according to information from German grid regulator Bundesnetzagentur and operators.

Coal prices have fallen to their lowest price in four years, making this type of facility extremely attractive from a profitability standpoint.

Generating electricity by burning coal currently makes a profit of 9.16 euros a MW-hour, compared with a loss of 19.31 euros a MW-hour from gas-fired power, according to data compiled by Bloomberg based on next-year German power prices.

The 10 new units will boost German hard coal generation capacity by 33 per cent to 32,432 MW from 24,447 MW as of Oct. 16, regulator data show.

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