Favourable conditions sees RWE plan gas plant re-start

A change in market conditions in Europe has prompted RWE to plan the re-start of a previously mothballed gas-fired power plant in the Netherlands.

Ignacio Lescano Carroll, Technical Project Officer with the European Turbine Network heralded the move, telling Power Engineering International, “the situation is set to change in Europe and the restart of RWE’s Moerdijk CCGT plant is demonstrating this changing scenario.”

Germany’s biggest electricity producer plans in October to restart part of its 426 MW Moerdijk-2 gas-fired plant in the Netherlands as fuel prices near a record low make previously unprofitable units viable. The plant previously restarted to help demand during winter, according to the company’s website.
Moerdijk gas-fired power plant
Bloomberg reports that gas price drops in the EU have outpaced coal and power over the last 12 months, increasing the fuel’s appeal to generate electricity and helping it last year overtake coal in the UK.

EU championing of renewable energy has also helped with gas plants ability to quickly start and stop enabling it as first choice for backup power. Gas emits about half the carbon dioxide of coal.

Baseload spark spreads in the UK have helped gas overtake coal in electricity use in 2015, leading to SSE Plc reopeningà‚ units at Keadby and Peterhead in November.

Analysts have told the news agency that RWE’s move “signals the more favourable market position of gas.”

The “relatively positive development” of spark spreads during winter makes it “logical” to have Moerdijk-2 available, RWE spokeswoman Stephanie Moeller said.

Ignacio Lescano Carroll, Technical Project Officer with the European Turbine Network told Power Engineering International, “The high amount of intermittent renewable power generation along with a lower price of coal compared to natural gas has led to the mothballing of many Combined Cycles Gas Turbine (CCGT) plants, including some of the most efficient CCGT plants in the world (Lingen, Irsching 4 & 5, Malzenice, and so on.”

“We believe that this situation is set to change in Europe and the restart of RWE’s Moerdijk CCGT plant is demonstrating this changing scenario. à‚ A slow comeback for natural gas-fired power generation has started in the UK where the “switch” from coal to gas is already happening due to a carbon price floor set at à‚£18/ tonne, which is way above the price in the EU’s Emissions Trading Scheme.”

“The lower price of natural gas and the new Large Combustion Plant Directive incentivises the reinsertion of CCPP due to the higher efficiency and lower carbon emission characteristics of natural gas fed CCGT plants. Therefore, we expect more European mothballed gas-fired plants to be re-opened in the near future to further replace coal and balance renewables in the EU energy mix.”

Meanwhile Zoe Double of energy consultancy ICIS is in consensus about what the trends are indicating for gas power at the present moment.

Double told Power Engineering International, “Profits for gas-fired generation in continental Europe have improved over the last year, as fuel prices have fallen more than power. There is a need for flexible capacity in the European power markets that can respond when there is less renewable generation available, but many plants have struggled with low margins in recent years.”

“However, the falls in the fuel price have meant that from last month, there are more opportunities for gas-fired plants to generate at a profit during the more expensive hours of the day.”

With profit out of reach until relatively recently, utilities mothballed some 4.1 GW of gas-fired power in the Netherlands through last year, according to grid operator TenneT Holding BV, which highlights the context for the present turnaround in fortunes.

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