Berlin, Germany — ESI-AFRICA.COM — 29 June 2011 – European power futures prices are too low to justify construction of the new gas-fired power plants that have become necessary in the wake of the German government’s decision to exit from nuclear energy.
“The market does not warrant investments in gas-to-power stations,” said RWE’s strategy chief Leonard Birnbaum to reporters during the energy industry lobby at BDEW’s annual congress here.
“You would need 75 to 80 euros a megawatt hour, and given that the price of year ahead delivery is now below 60 euros, it is evident you cannot build plants,” he added.
BDEW estimates that between 8 and 17GW of new German generation capacity “’ mostly gas and coal-based “’ will have to be built over the next decade to counter the volatility of green power and to make up for lost nuclear capacity.
The government aims to pass new energy legislation on 8 July, and BDEW, which represents 1,800 utility firms in a sector led by RWE and rival E.ON, demands supplies for customers be safeguarded and energy suppliers be given planning security.
An even bigger problem was Germany’s individual approach to energy policy in a sector that the EU Commission dreams of turning into a harmonised single market, Birnbaum said.