German auction agrees terms to close over 2,100 MW of coal power
FRANKFURT, July 14 (Reuters) - Germany has agreed terms with utilities to close down more than 2,100 megawatts (MW) of coal-fired power generation, its energy regulator said on Wednesday, as the country moves to cleaner energy.
Germany has pledged to abandon coal by 2038 and achieve a mostly carbon-free energy system by 2050, while trying to lessen the impact on utilities, regions, employment and the budget.
Under a series of tenders between 2020 and 2027, operators are asked to declare at which price they would be prepared to shut their plants that burn hard coal in return for funds to offset some of their losses.
The regulator sets a maximum price per MW of capacity to cap the public sector bill.
The ultimate price takes into account bidders' offers and the CO2 emissions of the plants in question.
The latest auction - which earmarks supply to go offline from Oct 31 2022, includes Steag's 717 MW Bergkamen A plant, the 350 MW Farge plant operated by Onyx Kraftwerk Farge, and Uniper's 345 MW Scholven C plant.
After 2027, compensation will no longer be available, so operators were ready to bid as low as possible to avoid losing out to competitors.
The auction had been for 2,481 MW, meaning it was undersubscribed, though all 11 bidders received permits.
Bids had ranged between zero and 155,000 euros ($182,776) per MW, which was the maximum the regulator had allowed. The average award was 102,799 euros per MW.
Wednesday's was the third such auction held. The first held last December agreed terms for the closure of 4,788 MW of capacity and a second auction more than 1,514 MW.
More highly polluting brown coal is being shut down via a separate scheme with fixed compensation.
($1 = 0.8480 euros) (Reporting by Vera Eckert; editing by Jason Neely)
