The new hard coal plant going up in Hamm, Germany, is apparently worthless and may never go into operation.
In mid-July, German media reported (in German) that 23 municipal utilities wanted to sell their stakes in Hamm D and E, which have a collective capacity of 1.6 gigawatts. RWE made them a surprising offer: €1 per municipal for their entire holdings – initially worth €2.5 billion (report in German). In other words, the €2.5 billion stake is now worth 23 euros.
While Block E went into commercial operation in the summer of 2014, the boiler at Block D faces technical problems and may never go into operation. France’s Alstom built the boiler.
The utilities are now scrambling to cover their losses. The municipal utility of Münster, for example, originally invested 40 million euros in the project. The municipal of Krefeld stands to lose 30 million euros. When construction began, Chancellor Merkel visited (report in German) and spoke of a “future-proof investment” (new coal plants are more efficient than old ones).
Of course, the utility that stands to lose the most is RWE itself. The 23 utilities hold only 23 percent of the project. As part of the agreement, they are to purchase electricity from the coal plants at a price set for 20 years. Unfortunately for them, prices on the power exchange are now lower.
Because invisible utilities cross-subsidize other public services (such as public transportation and swimming pools) from profits in the power sector, these losses could mean higher prices for buses, trams, etc.
Source: Renewables International. Reproduced with permission.