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Vattenfall to be compensated for Moorburg power plant closure

The German Federal Network Agency (Bundesnetzagentur) has decided to award compensation for a complete phase-out of the Swedish state-owned energy major Vattenfall’s coal-fired power plant Moorburg in Hamburg. This means that Moorburg can be phased out earlier than previously planned.

Commissioned in 2015, Vattenfall’s 100 percent hard coal-fired 1 558 MWe and 30 MWth Moorburg combined heat and power (CHP) plant in Hamburg, Germany plays a role for grid stability also with regard to the scope of the further development of renewable energies. The output of the power plant can be increased or reduced by more than 600 MW within 15 minutes. The German Federal Network Agency (Bundesnetzagentur) has decided to award compensation for a complete phase-out of Moorburg meaning that it can be phased out earlier than planned (photo courtesy Vattenfall).

According to Vattenfall, the bid for the early closure of the Moorburg combined heat and power (CHP) plant was part of the first auction process to reduce coal-fired power generation in Germany, which started earlier this year.

Companies that are operating coal-fired power plants in Northern Germany were asked to hand in their bids for a total of four gigawatts of capacity to be phased out.

We welcome this decision. It provides clarity and will enable us to phase out Moorburg earlier than previously planned. Although the plant, which started operations in 2015, is one of the most modern in Germany, early closure is in line both with the German state’s plan to reduce emissions from coal-fired electricity production, and Vattenfall’s strategy to make fossil-free living possible within one generation,” said Anna Borg, President, and CEO, Vattenfall.

Kept as a reserve?

In the next step, the German transmission system operators will decide by early March 2021 on the systemic importance of Moorburg. If Moorburg is not classified as system relevant, the firing of coal will be stopped at the latest on July 1, 2021.

If Moorburg is classified as relevant by the regional transmission system operator, and the German Federal Network Agency confirms this assessment, the power plant will have to be kept in reserve for a period to be determined.

Against the background of the German coal phase-out law, we have been looking at several alternatives for Moorburg, including change of fuel and divestment of the plant. Now we will progress with the planning for the early closure of the plant, which includes supporting our employees to find new jobs or in a responsible way agree on other options, said Tuomo Hatakka, Vattenfall’s Country Representative in Germany.

In line with the purpose of the coal phase-out law, companies participating in the auctions should not disclose the compensation amounts as those are sensitive information in a competitive market.

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