By:Nicholas Newman 12 March 2013
It appears that Europe’s gas generators are in danger of turning into zombie companies,[i]suggests Hugh Sharman Owner, Incoteco (Denmark) ApS. [ii] They finding it increasingly difficult coping with the market created by uncontrolled expansion of “free” but heavily subsidised renewables and the dumping of cheap imported coal from the United States. Unfavourable market conditions and negative gas power generation are forcing companies to lose money hand over fist, suggests Guido Custer Managing Director at Delta Energy.
Gas plants in crisis
This is particularly the case in both Holland and Germany which is full of zombie gas power plants. It is not surprising that we are hearing about gas power plants like Dong Energy idling, for much of the time, its brand new Rotterdam plant for most of the time. It is cheaper for Dong Energy to buy imported German wind and coal generated electricity at €45 per megawatt hour than produce it themselves at €50 per megawatt hour. Throughout Europe, we are seeing plans to moth ball gas plants by major utilities such as E.on, Statkraft, GDF Suez SA and Centrica Plc. Whilst, Gabrielle Seeling-Hochmuth, head of gas strategy at Vattenfall’s gas competence centre, suggested, that the company is unlikely in the next few years for the company to invest in new gas capacity, unless aready proposed.