Investment in combined-cycle gas turbine (CCGTs) power plants in Germany are "highly problematic" as decreasing, even negative clean spark spreads resulting from reduced runtime hours have cut profit margins to zero". Unless capacity remuneration mechanisms are introduced, PricewaterhouseCoopers sees no market signals that could convince operators to build new plants.
During the first half of 2012, new gas-fired and renewable capacity has dominated power plant additions in the United States. As total of 165 new electric power plants were added in the 33 federal states, with combined new capacity of 8,098 megawatts (MW), according to the US Energy Information Administration (EIA).
Germany's second-largest utility RWE on Tuesday announced it will cut more than 2,400 jobs as first-half year profit came in 'unchanged', while electricity sales fell 8 percent and gas sales dropped 11 percent. "The present framework conditions are anything but favourable", Peter Terium, RWE chief executive said when presenting the H1 results in Essen today.
Spot-price elements in long-term gas purchase contracts (LTCs) are required for new gas power projects to ensure enough gas is supplied at a sufficiently low price. "Since the end of 2008, the price level of supply contracts for [gas fired power plants] has often been above the level required for a commercially attractive use in power generation," Uli Brunner, energy expert, PA Consulting Group told Gas to Power Journal.