German's largest utility Eon has confirmed it will shut-down 1,037 MW of gas-fired power generation capacity, mothballing both it the 622 MW Staudinger 4 plant unit and the 415 MW Irsching 3 unit by the end of this year. The plants will operate as winter reserve, once E.on has transferred responsibility to the regulator BNA.
The German chancellor Angela Merkel by next summer aims to have parliament agreed on some form of market orientated capacity payment to underpin investment in new power generation capacity. A regular leaders' meeting in December and a special meeting in March, dedicated to Germany's Energiewende [energy transition] policy, would specify and build on the progress reached so far, she said.
China has to reform and liberalize its tight power tariff regime for gas-fired power generation to gather momentum and to attract investment in new-builds, says Gavin Thompson, principal consultant for Asia Pacific, Gas & Power at Wood Mackenzie.
"The power tariff is very flat, there is no capacity charge in peak generators and very little regional difference in power prices," Thompson told Gas to Power Journal at the sidelines of the Gas Asia Summit, held as part of the Singapore International Energy Week.
UK utilities and investors with gas to power assets in their portfolios face rising uncertainty in predicting long-term operational cash flows as market interventions as proposed under the UK's Electricity Market Reform have the effect of replacing market risk with political risk, says Dr. Jim Fitzgerald, Associate Partner at The Advisory House.
To launch a capacity mechanism in Britain is the right approach to incentivise new investment for security of supply, says to Ray Tomkins, founder and director at Economic Consulting Associates.
"We have been lucky that due a combination of circumstances - such as the dash-for-gas, the investment strategy of the vertically integrated oligopoly, and more recently the recession depressing demand- that major blackouts have been avoided as private generators have 'over-invested'," he said. "This cannot be relied on in the future...
As Germany's power grid operators are busy negotiating with power plant operators over the amount of available cold reserves, the federal network regulator Bundesnetzagentur (BNA) confirmed that Germany will need over 2,000 MW of capacity reserve to guarantee supply security in during the upcoming winter.
The autumn statement of the UK finance ministry, set for 5 December, will impact on the timing of the Government's update on the Electricity Market Reform (EMR), JP Morgan Cazenove said today. As both the EMR and the gas generation strategy paper need to be consistent with the Government's fiscal targets, the papers are „only likely to be published once the fiscal targets are known in December," says Edmund Reid, analyst at the bank.