Three new Dutch coal plants risk early closure

Three new coal-fired power plants in the Netherlands risk early closure after becoming stranded. The plants installed by RWE, Uniper and Engie in 2015 are not as valuable as originally expected and won’t […]

Three new coal-fired power plants in the Netherlands risk early closure after becoming stranded.

The plants installed by RWE, Uniper and Engie in 2015 are not as valuable as originally expected and won’t be able to make an adequate return on investment, according to a new report from the Institute for Energy Economics and Financial Analysis (IEEFA).

It states the companies’ balance sheets show the value of each of the plants has dropped to €1 billion (£0.84bn) or less – the RWE Eemshaven plant originally saw capital expenditure of around €3 billion (£2.53bn).

IEEFA valuations on the plants are even less – the report adds it has got to the point where retiring them early may prove the most cost-effective way for the Netherlands to hit its climate targets.

It suggests this move would likely need to be supported by government as the owners would be reluctant to close the plants uncompensated if they could still recoup some of the initial investment.

The case highlights the extent to which coal-fired generation is becoming increasingly vulnerable to carbon cutting initiatives and shows the sector can no longer rely on the support of policy and markets.

The plants were built on the expectation they would provide supply to match strong power demand growth. This growth has not fully materialised and what has appeared is being picked up by the rapidly growing renewables sector, the IEEFA adds.

British coal developers could be paid £152 million to keep the lights on next year.

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