RWE AG said Tuesday it entered into a long-term partnership with municipal utilities in which RWE Power AG and 23 municipal utilities from North Rhine-Westphalia, Hesse and Rhineland- Palatinate will participate in the construction of a joint hard-coal power plant in Hamm.
The new plant is to commence operations in 2011 and will have an output of 1,600 megawatts. The municipal utilities that have teamed up to build the new GEKKO (Gemeinschaftskraftwerk Steinkohle) plant will have a 350-MW share of this total.
"This innovative partnership marks a new departure in power generation", stressed Dr. Juergen Grossmann, CEO of RWE AG, at the signing ceremony. "We are delighted to have this opportunity to strengthen our historic ties to the municipal utilities."
The 25-year agreement envisages the building of a new twin-unit plant at a total cost of EUR2 billion, 450 million of which will come from the municipal utilities.
"Plans for several urgently needed new plants have had to be dropped in recent months", Grossmann continued, "and this makes our public commitment to more competition and more choice on the supplier side that much more important."
Ulrich Jobs, CEO of RWE Power AG, nevertheless added a word of caution: "As many plants in Germany are now nearing the end of their service life, we could find ourselves facing a shortfall in the order of 35,000 MW within the next few years - a shortfall further exacerbated by the politically motivated decision to phase out nuclear power. Hence the urgent need for new generating capacity."
Coal would continue to play an important role in meeting this need, he said. Thanks to the new power plant in Hamm, RWE's municipal partners will have the baseload generating capacity they need to become less dependent on market prices and so minimise their risks.
"With this project, we are enlarging our power procurement portfolio and securing at least part of our long-term energy needs", said Manfred Huelsmann, CEO of the Stadtwerke Osnabrück and GEKKO Group Spokesman. The municipal utilities, he said, were placing their faith in efficient, cutting-edge generation technologies, which in future would include far more renewables than was the case at present.
Manfred Huelsmann was also keen to stress the significance of security of supply in an age in which global energy shortages are looming: "Security of supply is a valuable commodity for our industrialised nations. And if we are to continue to enjoy it here in Germany, then we must have new and efficient coal-fired power plants." The agreement signed Tuesday was an important step in the direction of greater efficiency - and an example of what good partnership was all about, he said.
"In building this new and efficient coal-fired power plant, we are honouring our responsibilities both to our customers and to the environment," said Peter Blatzheim, Managing Director of the Stadtwerke Troisdorf and GEKKO Group Deputy Spokesman. "What counts for us municipal utilities is not just security of supply, but predictable prices, too - naturally combined with stateof- the-art engineering that keeps emissions to the minimum." RWE and the municipal utilities are convinced that this model will soon be emulated in Germany.
RWE has already offered the municipal utilities a chance to buy into renewables projects, too, most of them involving power generation from biomass and geothermal power plants. The new hard-coal power plant in Hamm will be a cutting-edge, capture-ready plant, which with an efficiency rate of some 46% will save some 2.5 million tons of CO2 annually compared with comparable older plants. Up to 3,000 workers will be working on the construction site at peak times.