Legal opinion confirms: Legal basis disadvantages the operators of reserve power plants

In March 2015, the owners of the Irsching power plant in Bavaria, ENTEGA, Mainova, N-ERGIE, and Uniper requested the preliminary decommissioning of the power plant block – just like Uniper did for the Irsching 4 power plant – because it is not economical to operate under the prevailing conditions in Germany. Because of the systemic importance of the plant, the transmission system operator, TenneT mandated the availability so that the plant would continue to be operated as a reserve for maintaining grid stability.

For this phase of the reserve operation, the owners of the power plant ask that their situation not be made worse than that of the operators of non-system relevant power plants. They demand appropriate remuneration for the use of their property in the public interest for reliable power supply. This entails at least the reimbursement of all costs incurred by the constitutional requirements.

This view is confirmed by the legal opinion of Professor Udo di Fabio, Department of Public Law at the Rheinische Friedrich-Wilhelms University of Bonn, which was commissioned by the companies: The current regulations of the reserve power plant ordinance as well as the planned new regulations within the electricity market law do not satisfy the constitutional requirements. According to the legal opinion, as long as the reimbursement of the costs is related only to the number of hours in which the power plant actually supplies power to maintain network stability, the operator of a systemically important power plant will be placed at a disadvantage. An actual full refund of the plant costs caused by the enslavement of the power plant must also take into account depreciation and capital costs.

According to Eckhardt Rümmler, Chief Operating Officer responsible for power generation at Uniper: “The compensation for the provision of power plants for the power reserve must be regulated fairly. The legal opinion confirms that the present situation is not sustainable”.

“After the decision of OLG Dusseldorf in the spring of 2015, there should have been a new regulation that ensures the appropriate remuneration of our services for the network operator. We are still waiting on this today. This situation is unacceptable”, says Josef Hasler, CEO of N-ERGIE AG.

“We have been forced against our will to keep the power plant in operation. We have not received a compensation which fully covers our costs. This is a confiscatory intervention. We therefore call for a cost-covering compensation for the continued operation of the power plant”, says Dr Constantin H. Alsheimer, CEO of Mainova AG.

“The Irsching community power plant is a particularly flexible and climate-friendly gas fired power plant of the latest design. However, based on the present circumstances in the German electricity market, an old lignite plant is much more profitable than an ultra-modern gas power plant. The legislature must be active in this case”, says Dr Marie-Luise Wolff-Hertwig, CEO of ENTEGA AG.

The owners of the Irsching community power plant are taking legal action against TenneT

Today, the owners of the Irsching community power plant appealed to the district court of Dusseldorf. The companies are demanding adequate compensation for the provision of power to the network operator TenneT in the last three years. According to the owners, TenneT would have to agree to the adjustment of the contract signed in 2013. On 28 April 2015, the Higher Regional Court of Dusseldorf ruled that the conditions laid down by the Federal Network Agency have led to an unreasonably low remuneration.

The payments stipulated in the 2013 agreement do not cover the full cost of provision and operation of the plant for grid stabilisation. The Higher Regional Court of Dusseldorf also deemed the compensation inappropriate. In anticipation of a new regulation under the Electricity Market Act – which still does not exist to this day – TenneT has considerably reduced the contractually agreed instalment payments since May 2015.

The Irsching Community Power Plant has a capacity of 846 megawatts and went into operation in 2010. With an efficiency of almost 60 percent, it is one of the most modern gas power plants in Europe. It is operated on behalf of the owner companies by Uniper Kraftwerke GmbH. Uniper holds 50.2 percent of the shares, N-ERGIE holds 25.2 percent, Mainova holds 15.6 percent, and ENTEGA holds 9 percent.

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