German coal-fired power plants may close ahead of schedule

Germany is ready to accelerate the closure of coal-fired power plants, as their profitability decreases, although they have not exhausted their resources. A quarter of coal-generating capacity in Europe's largest economy could close ahead of schedule if operators forgo modernization costs to maintain aging plants.

Steag GmbH, the country's fifth-largest electricity producer, is considering at least five of Germany's 13 coal-fired plants. The profitability of German coal-fired power plants has been near their lowest levels in at least five years, so other producers could follow Steag in helping to reduce the surplus of generating capacity, which is exacerbated by the growth of renewable energy sources.

Even German energy prices are plummeting, the lowest in more than a decade. While fuel prices have risen this year and coal has risen faster than natural gas. This spurred a 15 percent jump in German gas-fired generation in July, compared with a 16 percent decline in coal-based output. Anthracite makes up about 18 percent of the country's total.

In addition to the closures of the Steag power plants, RWE AG, Germany's largest electricity producer, has decided to close its Voerde A and B coal blocks Voerde next April.