Want to Buy a Used German Power Plant? Shipping Is Included

Germany’s utilities, battered by the country’s shift to wind turbines and solar panels, would be glad to sell you a power plant on the cheap. They’ll even pack it up and ship it to another country.

The two largest power producers, RWE AG and EON SE, are especially keen to sell their gas-fired plants, rendered uncompetitive by the rise of renewable energy on the one hand and record low coal prices on the other. It’s a relatively easy task to take them apart, move them by truck and ship and reassemble them elsewhere.

Sometimes people will buy whole plants, at others the key components. The giant power-generating turbines that lie at the heart of the station cost at least $30 million and buying second-hand can shave more than a third off that price, particularly attractive for buyers in developing countries.

“There is a liquid global market for gas turbines,” RWE Deputy Chief Executive Officer Rolf Martin Schmitz said on Jan. 21 in Berlin. Selling the plants, whole or in parts, is one option, he said. “Transport costs are entirely marginal.”

The Essen-based company sold turbines from a dismantled nuclear plant to be shipped to Egypt in 2012. RWE has more than six gas-fired generators mothballed in Germany and the Netherlands, which may never be needed in their home markets again.

RAG Mining Solutions GmbH is a broker for used power plants and components stripped out of them. Its website advertises 10 different plants in Germany, both coal- and gas-fired, which are for sale as a whole, or in bits.

Speedier Start

A used plant is at least one-third cheaper than a new one, RAG Mining Solutions CEO Martin Junker told Westdeutsche Allgemeine Zeitung in an interview published in August. It’s also speedier to start it operating.

“It’s much quicker to dismantle and assemble an old power plant than a complete new building,” he said, adding that he saw markets in the former Soviet Union, Asia and Africa and possibly Chile.

The company declined to comment for this story.

German plants are for sale because the shift to renewable energy, expected to provide 45 percent of power by 2025, has collapsed electricity prices. Power for delivery next year fell to the lowest since April 2004 last month.

Confronted with such a bleak market, EON established a decommissioning unit last year. It first tries to sell turbines and other components within the company. If that fails it looks for buyers elsewhere for bits of the plant or the whole thing, spokesman Markus Nitschke said by phone.

“There are increasing requests for components and occasionally for complete plants,” he said.

Slovakia Plant

It’s not just in Germany. EON will move its 430-megawatt Malzenice gas-fed plant in Slovakia should attractive conditions emerge, the utility said in May. Because of a weak local power market, the facility operated for less than three years before it was idled.

The supply of second-hand power generators is one factor weighing on turbine manufacturers General Electric Co. and Siemens AG, who said last week that turbine prices fell about 4 percent last year. The Munich-based company is already cutting 1,200 jobs from its energy operations as it reduces its gas turbine manufacturing capacity.

Stadtwerke Muenchen GmbH, Germany’s largest municipal utility, plans to shut down two gas turbines at its Freimann heating plant this year, and generally looks to sell components no longer needed, spokesman Christian Miehling said by phone.

That may be easier for some components than for others. “For smaller gas turbines there is a good market,” RWE’s Schmitz said. “For big facilities the market is significantly smaller.”

Copyright 2015 Bloomberg

Lead image: For sale sign via Shutterstock

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