Germany's Steag ready to bring back 2.3 GW of coal capacity with conditions

FRANKFURT (Reuters) - German hard-coal to power generator Steag is ready to bring 2.3 gigawatts (GW) of production capacity into the electricity market for the coming winter if financing, logistics and grid provisions are satisfactory, a senior executive said on Tuesday.

"We are working intensely on those three preconditions," said Steag's head of front office, Stephan Riezler, head of front office at Steag said at an event organised by coal importers lobby VDKi, of which he is deputy chairman.

Germany is trying to use more coal and possibly more nuclear fuels in burning for power, but less gas in a gas supply crisis triggered by dwindling Russian supply.

It has legislated to both bring back idled coal capacity that is system relevant, and to stop other coal capacity due to close from going offline.

Riezler said Steag could bring the Bexbach, Bergkamen, Weiher and Fenne plants into the market, whose capacity together can meet around 3% of Germany's maximum power demand, but it needed to see three factors changed.

A regulation for returning coal plants envisaged currently that their operations can be terminated again before April 2023, basing the operations on there being a gas scarcity.

Riezler demanded that the permissions were prolonged to the end of March 2024 and not tied to gas scarcity, so as to give operators planning headway and allow them to invest in relevant staff, logistics and resources.

"The short runtime of the regulation burdens power station operators and services companies with significant and unnecessary risks," he said.

Another stipulation that operators have 30 days worth of coal feed stock ready at the plant was impossible to fulfil because lower water levels were still hampering coal barge transport to plants as ships cannot sail fully-laden, he added.

(Reporting by Vera Eckert, editing by David Evans)