GDF Suez Chief: Europe Must Save Gas Plants for Energy Security
Europe must save its gas-fired electricity plants by paying for them to remain available for peak demand or face a threat to its energy security, warned Wednesday the head of GDF Suez, the top non-nuclear power producer in the world.
A rise in wind and solar power combined with a fall in the price of coal and EU pollution permits has dealt a one-two punch to gas-fired electricity plants in recent years.
GDF chief executive said Gerard Mestrallet expressed concern that European authorities had shown little concern that 30 to 40 gigawatts in gas-fired electricity plants have been shut down, the equivalent of over two dozen nuclear reactors.
"We can't let our European energy industry be destroyed by bits, in silence and indifference," he said at the annual conference of the France Gas Association.
"Gas plants are extremely useful as backup (in case of spikes in demand) and there will be a gap if we let them close," he added.
Mestrallet criticised the "Balkanisation of energy policy" in the EU, calling for a redefined European energy policy, including applying the brakes to renewable energy incentives.
"For the past five or six years in the energy sector we have heavily subsidised creating additional capacity, adding overcapacity to existing overcapacity," he said.
"Companies have their backs against the wall, forced to cut and close" their less profitable facilities like gas-fired plants.
GDF Suez has closed 10 gigawatts of capacity itself, he noted.
"We should first save combined-cycle gas plants before subsidising additional capacity by putting in place payments for capacity," said Mestrallet.
These payments help energy companies keep power plants on line and ready to add power to the grid when needed.
Adverse weather can lead to low production from renewable sources, and excess capacity is needed to ensure demand can be met during periods of extreme cold or heat.
Such a system is under study in France and leading European energy companies recently called for such system to be introduced.
Source: Agence France Presse
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