Vattenfall's German brown coal: what's being sold and who wants to buy
Vattenfall, owned by the Swedish state, is Germany鈥檚 fourth largest power provider, supplying . In 2013, lignite accounted for 81 percent of Vattenfall鈥檚 German electricity generation. In 2014, 94 percent of Vattenfall鈥檚 German power generation was from fossil fuels 鈥� mainly lignite (brown coal), alongside some generation from imported hard coal, largely at the Moorburg power plant in Hamburg, which went online in 2015. Vattenfall's lignite聽 and mining business unit 8,200 people, 5,700 of them in Brandenburg and 2,500 in Saxony.
Divesting from carbon-heavy lignite
Vattenfall in October 2014 that it was considering the sale of its German lignite operations - power plants and mines - to reduce its carbon footprint. In total, Vattenfall's German operations (including those unrelated to lignite operations) emitted a total of 72.2 million tonnes of CO2 in 2013.
Mining operations
Vattenfall is the sole operator of five opencast lignite mines 鈥� , , Reichwalde, and 鈥� in the German Lusatia region (in Germany鈥檚 eastern states of Brandenburg and Saxony). Their combined output was 63.6 million tonnes of lignite in 2013. Reserves of coal in Vattenfall鈥檚 Lusatia mining fields are estimated at .
The company was planning to extend two of the mines 鈥� 奥别濒锄辞飞-厂眉诲 and Nochten 鈥� but these plans have been thrown into doubt with Vattenall citing 鈥渦ncertain energy policy conditions for lignite mining and power generation in Germany.鈥� The company also had for three new opencast mines to start operating after 2025.
Power plants and other assets
In addition to the related mining operations, Vattenfall鈥檚 four lignite-powered plants in the region聽 are also up for sale. These are , , and block R, as well as a lignite refining unit at Schwarze Pumpe. Bidders also have the chance to buy Vattenfall鈥檚 plants in Thuringia, Saxony and Saxony-Anhalt as part of the sale. The hydro operations will not be offered separately.
Value of assets
Vattenfall said in its to interested bidders (in September 2015), that the lignite operations generated 2.3 billion euros in revenue in 2014, and the hydro operations 0.2 billion euros. Estimates of the value of Vattenfall鈥檚 lignite operations have varied due to uncertainty surrounding German policy on the carbon-intensive fuel, but analysts have suggested a figure of between 2 and 3 billion euros. But partly owing to political uncertainty, some investors offered considerably less, according to which were due in mid-December 2015.
In July 2015, Vattenfall wrote down the value of its German lignite operations by 1.6 billion euros, citing 鈥溾�� CEO Magnus Hall did however welcome government's plans to transfer 2.7 gigawatts of Germany鈥檚 lignite-powered plants into a 鈥�capacity reserve鈥� 鈥� meaning that operators would be paid for keeping plants on standby 鈥� saying the plans meant 鈥済reater clarity about the conditions for our work on finding a new owner for our lignite assets in Germany.鈥�
Interested parties
The sale is expected to be finalised in mid-2016. So far, the leading contenders for the acquisition appear to be German utility , as well as two Czech companies, and (EPH), which already owns lignite mines in in Saxony and Saxony-Anhalt through its German daughter company MIBRAG. Greenpeace had also it was interested in acquiring the lignite operations to make sure "the lignite is left in the ground". But the NGO was excluded from the sales process.
