RWE will buy a gas power plant from Vattenfall for USD 534 million

Author: Christoph Steitz

FRANKFURT (Reuters) – Germany’s RWE has agreed to buy a gas-fired power plant in the Netherlands that can also be partly fueled by hydrogen from Vattenfall in a deal that values ​​the plant at 500 million euros ($534 million).

Germany’s largest utility said on Thursday that the deal for the 1.4-gigawatt Magnum plant was expected to be finalized by the end of September, adding that it also included a 5.6-megawatt solar park.

RWE has allocated approximately EUR 5 billion by 2030 to the development of so-called flexible generation, which includes gas and hydrogen-fired power plants. In total, it plans gross investments worth EUR 50 billion by 2030.

Many companies see green hydrogen – that is, hydrogen produced from renewable energy – as the key to reducing dependence on fossil fuels, even though the industry is in its early stages of development.

Magnum “can be technically adapted to co-firing hydrogen by up to 30%,” RWE said in a statement, adding that the plant’s location in Eemshaven puts it close to RWE’s 1.56 GW coal- and biomass-fired power plant.

It was found that this could lead to benefits from the shared use of local infrastructure.

“Thanks to the Magnum transaction, we are purchasing a state-of-the-art hydrogen installation that is already ready for operation,” said Roger Miesen, CEO of RWE Generation SE.

“Its use in combination with our existing power plant in Eemshaven enables RWE to transform Eemshaven into one of the leading energy and hydrogen centers in north-west Europe.”

RWE, which is currently one of the largest European players in the renewable energy market, has stated that more generation capacity in gas-fired power plants will be needed to switch to solar and wind energy.

Swedish Vattenfall intends to phase out fossil fuels from its operations and focus on investments related to the energy transition, such as offshore wind energy and heating and cooling projects.

“The divestiture demonstrates Vattenfall’s focus on accelerating the energy transition and reallocating capital accordingly,” RWE shareholder ENKRAFT said in an emailed statement.

($1 = 0.9369 euros)

(Reporting by Christoph Steitz; Additional reporting by Nora Buli; Editing by Rachel More and Mark Potter)