STEAG GmbH

The energy company STEAG GmbH, Essen/Germany, is strengthening its position in the international growth market for renewable energy. On 1st July 2019, group subsidiary STEAG Energy Services GmbH (SES) acquired GILDEMEISTER energy solutions of DMG MORI, based in Bielefeld/Germany. The machine tool manufacturer DMG MORI entered the market for solar technology in 2007. Both parties have agreed not to disclose the purchase price.

“With the acquisition of GILDE-MEISTER energy solutions, we are strategically strengthening our service portfolio, especially around the photovoltaics megatrend. With GILDEMEISTER energy solutions’ extensive know-how and international network, we are taking a big step forward in this growth market”, states Joachim Rumstadt, Chair of the Executive Board at STEAG.

“GILDEMEISTER energy solutions will be in good hands. We are happy to have found in STEAG a strategic investor with an excellent perspective for our employees”, says Maurice Eschweiler, chief representative of DMG MORI. “Our focus is on our core skills as a sustainable, international innovator in the manufacturing industry.” Today, DMG MORI is focussing on its core business with machine tools and services and expanding in the cutting-edge fields of automation, digitalisation and additive manufacturing.

The employees of GILDEMEISTER energy solutions at the main site in Würzburg and the subsidiary companies in Stuttgart, Italy and Spain will be taken over by SES. The new company will trade under the name STEAG Solar Energy Solutions with the brand name SENS. “Photovoltaics is a cutting-edge field in which we want to continue growing as STEAG. I’m certain that we can use the project opportunities that are opening up to us even more successfully with SENS,” states Joachim Rumstadt, welcoming the newest member to the STEAG family. (STEAG/Si.)

Shareholders’ investment in the STEAG Group has once again paid off. The Essen-based energy company is transferring 45 M € in profit for the 2018 business year to its owner, Kommunale Beteiligungsgesellschaft (KSBG). “We faced up to the far-reaching challenges in the energy industry at an early stage,” said Joachim Rumstadt, Chairman of the Board of Management of STEAG GmbH, during the annual press conference at the company’s headquarters in Essen (Figure 1). The energy company continued its process of stabilisation in 2018.

2019 began with a landmark decision. At the end of January, the Commission on Growth, Structural Change and Employment (WSB Commission), appointed by the German Federal Government, issued the recommendation that Germany should gradually phase out lignite and hard coal-fired power generation by 2038. “The phasing out of coal has now been set out as an official objective. STEAG has the right strategy to shape the journey there,” says Rumstadt. “I am confident that we will master the challenges ahead.”

For STEAG, one of the leading power and heat suppliers in Germany, the WSB Commission’s final report contains numerous favourable points of departure. These relate, e. g., to the two STEAG power stations in Saarland which have been part of the grid reserve since April 2017 and classified as system-relevant by transmission system operator Amprion because they are indispensable if reliable energy supply is to be ensured at all times. They also relate to the construction of new combined cycle gas turbine (CCGT) plants at several of the Group’s existing power station sites.

In addition, STEAG could benefit from the WSB Commission’s view that climate-friendly heat supply should be given higher priority in the future. A systematic expansion of the district heating supply on the basis of environmentally friendly combined heat and power generation in the Rhine-Ruhr metropolitan region would improve the national CO₂ balance and help Germany to achieve its ambitious climate protection targets.

Like many other energy companies, STEAG is in the midst of a far-reaching transformation process. However, the STEAG management reacted to the consequences of the energy transition at an early stage with the “STEAG 2022” program in particular. At its core, implementation of the program is about increasing efficiency, optimising the portfolio and occupying new growth areas. The measures initiated by the STEAG management have led to an improvement of 107 M €. 55 % of that was accounted for by increased efficiency, 30 % by earnings from active portfolio management, and 15 % by growth initiatives.

As a result of the lower overall capacity utilisation at STEAG’s power stations and the final closure of three power station units in the previous year, Group sales in 2018 fell from 3.6 bn € to 2.9 bn €. The consolidated net income also declined compared with 2017. In terms of earnings before interest and taxes (EBIT), STEAG clearly exceeded the earnings forecast issued at the beginning of the business year, which predicted a decline of 30 %. The EBIT fell by only 19 % to 160 M € in 2018.

International business made a major contribution to this good result. Its share of the Group’s EBIT increased to 57 % in 2018. At 12.7 M €, the consolidated profit is once again in the black. As in the previous year, 45 M € will be transferred to the shareholder KSBG.

“Energy markets abroad offer huge potential. STEAG’s dedicated staff are consistently exploiting the opportunities offered by foreign markets and deploying their expertise to make full use of the earnings potential there. The municipal owners are fully behind STEAG’s international commitments,” emphasises Guntram Pehlke, Chairman of the Supervisory Board of STEAG GmbH.

For the 2019 business year, the STEAG management forecasts an increase in sales to 3.1 bn €. Earnings before interest and taxes are expected to improve by 20 to 25 % from the 2018 level. Investments in the amount of 230 M € are planned – a figure which is around one third higher than in the previous year. (STEAG/Si.)

The energy company STEAG GmbH, Essen/Germany, once again registered its two Saarland power stations Weiher 3 (724 MW) and Bexbach (780 MW) with the German Federal Network Agency for provisional closure on 29th April 2019. The process has been formally started to ensure that statutory deadlines are met and to explore the prospects for both sites beyond 2020. The announcement has been made on the REMIT platform – the official transparency platform for the wholesale energy market – as required by law.

Irrespective of this new application, both power stations will remain system-relevant until the end of April 2020 for now. According to transmission system operator Amprion, they are essential for stabilising the power grid in the event of an emergency. Both STEAG power stations were each required for this reason three times between December 2018 and February 2019. The Federal Network Agency must now decide, at Amprion’s request, the extent to which the two power stations will still be system-relevant after 30th April 2020 – or whether the registered power stations can be provisionally taken off the grid from May 2020. Amprion first established the system relevance of the power stations until 30th April 2019 back in spring 2017. This means that STEAG must ensure they are ready for operation at all times. The current classification applies until 30th April 2020. (STEAG/Si.)

With the phase-out of nuclear power production in 2022 and the planned end of coal-fired power generation in 2038, one thing is certain: Wind and solar energy will be the main pillars of electricity supply in Germany in the future. However, both renewable energy sources are subject to weather-related fluctuations. As an energy medium, hydrogen can balance out these fluctuations and thus become an important building block for a successful energy transition. For this reason, Essen/Germany-based STEAG GmbH’s power station site in Völklingen-Fenne, Saarland/Germany, is to be expanded to include the “Fenne HydroHub”, where hydrogen is to be produced on an industrial scale.

STEAG GmbH, Siemens AG, the Institute for Future Energy and Material Flow Systems (IZES gGmbH), and the German Research Centre for Artificial Intelligence (DFKI GmbH) are entering the “Fenne HydroHub” project outline in the “Living Labs for the Energy Transition” ideas competition staged by the German Federal Ministry for Economic Affairs and Energy (BMWi). Through this competition, the German government is aiming to accelerate the expansion of hydrogen technologies and the establishment of integrated energy solutions, and make them ready for the market.

Electricity-based hydrogen production (electrolysis) based on renewable energy sources will play a key role. Electricity from wind and solar power is used to split water into oxygen and so-called “green hydrogen” by electrolysis. The hydrogen can then be used as a substitute for fossil fuels, making energy production CO₂-free. For energy-intensive industries such as steel and chemicals, the use of hydrogen can be a decisive step towards better environmental compatibility and climate neutrality.

With the “Fenne HydroHub”, the four partners in the project want to create a prototype that can also be constructed at other locations across Germany. In addition to reducing CO₂ emissions, this will also create new jobs. A decision as to whether the partners can submit a firm application for funding in the second phase of the competition is expected at the end of June 2019. The project partners estimate an investment volume in the mid two-digit million range.

The Fenne energy hub provides optimum conditions for gathering experience in the operation and commercial use of the electrolysis process in an industrial laboratory. Not only does the site have the necessary electricity, gas, heat and storage infrastructure, it is also home to qualified employees who are already actively shaping the energy transition with their expertise. In addition, there is the geographical proximity to the Saarland steel industry as a possible customer for hydrogen. Furthermore, a link is to be established with the transport sector for hydrogen-powered vehicles.

The four partners are breaking new ground in Fenne, where the interaction of various components and systems is being tested on an industrial scale for the first time. A new electrolyser, a large hydrogen storage tank and a new high-temperature heat pump come together with an existing large-scale battery system, a mine gas engine cogeneration plant and an electrode boiler at the energy hub. This means that all the necessary connections to electricity, heat and gas networks are available and usable. In addition, STEAG is considering the construction of a combined cycle power plant at the Fenne site, in which hydrogen can be converted back to electricity on a large scale in a gas turbine. (STEAG/Si.)

In India, a population of more than 1.3 bn combined with strong economic growth are creating a huge demand for goods, services and raw materials. Developing the infrastructure, in particular unlimited access to electricity in rural regions, continues to pose a significant challenge. On 4th February 2019, at the invitation of STEAG GmbH, Essen/Germany, Prof. Andreas Pinkwart, Minister for Economic Affairs, Innovation, Digitalisation and Energy in North Rhine-Westphalia, went to New Delhi/India to find out how a company from North Rhine-Westphalia could contribute to this undertaking (Figure 1).

The Minister for Economic Affairs was greeted at the India Habitat Centre in the Indian capital by Joachim Rumstadt, Chair of the Executive Board at STEAG. Rumstadt presented the concept of distributed and resource-conserving electricity generation on the basis of PV technology, which STEAG in India is currently offering. Prof. Pinkwart was accompanied by a trade delegation made up of further business representatives from North Rhine-Westphalia. “Economic growth requires energy that covers a wide area reliably,” said Rumstadt in his opening speech.

Since the 1990s, the Essen-based energy producer has been represented in India by its subsidiary STEAG Energy Services (SES) and offers expertise in all areas of the energy sector. Minister Pinkwart was clearly impressed, saying “The STEAG photovoltaic container is a good example of the innovative products that can be developed by combining skills and expertise from North Rhine-Westphalia and India. I hope that a great number of entrepreneurs from North Rhine-Westphalia will recognise and make use of the opportunities India is opening up as a future market.”

SES currently employs around 1,500 members of staff in India – more than in any other country outside Germany – and has been building up a strong network and local expertise over several years. STEAG has a solid understanding of the market in India and develops its own technical solutions. Minister Pinkwart was given the opportunity to experience one of these solutions first-hand in the form of a 6 m long and 2.45 m wide overseas container – a container-based hybrid photovoltaic system which, with the addition of batteries, can reliably provide electricity for up to 24 hours a day, with or without a grid connection (Figure 2).

“STEAG develops solutions for areas in India where social development and economic growth have come to a standstill,” said Rumstadt. In urban areas, the connection to the power grid is unreliable at best; some areas have no access to electricity at all. Despite the existence of plans and budgets, millions of people can still only dream of having even the most basic comforts. It was this that drove SES to develop its effective solar solution. The output is sufficient for 4 kWp.

The containers, pre-installed in India with robust technology, are quick and easy to set up and commission. First, the container acts as a transport container, which is used to transport the entire equipment. The storage space available at the destination is prepared in such a way that it can be used for a variety of functions.

STEAG will market this technical solution in India and African countries together with renowned Indian non-profit organisation “The Energy and Resources Institute (teri)”. Since the mid-1970s, the independent institute has been searching for sustainable solutions to continuously improve the living conditions of the Indian population.

STEAG handed over the first container to the Dr Nalin Singhal Memorial Foundation. It is currently being used in the North Indian state of Uttar Pradesh. In the city of Gorakhpur, the photovoltaic system is reliably supplying electricity to a project run by non-governmental organisation (NGO) URJA Energy. URJA focusses on improving the living conditions and promoting the health of women. The project in Gorakhpur gives women work producing sanitary products in a small manufacturing facility. Power cuts used to be a daily occurrence and had a major impact on productivity. The STEAG container now provides a continuous supply of electricity. This is an impressive example of how experience and initiatives from North Rhine-Westphalia, combined with local knowledge and skills, can improve the living conditions of people in poor rural regions. (STEAG/Si.)

It was an emotional evening in the historic machine hall of the STEAG power station, with a celebration that went into the early hours of the morning. Employees, family members, friends and former colleagues were invited to bid farewell to the founding location of Steinkohlen-Elektrizität AG (STEAG) on 19th January 2019 (Figure 1). On 31st December 2018, after almost 80 years of electricity generation in Lünen, coal-fired units 6 and 7 were taken off the grid once and for all.

More than 300 guests stood on the ground where STEAG first began generating electricity in 1940. Blue and red spotlights lit up the grand industrial hall for the celebration. The turbines, which were first taken off grid on 22nd December 2018, loomed in the background as sad reminders of the reason behind the event. Electricity generation at the site provided 101 jobs; that’s 101 career prospects.

The fact that the company and works council were able to cut jobs without any compulsory redundancies softened the blow somewhat. 48 employees are taking early retirement and 53 will be employed at other STEAG sites nearby.

In his speech, Joachim Rumstadt, Chair of the Executive Board at STEAG GmbH, Essen/Germany, thanked employees and emphasised, “We will continue to take corporate responsibility in Lünen and have a strong presence here.” Rumstadt referred to the state-of-the-art abrasives facility and the storage batteries that will continue to supply the important primary regulation energy for the power grid. The STEAG New Energies subsidiary in Lünen is also operating a biomass power station at Remondis. STEAG will also continue to be responsible for managing the state-of-the-art Trianel power station.

“All of this shows that STEAG is playing an important role in the revolution on the energy market,” said Rumstadt. Power station manager Kai-Uwe Braekler and Ralf Melis, Works Council Chairman of STEAG, then said goodbye to “their team”. Once the official part of the event was over, the common thread between all speeches – that as the founding location, Lünen had always been characterised by a strong sense of community and solidarity among the workforce – became clear to see, as they celebrated together until the early hours of the morning. (STEAG/Si.)

On 2nd March 2018, the energy company STEAG GmbH, Essen/Germany, notified the Federal Network Agency of the legally binding decommissioning of power station units 6 and 7 in Lünen/Germany. On behalf of the transmission system operator Amprion, the Federal Network Agency will determine to what extent the facility is still system-relevant, i.e. whether the two units will be shut down completely.

STEAG was able to keep its fleet of power stations active in the market for a long time by optimising the costs and earnings structure at an early stage. In spite of this, the consistently challenging market environment has ultimately led to a decline in the facilities’ profitability. “We are fighting to save each power station unit,” explains Joachim Rumstadt, Chairman of the Executive Board at STEAG. “Given the age of unit 7 in Lünen, however, it cannot be expected to generate sufficient profit contributions in future. Unit 6 is contracted to continue producing electricity for Deutsche Bahn until the end of 2018. Once that contract expires, we do not see any further profitability in this block either,” adds Joachim Rumstadt. STEAG plans to decommission units 6 and 7 once and for all on 2nd March 2019.

The persistently low wholesale prices for electricity are hampering the profitability of conventional large-scale power plants in Germany. This impact is also being felt by STEAG’s model power station unit in Völklingen-Fenne in the Saarland. It is STEAG’s intention to temporarily withdraw this unit from the grid over this year and next, with works taking place between April and late September of each year. This is also the plan for unit 7 in Lünen for this year.

“The final decommissioning of the two power station units in Lünen will result in job losses,” explains Ralf Meli, Chairperson of the STEAG Group’s Works Council. “Back in late 2016, we joined with the STEAG executive board and the IG BCE industrial union to devise a group social plan and a general balance of interests, in order to ensure the staff reductions were handled responsibly and without the need for any compulsory redundancies. We will now negotiate an individual balance of interest for the colleagues affected.”

STEAG permanently disconnected Voerde power station’s West 1 and 2 units from the grid back in March 2017, followed by Herne 3 in North Rhine-Westphalia in the summer of 2017. “Combined with the current measures, the adjustment process is complete for now. We see a bright future for our high-performing power stations in the Ruhr region,” adds Joachim Rumstadt. “We expect to see significant improvements in the economic conditions once the withdrawal from the nuclear energy programme is complete.” (STEAG/Si.)

As part of its active portfolio management, the Essen/Germany-based energy company STEAG GmbH is selling a 49 % share of its wind farm portfolio in France (Figure 1)to an infrastructure fund managed by Allianz Global Investors, the asset manager of the insurance group headquartered in Munich/Germany. An agreement to this effect was signed at the end of November 2017. The transaction, which takes retrospective effect from 1st January 2017, is subject to the approval of the appropriate competition authorities. Both partners have agreed not to disclose the purchase price.

The sale of the shares of the French wind farm portfolio with a total power output of 94 MW was preceded by an open, transparent and competitive bidding process, which saw Allianz Global Investors named the successful bidder. The buyer is the Allianz Renewable Energy Fund II, an infrastructure fund managed by Allianz Global Investors for institutional investors.

With 51 % of the shares, STEAG remains the majority shareholder of the wind farms and will continue to manage future commercial and technical operations. (STEAG/Si.)

STEAG GmbH is selling its regional power grid in the Saarland to Creos Deutschland Holding GmbH with retroactive effect from 1st January 2017 as part of portfolio optimisation measures. The sale contract was signed on 31st July 2017. The sale of the Saarland power grid is part of the “STEAG 2022” strategy project, under which the Essen-based company is also reorganising its portfolio. The sale took place through a competitive bidding process set up by STEAG, in which Creos Deutschland Holding GmbH emerged as the successful bidder. The purchase price has not been disclosed.

STEAG Netz GmbH operates a medium- and high-voltage grid, around 450 km in length, with a staff of 26 in the Saarland. Back at the start of the 20th century, the grid supplied electricity to the mining industry in the Saarland. Today, the grid is used by industrial and business customers, energy producers and regional distributors. The distribution network is made up of 194 km of high-voltage overhead lines (110 kV and 65 kV) plus 277 km of medium- and low-voltage cable, and has around 240 points of use in total. It stretches from the south-west of the Saarland (border with France) to the north-east (border with Rhineland-Palatinate). It runs through the Saarland from Warndt in the south-west to Lebach in the north and Bexbach in the east. (STEAG/Si.)

A new building is being added to the power facilities at the Technical University of Darmstadt/Germany. It will house a complex air conditioning system and a highly efficient small-scale combined heat and power unit (CHP). The foundation stone was laid in a ceremony which took place on 12th May 2017 (Image 1). TU Darmstadt is currently supplied with heat, air conditioning and power under a long-term contracting agreement with project company ENTEGA STEAG Wärme GmbH, which was concluded last year. Important elements of the agreement include expansion of the TU Darmstadt power networks, modernisation of the existing CHP unit and setup of a new technical building directly on the Lichtwiese campus.

Covering an area of roughly 600 m² and at 11 m tall, the new building will be completed by 2018 and fitted with two “centrepieces” – a small-scale CHP unit with an electrical output of approximately 3 MW and a modern air conditioning system. For the air conditioning, an absorption refrigeration machine (refrigerating capacity 1 MW) must first be installed, which makes it possible to generate cool air using thermal energy from the CHP unit in a particularly environmentally friendly manner. In future, this air will then be fed into the roughly 3 km long closed circuit network currently being constructed on the Lichtwiese campus, and will cool facilities such as the Lichtenberg supercomputer and the technical laboratory infrastructure in the Chemistry department. Another step in the future development of the Lichtwiese campus is planned to take place at a later stage, and will involve installing a second absorption refrigeration machine, this time with a capacity of 2 MW.

ENTEGA STEAG Wärme GmbH, based in Darmstadt, was founded to finance, expand and operate all the power facilities, and is investing around 14 m € in the heating and air conditioning infrastructure over the course of this year and the next. The total sum of investment stands at 17 m € .

“This construction project is another milestone in the ecological and economically responsible expansion of the university’s infrastructure,” said TU President Prof. Hans Jürgen Prömel. “The new power facilities will make a considerable contribution to securing a long-term, future-proof and viable energy supply for TU Darmstadt and many more properties in the district.” Prömel added that the university’s project is directly supporting the federal state’s climate protection goals (“CO₂-neutral state administration”). According to him, the new power facilities will ultimately be “superbly incorporated into the ‘Energy-efficient Licht-wiese campus’ project – an interdisciplinary project funded by the federal government – as a subject of study.”

The expansion of the power facilities is being accompanied by the connection of the TU Darmstadt district heating grid to that of the Darmstadt Nord district. Thanks to this connection, around 30,000 MWh of heat from the waste-to-energy plant will be fed into the TU grid every year in future. This will enable TU Darmstadt to considerably increase the proportion of thermal energy generated from combined heat and power generation.

“This is a highly significant project both ecologically and strategically,” highlighted Marie-Luise Wolff-Hertwig, Chair of the Management Board at ENTEGA AG. “By connecting the TU and ENTEGA heating grids, we are developing the highly energy-efficient heat supply in Darmstadt a crucial step further. E. g., the Klinikum Darmstadt and local schools will also be connected to the heating grid during the expansion project.”

Thomas Billotet, Member of the Management Board at STEAG New Energies GmbH, said the following when the foundation stone was laid: “The system is tailored to meet the power, heating and air conditioning requirements at TU Darmstadt. We view this project, set up in partnership with ENTEGA, as an example of how our customers faced with complex challenges can rely on the technical expertise and experience of STEAG New Energies, in order to achieve clear economic advantages and actively reduce CO₂ emissions at the same time. By doing so, our customers join us in contributing towards the success of the energy transition and climate protection in Germany.”

The Mayor of Darmstadt, Jochen Partsch, explained: “The expansion of power facilities on the Lichtwiese campus is another key milestone on the road to a low-emission, decentralised and climate-neutral energy supply in our city. This is where energy efficiency, climate protection, cost savings and the immediate benefits for the people of Darmstadt go hand in hand. A fantastic project which shows how synergy can be achieved by key stakeholders in our city working closely together.”

In the 160 or so buildings belonging to TU Darmstadt, around 56,000 MWh of electricity, 60,000 MWh of heat and 5,000 MWh of air conditioning were consumed in 2016. Once the entire construction project – the new building and modernisation – is complete, CO₂ emissions will drop by approximately 9,600 t/a. (STEAG/Si.)