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When it comes to large public projects that are financially delayed or out of control, Hamburg also has a lot of experience. The deepening of the Elbe is only done after seventeen years of political and judicial disputes. The Elbphilharmonie concert hall at the western end of historic Speicherstadt has become more than eleven times more expensive than originally planned. Now a private sector project is about to go down in the city’s history as a failure amid the vortex of political entanglements. Power company Vattenfall wants to shut down its Moorburg hard coal power plant in the port area, just five years after the € 3 billion pile went online.
The Swedish company, one of the largest electricity providers in this country, participated in an auction by the Federal Network Agency for the dismantling of the power plant’s capacity. The goal is to determine which coal-fired power plant operators are willing to shut down their systems for the lowest compensation. If Vattenfall gets involved, Moorburg, one of the most modern and efficient plants in Germany, could be fully or partially closed by the end of this year. The case sheds light on Hamburg’s volatile energy policy. It also raises the question of the extent to which there is still investment security in the Hanseatic city, Germany’s largest industrial location.
It is true that the project was a bad star from the beginning. Vattenfall should never have been persuaded by former CDU Mayor Ole von Beust and his Senate to build the power plant twice as large as initially thought. That environmentalists would oppose Storm Meiler, and that much of the city viewed the plan critically, was already more than clear at the beginning of planning fifteen years ago.
An impossible dream of the SPD mayor
It is also true that Vattenfall is now entering the auction with a cool calculation. The price of CO2 certificates has increased significantly, while the price of electricity has decreased. With large coal-fired power plants like Moorburg, not much can be gained under these conditions. This may have contributed to viewing the auction as a favorable exit window.
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However, at least as important is the politics of Hamburg, which began torpedoing the project shortly after the start of construction. The Greens who entered the government tightened environmental regulations and thus contributed to the fact that the two units, each rated at 800 megawatts, were barely economically viable. They subsequently prevented the system from connecting to the district heating network in Hamburg. In the recent electoral campaign for citizenship, the bombardment of the parties continued. The SPD around the ruling mayor Peter Tschentscher campaigned for part of the plant to be closed and replaced with a gas-fired power plant and a site for hydrogen electrolysis. It is highly doubtful that this fantasy can ever be implemented at an economically justifiable cost.
The Greens are jubilant that Vattenfall is obviously fed up. They are much more than Moorburg and local politics. The party, which won more than 24 percent of the vote in the February elections and increased its weight in the coalition with the SPD, wants to turn Hamburg into a showcase for green politics. The idea is that throughout Germany, potential voters should be able to see what upheavals are possible if the green party co-rules. On the contrary, little resistance can be expected from the Hamburg SPD. Tschentscher himself initiated many course changes during the election campaign and developed green positions, also to prevent the coalition partner from becoming even more popular.
The consequences can be seen in many areas of politics, from port policy to transportation and housing. In energy policy, however, the consequences go particularly far, because here it is about the competitiveness of the entire locality. Many manufacturing companies in the port and in other parts of the city depend on competitive electricity prices, to which Moorburg could have contributed with efficient technology. There is also a gap in district heating, because Moorburg could have stepped in if the old Wedel thermal power plant went offline in a few years. Instead, the Senate wants to build new plants on its own so that it can achieve a carbon-free heating operation by 2030, as promised. In the end, electricity consumers and taxpayers pay for this policy, which has nothing to do with economic sanity.
