Vattenfall has announced that its German hydropower division could see a 60% reduction in its workforce in a bid to bring it back into profitability.

Vattenfall has announced that its German hydropower division could see a 60% reduction in its workforce in a bid to bring it back into profitability.

Under a comprehensive restructuring plan, to be implemented by the end of 2016, major job losses are expected amongst the 420 full-time employees of the division. The company also said it expects to keep in operation 2500MW of its current 2800MW of hydro capacity.

“Due to the price development on the German electricity market and the regulatory framework for existing storage facilities, Vattenfall’s pumped storage power plants have been under considerable economic pressure for years. The measures that are now being introduced are a major challenge for all stakeholders, but they have become the only realistic chance to keep most of our German pumped storage plants in long-term operation,” said Torbjörn Wahlborg, Head of Business Area Generation at Vattenfall.

Vattenfall will start talks with the German Workers’ Councils to which extent the individual plant locations will be affected and to discuss socially acceptable solutions for the employees.

The restructuring program, which is the result of a thorough analysis started in the autumn 2016, essentially includes the following:

• Optimization of plant operation

• So called ‘transitional operation mode’ of single plants

• Restructuring with focus on securing core competences in all areas

• Further reduction of the planned investment volume and all other cost items

The optimization of the operation in some pumped storage plants, in combination with other measures, aim at keeping approximately 2500MW of capacity in operation. The power plant of Niederwartha (Saxony) is already in the ‘transitional operation mode’. The plant in Geesthacht (Schleswig-Holstein) will soon be transferred into a ‘transitional operation mode’.

Since 2011, Vattenfall has invested around EUR60 million in the modernization and upgrading of its German pumped storage plants to make them an effective part of the German energy transition. Pumped storage plants are currently the only large-scale generation facilities with storage capacity for excess electricity from renewable energy sources.