RWE is to club together with a number of regional German utilities to finance construction of a new power plant in a model that the utility says will soon be emulated across Germany.

A total of 23 municipal utilities from North Rhine-Westphalia, Hesse and Rhineland-Palatinate have signed a long-term partnership with RWE to build the hard-coal power plant in Hamm, Westphalia. The plant will have an output of 1600 MW, of which the municipal utilities will have a 350 MW share.

RWE will build the new GEKKO (Gemeinschaftskraftwerk Steinkohle) plant at a cost of EUR2 billion, EUR450 million of which will come from the municipal utilities. The plant will be operational from 2011, providing the utilities with baseload generating capacity.

The GEKKO plant will help reduce the utilities’ exposure to market prices, says RWE, while playing an important role in replacing Germany’s ageing power plant fleet.

Peter Blatzheim, Managing Director of the Stadtwerke Troisdorf and GEKKO Group Deputy Spokesman said, “What counts for us municipal utilities is not just security of supply, but predictable prices, too – naturally combined with state-of-the-art engineering that keeps emissions to the minimum.”?

Dr. Ulrich Jobs, CEO of RWE Power AG, said: “As many plants in Germany are now nearing the end of their service life, we could find ourselves facing a shortfall in the order of 35 000 MW within the next few years – a shortfall further exacerbated by the politically motivated decision to phase out nuclear power.”

The Hamm plant will be made carbon capture-ready and will operate with an efficiency rate of 46 per cent.

RWE has hailed the model as “innovative” and believes that other utilities in Germany will seek to emulate the partnership as they invest in new generating capacity. RWE has already offered the municipal utilities the chance to participate in renewable energy projects.