The restructuring plan, which will be implemented next year, is expected to result in nearly 250 job cuts at the facilities, which currently has 420 full-time employees.

Under the program, the hydro power capacity will be reduced to around 2,500MW from the current capacity of 2,800MW.

The restructuring program will also include the optimization of plant operation, in addition to securing core competences in all areas.

The pumped storage plants that will be restructured under the program include 1.060MW PSW Goldisthal, 320MW PS Hohenwarte II, 80MW PSW Bleiloch and 63MW PS Hohenwarte in Thuringia, as well as 1.050MW PSW Markersbach and 40MW PSW Niederwartha in Saxony.

Other plants that will be affected include 120MW PSW Geesthacht in Schleswig-Holstein and 80MW Wendefurth in Saxony-Anhalt.

Vattenfall  business area generation head Torbjörn Wahlborg said: “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.”

Since 2011, the firm had invested about €60m in upgrading and modernizing the pumped storage plants in Germany.