Pitfalls for Vattenfall

Low-Down Brown Coal Blues

brown coal.AP Photo-Martin Meissner
There are a number of pitfalls for Vattenfall at the moment. Here, a brown coal open-pit mine near the Western German city of Grevenbroich
  • Why it matters

    Why it matters

    Vattenfall’s difficulty to sell its Geman lignite operations shows there is no end in sight to the the problems the utilities face in Germany.

  • Facts


    • Swedish, state-owned utility Vattenfall has been ordered by the Swedish government to exit the coal business due to climate concerns.
    • A slump of wholesale electricity prices in Germany has made many power plants loss-making, making it difficult to sell Vattenfall’s lignite operations.
    • Electricity prices have fallen as Germany switches to renewable energy sources and aims to produce 80 percent of its electricity from renewable energy sources by 2050.
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Magnus Hall, president and chief executive of the Vattenfall Group, was probably annoyed last October when Greenpeace made an offer for the Swedish power company’s lignite division. The environmental activists didn’t want to pay a single cent, instead demanding money to close it all down and ensure that carbon-spewing brown coal stays in the ground.

Now Mr. Hall is likely more worried than anything else, since the Greenpeace “offer” could soon become bitter reality.

The Swedish, state-owned energy company and the commissioned investment bank Citigroup are collecting binding bids until March 16. It is quite possible that even serious bidders, like the Czech energy group CEZ or the Central European energy group EPH, will place a negative purchase price on their offer.

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