<article><p class="lead">German utility Uniper's Datteln 4 coal-fired power plant will begin commercial operations on 30 May, but tight clean dark spreads suggest it may not run at full capacity in the near term.</p><p>The 1.1GW, 45pc-efficient plant is carrying out tests and has fed power into the grid on some days since 8 May. Datteln 4 has generated a total of 237GWh of electricity since then, the highest level for any coal-fired unit so far this month, data from Fraunhofer ISE show.</p><p>The unit's launch comes at a time when generation economics and fundamentals have pushed coal-fired generation to the margin of the German merit order. Production from coal-fired plants has been 2.11GW so far this month, the lowest for the period since at least 2011.</p><p>Next working day-ahead clean dark spreads for a 45pc-efficient unit have averaged minus €3.53/MWh so far this month, based on <i>Argus</i> assessments of API 2 coal swaps and EU ETS allowances, putting these units below 49pc-efficient gas-fired and 43pc-efficient lignite-fired units in the German day-ahead market merit order.</p><p>In the intra-day market, a 45pc-efficient coal-fired unit has on average been profitable to run during hours 4, 13 and 20 this month, based on <i>Argus</i> assessments. </p><p>Clean dark spreads for the same unit and June peak load have averaged minus €0.07/MWh this month.</p><p>The outlook for German coal-fired generation could strengthen during the summer, when wind and run-of-river generation typically decline. Third-quarter peak-load clean dark spreads for a 45pc-efficient unit have averaged €6.15/MWh so far this month, compared with €1.29/MWh for base-load hours. </p><p>But these units remain below the lowest-efficiency gas and highest-efficiency lignite-fired plants in the merit order for next quarter.</p><p>Datteln 4's start-up is controversial, as Germany plans to phase out its coal and lignite-fired plants by 2038. Under the country's draft phase-out law, Datteln 4 is scheduled to close between 2035 and 2038. Uniper previously confirmed that the curtailed duration of commissioning means the unit will not cover its investment costs.</p><p>Earlier this year, the firm said it will <a href="https://direct.argusmedia.com/newsandanalysis/article/2060548">close its remaining coal-fired units between 2022 and 2025</a> — except Datteln 4 — subject to approval of the final draft of the coal phase-out law, which is being debated in parliament.</p><p class="bylines">By Jacqueline Echevarria</p><p><div class="picture"><div><span class="pic_title">German clean dark spreads for a 45pc plant</span> <span class="units">€/MWh</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2020/05/26/germancleandarkspreadsfora45pcplant26052020013132.jpg"></div></article>
