By Nora Buli
OSLO (Reuters) -German utility Uniper is mothballing its 335-megawatt Karlshamnverket 2 oil-fired power plant in southern Sweden after a deal to supply back-up power during winter expired, the company said on Monday.
The step takes effect from November 16 and is a direct consequence of the cancelled procurement of Sweden’s strategic power reserve announced in October by transmission grid operator Svenska kraftnaet (Svk), the company said.
The cancellation left the unit without any long-term contracts, and there are also no commercial conditions to continue operations, it added.
“This is of course not the direction we want to see for Karlshamnsverket,” Henrik Svensson, the power plant’s manager said, adding Uniper believes the closure will have a negative effect on power system adequacy.
Demand in southern Sweden is often greater than supply, leaving the region more exposed to shortages.
To mothball the unit meant that block 2 is preserved and adapted for a longer downtime and Uniper maintains a close dialogue with both the government and relevant authorities about the situation and possible ways forward, it said.
Block 3 of Karlshamnverket, also with a capacity of 335 MW of, is not affected at the moment, but here too, a long-term solution must be put in place for the continued operation, Uniper said.
Block 1 of Karlshamnverket was permanently closed in 2015.
(Reporting by Nora Buli, editing by Terje Solsvik)
