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Vattenfall keeps German plants despite cost cuts

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Vattenfall keeps German plants despite cost cuts
Vattenfall's Brunsbüttel nuclear plant
14:01 CEST+02:00
State-owned energy giant Vattenfall is pursuing a cost-cutting plan involving 6 billion kronor ($862.67 million), but it has ruled out the sale of its much-criticised lignite power plants in Germany, according to CEO Øystein Løseth.

The company will pursue other means of shaving expenses, including reducing purchasing costs, improving processes in operations and maintenance, and trimming its payroll. Discussions with the union are under way, according to Vattenfall.

Løseth declined to comment on the number of people that may be laid off.

"It is much too early and I do not want to comment about it," he said.

He also believes that it is too early elaborate on which parts of the company will be divested. He would only state that the company's main regions are in Sweden, Germany and the Netherlands, indicating that the sales will likely take place in Poland, Denmark and Finland.

Løseth was very clear that Vattenfall has no plans to sell assets in Germany, nor any of its highly criticized lignite power plants.

"We want to optimise our brown coal plants in Germany and also the pit coal plants there," he said.

"The rumors that we would sell out of Germany is not correct."

Meanwhile, Vattenfall expects the its northern German nuclear power plants, which for years have been a problem child, to be put back into operation next year. They have stood still since 2009 due to several incidents and received a number of demands for improvements from the authorities.

"Before making the decision to extend the operating lifetime of nuclear power in Germany, it is very important for us to get them operational again," said Løseth, who expects the operation in Krümmel to restart on January 1st and in Brunsbüttel after the summer of 2011.

Vattenfall wants to grow further in energy types such as wind, nuclear, biomass, hydro and natural gas. The company will continue to work in the production, distribution, trading and sales of energy and supply electricity, heat and gas.

On January 1st, Vattenfall will also introduce a new "business-driven" organisational structure that will contribute to reducing costs. The ongoing discussions with the union will also address this.

Ola Alterå, state secretary to Minister for Enterprise and Energy Maud Olofsson, said Vattenfall's new strategic direction is a result of the government's new owner directive, which states that Vattenfall should focus less on expansion and more on climate adaptation and restoring confidence in the company.

"The board has begun to deliver on the basis of the directive and that is exactly what we expected," said Alterå.

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