The French arm of German utility E.ON is reconsidering its decision to close 1.1GW of coal-fired electricity generation in France.

The surprise move followed a lengthy meeting on Tuesday between senior E.ON executives and the company's central works council aimed at wrapping up a four-month investigation into the economic situation at each of the power plants.

"The management of E.ON France agreed to reconsider its plans in the form in which they were put to the central works council on 15 September 2011," E.ON said in a statement on Wednesday.

But despite acknowledging the potential consequences of the shut-downs for company staff, E.ON did not commit to keeping any of the plants on line.

It noted that the European large combustion plant directive (LCPD), which limits CO2 emissions from fossil-fuel-fired power plants over 50MW in capacity, will necessitate radical and expensive changes if the units are to continue generating electricity beyond 2015 when polluting plants will be forced to close by the directive.

"Although E.ON in France is ready to examine all alternative solutions, it also wishes to point out that the economic position of the coal-fired units affected will still be critical as of 2013, and that solutions must be found for the three units operating by dispensation under the European LCPD," E.ON said.

In June E.ON will put a new document to the employee representative bodies, "reflecting the latest technical and economic developments, the experts' summary and any progress on proposed takeover bids," the utility said.

In March, E.ON announced the closing date of its 1.9GW coal-fired plant at Kingsnorth in the UK. It was the first generator in the UK to declare its closing date under the LCPD (see EDEM 9 March 2012)

European power traders told ICIS last week that the closure of E.ON's plants could contribute to price spikes on the continent as the looming UK carbon tax will mean greater volumes of electricity flowing out of France (see EDEM 28 March 2012). TH

Copyright 2012 Heren Energy Ltd. All Rights Reserved.

(Originally published April 4, 2012, in European Daily Electricity Markets.)