BERLIN (dpa-AFX) - Does the country need new gas power plants – or not? For the German government, the answer is clear: absolutely. This is intended to ensure a secure electricity supply, even after the planned shutdown of the last coal-fired power plants in 2038. The government has now agreed on key points of a so-called power plant strategy with the European Commission.
Among other things, the plan includes state-supported construction of new gas power plants, which are to go into operation by 2031 at the latest. All of these plants must also be capable of running on hydrogen. The conversion to hydrogen should take place by 2045 at the latest, the year by which Germany aims to achieve climate neutrality. New gas power plants have been under discussion for years. Brussels still needs to give final approval to the German plans.
What exactly is planned?
In a first step, twelve gigawatts (GW) of new, so-called controllable capacities are to be put out to tender this year. Ten gigawatts of these should be able to generate electricity for a longer period, targeting gas power plants. For context: a large modern gas power plant typically has a capacity between 500 and 800 megawatts. The ministry is also planning further tenders in the coming years.
Incentives are also planned to encourage the conversion of gas power plants to hydrogen before 2045. From 2032, a technology-neutral "capacity market" is planned. Essentially, this means providers will be rewarded for making capacity available – even if these plants may only run for a few hours each year.
Are these new gas power plants really needed?
Yes, says the Federation of German Industries (BDI). "The construction of new gas power plants is essential due to the rising share of renewable energy in our electricity mix, in order to maintain security of supply in Germany during so-called 'dark doldrums' and to avoid extreme price spikes," said BDI Deputy Chief Executive Holger Lösch.
Security of supply is of utmost priority, especially for industry. "Dark doldrums" are periods when there is neither sunshine nor wind. Additionally, the necessary expansion of the power grid is not progressing quickly enough. To secure the volatile electricity supply from renewables, gas power plants are intended to serve as a reserve – but only for short periods each year.
New gas power plants secure the planned phase-out of coal-fired power by replacing the loss of large controllable capacities, Lösch said. Germany has already phased out nuclear energy. The country aims to gradually exit coal-fired power generation by 2038. This will result in the loss of much "controllable" and secured capacity.
To what extent are supply gaps otherwise a risk?
The German Association of Energy and Water Industries (BDEW) described the construction of new power plants as "particularly urgent" to ensure security of supply. Chief Executive Kerstin Andreae said: "Almost all modeling, including the Federal Network Agency's security of supply report, predicts that Germany is at risk of running into a supply gap in the coming years if the current regulatory framework is maintained and we do not add controllable capacities."
With the transformation of the energy system, measures must be taken to maintain security of supply at the current peak level in the long term. Transformation primarily refers to the continued expansion of renewable energy from wind and solar.
The Association of Gas and Hydrogen Industries also supports the plans. "Without new controllable power plants, electricity in Germany will become scarcer and therefore more expensive," said board member Timm Kehler. However, the planned twelve gigawatts are not enough. "After the nuclear and coal phase-outs, we will need significantly more secured capacity by 2035 to safeguard against dark doldrums."
Are there also critical voices?
Yes. The German Environmental Aid (DUH), for example, considers the construction of new gas power plants necessary to secure the electricity market in exceptional situations, such as prolonged dark doldrums – but only as a "last resort." Before building new gas power plants, a whole series of other measures is necessary, emphasizes DUH Federal Managing Director Sascha Müller-Kraenner: "Further and regionally managed expansion of renewables, expansion of transmission and distribution networks, better interconnection with European neighbors, connection of (battery) storage, and demand-side flexibility," he lists.
Only at the end of this chain would gas power plants serve as a "last resort." The federal government is skipping these measures and focusing solely on gas power plants.
Claudia Kemfert from the German Institute for Economic Research said that new fossil gas power plants are not fundamentally necessary for security of supply. "Large-scale new construction would create new fossil dependencies and is problematic both in terms of climate policy and economics." Security of supply can be achieved more cost-effectively and in a more climate-friendly way – for example, through electricity storage, grid expansion, European interconnection, and sustainable biogas.
Helena Melnikov, Chief Executive of the Association of German Chambers of Commerce and Industry, raises another point: "Security of supply is of central importance for the economy. This also includes, to a certain extent, modern gas power plants." However, a state-mandated and subsidized construction of gas power plants is the wrong approach, in her view. "More efficient and cost-effective than subsidies for new gas power plants would be an obligation for electricity suppliers to secure electricity deliveries on the market."
How expensive will it all be?
That remains unclear. But state subsidies are likely to cost billions in the coming years. The money could come from the federal budget – but there could also be a new levy for energy customers. "By subsidizing new gas power plants, Germany is committing itself to a specific and expensive technology for many years," said Melnikov. "This also burdens electricity consumers, who ultimately have to bear the costs through an additional levy. This is not just a few euros more on the electricity bill, but in total at least five billion euros a year." Industry associations have long complained about internationally high electricity prices.
Who is supposed to build the power plants?
Several energy companies are already at the starting line. For example, RWE has planned power plants at three locations in North Rhine-Westphalia. RWE CFO Michael Müller said last autumn that the company could imagine a total of three gigawatts of new flexible power plant capacity in Germany. Uniper has also stated its readiness to contribute around two gigawatts of hydrogen-capable power plants. "The agreed key points for the power plant strategy are an urgently needed step to make the energy transition in Germany cost-efficient and pragmatic," says Uniper CEO Michael Lewis. The Steag Iqony Group also wants to participate in the auctions with up to two gigawatts./hoe/DP/zb
