European Commission approves Germany’s electricity capacity mechanism to ensure security of supply

The European Commission has approved under EU state aid rules Germany’s strategic capacity reserve, which is meant to ensure the security of power supply in case of emergencies, the Commission said in a press release. “Capacity mechanisms can help to safeguard security of electricity supply, but they must be designed so as to avoid distortions of competition in energy markets,” said European Competition Commissioner Margrethe Vestager. Germany has clearly identified and quantified the security of supply risks and the reserve is needed to ensure security of supply during the ongoing reform of the German electricity market and to manage the phase-out of nuclear electricity generation. The reserve is temporary and will be removed when the underlying market issue is solved, the Commission said. The German economy ministry welcomed the decision, which allows Germany 2 gigawatts (GW) of reserve capacity from 2019 on. The capacity will be tendered in technology-neutral auctions, open to all types of capacity providers, including demand response.

Find the Commission press release in English here and the BMWi press release in German here.

Find background in the CLEW factsheet Germany's new power market design.