Germany to auction “huge number” of hydrogen power plants – minister

The transformation of Germany’s energy system away from fossil fuels must quickly be reinforced by sufficient “molecule-based” power plant capacity that can back up the country’s energy system during times of little wind and solar power generation, economy and climate minister Robert Habeck said. “Planning and auctioning needs to start now,” Habeck said at an event organised by German renewable power industry association BEE, adding that the government would be auctioning a “huge number” of hydrogen-fired power plants and other backup capacity still in 2023. “We need a lot of power plant capacity that is not running continuously,” the Green Party minister said, explaining that these plants will be primarily required to provide flexibility to the energy system and stabilise the grid whenever wind and sunshine are insufficient. “We have to act before the demand is there,” Habeck said.

With respect to the debate about reversing Germany’s nuclear power exit, a demand made by the Greens’ coalition partner Free Democrats (FDP), he called for greater “political discipline” and determination when pursuing a plan. “We must not reopen every debate,” Habeck said, adding that this would put off investors, who are uncertain whether investments in renewables and other energy transition technologies would be profitable. Renewable power companies needed “guarantees that they will receive orders,” Habeck said, which the government could end up providing. Providing capital at this crucial period of transformation could be necessary both for the rollout of renewable power and for weaning industry off fossil fuels, the minister said, but warned that this should not amount to a “subsidy competition” with other countries, particularly the U.S. and its Inflation Reduction Act (IRA). “That’s the dumbest thing that could happen,” he argued.

Achieving sufficient storage capacity for renewable power, for example in the form of hydrogen, is among the greatest challenges for achieving a decarbonised energy system. As Germany is phasing out nuclear power this year and aims to complete its coal exit in the 2030s, the country will need to install power plant capacity that can replace retired coal and nuclear plants. While natural gas has long been considered as a “bridge technology” on the way to 100 percent renewable power, the Russian war on Ukraine and the ensuing energy crisis have cast doubt on this strategy, prompting the German government to greatly speed up its plans for the rollout of renewable power sources and of syntheticgreen hydrogen, which is produced with renewables, to provide the necessary backup capacity for the grid.