New gas power plants to be built predominantly in Germany’s south

Bids from southern states for support in building new gas power plants will be given priority to ensure the projects are built where they are most needed, according to key provisions of an upcoming Power Plant Safety Act (Kraftwerkssicherheitsgesetz). News service Tagesspiegel Background reported that about two thirds of the new plants should be built in the south to lower redispatch costs and ensure grid stability. While Germany’s windy northern states harbour the bulk of wind power capacity, the country still lacks power lines to transport the electricity to the south. This currently leads to situations where renewables input in the north is curbed, while coal and gas plants in the south are activated to ensure grid stability.

With the Power Plant Safety Act, the government aims to ensure that a sufficient number of gas-fired power plants is built in the coming years to guarantee supply security in the future at times of little wind or sunshine. In several rounds of auctions, it will decide support for 5 gigawatts (GW) of regular gas-fired plants, 7 GW of new and modernised gas plants which will be converted to run on hydrogen some years later, 0.5 GW hydrogen-fired plants, and 0.5 GW of long-term storage capacity. The government has now made key details of the upcoming legislation available for stakeholder input until mid-October. It plans to hold the first round of auctions for government support at the beginning of 2025, and plants would then have to be built within six years, writes Tagesspiegel. A capacity mechanism – to be operational from 2028 – is meant to guarantee investments in any additional power plants needed.

“We are making the electricity system fit for a high proportion of renewable energies and also securing ourselves against times when there is little wind and sun,” said economy minister Robert Habeck. The planned law would also send an important signal regarding demand for the ramp-up of a hydrogen economy, and ensure that the coal exit could proceed as planned.

Energy industry association BDEW welcomed that the next step in the legislative process will be taken. “We must make rapid progress here so that the tenders and actual construction of the […] power plants and long-term storage facilities can finally begin,” said BDEW head Kerstin Andreae. This was a precondition for a fast coal exit, the energy industry lobby group added.