Germany must not create overcapacity of gas power plants – renewables industry

Germany must avoid building too many new gas power plants in the country’s efforts to secure electricity supply at times of little wind or sunshine, said renewables association BEE during an online event on government plans for new “hydrogen-ready” gas capacity. Instead, the government should bet on decentralised flexible renewables solutions, such as bioenergy, hydro power and electricity storage facilities. If used to their full potential, such options mean that Germany would need almost no new gas power plants, BEE had already said in a report last year.

The government coalition (much like previous governments) is betting on natural gas – and later hydrogen – power plants to produce electricity to fill the gap when there is not enough renewable power. The economy ministry (BMWK) has said that it will present a “power plant strategy” by summer 2023, to ensure that a future system can deliver enough electricity when there is to little wind or sunshine. The ministry said that an additional and refurbished 17-25 gigawatts of hydrogen-ready gas power units are necessary by 2030. The plants would only be used when renewable energy cannot supply enough electricity at peak demand periods, or at times when wind and solar is not sufficient. The foreseeable low utilisation rates are among the reasons why there is little market incentive to build new gas plants at the moment. Thus, the government would introduce an auction system for financial support to ensure that the power plants are built, said minister Robert Habeck earlier this year. The industry has long called for a system in which keeping gas plants at the ready is paid (capacity market) – not only the kilowatt hour of electricity that is actually produced (energy-only market).

Phasing out coal, Germany will need about 20 gigawatt of electricity generation which can be guaranteed at any time by 2030, said Dirk Biermann, Chief Markets & System Operations Officer at transmission system operator 50 Hertz. “It has to be guaranteed capacity and it has to be available by 2030, so I understand that the government aims to decide quickly.” A lack of time is indeed a key hurdle to make the government plans a reality, said Matthias Dümpelmann, managing director of 8KU, a group of several large municipal utilities. “We normally need six to seven years to set such facilities up,” he said.