Germany delays gas plant decision, 2030 state coal phase-out uncertain

The construction of new gas-fired power plants that are supposed to provide backup capacity for the German electricity system amid the transition to renewable power needs to be put on the new government’s agenda for its first 100 days, after the outgoing government of chancellor Olaf Scholz failed to get the related Power Plant Security Act across the line, the Federation of German Energy and Water Industries (BDEW) has said. “The construction of steerable plant capacity remains extremely critical,” said BDEW head Kerstin Andreae after the economy ministry (BMWK) said the minority government no longer sees a chance to adopt the law before the elections in February. The gas plants that are supposed to later run on green hydrogen are a prerequisite for meeting Germany’s coal phase-out ambitions and for guaranteeing supply security in the country, Andreae added. “These additional steerable power plants are indispensable for balancing the fluctuations from wind and solar power and ensure the power grid’s stability.”

According to newspaper Tagesspiegel, the conservative opposition party Christian Democratic Union (CDU) had signalled that it will not support the Power Plant Security Act in parliament, meaning the minority government of Scholz’s Social Democratic Party (SPD) and the Green Party lacks the numbers needed to get the law passed. “We will now focus on what is possible,” the BMWK said, stressing that the construction of backup plants, estimated to cost about 17 billion euros until 2045, had already been agreed with the European Commission.

Auctions for the new H2-ready gas power plants were supposed to commence in the first half of 2025, with the first plants scheduled to be operational by 2030. “These targets are no longer viable,” Tagesspiegel wrote. As the gas-fired plants are supposed to replace coal power plants that are gradually taken off the grid, the schedule of Germany’s coal phase-out could become affected by the delay. The government had agreed an end to coal-fired power production in western North Rhine-Westphalia (NRW) by 2030, well before the official 2038 deadline. For eastern Germany, the government expects carbon pricing to make coal plant operation economically unviable before the deadline.

Mona Neubaur, NRW’s economy minister from the Green Party, said in a report to the state’s parliament that a federal agreement and the fast implementation of auctions in the Power Plant Security Act were “necessary” for keeping the earlier 2030 deadline for ending coal-fired power production. Public broadcaster WDR reported that the fossil fuel could be needed until at least 2033 in NRW. The state alone could not guarantee the necessary conditions for investors without clarity from the federal government and the EU.