Germany plans to hold first gas power plant tender by September, cut small solar support

Germany’s economy ministry plans to hold two rounds of auctions for backup gas-fired power plants before the end of the year, with the first round pencilled in for September, business daily Handelsblatt reported. The ministry also provisionally proposed reforms to renewable energy support, as well as new rules for grid connections which would limit access priority for renewables, the report said.

The proposals will now be discussed among ministries and must be agreed upon with the governing coalition partner, the Social Democrats (SPD). There are likely to be changes especially around proposals in the renewable support legislation and the grid connection package, as the SPD has previously voiced disagreement over them, Frankfurter Allgemeine Zeitung reported.

Germany needs to build backup power capacity for times of little wind and sunshine, with gas-fired power plants seen as crucial to enable the coal phase-out. The process, however, has repeatedly been delayed. The economy ministry has now proposed to hold a first round of tenders for nine gigawatts (GW) of “long-term capacities” in September and a second in December, according to the Electricity Supply Security and Capacity Act seen by Handelsblatt. “The rationale given is that operators require a particularly long lead time here due to the lengthy planning and construction periods,” the business daily wrote. “The subsequent tenders will also be open to existing plants and other technologies.”

Local utility association VKU said that companies were willing to bid in the upcoming auctions, but required fair conditions. The economy ministry plans “risk creating artificial barriers to participation for smaller and local authority-led projects,” VKU head Ingbert Liebing said. He criticised “overly detailed regulations and requirements.”

Germany’s economy ministry proposed to change legislation that currently grants renewable power installations privileged access to the electricity grid, in a bid to better align renewable power projects with the grid’s capacity to transport the electricity they produce. An initial leaked draft was heavily criticised by the renewables industry, which argued it posed a risk to the energy transition. The ministry had also proposed to end guaranteed remuneration for roof-mounted solar panels, arguing that the systems have already reached market maturity and no longer require state support.

Both proposals are part of wider government plans to reform Germany’s renewable energy support framework, and follow other efforts by the economy ministry to rein in the costs associated with the energy transition.