Germany to use tenders to build 25 gigawatts of new gas power plants by 2030 – econ min

Germany will use auctions to ensure new gas power plants are built, which the government sees as necessary to secure supply at times when renewable energy does not deliver enough electricity, said economy minister Robert Habeck. “We will build the power plants we need for the times when wind and sun do not provide enough electricity out to tender,” said the minister at the presentation of a report on the progress of the country’s transition to climate neutrality. In recent years, Germany has used auctions to incentivise and control the expansion of wind and solar energy. Companies compete in these tenders to receive financial support for renewable electricity. “There are already instruments that we can use — and we will create more — so that by 2030 we will have created about 25 gigawatts of additional alternative capacity to coal-fired power plants.” These would be powered by natural gas, and later hydrogen “as soon as possible,” he said. His government would present a “power plant strategy” by the summer.

The government parties had said in their coalition agreement that several new gas power units are necessary to complement renewable electricity production, but Germany’s energy industry has long warned that companies have little incentive to build them. The plants would only be used when renewable energies do not supply enough electricity at peak demand periods, or at times when wind and solar is not sufficient. Keeping gas plants ready would have to be paid, instead of only the kilowatt hours produced, the industry has said.

Overall, things are looking up for Germany’s transformation towards a climate neutral energy system by 2045, as the country has “passed through the valley” regarding the expansion of wind and solar energy, said Habeck. “Solar energy is clearly picking up and I am sure that we can achieve the goals we have set ourselves,” he added. “With onshore wind, we can see a clear trend that it’s not yet at a sufficient level.” The ministry’s report, titled “Renewing prosperity in a climate-neutral way”, says that the government had managed to act quickly in response to the energy crisis fuelled by Russia’s war against Ukraine and succeeded in securing supply, stabilising the economy and relieving the population. The next step is discussing ways to renew Germany’s economic prosperity and protect the climate at the same time. Aside from renewable energy expansion, grid development, ramping up the hydrogen economy and the transition in heating, the government is laying a clear focus on decarbonising industry. As part of an upcoming industrial strategy, it aims to introduce “climate contract” subsidies to help companies switch to less climate-damaging ways of production, and to help industry get better direct access to cheap renewable electricity.