News
04 Sep 2025, 11:41
Carolina Kyllmann
|
Germany

Germany’s delay in making demand flexible increases need for new power plants – energy agency

A rapid expansion of renewables and power grids, as well as efforts to better adapt demand to fluctuating power generation, are essential to securing a stable electricity supply in Germany, the country's Federal Network Agency said. Delays would increase the need for new power plants that are independent of the weather to keep the lights on through 2035. In response, the energy industry stressed the importance of staying on track with the energy transition and called for the swift introduction of a capacity market and auctions for new power plants.

A delay in making electricity consumption more flexible - for example by shifting to heat pumps, electric cars, and electrolysers - would significantly increase the need for new generation capacity that does not depend on the weather such as gas-fired power plants, the Federal Network Agency (BNetzA) said in its latest security of supply monitoring report.

If consumers fail to shift demand to times of abundant renewables – for example, using more power during sunny hours or less when wind is scarce – or if renewables expansion falls behind, Germany could be forced to build up to 35.5 gigawatts (GW) of additional capacity by 2035 to ensure reliable supply, the agency found.

However, even in a scenario where energy transition targets such as renewables and grid expansion are met, BNetzA foresees a need to add up to 22.4 GW of so-called controllable capacities over the next decade.

“The power supply will remain secure in the future provided that additional controllable capacities are built,” said BNetzA head Klaus Müller.

Flexible consumers make significant contribution to security of supply

The BNetzA compared the two scenarios and then assessed what resources the electricity market would need to guarantee a secure supply at all times until 2035. 

“Tapping into the flexibility potential of new consumers such as heat pumps, storage systems, electric cars, electrolysers, and power-to-gas plants, as well as industrial load flexibility, makes a significant contribution to security of supply,” the agency said.

Smart meters are a perquisite for flexible electricity consumption, as they enable end users to react to higher or lower prices in the electricity market. However, the rollout rate in Germany is around three percent, according to the Association of Energy Market Innovators (bne). “Hundreds of network operators have not yet installed a single smart metering system,” the bne wrote. “The report clearly shows that this is now coming back to haunt us.”

Solar industry association BSW-Solar further criticised that the report used outdated assumptions and numbers for the potential of battery storage. “A security of supply report that systematically ignores large-scale storage facilities does not provide a viable basis for political decisions on power plant expansion or capacity markets,” said BSW-Solar head Carsten Körnig.

Power plants are a prerequisite for the timely coal phase-out

As Germany fundamentally changes how it generates electricity by expanding wind and solar power capacity, which are intermittent by nature, it needs to ensure consumption and backups develop alongside. The government currently plans to install up to 20 GW of new gas plant capacity, with at least 5 GW put up for auction around the start of 2026.

“We already have strained grid situations on certain days and in certain weather conditions,” said economy minister Katherina Reiche presenting the report. “We need to take action and build new controllable capacities, in particular new gas-fired power plants.”

The new plants are intended to provide backup capacity for renewable power amid the country’s coal phase-out. Coal power plants, which can relatively easily be ramped up or down to meet demand, will steadily leave Germany’s electricity market over the next decade. This means that new controllable capacity – in the form of (hydrogen-ready) gas power plants, pumped hydropower storage plants and large-scale battery storage – will be needed to cover electricity demand for limited periods.

“As important as the further ramp-up of renewables and storage facilities is, there is an equally urgent need for action in the construction of gas-fired power stations and Combined Heat and Power plants that can flexibly step in during so-called dark doldrums,” said local utilities association VKU.

“Politicians must finally act: the relevant tenders for gas-fired power plants, also hydrogen-ready gas-fired power plants, must be issued by the beginning of 2026 at the latest so that the plants are ready in good time,” said Kerstin Andreae, head of energy industry association BDEW, in reaction to the report. “In addition, we need a technology-neutral capacity market that incentivises the construction of further capacity.”

A capacity market can strengthen electricity supply security by providing sufficient revenue certainty and a viable business case for resources critical to system security. The BNetzA report also highlighted this a needed measure for a reliable electricity supply in the medium term.

Support our work

If you enjoyed reading this article, please consider donating to CLEW. Our journalism is free to all, and you can help to keep it that way.

All texts created by the Clean Energy Wire are available under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)” . They can be copied, shared and made publicly accessible by users so long as they give appropriate credit, provide a link to the license, and indicate if changes were made.
« previous news next news »

Ask CLEW

Sven Egenter

Researching a story? Drop CLEW a line or give us a call for background material and contacts.

Get support

+49 30 62858 497

Journalism for the energy transition

Get our Newsletter
Join our Network
Find an interviewee