Germany’s new gas plants face further delays due to unresolved auction design questions
Der Spiegel
The highly-anticipated auctions for new backup gas-fired power plants in Germany could be delayed further, as the country has not yet submitted a related draft law to the European Commission, news magazine Der Spiegel reported.
The EU in January agreed in principle to state aid for the gas plants that are intended to provide backup capacity during the country’s energy transition. Energy industry stakeholders say the auctions that the economy ministry initially had aimed to hold in late 2025 are a prerequisite for their further planning, including for the closure of Germany’s remaining coal-fired power plants.
Two months after Brussels gave its green light, economy minister Katherina Reiche has not finalised the regulatory framework for what the auctions covering 12 gigawatts (GW) of "controllable capacity" will look like. Technical questions include legal safeguards to ensure that at least part of the auctioned plant capacity is built to later be converted to run on hydrogen. According to the economy ministry, the auction could therefore be delayed until summer, the news magazine said.
The auctions were first proposed under the conservative Christian Democrat (CDU) minister’s predecessor, Robert Habeck from the Green Party, but have been delayed several times. Reasons include the previous government’s early end, as well as an unsuccessful bid by Reiche to expand the auctioned capacity to 20 GW.
The delays are raising concerns about Germany’s coal exit timeline, particularly in the western coal region, where a phase-out was planned for 2030. Energy industry representatives previously have warned that it would take at least five years to connect new gas plant to the grid after the auctions. An international law firm in autumn last year already said it expects the auction to be delayed until the end of 2026. The business case for the new gas plants can only be guaranteed with additional state support, because they would only run seldomly, when wind and solar power output are insufficient.
The environment ministry, led by Social Democrat (SPD) Carsten Schneider, said that it is awaiting a draft from the economy ministry to continue the government’s internal coordination, Spiegel reported.
An analysis by research institute Fraunhofer IEG, meanwhile, found that a “South bonus” proposed by the economy ministry to incentivise more construction of new capacity in southern Germany could distort the gas plants’ efficient distribution. “Existing and planned support mechanisms must be better coordinated. Otherwise, there is a risk that the construction of new capacity is obstructed in the North, which is also important for the grid from a technical perspective,” said Fraunhofer researcher Thorsten Spillmann. The auction design therefore must carefully balance incentives to avoid inefficiencies, the institute said.