Auctions for new gas-fired power plants in Germany, reports Clean Energy Wire, should be held before the end of this year, according to economy and energy minister Katherina Reiche. While the coalition government parties have agreed to install up to 20 GW of new gas plant capacity, this will not be achieved ‘in one go,’ Reiche said, adding that a ‘first batch’ of at least 5 GW should be put up for auction before the start of 2026.
The new plants are intended to provide backup capacity for renewable power during the country’s coal phase-out. Reiche told a utility conference organised by industry lobby group BDEW that the government is in ongoing talks with the European Commission regarding state support, as the EU requires ‘comprehensive justifications’ for the use of public money. She said that the Commission would likely ask Germany to introduce a capacity mechanism by 2028, as part of its plan to make sure the lights don’t go out during the energy transition before approving the auctions.
“We need flexibility, storage, and controllable capacity,” the minister said with a view to the next steps of Germany’s energy transition. In its coalition treaty, the government parties agreed a monitoring report to ensure greater cost efficiency and long-term supply security, by better gauging expected electricity demand and co-ordinating grid expansion with the build out of renewables. Industry group BDEW said it expects the report to be completed before September.
Reiche said that a small group of analysts rather than a broad commission would conduct the monitoring to get fast results. “Germany has to change course,” said the minister, pointing to the unprecedented three-year period of zero or minimum economic growth. “Energy policy is much more than climate policy,” she said, arguing that aspects such as competitiveness and social justice require more consideration.
BDEW welcomed the minister’s aims for speedy gas plant auctions, but warned that the provision to later operate these same plants with hydrogen should not be forgotten. “Nobody is going to build a gas plant that is no longer economically viable in 20 years’ time,” said BDEW head Kerstin Andreae. She stressed that quick auctions could only be a first step, and that preparations for introducing a capacity market or mechanism had to follow suit.
Andreae said that the BDEW generally supported the idea to review the status quo but warned that this must not end up slowing the renewables rollout. “Price-reducing effects can only set in once there is a high share of renewables,” meaning the build out should not be throttled.
