(Berlin / Germany) – The German government has agreed on its power plant strategy. In anticipation of a comprehensive capacity mechanism, a total of 12,5 gigawatts (GW) of power plant capacity and 500 megawatts of long-term storage capacity will be put out to tender, according to the Federal Ministry for Economic Affairs and Energy.
2-pillar strategy
According to the information, implementation is planned within the framework of a two-pillar system:
- As a first pillar, five gigawatts of new H2-ready gas power plants and two gigawatts of H2-ready modernizations would be put out to tender "in the near future". These would have to be converted to green or blue hydrogen as fuel from the eighth year of their commissioning or modernization. In addition, there are 500 megawatts of power plants known as "hydrogen sprinters" that run on hydrogen immediately, as well as long-term storage facilities with a capacity of 500 megawatts. Investment costs (capital expenditures, Capex) would be subsidized, and from the switch to hydrogen for 800 full-time hours per year, the difference in costs between hydrogen and natural gas (operational expenditures, Opex).
- In a second pillar, five gigawatts of new gas-fired power plants would be put out to tender, which would make a contribution to security of supply, particularly during periods of low energy, i.e. when neither wind nor solar energy feeds significant amounts of electricity into the grid. These are considered to be a "bridge to a comprehensive, technology-open capacity mechanism" that is to be operational from 2028, according to the ministry.
The Federal Ministry for Economic Affairs and Climate Action (BMWK) and the European Commission already held talks in August 2023 regarding the framework for promoting hydrogen power plant projects (as we reported ). Federal Minister for Economic Affairs Robert Habeck stated that the Power Plant Security Act will accelerate decarbonization of the power plant fleet "because we have agreed on a concrete hydrogen transition pathway for some of the power plants." Furthermore, the development of new hydrogen technologies will be promoted, and the phase-out of coal will be secured through the construction of new power plants.
6-week association consultation
Consultations are now planned over the next six weeks. This will be followed by "final approval under state aid law" of the project. The first call for tenders is scheduled for the end of 2024 / beginning of 2025. At the same time, the BMWK will present a paper with the options for the design of the capacity mechanism with key advantages and disadvantages.
Photo above
In the summer of last year, RWE Generation SE announced plans to build a hydrogen-capable gas and steam power plant at the Weisweiler site in North Rhine-Westphalia if "economic operation is made possible by suitable framework conditions". The existing lignite-fired power plant will be taken off the grid in 2029. © RWE
