Germany is taking a significant step towards energy transition by announcing tenders in 2024 for a total capacity of 10 GW of new gas-fired power plants.
These plants will be designed to transition to clean hydrogen, supporting the country’s strategy of moving away from fossil fuels. This initiative is part of the government’s efforts to ensure a stable and sustainable electricity supply.
Context of the Energy Transition
German Economy Minister Robert Habeck has indicated that the tenders could be finalized before the summer break.
The new gas power plants will play a crucial role in supplementing intermittent renewable energy sources until a fully green electricity supply is feasible.
The subsidies promised by Berlin are essential as these plants will only operate when weather-dependent renewable supply is insufficient, making it impossible to recover investment costs through their operations alone.
Energy Companies’ Perspectives
Several companies have already expressed interest in these projects. Among them, IQONY, a subsidiary of Steag, plans to build hydrogen-ready plants in Bergkamen, Bexbach, and Querschied-Weiher, subject to the conditions of the government tenders.
In March, IQONY emphasized the need for swift action from Berlin, as it cannot continue to operate coal-fired power plants indefinitely.
Michael Lewis, CEO of Uniper, acknowledged the enormous potential of this plan during a conference call in February, calling for rapid and detailed implementation. Uniper could start with 1-2 GW if the conditions set by the government are acceptable.
However, he believes that 10 GW is not enough for an early exit from coal, requiring instead between 20 and 25 GW of new capacity.
EnBW, another regional player, has also expressed interest in these projects in southwestern Germany. Andreas Schell, its former CEO, confirmed this ambition in January, and his successor, Georg Stamatelopoulos, reaffirmed this commitment while emphasizing the need for further details in the legislation.
Regional Projects and Challenges
LEAG, operating in eastern Germany and owned by the Czech energy group EPH, plans gas-fired power plants at four sites, totaling at least 3 GW of capacity, including an 870 MW plant in Schwarze Pumpe.
RWE has also expressed its ability to build 3 GW under the government tenders. Markus Krebber, CEO of RWE, warned that while the company is ready, Berlin’s strategy still lacks precise details.
Statkraft, the German subsidiary of the Norwegian company, has stated that it will study the government plan, focusing mainly on converting its existing gas-fired power plants to hydrogen. KMW, a municipal generator in the Rhine-Main region, plans to build a 250 MW hydrogen-ready power plant in Wiesbaden, with a district heating capacity of 100 MW, conditional on the government strategy.
These projects demonstrate Germany’s determination to move towards a sustainable energy transition while ensuring the stability of its electricity supply.
The challenges remain numerous, but the mobilization of energy players and government subsidies offer a promising framework for achieving these ambitious goals.