German government wants to promote gas-fired power plants - energy companies welcome plans
According to reports from last Sunday evening, the German federal government intends to implement its strategy under a new power plant security law. Firstly, five Gigawatt of gas power plants are to be tendered, which must be fully operated with hydrogen from the eighth year of commissioning onwards.
Additionally, two Gigawatt of existing gas power plants are planned to be comprehensively modernized, allowing them to be fully converted to hydrogen at a later stage. Furthermore, hydrogen power plants with a capacity of 500 Megawatt are planned, which can run on hydrogen from the outset. The document released now also mentions penalties and repayment obligations for companies that do not convert within eight years. Green and blue hydrogen are to be promoted.
Moreover, the Economy Ministry, led by Green Party politician Robert Habeck, intends to tender five Gigawatt of gas power plants to secure the supply in dark periods. These power plants will not be hydrogen-ready tendered. However, from circles within the Economy Ministry, it was heard that the power plants will have to be open to the new technology in any case, in order to achieve climate neutrality by 2045.
The costs of the funding were not clear from the paper. They depend on many factors, especially the results of the tenders and the development of hydrogen prices. A part of the measures is to be financed from the Climate and Transformation Fund. The funding for the second five Gigawatt-sized gas power plants, however, is to come from a levy.
Uniper evaluated the federal government's agreement as a "significant step forward". It provides "the energy industry with the necessary planning security and gives us the opportunity to drive a sustainable and future-oriented energy landscape forward", said Michael Lewis, CEO of Uniper, to the "Rheinische Post".
The planned funding is important, "so that the necessary H2-ready gas power plants can be built in the tight time frame up to 2030 to then replace coal power plants", it was also stated from RWE's side towards the newspaper. The company is now waiting to see how exactly the tenders will be designed.
The German Energy and Water Industry Association (BDEW) also sees the project positively. "The power plant security law is a decisive building block for a climate-neutral energy supply", explained Kerstin Andreae, Managing Director of the BDEW-Executive Board. The law must now be implemented swiftly.
In the next step, according to reports from the Economy Ministry, the public will be consulted, for which six weeks are planned. At the same time, the ministry is working on the legal implementation of the planned law.
- Robert Habeck, the Green Party politician leading the Federal Ministry of Economics, plans to tender five Gigawatt of gas power plants for supply security during dark periods.
- Under the new power plant security law, the first five Gigawatt of gas power plants must be fully operational with hydrogen from the eighth year of commissioning.
- The Federal Government's strategy includes modernizing two Gigawatt of existing gas power plants for future hydrogen conversion.
- Penalties and repayment obligations are proposed for energy companies that fail to convert to hydrogen within eight years, as outlined in the recent document.
- The Federal Ministry of Economics also plans to construct hydrogen power plants with a capacity of 500 Megawatt, capable of running on hydrogen from the outset.
- The Climate and Transformation Fund will partly finance some of the measures, while a levy will cover the funding for the second five Gigawatt-sized gas power plants.
- According to reports, the Economy Ministry will consult the public on the implementation of the power plant security law, and aim to complete this process within six weeks.
