Berlin By 2030, dozens of new gas-fired power plants will have to go into operation. They are to be used as back-up capacities when wind and sun are not delivering any electricity. But who is to build these power plants is unclear.
The Federal Ministry of Economics is working on a power plant strategy that is intended to encourage new construction, but no details are known so far. The industry insists on transparency and calls for haste.
The transmission system operator TransnetBW and the power plant operators Steag and GKM have now drawn up their own proposal: the companies are in favor of introducing a new construction advance.
Specifically, they demand that the payments that are already being made for power plant deployments and that serve to stabilize the grid (“redispatch”) should be guaranteed at the time of investing in a new power plant. These payments could then be included in the investment calculation of a power plant operator without any risk deduction.
The highlight: The investment incentives would arise exactly where potential investors expect their power plants to make a major contribution to grid stabilization. This would stimulate the construction of new power plants in precisely those areas where grid expansion is lagging behind the targets, and new power plants are therefore indispensable for grid stabilization anyway and are likely to be urgently needed as backup in the future. This is particularly the case in western and southwestern Germany.
“The systems are built regionally where they are needed to meet demand and stabilize the grid,” says a concept that the three companies had made by the consulting firm Enervis, which specializes in energy issues.
Risk to security of supply feared
The initiators push the pace. “The necessary decisions must be made now so that from 2030 onwards the largest possible number of plants with available capacity can go into operation – time is ticking,” said Holger Becker, commercial director at Grosskraftwerk Mannheim (GKM). GKM’s shareholders are RWE, EnBW and MVV.
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Andreas Reichel, head of the power plant operator Steag, argues that power plant operators need investment security and “a market model that not only pays for electricity generation, but also for the capacity provided”. Otherwise the security of supply is at risk. Reichel calls the core of the problem. It is undisputed that new gas-fired power plants have to be built because otherwise the guaranteed power plant capacity in Germany would be insufficient.
Since the phase-out of nuclear power has already been completed and the phase-out of coal is to follow by 2030, gas-fired power plants with an output of up to 25 gigawatts must also be connected to the grid by then. This corresponds to around 50 large power plant units.
However, since these power plants tend to be used less and less to meet the demand for electricity as the share of renewable energies in electricity generation increases, potential investors are holding back. They fear that their investment will not pay off.
Position of the Ministry of Economic Affairs unclear
The money that the power plant operators are already earning with network stabilization measures is now intended to serve as a bridge to profitability by being paid out as an advance. So far, the payment has been made subsequently and is uncertain at the time of the investment.
Werner Götz, head of the transmission system operator TransnetBW, argues that it is “a short-term, very cost-efficient option for a future secure and stable energy supply”. The system costs did not increase overall.
How the Ministry of Economics stands on such considerations is unclear. Minister Robert Habeck (Greens) has repeatedly said that he considers incentives for power plant construction to be indispensable. However, details are not known.
When asked, the ministry said it was working on a power plant strategy that would include instruments “that should lead to investments in new buildings and modernization of 25 gigawatts of controllable capacity in the short to medium term”. Talks are being held with the EU Commission on state aid issues and it is assumed that the first tenders will be announced by the end of the year.
Mechanical engineers want a quick solution
Resentment is growing in the industry because time is of the essence. Many stakeholders fear that the ministry will develop complex systems that will prove impractical.
“Companies need clarity as soon as possible about exactly what the tenders will look like as part of the power plant strategy. It is also important that approval procedures are accelerated and characterized by an attitude towards success in the approval authorities,” said Kerstin Andreae, General Manager of the Federal Association of Energy and Water Industries (BDEW). When expanding additional controllable power, particular urgency is required if we want to achieve the coal phase-out by 2030, said Andrae. “Project implementation times in power plant construction are between four and seven years,” said the BDEW boss.
Impatience is also growing at the Association of Machine and Plant Builders (VDMA). “Energy plant construction now needs a clear and reliable perspective quickly in order to provide long-term production capacities. Approaches that are as close to the market as possible are expedient for this,” said Dennis Rendschmidt, Managing Director of VDMA Power Systems. “Since the first tenders are to take place this year, there needs to be a dialogue with the industry about the appropriate framework conditions for investments in security of supply,” demands Rendschmidt.
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