“The agreement with the European Commission is a first step in the right direction, but the announced 12 gigawatts of controllable capacity are not sufficient.”

The EU Commission and the German federal government have today reached a fundamental agreement on key points of the power plant strategy. With this, the Commission paves the way for the tendering of twelve gigawatts of controllable capacities. Of this, ten gigawatts are to be tendered as hydrogen-ready gas-fired power plants and two gigawatts as technology-neutral. Dr. Timm Kehler, CEO of the Association of the Gas and Hydrogen Industry, sees the approval as a first proper step but points to a still-existing supply gap and highlights the role of hydrogen-ready gas-fired power plants in the market ramp-up of hydrogen.

“We are very relieved about the agreement between the federal government and the EU Commission on the power plant strategy. Without controllable power plants, electricity in Germany will become scarcer – and thus more expensive. But the announced twelve gigawatts of newly tendered power plant capacity are by far not sufficient. After the phase-out of nuclear energy and coal-fired power generation, Germany will need significantly more secured capacity by 2035, serving as backup for wind and solar energy and ensuring supply during periods of low renewable output. In its latest supply security monitoring, the Federal Network Agency clearly identifies the capacity gap: electricity supply in Germany can only be guaranteed if at least 22 GW of controllable capacity is installed by 2035.

We expressly welcome that all new plants must be hydrogen-ready from the start. This creates demand for hydrogen and sends a clear signal for the hydrogen backbone network. We also see the additional measures announced by the federal government to encourage an early switch to hydrogen as the right and important step.

We have also long advocated the technology-neutral, comprehensive capacity market included in the fundamental agreement: only a capacity market reliably rewards available capacity. It provides investment security, prevents expensive scarcity pricing, and helps stabilize electricity prices."