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A pump hall for district heating in a thermal power plant: The new gas power plants are supposed to step in when there is no wind and no sun is shining.
© Jan Woitas/dpa
The sun doesn't shine, the wind doesn't blow: in the future, gas power plants will ensure security of supply, which will later be operated with hydrogen.
What else is planned.
Berlin - The federal government has agreed on a restructuring of the electricity supply in Germany.
New gas power plants, which will later be operated with hydrogen, will in future be available as “backups” to secure electricity generation from renewable energies from wind and sun - at the lowest possible cost for electricity customers.
After long negotiations, Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) agreed on a power plant strategy, as the federal government announced on Monday in Berlin.
There should be a political agreement on the future design of the electricity market by summer at the latest.
Important questions still remain unanswered.
Goals of the energy transition
The energy industry has been waiting for a long time for a strategy for new gas-fired power plants, which will take several years to build.
Several companies are in the starting blocks.
The new power plants are intended to replace climate-damaging coal-fired power plants and step in when there is no wind and no sun to cover electricity demand.
However, energy companies are reluctant to invest because the new power plants are not easily profitable.
The federal government wants to massively expand renewable systems, primarily from wind and solar, by 2030.
This plays a central role in achieving climate goals.
The goal is: 80 percent of electricity should come from renewable energy sources by 2030.
Currently it is just over half.
The electricity system should be largely climate-neutral by 2035.
Increasing electrification plays an important role in many areas, for example in transport.
Germany should achieve greenhouse gas neutrality by 2045.
Then there should be a balance between greenhouse gas emissions and their reduction.
Key points of the agreement
The coalition had been negotiating a new power plant strategy for a long time.
The FDP primarily insisted on low costs.
According to the agreement, the strategy should now create the framework for investments in “modern, highly flexible and climate-friendly” power plants that will be able to run on hydrogen in the future.
In the short term, new power plant capacities amounting to 10 gigawatts of hydrogen-capable gas power plants will be put out to tender.
According to the federal government, it will be determined in 2032 when the power plants should be completely converted to hydrogen between 2035 and 2040.
A hydrogen core network should also be ready by 2032 - a motorway network, so to speak, for transporting hydrogen, most of which has to be imported.
The new gas power plants should be located at “system-serving” locations.
This means that the systems could be built where they have the best effect on security of supply.
The head of the transmission system operator 50Hertz, Stefan Kapferer, said that it depends on the right locations for new backup power plants.
The regionalization of power plants is an important contribution to getting system costs under control when it comes to electricity prices.
This is the only way to save costs that arise from network expansion and interventions in the generation output of electricity producers.
These costs are financed by electricity customers through network fees.
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In addition to hydrogen-capable power plants, long-term storage and nuclear fusion should also be promoted, for example.
“Openness to technology” was important to the FDP.
According to the Ministry of Research, institutes are already receiving funding for fusion research.
The government's compromise also includes the fact that CO2 capture and storage for gas power plants should be taken up as part of a new strategy.
But that is controversial.
An alliance of environmental associations criticized the federal government for opening “Pandora’s Box”.
The creation of secured performance as part of the power plant strategy must be consistently geared towards “green” hydrogen - this is produced on the basis of renewable energies.
The announced inclusion of “natural gas CCS” in the strategy is a frontal attack on the energy transition and a fossil wrong path.
The Carbon Capture and Storage (CCS) technology describes the capture of CO2 in industrial processes, for example, in order to then press the CO2 into deep layers of rock.
Strategy is intended to secure an earlier coal phase-out
Habeck called the power plant strategy, which now has to be discussed with the EU Commission, an important building block on the way to a climate-neutral electricity system.
“We are setting the framework for the conversion and expansion of climate-neutral power plants, while fossil power plants are increasingly being phased out of the market.
In this way, we are making our electricity system fit for the era of renewables and securing the early phase-out of coal.” Kerstin Andreae, general manager of the Federal Association of Energy and Water Industries, said that the construction of new gas power plants is the basis for the phase-out of coal.
The traffic light coalition has also agreed to “ideally” bring forward the coal phase-out to 2030 in order to prevent the emission of climate-damaging carbon dioxide.
So far, an eight-year phase-out has only been decided in the Rhenish district.
It is controversial in the areas of East Germany.
What the funding should look like and what it costs
Investment and operating costs should be supported for hydrogen-capable gas power plants.
Hydrogen is currently much more expensive than natural gas.
Not only hydrogen from renewable energies should be promoted, but also hydrogen from natural gas.
Government circles said they were expecting costs of around 15 to 20 billion by the early 1940s.
This is “absolutely possible” through the Climate and Transformation Fund (KTF).
The KTF is a special federal fund from which transformation projects such as heating replacement are financed.
Following a ruling by the Federal Constitutional Court, the funds in the fund have become scarcer.
Habeck's original plans would have been more expensive.
The government now wants to essentially forgo funding for new, pure hydrogen power plants.
Power plants that run exclusively on hydrogen should only be funded up to 500 megawatts as part of energy research.
According to dpa information, the costs are also lower due to the use not only of hydrogen from renewable energies, but also from natural gas.
FDP parliamentary group deputy Lukas Köhler said that it was ensured that new gas power plants could be financed quickly without the costs going through the roof.
A paper from the Ministry of Finance spoke of a “cost-effective” agreement for taxpayers and electricity customers.
New mechanism is to come
The construction of the new hydrogen-capable gas power plants is intended to be a temporary solution.
From 2028 at the latest, a capacity mechanism that should be “technology-neutral” should apply.
Such a capacity market is a change of course.
Brussels must agree to this.
Specifically, it is about a mechanism with which power plant operators are compensated for ensuring that their power plants are ready for use at all times and can step in when needed - so that they can earn money even when they are not producing electricity.
The Linden thermal power plant in Lower Saxony: The federal government has agreed on a strategy for building new hydrogen-capable gas power plants.
© Julian Stratenschulte/dpa
But what exactly this capacity mechanism should look like and how the system should be financed remains unclear.
The federal government wants to have the details of this mechanism determined by summer 2024 at the latest.
A paper from the Ministry of Finance states that the most efficient path should be chosen from power plants with different technologies, different types of storage and targeted reductions in consumption.
VKU general manager Ingbert Liebing said the success of the plans will largely depend on their concrete implementation.
“The key points must now be quickly followed by a practical strategy.” BDEW Managing Director Andreae said that clarity for investors urgently needs to be created.
dpa