As of: February 6, 2024, 6:58 p.m
By: Matthias Schneider
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Hydrogen-capable gas power plants should be the first step in the power plant strategy.
After that, there should be a market that is open to technology, but how is still completely open.
© Jan Woitas/dpa
The federal government has agreed on the long-awaited power plant strategy.
It is intended to answer the question of how Germany supplies itself without coal in times without wind and sun.
Why is a power plant strategy needed?
Today, gas and coal-fired power plants run a relatively large number of hours a year and can finance themselves through the electricity they sell.
However, electricity from wind and sun has no fuel costs and can therefore always force controllable power plants out of the market.
“Due to the expansion of electricity generation from renewable sources, the construction of controllable power plants on the free market has become increasingly economically unattractive,” explains Detlef Fischer, General Manager of the Association of the Bavarian Energy Industry.
Because controllable power plants are still needed in hours with little wind and sun, the government wants to pay the operators to keep the - future climate-neutral - generation capacities available.
What is the strategy?
The federal government wants to create a technology-open capacity market by 2028.
As was previously the case, you don't just pay for the electricity supplied, but also for the available power.
The Research Center for the Energy Industry (FfE) estimates that a climate-neutral Germany needs around 43 gigawatts (GW) of controllable power plant output.
An improvement: Today there are around 36 gigawatts of coal and 32 gigawatts of gas power on the grid.
The federal government wants to tender ten gigawatts of H2-ready gas power plants as quickly as possible to phase out coal.
These are conventional gas power plants that can be converted to hydrogen from 2035.
The companies Uniper, Steag and RWE have already signaled interest.
But first the EU must agree and the public must be heard.
Which technologies are used?
The hydrogen-capable gas power plants that have been approved only cover part of the required back-up capacity.
In addition, the Ministry of Economic Affairs speaks of a “technology-open” strategy.
The providers of different technologies should compete for capacity in order to reduce prices.
There is also talk of research funding for nuclear fusion.
However, this is unlikely to be ready for the market in this half of the century.
The biogas industry is in the starting blocks for this: “Many biomass power plants now run 6,000 hours a year.
But that will no longer be needed in the future: That's why in the long term, i.e. around 2040, it will make sense to burn the same amount of biogas for 1,250 hours - with many times the output," explains Horst Seide, President of the Biogas Association.
Because the gaps in volatile generation require highly flexible power plants.
There is great interest: “Many biogas plant operators also want to become part of the capacity market.” The capture of CO₂ from fossil gas power plants should also be considered in the future
How much does the strategy cost?
From the beginning, the original plans envisaged pure hydrogen power plants, which would have been significantly more expensive.
Because natural gas is now being used to generate electricity for longer, the costs are lower.
The state initially wants to bear the costs: “The funding could first be paid from the climate and transformation funds so that it can happen quickly,” explains Andreas Löschel, energy economist at the Ruhr University Bochum.
“In the long term, the capacity market is likely to be financed from the electricity market and ultimately passed on to electricity customers.”
Today it is difficult to say how expensive this is.
FfE boss Serafin von Roon estimates the costs for a pure hydrogen power plant park by applying the usual capital interest rate for network operators to the power plants.
“If we apply this to the kilowatt hours consumed, according to our calculations this means a surcharge of 0.28 cents per kilowatt hour.
This would mean that the power plant park would be completely financed.”
How good is the strategy?
It's still difficult to judge, says Detlef Fischer: "The most important points are not yet public: We don't know who will pay how much for the power plants in the end." Important decisions are also still pending for Andreas Löschel: "It's going to be strong “It depends on the details of how well this market works,” says the scientist.
“The gas power plants that have been decided are certainly a sensible start, but now we should take a long-term view and take dynamics into account.” For the market design, it is now important to view everything as a system: “For example, we also have to increase demand flexibility and storage in the Weaving in mechanism”.
You can't plan this on the drawing board: “We don't yet know how many gas power plants will ultimately be needed.
“That depends, among other things, on how quickly we gain flexibility in industry, through electric cars and heat pumps.”