BDEW welcomes the German government's agreement on the power plant strategy

Kerstin Andreae, Chairwoman of the Executive Board and member of the Executive Committee
Source: ©Thomas Imo Photothek/BDEW

The German government published an agreement on the power plant strategy on February 5. Kerstin Andreae, Chairwoman of the BDEW Executive Board, comments:

"It is hugely important that the German government has finally reached a decision on the power plant strategy. This is a crucial building block for a successful path towards climate neutrality while at the same time maintaining supply and system security. The expansion of new gas-fired power plants is the basis for phasing out coal. At the same time, hydrogen-capable gas-fired power plants are important customers and therefore a relevant building block for planning security within the hydrogen core network. The political agreement must now be followed by a concrete legislative proposal in the near future so that the first tender can take place this year.

Power plant
Source: pixabay

For cost reasons, it is right to start with the tendering of new hydrogen-capable power plants as part of the power plant strategy. The energy sector had proposed this as a contribution to cost efficiency. More expensive hybrid and sprinter power plants have been correctly postponed in the strategy. The dovetailing with a capacity mechanism demanded by the energy sector is also a necessary building block for investment security. From BDEW's perspective, the role of combined heat and power (CHP) must also be considered as part of power plant planning. CHP also makes an important contribution to security of supply and to safeguarding the heat transition. In addition, the Combined Heat and Power Act must be amended with regard to an increased decarbonization effect with hydrogen. The fact that the double burden of levies and charges on electricity for storage and electrolysis is to be eliminated is pleasing and addresses another demand from the industry.

Clarity must now be created for investors as a matter of urgency.The question of financing must be clarified just as quickly as the security under state aid law and the question of location.In addition, the specific tendering periods for the power plants are still unclear.According to today's agreement, a capacity mechanism should be ready to start in 2028.The interaction between the tenders as part of the power plant strategy and the planned and necessary capacity mechanism will also determine when it will be possible to phase out coal-fired power generation.

We will take a very close look at the individual planned regulations of the power plant strategy and evaluate them in detail. It is important that the energy sector is given sufficient time for the necessary practical check."