ADVERTISEMENT

Commodities

Germany Gives Up Plans for Major Expansion of Gas Plants

Oresunds vrket. malm, Sweden (Carsten Snejbjerg/Bloomberg)

(Bloomberg) -- Germany has dropped plans for a major expansion of gas-fired power plants because of an absence of political support, the Economy Ministry said.

A final draft law on the expansion plans, that had been negotiated with the EU Commission, could not be voted in parliament after Olaf Scholz’ three-party coalition collapsed, a ministry spokesperson said, confirming an earlier report from the German press agency DPA.

Europe’s largest economy wanted to build gas-fired power plants to help phase out coal by 2030, eight years ahead of a legal cut-off date. The nation is rapidly expanding its renewable energy sources, but exited nuclear power last year. The plan to expand gas-fired plants was meant to underpin the grid when wind and solar supplies ebb.

Germany had planned to auction 5 gigawatts of new units in early 2025 and another 5 gigawatts as part of a new capacity mechanism, expected to be ready by 2028. To build more flexible power capacity, the cabinet on Wednesday approved a package to support biogas plants as well as combined heat and power generation plants that meet certain green norms.

The nation’s energy group BDEW said that the construction of the hydrogen-ready gas plants remains “highly time-critical” and should be high on the agenda of a new government. “This is the only way we can guarantee supply and system security in the long term and implement the coal phase-out at the same time,” the organization’s chairwoman Kerstin Andreae said in a statement.

Germany utility Uniper SE — which expressed interest in constructing such plants — had already warned about the difficulties for the nation to exit coal by 2030 if the ramp up of hydrogen-ready units didn’t make progress.

©2024 Bloomberg L.P.