Germany Will Support 10 GW of New Gas Plants, With Eye Toward Hydrogen

German officials announced a new plan for the country’s power generation, a strategy that includes putting at least 10 GW of new gas-fired capacity up for tenders.

Officials on Feb. 5 said the plants would be designed to eventually burn hydrogen at some point between 2035 and 2040, according to Germany’s Economy Ministry. The agency on Monday said the plan is in its early stages, and is part of the country’s need to ensure a stable supply of electricity after Germany’s phase-out of nuclear power and coal-fired generation.

The ministry said German Chancellor Olaf Scholz, Economy Minister Robert Habeck, and Finance Minister Christian Lindner have agreed on a plan for the federal government to finance new gas-fired plants with money from the country’s climate and transition fund, known as the KTF Economic Plan, which was originally created in 2010 but has taken on new importance in Scholz’s government. The plan to build new power generation capacity was delayed for several months due to government wrangling over the transfer of unused money from Germany’s emergency plan for the pandemic. The Federal Constitutional Court, akin to the U.S. Supreme Court, in November of last year ruled that the 2021 transfer of $60 billion euros ($65 billion) from the COVID fund to the new climate fund, primarily for energy projects, was unconstitutional. The court ruled the money could not be made available as part of the KTF plan.

Gas Supplies

Germany’s gas supplies should not be an issue for the development of new gas-fired plants, officials said. The country, despite the loss of imports of natural gas from Russia after that country’s invasion of Ukraine, has kept gas supplies at strong levels due to milder winter weather, and with nearly full levels of gas in storage. Germany also has built new terminals and infrastructure to increase imports of liquefied natural gas (LNG).

Much of that LNG has come from the U.S. The Biden administration recently announced a pause on approvals for new U.S. LNG export projects, but a spokesperson for the European Commission told Reuters news service that the move “will not have any short-to-medium term impacts” on the security of the gas supply across the European Union.

Officials did not announce a timeline for the tender process, in which the government would solicit offers to build the new gas-fired capacity. The ministry, though, said plans for the new plants to be converted to burn hydrogen would need to be completed by 2032. Officials also said the federal government would subsidize hydrogen-fueled power plants, with generation capacity of up to 500 MW, as part of the country’s energy research program.

Support for Renewable Energy

The government also pledged to “as much as possible” eliminate regulatory issues that would slow the development of renewable energy. Germany in 2023 generated more than half of its electricity from renewables, mostly solar and wind power, for the first time, according to the  Centre for Solar Energy and Hydrogen Research Baden-Württemberg, and utility association BDEW. “Renewable energies will have covered almost 52% of gross electricity consumption in 2023,” the organizations said in a December 2023 news release. “This means that the share has risen by five percentage points compared to the same period last year and is above the 50% percent mark for the first time for a full year.”

Last year’s record level was an increase of the 46% share for renewable energy in the country’s energy mix in 2022. Officials said that was due to a drop in overall electricity consumption across Germany, and the increase in renewable energy output, which had a year-over-year jump of 6% to a record high of 267 TWh.

Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

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