Energy: The most important questions and answers about the power plant strategy

Energy: The most important questions and answers about the power plant strategy

The traffic light government agrees to build new gas power plants. The plan is ambitious, but has been largely received positively by energy companies and experts. Answers to the most important questions.

What exactly is the power plant strategy about?

The federal government’s power plant strategy essentially revolves around the question of whether and how many new power plants will be built in Germany in the coming years. The existing coal-burning plants are to be replaced by gas-fired power plants.

The reason for the strategy is the goal decided by the Bundestag that Germany should become a climate-neutral industrial country by 2045. In order to achieve this, we need even more renewable energies – the electricity system should be largely climate-neutral by 2035. On the other hand, there must be enough electricity available even in lulls to produce energy-intensive materials such as steel and cement without greenhouse gas emissions.

This is where “green” hydrogen comes into play, although it must first be produced by natural gas power plants. New gas power plants that will be operated with hydrogen from 2035 to 2040 will provide energy for this purpose in the future. In addition, they should step in as backups to compensate for lulls in wind and sun.

How many new power plants will be built?

In the short term, new power plant capacities of 10 gigawatts are to be created – four times 2.5 gigawatts. The construction of these hydrogen-capable gas power plants should be put out to tender. The energy company RWE has already expressed interest in building hydrogen-capable gas power plants. “RWE plans to take part in the tenders,” said a spokesman. Uniper also wants to build such gas power plants that can later run on hydrogen.

Environmental economist Andreas Löschel, Professor of Environmental and Resource Economics and Sustainability at the Ruhr University Bochum, considers the planned 10 gigawatts to be a good start: “This amount is certainly not oversized, but it can trigger important investments,” said Löschel. The money for this should come from the climate and transformation fund and go to the operators who will then build the power plants. Government circles expect costs of around 15 to 20 billion euros by the beginning of the 2040s.

Where will the new power plants be located?

The exact locations of new power plants are still unclear. They will probably choose places where there are already power plants today, says Löschel. “The new power plants have to be in the right place and are already being built in the south of Germany.” According to the federal government, these should be so-called “system-serving” locations, especially those at junctions with large, energy-intensive industrial complexes.

The subsidiary Iqony of the energy group Steag, for example, wants to use its power plant locations to build new hydrogen-capable gas power plants. So far, Iqony has operated power plants in North Rhine-Westphalia and Saarland. According to previous information, the company can “relatively quickly” implement new capacities at three locations with a total output of around two gigawatts.

Why do politics regulate and not the market?

Investments have so far been uninteresting for energy companies because the new power plants are not easily profitable. “If power plants that run for a few hours cannot generate high revenues and politicians are putting subsidies in the window, companies simply won’t invest in important generation technologies,” says Löschel. The federal government’s current plan is essentially a middle ground that is intended to encourage companies to contribute further investments.

“The state has recently intervened heavily in the market, for example by skimming off surpluses in the energy crisis,” said Löschel. “Where investments are made should not be determined by the state, but rather by market incentives.” The goal must be to ensure that the markets are less torpedoed by political interventions in the future.

How do experts rate the plan?

“On the whole, the approach is coherent. After much back and forth, politicians have apparently cut through the Gordian knot,” says energy economist Löschel.

Christoph Schmidt, President of the RWI – Leibniz Institute for Economic Research, also believes the strategy is correct. Germany has regulated the energy market very heavily for years, he told the business magazine. “The result was that there was no investment. And now it was time to take the money into our hands and say: We need this capacity.”

What criticism is there of the power plant strategy?

In addition to the positive voices, some experts express criticism: An alliance of environmental associations, for example, complains that the federal government is opening a “Pandora’s box” with the strategy: the capture of CO2 in rock should also be part of the strategy. This is a frontal attack on the energy transition and a wrong path based on fossil fuels, criticizes the German Association for the Environment and Nature Conservation BUND, among others. Through “Carbon Capture and Storage” (CCS), excess CO2 is pressed into deep rock layers.

A lot is still unclear about this process, says energy economist Löschel. “In principle, an opening towards blue hydrogen would be welcome in order to switch to hydrogen more quickly.”

What is the further schedule?

The federal government says it is in talks with the EU Commission to create a so-called capacity market from 2028 as part of the power plant strategy. Brussels must agree to this because it would fundamentally change the current electricity market. Power plant operators would then be paid to ensure that their power plants maintain capacity, i.e. are ready for use at any time and can step in – even if they end up not supplying any electricity at all.

Expert Löschel considers the schedule to be “super ambitious”. In any case, the days of coal are numbered, even if a complete phase-out of coal in 2030 is “not yet certain”.

According to the traffic light coalition, the new power plant strategy should be approved by the federal cabinet by summer at the latest.

Collaboration: Jannik Tillar

This article appeared firstwhich, like stern, is part of RTL Deutschland.

Source: Stern

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