Negotiations between the European Commission and the German government regarding energy infrastructure strategy are nearing a conclusion, revealing a significant divergence in ambitions for new natural gas power plants. Sources within the industry, cited by “Der Spiegel”, indicate the Commission intends to approve considerably fewer new plants than advocated for by German Economics Minister Katharina Reiche (CDU).
The tentative agreement, poised for imminent announcement, proposes the installation of a maximum 12 gigawatts (GW) of new, dispatchable capacity by 2031, predominantly derived from natural gas facilities. Bidding processes for these projects are slated to commence later this year. A crucial supplementary element is the establishment of a capacity mechanism, potentially valued at 29 GW, designed to encompass a broader range of flexible power sources, including battery storage, biogas plants and even industrial facilities prepared to curtail production during periods of scarcity.
The proposed 12 GW figure represents a substantial reduction from the 20 GW Minister Reiche reportedly sought to negotiate with Brussels, signaling a strategic shift from her predecessor, Robert Habeck, whose initial agreement with the Commission earlier in July 2024 also centered around the 12 GW mark. This indicates a struggle within the German government, with Minister Reiche seemingly determined to secure a more expansive expansion of natural gas infrastructure.
The rationale underpinning the development of new gas-fired power plants lies in bolstering Germany’s resilience against prolonged periods of low renewable energy output, often referred to as “dark doldrums”. Currently, Germany possesses approximately 90 GW of secured generation capacity, incorporating gas, hydro and biomass plants, alongside approximately 30 GW of highly polluting coal-fired power stations earmarked for decommissioning by 2038. The new gas plants are intended to compensate for the impending loss of this essential power source.
However, the compromise reflects a broader political tension. Critics argue that an extensive reliance on natural gas risks undermining Germany’s commitment to decarbonization and may lock the nation into fossil fuel dependency beyond 2038. While proponents emphasize the immediate need for dispatchable capacity to stabilize the grid as renewable energy penetration increases, the limitations imposed by the Commission highlight the ongoing debate regarding the pace and form of Germany’s energy transition within the EU framework. The Economics Ministry has declined to comment officially, citing ongoing proceedings and the fluidity of the final numbers.