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Germany may allow return of 10 GW capacity in gas crunch


24 May 2022 14:36

Photo: Shutterstock

Photo: Shutterstock


24 May 2022 14:36

(Montel) The German government plans to allow a market return 10.4 GW of hard coal, lignite and oil-fired reserve capacity if a gas supply crunch threatens power supply security, Montel learned on Tuesday.

The new rules are designed to use as little gas as possible in an emergency situation by replacing the generation from gas-fired power plants, a government document seen by Montel showed.

Two-thirds of the country’s gas-fired capacity of more than 30 GW will likely be among the first consumers to be cut off from fuel supply in the case of a gas shortfall.

In addition, the German economy and climate ministry plans to impose a premium on bids of gas-fired power generation in the market to push them out of the merit order and cut gas demand, according to the document.

To fill the gap, the ministry plans to keep 2.6 GW of hard coal capacity, which was successful in coal exit tenders for closure this and next year, on stand-by and ready for market return, it showed.

In addition, the ministry would also allow a market return of 4.3 GW of hard coal-fired capacity and 1.6 GW of oil-fired capacity, which are already in a power reserve scheme, it said.

Also, 1.9 GW of lignite-fired reserve capacity would be back on the market in case of a gas supply crunch.

The new rules, which are being discussed by government ministries, would expire on 31 March 2024, it said. So far, German reserve capacities are not allowed to participate in Europe’s biggest power market.

Berlin is preparing for the possibility of a Russian gas delivery stop in the wake of Russia’s invasion of Ukraine, EU sanctions and Russian countersanctions.

Russia stopped delivering gas to Finland last weekend and Russia’s gas giant Gazprom ended a delivery contract with a former German subsidiary earlier this month.

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