Following the phase-out of nuclear power, the German government plans to utilize gas-fired power plants when renewable energy sources cannot meet its electricity demand. The EU recently approved key aspects of Germany's power plant strategy, but funding remains unclear.
According to a report on the website of the German newspaper Die Zeit, the German government and the European Commission have reached a basic agreement in negotiations regarding the construction of gas-fired power plants to ensure Germany's energy security. The German Ministry of Economic Affairs and Energy announced this in Berlin on the 15th. German Minister of Economic Affairs and Energy, Katerina Reischer, stated that reaching a consensus on the power plant strategy is a crucial step in ensuring Germany's energy supply and maintaining the competitiveness of German industry.
This will allow the German government to tender for an additional 12 gigawatts of generating capacity. The tendering process is scheduled to begin in 2026. This means that Germany will build modern, efficient power plants, primarily gas-fired. These plants are expected to be operational by 2031 at the latest. A modern gas-fired power plant will have a conventional generating capacity of 500 to 800 megawatts. All power plants built according to this strategy will have hydrogen generation capabilities and will achieve complete decarbonization by 2045 at the latest.
The German Ministry for Economic Affairs and Energy announced that despite an agreement in principle, the EU's state aid process is not yet complete. The draft strategy for the power plants still needs approval from the European Commission under the State Aid Act.
The German government plans to invest billions of euros in power plant construction through this strategy, primarily concentrated in southern Germany. To date, corporate investment in this sector has been minimal. Because gas-fired power plants are mainly used to balance energy supply fluctuations, their operating capacity is relatively low, making profitability difficult.
Gas-fired power plants aim to help Germany cope with the phase-out of coal and periods of low wind and solar power generation-specifically, periods without sunshine and wind. In their coalition agreement, the CDU/CSU and SPD announced plans to incentivize the construction of up to 20 gigawatts of gas-fired power plants by 2030. Environmental groups have criticized the new gas-fired power plants.
German N-TV reported that Chancellor Merz had previously described the phase-out of nuclear power as a serious strategic mistake. Merz complained that Germany's energy transition costs are among the highest in the world. The federal government wants to correct this problem, but current energy capacity is severely insufficient. Economy Minister Reicher had previously announced plans to reduce the cost of the energy transition.
