Gas Power Plants on the Agenda: Germany's Bid for EU Subsidies
Government seeks advice on the matter from the respective Commission
In the heart of Europe, negotiations are ongoing between the German government and the European Union (EU) concerning potential subsidies for new gas-powered plants. These power plants serve as a safety net for power fluctuations caused by wind energy and cloudy days. Federal Minister of Economics, Katherina Reiche, is aggressively pushing for swift initiation, hoping to commence the first tender procedures by year-end.
Reiche's negotiations with the EU Commission are crucial—they must approve the planned state aid for these projects. The CDU politician recently addressed the Federal Association of Energy and Water Industry (BDEW) in Berlin, emphasizing that initial tenders will focus on power plants offering a total capacity between 5-10 gigawatts. The final amount depends on the agreement reached with the Commission regarding state aid. In the initial stages, gas power plants seem favorable due to their speedy availability and cost-effectiveness.
Hurdles and Concerns
The planned expansion of gas power plants to compensate for the volatile power production from wind and solar energy is part of Germany's coalition agreement, with state funding provisionally approved. However, prior agreements from the previous federal government regarding hydrogen conversion for these power plants remain uncertain under Reiche's leadership.
Reich is eager to revise the energy transition set out by her predecessor, Robert Habeck. While the expansion of renewable energies from wind and solar energy has been a success, it is not the whole picture—system costs and network bottlenecks need addressing to achieve more cost efficiency and long-term supply security.
A Call for Financing Transparency
Kerstin Andreae, CEO of BDEW, has expressed concern regarding the proposed billions in electricity price relief subsidies. To ensure investment security, she demands that the federal government finances electricity price relief from the core budget, not from the Climate and Transformation Fund (KTF).
On the other hand, environmental associations are advocating for funds from the new federal special fund to be allocated exclusively for investments in climate protection. Potential investments include improvements in railway infrastructure, public transport, and cycling facilities, as well as energy-efficient building renovation, municipal heating networks, natural climate protection, and international climate-related projects.
Controversy over Fund Allocation
The proposed gas power plants and liquefied natural gas terminals have been met with strong opposition from environmental groups, who argue that these projects should not receive additional funds. Instead, they advocate for maintenance and renovation of existing infrastructure in the road construction sector and for the promotion of hybrid vehicles.
It's a time of change and negotiations, as Germany plans for its future in energy production. Stay tuned for updates on these intriguing developments.
- Renewable Energies
- Energy Industry
- Energy Suppliers
- Energy Supply
- Energy Policy
- Energy Transition
- Federal Ministry of Economics
- EU Commission
- Katherina Reiche
[1] Germanwatch: Capacity Mechanism and New Gas-Fired Power Plants, 2023.[2] Bundesverband Energie und Wasserwirtschaft: The Role of Gas-Fired Power Plants in Germany, 2023.[3] Carbon Market Watch: Germany's Reliance on Gas: An Overview, 2023.
The Federal Minister of Economics, Katherina Reiche, has shown interest in expanding vocational training programs, focusing on vocational training for the energy sector, as part of her plans to address network bottlenecks and achieve more cost efficiency in the energy industry. Sports, an essential part of community life, could benefit from such vocational training programs, by training individuals in the maintenance and construction of sports facilities, thus ensuring their longevity and safety.
In light of the controversy over fund allocation for energy-related projects in Germany, environmental associations are advocating for the promotion of sustainable initiatives such as improvements in railway infrastructure, public transport, and cycling facilities, as well as energy-efficient building renovation and municipal heating networks, funded exclusively from the new federal special fund. These investments, in turn, would contribute to natural climate protection, international climate-related projects, and the promotion of hybrid vehicles, offering a greener and more sustainable alternative to the proposed gas power plants and liquefied natural gas terminals.
