Germany may have to rely on standby coal-fired power generation longer than previously expected, to keep its power system stable and power prices from spikes when renewable output is low.
The German plans to build new natural gas-fired power plants are behind schedule while the reserve margins on the system have shrunk since Europe’s biggest economy shut down its last nuclear power plant in 2023.
Without alternatives for backup generation to secure power supply at peak demand and low wind speeds, coal plants could be needed into the 2030s, too, Christoph Mueller, chief executive at German grid operator Amprion GmbH, told Bloomberg in an interview published on Wednesday.
“Some of these plants currently only have an operating perspective until 2026, the vast majority until 2031,” Mueller said, referring to the coal plants on standby.
“We should do a proper analysis now in case we need these power plants for longer,” the executive added.
Germany needs to soon move to award tenders for new natural gas capacity that would replace coal plants if Europe’s biggest economy is to meet its target to phase out coal in power generation by the end of the decade, German energy giant Uniper said last year.
Germany, which in 2023 closed all its remaining nuclear power plants – is now seeking to balance the generation and transmission systems with new gas power plants. But deadlines and timelines are being missed, and a new government is expected after the snap elections in late February.
The country has also decided to accelerate the coal phase-out to 2030, from an earlier planned date of 2038, but Germany has reactivated some mothballed coal-fired power plants during the past few winters after Russian natural gas supply ceased.
At the end of last year, Germany’s power prices spiked as the so-called power margin, the available electricity supply to meet demand, sunk as low wind speeds and colder weather were straining the power system.
Earlier this month, Germany’s coal importers lobby, VDKi, said that coal plants remain a pillar of German power generation during times of low wind speeds.
“Modern hard coal-fired power plants are an important backbone of the German electricity grid,” VDKi CEO Alexander Bethe said in a statement.
“In order to provide sufficient controllable power plants for security of supply, it is therefore necessary to introduce a technology-open, competitive centralised CAPACITY MARKET as soon as possible,” Bethe added.
Source: By Charles Kennedy from Oilprice.com