German energy associations split on gas plant tender draft law consultation

Germany's main energy associations are split on the future of the minority government's draft power plant safety act, or KWSG, after a final three-day consultation that ended Nov. 28.

The energy ministry, or BMWK, still aims to push the law that would underpin tenders for 10 GW new gas-fired generation capacity through cabinet and parliament, a spokesperson told S&P Global Commodity Insights Nov. 25, noting that the draft was also in a final coordination phase within government.

"In view of the upcoming elections and the fact that a budget has not yet been passed, we believe it is urgently necessary for the Bundestag to quickly pass the KWSG," gas and hydrogen sector association Zukunft Gas said in a statement. "Unfortunately, we cannot assume that the current government will complete this project."

"The priority in the first hundred days of the new government should therefore be to shape the question of [Germany's] power plant fleet of the future," said Timm Kehler, managing director at Zukunft Gas. "This is a prerequisite for replacing coal-fired power plants soon and for securing the expansion of fluctuating renewables with controllable, flexible gas-fired power plants."

Utility association BDEW raised concerns regarding high risks associated with the proposed regulations for hydrogen-ready gas power plants, which would deter private investment.

BDEW called for changes to the funding conditions to enhance their attractiveness to investors and banks, highlighting issues like insufficient hydrogen availability and delays in technology development.

"One thing is clear: Even an early election and new government configurations do not alleviate the time pressure for the expansion of generation capacities, neither for the energy industry nor for the legislators," BDEW Managing Director Kerstin Andreae said, having previously advocated for cross-party support for the draft law. "Therefore, it is good that the federal government is continuing to push this issue forward."

The opposition CDU/CSU does not currently intend to lend support to new legislative initiatives, it said, with its new energy agenda advocating a shift of focusfrom hydrogen-ready gas plant support to reviewing the potential of carbon capture and storage technologies.

CDU/CSU would also not bring forward coal and lignite plant closure dates, the main driver for the current coalition's drive to incentivize dispatchable generation to exit coal and lignite earlier than the current 2038 end date.

Meanwhile, renewables association BEE called for a radical review of the KWSG draft.

"The KWSG must be turned upside down," it said in its position on the consultation. "Power plant security needs to be aligned with the urgent demand for flexibility and should therefore be designed as a flexibility security law."

The next step for the draft law, which has an agreement in principle from the European Commission to pass state aid regulation, would be approval by cabinet in early December.

German Chancellor Olaf Scholz plans to table a no confidence vote on Dec. 16, which would trigger the dissolution of the Bundestag and new elections in February 2025.