Germany Unveils Plan to Tender 12.5 GW Power Plant Capacity and Long-Term Storage

Germany's federal government announced on Friday a comprehensive strategy to 12.5 GW of power plant capacity alongside 500 MW of long-term storage, underlining efforts to fortify the nation's against fluctuations in generation.

The tenders, to be conducted under the framework of the Power Plant Safety Act, are structured into two main pillars. The first pillar includes subsidies for 5 GW of new -ready gas-fired power plants and 2 GW of hydrogen-ready modernizations. These projects are mandated to transition to green or blue hydrogen by their eighth year of operation or modernization. Additionally, the plan includes 500 MW for pure hydrogen power plants and another 500 MW dedicated to long-term storage solutions.

The second pillar focuses on auctioning 5 GW of new gas-fired power plants, intended primarily to stabilize the grid during periods of low renewable energy output.

Following the announcement, there will be a six-week consultation period on the proposed pillars, with the initial tender expected by late 2024 or early 2025. These initiatives precede the establishment of a comprehensive capacity mechanism slated to be operational by 2028.

Economy Minister Robert Habeck emphasized that these measures are aimed at ensuring Germany's electricity system can effectively manage a higher share of renewable energy sources while maintaining stability during periods of reduced wind and solar power availability.

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