Germany announced on Friday its plans to launch the first tender for the construction and modernization of 12.5 gigawatts (GW) of gas power plants capable of converting to hydrogen by late 2024 or early 2025, responding to industry pressure. This initiative is pivotal in Germany's strategy to supplement wind and solar energy and accelerate its shift to low-carbon generation following the nuclear power phase-out.
“Germany's top utilities, including RWE, EnBW, and Uniper, have long called for more details on this initiative, fearing that insufficient clarity could jeopardize our coal phase-out acceleration,” remarked a spokesperson from the German economy ministry.
The plan includes two tenders for new hydrogen-ready gas power plants, each aiming for 5 GW capacity, along with tenders to retrofit existing plants (2 GW), establish long-term storage (0.5 GW), and build fully hydrogen-powered facilities (0.5 GW), the ministry outlined.
Under the scheme, the government will subsidize investment and operational cost differences between hydrogen and natural gas for 800 full-load hours annually upon hydrogen adoption, the ministry confirmed.
“Uniper is ready to engage in discussions and participate in the scheme, subject to favorable conditions,” said Uniper CEO Michael Lewis, highlighting the company's commitment.
RWE, Germany's largest power producer, welcomed the upcoming tenders while stressing the importance of receiving detailed auction design specifics to adequately prepare.
“Transparency in auction details is crucial as it requires significant preparation time,” emphasized EnBW CEO Georg Stamatelopoulos, underscoring the need for clarity and favorable conditions for potential bidders.
The tender process will unfold in two phases, with an eight-year timeline for first-phase plants to transition to green or blue hydrogen, primarily focusing on southern Germany to bolster grid stability and reduce costs, the ministry outlined.
Germany recently secured informal approval from the European Union to allocate substantial subsidies for the power plant construction, marking a pivotal advancement in its renewable energy transition strategy.
