Power Plant Strategy: is it a risk for Germany’s reputation as a climate leader?

The Power Plant Strategy presented yesterday was expected to provide more clarity on the role of renewables and energy storage in the country’s roadmap. However, instead of focusing on supporting the further build-out of renewable energies with energy storage, the plan puts forward investments in more gas-fired power plants, with the promise of converting them to run on hydrogen by 2040. Currently, €44 billion subsidies are expected to finance the gas power plant expansion.

Instead of making room for energy storage, local affordable renewable energy solutions and other non-fossil technologies, Germany would further rely on imported hydrogen and natural gas. Meanwhile, crucial energy storage technologies to provide flexibility and further integrate renewable energies are overlooked. It is not coherent after the European Commission previously announced a concrete Energy Storage Strategy, that should be a guidance for action at national level.

One of the non-fossil solutions that should be prioritised over new gas-fired power plants is long duration energy storage. A study by Aurora Energy Research published in 2023, underlined that the inclusion of Long-Duration Energy Storage technologies (LDES) in the German plans, would result in major economic benefits, reduced system costs, and would contribute substantially to emissions reduction. According to their estimates, cumulated total system costs could be reduced by €24 billion between 2025 and 2050 by using LDES!

On the brighter side, a technology-neutral capacity mechanism will be developed and become operational by 2028. The design of the capacity mechanisms will be key to encourage clean net-zero alternatives, provided that it is aimed at prioritising the finance of non-fossil solutions instead of more gas power plants.

While we welcome the focus of Germany to work on more flexible and clean power plants, the Power Plant Strategy sends the wrong signal to other countries and is damaging our common goals to succeed in reaching the EU objectives. It is not too late to do the right thing: we call on decision-makers to change course, and invest in diversified non-fossil assets that would cut the costs, limit our dependence on third-parties, and not rely yet again on fossil fuels!

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