For decarbonization, grid efficiency and security of supply are needed

According to its own statements, the German government is currently planning to put out to tender five gigawatts (GW) of hydrogen-capable power plants and five GW of gas-fired power plants for which no deadlines have been set for the conversion to hydrogen. A further two gigawatts of power plant capacity is to be added through modernization or conversion of the existing power plant fleet and 500 megawatts (MW) of power plant capacity is available for a hydrogen sprinter power plant, which by definition can be operated immediately and completely with hydrogen. In addition, the German government also intends to offer 500 MW of long-term electricity storage capacity.

So much for the framework conditions. The Federal Ministry for Economic Affairs and Energy's clear commitment to quickly launch the corresponding tenders for all pillars is to be welcomed. Only if this actually happens will it be possible to keep to the original schedule of commissioning the new power plants by the beginning of the next decade.

However, in addition to speed, the specific content of the tenders is also important for companies thinking about participating. The information that has become known so far about the expected framework conditions certainly gives cause for optimism: in addition to the main objective of achieving progress in decarbonization, the aspect of security of supply and, more specifically, the criterion of grid serviceability in the form of redispatch cost savings and grid stability are also to be taken into account.

The stipulation that all of the power plants – regardless of which of the pillars described above they are built under – are to be built "predominantly in the grid-related south" (which, incidentally, extends quite far into northern Germany), makes it clear that Berlin has understood that decarbonization and sustainable security of supply can only succeed hand in hand and cannot be considered independently.

An example from our own company illustrates why this is the case: At three of its sites in Saarland and North Rhine-Westphalia, the Steag Group is planning to build new power plants that can be operated first with natural gas and later with hydrogen. At these locations, there are currently plants that are fired with hard coal and are all classified as system-relevant by the Federal Network Agency (BNetzA). The fact that these existing plants, if they are not replaced or converted by new buildings, will have to continue to perform the function of "power grid fire department" with hard coal until after 2030 has only been a topic for experts so far.

As a company, we have been willing to decommission these plants for years, but the requirements of security of supply and grid stability are thwarting our plans: Without new power plant capacity at the same location, there is no realistic chance of being released from system relevance, either in regulatory or physical terms – the plants would therefore have to be kept operational until further notice. Given the age of the plants, this in turn presents us with ever greater technical challenges and the grid operators and ultimately private customers with ever greater financial challenges.

However, if steadily aging hard coal plants have to stand in for a few hundred operating hours per year for an unforeseeable period due to a lack of alternatives, then one may speak of a partial coal phase-out given the associated ban on market participation. However, this is certainly not the case in terms of the carbon footprint. Transferring the tasks of the old plants to the power plants of the next generation – including the qualified operating personnel – therefore makes sense in every respect.

The same could be said concerning the two gigawatts of power plant capacity to be retrofitted: It would make a lot of sense here to include those "young" hard coal-fired power plants within the meaning of the Coal-fired Power Generation Termination Act (KVBG) for which the aforementioned law has already promised an individual solution for decommissioning in return for compensation. And in terms of the CO2 balance, converting these plants to natural gas and, in the long term, hydrogen would represent a real quantum leap.