The federal cabinet today adopted a first ordinance on the basis of the new Act on the Maintenance of Substitute Power Stations. The “Ordinance on the temporary expansion of the power generation supply via installations from the grid reserve” permits oil-fired and coal-fired power stations which are currently in the grid reserve to return to the electricity market until the end of winter 2022/2023. The ordinance is being published today in the Federal Gazette and comes into force tomorrow.
This ordinance thus implements a further measure in the by Minister Habeck to strengthen preparedness and reduce gas consumption in the electricity sector. In addition to this ordinance, the Federal Government is continuing to work hard on using the €15 billion available to fill the gas storage facilities. In parallel, the Bundesnetzagentur (Federal Network Agency) is working on the implementation of the gas auction model to provide incentives for the industrial sector to save gas.
Federal Minister for Economic Affairs and Climate Action said: “We want to save gas now in the summer to fill our storage facilities for the winter. We are therefore allowing hard coal-fired and oil-fired power stations to come back onto the market until the end of the winter. They will enable us to save 5-10 terawatt-hours of gas in Germany and a similar amount again across Europe. In this way, we are boosting our preparedness and continuing to arm ourselves to cope with a worsening of the situation on the energy market.”
The Ordinance on the temporary expansion of the power generation supply covers power stations which are already part of the grid reserve and are not fired by natural gas. The total installed capacity amounts to around €4.3 GW of hard coal-fired installations, and 1.6 GW of oil-fired installations. In addition to this, there are coal-fired power plants which were made subject to a ban on coal-fired electricity generation in 2022 and 2023 on the basis of auctions under the Act Phasing Out Coal-fired Power Stations. This affects 2.1 GW of installed capacity in 2022 and another 0.5 GW in 2023. Operation on the electricity market is voluntary. The opportunities and the risks lie with the operator.
The formal precondition for the adoption of the statutory instrument and thus the activation of the grid reserve is the alert level of the Emergency Plan for Gas, which was declared on 23 June 2022.