OSW Commentary - Key to the future of the Energiewende: support for building new power plants

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OSW Commentary - Key to the future of the Energiewende: support for building new power plants

7 Mar 2024

Initially, the strategy was planned Given the current structure of the German energy to be ready by mid-2023 so that market, where power plants are only paid for the work on the construction of the electricity they generate, it is unprofitable for in- power plants could be finished vestors to build new conventional units intended by the end of the decade (accord- to operate as balancing capacities. [...] The dispute was further escalated by a ruling from the Federal Constitutional Court regarding the Climate and Transformation Fund, which was supposed to finance the planned subsidies.3 The pro- longed disagreement over this issue, which delayed the adoption and implementation of the planned strategy, led to growing frustration; this was openly articulated in the media, not only by the energy secto. [...] The date of transition from gas to hydrogen has been set for 2032 most likely because the comple- tion of the so-called base hydrogen network is scheduled at that time.4 The groundbreaking news is both the planned creation of a capacity market (Berlin has been reluctant to adopt this mechanism in recent years) and the permission to use the CCS technology in gas units (until now, the opinion that t. [...] The energy sector has mostly reacted positively to the agreement, since most of the changes were introduced in response to the expectations expressed by the CEOs of major companies such as RWE, Uniper, EnBW and LEAG; according to media reports, they were invited to join the final stages of the negotiations to consult the proposed solutions. [...] Considering the fundamental differences between the terms agreed upon and earlier ar- rangements, the negotiations with the European Commission may prove to be tedious and prolonged, especially since the first proposal, as speculated, had been seriously questioned by the Commission; the current form of the mechanism may in fact only raise more doubts.

Authors

Michał Kędzierski; Centre for Eastern Studies (OSW)

Pages
5
Published in
Poland