A total of 43% of Germany’s electricity generation projects which are planned to come online by 2020 might not be built because of economic pressure on conventional generation units and uncertainty for potential investors, the country’s association of energy and water industries, BDEW said on Monday.
As more capacity is due to come off line, this could lead to net reduction of 13.6GW of secured or conventional generation capacity that can be operated at any time. “According to what we know today, we need to assume that secured capacity will be reduced by 13.6GW by 2022 when the last nuclear plants are being shutdown, unless the political framework does not change,” Hildegard Muller, president of the BDEW said in a statement on Monday. Germany currently has 105GW of conventional generation capacity (including units in Austria, Switzerland and Luxembourg which feed into the German grid) and 83GW of renewable generation capacity installed, according to the country’s energy regulator.
In total 74 power generation projects, including offshore wind farms, with a combined capacity of 37.8GW, could in theory come online by 2020. But 32 of these projects are “questioned”, an increase from 22 last year, because of deteriorating economic conditions for conventional plants, Muller said.
Only 20.5GW of the planned capacity has a high chance of being built, the BDEW said. But this figure also includes 9.5GW of offshore wind power projects. The BDEW does not include offshore wind generation as secured capacity because its generation is intermittent.
This 20.5GW of additional secured generation capacity could be outbalanced by capacity losses. From Germany’s nuclear fleet, 4GW will go off line by 2020 followed by 8.1GW from 2021 to 2022. For other conventional plants BDEW said 6.2GW which has been announced for shutdown.
Another 6.3GW of conventional generation has been slated for mothballing. This means that they cannot return to the wholesale market for five years.
BDEW urged the government to address the future power market design as soon as a reform of the country’s renewable subsidy scheme is on its way. The coalition government is expected to propose a reform bill to the public on Wednesday. The reform could be implemented in August 2014. The government has acknowledged the need for a capacity market mechanism in the medium term but so far seems reluctant to implement one in the coming years ( see EDEM 24 January 2014 ). Martin Degen