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The Importance of Renewable Energy and Storage in Germany's Power Plant Strategy

2024-03-12

The German government has recently announced its power plant strategy, which focuses on promoting gas-fired power plants. However, the Federal Association for Renewable Energies (BEE) believes that controllable renewable energy systems, storage solutions, and decentralized electrolyzers are more resilient and should be prioritized.

 

New Details of the Power Plant Strategy

 

The Federal Ministry for Economic Affairs and Climate Protection (BMWK) has revealed new details about the planned power plant strategy. In addition to a technology-neutral tender for long-term storage, convertible hydrogen power plants will receive operational cost support and an investment premium. From the perspective of the BEE, the government should align the power plant strategy with renewable energies for cost efficiency, resilience, climate protection, and supply security reasons.

 

BEE President Simone Peter emphasizes the need for further development of the current considerations in order to create a flexibility strategy that takes future energy markets into account. She believes that renewable energy should be the backbone of the future energy system, with bioenergy, hydropower, geothermal power, storage solutions, and decentralized Power-to-X (PtX) solutions being more cost-effective than hydrogen-ready power plants. An improvement of the framework conditions in the Renewable Energy Sources Act (EEG) for controllable renewable energy systems, as well as incentives for storage solutions and decentralized electrolyzers, would be more beneficial than the planned subsidies for hydrogen power plants. The storage strategy provides some initial approaches that need to be underpinned and expanded by the federal government.

 

The Resilience of Decentralized Renewable Energy and Storage

 

According to the BEE, decentralized renewable energy systems, storage solutions, and domestically produced green hydrogen are also more resilient as they are not dependent on imported natural gas or hydrogen. Additionally, they are a perfect match for decentralized wind and solar power generators and have an immediate positive impact on climate protection. In contrast, hydrogen-ready power plants can continue to operate with fossil natural gas until 2040, which raises concerns about their technical feasibility on a large scale as well as uncertainties regarding sufficient hydrogen availability and its environmental impact. In this regard, domestic solutions provide a more promising alternative.

 

It is encouraging to see that the German government is taking steps towards decentralized renewable solutions in its power plant strategy. Instead of building new hybrid power plants, the strategy now includes auctions for long-term storage. BEE President Simone Peter emphasizes the importance of continuing down this path and incentivizing both on-site electricity and gas storage solutions, ranging from biogas to green hydrogen. Decentralization is key to ensuring system flexibility, affordability, and success, and this should be solidified in the further decision-making process.

 

The Biogas Association recently highlighted that expanding biogas utilization to 24 GW is not only possible but also more cost-effective than constructing fossil gas power plants. The NRW Renewable Energy Association (LEE NRW) also criticizes the absence of biogas in the government's power plant strategy.

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