The country hasn’t built many non-renewable power plants recently, leaving few stations when wind and solar falter. — Bloomberg
FRANKFURT: Germany is heading toward a potential power shortfall of between 10 gigawatt (GW) to 24GW in 2030 during high-demand periods as it closes generation faster than it builds replacements – a gap analysts say has to be bridged.
The system now risks a longer reliance on coal. Demand is projected to climb as transport, heating and industry electrify, but nuclear plants have been closed, coal is being phased out and Germany still lacks a capacity market to replace backup supply.
The country hasn’t built many non-renewable power plants recently, leaving few stations when wind and solar falter.
In that vacuum, Sabrina Kernbichler, lead power analyst at Energy Aspects Ltd, estimates a supply gap of as much as 10GW in “very rare cases” of high demand and weak wind and solar.
Nathalie Gerl, her counterpart at LSEG, sees a possible deficit of as much as 24GW on cold winter days when demand reaches about 78GW and no new gas units are online yet.
Power prices reflect the strain. Germany has become one of Europe’s most expensive electricity markets – an outcome analysts have warned about for several years – pushing costs higher for households and industry.
Germany’s energy regulator told Bloomberg News that new laws to expand power capacity are “urgently needed”, and Chancellor Friedrich Merz has already signalled that he would prioritise energy security over climate considerations.
New gas plants were meant to help, but a key subsidy approval from the European Union is still pending. Germany’s economy minister now anticipates holding auctions in March, with plants only set to go online in 2031.
Yet even if those approvals come through, other obstacles loom. Investment bank Macquarie Group warns of a global shortage of gas turbines, intensified by surging, artificial intelligence-driven power demand in the United States.
That supply squeeze means most of Germany’s planned 10GW of capacity is unlikely to be operational this decade, Serafino Capoferri, an associate director and carbon strategist, wrote in a note.
Coal usage is another question mark. Germany’s phaseout deadline is 2038, though a separate agreement with energy company RWE aims to close lignite plants in North Rhine-Westphalia – the country’s industrial heartland – eight years sooner.
That timeline is now in question. To avoid power shortfalls, Berlin may need to prolong the life of some lignite units, a decision it’s set to make next August.
If the phaseout does slip, the most likely fallback would be to shift those plants into a standby lignite reserve, similar to the grid reserve already used for hard-coal units, according to Kernbichler. — Bloomberg
