Promoting new gas power plants: Reiche is planning stricter requirements for coal conversion

After the coal phase-out in 2030, gas-fired power plants will ensure the stability of the electricity grid. The conversion of decommissioned coal-fired power plants should also be supported by the state. In order to avoid false incentives, Economics Minister Reiche is tightening up the requirements.

At the start of the second tender for new, state-funded power plants, the Federal Ministry of Economics wants to specify the rules for switching from coal to natural gas. The ministry announced in the evening that it had decided to issue a regulation on this matter. Accordingly, the conversion from coal to natural gas should only be considered a new building eligible for funding if the previous coal-fired power plant was already shut down on July 22, 2026 or must be shut down by January 1, 2030 at the latest according to the Coal Phase-out Act. This is intended to prevent coal-fired power plants from being shut down prematurely due to funding.

The regulation is intended to regulate more precisely which expenses can be counted towards the prescribed minimum investment of 431,000 euros per megawatt of eligible output. Only investments in new power plants or the expansion of existing plants are taken into account, but not mere modernizations. The regulation should come into force soon.

The first surcharges remain unaffected

The clarification follows criticism of the first round of tenders, in which RWE and LEAG in particular were involved. The East German lignite company LEAG wants to build new gas plants at existing coal-fired power plant locations and use existing infrastructure to save costs. The Ministry of Economic Affairs defended these projects as cost-effective. The new regulation has no impact on the awards that have already been awarded. All successful projects also met the specified conditions.

Meanwhile, the Federal Network Agency announced a further 3,840 megawatts of billable power plant capacity. Bids can be submitted until December 29th. The maximum price remains at 244,000 euros per megawatt per year, and the funding runs for 15 years. The tender volume is smaller than originally planned because more services were awarded in the first round than planned.

RWE and LEAG secured ten of the eleven contracts in the first round. The new gas power plants are scheduled to step in from November 2031 if wind and solar systems do not generate enough electricity. The promised remuneration of all surcharges adds up to around twelve billion euros gross over 15 years. The costs should ultimately be borne by electricity customers.