Germany’s Delayed Demand Adaptability Increases Need for New Power Plants, Agency Finds
A recent report from Germany’s Federal Network Agency (Bnetza) indicates that a lack of progress in making electricity demand more flexible is increasing the necessity for new power plant construction to ensure grid stability.The report highlights that while the expansion of renewable energy sources and energy storage is crucial, it’s not sufficient on its own.
Currently, hydropower accounts for 4 percent of germany’s power production, primarily from run-of-the-river hydroelectric plants. However, the intermittent nature of renewable production – fluctuating with weather conditions – often leads to grid congestion and reliance on conventional baseload power plants to maintain security of supply.
The Bnetza report emphasizes the urgent need for action beyond renewables and storage. Local utilities association Vku stated that the construction of gas-fired power stations and Combined Heat and Power plants, capable of quickly responding to supply gaps – particularly during periods of low wind and solar output (“dark doldrums”) – is equally meaningful.
Industry association BDEW echoed this sentiment, calling for tenders for gas-fired power plants, including those hydrogen-ready, to be issued by the beginning of 2026 to ensure timely completion. They also advocate for a technology-neutral capacity market to incentivize further capacity building.
A capacity market, as defined by Clean Energy Wire, is a system where power plant operators are compensated for both electricity produced and for maintaining generation capacity during times of scarcity. The Bnetza report supports this approach, stating that a capacity market can strengthen electricity supply security by providing revenue certainty and a viable business case for critical resources.
