By Vera Eckert
FRANKFURT (Reuters) -Germany should create a centralised plan for power providers to spur quick investment in new gas-to-power plants ahead of planned tenders, the boss of German utility Uniper told Reuters.
Planned tenders in early 2025, approved by the EU in June, are part of efforts to supplement intermittent renewable energy and speed up the transition to low carbon generation.
The Economy Ministry on Wednesday started a six-week consultation around a total 12.5 gigawatts (GW) of new power plant capacity, laying out four options for an accompanying market design and itself favouring an option that takes account of Germany’s decentralised energy industry and geography.
“Uniper is critical of the government’s favoured option of a so-called decentralised system,” said CEO Michael Lewis in an interview held on Wednesday.
“It’s more complicated and takes investors longer to understand,” he said in remarks that echo feedback from a variety of would-be investors.
While a central capacity market favours a system where power generators compete in government tenders for fixed remuneration to build new capacity, the more complex decentralised model is based on the purchase of certificates to support power plant investments.
The operations of the new plants, for which there could be construction aid, will be embedded in a capacity market scheme which will offer incentives for their running.
“The capacity market is about getting paid for having the plant available, not from the sale of megawatt hours,” said Lewis.
Countries including Italy, Belgium and Britain have successful capacity markets, Lewis said, adding he would prefer the UK model for Germany: “It’s an auction process, so it reveals the true cost.”
He said if Germany drags its feet on the process, it risks missing a proposed 2030 deadline for phasing out coal.
(Reporting by Vera Eckert; Editing by Christoph Steitz, Friederike Heine, Elaine Hardcastle)
