Germany passes power market reform

Germany‘s cabinet this week approved a power market reform plan that includes placing older lignite-fired plants on standby.

According to a summary in English by Energiewende-focused news site Clean Energy Wire, the plan eschews a capacity market, which Germany’s energy ministry said “can be expensive and inefficient”. Instead, the nation will opt for a capacity reserve, initially proposed earlier this year (

Among the reform plan’s features are tougher regulation on power suppliers and traders; a promise that the government will not interfere in the functioning of the power market; allowing “flexibility options” such as load management, flexible power production, energy storage capacity and even electric cars to access the market as balancing power options; distributing grid fees nationally rather than locally; and strengthening the capacity reserve.

The plan aims for a capacity reserve of around 4.4 GW, or 5 per cent of the average maximum peak load predicted for the next five years. The ministry said this reserve power will be invoked only after “all market-based optionsࢀ¦ are exhausted”, and participating plants will be excluded from the power market.

Tenders for participation in the capacity reserve will be offered from 2017, the government said, when the current reserve plan runs out. The first tender will be for 1.8 GW for two years, and will be technology-neutral. à‚ 

The government also approved a plan to put aging and less efficient lignite-fired plants into a 2.7 GW emergency reserve pool, beginning next year. These plants will be mothballed for four years before eventually being shut down, and “only called upon as a very last resort, for example in the case of long-lasting, extreme weather events,” the government said. Plant owners will be reimbursed for any lost revenues. à‚ 

In July, RWE Generation CEO Matthias Hartung said he expected that up to half of the emergency reserve will be drawn from his company’s lignite-fired power plant fleet ( à‚ 

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