Siemens is on the cusp of building a gas-fired power plant in Bavaria, Germany, the first such project in its native country in four years.

The company cleared a regulatory hurdle on the path towards gaining approval for the plant, which would act as a reserve power facility.

Welt am Sonntag newspaper had reported that it could be worth up to $565m for Siemens to develop a 600 MW gas-fired power plant.
Siemens gas turbine and engineer
Germany’s cartel office approved the plant in Leipheim, north east of Ulm in Bavaria, which would be built by Siemens and Stadtwerke Ulm, a utility in Baden Wuerttemberg. It still needs approval from European Union competition authorities.

The gas-fired plant is designated as a reserve power plant for Bavaria where the neighbouring nuclear power station Gundremmingen will be switched off in two stages, 2017 for block B and 2021 for Gundremmingen C.

A Siemens spokesman said the project was still awaiting approval from European cartel authorities. “We cannot yet give any further details.”

He also said that a firm order would only materialise after the consortium had been fully established.

But the state, like Germany as a whole, still needs some conventional energy capacity to guard against supply swings in a region that is home to carmakers BMW and Audi that are heavy energy users.

Analysts say that gas plants operating in the reserve market for power in Germany that can switch on quickly when there is a shortfall can earn extra money , making them commercially viable.