German government planning 4 GW reserve capacity scheme

A document from the German government proposes using already available power capacity to contribute to a new reserve scheme.

The scheme would equate to around 4 GW in back-up capacity, equivalent to eight coal blocks, although capacity auctions for the reserve could be attended by any plant type.

The paper seen by Reuters emerged from the economy ministry and shows no inclination towards generous pay-outs proposed by utilities.

The projects would be tendered at auctions and awarded to the lowest bidders and the capacity would then be in place to guard against network black-outs, a greater risk because of Germany‘s move away from nuclear and fossil fuels and use electricity from intermittent wind and solar units instead.
“The capacity reserve would offer the power market an additional ‘belt and braces’ insurance,” the paper said.

Under the plan, the utilities offering the capacity, would remain the owners of the plants but could only operate them to cope with emergencies, not to supply the market normally.

This would be rewarded by a standby fee, charged to consumers and monitored by the energy regulatory authority, the Bundesnetzagentur.

Plants in industrial southern Germany are already contracted to offer reserve capacity during winter seasons – when demand is highest – up to 2017.

The winter season reserve would eventually become obsolete, because new power transmission lines would be constructed to transport power, especially from wind, from the north to the south, the government said.

Vera Eckert, Senior Power Correspondent at Reuters told Power Engineering International that Minister Sigmar Gabriel’s chances of getting such a proposal passed were not clear cut.

“What are the chances of this going through? It is pretty detailed but there is opposition to the overall package for the power sector (including the planned tax on CO2 for the oldest plants and abandoning targets for combined heat and power), from within his party, the SPD, and from unions which are concerned about jobs, so there could still be changes.”


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