Germany will return almost 2 GW of coal-fired power plants to operation as a safety net.

German coal-fired power plant operators may return up to 1.9 GW of reserve power units to the market this winter to cushion the power system in case of peak demand. After a reduction in supplies from the Russian Federation, Berlin resumed the operation of coal plants and extended their service life; last winter, coal thermal power plants also insured the country’s energy system. Due to rising gas prices, until recently, utility companies were actively using coal generation. Although gas prices have now fallen significantly, analysts note that there are risks in the event of a cold winter.

German utilities RWE and LEAG are preparing to launch coal-fired power plants that are currently in reserve. The German Cabinet of Ministers has authorized the return of reserve units to the market from October to the end of March 2024 in order to insure the energy system in the event of a gas shortage, the country’s Ministry of Economy reported on October 4.

We are talking about two RWE coal power units in Niederaussem, as well as a power unit in Neurath. In the east of Germany, LEAG may return to the market two units of a brown coal power plant in Jenschwald. The total reserve generation capacity is 1.9 GW. These capacities were already reserved by the German energy system last year, when the country faced a severe energy crisis caused by a reduction in pipeline gas supplies from the Russian Federation, and was forced to cut gas consumption. A decision may also be made to extend the operation of two more RWE coal power units in Neurath until spring 2025.

“These power plants are among the European top in terms of specific emissions of CO2 and harmful substances,” notes Sergei Kondratyev from the Institute of Energy and Finance. The German Energy Ministry said the decision to reactivate coal-fired power plants will not affect plans to phase out coal by 2030.

It was initially assumed that these coal blocks should be put into reserve or closed, and RWE planned to completely stop using coal in generation by 2038. Last October, the company shifted this deadline to the left to 2030, but at the same time the authorities allowed it to temporarily operate three coal blocks in North Rhine-Westphalia. RWE intends to build replacement gas units with a capacity of 3 GW in the future, which can also run on hydrogen, but there is no data yet on the start of construction.

If last winter Europe suffered not so much from power outages, but from extremely high prices for gas and electricity, then in the upcoming heating season these risks are significantly lower. German officials are generally positive about Germany’s preparedness for the coming winter. Underground gas storage facilities are 96% full, and LNG supplies to the country are also at a stable level. In addition, the country can import electricity from France, which has resolved technical problems with the operation of nuclear power plants, due to which about 15 units were taken out of repair last year.

In August, due to stabilization of prices in Germany, for the first time in the last year and a half, there was an increase in demand for gas from industry, thereby facilitating the energy transition from coal to gas. Electricity production from gas in August increased by 24% year-on-year, while production from coal-fired thermal power plants decreased by 48%. The share of coal generation in Germany’s energy balance in August was 23%, gas – 18%, according to GECF estimates.

Whether this coal-fired generation will be in demand this winter will depend on weather conditions, notes Sergei Kondratyev—now over 60% of the installed capacity of the German energy system comes from non-dispatchable renewable energy sources (SPP and WPP).

In September, production at coal-fired thermal power plants amounted to 9 billion kWh compared to 15 billion kWh in September 2022, the load at peak hours is now 10 GW (with an installed capacity of 37.5 GW). “But in winter, judging by the indicators for the passage of winter 2022/23, on days of maximum load 26.3–26.5 GW may be in demand, that is, taking into account possible unscheduled repairs, each power unit in coal generation may be counted, and to the conclusion 2 GW of capacity was planned,” the analyst adds.

Tatiana Dyatel