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• Germany's coalition government has proposed reforms to encourage investment in gas-fired power plants as part of its strategy to strengthen energy security during the transition away from coal.
• The reforms include raising the maximum permissible bid for power station tenders and easing certain operational requirements to improve project viability.
• The government plans to tender 12 GW of new gas-fired power generation capacity in 2026, with projects distributed across northern and southern Germany.
• Industry representatives have welcomed the measures, while opposition leaders have criticised the proposals over concerns about rising costs and increased dependence on gas.
Germany's coalition government has unveiled a series of investor-friendly reforms aimed at accelerating the construction of gas-fired power plants, as the country continues its transition away from coal-based electricity generation while seeking to maintain energy security.
Under the proposed legislative changes, the government plans to increase the maximum permissible bid for gas power station tenders to 244,000 euros per megawatt, up from the current limit of 173,000 euros per megawatt. The higher ceiling is intended to improve the commercial viability of new projects in the face of rising construction and financing costs.
The reforms form part of Germany's broader plan to tender 12 gigawatts (GW) of new gas-fired generation capacity during 2026. The additional capacity is expected to provide reliable backup power as the country continues phasing out coal-fired power plants and expands its renewable energy portfolio.
The proposed legislation also seeks to make investment conditions more attractive by revising operational requirements for power plants. Among the key changes is the relaxation of rules governing continuous electricity supply, making future projects more flexible and commercially viable for developers.
To ensure balanced infrastructure development, the government intends to distribute the new capacity regionally, with approximately one-third of the tender volume allocated to northern Germany and the remaining two-thirds to the southern part of the country, where electricity demand is higher and grid support is considered more critical.
Germany's energy industry has welcomed the proposed reforms, stating that the revised framework improves the economic feasibility of investing in modern gas-fired power stations at a time of escalating project costs. Industry representatives have urged lawmakers to approve the legislation before Parliament's summer recess and secure clearance from the European Commission so that the next rounds of tenders can proceed later this year.
However, the proposals have drawn criticism from opposition leaders, particularly the Green Party, which argues that the reforms could substantially increase public spending on gas infrastructure and slow the country's transition towards cleaner sources of energy.
The proposed measures underscore Germany's effort to balance its long-term decarbonisation goals with the immediate need for reliable and flexible electricity generation during the ongoing transformation of its energy sector.
Source: Reuters
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