FRANKFURT, April 24 (Reuters) - German power companies are calling into question the economic viability of over 90 percent of planned gas-to-power plants in Europe’s largest economy, German energy industry association BDEW said, demanding policymakers clarify the role of gas.
“Investment in gas-fired power plants will only materialise if the politicians ensure that gas as a feedstock and gas infrastructure have a political future,” BDEW managing director Stefan Kapferer said in a statement on Monday.
The association cited a lack of profitability at gas-fired power stations.
Their margins are not competitive due to competing energy supply from subsidised renewable power. Germany also runs a high share of coal-fired power thanks to a relatively relaxed carbon emissions regime.
But both gas-fired and pumped storage hydro plants are flexible and therefore a good counterbalance to the growing share of renewables, BDEW said, adding that it knew of pent-up investment plans for 4,660 MW of pumped storage.
Germany is headed for a permanent exit from nuclear power by 2022.
The lobby issued its statement along with plant data at a news conference on the first day of the Hanover trade fair, the showcase for Germany’s industry.
It warned that if current plant closure plans were compared with the low volume of new constructions, Germany could fall short of 24-hour supply of power in future years.
Wind and solar energy have been expanding to a share of over 30 percent of power supply but cannot guarantee supply at all times, while 6,623 MW of conventional plants have been retired over the last four years.
BDEW called on future governments to put in place “capacity mechanisms” like in Britain and France.
These pay unprofitable plants for offering certain volumes at certain times, to alleviate stress on the power transport grid.
BDEW represents around 1,800 companies active in the production, transport and sale of power, gas, water and heat. (Reporting by Vera Eckert; Editing by Maria Sheahan)