Germany Losing Time to Replace Coal as Berlin Scraps Gas Plan

Germany looks likely to fall behind in its push to phase out coal power plants by 2030 after a plan to expand gas-fired alternatives was canceled.

While Chancellor Olaf Scholz’s government pledged to pursue an early exit from coal — the country’s legal deadline isn’t until 2038 — the endeavor was dealt a blow this week when officials gave up on a draft law for the construction of new gas plants. The measure couldn’t be voted on after Germany’s three-party coalition collapsed last month, the Economy Ministry said.

Europe’s largest economy wanted to build gas-fired power plants to lower the energy sector’s greenhouse gas emissions and provide backup for its rapidly expanding its renewables. Developers have criticized the government’s slow progress in moving ahead with the plan and will now have to wait even longer. 

“The current situation means a delay of at least another year,” said Werner Götz, Chief Executive Officer of transmission system operator TransnetBW GmbH. “We are losing valuable time that we don’t have.”

The government’s aim was to auction five gigawatts of new capacity by 2026, for which it had set aside almost €18 billion ($18.9 billion). In total, it envisioned adding 13 gigawatts of capacity, and a part of that was supposed to be later converted to run on hydrogen.

Götz warned that continuing to rely on aging coal-fired power stations to stabilize the grid carries risks, since they are prone to failure with an average age of 33 years and there is hardly any staff left to operate them.

While most mainstream parties that are proving popular ahead of Germany’s Feb. 23 election acknowledge the importance of adding more backup power generators to complement renewables, it could take months before new plans are drawn up and passed by parliament.

Other energy companies, such as coal plant operator Steag GmbH, also voiced concern over the delayed timeline. A spokesperson said it takes a lead time of six years to construct a new gas-fired power plant, and while the firm has already started the planning work for several such plants, the timeframe would have been tight even without the latest development.

“Without these power plants, the phase-out of coal will become increasingly distant,” said Ingbert Liebing, head of the German Association of Local Public Utilities.

In addition to leading to higher carbon dioxide emissions, the delay will also result in higher electricity costs, said Simon Müller, director for Germany at think tank Agora Energiewende.

The scrapped plan will also have ripple effects in neighboring countries. Hydrogen-ready gas plants in Germany “were on our radar as potential first movers and hydrogen consumers,” said Stefan Van Laer, a climate transition developer at the Port of Antwerp-Bruges. “This means the rest of the market, like production or infrastructure development will also be delayed.”

Industry representatives hope that legislation on gas-fired power plants will be part of the new government’s first 100 days in office. The opposition conservatives — who are likely to gain ground in the snap elections — criticized the fact that preventing power shortfalls will now fall to the new government. 

“Time is pressing and we would tackle this as one of the first tasks in the new legislative period,” the Christian Democrat’s vice chairman Andreas Jung said.