PVTIME – Germany’s Federal Network Agency has published the results of the country’s first tender for long-term backup capacity. A total of 5.16GW of firm generation capacity was awarded across 11 successful bids. Structured under the Electricity Supply Security and Capacity Act, the awarded assets will be supported by 15-year capacity payment agreements, which will help to maintain a reliable power supply during periods of low output from variable renewable sources as Germany continues its programme to phase out coal.
A total of almost 12GW of bids were received against an original target of 4.5GW, demonstrating significant market interest in the scheme. RWE has secured contracts for three new combined-cycle gas power stations designed to operate with hydrogen compatibility in the future. These facilities are to be located in North Rhine-Westphalia, and the volume awarded to these three sites accounts for around 2.1GW of reduced capacity. The plants will initially run on natural gas, but will have the technical capability to accommodate rising shares of green hydrogen once the necessary infrastructure is in place. Pre-construction planning, including permitting and supply arrangements, is already underway, with site activity due to commence shortly.
The remaining capacity has been allocated to other market participants, including LEAG. The average clearing price for the auction was below the regulatory ceiling, indicating competitive pricing among bidders and limiting the public cost burden for these grid stability assets.
This tender is a vital part of Germany’s broader energy transition strategy, providing dispatchable generation capacity to support the increasing deployment of wind and solar power. While the hydrogen-ready design paves the way for decarbonisation throughout the asset’s lifecycle, the long-term emissions profile of these plants hinges on the timely expansion of domestic green hydrogen production. The full construction and commissioning timelines for projects other than those developed by RWE will be confirmed as the individual permitting processes progress.
