German energy minister Sigmar Gabriel said his government during the first half of this year will start talks with utilities about capacity mechanisms as a backup for volatile renewable energy output.
he rejected the creation of a full-fledged capacity market that would include all
loss-making fossil power plants in the country.
government should verify at which locations regional capacity mechanisms are
needed, he said.
look at that in discussions with industry and utilities,” Gabriel said at an
energy conference in Berlin.
“But we won’t
include all conventional (fossil) power plants in a capacity market. That would
be a bit expensive. We won’t do that.”
big utilities for long have been demanding a mechanism to get remunerated for
not shutting down completely gas or coal-fired power stations that are
loss-making as they operate only partly due to an abundance of renewable energy
that enters the country’s power markets with priority.
Terium, chief executive at Germany’s second-largest utility RWE, at the same
conference complained that his company has 16GW of capacity in gas-fired power
plants that mostly make losses.
plants are needed urgently, when the sun doesn't shine and the wind doesn’t
blow,” Terium cautioned, adding that the security of Germany’s energy supply was
in danger if too many fossil plants have to be switched off.
board member at Germany’s biggest utility E.ON, said that there are currently
no gas power plants that make money in continental Europe.
spreads (theoretical gross margins) are such, that the entire gas-fired
production fleet brings tears into one’s eyes,” he said at a press conference,
stressing that no operator will become rich through capacity mechanisms.