VGB POWERTECH 7 (2021) - International Journal for Generation and Storage of Electricity and Heat

White Paper: German coal phase-out 360° VGB PowerTech 7 l 2021
es of 100 MW units. The current design is
not capable of utilizing the potential of
small decentralized units which is not only
creating exclusive competition, but also depriving
the grid from a strong potential for
stabilizing.
5. Security-of-supply
German coal phase-out began with the initial
shut-downs last December, but it was
subsequently necessary for the Heyden
power plant (875 MW) to be brought back
to meet the demand in cold weeks already
6 times in the past months. This further increased
concerns about the feasibility of
the phase-out plan. BNetzA has changed
the status of Heyden, Datteln 4, Walsum 9
and Westfallen to ‘system relevant’ to serve
as grid reserve capacity.
The coal phase-out is overlapping with the
ongoing nuclear phase-out, which makes
the security of supply issues even more
prominent. The nuclear phase out has already
been planned following Germany’s
response to the Fukushima incident and
the decommission dates of the last operating
6 power plants are set. Nuclear generation
will end by the end of 2022. Location
of the power plants to be closed can be seen
form the Figure 5.
There will definitely be a need for flexible
generation with the ever-increasing share
of renewables in the fuel mix. Heat and
power coupling law (KWKG) incentives
will be aiming for developing further gas
capacity and promoting retrofit of the existing
young coal power plants for CHP. It is
questionable, if such modifications or new
builds can be finished on time.
Current estimations is that there will be a
need for around 18GW of additional gas
capacity to fill the gap after phase-outs and
enable the planned renewable integration
by 2030. On the other hand, the state
might struggle to find the necessary investment
for the expansion of the gas capacity
as such facilities will mostly generate income
during the demand spikes where renewables
fall short and in the balancing
markets when opportunity arises. The option
of a Capacity Market was brought up
by Green Party to attract the necessary investments,
this would be a major change in
the market design, it would go too far to
cover this subject in this article.
Currently, 93 % of the German gas mix is
imported, mainly from Russia, The Netherlands
and Norway. Dutch gas will be seriously
reduced, if not completely, due to the
termination of the activities in the Groningen
field by 2022. More gas dependence
presses the need for diversifying supply
sources.
Nord Stream 2 is to be commissioned this
year to double the gas import from Russia
to 110 billion m 3 , despite sanctions from
the US. There are 8 new LNG terminals being
built on the German North-West coast
to be privately operated, enabling imports
Fig. 5. Location of the power plants to be closed in Germany.
EnAppSys will be closely following
the reperussions on the
balancing markets
The blame for extreme system prices usually
rests on the shoulders of renewables
rather than on the market design.
German balancing markets are very dynamic.
Not just in terms of prices, but also
in terms of rule changes. The market demainly
from the US which should ease the
Nord Stream 2 tension.
Most of the new gas turbines are designed
to handle ~30 % hydrogen concentrations
in the gas mix, with the ambition of increasing
up to 100 % in the next decade.
With the current efforts in the hydrogen
and PtX sector developments, the solution
might arrive from sector coupling in the
mid-term.
Interconnectivity of the grid is an additional
asset for the wholesale and balancing
markets. There is a further need for flexible
loads, short and long storage solutions for
a future energy-system with such a high
level of renewable penetration.
6. Electricity prices/Affordability
The government statements rely on decreasing
power prices with increasing renewable
share to balance out the price increase
due to the phase-out.
Another increasing concern is related to
carbon prices. The growing impact of
hedge and investment funds in the carbon
market may lead to even faster decarbonization,
leaving less time to develop the nec-
essary gas capacity. It may also cause very
high prices during the peak demand periods.
On the other hand, already a few schemes
were designed for reducing the electricity
prices, by reducing taxes. A big share of the
income generated from carbon allowances
for heating and transportation will be
used to reduce the EEG-levy which constitutes
21 % of the final consumer bill. Secondly,
once a year, an electricity subsidy
can be given to the private and business
consumers after 2023. There is also a plan
to provide subsidies to energy intensive
companies that compete on an international
level.
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