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Germany’s natural gas transition at risk
- 12 years ago (2012-04-28)
- Junior Isles
Wingas GmbH, one of Germany’s largest importers of natural gas, claims the German government needs to improve investment conditions for gas-fired power plants if it is to ensure continued energy security.
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"We need more gas-fired power plants, but we also need a clear political commitment on how to secure future baseload power demand under economic conditions," said Wingas’ managing director, Gerhard Koenig.
Koenig asserted that the government should help improve economic conditions for new-built gas-fired power plants, in particular for small municipal utilities, which would boost competition.
His comments come ahead of a potentially important meeting between Chancellor Angela Merkel and key German energy industry officials next week on power generation issues.
Wingas, a joint venture between BASF SE's oil and gas unit Wintershall AG, and Russia's Gazprom OAO, is clearly in a position to benefit from any new gas power plant proposals, since these facilities require lucrative gas supply contracts.
Koenig's worries are shared by many power producers who fear energy prices are too low to justify the billions of euros of investment Germany needs to increase renewables and replace nuclear generation simultaneously.
The proliferation of renewables is already reducing the number of hours that German fossil-fuelled power plants are operating, hurting profits.
Germany currently only uses coal and gas-fired power plants when there is not enough wind and solar power to meet demand.
The government has expressed its support for gas-fired power plants to fill the power generation capacity gap left by the decline of nuclear but, as Koenig points out, market conditions put this into doubt.