Germany to Sweeten Terms of Gas Plant Auction to Draw More Bids
(Bloomberg) -- Germany will lift the maximum amount it will pay developers in upcoming auctions for gas-fired power plants as it seeks to attract more bids for urgently needed back-up power capacity.
The maximum amount in the tenders for long-term capacity will be raised to €244,000 ($278,480) per megawatt, up from €173,000, according to an amendment from the ruling coalition and seen by Bloomberg. The move follows complaints from some operators that prices for gas turbines and other components have surged significantly.
Europe’s biggest economy — which has phased out nuclear energy and aims to exit coal by 2038 — needs new gas-fired plants as a back-up when wind and solar are not available.
A spokesperson for the Economy Ministry declined to comment.
The amendment, which was first reported by German media, is the final change to the bill scheduled to be voted in parliament on July 9. The tenders are scheduled for Sept. 8 and Dec. 29, and still need final approval from the European Union.
The amendment also allows for capacity that’s not been awarded to again be re-auctioned in a battery tender in May 2027.
LEAG — one of the country’s largest power producers and a major operator of conventional power plants — had been particularly skeptical of the previous auction design. It protested, arguing that at those price levels it wasn’t economical to bid in the auctions and reduce its own coal-fired generation.
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