Germany Plans First Auction for New Gas Plants in September
(Bloomberg) -- Germany plans to start holding tenders from September to build new gas-fired power plants, a draft law seen by Bloomberg shows, a move that has come under pressure from the chancellor’s junior coalition partner.
A total of 9 gigawatts of long-term capacities will be auctioned on Sept. 1 and Dec. 8, with another round of 2 gigawatts — which can include battery storage — held in May 2027, according to the document from the economy ministry. The legislation has been in the works for three years, and the plants should be operational by 2031.
Europe’s biggest economy — which took its last nuclear plants offline three years ago and plans to phase out coal — will need the flexibility of gas-fueled power when wind and solar output aren’t enough. Germany plans to finance the auctions via a levy that’s added to consumers’ bills, a potentially controversial measure after a contentious gas-storage levy was recently abandoned.
A ministry spokesperson confirmed the details of the document and said that discussions over the draft law have started. However, the proposal faces pushback from Chancellor Friedrich Merz’s junior partner, the Social Democrats, within the government and in parliament.
“These proposals amount to a surrender in the face of the agreed-upon goals and the urgent demands of the fossil fuel crisis,” Nina Scheer, energy lawmaker for the Social Democrats, said in a statement. The plans “perpetuate our dependence on natural gas rather than overcoming it.”
The new gas plants are proposed to run for at least 15 years and should be capable of switching to hydrogen, as part of the country’s aim to be climate-neutral by 2045.
“No power plants capable of using hydrogen are currently being built on the market,” Energy State Secretary Frank Wetzel said at a utilities conference of Handelsblatt in Berlin on Wednesday. “We are now promoting them — that is key.”
The government will introduce a capacity market from 2032, with auctions in 2027 and 2029, according to the document, which was first reported by German media. As a way to encourage local production, half of the parts used for the new plants should be manufactured in the European Economic Area.
(Updates with SPD reaction in the fourth paragraph.)
©2026 Bloomberg L.P.
