April 23, 2018 / 9:14 AM / 7 months ago

German power plant lobby sees tighter supply by 2023

FRANKFURT (Reuters) - German power companies see a potential gap between conventional electricity supply and demand by the early 2020s, urging policymakers to help investors plan better by rewarding conventional capacity and speeding power grid expansion.

A visitor fist bumps a humanoid robot at the booth of IBG at Hannover Messe, the trade fair in Hanover, Germany, April 23, 2018. REUTERS/Fabian Bimmer

“Existing overcapacity will not just disappear completely within a few years. What’s more worrying is that we will run into undersupply of secure capacity by 2023 with our eyes open,” said Stefan Kapferer, managing director of the German energy industry association BDEW.

Germany, Europe’s largest economy, could retire 18,600 megawatts (MW) of electricity capacity by 2023 while adding about 4,400 MW, the group said.

While conventional fossil fuels capacity could fall to 75,300 MW by that stage, the energy regulator works on the assumption that maximum power demand could reach 81,800 MW, risking problems because power cannot be stored to a large extent.

The lobby issued its statement on the first day of the Hannover Messe trade fair. It stressed it did not want to conjure up the image of system breakdowns.

Germany’s renewable power capacity has reached a level of around 100,000 MW.

The problem is that while this can theoretically meet 100 percent of demand under favourable weather conditions, once the weather turns, there can be next to no green power.

In addition, some 6,800 MW of unprofitable capacity is currently forced to stay online as the regulator has classified it as system-relevant for energy security, but this may disappear at some stage, BDEW said.

A government goal to cut carbon dioxide emissions by 55 percent by 2030 from 1990 levels could be missed if coal-fired capacity was needed to stay online during the next decade to ensure the stability of power networks.

As a remedy, BDEW said policymakers should favour low-pollution combined heat and power, called cogeneration, energy storage facilities, new gas-fired power plants and expand new grids faster.

Cogeneration and storage efforts are being held back by unfavourable investment conditions while gas plants have become unprofitable due to high fuel prices.

Meanwhile, Germany is set to quit nuclear power by 2023, losing 11,000 MW of capacity between 2016 and then.

BDEW represents around 1,800 companies involved in the production, transport and sale of power, gas, water and heat.

Reporting by Vera Eckert; editing by Maria Sheahan and Jason Neely

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