Germany Looks at 2020 Power Plan and Energy Balancing

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Researched by Industrial Info Resources (Sugar Land, Texas)--According to Stephan Kohler, the CEO of Germany's energy agency Deutsch Energie-Agentur GMbH (DENA), the country does not have an energy deficit at the moment, but could be in short supply in the future. He said that electrical power would be more expensive and dirtier if the construction of efficient coal and gas plants was not accelerated. The development of the country's renewable energy must be interconnected with a reliable supply from efficient and flexible coal and gas plants, he said. The security of supply was vital to an industrialized nation like Germany, he added.

A study published by DENA in conjunction with the Technical University of Munich, "Power Plant and Grid Planning in Germany," calculates that the deficit of guaranteed power plant output in reaction to peak demand will increase to 11,700 MW. This level of deficit will only occur if overall power consumption is reduced by 8% and the quota of renewable energies and combined heat and power generation can be increased to 30% and 25% respectively.

For related information, see March 28, 2008, news article - Germany Faces Major Power Shortages as Technology Debate Stalls Projects.

DENA considers that construction of the additional coal- and gas-based generating capacity through 2020 is urgently needed and will require about 15 major new power plants. Current committed plans for power plants are not sufficient to ensure that future energy demand during peak periods can be met cost-effectively in a secure and environmentally friendly way. If the modernization of coal- and gas-fed power production is not accelerated, old and inefficient fossil-fuel-based plants will be in use for a longer period, leading to higher electricity prices and having a negative impact on the climate.

The European Energy Forum has been reviewing the continent's power planning requirements through 2020. Areva's (EPA:CEI) (Paris, France) Senior Vice President for International Affairs and Marketing, Ana Palacio, addressing the forum on scenarios for the European electricity mix by 2020 and beyond, said that the E.U.'s 30% emission-reduction target could affect the security of energy supply and that energy policy would have to be adapted to reach both environmental and supply objectives. The proposed phasing out of nuclear power generation in some countries was another factor affecting the electricity supply gap in Europe, she said. For related information, see March 25, 2005, news item - German Nuclear Phase-Out Creates Major New Coal and Gas-Fired Power Investment Opportunities.

In a move to ensure power producers could export balancing energy into German major power utility E.ON's (OTC:EONGY) (Dusseldorf, Germany) transmission zone, the European Commission has adopted a decision that renders commitments offered by E.ON to divest the company's ultrahigh voltage transmission system in Germany and to sell about 4,800 MW of its generating capacity legally binding. E.ON is proceeding with these selloffs within a prescribed timeframe. The Commission had concerns that E.ON may have withdrawn available generation capacity from the German wholesale electricity markets in order to raise prices and deter new investors from entering the power-generation market. Furthermore, the Commission had concerns that E.ON may have favored its production affiliate for providing balancing services and prevented other power producers from exporting balancing power into its transmission zone.

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