Germany to quicken power market reform amid rising demand, minister says


Germany must act quickly to meet its renewable energy targets if it wants to keep the lights on amid rising energy demand, Economy Minister Robert Habeck said.

Habeck is looking to overhaul the 550 terawatt hours (TWh) per year market, as demand rises and power supply becomes more intermittent as Europe's largest economy moves away from fossil fuels in accordance with its climate commitments.

"We will do most of the necessary work in 2023," he said at a consultation meeting on power market reform.

Germany's goal is to generate 80% of its electricity from wind and sun by 2030, a target that has grown more urgent since Russia's reduction in fossil fuel supplies to Germany last year.

When more reliable nuclear and coal production is phased out, the government will prepare tenders for gas-fired power capacity, according to Habeck.

He said a tender strategy will be available this quarter, emphasizing that gas will eventually be replaced by lower-carbon options such as hydrogen produced from renewable power via electrolysis.

Another difficulty will be the simultaneous growth in demand for electricity to power electric vehicles and heat pumps.

According to Habeck, Germany's approach could put it apart from other European Union countries that holding on more stable sources of power.

"Creating alternative baseload will be a specific challenge," the minister said. "In a way, it will be like teaching an elephant how to dance.”

Industry representatives said Germany should be practical and learn from other countries' experiences.

According to Samuel Alt of Siemens Energy, Britain implemented a so-called capacity market in 2014 to entice investors into renewables and dramatically reduce its carbon intensity.

Daniel Hoelder, a representative of renewable developer Baywa r.e., said that tax credit incentives proposed by the U.S. administration for renewable resources were "a very, very interesting option."













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