Germany must save gas. The use of coal instead of gas to generate electricity should make an important contribution to this. In recent months, however, the opposite has been the case in some cases. Meanwhile, wholesale electricity prices jump to record highs.
The extensive ban on the use of natural gas to generate electricity is one of the most important building blocks to prepare Germany for a possible gas shortage in the coming winter. Twelve percent of gas consumption last year went into electricity generation. This gas was to be replaced to a large extent by the start-up of coal-fired power plants, some of which were in reserve and some which had already been shut down. But this plan hasn’t worked out so far. On the contrary: data from the Federal Network Agency shows that power plant operators generated significantly more electricity from natural gas in May and July 2022 than in the same month of the previous year. In June, gas generation was slightly below the previous year’s level.
The reason for the increase in gas generation are acute problems with other energy sources in Germany and in neighboring countries connected to the German electricity market. In France, for example, only about half of the nuclear power plants are currently in operation due to technical problems and the dramatic low water in many rivers. In Germany, too, the low water has an impact, including on the transport of hard coal.
But the planned ramp-up of coal-fired power plants is also proving to be more difficult than hoped for other reasons. Since the start of the gas crisis, only one coal-fired power plant has actually been started up again, the hard coal-fired power plant in Mehrum in Lower Saxony.
The “Handelsblatt” quotes a manager from the energy industry who complains that the entire logistics chain for transporting coal is incomplete. The industry had already prepared for the decision to phase out coal in a few years. “It starts with the crane operator in Rotterdam and extends to upgrading railway wagons for transporting coal – there is a shortage everywhere,” says an industry manager.
The power plant operators are also being held back by the political framework. The legal basis for the hoped-for start-up of the coal-fired power plants is the new Replacement Power Plant Availability Act. However, the conditions for the return of coal piles that have been shut down or scheduled to be shut down are very narrow. The exemptions are initially limited to next spring. Operators fear that they could be stuck with the costs, especially for the purchase of coal, which is currently extremely expensive, if their power plant were only connected to the grid for a short time or not at all.
There are also problems with environmental regulations. Power plant operator Leag, for example, demanded that the federal government exempt two of its blocks of the Jänischwalde lignite power plant, which are currently in the safety reserve, from the requirements of the Federal Immission Control Act. A legally compliant retrofit takes too much time. All affected power plant operators have to fill hundreds of new jobs in order to be able to operate the reactors at full capacity again for a longer period of time, a difficult task in view of the shortage of skilled workers in almost all sectors. The Essen-based group RWE has announced that it intends to bring employees back from retirement.
The acute problems of the power plant operations and the increased generation of electricity from the drastically more expensive natural gas are also reflected in the price of electricity. Wholesale prices on the EEX power exchange reached new record highs this week. The price for one megawatt hour of electricity for delivery in the coming year exceeded the 500 euro threshold for the first time. The price has thus doubled within a few weeks and has increased around sixfold since last year.
