February 28, 2020 / 3:24 PM / a month ago

Germany adds 1,056 MW to electricity reserve capacity from October

FRANKFURT, Feb 28 (Reuters) - Germany’s electricity grid companies on Friday published details of compensation levels for three operators of 1,056 megawatts (MW) of power capacity which will close their plants in October but keep them on standby in case of output shortfalls.

As Europe’s biggest economy plans to abandon nuclear power by 2022 and coal burning gradually by 2038, the energy regulator is tasked with ensuring supply through a number of schemes, including an auction scheme, awarding compensation in exchange for closure while reserving capacity.

Reserve capacity is needed because power cannot be stored to large extents, making it necessary to closely align supply and demand, especially as expanding green power capacity is largely weather-dependent.

The 2,000 MW capacity reserve auction scheme was open to operators of brown coal-fired plants as policymakers wanted to combine the need to ensure balanced supply with incentives to close heavily carbon polluting power generation.

A statement issued by the four big transmission system operators (TSOs) said the regulator has awarded 68,000 euros ($73,902.40) per MW per year for the two years starting on October 1.

RWE obtained approval for closing its Gersteinwerk F and G plants of 340 MW each, Statkraft Markets to close its Landesbergen and Emden sites of a total 106 MW, and Leag, an operator in Lusitania, received money for a total 270 MW of closures.

A total of 1,056 MW capacity won compensation in exchange for closure, the shortfall resulting from some would-be participants not qualifying, the TSOs said.

A statement from the regulator said that there was no concern that the shortfall would endanger the system’s ability to meet demand, citing a recent monitoring report by the Economy Ministry that had examined conditions in the sector.

Some grid operators, manufacturing companies and analysts disagree with the ministry, arguing that it is risky to try and rely largely on renewables.

Germany could struggle to keep the lights on and cannot rely on imports from neighbours at times of unfavourable weather, they say. ($1 = 0.9201 euros) (Reporting by Vera Eckert, editing by Elaine Hardcastle)

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