Oil Report

German state agency calls for new power stations

ESSEN, Germany, Feb 10 (Reuters) - Germany must press on with building up conventional power generation alongside its push for a renewable energy expansion to avoid supply shortfalls and rising prices, German energy agency Dena said on Tuesday.

Demand increases and supply volatility arising from a growing share of erratic production from renewable sources still make new coal and gas-fired power stations necessary, Dena Managing Director Stephan Kohler said during a trade fair.

The state agency upheld forecasts Germany could be short of some 12,000 megawatts (MW), or 15 large units, by 2020 should investor confidence be hurt by the financial crisis, a strict European Union regime for carbon emissions from power plants, and local opposition.

“New build of fossil fuels-based power plants is essential to cover demand peaks, to avoid an efficiency gap due to old plants running longer and to speed innovation,” Kohler said.

“This is also to avoid rising power prices and to ensure Germany’s role as a base for industry is safeguarded.”

Germany’s power capacity stands around 80,000 MW now, a number which is often fully utilised during the November-March winter season, when demand peaks and full load is produced.

Dena’s supply gap calculations assume that contributions from renewable sources will double to provide 30 percent of German power by 2020, while nuclear energy, which currently provides just under a third, is phased out by 2021.

To encourage carbon-free production after 2013, Brussels asks generators to pay for all their CO2 permission permits.

Ambitious renewable producers recently said they could even triple their share of generation to 47 percent by 2020.

Kohler illustrated problems with wind energy, saying 23,000 MW were nominally installed, but high pressure fronts in January curbed wind speeds. On one day, only 113 MW capacity was active.

“This is nothing against renewables, we will just run into problems if we have 45,000 MW of weak load in the system (2020), we’d have to store power (which is technically not yet possible) or look abroad in the European market environment,” he said.

But imports from neighbouring Europe could not solve the problems as it faced wider supply shortfall scenarios itself.

Also, more trade would necessitate more spending on cross-border transmission lines, which faced uncertainty, Kohler said.

For a table showing planned German power stations please click on [ID:nLJ150582].

For a factbox showing delays and controversy around coal-fired plant projects please click on [ID:nLJ148634]

Reporting by Vera Eckert; Editing by Keiron Henderson