The German energy industry will invest more than €60 billion ($79 billion) by 2020 in constructing and modernizing power plants, partly to compensate for the phase-out of nuclear energy in the country, according to a utility lobby group.
The German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft, BDEW) says that some 84 large power projects are planned, each of which will add at least 20 MWe of generating capacity. These facilities include 23 offshore wind farms, 29 gas-fired plants, 17 coal-fired plants and 10 pumped-storage power plants and have a combined capacity of 42,000 MWe.
Of these 84 projects, 69 are already in at least the permitting stage, while 15 are still at the planning stage under the management of various public utilities, large energy companies, associations and private investors. However, BDEW noted that in addition there are many small, local power plants being implemented by public utilities.
Speaking at the opening of the 2012 Hannover Fair, BDEW chairman Hildegard Müller said, 'The energy sector is optimistic about the future despite the known risks associated with the considerable investment needed for the development of large renewable facilities. The increased commitment to including offshore units and pumped storage plants is a positive sign that the industry is investing in future energy supply.' However, he warned that this optimism 'should not hide the fact that there are not only obstacles for renewable energy projects, but also for coal and gas power plants.' He added that some plans for conventional power plants 'seem to be on ice.'
Müller noted that while some gas power plants have already been approved, actual investment decisions are still pending because companies are concerned about the profitability of such plants due to uncertainty of how many hours they would be able to operate to provide baseload power.
The list of planned new plants is 'the optimistic view of investment trends and shows that enough projects are in the pipeline to replace the outgoing nuclear energy and act as a backup for renewable energy,' he said. However, he said that the government must have an energy policy in place by 2015 that removes uncertainties about investing in energy projects so that new generating capacity can be built by 2020.
Founded in 2007, BDEW represents some 1800 energy and water companies, ranging from local and municipal utilities to regional and inter-regional suppliers. The association is main point of contact on all issues relating to natural gas, electricity, district heat as well as water and wastewater.
In the days after the Fukushima accident in Japan in March 2011, Germany announced a three-month moratorium on the operation of its nuclear power reactors that started up in 1980 or earlier. This was followed by a decision to permanently shut down those eight reactors. In addition, the country is to gradually shut down its other reactors, with the last one scheduled to close by 2022.
Research from the KfW Bankegruppe earlier suggested that Germany needs to invest about €25 billion ($33 billion) per year until 2020 to achieve its energy targets. By 2020, Germany wants to have cut greenhouse gas emissions by 40%, doubled renewables to supply 35% of electricity and cut primary energy consumption by 20%. KfW Bankegruppe, which supports domestic development, put the total investment required for this at €239-262 billion ($321-352 billion). It noted that the scale of the challenge would require action from the public, business and the government. The government should find as much of the investment as possible to facilitate sufficient private contributions. Among the investment required is up to €10 billion ($13 billion) on 10 GWe of fossil generation; some €144 billion ($193 billion) on renewables; and up to €29 billion ($39 billion) on 3600 kilometres of high-voltage power lines. The bank noted that large capital-intensive projects have a tendency to go over budget.
Researched and written
by World Nuclear News