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Fig. 1. STEAG GmbH demands fair remuneration for reserve power plants. // Bild 1. Die STEAG GmbH fordert eine faire Vergütung für Reservekraftwerke. Photo/Foto: STEAG

STEAG calls for fair remuneration for reserve power plants

In 2022, STEAG GmbH, Essen/Germany, brought around 2.5 GW of additional power plant capacity back onto the market. Of all the power plant operators, this was the biggest contribution to ensuring security of supply in Germany during the recent energy crisis. These plants are now being withdrawn from the market, but are to remain in the grid reserve.

When the supply situation in Germany and Europe was significantly tense in autumn and winter 2022 due to the Russian war of aggression against Ukraine, STEAG did not hesitate for long: in Saarland the Weiher (656 MW) and Bexbach (726 MW) power plants, the MKV (179 MW) and HKV (211 MW) units in Völklingen-Fenne and the Bergkamen power plant (717 MW) in the Ruhr region were made fit for market operation in a very short time and in a real tour de force by the workforce. All of this was done not least at the express request of the German government. “Since then, our hard coal-fired power plants have made an important contribution to ensuring security of supply,” emphasises Andreas Reichel, Chairman of the STEAG Management Board and Labour Director. “We can be proud of what we have achieved.” The Substitute Power Plant Provision Act (EKBG), which enabled the reserve power plants to return to the market for a limited period, is expiring, meaning that the five power generation plants provided by STEAG 18 months ago, with a total of 2.5 GW of power plant capacity, will be withdrawn from market operation again on 1st April 2024.

However, they will continue to make a significant contribution as part of the grid reserve: In March 2024, the Federal Network Agency (BNetzA) decided that the five STEAG Power power plant units in question are system-relevant. This means that STEAG, as the owner, is not allowed to switch off these plants, but must keep them permanently operational. In the opinion of the BNetzA, the four units in Saarland and the power plant in the Ruhr region are essential for grid stability.

Should it be necessary in the future, the transmission system operator Amprion could request these power plants with a short lead time to stabilise the electricity grids. “From now on, we will be working on the instructions of the grid operator,” Reichel continues. “This is good for security of supply in Germany. However, this model is not economically viable under the current rules.”

This is particularly evident in the case of the Weiher and Bexbach power plants in Saarland. The BNetzA first categorised these plants as system-relevant in April 2017. They then remained in the grid reserve until the end of October 2022 before they were allowed to temporarily return to market operation following the adoption of the EKBG. The BNetzA has now categorised both plants as systemically relevant once again – until the end of March 2031. “If this decision is upheld, we are talking about a system relevance of almost 13 years in the case of Bexbach and Weiher,” says Reichel. “The grid reserve is not intended for such a long period.” Strictly speaking, STEAG would be deprived of its ownership rights to the power plants for more than a decade. STEAG has therefore lodged an appeal against the BNetzA’s designation decision.

At the same time, the German government expects power plant operators to make considerable investments in the construction of new climate-neutral gas-fired power plants by 2030, which STEAG is also keen to do. Reichel is therefore calling for a new remuneration model (Figure 1). “With the current pure cost reimbursement for power plants in the grid reserve, we are a long way from appropriate remuneration for entrepreneurial activity. We must be able to earn money with the plants. Because only companies that generate profits are in a position to invest.”

For years, the STEAG Group has been making a significant contribution to a secure supply of electricity and heat in Germany. This should continue in the future: STEAG is therefore suggesting that the bridging function of the existing coal-fired power plants should be honoured. “With our young subsidiary Iqony, we are actively shaping the energy supply of tomorrow. In addition to the expansion in district heating supply, this also includes the construction of new hydrogen-capable gas-fired power plants. Our power plant sites offer ideal conditions for these energy transition projects thanks to the existing infrastructure and highly qualified power plant teams,” summarises Reichel. (STEAG/Si.)