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Germany Approves 11 GW Reserve Power Plan to Support Coal Phase-Out

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Germany's parliament approved an electricity supply law to strengthen power security during the country's coal phase-out by producing a total of 11 gigawatts of backup power capacity, the Federal Ministry for Economic Affairs and Energy said Friday.

The government will auction two rounds of 4.5 gigawatts each, totaling 9 GW, or about 20 power plants. It also plans a separate 2 GW auction in May 2027 that will allow battery storage projects to participate, the ministry said.

The law passed Friday will use reserve power plants to generate electricity when wind and solar output falls, helping keep the grid stable, the ministry said.

The new plants must also be hydrogen-ready and switch to fully climate-neutral operations by 2045, while the 9 GW of reserve capacity must provide electricity for extended periods when renewable output stays low, the ministry said.

Lawmakers also changed where the new plants will be built. One-third of the projects will go to northern Germany and two-thirds to southern Germany after several states called for a different regional balance, the ministry said.

The law also raises the maximum bid cap to 244,000 euros ($278,649) per megawatt from 173,000 euros/megawatt, allowing operators to seek higher payments for making reserve plants available through the auctions, the ministry said.

The government also made it easier for battery storage operators to join the auctions. Systems can now pause for up to three hours instead of one, and they only need to recharge to 80% before supplying electricity again, the ministry said.

The Bundestag also asked the government to quickly introduce rules that allow small power plant pools to qualify for the electricity market and to speed up the digitalization of Germany's power grid, the ministry said.

The coalition also aims to complete more than 90% of the smart meter rollout by the end of 2030, offer a lower-cost smart meter option, improve grid data sharing, guarantee industrial grid connections, and prevent rollout delays from limiting market participation, the ministry said.

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