(Bloomberg) — Germany’s largest grid operator says that the costs of managing the country’s power network likely jumped to a new record of nearly €3.5 ($3.8) billion in 2022.
(Bloomberg) — Germany’s largest grid operator says that the costs of managing the country’s power network likely jumped to a new record of nearly €3.5 ($3.8) billion in 2022.
Costs arise when operators have to intervene in the system to manage temporary power bottlenecks, switch on and off power plants in reserve or equalize fluctuations from solar or wind power. System management costs were at €2.3 billion in 2021 and €1.4 billion in 2020.
“If we now set the course for a new market design and for accelerating grid expansion, I am convinced that these costs can be reduced significantly,” Amprion GmbH chief executive officer Hans-Juergen Brick said in an interview in Berlin on Monday.
Germany has faced soaring grid management costs as French nuclear woes and high gas prices in the wake of Russia’s invasion of Ukraine pressured the power system. To stabilize power prices for customers, the government has already announced €13 billion to reduce the grid usage fees, and also introduced general power and gas price subsidies for industries and households.
Europe’s largest economy is now working on a redesign for its power market to bring it in line with its climate goals. The European Commission is also in the process of redesigning the bloc’s power market.
“We need planning certainty for investors to invest in gas-fired power plants. We don’t see that,” said Brick, highlighting one of the priorities he sees for the new power market design.
To reach the country’s goal of producing 80% of power from renewable sources by 2030, Germany would need between 15 to 43 gigawatts of additional capacity from gas-fired power plants to ensure grid stability, the Amprion CEO said.
“For 15 gigawatts alone, 30 new gas-fired power plants would have to be built. This is a key prerequisite for the phase-out of coal by 2030,” Brick said.
He also advocated enhancing the power market with so-called “capacity market” elements, which would compensate power producers for their availability — rather than for actual electricity — to encourage security of supply.
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