StromVKG: Good Framework Needs Realistic Investment Conditions

On the occasion of today’s hearing of the Bundestag Committee on Economic Affairs and Energy on the Electricity Supply Security and Capacity Act (StromVKG), Dr Timm Kehler, Chairman of the association Die Gas- und Wasserstoffwirtschaft, welcomes the draft act as an important signal for security of supply. At the same time, he sees a need for targeted improvements so that the act actually creates the conditions for investment in new power plants:

“After lengthy negotiations, the StromVKG establishes a sensible framework for the urgently needed investments in dispatchable power generation. The energy transition requires not only more renewable energies, but also capacity that is available at all times to cover periods of low renewable output, peak loads and to enable the coal phase‑out.

For the draft act to actually lead to concrete investments, the auction parameters must be right. The proposed maximum price of 173 euros per kilowatt does not adequately reflect the cost and risk reality of new power plant projects. Minimum bid levels, collateral, penalties and clawback rules – i.e. the skimming of market revenues in high‑price periods – should be designed in such a way that they promote cost efficiency and do not drive additional risk premiums into the bids.

We are also critical of the planned obligation regarding inertia provision (Momentanreserve). In our view, it does not belong in this act, but should be addressed through a separate procedure by the transmission system operators. If it nonetheless remains in the StromVKG, it must be designed so that no additional costs arise and technologies such as gas engines are not excluded from participation.

With regard to regional steering, however, we do not see any need for fundamental changes. The “South bonus” is sensible, but it does not replace location policy. New power plants need available sites, fast permitting procedures and timely availability of connections for electricity, gas and, looking ahead, hydrogen. Here, the federal states also have a role to play.

The StromVKG should be specifically improved and adopted before the parliamentary summer recess. Germany now needs planning certainty and a framework that truly enables investment in firm capacity.”