Dear readers of the vgbe energy journal,

It the investment challenges posed by the energy transition remain the central issue facing the German energy sector. Ever since the phase-out of nuclear power and the legally mandated accelerated closure of coal-fired power plants, it has been clear that there is a significant shortfall in controllable power generation capacity: Estimates range from 20 to 40 GW. However, political uncertainties and a lack of financial incentives have hindered the urgently needed construction of modern, efficient power plants for years.

The Power Plant Strategy was intended to remedy this – yet three years after the initial debates on the matter, we still face a significant capacity shortfall at the end of the 2020s and the start of the 2030s. For a long time, the actual demand for power plants was overestimated at both national and European level. The assumption that electricity from PV and wind alone would suffice was dominant. The idea that numerous gas-fired power plants would emerge almost automatically was proved to be an illusion with the publication of the Federal Network Agency’s 2023 Security of Supply Report. Subsequently, the political focus was initially one-sidedly on hydrogen power plants – a path fraught with major challenges.

It was only with the 2025 Security of Supply Report and pressure from the new Federal Government that the door opened to a de facto accelerated capacity market: At last, Germany was able to signal to Brussels that a realistic mechanism was being designed – involving gas-fired power plants and the aim of establishing a comprehensive capacity market from 2032 onwards. Yet time is of the essence, and even now the fast realisation of dispatchable generation capacities designed for continuous operation still faces a number of hurdles.

Power plant developers in Germany have long since prepared themselves: there are numerous, technically mature projects; many are already in the permitting process. Contracts with suppliers have been negotiated, and, not least, tens of millions of euros per project have been invested at their own risk – among others for grid and gas capacity reservations. The “T-5” tenders, running until 2031, set a tight but still achievable timeframe. Yet further delays jeopardise the future of the projects. In the global market for large gas turbines, Germany now plays an almost negligible role: the action is in the USA, Asia and the Gulf states. Delays and special requests, for example regarding system services, further weaken Germany’s position with manufacturers. Clarity is needed here: planning and investment certainty are paramount.

The requirements for H2 readiness in efficient gas-fired power plants set out in the previous Federal Government’s drafts were, from an investor’s perspective, unfeasible. When can large gas turbines be converted to 100 % hydrogen? What will it cost? Is there enough hydrogen available? None of these questions could or can be answered today. The new Federal Government’s shift towards tenders for the transition to hydrogen is the right approach. This is how technical solutions will be found.

System services such as spinning reserve, reactive power provision or frequency control are necessary to keep grids stable – there is no doubt about this. However, special national requirements for new power plants make implementation more expensive and slow it down. Operators need clear rules; a flood of regulatory authorisations or vague technical requirements hamper investment and jeopardise grid stability. Power plant operators have a clear position on the technical feasibility of system services, for example regarding the power limit for synchronous condenser couplings on turbine shafts of approximately 350 MW(el) and the technically acceptable tripping conditions in the event of frequency changes (keyword ‘RoCoF’).

Here, the vgbe’s neutral platform is crucial both for fostering independent opinion-forming and for providing a collective counterbalance to the transmission system operators. The challenges facing our electricity grid are immense, and targeted infrastructure expansion is essential. This is precisely where the focus should lie – not on regulations that stifle innovation for individual generation units.

Many power plant projects are ready to go. Utilities and developers are ready to invest. However, they need reliable market frameworks and planning certainty. The Power Plant Safety Act presents a major opportunity: the energy transition can only succeed with dispatchable power plants and a functioning market design. It is time to deliver on the political promise to create planning certainty – and to make Germany a pioneer once again for innovative, climate-friendly power plants.