Bloomberg News

Merkel Energy Switch Needs Fossil Plants to Be Built, Dena Says

August 22, 2012

Chancellor Angela Merkel’s plan to exit nuclear-energy generation and switch to renewables means Germany will have to rely on fossil-fired plants to make sure the lights stay on, a state-owned energy researcher said.

Utilities need to build 49 gigawatts of new coal- and natural-gas fired plants by 2030 because wind and solar panels don’t produce around the clock, Dena said today. While Germany targets an 80 percent-share of renewables in its power mix by 2050, fossil plants will still have to provide most of the secured capacity, it said in a study commissioned by RWE AG (RWE), the German utility that mainly relies on coal.

“The pressure to build new fossil-fired plants now is very high,” Stephan Kohler, the head of Dena, told reporters in Berlin today. He also called for a European “capacity market” to ensure that fossil plants are commissioned even as their economic viability is undermined because renewables get priority in the German mix.

Merkel is shifting Germany away from nuclear power in favor of renewable sources such as solar and wind following the meltdown in Japan last year. The plan is estimated to cost 200 billion euros ($249 billion), according to the DIW economic institute in Berlin.

Germany’s energy supply in 2050 will “cost significantly more” than today’s in part because the country will have to import about 134 terawatt-hours of electricity a year, or 22 percent of its demand, Kohler said.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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