German gas and hydrogen industry welcomes EU-Germany power plant deal

The European Commission and the German federal government have reached a fundamental agreement on key elements of Germany’s long-debated power plant strategy, paving the way for new tenders totaling 12 gigawatts of controllable generation capacity.

Under the agreement announced on January 15, 2026, ten gigawatts are to be tendered as hydrogen-ready gas-fired power plants, while a further two gigawatts will be awarded through technology-neutral tenders.

Dr. Timm Kehler, CEO of the Association of the Gas and Hydrogen Industry (Zukunft Gas), described the deal as an important breakthrough but warned that the planned volumes fall far short of what Germany will need to secure reliable electricity supplies in the coming decade.

“We are very relieved about the agreement between the federal government and the EU Commission on the power plant strategy,” Kehler said. “Without controllable power plants, electricity in Germany will become scarcer – and therefore more expensive.”

At the same time, he cautioned that the announced 12 gigawatts of new capacity are “by far not sufficient” to close the looming supply gap as Germany phases out nuclear and coal-fired generation.

“Germany will need significantly more secured capacity by 2035 to back up wind and solar power and to ensure supply during periods of low renewable output,” Kehler stressed.

He pointed to the latest monitoring report from the Federal Network Agency (Bundesnetzagentur), which concludes that at least 22 gigawatts of additional controllable capacity will be required by 2035 to maintain supply security.

The industry association particularly welcomed the requirement that all newly built plants must be hydrogen-ready from the outset. According to Kehler, this creates early and tangible demand for hydrogen and sends an important investment signal for the planned national hydrogen backbone network.

“We also see the additional measures announced by the federal government to encourage an early switch to hydrogen as the right and important step,” he added.

Beyond the immediate tender program, Kehler emphasized the importance of a broader reform of Germany’s electricity market design. The fundamental agreement includes a commitment to introduce a comprehensive, technology-neutral capacity market – a model long advocated by the gas industry.

“Only a capacity market reliably rewards available capacity,” Kehler argued. “It provides investment security, prevents expensive scarcity pricing, and helps stabilize electricity prices.”

Source and Photo: Gas- und Wassserstoffwirtschaft e.V.