Finance
Germany, EU reach general agreement on power plant strategy
Published by Global Banking and Finance Review
Posted on January 15, 2026
Germany and EU Finalize Agreement on New Power Plant Strategy
Germany's Power Plant Strategy Agreement
By Holger Hansen and Christoph Steitz
BERLIN/FRANKFURT, Jan 15 (Reuters) - Germany said on Thursday it had reached an agreement with the European Commission on a plan to build new power stations, adding it would tender 12 gigawatts (GW) worth of capacity in 2026, with a focus on gas-fired sites.
This is a major step on Germany's path to ensure security of supply in light of the country's ongoing phase-out of coal-fired power capacity.
Capacity and Timeline
"With the short-term tenders ... we are also laying the foundation for a secure electricity supply in Germany in the future and thus for the competitiveness of our industry," Economy Minister Katherina Reiche said.
Utility Companies' Response
Most of the new capacity, 10 GW, must be able to generate electricity over a longer period of time to ensure steady supply, Germany's economy ministry said, adding that this included but was not limited to gas-fired power stations.
The new power stations, which are expected to enter service in 2031, will be able to run on hydrogen by 2045 at the latest, in line with Germany's goal of becoming climate neutral that year, the ministry said.
State aid procedures related to the plan have not been completed yet, Berlin said, adding that the strategy would still have to be finally approved by the European Commission.
Germany's top utilities, most notably RWE, Uniper, and EnBW, have been waiting for details of the power plant strategy, eager to start building the sites provided the regulatory framework allows profitable operation.
Uniper CEO Michael Lewis called the agreement an "urgently needed step towards making the energy transition in Germany cost-efficient and pragmatic. Instead of rigid requirements, operators can make business decisions about when to switch to hydrogen."
Future Tenders and Capacity Plans
The ministry said there would be additional tenders for new capacity in 2027 and 2029/2030, which would also have to be available by 2031.
(Reporting by Holger Hansen and Christoph Steitz; Editing by Susan Fenton, Ed Osmond and David Gregorio)
Frequently Asked Questions about Germany, EU reach general agreement on power plant strategy
1What is a power plant?
A power plant is a facility that generates electricity by converting various energy sources, such as fossil fuels, nuclear, or renewable sources, into electrical power.
2What is gigawatt?
A gigawatt is a unit of power equal to one billion watts, commonly used to measure the output of large power plants.
3What is gas-fired power?
Gas-fired power refers to electricity generated by burning natural gas in a power plant, which is often considered a cleaner alternative to coal.
4What is the European Commission?
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
5What is sustainability in energy?
Sustainability in energy refers to the use of energy sources and practices that meet present needs without compromising the ability of future generations to meet theirs, often focusing on renewable resources.
