- Germany and the European Commission agree in principle on state support for new gas fired power plants convertible to hydrogen.
- Twelve gigawatts of controllable capacity to be tendered from 2026 with first units operational by 2031.
- Plan aims to safeguard electricity supply as coal is phased out and renewable capacity expands.
Germany and the European Commission have reached a political agreement that will allow state support for the construction of new gas fired power plants capable of converting to hydrogen at a later stage. The first units are expected to come online by 2031, providing backup capacity to support Germany’s accelerating energy transition.
According to the German economy and energy ministry, the agreement clears the way for federal incentives to develop new controllable power capacity in order to maintain supply security as coal fired generation is phased out and renewable energy capacity continues to expand.
“With the short term tenders for twelve gigawatts of new additional controllable capacity, we are laying the foundation for a secure electricity supply in Germany in the future and thus for the competitiveness of our industry,” said economy minister Katherina Reiche.
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Under the framework agreement, Germany will launch state supported tenders for twelve gigawatts of controllable capacity in 2026. Ten gigawatts of this total must be able to generate electricity continuously over extended periods and are expected to be largely gas fired facilities. These plants are scheduled to be operational by 2031.
Further tender rounds are planned for 2027 and again in 2029 and 2030. These will cover both new build and existing power plants that can contribute to controllable capacity and be available by 2031.
All newly constructed gas fired plants supported under the scheme must be hydrogen ready and fully decarbonise by 2045 at the latest. The wording of the agreement allows for different decarbonisation pathways, potentially including carbon capture and storage. Additional measures are also planned to encourage a shift to hydrogen use, including support tenders from 2027 to bridge the cost gap between hydrogen and fossil gas, with two gigawatts expected to switch by 2040 and a further two gigawatts by 2043.
The agreement builds on a similar proposal put forward by the previous coalition government in late 2025. That initiative was never finalised following the early collapse of the government and subsequent elections. The new administration opted to restart negotiations with the European Commission, scaling back its original ambition of twenty gigawatts of new gas capacity to improve the chances of approval.
The planned gas plants are seen by policymakers as a critical enabler of Germany’s coal exit. As the country retires coal fired generation and works towards climate neutrality by 2045, it requires reliable backup capacity to compensate for periods of low wind and solar output. While alternatives such as large scale battery storage and demand side management are expected to play an increasing role, gas fired plants are viewed as a transitional solution before a broader shift to green hydrogen.
However, the approach remains controversial. Renewable energy companies and climate organisations have filed complaints with the European Commission, arguing that state support for gas plants risks distorting competition and slowing investment in cleaner flexibility options such as storage and demand response.
Looking ahead, the government intends to introduce a broader capacity market by 2027 to secure electricity supply from 2032 onwards. Industry representatives are calling for a simple and technology neutral design that supports not only new power plants but also flexibility, storage, biogas, combined heat and power and hydropower assets.
Author: Bryan Groenendaal
