The total output of now a good five gigawatts is to be provided by dispatchable gas-fired power plants that can be converted to hydrogen in the future. The next auction round already starts on November 10. The basis for the auctions is the Electricity Supply Security and Capacity Act (Strom-Versorgungssicherheits- und Kapazitätengesetz, StromVKG), adopted in July 2026. Through so-called capacity payments, it is intended to ensure that sufficient firm capacity is available in Germany even during wintry dark doldrums (Dunkelflauten). In the first round, all contracts for what is referred to as long-term capacity went to gas-fired power plants that are to be made hydrogen-ready in the future, most of them to two companies. The awarded prices remained well below the maximum value.
Wanted: Capacity commitments for at least ten hours
The tender volume in the first round was 4,500 megawatts of reduced capacity (rMW). This value results from the nominal capacity and a technology-specific “reduction factor,” which is intended to reflect how much the plant is expected to contribute to security of supply. For gas and steam turbines, it is 0.85. The plants must also be able to deliver 80 percent of their installed capacity continuously for at least ten hours. The operators commit to keeping the capacities available for at least 15 years.
The tender was not explicitly limited to gas-fired power plants. In principle, biomass plants, geothermal plants or battery storage systems, for example, may also participate in the auctions. The reduced capacity for participation in the auction must be at least 1 MW. Under certain conditions, several smaller plants may be combined into what is known as a pool.
Capacity payment remains below maximum value
The Bundesnetzagentur awarded contracts for 11 bids with a total volume of around 5,160 rMW. The deviation from the tender volume of 4,500 rMW results from the fact that the bid which first exceeded the tender volume was still awarded a contract. By the bid deadline, 41 bids had been submitted, with a total bid volume of approximately 11,958 rMW. Of these, seven bids were excluded because, for example, legally mandatory information was not provided or required evidence was not submitted.
In return for providing the firm capacity, operators receive what is known as a capacity payment. On a volume-weighted average, this amounts to 155,296 euros per rMW per year. That is significantly less than the set maximum price of 244,000 euros. The capacities from the first bidding round thus cost 800 million euros annually, or 12 billion euros over 15 years. This premium applies to mere availability, it does not yet include any electricity production.
Ten of the eleven contracts go to two companies
The winning companies of the first auction round are two major energy groups and a municipal utility. In the lead is Lausitz Energie Kraftwerke AG (LEAG) with seven awards. These include six power plant units under the name LEAG and another one that is listed in the award list as “Gaskraftwerk Leipheim 20.”
LEAG puts the total capacity at 3,680 megawatts of installed capacity, or 2,998 rMW. LEAG is therefore in the lead not only in the number of awards, but also in capacity. LEAG is relying on six units with a nominal capacity of 560 MW each. These are distributed between the Jänschwalde site (four units) and Boxberg (two units). In Leipheim, a further 320 MW is installed. According to LEAG, all of them are located at already developed power plant sites, which is relevant both for rapid implementation and for the comparatively low level of support.
Next is RWE Generation with three sites. According to RWE, this involves a total capacity of a good 2,100 rMW. These are distributed as 730 rMW in Voerde, 700 rMW in Weisweiler, and 700 rMW in Werne, all in the Federal State of North Rhine-Westphalia.
The eleventh contract went to Stadtwerke Karlsruhe, the municipal utility of Karlsruhe. According to its own information, this does not concern large units, but a gas engine power plant on the premises of the Heizkraftwerk West combined heat and power plant. It is to consist of twelve modules with an electrical and thermal output of 4.5 megawatts each. The total capacity amounts to 54 megawatts electrical and 54 megawatts thermal. Commissioning is scheduled for the end of 2029.
Geographically, the west and east of Germany are particularly strongly represented. The largest award volume results from bids for sites in the Federal State of North Rhine-Westphalia (around 2,118 rMW, 3 awards), followed by sites in the Federal State of Brandenburg (around 1,819 rMW, 4 awards) and the Federal State of Saxony (around 910 rMW, 2 awards). In the southern federal states of Bavaria (around 269 rMW, 1 award) and Baden-Württemberg (around 45 rMW, 1 award), comparatively little long-term capacity is being added in this round.
