Friday 7 April 2017

EU investigates German plans for power capacity reserve

The European Commission has opened an in-depth investigation to assess Germany’s plans to set up an electricity capacity reserve.

The nation plans to introduce a capacity reserve measure, which would require the German network operator to procure 2GW of capacity that would be held in reserve outside the market.

Germany does not expect structural capacity shortages in the future but aims to create a safeguard against unforeseen developments during its ongoing transition to a low carbon energy supply.

The Commission says it has doubts about Germany’s assessment of the need for the reserve and seeks to better understand the assumptions and scenarios the nation has used to calaculate the development of power demand and supply in the years ahead.

It will also give interested third parties the opportunity to comment on the assessment and submit their views.

The scheme is set to start operating in winter 2018/19, for an initial period of two years.

The Commission states: “The initial 2GW reserve could then be renewed and enlarged in subsequent years. The Commission is concerned that, even if Germany’s assessment were to be confirmed that the reserve is needed today, the measure could continue to exist even when it will not longer be necessary.”

It also found the criteria for capacity providers to participate in the reserve may not be sufficiently open for demand response operators and foreign capacity providers are excluded from participation.