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Germany’s Subsidised Gas-Plant Plan Faces EU State-Aid Challenge and Cost Warnings

Approval from Brussels hinges on demonstrating necessity with a competitive, technology‑neutral design.

Overview

  • Economics Minister Katherina Reiche proposes at least 20 GW of reserve gas capacity from 2027 with state construction support to cover periods of low renewable output.
  • A K&L Gates opinion for Deutsche Umwelthilfe argues the subsidy model may violate EU state‑aid rules due to insufficient proof of market failure, questions over proportionality, and non‑compliant regional or site bonuses.
  • HNA reports Reiche signaled specific locations in the LausitzSchwarze Pumpe, Lippendorf and Leipheim—totaling 2 GW, a move critics say conflicts with requirements for open, technology‑neutral auctions.
  • A Roland Berger study for Enpal estimates decentralized solutions could save €185–255 billion by 2045 and reduce household costs by €900–€1,200 per year, while still allowing for some gas capacity below the scale proposed.
  • Feasibility concerns include tight turbine supply, scarce green hydrogen, an existing capacity reserve that covers emergencies through 2026, and earlier EU understandings that only encompassed about 5 GW plus 7.5 GW of hydrogen‑ready units.