Germany’s Federal Network Agency has approved the construction of new gas power plants to ensure electricity supply during low renewable energy production, with most contracts awarded to RWE and Leag.

Germany’s Federal Network Agency has announced the results of its first bidding round for new gas power plants aimed at ensuring electricity supply during periods of low wind and solar energy production. The approved projects will be located in Brandenburg, North Rhine-Westphalia, Saxony, Bavaria, and Baden-Württemberg, with construction expected to be completed by 2031. The majority of contracts were awarded to energy companies RWE and Leag, which plan to build the plants at existing or former coal power plant sites.

The new gas power plants are part of Germany’s strategy to phase out coal-fired electricity generation by 2038 while maintaining energy security. Initially, these plants will operate using natural gas, but they are expected to transition to hydrogen produced through climate-friendly methods by 2045. The Federal Network Agency has committed to providing financial support to operators for 15 years to ensure the availability of generation capacity, even if the plants operate only a few hours annually. In the first bidding round, 41 bids were submitted, with 11 projects receiving approval, representing a total generation capacity of 5,160 megawatts.

Among the awarded projects, Leag received seven contracts, including four for its Jänschwalde site in Brandenburg and two for its Boxberg site in Saxony. RWE secured three contracts for sites in Voerde, Weisweiler, and Werne in North Rhine-Westphalia. Additional contracts were awarded to Leag’s subsidiary Gaskraftwerk Leipheim in Bavaria and the municipal utility Stadtwerke Karlsruhe in Baden-Württemberg. The costs of these projects, estimated at €800 million annually, will be covered by electricity consumers through a new levy, though the exact impact on electricity prices remains uncertain. Federal Minister for Economic Affairs Katherina Reiche described the initiative as a significant step toward securing renewable energy expansion and coal phase-out, while Leag CEO Adi Roesch emphasized the company’s commitment to energy transformation in eastern Germany.