German power group offers strategic capacity reserve

FRANKFURT (Reuters) - Germany's power industry on Thursday proposed offering reserve capacity to help the country in tight supply situations after it switched off large parts of its nuclear generation capacity following last year's Fukushima nuclear accident in Japan.

The bid by industry lobby BDEW was pre-emptive, to try and avoid state intervention, it said in a statement.

Germany's 500-terawatt-hours-a-year power sector serves a highly industrialized economy which cannot function without stable electricity supply.

"BDEW demands to give preference to a strategic reserve as an instrument, over rigid intervention planned by the authorities," it said.

"Our aim is to propose market-based, competitive rules which make the currently discussed legislation unnecessary."

The essence of the BDEW suggestion is for additional capacity requirements to be put to auction.

This way, operators of unprofitable power capacity could commit to keeping it open for two-year periods during which they could rev up the plants at short notice, but would not be allowed to produce any power for the regular wholesale market.

BDEW said this plan would be transparent and in line with market mechanisms.

The government for its part aims to mandate provision of power in regions where supply may be shaky at times, especially in the south of the country, where most of the 8.4 gigawatt (GW) reactor capacity shut in 2011 was based.

The government also envisages forcing plants there to stay open beyond a profitable life cycle, to act as a buffer.

A meeting hosted by Chancellor Angela Merkel in May identified a power gap equivalent to the output of up to 15 plants by 2020, due to the accelerated nuclear switch-offs and an increasing reliance on renewable power.

As problems could arise as early as the coming winter, when demand is high and renewable power production from solar panels and wind turbines can vary wildly depending on the weather, the energy regulator is pulling together reserves now.

As in the last winter, the authority needs two gigawatts (GW) of reserve capacities to manage tricky situations and has secured pledges for half of this.

BDEW stressed that, regardless of the short-term, its proposal stretched up to 2020 or 2022, when the last nuclear power station is meant to be closed permanently.

"It is evident that there is a special situation to cope with the medium term perspective up to 2020, 2022. Our demand for a strategic reserve addresses this situation," it said.

BDEW also said its proposal could serve as a long-term solution after 2022 when it could be converted into a cross-border system in a more harmonized European energy market.

(Editing by Catherine Evans)

Source: http://news.yahoo.com/german-power-group-offers-strategic-capacity-111353016.html

drop dead gorgeous ticket city bowl 2011 nfl playoff schedule cowboys vs giants ndaa timberwolves weight watchers