London (Platts)--9Oct2012/806 am EDT/1206 GMT

Germany may need more generation reserves this winter than last if it is to avoid the risk of electricity shortages, the head of federal grid regulator BNetzA said Tuesday.

"There is a danger of a shortage [this winter], but we are pretty sure that we can meet the demand," BNetzA President Jochen Homann told German daily Sueddeutsche Zeitung.

The regulator also is working on plans to prevent system-relevant power plants from closure, the report said.

"The grid operators have given us a list of 51 gas-fired power plants they consider system-relevant," Homann said according to the newspaper report. "Those plants should not be closed."

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Overall, there is combined gas-fired capacity of 18,074 MW operating in Germany, according to the latest BNetzA data. That data lists 750 MW of gas plants in so-called cold reserve and another 495 MW as reserve plants.

According to press reports earlier this month, the federal economy ministry has prepared a draft law that would require power plant operators to provide a a 12-month notice before closing a plant. If the plant is deemed essential for the security of power supply, the new rules would prevent them from being closed, it said.

The government will ask the grid regulator and grid operators to prepare a list of system relevant power plants, the report said.

The owners of the power plants would receive "adequate compensation" which the draft law estimates at a maximum of Eur287 million ($373 million), while the plants would be dispatched by transmission system operators in a market neutral way as reserve capacity, the report said.

Under current regulations, there is no formal notice period for the closure of power plants and grid operators, not power plant operators are legally responsible for security of supply.

Tennet is so far the only grid operator to have announced any winter reserves, saying that it is currently securing 940 MW of reserve power plant capacity in Austria.

According to Tennet's statement, Germany's four TSOs are responsible for securing the cold reserve based on the recommendation of the grid regulator.

In total, this winter's reserve capacity is estimated at around 2,000 MW, it said.

German utility E.ON told analysts in August that it was in talks with the grid regulator and operators about moving a number of its older, unprofitable gas-fired power plants into a strategic power plant reserve.

Profit-margins for using gas-fired power plants to produce power for Germany next year have been negative for most of the past two years as the boom in solar power installations has reduced operational hours of many older plants.

But some power plants, which may be uneconomic to run throughout the year, still are needed as reserve capacity for times when the power grid is stressed, especially in the south of the country. --Andreas Franke, andreas_franke@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com

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