Development of conventional power plant capacities on the German electricity market

In 2023, the capacity of conventional power plants in Germany increased because of short-term regulatory requirements. This contrasts with the trend in recent years. While the secured capacity has decreased by around 15% in the past 10 years and will continue to do so in the future, there are various options available to respond. In addition to direct compensation through the development of an H2-ready power plant fleet, the decline in secured capacity can also be answered with an increased expansion of renewable energies, accelerated European market integration, as well as storage and load flexibility.

Contrastingly, the marginal costs for the operation of fossil power plants fell in 2023, due to falling natural gas and coal prices. While the average gas price was almost two thirds lower than in the previous year, the price of hard coal also fell by more than half. As a result, the marginal cost differences between these two types of power plant technology have decreased.

The analysis was carried out using the updated EWI Merit Order Tool, which enables the determination and graphical representation of the average merit order of the conventional power plant fleet in 2023.