The East German energy producer LEAG could emerge as a major winner in the tender for power plant capacities issued by the Federal Network Agency. The authority is scheduled to announce which entities are expected to receive billions of Euros from the state to build power plants capable of maintaining electricity generation for extended periods. According to the “Frankfurter Allgemeine Zeitung”, citing its own information, LEAG also submitted bids for existing brown coal power stations that are slated for conversion to use gas.
Federal Minister for Economic Affairs, Katherina Reiche (CDU), aims to achieve the construction of new gas power plants through this tender process. Leif Timmermann, board member of the EPH energy sector of the Czech LEAG owner EP Group, told the newspaper that retrofitting these existing plants is more than 30 percent cheaper than constructing entirely new gas power plant capacity. As a director on the supervisory board of LEAG’s power plant division, Timmermann stated that the company offered significantly competitive bids in the Network Agency’s tender. This specifically concerns facilities with a capacity of around 3 gigawatts at the East German plant sites of Boxberg and Jänschwalde. EPH also submitted further bids for new power plants totaling about 2 gigawatts in Leipheim, Lippendorf, and Schwarze Pumpe. However, it is noted that converted coal power plants are considered less environmentally friendly compared to brand-new gas plants.
Overall, the first round of the Federal Network Agency’s tender covers 4.5 gigawatts, followed by a second round of 4.5 gigawatts. This initiative aligns with the strategy previously pursued by former Federal Minister for Economic Affairs Robert Habeck (Greens). The objective is to construct numerous new gas power plants that can cover periods of low wind (dark low periods) and flexibly respond when wind and solar energy are unavailable. These projects are set to be funded through a new surcharge added to consumer electricity bills.
While the funds are primarily intended for new gas power plants, if LEAG is awarded a contract for older brown coal power plants, industry insiders anticipate lengthy legal disputes. Nonetheless, the union IGBCE welcomed LEAG’s plans, with Stephanie Albrecht-Suliak, head of the IGBCE regional branch in Northeast Germany, telling the “Frankfurter Allgemeine Zeitung” that this could offer a constructive answer for the power plant sites in Jänschwalde and Boxberg, places which have long been called for phasing out coal. The brown coal plant in Jänschwalde is scheduled to be taken offline at the end of 2028, and the first units at Boxberg are set to be shut down in 2029.
