Germany Halves Planned Gas Power Buildout in New Decarbonisation Deal

Germany has scaled back its planned gas-fired power rollout to 10 GW—roughly half of what was proposed earlier this year—as part of a political compromise balancing energy security and decarbonisation. Chancellor Friedrich Merz and coalition partners agreed the revised plan late Thursday, aiming to ensure backup capacity for renewables without locking in long-term fossil dependence. All new plants must be hydrogen-ready, with tenders requiring technical capability for future conversion. The European Commission has signalled preliminary support for the updated scheme, which also includes 2 GW of technology-neutral capacity, potentially battery storage. Subsidies worth billions will be needed to attract developers, given the low utilisation of such backup plants. Tenders for 8 GW will be launched next year, targeting operation by 2031. Additional tenders in 2026–27 will require rapid conversion from gas to hydrogen, with another technology-neutral auction planned for 2029.