Energy Transition Stalls: Germany to Build New Gas-Fired Power Plants
To build new power plants, the German government will stick its hands in the pockets of taxpayers again: a new tax will be introduced that all households will have to pay
With electricity prices skyrocketing in European Union countries that have turned away from low-cost Russian gas for political reasons, a new blow is coming to Germany that will affect all taxpayers. The energy transition is treading water, wind and solar power generation cannot guarantee even the minimum needs of consumers, and the German government has presented a plan to build new gas-fired power plants that will guarantee the necessary flow of electricity.
Economy Minister Robert Habeck said the plants will be gas-fueled starting in the eighth year of operation, with the possibility of converting to hydrogen. To be implemented, the plan must be approved by the European Commission in the coming weeks.
Once approved, Habeck said, the German government will introduce “a new tax on the price of electricity to subsidize the construction of new gas-fired power plants and the modernization of existing ones.”
In the first quarter of 2024, 162 companies with a turnover of more than ten million euros declared themselves insolvent in Germany, which is an increase of 41 percent compared to the same period last year. The alarming data was published by German newspaper Handelsblatt, citing an analysis by corporate restructuring company Falkensteg. Of the 279 companies surveyed that had to file for bankruptcy in 2023, only 35% were saved by the end of the first half of 2024, and that was through “sale to an investor or because creditors agreed to a bankruptcy plan.” According to the study, real estate, automotive, and engineering companies were hit hard. “Among the insolvent companies are big names, such as tour operator FTI, department store chain Galeria, and fashion company Esprit,” Handelsblatt wrote.
Last week, the German government approved the German federal budget for 2025, immediately sparking a battle between the Ministry of Finance and the Bundesbank, Germany’s central bank, began. According to Bundesbank President Joachim Nagel, Finance Minister Christian Lindner “cannot rely on the German Central Bank to help mobilize money for the budget by selling gold reserves.” According to Nagel, “gold is an anchor of trust and has a high symbolic value, especially for the population.” The German Bundesbank holds about 3,356 tons of gold, making it the second largest gold treasure in the world after the US treasure (8,133 tons). This is followed by Italy (3452 tons), France (2437 tons), and Russia (2351 tons).