RWE: German Government to Auction Gas Plants and Start Capacity Payments; Potentially Positive

The German government agreed on Feb. 5 to tender up 10 gigawatts of new gas-fired power plants. It is willing to provide EUR 17 billion of subsidies, according to Reuters. Those plants should be able to switch to hydrogen between 2035 and 2040. The German government also said it intends to introduce a capacity mechanism for existing baseload power plants by the middle of the year that would be functional by 2028. This capacity mechanism, already in place in other countries like the U.K. and Belgium, has long been awaited for Germany.