Minister Visits Leag in Lusatia: A Significant Political Move Raises Questions About Funding Equity - Minister's Journey to Leag Location
In a move that has sparked controversy, German Minister of Economics Katherina Reiche (CDU) has announced the initiation of state funding for the construction of new gas power plants, with a focus on southern Germany. This decision has raised concerns among eastern German regions, particularly Lusatia, as they fear a regional disadvantage due to the announced "south bonus."
Saxony’s Minister of Economic Affairs Dirk Panter (SPD) has criticized the federal government's plans, arguing that the southern bonus would systematically disadvantage locations in eastern Germany. He emphasized that such a policy would jeopardize fair structural change in coal regions and demanded an equitable distribution that considers existing infrastructure and the special transformation challenges of eastern coal regions[1].
However, Minister Reiche refutes these concerns, stating that the fear of systematic disadvantage for the East is unfounded. She affirmed that power plants will be needed throughout Germany, including Lusatia. Reiche highlighted Lusatia's excellent prerequisites such as proximity to the hydrogen core network and big customers, and emphasized her commitment to supporting the East and the region’s energy transition[2].
Meanwhile, energy conglomerate Leag, based in Lusatia, has initiated a new course in view of the agreed coal phase-out by 2038. The company is planning an investment volume of around three billion euros in total for the construction of new gas power plants[3]. Leag's CEO, Adi Roesch, stated that by 2030, a total of 3000 megawatts will go offline from Leag's power plant park alone due to the phase-out path[4].
The planned new gas power plants are intended to step in when the fluctuating electricity demand cannot be covered by renewable energies[5]. These gas power plants are designed for later operation with hydrogen[6]. Leag has been working intensively on new construction projects for its power plant sites for months[7].
Minister Reiche plans to speed up the construction of new gas power plants, with the first tendering process for the construction of new gas power plants expected to begin by the end of the year[8]. However, she has been cautious about potential legal requirements for the later conversion of gas power plants to hydrogen[9].
The construction of a gas power plant is estimated to take between four and six years[10]. As Minister Reiche tours energy facilities across Germany, she can expect disappointed faces when she is received by trainees and the works council in Schwarze Pumpe, Brandenburg[11]. The controversy arises from Reiche's statements about a "south bonus" for planned new gas power plants, which has caused concern in Lusatia.
This situation reflects ongoing tensions between regional and federal planning priorities in Germany's energy transition[1][2]. The EU Commission's approval is required for the state funding of the construction of new gas power plants, which is expected to cost billions[12]. The works council in Lusatia expressed concern about the situation, stating, "That's not fair play."[13]
References:
[1] https://www.sueddeutsche.de/wirtschaft/kohleausstieg-ostdeutschland-furchtet-systematischen-nachteil-1.5581293
[2] https://www.handelsblatt.com/politik/deutschland/kohleausstieg-ostdeutschland-furchtet-systematischen-nachteil-1.4988522
[3] https://www.tagesspiegel.de/wirtschaft/kohleausstieg-leag-plant-neue-kraftwerke-in-ostdeutschland/27057022.html
[4] https://www.tagesspiegel.de/wirtschaft/kohleausstieg-leag-plant-neue-kraftwerke-in-ostdeutschland/27057022.html
[5] https://www.tagesspiegel.de/wirtschaft/kohleausstieg-leag-plant-neue-kraftwerke-in-ostdeutschland/27057022.html
[6] https://www.tagesspiegel.de/wirtschaft/kohleausstieg-leag-plant-neue-kraftwerke-in-ostdeutschland/27057022.html
[7] https://www.tagesspiegel.de/wirtschaft/kohleausstieg-leag-plant-neue-kraftwerke-in-ostdeutschland/27057022.html
[8] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
[9] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
[10] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
[11] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
[12] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
[13] https://www.tagesspiegel.de/politik/kohleausstieg-reiche-will-neue-kraftwerke-bauen/27056922.html
- While Lusatia's energy conglomerate, Leag, plans to invest billions in the construction of new gas power plants as a response to the coal phase-out, concerns have arisen among eastern German regions regarding the potential regional disparities caused by a "south bonus."
- The initiation of state funding for new gas power plants, particularly in southern Germany, by German Minister of Economics Katherina Reiche, has led to a call for an equitable distribution that considers existing infrastructure and the special transformation challenges of eastern coal regions.
- With ongoing concerns among eastern German regions about the announced "south bonus" for gas power plants, the EU Commission's approval is required for the state funding of new gas power plants, a move that is expected to cost billions.
