| dc.description.abstract | Germany is heading towards a power supply based mainly on renewable energy, with a target of 80% power from renewable sources set by the German Government to be reached by 2050. Nevertheless the Energiewende runs the serious risk to produce a supply gap and hence fossil fuels will be a part of the German energy landscape for the foreseeable future. The environment to invest into gas fired power plants seems to be perfect - low gas prices, the phase out of Germany's installed base of nuclear reactors, and a steady demand for reliable and flexible power production should make it an easy decision.
But the German Energiewende is a political construct - it created a highly subsidized system that runs against market forces. Therefor a theoretical decision making model was developed in this thesis to assess the interconnection between the economic conditions, the influence of market settings and policies, and the behavior of the actors themselves, based on the PESTLE framework and Porter's Five Forces. The so identified variables were then included into an empirical model to answer the main research question: Are investments in gas-fired plants feasible given the conditions that prevail in the German energy market?
The model shows that even a 3-4 fold increase of electricity prices does not make an investment into a gas fired power plant profitable, given the current market conditions in Germany. Some measures could bolster the profitability of a gas fired power plant, such as positioning it in an industrial application where not electricity is the main source of income, but steam or heat. Besides this, the biggest impact on the profitability of a gas fired power plant are its operation hours.
The obstacles induced by regulators and booming and subsidized renewable energy sources are great to overcome easily. Nevertheless, decreasing CO2 emissions by replacing old coal fired power generation by cleaner natural gas, as well the special supply-demand-gap between north and south Germany, and the demand for flexible back up power generation to replace nuclear, offer a great potential - it is up to policy makers to unlock it. | |
