As part of the planned expansion of natural gas power plants, the German government is focusing on Southern Germany , with two-thirds of the new capacity set to be established in this region. Minister for Economic Affairs Katherina Reiche (CDU) revealed this during a visit in Bavaria, where she announced the introduction of a “South Bonus” aimed at incentivizing investments in the area. This announcement was made alongside Bavarian Minister-President Markus Söder (CSU) at a press conference held by the picturesque Tegernsee .
Reiche indicated that extensive discussions are currently taking place with the EU Commission regarding new gas power plant tenders. The Commission’s approval is crucial for state aid to avoid competition distortions within the EU.
Minister-President Söder explicitly welcomed these plans, stating that the Free State has been at a disadvantage in the past, but now there is a “real ray of hope.” He declared his intention to pursue closer cooperation with the Federal Government under the coalition of Union and SPD, emphasizing that improved linkage of Bavaria to the hydrogen network is a significant signal.
Gas Power Plants with a Capacity of up to 20 Gigawatts Planned
The expansion of gas power plants forms part of a broader energy policy realignment by the newly formed coalition government. According to the coalition agreement, up to 20 gigawatts (GW) of new gas power capacity is anticipated, which translates to around 40 plants —almost double the previous planning initiated by Robert Habeck (Greens). Unlike earlier stipulations requiring a shift to hydrogen, this coalition has opted for the use of CCS (Carbon Capture and Storage) technologies, despite the high associated energy and investment costs.
Additionally, the new power plants will no longer only serve as reserves for wind and solar calms but will also be utilized actively to stabilize electricity prices. Previously, extensive gas generation led to significant price surges during these intermittent phases.
Bavaria has lagged behind nationally in wind power expansion, facing ongoing criticism from the wind energy sector concerning a north-south divide . A contentious issue between Habeck and Söder has been the 10H regulation , which mandates new wind turbines in Bavaria to be at least ten times their height away from habitation. As Minister of Economics, Habeck has called for the repeal of this restrictive distance rule.
In contrast, Bavaria has consistently ranked high in solar photovoltaic installations, with a large proportion of Germany’s solar energy capacity coming from the state. According to figures from the Federal Network Agency , in 2024, approximately one-quarter of newly installed photovoltaic capacity was attributed to Bavaria, outpacing all other federal states.
Former Head of Westenergie
Before her appointment as Minister of Economics, Reiche was the CEO of E.on subsidiary Westenergie and served on the supervisory board of the Swedish energy firm Ingrid Capacity . Between 1998 and 2015, she was a member of the Bundestag . The trained chemist transitioned in 2015 to become the chief executive of the Association of Municipal Enterprises , which represents numerous municipal utilities. Her move sparked a debate about whether a transitional period should be mandated for lawmakers entering the private sector.
In June 2020, Reiche took on the leadership of the German Hydrogen Council .