EU approves Germany’s €35 billion electricity capacity plan

EU approves Germany’s €35 billion electricity capacity mechanism

The European Commission has approved Germany’s electricity capacity mechanism, which the country plans to implement from 2031. The program could provide up to €35 billion in support, with capacity selected through competitive tenders.

Scraper SystemSeptember 02, 2026, 03:38 PM

EU approves Germany’s €35 billion electricity capacity mechanism

Germany’s capacity mechanism, prepared to support the security of its electricity supply, has been approved by the European Commission. Public support allocated for the program, which is planned to begin in 2031, is expected to reach up to €35 billion.

The mechanism is based on keeping generation, storage and demand-management capacity available to meet electricity demand under all conditions. Capacity providers will be paid not only for the electricity they supply to the market but also for the capacity they keep ready for use when needed.

Capacity to be selected through tenders

The capacity eligible for the program will be determined through competitive tenders. In addition to electricity generation facilities and energy storage systems, businesses able to reduce their consumption when necessary will also be eligible to participate in the tenders.

The European Commission concluded that the mechanism is necessary and proportionate to ensure the security of Germany’s electricity supply. It also assessed that the program’s negative impact on the European Union’s electricity market would remain limited.

Payments will also be made for available capacity

The electricity capacity mechanism provides for power plants to receive support not only for the electricity they generate but also for the installed capacity they keep ready to operate on the grid at any time.

The system aims to keep generation, storage and demand-management capacity available for use when needed. This is intended to help prevent outages when demand cannot be met and support the security of the electricity supply.

The European Commission’s authority over public support

Defining the framework governing the conditions under which EU member states may provide public support falls within the European Commission’s remit. Member states may use this support in ways that do not harm competition and are consistent with the public interest.

EU approves Germany’s €35 billion electricity capacity mechanism