StromVKG

The Stromversorgungskostensenkungsgesetz (StromVKG) is Germany's statutory framework for capacity payments to gas-fired power plants. The law creates a revenue floor for operators willing to keep dispatchable generation available, compensating them for being on standby even when wholesale prices make running uneconomical. The mechanism is designed to prevent stranded-asset closures of the gas fleet before sufficient firm-capacity alternatives are in place.

The German cabinet approved StromVKG on 8 June 2026, targeting 11 GW of gas-fired capacity across the first auction round, with auctions scheduled to open on 8 September 2026 . The law arrives as Germany phases out its last nuclear stations and Russian pipeline gas, leaving the grid dependent on flexible gas-fired generation to balance wind and solar intermittency. Capacity payments were contested in Brussels on state-aid grounds for years; the approved design narrows eligibility to units that can ramp within 15 minutes, limiting subsidy costs while preserving system flexibility.

For European power markets, StromVKG matters because German clean spark spreads have been negative for weeks, threatening the commercial viability of open-cycle gas turbines . If the capacity market succeeds in keeping plant open, it reduces the risk of a winter supply crunch; if auctions clear well below cost-recovery levels, closures will continue regardless of the new framework.