Germany's federal cabinet approved the Stromversorgungskostensenkungsgesetz (StromVKG) on Monday 8 June and referred it to the Bundestag for debate1. The StromVKG is a capacity-payment law: it pays operators a long-term premium to build and hold dispatchable backup generation, rather than waiting for wholesale prices to reward that capacity on their own. The draft funds the build through competitive auctions opening 8 September and 22 December 2026, with the subsidy bill peaking near €3bn a year from 2031.
The target has been cut hard, to 10 GW of new capacity by 2032 from the coalition's original 20 GW ambition, with an 11 GW headline. The mechanism is the point: this is Berlin paying to build the very gas plants its own clean spark spread says cannot run at a profit. FNB Gas, Germany's association of gas transmission operators, declared the market-based storage-refill mechanism broken on zero-booking auction evidence, setting the institutional predicate for a capacity payment that substitutes for an absent price signal.
The StromVKG is a distinct instrument from Economy Minister Katherina Reiche's 12 GW hydrogen-ready gas tender agreed with Brussels; the StromVKG is the capacity-payment statute, that tender is the build mandate. Industry has pushed for swift passage, because the September auction date cannot hold unless the Bundestag votes before its summer recess.
