Gas-fired power plant · Glossary

A gas-fired power plant is a power plant that generates electrical energy from a gaseous fuel. Today this usually means natural gas. However, certain plants can technically also be run on biogas, synthetic methane or, in future, hydrogen. For the power system, a gas-fired power plant counts above all as dispatchable generation. Unlike wind and solar installations, it can deliberately raise or lower its feed-in within technical limits.

The electrical capacity of a gas-fired power plant is stated in kilowatts, megawatts or gigawatts. It describes the maximum amount of electricity the plant can provide at a given moment. The amount of electricity actually generated, by contrast, is measured in kilowatt-hours, megawatt-hours or terawatt-hours. One analogy: capacity corresponds to the width of a water tap, while the amount of energy corresponds to the water that actually flows through over the course of a year. This distinction is central. A gas-fired power plant can be important for security of supply even if it runs only a few hours a year. It then mainly provides capacity rather than large quantities of energy. However, installed capacity does not yet tell us what contribution is reliably available in a scarcity situation. Fuel supply, technical availability, maintenance condition, grid connection and operating rules also matter here.

Plant types and efficiencies

There are various technical types. Simple gas turbine power plants operate in an open cycle: the hot exhaust gas leaves the turbine unused. They start comparatively quickly and can change their output rapidly. They are therefore suitable for peak load and short-term balancing tasks. Their electrical efficiency, however, is clearly below that of combined plants, typically roughly 35 to just over 40 percent depending on size.

Combined-cycle gas turbine power plants, CCGT plants for short, are a form of combined power plant. Here the hot exhaust gas of the gas turbine serves as a heat source for a downstream heat recovery steam generator. This produces steam for an additional steam turbine. Modern CCGT plants thus achieve electrical efficiencies of over 60 percent and are among the most efficient conventional power plants. One example is the plant in Irsching, Bavaria, at around 60.75 percent. Because the steam side is slower to respond, CCGT plants, depending on their design, react less quickly than simple gas turbines.

There are also gas-fired combined heat and power units and other combined heat and power plants that supply electricity and usable heat at the same time. For these, electricity operation often depends on heat demand, on a connected heat network or on industrial processes. Gas engines are also used for smaller, quickly adjustable capacities.

Distinction from other power plants and system concepts

A gas-fired power plant is not the same as a peaking power plant, even though many gas plants can take on exactly this role. A modern CCGT plant can also generate electricity over longer periods if the electricity price is high enough and gas prices and CO₂ costs allow it. Conversely, a gas turbine may serve almost only as a reserve plant. The technical plant and its economic mode of use therefore do not necessarily coincide.

Equating gas-fired power plants with security of supply is also imprecise. Security of supply does not arise from a single type of power plant. It arises from the interplay of firm capacity, grids, storage, demand flexibility, fuel logistics, reserve concepts and clear responsibilities. Gas-fired power plants can play an important role here because they generate electricity independently of the weather and are often faster to regulate than coal or nuclear power plants. They do not, however, replace a look at load profiles, grid bottlenecks and flexibility on the consumption side.

Gas-fired power plants differ fundamentally from storage. They do not shift previously generated electricity in time but convert chemical energy from a fuel into electricity. A battery storage system smooths out short-term fluctuations and shifts electricity from times of low prices to times of higher prices. Its discharge duration, however, is limited. A gas-fired power plant, by contrast, can generate even when little wind and solar power is available for days, provided fuel and plant are available. This makes gas-fired power plants relevant for the Dunkelflaute (prolonged low wind and solar output). How many plants are needed for this, and under which rules they are financed, is not answered by this, however.

Role in residual load and renewable energies

As the share of wind energy and photovoltaics rises, the task of gas-fired power plants changes. They run less often than classic baseload plants and more frequently cover the residual load. This is the electricity demand that remains after deducting feed-in from wind and sun. Residual load can fluctuate strongly. On sunny and windy days it is low or temporarily negative. With little wind, weak solar generation and high consumption, it can rise sharply.

This results in a different economic role. The plants must earn their fixed costs in fewer full-load hours if renewable energies feed in very cheaply in many hours. The pure energy market remunerates kilowatt-hours generated, not yet the mere availability of a plant. If plants run only rarely, high prices in a few scarcity hours are needed for investments to pay off. If this revenue fails to materialise, this is called the missing money problem. Politically, the question therefore arises whether a pure electricity market is sufficient or whether a capacity market, a strategic reserve or other remuneration for firm capacity is necessary.

This yields a connection that is often overlooked: a gas-fired power plant can be necessary for the system even though it generates little electricity per year. In the climate balance, it is precisely this short running time that limits emissions. In the investment calculation, the same short running time is a problem because the plant earns revenue in only a few hours. Electricity markets, reserve products, grid charges and tenders each set their own incentives for construction, operation and decommissioning.

Germany: tenders under the StromVKG (as of November 2026)

In Germany there is now a separate remuneration for the provision of capacity for new dispatchable plants. The basis is the Strom-Versorgungssicherheits- und Kapazitätengesetz (StromVKG, Electricity Security of Supply and Capacity Act). On 21 July 2026, the Bundesnetzagentur launched the tenders for so-called long-term capacities. Plants that can reliably supply electricity over a longer period may participate, that is, also in longer phases without renewable generation or without electricity imports. The technical requirements include, among other things, the provision of instantaneous reserve, even when the plant is not currently delivering any output. Anyone who receives an award must keep the capacity available for 15 years. In return, they receive an annual remuneration, the amount of which is determined competitively. A regional component favours, under certain conditions, sites in the south in terms of the grid.

What is tendered is not installed capacity but reduced capacity in rMW. A factor set by law assesses the actual contribution of a technology to security of supply, similar to a capacity credit. In the first round, with a bid date of 8 September 2026, 4,500 rMW were tendered. The maximum price was 244,000 euros per rMW and year.

The results were published on 3 November 2026. 41 bids with around 11,958 rMW were received, seven of which were excluded. Eleven bids received awards totalling around 5,160 rMW. The volume exceeds the tendered quantity because the bid that first crossed the threshold was still awarded. The volume-weighted average award value was 155,296 euros per rMW and year. Most awards went to sites in North Rhine-Westphalia and Brandenburg, followed by Saxony, Bavaria and Baden-Württemberg. According to the Bundesnetzagentur, power plants and electricity storage facilities competed intensively with each other. The second bid date for long-term capacities is scheduled for 29 December 2026.

Emissions, fuel and efficiency

Anyone who burns natural gas in gas-fired power plants causes CO₂ emissions. A rough calculation shows the order of magnitude: natural gas releases around 200 grams of CO₂ per kilowatt-hour of fuel energy when burned. At an efficiency of 60 percent, this corresponds to roughly 330 to 340 grams of CO₂ per kilowatt-hour of electricity generated. For a simple gas turbine with about 38 percent, it is roughly over 500 grams. Efficient CCGT plants are thus clearly below many coal-fired power plants, but not at zero.

In addition there are emissions along the supply chain, especially when methane escapes during extraction, transport or storage. Methane is a potent greenhouse gas. A study commissioned by the Umweltbundesamt (German Environment Agency) concluded that the upstream emissions of liquefied natural gas are, depending on the supplier country, about 2.2 to 3.0 times as high as those of the German natural gas consumption mix of 2018. The climate assessment of a gas-fired power plant therefore depends not only on the efficiency in the power plant but also on the origin and losses of the fuel. Economically, emissions feed through into generation costs via the CO₂ price in emissions trading.

Efficiency describes what share of the fuel energy becomes usable as electricity. With combined heat and power, overall fuel utilisation can be high if the heat is actually needed. If heat is generated only to justify electricity operation, or if there is no sensible offtaker, this indicator loses its informative value. Whether a plant appears efficient therefore depends on the system boundary: electricity only or electricity and heat, a single operating hour or a whole year.

A further distinction is needed for hydrogen-ready gas-fired power plants. A plant that is technically prepared for later hydrogen use usually continues to generate electricity from natural gas in operation. This remains the case as long as no sufficient, affordable and climate-friendly hydrogen is available. Hydrogen readiness therefore does not mean freedom from emissions, but the option of a later fuel switch. Whether this option holds depends on a hydrogen network, storage, imports, electrolysis capacities, safety requirements and fuel costs. For the German power plant strategy, it is intended that subsidised new gas-fired power plants can be converted to hydrogen and can be decarbonised by the mid-2040s.

Economic and institutional significance

Gas-fired power plants sit at the interface of the electricity market, gas infrastructure and climate policy. Their operation depends on electricity prices, gas prices, CO₂ prices, grid charges, balancing energy markets, reserve requirements and now also on capacity payments. A plant can be technically present and yet not run economically if fuel and emission allowances are too expensive. It can also appear economically attractive and yet help the grid little at its location if the bottlenecks lie elsewhere. Location, connection capacity and the regional grid situation are therefore not incidental. The regional component of the German tenders also shows this.

For grid operators, gas-fired power plants also have an operational function. They can provide balancing capacity, support voltage, supply instantaneous reserve or help with restoration after a large-scale outage. The precondition is that they are technically equipped and contractually integrated for this. Not every plant provides every one of these system services. Terms such as firm capacity, black start capability, balancing energy and reserve should therefore not be applied across the board to all gas-fired power plants.

A widespread misunderstanding treats new gas-fired power plants either as a relapse into fossil energy or as a simple solution to all fluctuations in renewable energies. Both views obscure the concrete conditions. Fossil running times must fall if climate targets are to be met. At the same time, a power system with a lot of wind and solar power needs firm capacity for times of scarce feed-in. Conflicts arise where technical possibility, market rule and political responsibility diverge: the plants are supposed to run rarely, be available at all times, emit little, remain affordable and pay off as an investment.

Using the term gas-fired power plant precisely makes visible which task is meant: electricity generation from gaseous fuel, provision of dispatchable capacity, backing up the residual load, delivery of system services or transition to climate-neutral fuels. None of these functions is automatically present in every plant. In the future power system, a gas-fired power plant is neither merely a legacy burden nor an all-purpose insurance policy. It is a dispatchable plant whose benefits and costs depend on fuel, mode of operation, market rules, location and availability.

Sources

StromVKG – Ergebnisse der ersten Ausschreibung für Langzeitkapazitäten — Bundesnetzagentur; 2026-11-03. Abschnitte „Ergebnisse der Ausschreibung“ und „Weitere Verfahrensschritte“
Start der Ausschreibungen für Langzeitkapazitäten nach StromVKG – Gebotstermin 8. September 2026 — Bundesnetzagentur; 2026-07-21. Abschnitte „Ausschreibungen für Langzeitkapazitäten nach StromVKG“ und „Gebotstermin 8. September 2026“
Startseite der Bundesnetzagentur – Meldung zum 2. Gebotstermin Langzeitkapazitäten — Bundesnetzagentur; unbekannt (Meldung vom 11.11.2026). Rubrik „Aktuell“, Eintrag vom 11.11.2026
Technologiesteckbrief Konventionelle Kraftwerke (Schriftenreihe Energiesysteme der Zukunft) — acatech/Leopoldina/Akademienunion – Energiesysteme der Zukunft (ESYS); unbekannt. Abschnitt zu GuD-Anlagen (laut Suchergebnis)
Betrachtung der Vorkettenemissionen von Erdgas und Steinkohle (Climate Change 61/2021) — Umweltbundesamt; 2021. Abschnitt LNG-Vorkette, Abbildung 11 (laut Suchergebnis)

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Edited by eCMS on 12.11.2026 05:05