Modernisation of existing and new construction of power plants in Germany: results of an optimisation model

If the average lifetime of a power plant is assumed, as is commonly accepted, to be 30 to 35 years, then the German power plant inventory is outdated. In light of this, several studies have predicted a comprehensive conversion of the German power-generating industry within the next few years. It is the objective of this paper to verify this finding using an optimisation approach. Different policy scenarios are defined. The requirements are calculated for the future modernisation of existing and the new construction of conventional power plants in Germany, as well as the share of new and total capacity provided by various energy sources. The optimisation approach used considers the modernisation of old plants as an investment alternative to the construction of new plants. This fills the gap in existing power station models which do not consider plant modernisation. Estimates, depending on scenario assumptions, show that discrepancies between models that include plant modernisation and models that do not include it are considerable.