German economy minister sees chance to avoid energy price spikes

Weekly cabinet meeting in Berlin

(This Feb. 1 story has been corrected to change the metric to gigawatts (GW), not megawatts (MW), in the last paragraph)

BERLIN/FRANKFURT (Reuters) - The decline in ‮‮energy prices‬‬ on global markets was not expected, Economy Minister Robert Habeck said on Wednesday, adding that he saw a chance Germany won't see last year's price spikes if it comes out of winter with well-filled gas storage.

"No one can really swear or predict whether it will be a lasting change for the better. But there is a chance," Habeck told journalists following a regular cabinet meeting.

Habeck said Germany's energy supply in the coming years would be secure even if the country were to phase out coal-fired power plants in the east earlier than the scheduled exit of 2038.

"I deliberately formulate it in the subjunctive, because there is no agreement on this yet," Habeck added.

Supply in the years 2025-2031 will be safe amid the expansion of renewable capacity and transport grids in moves away from fossil fuel-fired generation, a government statement said.

A report that factored in an increase in power usage by electric cars and heat pumps had been supplied by the Federal Network Authority and was passed by the cabinet on Wednesday.

It took into account possible extreme weather events and technical failures and the need to exploit storage options and power demand management to deal with the intermittency of renewable energy.

The government is due to issue a power plant strategy in the first half of 2023 and wants new gas-to-power plants to be made ready to burn clean hydrogen instead of natural gas.

It also aims to produce, import and market green hydrogen, derived from wind and solar power via electrolysis but also from biomass and biomethane, as a future energy source.

The cabinet has approved measures to speed up the wind and solar power roll-out as well as that of offshore wind.

In total, Germany should have access to 360 gigawatts (GW) of green power capacity by 2030.

(Reporting by Riham Alkousaa and Vera Eckert, editing by Rachel More and Philippa Fletcher)