By Markus Wacket
BERLIN (Reuters) - High-level talks between the government and the utility sector on Thursday ended without a deal on a much-awaited strategy for new gas-fired power plants, according to three people familiar with the matter.
The key issue that remains unresolved is whether hydrogen-capable plants should receive start-up, or capital expenditure, funding in addition to support for operating expenses, the people said.
Chancellor Olaf Scholz had called a fresh round of talks for Thursday morning after a previous one earlier in the week failed to produce a deal, putting further pressure on the coalition to come up with a solution.
In addition to Finance Minister Christian Lindner and officials from the Economy Ministry, top representatives from the utility sector, including Uniper and RWE (LON:0HA0), also participated.
At the talks' core, the goal is to promote the construction of new gas-fired power plants with billions of euros to compensate for the growing but intermittent renewables capacity in Germany.
They are to be gradually converted to plants making climate-friendly hydrogen, which is likely to be significantly more expensive than natural gas for a long time.
According to government and industry circles, Economy Minister Robert Habeck and Scholz are largely in agreement and are pushing for a swift decision, while Lindner still has reservations, only wanting to fund operating expenses at most.
The plan, with an estimated cost of 40 billion euros ($43.35 billion), is part of Germany's attempts to avoid power shortages as it phases out coal in favour of renewable generation.
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