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26/09/2016

German states challenge climate fees on outdated power plants

Energy

German states challenge climate fees on outdated power plants

To uphold the international community's 2020 climate targets, Germany must cut its CO2 emissions by 40% compared to 1990.

[Philipp Gerbig/Flickr]

Sigmar Gabriel’s plans to demand climate fees from Germany’s old power plants faces considerable opposition, especially from regions dependent on lignite, which claim the measure could eliminate thousands of jobs and raise energy prices. EurActiv Germany reports.

The Economic Affairs Minister’s plan to hit coal-fired power plants with a climate fee has been met with considerable resentment from eastern states.

Brandenburg’s state prime minister Dietmar Woidke said on Friday (27 March) that “the Economic Affairs Ministry’s plans will create significant insecurity in the energy sector and the entire German industrial sector”.

Climate protection can only be executed successfully, he explained, if actions are globally coordinated.

“But a model that eliminates many thousands of jobs in Germany will not be copied internationally,” Woidke said, speaking in the Bundesrat, the legislative body in which Germany’s 16 regions are represented at the national level.

Not only does this make Gabriel’s recommendations wrong from an economic and regional perspective, the Social Democrat pointed out, but also in light of the many efforts to promote climate protection.

Last week, the Economic Affairs Ministry submitted a paper outlining key features of a new climate protection instrument to cut down on CO2 in the energy sector.

The document includes plans to require the oldest and most inefficient coal-fired power plants to pay a climate protection fee. Operation of these plants is intended to become gradually more costly, cutting down on overcapacities and greenhouse gases from coal power generation.

But without additional measures, Germany is still set to miss its climate target of a 40% CO2 reduction by 2020.

>>Read: Germany’s climate targets unattainable with dirty coal power, analysts say

Saxony’s center-right Minister-President, Stanislaw Tillich, (CDU), called the climate fee a “penalty payment for power plants”, during a statement before the Bundesrat.

It is a purely German instrument to reduce CO2 emissions, he said. In light of the existing system of certificate trading at the European level, this will create a double burden for German power plants, Tillich warned, saying it remains to be discussed whether this is compatible with EU law.

He warned against a national solo effort, pointing to the roughly 10,000 jobs dependent on the lignite power plant in Lausitz alone. The document is “well-meaning but badly made”, Tillich said. Numerous power plants would have no more future, he predicted, leading to higher energy prices as a result.

Saxony-Anhalt’s Minister-President Reiner Haseloff rejected Gabriel’s initiative “with no if’s, and’s or but’s”.

After eastern Germany lost its industry due to reunification, Haseloff said the region has already contributed greatly to reducing CO2 emissions that are harmful to the climate, .

After a meeting on Friday between Gabriel and regional ministers for energy policy, Brandenburg’s Energy and Economic Affairs Minister was one of the few who were optimistic. Social Democrat Albrecht Gerber told Rundfunk Berlin-Brandenburg (Rbb) radio, “we have agreed to start fresh talks on everything. So we can put a white sheet of paper on the table”.

The federal states of Saxony, North-Rhine Westphalia and Brandenburg have now planned to form a working group with the Federal German Economic Affairs Ministry.

Members are expected to draft alternative proposals and compile the first results of their cooperation by the end of April.

Removing nuclear and coal would have “catastrophic effects”

The Ministry’s plan was met with massive criticism and rejection from the industry. “Should the German government implement these key points, it would threaten Germany’s security of supply,” explained Wolfgang März, CEO of the Chamber of Industry and Commerce in Magdeburg.

“A simultaneous exit from nuclear and coal power is simply impossible or else linked to catastrophic effects,” he warned. Politicians are forgetting lignite’s significant contribution to the current security of supply, März said.

>>Read: Germany denies plans to close old coal plants in sprint to 2020 targets

The industry representative also indicated that an increase in the cost of coal power in Germany is more likely to lead to importation of cheaper coal power from Poland and the Czech Republic, rather than drawing from more efficient but more expensive gas power plants.

As a result, März said, the proposal would have almost no effect.

Environment associations: “Initiative is long overdue”

Meanwhile, environmental protection associations welcomed Gabriel’s plan, saying it is long overdue.

In this way, the Economic Affairs Ministry is finally sounding the bell for the unavoidable exit from coal-fired power generation, said the president of the conservation organisation NABU, Olaf Tschimpke.

NABU supports the plan to make the dirtiest and most outdated lignite power states carry the burden of higher fees. “A national emissions-related fee for coal-fired power plants is a useful instrument for climate protection,” said NABU’s president, “So far, the European emissions trade remains a toothless tiger that hardly demands anything from energy dinosaurs with lignite power plants.”

“With the future in mind, it should not be a proposal but, rather, should become a matter of course, that the biggest air polluters pay their share to climate protection,” Tschimpke emphasised.

The foreseeable decline of lignite power generation undoubtedly creates a challenge for the regions affected but there is no reason to panic, said NABU energy expert Tina Mieritz.

“The energy providers who still depend on coal were supposed to change their strategy years ago instead of talking down the Energiewende,” she indicated.

“It is high time that the German regions, the federal government and energy providers actively support the unavoidable structural change and come up with new perspectives through the future-oriented sectors like efficiency technologies,” Mieritz pointed out.

National CEO of the German Environmental Relief Organisation (DUH), Sascha Müller-Kraenner said, “Dismantling overcapacities in coal-fired power generation is long overdue. Now, Sigmar Gabriel has recognised this as well.”

“His proposal only provides the most minimal solution, from a climate protection perspective, to reach the climate target,” Müller-Kraenner continued.“Still, it is generally suitable for ensuring dirty coal-fired power plants partially or completely leave the grid through cleverly-placed economic incentives.”

Background

Stemming from the 1980s, the term Energiewende describes a movement in Germany to shift to clean energy, reducing the country's dependence on gas, coal and nuclear energy.

In the wake of the Fukushima nuclear disaster 2011, the campaign was picked up by the Merkel administration.

The German government quickly reacted, passing legislation that would phase out the country's nuclear power plants by 2022.

It also introduced a number of targets for shifting to renewable electricity generation.