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27/09/2016

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

Energy

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

German Energy and Economic Affairs Minister Sigmar Gabriel [The Council of the European Union]

According to a paper from the German Economic Affairs Ministry, the government plans to impose carbon dioxide reductions on energy providers. But Energy Minister Sigmar Gabriel denies the plan would forcefully shut down outdated coal-fired power plants. EurActiv Germany reports.

“I will not make a proposal to shut down coal-fired power plants”, said German Energy and Economic Affairs Minister Sigmar Gabriel on Monday (24 November) in Berlin.

Because Germany’s carbon dioxide (CO2) emissions are currently at 341 million tonnes per year, cutting 22 million tonnes would not require any forced closings of coal-fired power plants, Gabriel explained.

A government document came to light over the weekend, outlining plans requiring energy providers to reduce CO2 emissions by 22 million tonnes until the year 2020. The amount would be equally distributed among all power plants, the paper says, but this means around eight lignite and hard coal burning plants would have to be shut down completely.

On Saturday (22 November), Reuters cited the document, which was confirmed by sources in the German government through Der Spiegel.

The development comes amid previous reports that Germany was set to miss its climate targets for the year 2020. By that year, the German government has pledged to reduce its annual CO2 emissions by 40% compared to 1990 levels.

Currently, emissions are 5-8% beyond that goal, meaning a reduction of 62 to 100 million tonnes of CO2 per year must still be made to reach the goal.

Environment Minister Barbara Hendricks recently tabled an action programme for climate protection, but the plan did not specify a core source for power generation.

So far, Gabriel has repeatedly indicated that it would be impossible to simultaneously phase out nuclear and coal power. Whoever supports this, he said, would create an explosion in energy prices, create potential supply shortages, and encourage mass migration of industry components to foreign countries.

In the long-term, coal and gas powered energy will still be needed to “back-up the Energiewende” (see background), Gabriel explained, at times when wind and solar power do not satisfy demand.

“The German government will hold talks with stakeholders to secure supply through fossil fuel powered plants, to ensure structural change occurs in a socially acceptable way and – in the interest of companies and private households – to maintain affordable energy prices,” the newly-revealed document indicates.

Referring to a study, the Federation of German Industries (BDI) warned that shutting down coal-fired power plants would lead to a spike in energy prices and competitive disadvantages for German industry.

“Our study clearly shows power plant closings directly damage the competitiveness of German industry, without helping the climate. CO2 emissions as a whole will not be reduced but, rather, only displaced. Foreign, less-efficient coal-fired plants will take on 95% of power generation from closed domestic power plants,” said the BDI’s Director General Markus Kerber.

According to the BDI study, energy prices will rise close to 7% per megawatt hour by the year 2020, if coal power plants with around a 10 gigawatt capacity are closed.

Energy-intensive industries in particular, will suffer a significant blow to competitiveness, said a study by the institutes r2b energy consulting and the Hamburg Institute of International Economics (HWWI).

The BDI is assuming that 10 gigawatt-plants are planned to be shut down, Gabriel emphasised. “This is not a recommendation we debated this afternoon,” he added, indicating the discussion he had with energy providers RWE, E.on, Vattenfall, Steag, EnBW and Thüga on Monday.

“Companies reacted reluctantly in favour,” explained Gabriel after the meeting. It is clear that there is no overflowing excitement over the plans, he pointed out.

The German Federation of Renewable Energies (BEE) voiced its explicit support of Gabriel’s plans to impose binding CO2 savings targets on power plant managers.

“It is a step in the right direction,” said BEE Managing Director Hermann Falk. “The oldest and most inefficient coal-fired kilns not only emit the most CO2, they are also among the worst for the new energy world because they are the least flexible with regard to power generation.”

Without considerable reductions in coal-fired power generation the climate protection goal is likely to fall short of its target, said a study recently published by Germanwatch and the Worldwide Fund for Nature (WWF). The authors calculated that at least 100 million tonnes of CO2 would have to be cut compared to 2013.

The study suggests a consistent plan to shut down lignite-burning facilities after 35 years and hard coal power plants after 40 years of use. On the other hand, after coal power plants have operated for 35 years, the study indicated they could be required to comply with caps on emissions before being shut down after 40 years in operation.

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.