The German government will announce on Thursday (2 July) a decision to order the shutdown of several coal-fired plants in order to reach its ambitious climate goals by 2020, according to government sources.
Chancellor Angela Merkel and the leaders of her two junior coalition parties also settled a dispute over high-voltage power lines which are planned to carry green energy from the breezy north to the industrial south, the sources said.
Energy minister Sigmar Gabriel is expected to explain the results of the coalition negotiations which lasted more than four hours at a news conference on Thursday morning.
“Coal-fired plants with a capacity of 2.7 gigawatts will be shut down,” said the government sources, who declined to say how many plants will be closed.
“The affected power plants will not be allowed to sell electricity on the normal energy market,” they said, adding that with this step Germany would manage to reach its goal to curb CO2 emissions by 40% by 2020 compared with 1990 levels.
Gabriel originally proposed putting a levy on CO2 emitted by the oldest and most-polluting power stations above a certain threshold to help reach a target of cutting CO2 emissions from the coal sector by a further 22 million tonnes by 2020.
But he faced a backlash from industry, with unions saying the plan could put up to 100,000 jobs at risk and lead to the decline of the mining and power generation industries.
The utility companies have lobbied hard against the levy and demanded compensation for an alternative reserve option.
While the levy now seems to be scrapped, it remained unclear whether companies such as RWE or Vattenfall Europe would get compensation payments or not.
Unconfirmed media reports earlier in the week have said the utilities may be allowed to move 2.7 gigawatts of old coal-fired capacity into a reserve scheme in the coming years, netting a few hundred million euros in the process.
The European Union was the first bloc to agree its position before UN talks take place in Paris later this year to seek a new worldwide deal on global warming.
EU leaders committed in October last year to reduce greenhouse gas emissions by at least 40% by 2030, and increase energy efficiency and renewables by at least 27%.
A special "flexibility clause" was added to the final text, making it possible for the European Council to return to the targets after the UN summit in December 2015.