Five questions surrounding Germany’s coal phase-out plan

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Coal and brown coal now provide more than 42% of Germany’s power, according to the International Energy Agency. That proportion has been growing since Germany's decision to phase-out nuclear power. [Daniel Mennerich / Flickr]

Many in Germany want to have their cake and eat it by scrapping nuclear power and avoiding coal at the same time. Pieter Cleppe looks at some of the questions raised by Germany’s decision.

Pieter Cleppe is head of Brussels office at Open Europe, a euro-critical think-tank focused on Britain’s new relationship with the EU and the rest of the world after Brexit.

After a long debate, Germany’s so-called “Coal Commission”, which includes representatives from political, industry, and environmental groups, has recommended the country end its use of coal power by 2038. This still needs to be approved by four German states that will be affected, as well as by the federal government, though Chancellor Angela Merkel has already voiced support.

With questions still surrounding the whole endeavor, here’s an overview of the five most pressing debates.

  1. What will it cost?

The Coal Commission suggests spending at least €40 billion to aid coal-mining states affected by the phase-out, and at least €2 billion per year to limit increases in consumer power bills – already the highest in Europe. 5,000 government jobs would be relocated to the affected regions, carrying costs in itself.

The Association of German Chambers of Industry and Commerce (DIHK) estimates the real cost at closer to €170 billion, taking into account the effect on energy prices, possible damages, and the cost of extra investment into alternative energy sources such as natural gas plants. It warns price increases must be avoided, as German companies already face the highest power bills in the European Union.

These come in addition to the costs of Germany’s overall energy transition plan, which aims to almost completely shift from fossil fuels to renewable energy at an estimated price of €1.1 trillion by 2050.

Much of the potential economic damage will depend on the second major issue: energy security.

  1. Will the phase-out plan endanger energy security?

If it weren’t for Angela Merkel’s decision to phase out nuclear energy following Fukushima, the challenge would be much less tricky.

Coal and brown coal now provide more than 42% of Germany’s power, according to the International Energy Agency. That proportion has been growing since the nuclear decision. As a result, Germany has admitted it is on track to miss its 2020 CO2 emissions targets.

Many in Germany want to have their cake and eat it, scrapping nuclear power and avoiding coal at the same time. The Coal Commission wants coal capacity reduced from 42 gigawatts of generation capacity to 30 gigawatts by the end of 2022, and 17 gigawatts by the end of 2030. German industry fears energy blackouts in a country more dependent on coal than the UK or Canada, who have decided to phase it out.

Almost no other country has tried to simultaneously phase out both nuclear and coal simultaneously. Sweden, for example, reversed its decision to phase out nuclear power in 2009.

One study has claimed renewable energy sources overtook coal as Germany’s main power source for the first time in 2018, but that’s not the whole story. As Rolf Schmitz, head of leading energy firm RWE, maintains: “there are days when renewables are covering 70% or more of energy needs, but there are also days when that share is only 5%, when the wind doesn’t blow and the sun doesn’t shine”.

Another challenge, acknowledged by the Coal Commission itself, is that major investments in Germany’s energy transport and storage infrastructure are needed to cope with an exit from coal, to transport wind energy created offshore in the North Sea to the south of the country, and to improve storage capacity.

Precisely because of such doubts, Ralph Brinkhaus, the faction leader of Merkel’s CDU in the German Parliament, has warned the coal exit could be delayed beyond 2038 if the deadline creates problems for the electricity supply: “energy supply security must be guaranteed… if it is endangered, we should be free to do another round and address that, without abandoning the path we’ve chosen. There’s no reason to be dogmatic about this.”

  1. Isn’t it all a bit hypocritical?

As journalist Brigitte Fehrle argued in a comment for German public radio: “it would be fatal for the credibility of the whole initiative when instead of receiving energy from German brown coal-powered plants, brown coal from Poland or the Czech Republic would need to be imported”. Merkel herself has already commented that “we want to be out of coal in 2038. Then we need more gas”.

However, gas is no panacea for avoiding carbon emissions. Christian Lindner of German liberal opposition party FDP, who has dismissed the Commission’s recommendations as “pure ideology”, predicted that “in 2030, this game will be repeated with the energy source gas”.

The Dutch government was criticised in a similar way for shutting down gas exploration, with opponents pointing out it may open the door to more gas imports from Russia. Abandoning coal may leave Germany more dependent on Russian gas, with Merkel already under fire for allowing “Nord Stream 2”.

  1. How environmentally friendly are alternative energy sources?

Hazardous materials are necessary to produce solar panels, and wind turbines have their own environmental downsides. But surely those drawbacks are worth it, given how renewables will replace every other energy source?

That’s questionable. On a global level, the role of wind and solar energy is still modest at best. According to the International Energy Agency’s 2016 Key Renewables Trends, wind provided 0.46% of global energy consumption in 2014, and solar and tide combined provided 0.35%. This is total energy, not just electricity, which accounts for less than a fifth of all final energy.

Even if 14% of the world’s energy is considered “renewable”, three quarters of that is biomass. Professor John Beddington, a former UK government chief scientific adviser, argues wood-burning in order to help countries reach renewable energy targets shouldn’t be the way forward; otherwise, Europe may soon need to burn an amount of wood greater than its total harvest – not exactly in line with green gospel.

  1. Isn’t coal energy technology improving?

While progress in renewables makes headlines, fossil fuels have also been improving, with the development of “clean coal” technologies.

The current debate’s hysterical approach ignores the fact that 60% of primary energy will still come from fossil fuels by 2040, down from just 81% today.

If one cares about reducing CO2 emissions, completely phasing out coal is not only expensive but also ignores the role of technological progress in improving an indispensable energy source.

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