Markets & Policies

A coal phase-out plan for Germany?

After long negotiations Angela Merkel's conservatives (CDU/CSU) and the Social Democrats (SPD) seem to have reached an agreement to form a new government coalition, and setting up a coal phase- out plan is one of the main pillars of the treaty.

The lack of a proper coal phase-out plan is probably the only, or at least most visible and debated, flaw of the German “Energiewende[1], which has been widely welcomed and perceived as a very ambitious long term energy transition plan to a low-carbon, nuclear-free economy. But in the past few weeks the discussion about the coal power plants has been reignited, and now a timeline for coal phase-out has become one of the crucial elements of the coalition agreement between CDU/CSU and SPD.

Lower ambitions?

The political will to set up a coal phase-out plan comes together with and is strictly liked to another hot topic of negotiations agreement: the German voluntarily self-imposed target of a 40% reduction of the greenhouse gas (GHG) emissions in 2020 compared to 1990 is very likely not achievable. The 40% target will probably be achieved with just few years of delay, and the long term ambitions remain untouched, with a medium-term target to cut GHG emissions in Germany by at least 55% by 2030 compared to 1990 levels, and “to become extensively GHG-neutral by 2050”. If on one side it seems pretty clear that Germany climate change and pollution fighting ambitions are set to remain very high, on the other side of the coin admitting that the national 2020 goal is not achievable it’s not a good signal from one of the worldwide climate leading countries, and it could potentially affect affected Germany  international reputation. Planning a timeline for coal phase-out and a final end date for the use of coal, at least in electricity generation, will definitely be a positive message and an important commitment for the country.

The nuclear phase-out

After the Fukushima accident nuclear phase-out (or at least reduction) discussions and plans have become pretty popular all over Europe, from Switzerland, to France, Italy and other countries, and in Germany it has become the central part of the Energiewende. In 2011 seven nuclear power plants were permanently shut down, for a total of 8400 MW, while today only 7 nuclear power plants are still operating on the German market, for a total of 9500 MW. Figure 1 shows the planned nuclear phase out from 2000 to 2022.

Electricity generation mix in Germany

The fast pace of the German nuclear phase-out policy was pointed out as a possibly counterproductive policy in the context of the national climate change targets, since the increase in renewables could eventually only partially offset the demand, with the result that the lower nuclear power generation could be at least partially replaced by fossil fuels, finally resulting in an increase in GHG emissions. Figure 2 shows the evolution of the electricity generation mix in Germany from 2002 to 2017: the impressive growth in the renewable energy sources generation, wind and solar in particular, was not enough to fully offset an almost 40 TWh reduction in the nuclear power generation that followed the 2011 nuclear power plants sudden closures, and the result was an increase in coal power plants generation.

This temporary “coal renaissance” is better depicted in Figure 3, where the concurrence between the impact of the 2011 nuclear phase out and the increase in coal generation is shown more clearly.

Although this upswing in the coal electricity generation just lasted few years, it has probably put a spotlight on the need to start planning a national coal phase-out. In 2017 the renewable energy sources (RES) share on the total electricity generation in Germany was almost equal to the coal electricity generation share (38% for total RES, 39% for total coal), and looking at the recent historical data we can see how RES have rapidly caught up with coal (Figure 4). But the issue of coal power generation in Germany remains at least for the near future: with 25 GW and more that 21 GW of, respectively, hard coal and brown coal capacity still installed and working in 2017, a possible slowdown in the growth of the RES capacity (lower/less incentives, most favourable area already take…), and a CO2 price under the EU Emission Trading System slowly increasing but still not really able to effectively support the technological switching (still less than 10 €/tCO2) … the coal power plants are likely to have a significant role in the power generation mix of the country for a number of years.

Annual electricity generation in Germany from renewables and coal, 2002-2017, TWh

Calling for a phase-out plan!

A pragmatic planning and timeline for a coal phase-out seems to be the next logical step to complement and make more trustworthy the near and long term emission reduction ambitions of Germany. Whenever the target is in term of emission reductions for electricity generation, setting a goodbye plan for coal in parallel with supporting and driving investments in renewables and energy efficiency should be the first move of every policy maker. Then, eventually, a nuclear phase-out could be considered for safety and costs reasons (both commissioning costs of new plants and decommissioning costs of shut down plants), and also for the difficulty to couple the nuclear rigid baseload generation with the intermittent RES.

But planning a nuclear phase out was so far much more politically feasible than planning a coal phase-out, both because the Fukushima accident really impacted the public opinion and also because of the powerful German coal industry, although talks about that already started few years ago in Germany.

The resistance of the German coal industry is probably going to surrender to the inevitability of a coal-phase out, finally starting to work on how to deal with it instead of fighting against it.

A timeline for the end of coal in Germany is going to be perceived as a very important and strong stance within the European borders as well as in the international arena, and the country will probably benefit of it in various ways, from strengthening its position as a climate change leader to the health and environmental improvements for local communities.

[1] A lot of information about the German Energiewende can be found in the Energy Transition – The Global Energiewende website: https://energytransition.org/

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