Released February 17, 2020 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany's government has approved the exit strategy and the tens of billions of euros it will cost for the country to exit coal-fired power in the coming decades.
All coal-fired power plants will be taken offline by 2038, and a budget of 40 billion euro ($43.8 billion) has been agreed to help compensate power companies, regions, employees and the mining sector. In practice, by 2022, the power generated from hard coal and lignite will each be reduced to around 15 gigawatts (GW). By 2030, this figure is to be reduced to 8 GW for hard coal-fired power stations and 9 GW for lignite-fired power stations. Coal-fired power plants supply approximately 30% of Germany's electricity and employ more than 60,000 people. More than 80 coal-fired plants will have to be closed within two decades. The closures will also severely impact the country's lignite mining industry. The country will be relying on the continued growth of renewables (solar and wind) and the faster rollout of new gas-fired plants to fill the power gap.
"Germany, one of the most effective and most successful industrial nations in the world, is now taking huge steps forward to phase out the era of fossil fuels," stressed Federal Finance Minister Olaf Scholz. He added that power plant operators will receive compensation totalling 4.35 billion euros ($4.8 billion) over the next 15 years for the premature closure of power plants. Eight of the oldest coal-fired power plant blocks will be shut down "very rapidly," with the first one closing before the end of this year.
"We are the first country to agree a binding end to the use of coal and nuclear power to generate electricity. That is also an important signal at the international level," declared Federal Environment Minister Svenja Schulze, praising the agreement between federal and state governments.
Germany's energy industry association, BDEW, praised the path agreed for the exit from lignite powered plants but urged the government to accelerate its alternative power plans for renewables and gas. Kerstin Andreae, chairman of the BDEW, said: "It is gratifying that a decision has finally been made. Power plant shutdowns make an important contribution to achieving the CO2 reduction targets. In order to guarantee security of supply and the shutdown of power plants, further important decisions are imperative. The expansion of wind energy has slumped. Instead of preventing expansion by using spacing rules, the expansion of renewable energies should be pushed ahead with commitment. With regard to the important role of photovoltaics for Germany's future energy system, the government must finally lift the 52-GW cap. At the same time, the expansion of environmentally friendly combined heat and power (CHP) must finally be massively accelerated. The Federal Ministry of Economics itself emphasizes that a total of 17 GW of CHP plants based on gas must be added to maintain the high level of security of supply by 2030. The right framework must be created for this."
The BDEW was highly critical of the government's stated compensation plan for hard-coal power plant operators. According to the framework deal agreed by government, plant operators will compete by submitting tenders for the lowest possible decommissioning premiums, with the winners refunded by the government for closing their plants. BDEW's Andreae said: "The draft adopted today by the Federal Cabinet represents massive discrimination for the operators of hard coal-fired power plants. We are critical of the planned maximum compensation for the shutdown of modern hard coal power plants in connection with the impending decommissioning without compensation. The planned maximum prices of the proposed tenders would mean considerable losses for the power plant operators - mostly public utilities. These companies invested large sums of money in the construction of the power plants, which was then also required by politicians. Now they would be punished for these politically wanted investments."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
All coal-fired power plants will be taken offline by 2038, and a budget of 40 billion euro ($43.8 billion) has been agreed to help compensate power companies, regions, employees and the mining sector. In practice, by 2022, the power generated from hard coal and lignite will each be reduced to around 15 gigawatts (GW). By 2030, this figure is to be reduced to 8 GW for hard coal-fired power stations and 9 GW for lignite-fired power stations. Coal-fired power plants supply approximately 30% of Germany's electricity and employ more than 60,000 people. More than 80 coal-fired plants will have to be closed within two decades. The closures will also severely impact the country's lignite mining industry. The country will be relying on the continued growth of renewables (solar and wind) and the faster rollout of new gas-fired plants to fill the power gap.
"Germany, one of the most effective and most successful industrial nations in the world, is now taking huge steps forward to phase out the era of fossil fuels," stressed Federal Finance Minister Olaf Scholz. He added that power plant operators will receive compensation totalling 4.35 billion euros ($4.8 billion) over the next 15 years for the premature closure of power plants. Eight of the oldest coal-fired power plant blocks will be shut down "very rapidly," with the first one closing before the end of this year.
"We are the first country to agree a binding end to the use of coal and nuclear power to generate electricity. That is also an important signal at the international level," declared Federal Environment Minister Svenja Schulze, praising the agreement between federal and state governments.
Germany's energy industry association, BDEW, praised the path agreed for the exit from lignite powered plants but urged the government to accelerate its alternative power plans for renewables and gas. Kerstin Andreae, chairman of the BDEW, said: "It is gratifying that a decision has finally been made. Power plant shutdowns make an important contribution to achieving the CO2 reduction targets. In order to guarantee security of supply and the shutdown of power plants, further important decisions are imperative. The expansion of wind energy has slumped. Instead of preventing expansion by using spacing rules, the expansion of renewable energies should be pushed ahead with commitment. With regard to the important role of photovoltaics for Germany's future energy system, the government must finally lift the 52-GW cap. At the same time, the expansion of environmentally friendly combined heat and power (CHP) must finally be massively accelerated. The Federal Ministry of Economics itself emphasizes that a total of 17 GW of CHP plants based on gas must be added to maintain the high level of security of supply by 2030. The right framework must be created for this."
The BDEW was highly critical of the government's stated compensation plan for hard-coal power plant operators. According to the framework deal agreed by government, plant operators will compete by submitting tenders for the lowest possible decommissioning premiums, with the winners refunded by the government for closing their plants. BDEW's Andreae said: "The draft adopted today by the Federal Cabinet represents massive discrimination for the operators of hard coal-fired power plants. We are critical of the planned maximum compensation for the shutdown of modern hard coal power plants in connection with the impending decommissioning without compensation. The planned maximum prices of the proposed tenders would mean considerable losses for the power plant operators - mostly public utilities. These companies invested large sums of money in the construction of the power plants, which was then also required by politicians. Now they would be punished for these politically wanted investments."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
