Germany finalises coal deal after months of debate.

• 8 years ago (2015-07-03)
• David Flin

Europe 1061 Nuclear 640

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Germany has abandoned plans for a levy on coal-fired power plants, but will reduce brown-coal power generation to safeguard its 2020 carbon reduction targets. The plans, which follow months of debate within Angela Merkel’s government, were welcomed by industry, but condemned by environmental groups, which accused the government of selling out to business interests.

Merkel’s coalition government said that around 2.7 GW of power generation from brown coal will be closed, but retained as reserve power in case of emergency. This announcement caused shares in the utility RWE to rise by 5.6 per cent.

The plan also involves compensating power providers if they participated in a new capacity reserve system, where brown coal plants can be switched back on if there are power shortages, a clause that the owners had pushed for.

Sigmar Gabriel, Economy Minister, said: “We are sending an international signal to show we are achieving the switch to renewables in a highly industrialised country.”

The plans also include support for power and heat cogeneration, greater investment in efficiency measures, and the government settled a dispute over high voltage power transmission lines needed to carry green energy between the north and south of the country.

Gabriel’s ministry is expected to write the plan into law later this year.

Tobias Muenchmeyer, spokesman for Greenpeace, has criticised the plans, and said: “Angela Merkel has broken her climate promises from Elmau. Instead of starting the exit from coal, she has ensured all the dreams of the plant operators come true.” The G7 had made a climate deal at Schloss Elmau in Bavaria in May.

Matthias von Bechtolsheim, Partner at consultancy Arthur D Little, said: “Power stations that are necessary for security of supply in winter might have been closed for good.”

Germany is in the process of boosting renewable energy production and phasing out nuclear energy. It has set a target of reducing its 2020 carbon emissions by 40 per cent compared to 1990 levels. Coal currently accounts for about 44 per cent of Germany’s power generation, compared to about 27 per cent from renewable sources.