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Compensation in the billions

by The Energy Intelligence
July 9, 2020
in Insight
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The coal phase-out law is to end coal-fired power generation "by December 31, 2038 at the latest

Federal Minister Peter Altmaier at a press conference on July 3, 2020 on the coal phase-out law. Photo: Abarzúa

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One and a half years after the Commission’s final report “Growth, Structural Change and Employment”, the Bundestag initiated the coal phase-out.

The coal phase-out law is to end coal-fired power generation “by December 31, 2038 at the latest”. It provides compensation payments of 4.35 billion euros for lignite companies.

“You would have had the chance to create something really historic here today. Something that hundreds of thousands of people have fought on the streets, ” said MdB Annalena Baerbockon July 3rd before the vote in the Bundestag.

The federal chairwoman of the Greens criticized the fact that, contrary to the decision of the coal commission, the coal-fired power plant Datteln 4 was put into operation.

“They unilaterally canceled this compromise that was found between the unions, environmental associations, industry representatives and scientists,” said Baerbock. Instead, the bill was “an 18-year financial coal protection law.”

The B’90 / Greens faction demands that the lignite-fired power plants should be shut down earlier and continuously and has therefore rejected the coal phase-out law. How is the planned coal phase-out planned?

On the last day of the session before the non-sessional summer time, the Bundestag voted in favor of the “Coal Exit Act” and the “Structural Strengthening Act on Coal Regions”. Both draft laws were adopted in the version of the Committee on Economic Affairs and Energy ( printed matter 19/20714 (new), 02.07.20 ) and confirmed by the Federal Council.

The Structural Strengthening Act provides for grants of up to EUR 14 billion for the federal states concerned and up to EUR 26 billion for additional federal measures. The legal regulations on the phaseout of coal still have to be approved under state aid law.

According to the recommendation, the net nominal output of hard coal and lignite power plants should each be reduced to 15 gigawatts (GW) by December 31, 2022 (3), to 8 GW hard coal and 9 GW lignite by April 1, 2030 and “at the latest” by December 31. 2038 to zero.

Tendering procedures are to be introduced for the period from 2020 to 2027 to reduce electricity generation from hard coal and for small brown coal plants.

Coal-fired power plants are to be decommissioned after 2027 without compensation. From 2031, the decommissioning should be carried out without tenders. If the participation in the tenders is too low, regulatory shutdowns are planned from 2024. Small plants up to 150 MW are not to be shut down by law until 2030 at the earliest.

The Federal Government has negotiated a public law contract with the plant and open-cast mine operators for the reduction and termination of lignite-based electricity generation. This regulates a claim for compensation for the decommissioning of lignite plants until the end of 2029.

The amount was set at EUR 2.6 billion for RWE Power AG and EUR 1.75 billion for Lausitz Energie Bergbau AG (LEAG KW). According to member of the Bundestag Lorenz Gösta Beutin (party Die Linke) also binds such contracts to future federal governments to generate electricity from coal and make an earlier exit more difficult.

The committee version of the “Coal Exit Act” includes a determination of the necessity of the Garzweiler II opencast mine in North Rhine-Westphalia. According to Alliance Green MP Oliver Krischer , this political decision is a mistake like the extension of the term.

“A mine that is actually supposed to be decommissioned is declared necessary. They want to expropriate and expel people in the last five villages in the region around Garzweiler, ”said the deputy group leader of the parliamentary group.

Also the MP Caren Laypoints out in her speech to the Bundestag that tens of thousands of people have been displaced for coal and hundreds of villages have disappeared. “That has to be the end. No village is allowed to fall for coal anymore, ”warns the deputy chairwoman of the parliamentary group Die Linke.

The coal exit law stipulates that 2030 renewable energies should cover 65 percent of gross electricity consumption. Regarding this, there were no legal provisions for the addition of plants for the use of renewable energies, criticizes Dr. Simone Peter, President of the Federal Association for Renewable Energy.

Further steps would have to follow in order to meet the growing need for green electricity in the context of sector coupling with domestic renewable energies, said Peter. The coal phaseout law not only contradicts the climate targets, but also the expansion targets for renewable energies.

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A few hours after the vote in the Bundestag, in a press conference, Economics Minister Peter Altmaier says that the coal phase-out law means “that after 150 years, the era of coal power generation in Germany will come to an end”. Hubert Weiger, former federal chairman of the BUND and member of the coal commission, describes the coal exit law as “betrayal of the climate protection policy”, as the Fürther Nachrichten reported earlier this week.

Weiger criticized that the majority of the decommissioning is planned about 15 years later than was proposed in the coal commis at on the phosion. Although the environmental associations have indicated a considerable willingness to compromise, “the so-called compromise is that the power plants can pollute the environment with greenhouse gases much longer than ever intended”.

By Tatiana Abarzúa, International Solar Energy Society, German Section.

Tags: coal phase-outEconomics Minister Peter AltmaierGerman society for solar energyLorenz Gösta Beutin
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