Germany strikes $4.8 bn plan to phase out coal
The announcement came after marathon talks on Wednesday on how the German government can achieve its transition to cleaner power, in what will be a major overhaul for the coal-dependent country
THE German government has cleared the way for its bid to phase out coal-fuelled power by 2038, with a multibillioneuro deal to compensate energy firms and regions that will lose out in the process.
Finance Minister Olaf Scholz said on Thursday that the operators of coal-fired power plants will be given a total of 4.35 billion euros ($4.8 billion) to offset the incremental decommissioning of their power plants.
The announcement came after marathon talks on Wednesday on how the German government can achieve its transition to cleaner power, in what will be a major overhaul for the coal-dependent country.
Discussions with the energy firms were conducted in parallel with talks with state premiers from Germany’s coal-producing regions.
In addition to the compensation for energy firms for the premature closures of their sites, the regions affected by the industrial overhaul are to receive 40 billion euros in state funding to transfer their local economies away from coal.
Billions more are expected to be paid out in a scheme to tide over employees who lose their jobs in the coal industry until they reach retirement age.
The government hopes to pass legislation cementing the plans by the middle of this year.
Scholz and Environment Minister Svenja Schulze set out the timeline for decommissioning coal power plants at a press conference in Berlin.
Eight “very old and dirty” units are to be decommissioned, the first of which will close at the end of the year,
Schulze said.
“The coal exit begins immediately, it is binding,” she added.
Negotiations regarding one of the sites in the western state of North Rhine Westphalia were particularly controversial: The Datteln 4 hard coal-fired power station is newly built, but not yet in operation. A commission set up by the government recommended last year that it should stay that way if Germany is to hit its target.
But government and state officials agreed to launch operations at the plant for the time being.
Environmental experts who were part of the commission criticised the plans on Thursday, arguing that they do not honour the recommendations set out in their final report.
The head of the DNR, an umbrella group for German conservation and environmental organizations, pointed out that 50 per cent of lignite coal was to be phased out from 2035, leaving them just three years to eliminate the other half before the planned exit.
Kai Niebert also criticized that the Datteln 4 plant would go into operation. “Additional shutdowns will not be able to compensate the increased emissions,” he argued.
In a win for environmentalists, the government phaseout involves scrapping plans to mine part of Hambach Forest, an ancient woodland in western Germany that became one of the central protest sites of the country’s anti-coal movement.
Around 35 per cent of Germany’s power came from coal in 2018, according to government data. In neighbouring France, by comparison, coal only makes up for 3 per cent of energy production.
“Germany has set out to do something big. I am certain that we will succeed,” Scholz said.
“We are the first country to finally turn away from nuclear and coal,” he added, referring to Germany’s goal to shut down all of its nuclear reactors by 2022.