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Germany Warns Against Rushed Coal 'Exit'

Posted by January 19, 2016

Germany on Tuesday warned against a hasty exit from coal-fired power generation, concerned that such a move could pile more pressure on producers still wrestling with the planned shutdown of nuclear plants by 2022.

Calls for the German government to set a timeline for phasing out coal-generated electricity have grown following the climate protection deal struck in Paris last month.

"When we're talking about the future of coal I would advise being less ideological about it and to focus more on climate goals and the economic consequences," Economy Minister Sigmar Gabriel said at an industry conference on Tuesday.

Gabriel said coal should not be tackled in similar "seismic waves", referring to Germany's decision to abandon nuclear power after the Fukushima nuclear disaster in 2011 in a move that has been described as too fast.

"We need to be aware of what is needed to have a stable energy supply," he said, adding he wanted to invite all relevant parties to a roundtable this year about the future of coal.

Gabriel's comments chime with those made by Germany's largest power producer RWE on Tuesday, when it rejected new calls to phase out coal-fired power generation.

"The whole debate (about exiting coal) is unnecessary," RWE Chief Operating Officer Rolf Martin Schmitz told Reuters on the sidelines of the industry event.

Coal accounted for 60 percent of RWE's power production in 2014, while the share at rival E.ON was 27 percent.

The utilities have stressed that steps taken in 2015 to move domestic brown coal plants into a reserve scheme later this decade, as well as dismal power generation profits, were sufficient to see the gradual end of coal burning.

Some 2.7 gigawatts of power generation from brown coal, equivalent to the output from five power plants, will be closed but retained as reserve power in case of emergency, parties in the coalition government agreed last year.

The government wants 80 percent of German power provided by renewables by 2050. In 2015, the share was 30 percent, data from industry group BDEW shows. However, brown coal and imported hard coal still accounted for 42 percent together.

"RWE has a clear plan (for coal) until 2050. We are able to provide sufficient power at decent prices until then," Schmitz said.

Coal-fired power production employs not just tens of thousands of people, but is needed to provide round-the-clock power to Europe's biggest economy as it cannot solely rely on volatile green power, the utilities argue.

Gabriel said it was irresponsible to talk about a coal exit without offering those working in coal-producing regions, such as Lusatia in eastern Germany, alternative job prospects.

"Whoever wants to talks about an exit in Lusatia, must at the same time enter into a realistic discussion about sustainable jobs that earn a decent wage," he said.

The first priority for reducing carbon emissions should be to make sure that Europe's Emissions Trading System works properly, he said.

Reporting by Vera Eckert

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