An official proposal to phase out Germany’s coal-fired power stations by 2038 will be costly, German think tank, the ifo institute, warned on Sunday.
After more than 20 hours of talks on Saturday, the German coal exit commission, which has over 30 members from industry, politicians and NGOs, said that Germany should shut down all of its coal-fired power plants by 2038 at the latest.
Under the proposed plans, coal power capacity in Germany would reduce from the current 42.6 gigawatts to 30 gigawatts by the end of 2022 and to 17 gigawatts by the end of 2030.
The ifo Institute has criticized the commission proposal, saying “the exit from coal is at least partially offset by imports of nuclear and coal-fired power from Poland and the Czech Republic.”
“The compensation for power plant operators and the planned reduction in electricity prices will also increase the costs of phasing out coal,” Karen Pittel, the head of the ifo Center for Energy, Climate and Resources, said.
“The opportunity was missed to combine the phase-out of coal with a fundamental reform of energy and climate policy. There is still no long-term plan for implementing the German and international climate targets," she said.
According to the institute, the scheduled shutdown of coal-fired power plants would incur additional costs for the energy system transformation, which, according to current estimates, would require well over €1 trillion in additional investments by 2050.
The commission, which has been working since last summer, said at least €40 billion in aid should be provided for coal-mining states affected by the exit.
Nonetheless, the German government and green groups have welcomed the coal commission’s proposal to phase out the country’s coal-fired power stations by 2038.
“A strong signal” that is “good for business and climate”, Peter Altmaier, minister for economic affairs and energy, tweeted.
The deal would mean “less CO2, more new jobs, security of supply and affordability," he said.
Altmaier also told the Frankfurter Allgemeine Sonntagszeitung newspaper that the coal commission’s proposal would allow his country to meet its climate change target for 2030.
He described the country’s plans to exit coal production as "one of the most challenging transformational processes” in the last 10 years and added the German government would "carefully and constructively" examine the proposals.
Coal was the most important energy source for power generation in Germany in 2017. Some 37 percent of gross electricity was generated from coal and lignite in that year, according to Germany’s economy ministry.
Regardless, Germany aims to have renewables provide 65 percent of the country’s energy by 2030.
According to Germany-based Fraunhofer Institute on Jan. 3, renewable energy, such as solar, wind, and hydropower, became Germany’s main source of electricity in 2018, providing 40.3 percent of the country’s net electricity production, beating coal for the first time in history.
As a result of the nuclear disaster in Fukushima, Japan, in March 2011, the German government ordered the immediate shutdown of eight of the country's 17 reactors. The decision also outlined a timeline for shutting all nuclear reactors by 2022.
German Chancellor Angela Merkel told an audience at the World Economic Forum in Davos, Switzerland last Wednesday, Jan.23, that Germany faces three big challenges ahead: - “The transition to sustainable energy, the creation of a digital infrastructure and the better management of migration.”
By Bahattin Gonultas in Berlin