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Worsening coal economics push German emissions to record low

SNL Image

Coal power plants produced much less electricity in Germany during 2019.
Source: Julian Stratenschulte/dpa via AP Photo

Last year Germany produced more power from renewables than coal and nuclear power combined for the first time ever, as high prices for carbon emissions drove record numbers of coal plants off the grid.

An analysis by Agora Energiewende, a think tank, shows that the share of renewables in electricity consumption rose to 42.6% in 2019, making it the first year in which generation from wind, hydro, solar and biogas plants exceeded the total generation from coal and nuclear. Renewables production rose mainly because of new solar plants and good conditions for wind throughout the year.

As a result, greenhouse gas emissions declined by more than 50 million tonnes in the year and now stand 35% below their 1990 level, Agora said. Germany is targeting a 40% reduction by the end of 2020, but the think tank warned the goal could still be jeopardized by the slowing expansion of onshore wind power.

Onshore wind additions have seen a significant drop over the last two years as slow permitting procedures, as well as the threat of lawsuits, have depressed developer interest in government auctions. Agora expects only 1 GW of new onshore wind capacity to come online this year, compared with 4 GW of new solar.

Germany is phasing out nuclear power by 2022 and has been taking its remaining plants offline one by one since 2011. Meanwhile, hard coal and lignite — which still make up a large part of installed power capacity in Germany — produced 31% and 22% less in 2019 than during the previous year, respectively.

High prices for allowances under the EU's carbon trading scheme, coupled with low gas prices, incentivized burning gas instead of coal in many countries during 2019. In Germany, natural gas generation consequently rose by 11% last year.

Other countries are much closer to quitting coal: in the U.K., zero-carbon power, including nuclear, outstripped generation from all fossil fuels for the first time last year, thanks in large part to an additional carbon price levied on power plants.

Agora noted that progress on emissions reductions in Germany's power sector is also being offset by rising emissions from buildings and transport, which both consumed more natural gas, heating oil, petrol and diesel than in the previous year.

Germany recently passed a climate law that will introduce a CO2 price for both sectors, which was raised after the government's initial proposal was decried as too low. Still, "there is a danger that emissions will rise again in 2020 to 2022," said Patrick Graichen, director of Agora Energiewende.

Total electricity demand in Germany fell to 569 TWh in 2019, the lowest level registered in the past two decades, Agora said, due to slower economic growth, lower consumption by the energy-intensive materials industry and lower on-site consumption by conventional power plants.