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German 2018 lignite coal mining output down 3% at 166 mil mt

Highlights

Lignite reserve to cut CO2 emission by 19 mil mt/year by 2020

Lignite plants emitted estimated 149 million mt CO2 in 2018

London — German 2018 lignite coal mining output fell by 3% on the year to 166 million mt, mining association DEBRIV said Friday.

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That translates into 5 million mt less CO2 emitted in 2018, it said, adding that already planned closures later this year are expected to cut CO2 emissions from lignite-fired power plants by 19 million mt a year from 2020.

DEBRIV did not provide total annual emissions data which think-tank Agora estimates around 149 million mt of CO2 for 2018, down from 200 million mt in 1990.

The removal of 2.7 GW of capacity across eight old lignite units from the market in steps between 2016 and 2019 will reduce lignite-fired power output by 13% in 2020, DEBRIV said.

Lignite was the biggest source of German electricity in 2018 providing 133 TWh or 22% of total power demand, data by utility group BDEW show.

The lignite reserve mechanism, where units are compensated to remain on stand-by for four years before closure, could be seen as a blue-print for further gradual closures currently debated by the Coal Commission.

Chancellor Angela Merkel is set to discuss coal exit plans with state prime ministers from lignite mining regions and the Coal Commission at a meeting January 15.

Political pressure against too stringent closure measures has been mounting in the Eastern mining regions with both Saxony and Brandenburg facing state elections this year.

Beside the Coal Commission's recommendations, the Hambach court order and tighter EU air quality standards from 2021 may affect lignite in the near term.

The Hambach court order, which has frozen the expansion permit of the Hambach mine operated by RWE, is set to lead to a 9-13 TWh shortfall in power output this year and next from RWE's lignite plants.

This one-off factor alone could cut annual lignite emissions by up to 15 million mt this year and next with a final decision in the highly symbolic case not expected before the end of 2020.

--Andreas Franke, andreas.franke@spglobal.com

--Edited by Jonathan Dart, newsdesk@spglobal.com