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German utilities reject government plans for coal, emissions cuts

Highlights

Germany's utility lobby group BDEW sees no space currently for power plant operators to cut emissions unilaterally without fundamental reform of the power market, it said in a statement Monday evening after talks with Germany's energy minister in Berlin.

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"The industry has made clear that the current difficult situation for power plant operators leaves no scope for further unilateral concessions without fundamental reforms," the BDEW said.

According to the lobby group's statement, energy and economy minister Sigmar Gabriel plans to propose that power plant operators reduce emissions of carbon dioxide by a total of 22 million mt by 2020.

The cuts targeted at coal plants should be legally binding from 2016 and would be equivalent to 4.4 million mt/year between 2016 and 2020.


According to analysts' research, such cuts would necessitate the closure of power plants with around 8 GW capacity depending on which coal is used with domestic lignite plants on average emitting double the amount of carbon dioxide than hard-coal plants.

Germany, which saw a massive boom in renewables over the past years, but still generates almost half of its electricity from coal, is behind a binding EU 2020 target to cut carbon emissions by 40% from 1990 levels.

The government therefore aims to limit carbon emissions in power generation, according to various reports.

Until recently, Gabriel from the Social-Democrats, had argued that Germany could not limit its coal use while also phasing out nuclear power following the Fukushima nuclear disaster in 2011.

However, environment minister Barbara Hendricks, also from the junior coalition partner SPD, has stated that Germany needs to reduce its coal and lignite use in order to meet the 2020 target.

Chancellor Angela Merkel's cabinet plans to consider the coalition government's climate action plan on December 3.

The energy lobby BDEW said that it wants to continue the dialog with the government in a constructive way and that the utilities support the government's climate targets.

However, the impact of such a plan on security of supply, jobs and economic development need to be taken into consideration as well as set in a European context, the BDEW added.

"[Utilities] have expressed their willingness to participate in a climate-friendly transformation of power plants based in a competitive framework," the lobby group said.

The BDEW's members have made comprehensive proposals regarding a reform of the power market design of the future, it added.

The BDEW represents some 1,800 utilities, ranging from the country's biggest energy firms E.ON and RWE to small municipal utilities as well as renewable energy firms, overall accounting for a combined 90% of the power market.

--Andreas Franke, andreas.franke@platts.com
--Edited by Maurice Geller, maurice.geller@platts.com