With only one vote against, the commission has agreed that assistance totalling 40 billion euros will be made available to the federal states affected by the decision to end the use of coal in power generation. The commission says that each of these regions should receive 1.3 billion euros over a 20-year period. Over the same period, the federal states will receive a total of 700 million euros in support.
German government welcomes commission’s final report
Peter Altmaier, Federal Minister for Economic Affairs and Energy, has announced a thorough review of the compromises negotiated by the coal commission. This will be one of the most challenging transition processes of recent decades, he declared, but the fact that a widespread majority are in favour of the compromise offers the chance to achieve it "with broad consensus within society".
On behalf of the German government, federal government spokesperson Steffen Seibert thanked the coal commission for its work. He said the government must now forge an effective energy strategy on the basis of the results of the commission. "There are always three fundamentals that must be taken into account – the need to ensure reliable energy supplies, to ensure that energy remains affordable, and the imperative of mitigating climate change," said Steffen Seibert.
Climate change mitigation and prosperity
The German government agrees with the commission that the goals of mitigating climate change, creating new jobs, ensuring a secure and reliable energy supply, underpinning competitiveness and ensuring a socially acceptable solution are all equally important. "We need climate protection just as much as we need prosperity and jobs," stressed Peter Altmaier, speaking in Berlin. The responsible ministries will conduct initial assessments in February.
Federal Finance Minister Olaf Scholz told the German Sunday newspaper Frankfurter Allgemeine Sonntagszeitung that electricity supplies in Germany must remain reliable and affordable. At the same time, new future-proof jobs must be created in the affected regions. "As long as we do not lose sight of our common goal, we can make Germany an exemplary state in terms of energy policy."
Creating viable jobs for the future
The commission proposes that 5,000 jobs be created in coal-producing regions over the next ten years. Federal and state agencies could move to these regions and new research facilities, like Max Planck Society and Fraunhofer-Gesellschaft institutes, could be founded.
There are already plans to establish a Fraunhofer institute for energy infrastructure and geothermal power at two sites. In Cottbus and Zittau/Görlitz, a German Aerospace Center (DLR) institute for low-carbon industrial processes is planned. And in the Lausitz region, a competence centre for climate change mitigation in energy-intensive industries is to be established. It is to drive forward the decarbonisation of energy-intensive processes.
Roadmap for the end of coal-generated power
The commission states that measures should be thoroughly reviewed by an independent expert body in 2023, 2026 and 2029, and any necessary corrections made.
The review should ascertain how the phaseout of power generation from coal and lignite is impacting on the attainment of climate targets, electricity prices, reliability of electricity supplies, jobs, structural change and regional value creation.
In 2030, coal power capacity (including lignite) is to be more than halved to 17 GW. This will enable the energy sector to meet the German government’s climate targets.
The phaseout of power generation from coal could be completed by 2035, according to the commission. This is why a review in 2032 is to ascertain, in agreement with power plant operators, whether the end date can be brought forward to no earlier than 2035, in view of climate change and taking into account the need for reliable energy supplies.
Law on structural change
The assistance to be provided by the federal government to help the coal-producing states (North Rhine-Westphalia, Brandenburg, Saxony and Saxony-Anhalt) to cope with structural change, is to be regulated in an act of parliament. According to the final report there is to be a state treaty that future governments too would be required to honour.
The commission calls on the German government to present the main outlines of a relevant act of parliament by the end of April 2019, and to consult with the individual federal states to this end.
Reducing power plant capacity
Over the next four years power plants with a total capacity of 12 GW are to be removed from the grid, including 3GW of lignite-powered capacity. That is equivalent to about 24 larger power plant blocks.
Lignite-fired power stations are only to be removed from the national grid in the west of the country during this period, which will impact on lignite mining there. The commission thus states that it is "desirable that the ancient woodland of the Hambacher Forst be preserved".
Compensation for rising electricity prices
By 2022, nuclear power stations are also to be shut down in Germany. For this reason, the commission expects electricity prices to rise as coal-fired power is phased out. "There must be compensation to ease the burden of rising electricity prices on businesses and private households," says the report. The commission’s idea is to reduce grid fees which account for about one fifth of the electricity bills paid by private households.
The commission suggests that a subsidy of at least 2 billion euros a year would be needed to reduce the grid fee. The exact figure is to be set in 2023. The commission does not suggest any addition levy or charge for purchasers of electricity.
Easing the burden on energy-intensive industry
Energy-intensive industry is to be freed in the long term from the burden posed by the requirement that coal- and gas-fired power stations acquire emissions certificates. At present a compensatory regulation is in place for these costs, but it is set to expire in 2020. The German government intends to apply to the EU for an extension.
The most recent figures point to the compensatory regulations totalling almost 300 million euros per year. Since emissions certificates have increased significantly in price, however, this sum will be higher in future.
Compensation for power plant operators
The commission proposes unanimous contractual regulations with power plant operators for the earlier phaseout of coal-generated power, with respect to plant closure. This also applies to power plants that have not yet been completed, including the plant in Datteln.
Compensation is to be made available not only for the first stage of the phaseout up to 2022. The commission assumes that the entire planning up to 2030 will be agreed unanimously following negotiations with the operators of lignite-fired power stations.
No sums have been mentioned, but they could be of the order paid a few years ago for power stations which then served as reserve capacity. At that time around 600 million euros per GW installed capacity were paid. A total of 43 GW of coal power capacity is still feeding the national grid.