Energy Supply

Advice for wannabe paragon Germany – and Donald Trump

main 52657691 source Arno Burgi DPA – coal mine miner machine Schaufelradbagger in Saxony
A big business in decline. Source: Arno Burgi / DPA

Advice on energy policy may be the last thing Germany’s parties, licking their wounds after the failure of a month of coalition talks, want to hear right now as the country descends in political limbo. But now that they have time on their hands ahead of a new election or a possible fresh attempt to form a government, they might want to read what the executive director of the International Energy Agency, Fatih Birol, has to say. His message, coming from an organization that represents 29 industrialized countries, including Germany and the United States, might also be addressed at Donald Trump, although Mr. Biro did not mention the US president by name.

The IEA’s director, who last week presented the agency’s annual World Energy Outlook, expressed surprise that natural gas doesn’t feature prominently in the German energy policy debate even though it could help the country speed up its reduction in CO2 emissions.

“In the future, things will get ever harder for the coal industry; there’s little doubt about that.”

Fatih Birol, executive director, IEA

“While natural gas plays an important role in thinking on climate protection in many countries, that isn’t the case in Germany,” Mr. Biro said. “That astonishes me. Natural gas has many advantages as a source of energy. In addition, we will see a growing supply of gas on the world market in the coming months, for example, from the US and from Australia. We see big opportunities in that.”

Germany’s continued use of coal to ensure a stable energy supply as it transitions to wind and solar power has been cited as one of the reasons why it’s on course to miss its 2020 target of cutting CO2 emissions by 40 percent compared with 1990 levels. At present, experts estimate that the reduction will be just 30 percent by 2020. Coal, which is used to produce 40 percent of Germany’s electricity, is one of the culprits.

Mr. Birol pointed out that gas emits only half as much CO2 as coal. “Gas can make a big contribution to reducing the CO2 footprint of a country,” he said, adding that the price of carbon-dioxide emissions certificates needed to be increased to make gas more attractive as a source of energy.

energy use in germany

At the UN climate talks that ended in Bonn last week, Germany found itself sidelined when a group of more than 20 countries agreed to stop using coal altogether by 2030. To its embarrassment, Germany, which prides itself on its commitment to green power and to spearheading the fight against global warming, could not join in because of its reliance on coal for electricity – not just coal, but brown coal or lignite, the dirtiest kind. There’s a yawning gap between Germany’s rhetoric on climate change and its actual performance; the failed coalition talks highlighted the problem, with parties quarreling over the speed of the coal phaseout.

On the other side of the Atlantic, Donald Trump has been a strong advocate to keep America’s coal mining sector alive, and put a halt to mine closures and job losses. Mr. Birol, however, said global coal consumption was stagnating or receding. “In the future, things will get ever harder for the coal industry; there’s little doubt about that; that’s due in part to regulations to protect the climate and in part to electricity generation from renewable sources getting ever cheaper,” he noted. “In some regions solar power will soon be the cheapest way to produce power. That will make coal-fired electricity production increasingly unattractive.”

The IEA has forecast natural gas to be the biggest US energy source to generate electricity in 2016, taking over from coal. Thanks to the US shale gas boom prices have gone down, making gas more attractive than coal.

The IEA’s director said he couldn’t predict when the demise of coal would finally come. “But the trend is pretty clear,” he argued. “If the sector doesn’t find a solution to the CO2 problem, such as by separating and storing the CO2, it doesn’t have a big future left in the long term.”

A nation doesn’t have to phase out coal, he said, but closing coal-burning power plants, he added, is one of the most cost-effective ways of reducing CO2 emission goals.

Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. To contact the author: stratmann@handelsblatt.com

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