Politics

Energy Policy

Taking the Coal Out of Coalition

Germany's big dirty secret. Source: DPA

Source: DPA

A former coal pit outside Cottbus, a gritty industrial town on the Polish border, will soon be flooded to create a lakeside haven for anglers and sailors. That’s a world away from an open-face mine that looks more like a post-industrial moonscape.

Germany as a whole is in the midst of transforming its landscape thanks to its so-called Energiewende, or energy transformation. The country is winding down coal mining as part of a vaunted (and decidedly speedy) policy turnaround, beginning soon after the nuclear power-plant disaster at Fukushima, Japan in 2011.

But although the German countryside is dotted by windmills and solar panels, many coal mines like the one in Cottbus remain in operation. It’s one of four open-face mines owned by energy producer LEAG, which also runs four lignite-fired power plants. Employing 8,000 people, LEAG used to be Vattenfall’s brown coal subsidiary but has been under Czech ownership since 2017. It has enough brown coal at its disposal to keep firing power plants for the next 25 to 30 years, and will operate the lignite-fired plants through 2047.

Even if the CDU, SPD and FDP play coy with the specifics of a phaseout, one thing is clear: The coal industry no longer has friends it can depend on in politics.

How to handle the end game for brown and black coal is one of the biggest questions looming after next month’s German national elections, which will most likely bring forth another coalition of several political parties. Policymakers must decide whether to set an early, fixed date for terminating coal-fired power, or to let it die a long, slow death.

The parties’ solutions differ. The Greens say without abandoning coal-fired energy right away, all climate protection endeavors are for naught. The party promises to “immediately remove the 20 dirtiest coal-fired power plants from the grid” and eliminate coal power by 2030. The Left Party proposes a similar schedule, phasing out coal starting in 2018 and ceasing entirely in 2035.

The Christian Democrats (CDU), Social Democrats (SPD) and Free Democrats (FDP), are more lenient in their positions on coal. The SPD would approach the challenges associated with structural change in the industry “together with the individual federal states, the concerned regions, the trade unions, the companies and the citizenry.” The SPD’s election program projects a gentler path towards to CO2-free energy generation, promising “by 2050 at the latest, we need to generate, as far as possible, greenhouse gas-neutral energy. With that, we’re ensuring that Germany’s industry will remain internationally competitive.”

The CDU is also vague, saying, “the long-term abandonment of brown coal needs to unfold parallel to a new, concrete structural development.” In its party program, the CDU posits that “long-term” the country needs to replace “a large part of fossil energy like coal, oil and gas” with environmentally friendly energy. This kind of positions all but guarantees a fixed position – at least in the medium-term – for brown and black coal in Germany’s energy landscape. The FDP has omitted the topic entirely from its election program.

Even if the CDU, SPD and FDP play coy with the specifics of a phaseout, one thing is clear: The coal industry no longer has friends it can depend on in politics. The coal companies themselves know that brown and black coal-fired power plants are fast becoming obsolete, and that new investments won’t be forthcoming.

When the wind drops and the sun doesn’t shine, how can energy supply be guaranteed without coal?

That could present problems for energy security. Brown and black coal currently make up 40 percent of power generated in Germany. Renewables generate 35 percent. But when the wind drops and the sun doesn’t shine, how can energy supply be guaranteed without coal? None of the parties’ election programs have an answer.

Voices from industry – like mine operator Helmar Rendez, who may be a voice in the wilderness but that doesn’t stop him trying – say abandoning coal would be a major mistake. “Between November 2016 and March 2017, we saw a dark period when wind and sun didn’t contribute anything to our power supply. During such phases, our power supply is completely reliant on conventional power plants,” he said. Lignite-fired power plants are “central defenders of Germany’s power supply” and a secure power supply the basis of the country’s well-being, according to Mr. Rendez.

If these questions weren’t tough enough for the new government, there is also the larger question of who is to pay for the whole transition to green energy. At present, consumers pay higher prices for electricity each year, but politicians differ on where to redirect the bill.

If it were up to Andreas Kuhlmann, chief executive of the German energy agency DENA, the whole system would be overhauled as it is too complex. “For those who are occupied on a daily basis with the Energiewende, there are no doubts: The present system of cost allocation, regulation and economic incentives is a dead-end street. It prevents innovation and doesn’t allow for the necessary control effects. This should be top priority.”

Sound advice – that politicians, sadly, aren’t yet ready to follow.

 

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

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