First German renewables run without support due to high power prices
Clean Energy Wire
The increase in the wholesale market price for electricity in 2018 has led to a reduction of the so-called “market premium” that renewable power suppliers like wind and solar PV installations receive as a guaranteed payment, the German Renewable Energy Federation (BEE) says. The BEE gave the example of a new solar PV installation in Wittstock which won an auction with 5.42 cent per kilowatt-hour (ct/kWh). As long as the wholesale power price is below this value, the installation receives the difference as the market premium. But since the wholesale price rose to over 5.5 ct/kWh in August, the Wittstock PV plant received its revenue entirely from the market price without the need for support. Marco Nicolosi, analyst at Connect Energy Economics said that if wholesale power prices increased further – which they are predicted to do because of higher EU ETS prices and the phase-out of nuclear and coal power – more and more new renewables installations would run without the need for premium payments. For the large share of older installations with much higher guaranteed feed-in remunerations, the premium would not be reduced as much, but the BEE still estimates that some 2 billion euros in renewables support could be saved due to the development in 2019.
See the CLEW factsheet Germany ponders how to finance renewables expansion in the future for more information.
Two executives of major German companies, VW CEO Herbert Diess and RWE CEO Rolf Martin Schmitz have traded blows over lignite mining, reports business daily Handelsblatt. Diess triggered the dispute by declaring in an interview the Süddeutsche Zeitung that it was a mystery to him how anyone could “even think about extending a lignite mining area” just as car companies are investing billions into electrification, and added that he might consider joining anti-lignite protests in the Hambach Forest. RWE CEO Schmitz countered by inviting Diess to the Hambach mine “to show him our operations, the surroundings and our recultivation.”
Environmentalists were critical of Diess’ statements. Greenpeace climate and energy expert Karsten Smid told the newspaper Diess wanted to “deny his own climate responsibility and put the blame on someone else.” Volkswagen this week sharply criticised more ambitious EU car fleet emission limits.
For background, read the article Court's halt to forest clearing fans talk of easier German coal exit
Unless Germany quickly phases out coal-fired power generation, diesel cars will continue to be better for the climate than e-cars, Volkswagen CEO Herbert Diess told the Süddeutsche Zeitung in an interview. For this reason, Germany will need diesel cars even ten years from now, said Diess. “It makes no sense at all to put electric vehicles on the road if we simultaneously produce electricity for them from lignite. Then we will be driving with coal instead of oil and produce more CO₂ than today.” Diess also criticised the European Parliament’s proposal to cut new passenger car emissions by 40 percent by 2030. This would mean that more than half of all vehicles would have to be powered purely by electricity by that year. “The transformation at this speed and with its consequences is hardly manageable” and would constitute “a painful revolution rather than a controllable transition”, said Diess.
Find the full interview (behind paywall) in German here.
For background, read the CLEW news item EU governments agree to cut car emissions faster than proposed by Germany.
Rheinische Post / Frankfurter Rundschau
Economy and energy minister Peter Altmaier has proposed quickly retiring five gigawatts of lignite power generation capacity with a view to the country’s ongoing talks about a coal phase-out, sources told the Rheinische Post. In addition, he suggested that utility Uniper’s new hard coal plant in Datteln should not be connected to the grid, according to the report by Antje Höning und Birgit Marschall. Uniper said it would be foolish to continue the operation of older power plants instead of the relatively clean Datteln plant.
The Frankfurter Rundschau reported that the Green party looks set to increase its climate ambitions by calling for the immediate retirement of the country’s 20 most dirty power plants. Because of government inaction on coal, at least ten or eleven gigwatts of coal capacity must be switched off, according to a position paper by party head Annalena Baerbock and Oliver Krischer, deputy leader of the party’s parliamentary group. The paper also calls for an end to lignite mine extensions and speeding up the roll-out of renewables.
During last year’s unsuccessful coalition talks with the Greens and the pro-business FDP, Altmaier’s Christian Democrats (CDU) also proposed the retirement of five gigawatts and later agreed to retire seven gigawatts.
Read the Rheinische Post article in German here.
Find plenty of background in the article Commission watch – Managing Germany’s coal phase-out.
Süddeutsche Zeitung / Clean Energy Wire
Hundreds of coal workers in the eastern German region Lusatia welcomed the country’s coal exit commission during a trip to the region with protest banners saying, “good jobs are being trampled on,” Michael Bauchmüller writes in the Süddeutsche Zeitung. The region south of Berlin used to employ over 80,000 people in coal mining during the industry’s high times in the former communist East Germany, but today their number has fallen to a mere 8,000 who fear that the end of coal-fired power production will sound the economic death knell for the otherwise laggard region, Bauchmüller says.
Anti-coal protesters gathered in front of Germany’s economy ministry in Berlin on Friday, where the commission met after its trip to Lusatia. The protesters called for phasing out coal by 2030 and for saving the Hambach Forest, which over the last weeks had become a symbol for climate activists who protested the clearing of trees to make way for mining.
The commission released a press statement after the trip stating, “everyone in the commission knows that the concerns of people [in Lusatia and other coal regions] and their families have to take centre stage if the sustainable transition of our energy supply is to be successful.”
The commission plans to publish its first list of recommendations for future economic development in Germany’s coal regions by the end of October.
Find the article in German here.
For background, see the CLEW article Special deals for mining areas to ease coal exit – task force draft, which will be updated throughout the day.
Frankfurter Allgemeine Zeitung / German government
Germany faces fines to the tune of two billion euros by 2020 for failing to meet emissions reduction targets in sectors not covered by the European Emissions Trading System (ETS), Andreas Mihm writes in the Frankfurter Allgemeine Zeitung. The German government will have to buy up emissions allowances from other states with a better record of meeting the EU targets, especially from Eastern Europe, the article says. So far, Germany was able to compensate for missing certain targets through saving more emissions than formally necessary in other areas, “but since October, every additional tonne of CO2 will have to be paid for straight from the state’s budget,” a situation that did not exist before, says Hans-Jochen Luhmann of the Wuppertal Institute for Climate, Environment and Energy. The exact bill that Germany will have to foot depends on the price for carbon emissions that is derived from the ETS, but the German government so far has not included the expected additional costs in its budget planning, Mihm writes.
In an answer to a parliamentary inquiry by the pro-business party FDP, the government says it cannot confirm calculations by the Institute for Applied Ecology (Öko-Institut) that the EU’s effort-sharing might cost up to 30 billion euros by 2030. “The EU member states are not obliged to reveal the costs for emissions allowances transfers,” the government says, adding that the exact bill could therefore not be calculated and that it would “not take part in speculation.”
Find the government’s answer in German here.
See the CLEW article Germany may have to buy way out of EU climate goal – ministry paper and the factsheet Understanding the EU ETS for more information.
The Wall Street Journal / New York Times
Though Germany has championed the use of clean energy, the country is struggling with the phase-out of lignite, one of its most important energy sources to date, writes Michelle Hackman in an article in the Wall Street Journal. It is an energy source controversial both because of the greenhouse gases it emits when burned, and because “it is mined in vast, open pits that devour landscapes and villages,” writes Hackman.
In a separate article in the New York Times, Greenpeace International director Jennifer Morgan tells Melissa Eddy that unless chancellor Angela Merkel turns her full attention to reducing emissions in Germany, particularly from coal, with clear support for a phase-out of coal by 2030, her legacy will not be green. “It will be dirty brown.”
For background, read the CLEW factsheet Germany’s coal exit commission and CLEW’s Commission watch – Managing Germany’s coal phase-out.
ARD / Infratest dimap
A majority of Germans want the federal government to do more for climate protection, according to a representative survey by public broadcaster ARD, conducted by Infratest dimap. 74 percent of respondents said the government should do more, 22 percent said the efforts are appropriate, and 3 percent want the government to do less – a large majority of which were supporters of the right-wing populist Alternative for Germany (AfD), which says climate change is a “hoax”. When it comes to coal-fuelled energy, 84 percent of respondents consider climate protection an important criterion, while 48 percent said the same about supply security and 16 percent about the power price.
Find the article in German here.
For background, read the CLEW factsheet Polls reveal citizens' support for Energiewende.
A survey commissioned by price comparison website Verivox has found that almost one in five Germans says people should pay higher power prices in order to facilitate investments in the decarbonisation of the energy system. In the survey with over 2,000 people by pollster YouGov, 18 percent said that power customers should pay even more for making energy generation more sutainable and 28 percent said they were uncertain about this, while almost half rejected further price increases. According to Verivox, especially younger people were in favour of paying more, with 32 percent of people aged 18 to 24 saying prices are not high enough yet. Power prices in Germany nearly have doubled since the year 2000, from 13.9 cents per kilowatt hour (kWh) to 27.6 ct/kWh in October 2018.
Find the press release in German here.
Federal Environment Agency (UBA)
Germany needs a national strategy to boost walking as the most basic, quiet and emission-free form of mobility, according to the Federal Environment Agency (UBA). The agency says the potential to increase walking is large because a fifth of all distances covered by cars are shorter than two kilometres. “Pedestrians are a blind spot of transport policy,” said agency head Maria Krautzberger. “We need a national strategy for pedestrian traffic similar to those of several other European countries” such as Austria, Scotland, Wales, Finland and Norway, the UBA said. The agency suggests stricter speed limits, steeper fines, and fewer parking spaces for cars and an extension of pedestrian areas in order to increase the share of pedestrian traffic by half by 2030. Some media reports focused on the UBA’s proposal to eliminate two thirds of all car parking spaces in cities in the longer term to improve the conditions for walking, cycling, public transport and car sharing.
Find background in the dossiers Towns and cities central to heating and transport transition and Car giant Germany struggles to ignite Energiewende in transportation.
Frankfurter Allgemeine Zeitung
Germany’s surcharge paid for the roll-out of renewable energy sources, the EEG-surcharge, will “noticeably decrease” in 2019, writes Andreas Mihm in Frankfurter Allgemeine Zeitung. According to the article, the renewables levy will decrease to 6.4 cents per kilowatt hour (ct/kWh) from the current 6.792 ct/kWh. A likely reasons for the reduction is a billion-euro surplus in Germany’s “green energy account”, partly due to rising power prices, writes Mihm. The German Renewable Energy Federation (BEE) had expected a decrease to 6.51 ct/kWh. The EEG-surcharge closes the gap between the expenses for the feed-in tariffs for electricity from renewable power plants and the income generated by the sale of EEG electricity on the electricity exchange.
For background, read the CLEW factsheet Balancing the books: Germany's "green energy account".