Reducing coal in favour of renewables cheaper and cleaner for Germany

A gradual reduction of coal-fired power production and the parallel expansion of renewable energy sources to 65 percent of Germany’s 2030 power mix would reduce electricity costs and emissions and allow the country to reach its climate target in the energy sector, according to think tank Agora Energiewende*. The think tank says that while reducing coal capacity would initially cause the wholesale power price to rise by 0.4 cent per kilowatt hour (kWh), a parallel increase in the share of wind and solar power would reduce the price by 0.8 ct/kWh, resulting in a net reduction of electricity costs. “Energy-intensive industries would benefit the most from this combination. They could take advantage of a lower power price without having to fund the expansion of renewables” if they continue to be exempt from Germany’s renewables surcharge, said Agora Energiewende’s Frank Peter. Higher costs for other customers would be offset by lower wholesale prices, Agora’s analysis found. To ensure supply security, Germany would have to invest in building flexible new gas power plants, increase European power market integration and improve demand-side management, it added.

Find the study and a press release in German here.

See the factsheet Germany’s greenhouse gas emissions and climate targets for more information.

*Like the Clean Energy Wire, Agora Energiewende is funded by Stiftung Mercator and the European Climate Foundation.