German coal exit on track despite weak third phaseout tender – grid agency
Clean Energy Wire
Germany's third auction to withdraw coal power capacity was slightly undersubscribed for the first time, but the country's coal phase-out remains on track, the Federal Grid Agency (BNetzA) said. It received eleven bids with a total capacity of 2,133 megawatts (MW), a little below the tendered capacity of 2,481 MW. All bidders were awarded a contract, with plant sizes ranging from eight to 717 MW. "The coal phaseout is progressing steadily," said agency head Jochen Homann. By the end of next year, a maximum of 15,000 MW of hard coal and small-scale lignite plants are to generate electricity in Germany. "Despite the slight undersubscription in this round, the target will be met," the agency said, pointing to plants that are withdrawn or will switch to another fuel outside the tender procedure.
Awarded bids ranged from zero to 155,000 euros per MW of capacity, resulting in an average of around 103,000 euros per MW. For the first time, even the bidder with the highest price was rewarded with a contract. The awarded plants are no longer allowed to burn coal from 31 October 2022. Germany plans to phase out coal by 2038 at the latest. While there is a specific phase-out schedule for the large lignite (brown coal) plants, hard coal fired power stations and small lignite plants shall participate in the acution scheme by the BNetzA to achieve annual capacity reductions. The earlier they participate in the auctions, the higher are the compensation payments per megawatt that they can be awarded in the tenders.
The country's transmission grid operators will now check whether the plants participating in the auction are crucial for Germany's power supply. If necessary, they will be relegated to the so-called grid reserve, meaning they are no longer allowed to sell electricity, but are still available to safeguard the electricity grid in critical situations.