Germany must cut coal capacity in half by 2030 - gvt official
Clean Energy Wire
The goals in Germany’s climate action plan, agreed by the government in November 2016, mean that half of the country’s coal-fired power capacity must retire by 2030, state secretary in the economy and energy ministry Rainer Baake told a business conference in the run-up to Germany’s largest energy trade-fair E-World in Essen. Baake urged the industry to come up with their own proposals for the necessary process to avoid unwanted regulation.
Speaking at the same event, the head of utility MVV Energie, Georg Müller, said organising the coal phase-out was one of the main tasks ahead for the next government after September’s federal elections. The state secretary, who is in charge of the Energiewende policies at the ministry, stressed that the climate action plan also defined the agenda of the next government in terms of getting the energy system ready to decarbonise sectors such as mobility and heating. While he reiterated the ministry’s positive view of the government’s work over the past 3-1/2 years, he said more should have been done on climate protection as the country looked now likely to miss its 2020 goal of reducing carbon emissions by 40 percent compared to 1990.
In the discussions with industry leaders, Baake also reiterated that payments for fossil-fuel stand-by power plants in a capacity market were unnecessary given current overcapacities. He rejected renewed criticism from industry groups, which has flared up again in the view of a particularly dark and windless German January with little power production from solar and wind installations. Ultimately, the new power market design, allowing sharp price peaks in times of scarce power supply, would provide enough incentives for players to invest in new capacity in the future, Baake said. Former BDEW utilities lobby president Hildegard Müller, now board member at RWE’s renewables spin-off innogy, insisted that Germany would see a capacity market of sorts at some stage.
Challenging times lie ahead for the German onshore wind industry after strong growth in 2016, according to business associations BWE and VDMA. In the past year, capacity additions grew by around one quarter compared to 2015 to 4,625 megawatts. The number of jobs in the sector increased to 135,000 in 2016 from 122,400 in the previous year, while industry revenue rose to 12 billion euros from 11.2 billion in 2015.
The associations expect 4,500 to 5,000 megawatts of new onshore wind capacity this year and 3,000 to 3,500 in 2018. Both years will be characterised by Germany’s transition to an auction-based system for renewable support. 2019 will be the first year in which only installations that won an auction will be realised. The associations fear this will lead to a drop in the German market to below 2,800 megawatts in 2019.
“Industry will work to compensate the decrease of the German market with exports,” said Matthias Zelinger, head of VDMA Power Systems. BWE said it is still hard to tell how many old wind turbines will be decommissioned after 2020 when they will no longer receive feed-in tariffs after a lifetime of 20 years. “A drop in total installed capacity is possible,” said the association’s head Hermann Albers. He warned that could pose a problem for government goals to power the transport and heating sectors with renewable energy in the future.
Find the press release in German here.
For background on Germany’s transition to an auction system for renewables, read the CLEW dossier The reform of the Renewable Energy Act.
Germany’s pioneering turn toward clean energy is approaching another milestone with a new round of auctions for wind power expected to push the price of electricity from renewables to record lows, write Weixin Zha, Brian Parkin and Tino Andresen in a QuickTake Q&A with background on the first auction.
Read the Bloomberg story here.
The Energiewende deeply affected not only fossil power plant operators like RWE and the old E.ON, but also companies involved in their construction, such as Siemens and US-rival General Electric, reports Martin Wocher in business daily Handelsblatt. The latest example is Japanese Mitsubishi Hitachi Power Systems Europe (MHPSE), which is shedding more than a third of its 1,000 jobs in Duisburg. Within Germany, the business with fossil-generated power plants has almost ground to a halt, and foreign markets can’t compensate the loss. The company said in the press release announcing the cuts that through its strategy realignemt it aimed “to become a leading European company for CO2 emissions reductions in the field of power production”.
Federal Association for Information Technology (Bitkom)
Three in four Germans are interested in electricity contracts with a variable power price that depends on supply and demand, according to a representative survey by the Federal Association for Information Technology (Bitkom). 58 percent of respondents said their main motivation would be to support the generation of renewable electricity, 57 percent said they hoped to reduce their power bill. Half of respondents did not know their yearly power consumption, and more than a third did not know their monthly payments. 55 percent said they had never changed their power supplier, a move that can save many households several hundred euros per year.
Find the Bitkom press release in German here.
For background, read the CLEW factsheets What German households pay for power and How can Germany keep the lights on in a renewable energy future?
Swedish power company Vattenfall reported a fourth-quarter and full-year net loss on the back of low electricity prices and write-downs, press agency dpa reports. For the full year 2016, Vattenfall said its net loss was 2.7 billion euros, including the sale of its German coal operations that was completed in September, amid a shift to renewable sources, dpa said. “Significant progress was made during the year through the lignite divestment, the Swedish energy policy agreement and the German nuclear waste law resulting in a positive outcome for the company and our customers, together with a reduced risk overall,” said the company’s CEO Magnus Hall in a press release.
Read the press release in English here.
Swedish utility Vattenfall said it will replace all its vehicles by electric cars over the next five years, reports Deutsche Welle. The company noted the measure was required to become "climate-neutral" by 2050. Starting in January 2017, Vattenfall will gradually switch its fleet, with 1,700 cars in Sweden, 1,100 cars in Germany and 750 vehicles in the Netherlands to be replaced.
House owners in Germany are not improving their properties to more energy efficient standards fast enough for the country to meet its efficiency targets, German Energy Agency Dena said in a release. “Our figures show: An acceleration of energy efficiency in the heating sector is not noticeable. The pressure to act is therefore increasing,” Dena head Andreas Kuhlmann said. If the reduction in heating demand continues at the current rate, the country will miss its goal to reduce demand by 20 percent by 2020 compared to 2008 by two years, Dena said. Kuhlmann called for an increase in incentives for energetical renovation.
Find the Dena press release here.
Read the CLEW dossier Taming the Appetite for Energy for details on Germany’s efficiency efforts.
Warnings from representatives of Germany’s conventional power industry that the country’s power supply security was in danger during dark and windless periods like in January as more and more conventional plants are becoming uneconomical and are set to retire are “nonsense”, writes Stefan Schultz on Spiegel Online. Even on a day like January 24 – cited as an example – Germany was constantly exporting electricity, showing that supply was secure even in those periods.
Find the Spiegel Online article here.
Read a CLEW factsheet about the options discussed to keep the lights on during dark and calm days.