03 Jul 2015, 00:00
Sven Egenter Ruby Russell

In the media: Criticism of cost of deal to retire some coal plants

Ministry for Economic Affairs and Energy

State secretary Baake: power market 2.0 guarantees supply security

Germany’s economy and energy ministry is proposing a reform of the power market based on an energy only market in its white paper published on Friday. The proposal does not include a capacity market with payments for conventional power plants on stand-by. “The power market 2.0 guarantees supply security, is cheaper than a capacity market, creates incentives for innovation and allows the integration of large amounts of renewable energy,” energy state secretary Rainer Baake told journalists.
The white paper is now open for consultation until the end of August, before the cabinet makes a decision over the project in October. The parliamentary process should be concluded by February 2016.
The heads of the three governing coalition parties agreed on the package after final, late-night talks on 1 July.
The proposed reform also contains the capacity reserve for times at which the market forces do not secure supply. Lignite power plants with a capacity of 2.7 gigawatts will be included in these reserves, as part of a deal struck as an alternative to a levy on old coal plants in order to reach the climate targets by 2020.
Baake reiterated that his proposal of a levy would have been cheaper. “The climate levy would have been an intelligent instrument. But another way has been chosen,” he said. Baake was confident that the European Commission would allow the payments for power plants in the capacity reserve, including an estimated 230 million euros to the lignite plant operators.

Find the white paper in German here (including a summary in English on page 6) here.

Read a CLEW factsheet on key points in the white paper here and a dossier about the debate here.

Read a blow-by-blow account of the climate levy debate here and a story about the compromise here.


Die Welt

Environment minister: “The coal exit comes”

In a comment piece published by Die Welt, Environment Minister Barbara Hendricks sets out her position on the coalition government’s energy agreement, saying it is positive that there has been no attempt to climb down from Germany’s climate targets, and that the focus of the agreement is on shutting down lignite power plants. But she says the agreement will be much more expensive than the proposed climate levy and accounts for only a part of the 22 million tonnes of CO2 reduction from the power sector, requiring increased contributions from other sectors. All parties must be clear that the coal power sector it cannot shirk its climate protection responsibilities, she writes – “quite the contrary!”
Hendricks says the debate suffered from “polemics” including threats of job losses and “de-industrialisation”. The minister says no one can deny that an exit from coal is coming, what is needed is structural support for the regions most affected.

See the article in German here.

See CLEW's factsheet on the new energy agreement here.  


Süddeutsche Zeitung

“Coalition of madness”

In a commentary for the Süddeutsche Zeitung, Michael Bauchmüller points to contradictions in the government's tackling of the energy transition: Chancellor Angel Merkel commits to decarbonisation at the G7 in Elmau, but doesn’t follow through at home, while CSU chairman Horst Seehofer demands security of supply for Bavaria, but resists grid extension. And the energy minister came up with an ingenious climate plan, only to scrap it under pressure from the trade unions. Bauchmüller says the government’s decision to transfer older lignite powered-stations into a capacity reserve, rather than introduce a coal levy is crazy: these plants should be shut down but instead their operators will make even more money, at the expense of energy consumers. But, he writes, they shouldn’t rejoice too much. The major political parties, having previously shunned the issue of an exit from coal are now clearly committed.

See the article in German here.



“Energy transition only for the rich”

In a comment piece for taz, Bernhard Pötter writes that the government’s “golden handshake” for coal will cost German consumers and taxpayers 2.5 billion euros. But it also comes with an international price tag, he says, because it sends a message to other countries that the energy transition is only possible with a hefty chequebook.

See the article in German here.



“Germany gives dirtiest coal plants six years for phase out”

Bloomberg describes the government’s decision to keep 2.7 gigawatts of old lignite-powered capacity on standby “a six-year lifeline to some of the dirtiest coal-fired plants.” Shares in German utilities surged, RWE by 6.4 percent, and E.ON by 3.7 percent, Bloomberg reports, quoting a Commerzbank analyst saying the decision was “a great relief for RWE.”

See the article in English here.


Handelsblatt Global Edition

“Reform hailed in renewables program”

Handelsblatt Global reports that the German government agreed on major reform of its energy policy which would “reduce the costs of the transition to the utility industry and pass on more costs to German consumers, who already pay some of the highest energy prices in Europe.”

See the article in English here.



“Germany's energy transition breaks the Energiewende paradox”

Writing for Forbes, James Conca says Germany’s carbon emissions fell last year, breaking the “Energiewende paradox”. But he questions whether the nuclear capacity coming offline in the coming years will be replaced by renewables or coal, saying that renewable power generation would have to be doubled by 2030 to avoid increased dependence on fossil fuels.

See the article in English here.



“EnBW and PROKON will not merge”

German utility EnBW has announced that its hoped takeover of wind power company Prokon will not go ahead, after the company’s creditors voted to keep the company as a cooperative. EnBW said it regretted the decision but “plans to invest 3.5 billion euros over the coming years in the further expansion of renewable energies both on land and at sea alone.”

See the press release in English here.

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