Energy minister speech at utilities congress
Government considers alternative to climate levy
The proposal to charge old coal-fired power stations a “climate levy” to force them reduce CO2 emissions might be replaced by alternative instruments to cut emissions from the power sector, economy and energy minister Sigmar Gabriel has said. The government should reach a decision when members of the ruling coalition meet,on 1 July, he said.
Speaking at the conference of the German Association for Energy and Water Industries (BDEW), Gabriel said an alternative proposal for cutting 22 million tonnes of CO2 from the power sector was being considered. This would include mothballing old hard coal plants, a capacity reserve made up of old lignite (brown coal) power stations, more support for combined heat and power plants, plus a number of other measures. Gabriel said he still believed the climate levy to be the most suitable and cost efficient instrument. But trade unions and energy companies have warned it could lead to a "domino effect" leading to power station and mine closures and job losses. “When experts say that there will be no structural ruptures but the companies say there will be, it’s well advised to assume the worst case scenario,” Gabriel said. “But then somebody also has to pay for it,” he added, referring to the costs of the alternatives measures.
BDEW Chairwoman Hildegard Müller told reporters after the speech that in her view, Gabriel had shown a lot of sympathy for the trade union’s proposal which is at the heart of the alternative mentioned by the minister.
See CLEW’s blow-by-blow account of the climate levy debate here - update follows.
Heinrich Böll Foundatio/DIW Berlin/European Climate Foundation
“Climate levy can effectively and economically reduce CO2 emissions from the power sector – alternative proposals ineffective and expensive”
The German Institute for Economic Research has examined the climate, cost and employment impacts of proposed polices to cut CO2 from the electricity sector, for a new study commissioned by the Heinrich Böll Foundation and the European Climate Foundation. The study found the proposed climate levy to be the most cost-effective option on table, making it possible for Germany to reach its target of cutting emissions by 40 percent (on 1990 levels) by 2020. The DIW said the climate levy was a far better options than alternatives such as the IG BCE (tade union) proposal to stake 2.7 GW of coal capacity offline, which would be expensive and make a very small contribution to climate protection.
The study found that the climate levy as originally proposed could cut carbon emissions from the sector by around 26 million tonnes, while a revised form of the law now under discussion would reduce that to around 18 million tonnes, the DIW said in a press release. In both cases, the reduction would be achieved by curtailing production from old lignite-powered plants in favour of newer, more efficient power stations, and to a lesser extent on moving from hard coal to gas.
The DIW calculates that the impact on household power prices would be a rise of 0.2 cents per kilowatt-hour (kWh), with industrial consumers seeing a rise of 0.3 cents/kWh.
See the press release in German here.
Download the study in German here.
EnBW boss: “I am a true believer in wind and solar”
In an interview with Süddeutsche Zeitung, EnBW CEO Frank Mastiaux said Germany’s exit from coal was coming, the question was how fast. He told the paper the G7 target to phase out fossil fuels sent an important signal to the world and that he envisaged decentralised renewable power production as the backbone of the future energy supply, with digitisation and networking playing a major role. On the utility’s bid to take over wind farm operator Prokon, Mastiaux said EnBW would offer the current private owners immediate and secure return on their investment and the funds to expand capacity.
DIW’s Claudia Kemfert: “Supply is safe”
In an interview for with the Frankfurter Rundschau, Claudia Kemfert of the DIW said security of supply is not at risk from the shutdown of nuclear power plants in Bavaria, even without planned grid expansion. But Kemfert told the paper that coal power production must be reduced to negate the need for new power lines planned between Saxony and Bavaria. She said, however, that the Südlink line from north Germany would be necessary from 2025.
“Hendricks insists on nuclear waste storage in Bavaria”
Environment minister Barbara Hendricks has accused Bavaria of an inappropriate response to calls for the state do its bit in the storage of nuclear waste, according to a report in Die Welt. Hendricks is pressing for Bavaria to store between seven and nine containers of processed nuclear waste, saying that the state has benefitted more than any other from nuclear power.
See the article in German here.
“Energy giant plans to sell oil fields in the North Sea”
Germany’s biggest utility, E.ON, is looking to sell of its oil and gas fields in the North Sea and Algeria. The company hopes to raise 2 billion dollars from the sale, which sale is expected to be launched in the coming weeks, WirtschaftsWoche reports.
See the article in German here.
See CLEW’s Dossier on German utilities and the energy transition here.