Planned sale of coal operator risks delaying Germany's plan to exit coal by 2030 – analysts
Clean Energy Wire
Plans to sell the western German coal plant operator STEAG could present a significant hurdle to government plans to pull the country’s coal exit forward to 2030, unless the company puts in place a binding decommissioning plan as part of the sales process, analysts from the Institute for Energy Economics and Financial Analysis (IEEFA) have warned. “As a state-owned company, STEAG’s management should set the standard for a planned and effective coal phaseout strategy that upholds and accelerates Germany’s Energiewende agenda,” power sector analyst Jonathan Bruegel said. STEAG has not yet released a decarbonisation plan, IEEFA said, adding that “there is a risk that STEAG’s buyer might maximise the coal fleet’s lifetime until it is compulsorily decommissioned. […] Selling STEAG to a private owner with a profit maximisation goal is neither timely nor helpful for paving the way for Germany’s coal exit strategy.”
STEAG has been put up for sale by its owners. Reuters had reported that the company, which is owned by six municipal utilities in Germany's industrial Ruhr region, aims to sign a deal with a strategic buyer or financial investor over the coming months and close the transaction by the end of the year. Czech energy group EPH – which also partially acquired eastern German lignite operations from Vattenfall some years ago – is a potential buyer, Reuters said.
Analysts and energy politicians have long argued that, due to increased prices in the European CO2 trading system, an earlier coal exit is very likely because the majority of coal power plants are not profitable anymore after 2030. However, IEEFA analyst Bruegel said: “Power market fundamentals alone won’t be enough to push STEAG’s coal fleet out of the energy mix. If Germany is serious about its Energiewende targets then governments must intervene in this sale before it’s too late.” Germany’s ruling coalition agreed to “ideally” pull forward the coal exit to 2030, which is currently scheduled for 2038 at the latest.