German coal in a downward spiral
Over the past year, we have heard a lot of charges that Germany is switching to coal. Many of us have noted that this effect is quite temporary. Now, Germany’s most prominent coal field, Garzweiler, may be coming to a premature end.
According to a report in Germany daily Süddeutsche Zeitung, German coal giant RWE is considering closing brown coal field Garzweiler, one of the largest in the world (see these images), in 2017 or 2018 because its coal plants in the area are increasingly unprofitable. As Renewables International recently reported, prices on the power exchange are frequently negative, meaning that power providers are willing to pay people to consume electricity so that inflexible baseload plants do not have to be ramped down further.
While the firm was quick to deny any such official plans, its CEO did say that capacity mechanisms would be needed for conventional power supply to remain competitive. Some 26 coal and gas plants are now on the chopping block in Germany – 7 more than at the beginning of September – with a collective capacity of 6,735 megawatts. One municipal utility wishes to shut down its entire fleet.
The threat that solar and wind pose to conventional plants even extends beyond German borders. RWE is planning to reduce its coal capacity in the Netherlands, where 5 coal plants are to be shut down as a part of the country’s official Energy Agreement – but the authorities are not all pleased about the plans, as this report (in Dutch) explains.
In Germany, firms also cannot shut down plants without permission from the government, which wishes to ensure dispatchable capacity. The question going forward is whether capacity payments will be provided for coal. Calls for a coal phaseout are getting louder now that the elections are over; many proponents of renewables may have been holding back on criticism in the hope of not hurting the SPD’s turnout. But now, Jochen Flasbath, head of the German Environmental Agency, has published his call for a coal phaseout in Germany weekly Die Zeit.
Proponents of renewables support capacity payments but want to see them made contingent upon low carbon emissions to favor natural gas over coal. It will be a tough sell; Germany imports almost all of its gas, 40% of it from Russia, and is the world’s largest brown coal producer. An estimated 35,000 jobs could be at stake in the Garzweiler region, nearly a tenth of the jobs in the renewables sector. But clearly, German coal is likely to shrink more than grow; the end of Garzweiler may just be the beginning. (Craig Morris)