Brown out: Germany puts lignite coal plants on ‘standby’ for 2019 shutdown
Germany’s utilities are putting their lignite-fired plants on “standby” for four years and shutting them down for good by 2019 to help the country cut carbon emissions.
The German government on Oct. 24 announced its agreement with Mibrag, RWE AG and Vattenfall under which the energy companies are to phase out 2,700 MW of lignite-fired plants starting in 2016. In compensation, the utilities will receive a total of €1.61 billion, or €230 million annually over seven years, which will be passed on to consumers through a rate increase of about 0.05 cents/kWh, the German Ministry of Economics said.
On the same day as the agreement was revealed, RWE announced it is transferring five lignite plants, each with a capacity of 300 MW, into “standby” mode for four years. RWE said coal plants on “standby” will only be available as facilities of last resort for a specific period of time to safeguard power supplies.
Peter Terium, CEO of RWE AG, said in a press release that “this solution will enable our lignite-fired power plants to make a major contribution to the additional CO2-reduction of 12.5 million tonnes. This is positive. However, it hits the company hard and means a huge burden for our employees. After all, our power generation from Rhenish lignite will decline by 15 percent.”
According to the German government, the phase out of brown coal will help the country reduce its carbon dioxide emissions from 11 to 12.5 million of tonnes by 2020.
“The measure is important in order to reach our climate targets and at the same time ensure that it does not lead to structural breaks in the affected regions. Thus it is a good and acceptable solution for workers and businesses,” said economics minister Sigmar Gabriel in a press release.
Gabriel is also vice chancellor and head of the Social Democrats, the junior partner in the governing “grand” coalition with Chancellor Angela Merkel’s Christian Democrats. Under Merkel’s leadership, the two traditional parties of Germany have also been seeing the phase out of 17 nuclear plants by 2022 as part of the country’s Energiewende policy to achieve 80% of its electricity from renewable sources by 2050. Merkel’s cabinet on Oct. 14 approved a draft law to ensure Germany’s utilities are held liable for the €47.6 billion costs of shutting down and decommissioning the nuclear plants.
According to figures released by German Association of Energy and Water Industries in March, renewables constituted 26.6% of Germany’s electricity mix in 2014 followed by lignite at 25.4%, bituminous coal at 17.8%, nuclear energy at 15.4% and natural gas at 9.5%.