German coalition deal sees fresh dialogue on coal’s role

As a result of coalition negotiations, the role of coal power received more air play by the German media last week, but government insiders say that plans for the sector in Germany have remained consistent with what was devised before the energiewende was announced.

Bloomberg reports that social democrat and coal advocate Ulrich Freese has made the most of Chancellor Angela Merkel’s pledge to counter rising power prices by succeeding in inserting à‚ a commitment to use lignite to help bridge the gap in Germany‘s energy mix and rein in the second-highest electricity prices in the European Union after Denmark’s.

However government insiders have told Power Engineering International that, despite how Mr Freese’s actions might be perceived, there is to be little new in the country’s plans for coal power generation, as almost all of the projects mooted had been scheduled since prior to the energiewende announcement.

Ulrich Freese

While Chancellor Merkel is facing criticism in some quarters for what is being viewed as threat to previous pledges to boost renewable power to 45 per cent by 2025 and 60 per cent by 2035 (it currently takes up 23 per cent), Freese insists that coal is vital to Germany’s ability to stop energy costs escalating further.

“This isn’t just about the environment, this is about the money” Germans pay for electricity, Freese, 62, said in an interview on Dec. 2. “We’ve got the most modern coal plants in the world. Brown coal lets us produce comparatively cheap and climate-friendly electricity.” His contribution, he says, was to add “precision” to the coalition’s coal policy.

An insider at Germany’s environment department, who did not wish to be named, has insisted to PEi that it is misleading to perceive that coal power capacities are suddenly being stepped up.

“The fact remains that all the coal projects we are seeing right now have been in the pipeline since about 2007 and 2008. According to data from the German regualtory authority (Bundesnetzagentur), until 2015 there is set to be even more coal fired power plants entering into operation, so we will see more of the same news on coal over the next two years. Therefore it is really important to note that this has nothing to do with the negotiations as the construction of all of these plants had begun before the Energiewende was announced in June 2011.”

The sourced added, “the government generally limits itself to setting up the political and legal frameworks for the markets and, traditionally, trying to provide as much investment security for the markets as possible. This reinforces the point that the government does not interfere with projects that were started before the announcement of the energiewende concept.”

RWE (FWB:à‚ RWE) are happy that coal’s role seems to have been further clarified following talks between the partners. More than half of the company’s power plant capacity, or 23 GW, is coal-based, according to a company brochure. It generated 81 billion kilowatt-hours of electricity with its lignite plants in 2012, more than from renewable sources and natural gas combined.

“We welcome the clear commitment to fossil-fired power plants in the coalition contract,” Hildegard Mueller, the head of the BDEW lobby that represents EON, Vattenfall, RWE and EnBW Energie Baden-Wuerttemberg AG (EBK), told reporters in Berlin this week. She added that gas and coal plants are “necessary to balance out the renewable energies and their fluctuating generation.”

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