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Germany to Phase out Coal by 2030

Germany intends to phase out coal use by 2030, eight years sooner than previously envisaged. The country intends to generate 80 percent of its electricity through renewable sources in the same year. According to the BBC, Olaf Scholz, the Social Democratic Party's leader, unveiled the idea in November 2021 as part of a pact that would see the former vice-chancellor, who would succeed Angela Merkel as chancellor, lead a three-way coalition with the Greens and Free Democrats.

Germany intends to phase out coal use by 2030, eight years sooner than previously envisaged. The country intends to generate 80 percent of its electricity through renewable sources in the same year. According to the BBC, Olaf Scholz, the Social Democratic Party’s leader, unveiled the idea in November 2021 as part of a pact that would see the former vice-chancellor, who would succeed Angela Merkel as chancellor, lead a three-way coalition with the Greens and Free Democrats.

The agreement includes a number of measures aimed at reducing Germany’s greenhouse gas emissions, which remain high in comparison to many European neighbors due to the country’s heavily industrialized economy and reliance on coal. The coalition has committed to making renewable energy expansion a “central project” of its government. By 2030, the agreement states, renewable energy will account for 80 percent of Germany’s electricity generation, up from around 40% currently. Accordingly, the target is akin to the United Kingdom’s goal of reaching net-zero electricity generation by 2035 and the United States’ goal of reaching “100 percent carbon-free electricity” by 2035. To accomplish this, the agreement calls for an upgrade of Germany’s electricity grid to make it more solar, wind, and hydrogen-powered.

Included in the agreement’s scope are the following specific objectives:

  • Germany expects to generate 680–750 terawatt hours of gross power by 2030, with renewable energy sources accounting for 80 percent of that total.
  • Germany has committed to significantly speeding up planning and approval processes, which have been identified by the sector as a major impediment to the faster spread of renewable energy.
  • Germany intends to increase photovoltaic capacity to roughly 200 gigawatts (GW) by 2030, up from around 60 GW at the moment, with the technology being deployed on all appropriate roofs in the future. Onshore wind energy will be employed on 2% of Germany’s land area.
  • Sets a target of at least 30 GW of offshore wind capacity by 2030, 40 GW by 2035, and 70 GW by 2045.
  • By 2030, half of Germany’s heat supply will be carbon neutral.
  • It aims for a more expeditious phase-out of coal power, ideally by 2030.
  • It aims to build ten gigatonnes of electrolyzer capacity by 2030 as part of its hydrogen push.
  • Beginning January 1, 2023, it aims to pay the renewable energy support fee under the EEG program from the budget, not consumer levies.
  • It aims to ensure that the CO2 price does not fall below 60 euros/tonne in the long run if the EU is unable to agree on a minimum price.

Coal Phase-Out

Germany’s parliament ratified the country’s coal exit law in July 2020, 18 months after a multi-stakeholder coal exit panel proposed that the country phase out coal-fired power generation by 2038 at the earliest. The coal exit law establishes a timeline for decommissioning the country’s remaining coal-fired power capacity, specifically distinguishing between lignite and hard coal. A phase-out of lignite has a higher impact on mining regions and workers than a phase-out of hard coal. Germany’s final hard coal mine ceased operations in 2018. Germany is the fourth largest consumer of coal in the world and has lagged significantly behind its western European neighbors in phasing it out, owing to the country’s enormous deposits of lignite coal, on which it has historically relied to secure its energy independence. In the first half of 2021, coal accounted for more than a quarter of Germany’s electricity output.

According to the agreement, Germany would accelerate its coal phase-out from the 2038 deadline set by the previous government. “Ideally, this will be accomplished by 2030,” the document states. Though some campaigners expressed disappointment at the lack of a formal commitment, energy experts believe the deteriorating economic case for coal in Europe—as a result of EU legislation and market shifts—makes the 2030 deadline more likely to be met. The benefits of coal phase-out outweigh the expenses, and it creates new economic prospects. The technologies required for coal-fired power generation to be phased out are now available or have been developed to the point where they can be implemented within the requisite timescale. Germany’s coal phase-out would spur required investments in demand management, storage, sector coupling via power-to-x applications which will help reduce fossil energy consumption and efficiency technology. Additionally, reducing coal-fired electricity generation may help alleviate system congestion in some areas.

In summary, the agreement aims to boost renewable energy sources, phase out coal, minimize the use of natural gas as a source of energy and finally place climate change at the heart of the government.

Feel free to contact the Energy Transition Centre today for questions. 

·  Julius Moerder, Head of Energy Transition Centre [email protected]

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·  Leon van Der Merwe, Head of Energy Transition Centre, South Africa [email protected]