The cabinet of Chancellor Angela Merkel has approved legislation to shutter 41GW in German coal and lignite capacity by 2038 at the latest.
The phase-out is supposed to be flanked by a massive build-up of renewable energies, which are targeted to make up 65% of the power mix in Europe’s largest economy by 2030, but the government so far hasn’t presented a plan on how to reach that share.
“The world is watching, how Germany succeeds in climate protection and the coal exit. We will show, how an industrial country can switch completely from coal-based power generation to renewable energies and at the same time creates economic perspectives for coal regions,” environment minister Svenja Schulze said.
“Now the next step must follow, the courageous further expansion of wind- and solar energy.”
German finance minister Olaf Scholz also said Germany now must progress in the expansion of power grids and renewable energies, but stressed the energy supply must not only be clean, but also affordable.
According to the 203-page law proposal that the government hopes will be okayed by parliament until the summer, the country’s coal and lignite capacity is slated to be reduced to 30GW by 2022, 17GW by 2030, and then to zero by either 2038 or 2035.
The government in mid-January had already presented a schedule to shutter Germany’s lignite capacity, which will be accompanied by massive payments to fossil-based utilities such as RWE, and €40bn ($44bn) in aid to affected mining regions.
The high compensation payments are wrong, and the coal exit could be much cheaper for the country if achieved via rising prices for emissions, the Potsdam Institute for Climate Impact Research (PIK) said.
"The government unnecessarily ramps up the cost: the high direct payments to power plant operators, compensating for shutdowns, are wrong," PIK director Ottmar Edenhofer said.
"They undermine the polluter-pays principle, wherein anyone causing emissions should pay accordingly. Now the person who seizes to cause emissions is rewarded financially. This is why operators have kept some power plants on the grid longer than is economically feasible – so that they can now collect compensation payments.“
Hard coal-based power plants will be shuttered through a tendering scheme that until 2026 will reward companies for presenting the lowest compensation claims.
The country by 2022 is also phasing out nuclear power.
Germany targets to reduce its greenhouse gas emissions by 55% by 2030, 70% by 2040, and 80-95% by 2050 – all when compared to 1990 levels.
German renewable energy federation BEE said the government failed to follow the recommendations of the so-called coal exit commission that one year ago next to the €40bn in aid to mining regions also had said a binding path towards the 65% of green power in the energy mix should be shown.
BEE president Simone Peters demanded from the government to finally lift the 52GW capacity limit after which no support will be paid for new PV installations, to reduce hurdles to permits for wind power projects, and lift the 2030 target for offshore wind to 20GW - all measures promised by the government.
UPDATES to add comment by renewables and environmental groups