Questions & Answers

Is Germany undergoing a coal renaissance?

In 2016, only one new coal plant was in the pipeline of being built. The plants built in the past few years were planned starting in the first phase of emissions trading, which failed to provide a shift from coal power to power from natural gas. But increasingly, renewables are offsetting demand, so this additional capacity is likely to be unprofitable. In 2014, electricity production from hard coal and lignite went down by more than 6 percent. The firms are now scrambling to shut down capacity. Since Fukushima, not a single coal plant has been added to utility plans.

One of the main concerns about Germany’s energy transition is the role of coal power. In 2015, talk about a possible coal phase-out shifted into high gear. Because the coal sector employs so many miners, far more jobs are at stake than in the nuclear sector - one reason for why a nuclear phase-out was politically easier. But increasingly, labor union leaders accept the inevitability of a coal phase-out and now wish to focus not on preventing it, but on shaping it. Negotiations therefore concern the decade in which the last coal mine and coal plant will be shut down and how workers and their communities can benefit from this transition.

The recent reports of new coal plants going online have also drawn a lot of attention. As Germany phases out its nuclear plants up to 2022, more space will indeed be created on the power grid for coal plants, which would otherwise be squeezed out by renewables. At present, renewable electricity primarily offsets power from natural gas, which is currently more expensive than coal power. Natural gas combustion emits only about half as much CO2 as the burning of coal. Though it would be better for the climate, a switch from coal power to natural gas will be a tough sell politically. 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, less than a tenth of the jobs in the renewables sector.

Depending on how quickly renewables grow in power supply, however, new plants may increasingly run for fewer hours per year. A study published in 2013 for the British government found that the “apparent surge” in new coal plant construction in Germany was the result of a favorable market environment in 2007/2008 and concludes that “there will be no major new coal or lignite projects in Germany for the foreseeable future beyond those currently under construction.”

Indeed, since the nuclear phase-out of 2011, plans to build new coal plants in Germany are down. In democracies, coal plants are not built in a couple of years, so the ones that went online in 2012 and 2013 were not a result of energy transition.

A chart published by German environmental NGO Deutsche Umwelthilfe in 2013 shows that, as a reaction to the nuclear phase-out, Germany has not started building any coal plants and has even stepped away from six.

During the nuclear phase-out, renewable electricity is likely to fill the gap left binding by nuclear power. However, the growth of renewables will probably only slightly outstrip the nuclear decline so that coal power will remain relatively strong, especially lignite. In contrast, electricity from hard coal is expected to decline. In 2015, the German government announced plans to reduce emissions from lignite. If these plans become law, power from lignite could indeed drop during the nuclear phase-out.

Whatever the case, the coal phase-out begins with or without an official announcement after the nuclear phase-out is completed at the end of 2022 - simply because there will be nothing left for renewables to offset in Germany's power supply.