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Germany’s Incoming Govt Agrees To Phase Out Coal Eight Years Ahead of Schedule

The coalition that will form the government to succeed Germany’s Angela Merkel has agreed to phase out coal by 2030, eight years than currently planned, Reuters reported on Friday.

The center-left Social Democrats, the Greens, and the liberal Free Democrats have agreed on a plan for Germany to exit coal by the end of this decade, according to a draft agreement on major policy points for the next ruling coalition that Reuters has seen.

The Social Democrats, SPD, narrowly beat Merkel’s CDU/CSU conservative coalition at the September 26 general election. The Social Democrats said they would explore a coalition with the Greens and the Free Democrats, rather than renew a broad alliance with the coalition led by Merkel until now.

On Friday, the leaders of the three parties willing to form a coalition government said they would recommend the beginning of formal talks, after weeks of “exploratory talks.”

It is no surprise that a coalition involving the Greens would want a swift coal exit, but the timing of the decision to push forward the coal phase-out by eight years coincides with the major power and energy crisis in Europe, including in Germany.

Industrial power prices in Europe’s biggest economy hit a new record on Thursday, while grid operators said they would slash by nearly 43 percent a power surcharge initially designed to support renewables in order to help alleviate consumers’ pain amid the galloping energy prices.

The coal exit for Germany could be more difficult than in other European economies, because the country plans to phase out nuclear power generation by the end of 2022.

Lignite and hard coal accounted for around 26 percent of Germany’s power generation in the first half of 2021, according to data from the German Association of Energy and Water Industries, BDEW.

The closure of all nuclear reactors in Germany by 2022 means that Germany might need to retain half of its coal-fired power generation until 2030 to offset the nuclear phase-out, German officials said before the pandemic.

By Tsvetana Paraskova for Oilprice.com

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