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Greenhouse Gas Emission Reductions and the Phasing-out of Coal in Germany

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Energiewende "Made in Germany"

Abstract

The reduction of greenhouse gas (GHG) emissions, in particular CO2, is a major objective of the German energiewende. There has been broad consensus on this goal for many years now—in contrast to the continuing discussion over the proposed shutdown of Germany’s nuclear power plants. The German government’s Energy Concept 2010 already aimed at a 80–95% reduction of GHG by 2050 (compared to the base year 1990). In contrast to other sectors such as transport, agriculture, and heating, the electricity sector is capable of reducing CO2 emissions at relatively moderate cost through renewable energy sources. When excluding the option of carbon capture, transport and storage (CCTS) technologies, achieving ambitious climate objectives in Germany (and elsewhere) implies phasing out both hard coal and lignite. This chapter provides an overview of Germany’s GHG emission reduction targets in the electricity sector and the progress achieved so far. The electricity sector has the potential to lead the way in decarbonization, provided that the appropriate regulatory framework is in place. Due to insufficient price signals that can be expected to persist for the next decade, the European Emissions Trading System (EU-ETS) will not be able to achieve this objective on its own but will require support from appropriate national instruments. Section 4.2 gives an overview of Germany’s GHG emission reduction targets and their relation to European targets. Section 4.3 focuses on coal-fired electricity generation and its problematic role in the German energy sector. Section 4.4 discusses the influence of the EU-ETS as well as various additional national instruments, including a CO2 emissions performance standard (EPS), a CO2 floor price, and a phase-out law. In Section 4.5, we show that a medium-term coal phase-out is compatible with resource adequacy in Germany. The resulting structural change in the affected local basins can be handled through additional schemes, thus posing no major obstacle to the phase-out of coal. Section 4.6 concludes.

“Governments, business and regions all around the world are moving beyond coal. Electricity generation from coal is declining. This is an irreversible trend towards clean power, also here in Europe. (...) All Europeans should benefit from this transition, and no region should be left behind when moving away fossil fuels.”

Miguel Arias Cañete, Commissioner for Climate Action and Energy, European Commission at the Launch of the Platform for Coal Regions in Transition in Strasbourg, 11 December 2017 (http://europa.eu/rapid/press-release_IP-17-5165_en.htm)

This chapter summarizes work by our research program on “The Future of the Lignite Industry” and the Junior Research Group “CoalExit”, see for other publications https://www.diw.de/sixcms/detail.php?id=diw_01.c.429667.en; as well as the Junior Research Group “CoalExit”  https://www.wip.tu-berlin.de/menue/nachwuchsforschungsgruppe_coalexit/parameter/en/; it has been updated from Chapter 3 of my dissertation (Oei 2015). I thank Hanna Brauers, Clemens Gerbaulet, Leonard Göke, Franziska Holz, Christian von Hirschhausen, Claudia Kemfert, Roman Mendelevitch, and Felix Reitz for cooperation and comments, the usual disclaimer applies.

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Notes

  1. 1.

    Hirschhausen, C. von, & Oei, P.-Y. (2013). Gutachten zur energiepolitischen Notwendigkeit der Inanspruchnahme der im Teilfeld II des Tagebau Welzow-Süd lagernden Kohlevorräte unter besonderer Berücksichtigung der Zielfunktionen der Energiestrategie 2030 des Landes Brandenburg (Politikberatung kompakt No. 71). Berlin, Germany: Deutsches Institut für Wirt-schaftsforschung (DIW); and Hirschhausen, C. von, & Oei, P.-Y. (2013). Gutachten zur energiewirtschaftlichen Notwendigkeit der Fortschreibung des Braunkohlenplans “Tagebau Nochten” (Politikberatung kompakt No. 72). Berlin, Germany: Deutsches Institut für Wirtschaftsforschung (DIW).

  2. 2.

    See also Michelsen, Neuhoff and Schopp (2015): Using Equity Capital to Unlock Investment in Building Energy Efficiency? DIW Economic Bulletin 19/2015. p. 259–265. DIW Berlin, Germany.

  3. 3.

    See Projektionsbericht der Bundesregierung (2015), pursuing to regulation NO. 525/2013/EU; BMVI (Hg.) (2014): Verkehrsverflechtungsprognose 2030. Los 3: Erstellung der Prognose der deutschlandweiten Verkehrsverflechtungen unter Berücksichtigung des Luftverkehrs. Intraplan Consult, BVU Beratergruppe Verkehr+Umwelt, Ingenieurgruppe IVV, Planco Consulting; Oeko-Institut & Prognos (2009).

  4. 4.

    This section is based on a comprehensive study by Oei et al. (2014a, 2014b) on phasing out coal, in particular lignite.

  5. 5.

    These costs are paid by society and are therefore not taken into account by the polluting entity. See Ecofys (2014): Subsidies and costs of EU energy. Study for the European Commission; Climate Advisors (2011): The Social Cost of Coal: Implications for the World Bank. Washington, USA; and EC (2003): External Costs. Research results on socio-environmental damages due to electricity and transport. Brussels, Belgium.

  6. 6.

    Leader of the G7. (2015). Leaders’ Declaration G7 Summit, June 7–8, 2015. Schloss Elmau, Germany.

  7. 7.

    BMU. 2012. “Langfristszenarien und Strategien für den Ausbau der erneuerbaren Energien in Deutschland bei Berücksichtigung der Entwicklung in Europa und global.” Schlussbericht BMU-FKZ 03MAP146. Stuttgart, Germany: Deutsches Zentrum für Luft- und Raumfahrt (DLR), Stuttgart Institut für Technische Thermodynamik, Fraunhofer Institut (IWES), Kassel Ingenieurbüro für neue Energien (IFNE).

  8. 8.

    The average CO2 emission factors refer to power consumption for the year 2010, see UBA (2013): Entwicklung der spezifischen Kohlendioxid-Emissionen des deutschen Strommix in den Jahren 1990 bis 2012. Petra Icha, Climate Change 07/2013. More modern plants, in contrast, emit around 940 g/kWh for lignite, 735 g/kWh for hard coal, and 347 g/kWh for natural gas-based power plants, see UBA (2009): Klimaschutz und Versorgungssicherheit. Entwicklung einer nachhaltigen Stromversorgung, Climate Change 13.

  9. 9.

    Gerbaulet, Clemens, Jonas Egerer, Pao-Yu Oei, and Christian von Hirschhausen. 2012. “Abnehmende Bedeutung der Braunkohleverstromung: weder neue Kraftwerke noch Tagebaue benötigt.” DIW Wochenbericht 79 (48): 25–33.

  10. 10.

    See Ziehm (2014): “Neue Braunkohlentagebaue und Verfassungsrecht – Konsequenzen aus dem Garzweiler-Urteil des Bundesverfassungsgerichts.” Expert report commissioned by Alliance ‘90/The Greens.

  11. 11.

    EC. (2014). Questions and answers on the proposed market stability reserve for the EU emissions trading system. Brussels, Belgium: European Commission.

  12. 12.

    See Graichen and Redl (2014): Das deutsche Energiewende-Paradox: Ursachen und Herausforderungen; Eine Analyse des Stromsystems von 2010 bis 2030 in Bezug auf Erneuerbare Energien, Kohle, Gas, Kernkraft und CO2-Emissionen. Agora Energiewende. Berlin.

  13. 13.

    BMUB. 2014. “Aktionsprogramm Klimaschutz 2020: Eckpunkte Des BMUB.” Berlin, Germany: Bundesministerium für Umwelt, Naturschutz, Bau und Reaktorsicherheit.

  14. 14.

    Handelsblatt (2015): Stadtwerke gegen RWE http://www.handelsblatt.com/politik/deutschland/klimaabgabe-plaene-stadtwerke-gegen-rwe/11677972.html; Süddeutsche Zeitung (2015): Dicke Luft in der Strombranche http://www.sueddeutsche.de/wirtschaft/klimaschutz-dicke-luft-in-der-strombranche-1.2502249, last accessed September 20, 2016.

  15. 15.

    See Agora Energiewende (2014): Comparing Electricity Prices for Industry. Analysis. An Elusive Task – Illustrated by the German Case. Berlin; and Neuhoff et al. (2014): Energie- und Klimapolitik: Europa ist nicht allein. (DIW Wochenbericht Nr. 6/2014) DIW Berlin.

  16. 16.

    Agora Energiewende. 2016. Elf Eckpunkte für einen Kohlekonsens. Konzept zur schrittweisen Dekarbonisierung des deutschen Stromsektors (Langfassung). Impulse, Berlin.

  17. 17.

    Agora Energiewende. 2017. Eine Zukunft für die Lausitz: Elemente eines Strukturwandelkonzepts für das Lausitzer Braunkohlerevier. Impulse, Berlin.

  18. 18.

    BMUB. 2014. “Aktionsprogramm Klimaschutz 2020: Eckpunkte Des BMUB.” Berlin, Germany: Bundesministerium für Umwelt, Naturschutz, Bau und Reaktorsicherheit.

  19. 19.

    See Umweltbundesamt. 2017. “Entwicklung der Kohlendioxid-Emissionen der fossilen Stromerzeugung nach eingesetzten Energieträgern.” Available online.

  20. 20.

    The Parliament of Great Britain. Energy Bill, HL Bill 30. The Stationary Office, London, UK (2013).

  21. 21.

    See Ziehm and Wegener (2013): Zur Zulässigkeit nationaler CO2-Grenzwerte für dem Emissionshandel unterfallende neue Energieerzeugungsanlagen. Deutsche Umwelthilfe. Berlin.

  22. 22.

    Ziehm, C., Kemfert, C., Oei, P.-Y., Reitz, F., & v. Hirschhausen, C. von. (2014). Entwurf und Erläuterung für ein Gesetz zur Festsetzung nationaler CO2-Emissionsstandards für fossile Kraftwerke in Deutschland (Politikberatung kompakt No. 82). Berlin, Germany: DIW Berlin.

  23. 23.

    According to plans for the phase-out of nuclear energy in Germany, the 30-year limit is calculated based on amortization plus a given profit realization period.

  24. 24.

    Calculation basis: gas power plant emissions data (450 g CO2/kWh), the total annual operating hours at 80% capacity: 450 g CO2/kWh × 8760 h × 0.8 = 3154 t CO2/MW.

  25. 25.

    A reduction of German production also reduces net exports and consequently increases generation and emissions in neighboring countries. A more recent study shows that the net CO2 reduction effect in the European electricity sector is around 50% of the German reduction when introducing a national EPS (Oei et al. 2015a).

  26. 26.

    See HM Revenue & Customs (2014): Carbon price floor: reform and other technical amendments. Originally, the CPF was to increase linearly to 30 £/t by 2020/2021, but this figure was frozen at 18 £/t for the rest of the decade. The reason for this decision was the large gap between the CPF and the CO2 price in the EU-ETS scheme, which might have had a negative impact on the competitiveness of the UK’s domestic industry.

  27. 27.

    A Climate Change Act bill recently proposed by the parliamentary group Alliance ‘90/The Greens calls for the introduction of a minimum price for CO2 similar to that in the UK. According to the bill, the CO2 price was to start at €15/t in 2015 and increase by €1/t per annum up to 2020, See Deutscher Bundestag (2014): Entwurf eines Gesetzes zur Festlegung nationaler Klimaschutzziele und zur Förderung des Klimaschutzes (Klimaschutzgesetz), Bundestag printed paper 18/1612.

  28. 28.

    See Deutscher Bundestag (2009): Neue Kohlekraftwerke verhindern – Genehmigungsrecht verschärfen: Beschlussempfehlung und Bericht des Ausschusses für Umwelt, Naturschutz und Reaktorsicherheit.

  29. 29.

    VDE. (2012). Erneuerbare Energie braucht flexible Kraftwerke – Szenarien bis 2020. Frankfurt am Main, Germany: VDE Verband der Elektrotechnik Elektronik Informationstechnik e.V. – Energietechnische Gesellschaft im VDE (ETG).

  30. 30.

    See Klaus et al. (2012): Allokationsmethoden der Reststrommengen nach dem Entwurf des Kohleausstiegsgesetzes – Verteilung der Reststrommengen und Folgenabschätzung für den Kohlekraftwerkspark; Studie von Ecofys im Auftrag von Greenpeace.

  31. 31.

    In the Netherlands, for example, agreements were made with individual operators, who, after a Dutch tax on coal electrification was abolished, agreed to the closure of several older coal-fired power plants with a total capacity of 3 GW until 2017.

  32. 32.

    See Matthes et al. (2012): Fokussierte Kapazitätsmärkte. Ein neues Marktdesign für den Übergang zu einem neuen Energiesystem. Öko-Institut e.V. – LBD-Beratungsgesellschaft mbH – RAUE LLP. Berlin.

  33. 33.

    Reitz, F., Gerbaulet, C., Kemfert, C., Lorenz, C., Oei, P.-Y., & v. Hirschhausen, C. (2014). Szenarien einer nachhaltigen Kraftwerksentwicklung in Deutschland (Politikberatung kompakt No. 90). Berlin, Germany: Deutsches Institut für Wirtschaftsforschung.

  34. 34.

    The effects of this modeling approach, however, focus on Germany only. Including the neighboring countries would lead to a small shift of production and emissions from Germany to its neighbors.

  35. 35.

    The German Ministry for Economy and Energy (BMWi) decided in November 2015 to move 2.7 GW of old lignite capacities into a reserve for climate reasons. An analysis shows that this reserve, however, is too small to reach Germany’s 2020 climate targets (Oei et al. 2015a). Oei, P.-Y., Gerbaulet, C., Kemfert, C., Kunz, F., & Hirschhausen, C. (2016). “Kohlereserve” vs. CO2-Grenzwerte in der Stromwirtschaft – Ein modellbasierter Vergleich. Energiewirtschaftliche Ta-gesfragen, 66(1/2), 57–60.

  36. 36.

    This study only analyzes the situation in Germany. It neglects that a reduction of German production also reduces net exports and consequently increases generation and emissions in neighboring countries. More recent studies show that the net CO2 reduction effect in the European electricity sector is around 50% of the German reduction when introducing national measures (Oei et al. 2015a).

  37. 37.

    Mieth, R., Gerbaulet, C., von Hirschhausen, C., Kemfert, C., Kunz, F., & Weinhold, R. (2015). Perspektiven für eine sichere, preiswerte und umweltverträgliche Energieversorgung in Bayern (No. 97). Berlin, Germany: DIW Berlin: Politikberatung kompakt.

  38. 38.

    Neuhoff, K., Acworth, W., Decheziepretre, A., Sartor, O., Sato, M., & Schopp, A. (2014). Energie- und Klimapolitik: Europa ist nicht allein (DIW Wochenbericht No. 6/2014). Berlin, Germany: DIW Berlin.

  39. 39.

    Additional effects are the low EU-ETS CO2 certificate and global coal prices.

  40. 40.

    Vision 1 “Slow Progress” assumes little European integration and delayed climate action. The second vision, “Money Rules,” also does not assume the achievement of climate targets but is based on increased European integration. The climate targets of the Roadmap 2050 are reached in the third vision, “Green Transition,” as well as in the fourth vision, “Green Revolution.” “Green Transition,” in contrast to “Green Revolution,” assumes little European integration.

  41. 41.

    This is also due to the fact that the visions assume different generation capacities in the other countries. Generation capacities for Germany, however, were left constant throughout all runs.

  42. 42.

    Statistik der Kohlenwirtschaft (2018). Belegschaft im Steinkohlenbergbau der Bundesrepublik Deutschland. Essen, Bergheim. https://kohlenstatistik.de/files/arbeiter_u_angestellte_3.xlsx. Retrieved July 17, 2018.

  43. 43.

    Ibid.

  44. 44.

    Statistik der Kohlenwirtschaft e.V. (2018). Datenübersichten zu Steinkohle und Braunkohle in Deutschland 2018. Retrieved May 15, 2018, from http://www.kohlenstatistik.de/.

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Authors and Affiliations

  1. Junior Research Group “CoalExit”, Berlin, Germany

    Pao-Yu Oei

  2. TU Berlin, Berlin, Germany

    Pao-Yu Oei

  3. DIW Berlin, Berlin, Germany

    Pao-Yu Oei

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Editors and Affiliations

  1. Economics and Management, University of Technology (TU Berlin), Berlin, Germany

    Christian von Hirschhausen

  2. Economics and Management, University of Technology (TU Berlin), Berlin, Germany

    Clemens Gerbaulet

  3. DIW, Energy-Transport-Environment, German Institute for Economic Research, Berlin, Germany

    Claudia Kemfert

  4. DIW, Energy-Transport-Environment, German Institute for Economic Research, Berlin, Germany

    Casimir Lorenz

  5. Junior Research Group “CoalExit”, University of Technology (TU Berlin), Berlin, Germany

    Pao-Yu Oei

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Oei, PY. (2018). Greenhouse Gas Emission Reductions and the Phasing-out of Coal in Germany. In: von Hirschhausen, C., Gerbaulet, C., Kemfert, C., Lorenz, C., Oei, PY. (eds) Energiewende "Made in Germany". Springer, Cham. https://doi.org/10.1007/978-3-319-95126-3_4

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