opportunities and challenges in the context of the coal phase-out … · 2019-11-27 ·...
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Opportunities and challenges in the context of the coal phase-out in GermanyMay 14th 2019
Dr. Arjuna Nebel
IEA EGRD workshop, SYSTEM RESILIENCE AND FLEXIBILITY
Wuppertal InstituteResearch for a sustainable development
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230 employees
~150 national and international
projects per year
Founded in 1991
Coal phase-out in Germany
Coal phase-out in GermanyOverview
Current situation
Comparison with business as usual
Security of supply
Structural change and employment
Outlook
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Current situationThe coal phase-out is mainly driven by climate policy
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Source: DIW, WI, Eco 2019
Current situationEmissions budget – cumulated emissions per period are the key climate impact factor
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Source: DIW, WI, Eco 2019
Current situationCurrent economic incentives seem insufficient
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Source: DIW, WI, Eco 2019
Current situationStakeholder commission recommend a coal phase-out
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The Commission on Growth, Structural Change and Employment recommended in January 2019:
• The phasing out of the coal-fired power generation in Germany until 2038 (2035)
• To withdraw the corresponding CO2 certificates• A financial compensation for particularly affected regions• Speedup of renewable capacity expansion• Detailed monitoring of the security of supply• A financial compensation for possibly occurring price increases
Comparison with business as usualUntil 2030 lignite power plants are decommissioned according to their lifetime
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5 000
10 000
15 000
20 000
25 000
nom
inal
cap
acity
in M
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Lignite power plants in Germany
nominal capacity Germany (40 years lifetime) nominal capacity Germany (50 years lifetime)nominal capacity Germany (historic) nominal capacity Germany
Source: own calculations
Comparison with business as usualUntil 2030 hard coal power plants are decommissioned according to their lifetime
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0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
Nom
inal
cap
acity
in M
W
Hard coal power plants in Germany
nominal capacity Germany (40 years lifetime) nominal capacity Germany (50 years lifetime)nominal capacity Germany (historic) nominal capacity Germany
Source: own calculations
Security of supplyForecasts of the security of supply have been changing significantly within the last years
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Pric
e in
€/M
Wh
Cap
acity
in G
W
Peak Load in GW Peak Load prediction in GW
guaranteed capacity at peak load prediction in GW Electricity Price Phelix base front year future in €/MWh
Source: own calculations based on Amprion (2019) and EEX (2019)
Security of supplyThere are several instruments to ensure the security of supply in Germany
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Close monitoring of the security of supply situationThe prohibition on decommissioning power plants if security of supply is threatenedStrengthening the capacity reserveStrengthening the network reserveIf there is a foreseeable threat to the security of supply, the transmission system operators have the option of launching tenders for new gas-fired power plantsThe development of further load flexibilities for major industrial customersThe expansion of the transmission grid and stronger integration into the European internal market
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Structural change and employmentOverall jobs in the coal sector have already been declining
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Source: own calculations based on Statistik der Kohlenwirtschaft e.V. (2016a, 2016b, 2017)
Overall jobs in coal mining Jobs in hard coal mining
Jobs in lignite mining
Coal mining jobs decreased from over 750,000 to less than 21,000 in 2016. This was driven by purely economic reasons.
Structural change and employmentBut certain regions are heavily dependent on coal
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Source: Friedrich-Ebert-Stiftung (2016)
Rheinisches Revier
HelmstedterRevier Lausitzer
Revier
MitteldeutschesRevier
Lignite Mining AreasPhase-out of coal:
Lignite mining is economically important for structurally weak regions
GDP per Capita
ConclusionThe coal phase-out will probably not be enough to reach climate targets, but won’t cause security of supply issues either
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The suggested coal phase-out will not be enough to reach climate targets which are in line with the Paris agreement• Depending on the implementation, the current intermediate targets for
2030 and 2040 might not be totally in line with a pathway being able to reach the Paris Agreement
• However for the moment it is of much more importance to have a starting point for a step by step phase-out process and to learn − if a faster phase-out is possible - even from an economic point of view if
cost degression of renewable energy technology continues− if the energy sector would have to reduce emissions even faster as other
sectors lag behind
Security of supply won’t be a critical issue• The rate of decommissioning is manageable• There are several instruments to ensure the security of supply
OutlookThe energy system transformation could be given a boost, but the real challenges of industrial structural change lie ahead
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A coal phase-out could release political commitment to accelerate the energy system transformation• A public agreement on the medium-term design of the energy system makes
it possible to tackle the challenges and work on concrete solutions without being captured in intensive controversial political debates
The challenges arising in connection with structural change in industry are still ahead of us• In terms of its economic impact, the expected transformation process in the
automotive industry is compared to the coal sector even more challenging for the national economy
Thank YouFor Your Attention
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Dr. Arjuna Nebel
+49 202 2492-161
Literature
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DIW, WI, Eco (2019), Phasing out coal in the German energy sector, https://epub.wupperinst.org/frontdoor/index/index/docId/7265
Amprion (2019), Forecast Margin, https://www.amprion.net/Grid-Data/Forecast-Margin/
EEX (2019), Phelix-DE/AT Futures,https://www.eex.com/de/marktdaten/strom/futures/phelix-deat-futures#!/
Statistik der Kohlenwirtschaft e.V (2016, 2017), Der Kohlenbergbau in der Energiewirtschaft der Bundesrepublik Deutschland,https://kohlenstatistik.de/
Friedrich-Ebert-Siftung (2016), Ungleiches Deutschland: SozioökonomischerDisparitätenbericht 2015, http://library.fes.de/pdf-files/wiso/12390.pdf