Abstract
RWE, Germany’s largest power producer, will ditch coal by 2030. The company said that between now and then, it would shut down all of its remaining lignite-to-power plants and transfer their work to natural gas and renewable energy. It also plans to stop using power stations fueled by hard coal by 2024.
The move towards the German economy
The move is expected to have a significant impact on the German economy, but it is part of an effort to assist Germany in meeting its ambitious targets of reducing carbon dioxide emissions by 40% by 2020 and 80% by 2050.
RWE’s decision, which will be presented as part of its annual report in February, will cost up to €6.5 billion through 2030, despite the company’s anticipated savings from the move. The company aims to save about €4 billion annually after costs for closures and replacements are factored in.
“In a globalized world, you can’t just stick with one technology,”
RWE Chief Executive Peter Terium said in a phone interview. “And this is a reasonable investment for our future.”
The government made comments
This announcement came after the German government pledged earlier this week to make the country coal-free by 2050. Germany’s recent pledges on clean energy are continuing a trend that has seen EU states increasingly rely on renewable sources rather than fossil fuels for the generation of electricity—examples include Sweden, which is nuclear free, or Austria, which has despaired of meeting its 2020 greenhouse gas reduction target on fossil fuels alone.
This month’s announcements followed a similar pledge from UK power supplier E. ON, which announced that it plans to stop generating electricity from coal by 2024. This move will also see the closure of two oil-fired power stations in the UK as well as two in Germany. The company also sells oil and gas assets, both of which are expected to be divested by 2024.
It is not clear how much direct effect these companies’ statements will have on global greenhouse gas emissions—the International Energy Agency (IEA) has calculated that lignite still makes up about 25% of global coal production, while hard coal accounts for another 30%. However, a move away from coal is still a step in the right direction—coal-fired power plants are some of the most climate-unfriendly sources of electricity available.
Earlier this year, it was reported that a single UK coal plant generates more climate pollution than all the cars in Britain. The carbon footprint from hard coal and lignite amounts to about double that of oil, which is the source of about 20% of world energy.
The elaborate scheme on Germany
In contrast to a previous target date of 2038, the German government agreed in November to “ideally” move forward the country’s exit from coal-fired power generating to 2030; however, that plan still required agreements with the individual operators.
The decommissioning of RWE’s Neurath D and E power plant units, which were supposed to be pulled off the grid at the end of this year, will be postponed until March 31, 2024, as was announced last week. The units will also remain on the market.
Berlin has until 2024 to either extend the lifespan or move the units to a reserve power plant, with both choices having a March 31, 2025, deadline.
Summary
RWE, Germany’s largest power producer, will ditch coal by 2030. The company said that it would shut down all of its remaining lignite-to-power plants. Move is part of an effort to assist Germany in meeting its ambitious carbon dioxide emissions targets. This follows a similar pledge from UK power supplier E.ON. Coal-fired power plants are some of the most climate-unfriendly sources of electricity. The carbon footprint from coal amounts to about double that of oil.
