Explained: Why Germany, That Wants To Be Greenest Economy, Is Firing Up 10 GW Of Mothballed Coal Power Plants

Germany has decided to fire up idle coal power plants as Russian cuts to gas exports threaten shortfalls in Europe’s largest economy. Berlin was working on a new law to temporarily bring back up to 10 gigawatts (GW) of idle coal-fired power plants for up to two years. This accounts for just under 5 per cent of total German production capacity.

"This is bitter, but it's essential in this situation to reduce gas consumption," Robert Habeck, Economy Minister and a senior member of the Green party, said in a statement.

The plan is at odds with Germany’s climate policy-the German parliament passed a law in 2020 to phase out the use of coal entirely by 2038.

Germany's decision to turn back to coal power, which is highly carbon intensive, underscores how Russia's invasion of Ukraine and the subsequent surge in energy prices is threatening governments' climate policies.

What explains the flip-flop?

The decision to fire up idle coal power plants was necessitated by the reduction in natural gas supplies from Russia. Natural gas accounted for nearly 27 per cent of Germany’s total energy consumption in 2021, mostly for heating and industry purposes and to a much lower extent (around 15 per cent) for electricity production.

Russia’s state-controlled gas exporter Gazprom announced a 60 per cent reduction in natural gas deliveries to Germany via Nord Stream 1 (NS1) pipeline that runs through the Baltic Sea to Germany.

Russia has said Gazprom's decision to slash natural gas flows to Germany is the result of Canadian sanctions that left pumping equipment maintained by Siemens Energy stranded in Montreal.

But Germany has disputed this argument, arguing any technical issue was a pretext for Moscow’s retaliation against EU sanctions. The German authorities pointed out that Gazprom has not utilised alternative pipeline routes to make up for the supply shortfall through NS1.

Where Coal stand in the energy mix of the country?

Germany is still heavily reliant on fossil fuels for domestic power production. In 2021, some 28 per cent of gross electricity was generated using lignite and coal, considered the most polluting of energy sources. Natural gas contributed another 15.4 per cent. Meanwhile, the combined share of renewables stood at roughly 41 per cent, with wind the most prominent of Germany's renewable energy sources.

By the end of May, Germany had 31.4 GW of coal-fired plants and 27.9 GW of gas-fired plants on the grid, according to regulatory data.

Coal plants are the biggest polluters in the European Union. Nine of the ten most polluting institutions in the region are coal-fired power plants, the majority of which are located in Germany. As such, in the year 2020, the government agreed to end its reliance on coal by the year 2038, much later than many other EU member states.

However, Germany's new coalition of SPD, Greens and liberal FDP agreed in November 2021 to bring forward the country's coal phase-out date from 2038 to 2030.

How does the nuclear phase out plan compounds the problem?

Germany until March 2011 obtained one-quarter of its electricity from nuclear energy, using 17 reactors. A coalition government formed after the 1998 federal elections had the phasing out of nuclear energy as a feature of its policy.

It was after the Fukushima accident in Japan that the conservative government under Angela Merkel in March 2011 decided to phase-out the operation of the remaining nine plants by 2022.

The last nuclear power plant in Germany will cease operation in December 2022. This definitive end-date is part of the 2011 Nuclear Energy Act (Atomgesetz) which withdrew the authorisation to operate nuclear reactors for power generation according to a phase-out schedule.

In the past months, some energy and industry managers, researchers and climate activists and pro-nuclear groups have again made a case for the use of nuclear power. Despite frequent articles and opinion pieces in its favour, the lifespan of three remaining active nuclear power plants with a cumulative capacity of 4 GW will not be extended as the government has concluded the technical and safety hurdles are too high.

What is the way forward?

To start with, Germany aims to reduce normal consumption by about a fifth without resorting to rationing, so it can fill its storage tanks ahead of the winter, when demand rises.

Germany has prioritised refilling gas storage tanks that can be used in winter. As of mid-June 2022, the country’s gas storages were filled to 56 per cent of capacity. A new law obliges storage operators to fill their facilities to at least 90 per cent of capacity by November and retain at least 40 per cent by February.

The country is also working on increasing Norwegian pipeline supplies and LNG imports. Germany plans to install four floating liquefied natural gas terminals. Government-backed loans to encourage the gas market operator to fill storage facilities more quickly is also on the cards.

Further, Germany will also introduce an auction mechanism for industrial gas users to encourage them to save gas. Companies that cut consumption will be compensated, but the details are still being finalised.

While Germany has managed to quickly reduce its dependence on Russian gas since the Ukraine War, from around 55 per cent in February to around 35 in May 2022, however, it still faces the significant challenge of replacing the remaining share with alternative sources and thus, facing the heat of supply crunch.

Also Read: Explained: Europe's Energy Crisis In The Wake Of Russia-Ukraine War