Germany adds a new twist to the long-running saga of trying to meet EU demands on carbon dioxide reduction, as PEI reports. Should be good for another hike in already high German electricity prices.
Germany’s top three utilities have agreed to begin placing their most carbon-emitting coal-fired power plants into the country’s power reserve this winter in a move predicted to reduce carbon dioxide emissions by 12.5 million tonnes by 2020.
The utilities, RWE, Vattenfall and Mibrag will be paid about 1.6 billion euros ($1.76 billion) to keep about 2.7 GW of brown coal plants offline except in an emergency when power demand exceeds supply.
The lignite-fired units will be taken off grid over the four years 2016-2019 and used only as ‘facilities of last resort’ according to a report from Reuters.
The government’s strategy is motivated in three ways – keeping some of German energy generation’s biggest polluters offline without shutting them down: cutting carbon emissions to meet its climate pledges, setting up a backstop against outages as clean energy expands and finally to assuage utilities that might otherwise shut down plants and fire workers.
“The measure is important for reaching our climate goals and at the same time ensuring that the affected regions don’t suffer structural damage,” Economy Minister Sigmar Gabriel said. Gabriel’s ministry dropped plans for a levy on coal-fired power plants in the summer and instead said it would pay companies to shift capacity to a coal-fired reserve to safeguard its target to cut emissions by 12.5 million tons by 2020.
RWE said it would shift about 15 per cent of its total lignite capacity of about 10,000 MW to the reserve. Company chairman Peter Terium said, “This solution will enable our lignite-fired power plants to make a major contribution to the additional CO2 reduction of 12.5 million tonnes.” “However, it hits the company hard and means a huge burden for our employees,” he added.