Germany should mothball a few lignite plants to meet 2020 CO2 goal -report

Published 16:24 on June 15, 2015  /  Last updated at 16:24 on June 15, 2015  /  EMEA, EU ETS  /  No Comments

Germany could cut its GHG emissions by 90 million tonnes before 2020 by mothballing a small selection of lignite plants instead of penalising all its old coal-fired power stations, a study published Sunday showed.

Germany could cut its GHG emissions by 90 million tonnes before 2020 by mothballing a small selection of lignite plants instead of penalising all its old coal-fired power stations, a study published Sunday showed.

The government is mulling a proposal that would force coal plants that are more than 20 years old to buy extra EU Allowances if they exceed fixed emissions limits, but the study commissioned by two of Germany’s most powerful lobby groups said it isn’t necessary.

“A reserve for old coal-fired power stations … would be largely suitable for achieving this reduction,” said the report, which was written by think-tank Agora Energiewende at the request of workers’ union IG BCE and industry association BDI, which both opposed the government’s idea.

The lignite reserve plan would involve mothballing around 18-20 lignite blocks with total capacity of 4-6 gigawatts, putting them on standby in case they’re required to support baseload demand.

Agora said many of these units are scheduled to be decommissioned after 2020 anyway as they are approaching the end of their operating lives.

An Agora spokesman on Monday said representatives from IG BCE and BDI met with high-level government officials last Tuesday to present their plan.

BEARISH FOR EUAs

The lignite reserve plan would be bearish for EUA prices compared to the government’s divisive proposal – which under its current design would force older plants that breach CO2 limits to pay a fine using allowances instead of money.

Germany has committed to slashing its CO2 output by 40% by 2020, and the economy ministry, headed by Sigmar Gabriel of the Socialists, tabled earlier this year its coal penalty plan to achieve cuts of 22 million tonnes to help it meet the goal.

However, after opposition from industry and from members of the ruling CDU/CSU party – the senior coalition partners to the Socialists in government – the government reduced the abatement target to 16 million tonnes.

A spokesman for the country’s economy ministry last week said it was looking at all options after local media reported that Gabriel had decided to shelve the plan.

Read a copy of the Agora report in German here.

By Mike Szabo – mike@carbon-pulse.com

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