German utility RWE expects to cut its output of lignite-fired power by 10-15% by 2020 compared to current levels, CEO Matthias Hartung told reporters on Tuesday, according to Reuters.
The move will reduce the company’s demand for EU Allowances, as lignite is the most CO2-intensive type of coal.
Of the 208 terawatt hours (TWh) total power volume produced by RWE last year, 37% were derived from lignite and 23% from hard coal, according to company documents.
Hartung told reporters that lignite plants owned by RWE could make up half of the capacity reserve agreed by German lawmakers earlier this month, a strategy to help the country meet its 2020 emissions goal while avoiding baseload electricity shortages.
“Further talks will show how many of our blocks will go into the reserve,” Hartung said in prepared comments, according to Bloomberg. “We assume that the distribution of 2.7 gigawatts will be roughly according to the current distribution of lignite power generation in Germany.”
RWE’s lignite plant availability in Q1 rose to 93%, some 5% above the same period last year.
“We will evaluate further steps from technical, economical and legal perspectives … There are no decisions about the definite shutdown of blocks yet,” Hartung added, according to Bloomberg.
Emitting around 7% of the entire EU ETS cap, RWE is both the biggest emitter and buyer in the scheme, discharging 141.4 million tonnes of CO2 in 2014 and facing a permit shortfall of 139 million, according to Carbon Market Data.
Separately, some 63% of Germans surveyed in a recent poll commissioned by RWE said they believe it’s wrong to phase out coal plants following the country’s nuclear energy exit.
The poll also found that two thirds of Germans believe that electricity prices have a large influence on the competitiveness of German industry.
The company has warned that its profits will fall and it will need to shed highly-qualified staff due to lower future power prices.