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The draft coal exit law offers greater clarity but EnBW believes there is a need for amendments and improvement

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Karlsruhe. The so-called “coal commission” achieved important and sustainable consensus for the phasing out of coal-fired generation last year. It thus developed another essential cornerstone for the implementation of the Energiewende. The coal exit law (Law for reducing and ending coal-fired generation and amending other laws) that aims to build on the work of the coal commission and was approved today by the German Federal Cabinet comprises a series of measures and regulations that will provide greater clarity about the specific conditions for the phasing out of coal-fired generation. This is generally to be welcomed. However, EnBW believes that individual measures and regulations are in urgent need of improvement.

The law deviates from the recommendations made by the coal commission in some crucial respects. This applies, in particular, to the linear pathway for the phasing out of brown coal. As a consequence, it means that older and CO₂-intensive brown coal power plants will operate for longer, while significantly more modern hard coal power plants with heat extraction that generate less emissions are due to be removed from the grid earlier instead. This is without doubt contrary to the spirit of climate protection, which is the declared overriding aim of the phasing out of coal-fired generation. Therefore, EnBW believes that there is an urgent need to revert back to the phase-out pathway recommended by the coal commission.

The regulations agreed today will also place the hard coal power plants in Southern/Southwest Germany and their operators at a considerable disadvantage. The proposed tender system only envisages compensation for the decommissioning of power plants up to 2026. In contrast, power plants will be decommissioned from 2027 onwards solely in accordance with the regulatory process – i.e. without the payment of any compensation. Due to the “grid factor”, the operators of hard coal power plants in Southern Germany do not have any realistic chance of being able to disconnect their power plants from the grid at an earlier date, e.g. before the end of their operating lives, in exchange for compensation. This not only places the operators of power plants in Southern Germany at a disadvantage compared to the competition. Due to the early decommissioning of these power plants in accordance with the regulatory process without any economic compensation, these operators will also lack the financial funds for important investments in climate-friendly alternatives. In the spirit of equal competition and to promote the investment that is still required for the Energiewende, the tender and compensation regulations thus need to be amended and improved.

The climate-friendly alternatives that should be given greater support include combined heat and power plants. Alongside electricity, the majority of the coal power plants in Southern Germany also generate highly efficient district heating at the same time. Overall, the proposed amendment to the Combined Heat and Power Act (KWKG) does not provide sufficient incentives for companies to invest in converting the supply of heating from coal to climate-friendly fuels, such as gas or biomass. Yet these incentives are important for speeding up the Energiewende, especially in the heating sector, and ensuring that heating costs do not increase significantly for customers at the same time. Finally, this type of conversion of existing coal power plants can also prevent them from being decommissioned and thus save these locations and jobs. Therefore, EnBW is calling for an increase in the “coal replacement bonus” so that district heating can be supplied to customers at no additional cost and the reliable supply of district heating can still be guaranteed.

As the gas capacities that are required in Southern Germany for switching fuels in the energy sector will only be guaranteed after 2025, EnBW is also calling for the synchronised extension of the so-called “south bonus” until at least the end of 2028. The bonus is currently being paid for the ongoing commissioning of new CHP power plants up to 2026.

In its long-term corporate strategy, EnBW has rigorously aligned itself towards the implementation of the Energiewende since 2013 and oriented its business activities accordingly. EnBW has thus consistently given its constructive support to the negotiations held by the coal commission and the government up to now. In view of the draft law that has now been approved and the subsequent legislative process, EnBW believes, however, that it is now obligated to highlight the need for amendments and improvement to the draft law as part of its responsibility for the security of the energy supply in Southern Germany.

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EnBW Energie Baden-Württemberg AG
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