Faced with the challenge of another winter with limited gas supplies, the German government has made the decision to keep its lignite coal power plants on standby for one more season. This decision comes as part of Germany’s plan to gradually and collectively shut down its coal power plants in exchange for a portion of the government’s €40 billion coal phase-out fund.
Last year, the coal plants were kept operational due to disruptions in gas supplies from Russia following the Ukraine conflict, as well as issues with France’s nuclear generation capacity. To address this emergency situation, the government has extended the measure for the upcoming winter, ensuring that approximately 1.9 GW of lignite capacity remains available. This adds to Germany’s existing 45 GW of coal power plants.
The primary purpose of keeping the lignite plants on standby is to reduce the reliance on gas in electricity generation during periods of peak demand, thus helping to maintain lower electricity prices. By reactivating the supply reserve, the government aims to save gas in electricity generation and prevent supply bottlenecks during the 2023/2024 heating period. It is estimated that this measure will result in gas savings ranging from 3.9 TWh to 5.6 TWh, leading to a reduction in electricity prices by €0.4 per Megawatt-hour (MWh) to €2.8 per MWh.
While these gas savings are significant, it is important to acknowledge the climate impact associated with running lignite coal power plants. Lignite is known to be the biggest contributor to climate pollution. The government has expressed its commitment to assessing the additional carbon emissions resulting from keeping the coal plants on standby. These emissions are estimated to range from 2.5 to 5.6 tonnes of CO2.
Despite the decision to keep the lignite plants operational, the government emphasizes that the goal of achieving a coal phase-out by 2030 remains unchanged, as do the climate targets. The data from the third quarter of 2023 supports this assertion, as Germany witnessed its lowest-ever power generation from coal, amounting to only 22.2 TWh. This is a significant decrease compared to the over 60 TWh produced eight years ago.