Could Germany Run Coal Power Plants Longer Amid Lignite Exit Uncertainty?
Germany's Lignite Exit and Potential Extension of Coal Power Plants
Background and Recent Developments
Aug 14 (Reuters) - Germany delayed this week an interim report about the implications of the lignite exit in its biggest state, fuelling market expectations that the government could choose to let some plants run longer than initially planned.
Here is a brief overview of the issue:
What Has Happened?
Germany agreed in 2022 with its biggest power producer RWE to phase out lignite-fired power production by March 2030 in its biggest state of North Rhine-Westphalia, eight years sooner than a nationwide coal phase-out target.
It can examine by 2026 at the latest whether this plan works or whether security of supply is at risk, giving it the option to let some of RWE's lignite plants run until 2033.
The economy ministry delayed plans this week for the issue of an interim report on the impact of the phase-out by August 15, to wait for results of tenders for gas-fired power plants taking place this year.
Lignite is one of the dirtiest fossil fuels.
Why Does It Matter?
The delay has stoked market expectation that Germany could choose to put some RWE lignite plants with capacity of 3.6 gigawatts (GW) on so-called security standby until the end of 2033, to ensure demand is satisfied.
Asked about the matter on Thursday, RWE Chief Executive Markus Krebber said there was no change to the 2030 date and the government had not reached out to the company to seek an extension.
Can Germany Do Without Coal?
Technically, yes.
It has 266 GW of installed capacity, but around two-thirds of that comes from intermittent solar parks and wind farms, which cannot guarantee round-the-clock supply.
This has stoked a debate around whether Germany has enough baseload capacity in light of its planned coal exit, which was one driver behind tendering new gas-fired power plant capacity.
Political and Market Reactions
The far-right Alternative for Germany (AfD), Germany's biggest opposition party that currently leads nationwide polls, opposes the country's coal and nuclear exit, demanding a reversal to avoid the risk of blackouts.
(Reporting by Christoph Steitz and Holger Hansen; Editing by Clarence Fernandez)
