Germany has reached agreement to provide €4.35 billion for utilities, such as the RWE power plant company, which will close some of their coal plants early. In addition, government institutions and military installations will be moved to the affected regions in an effort to create local jobs and revenues

By Ian Horswill

Posted on January 17, 2020

Germany, one of the world’s biggest consumers of coal, will close down all 84 of its coal-fired power plants by 2038 at the latest.

Germany, which still relies on the coal-fired power plants for 40% of electricity, has struck an agreement with local governments, industry and unions to provide €4.35 billion for utilities, such as the RWE power plant company, which will close some of their coal plants early.

Germany Chancellor Angela Merkel and premiers from Saxony-Anhalt, Saxony, North Rhine-Westphalia and Brandenburg agreed to the “shutdown plan” for power plants using the highly polluting fossil fuel, her spokesman Steffen Seibert said in a statement.

The plan also includes provision to move government institutions and military installations to the affected regions in an effort to create jobs and revenues. Some areas will also benefit from the building of new gas-fired power stations. 

“This is an historic accomplishment,” said Ronald Pofalla, chairman of the 28-member government commission, at a news conference in Berlin following a marathon 21-hour negotiating session, Los Angeles Times reported.

“It was anything but a sure thing. But we did it,” Pofalla said. “There won’t be any more coal-burning plants in Germany by 2038.”

The agreement will ensure the use of nuclear and coal power is shut at the same time, sharply increasing the country’s dependence on renewable sources of power such as wind and solar.

Germany wants to meet at least 65% of its electricity needs with renewable power by the end of this decade. 

“Germany, which is one of the strongest and most successful industrial nations in the world, is taking giant steps towards leaving behind the fossil age,” said Olaf Scholz, the finance minister. 

Svenja Schulze, environment minister, added: “We are the first country that will exit from both nuclear and coal [power]. That is also an important international signal that we are sending out.”

RWE will receive €2.6 billion compensation, with the remaining €1.75 billion set aside for utilities in eastern Germany. RWE CEO Rolf Martin Schmitz said the deal was acceptable but would stretch RWE “to the limit”.

The agreement to eliminate coal-burning and nuclear plants means that Germany will be counting on renewable energy to provide 65% to 80% of the country’s power by 2040. Last year, renewables overtook coal as the leading source and now account for 46% of Germany’s electricity.

The timetable for plant closures demands the first 300MW unit to be taken out of service at the end of 2020, with another 900MW due to end at the end of 2021. Some of the biggest, most heavily polluting coal power stations will only be closed in 2028 and 2029.

Germany and nearly 200 nations around the world agreed to the landmark Paris climate accord in 2015 to work to keep global warming “well below” 2 degrees Celsius and pursue efforts to limit the rise to 1.5 degrees. Scientists say the world is already experiencing the consequences of global warming in the form of rising sea levels, more intense hurricanes and wildfires.