Power struggle: after Germany's renewables surge, can it keep its coal in the ground?

In August 2014 climate activists blocked a digger in one of the Rhineland open-pit coal mines. Protests will resume in August 2015. Photo: 350.org via Flickr (CC BY-NC-SA).
In August 2014 climate activists blocked a digger in one of the Rhineland open-pit coal mines. Protests will resume in August 2015. Photo: 350.org via Flickr (CC BY-NC-SA).
Germany's 'Energiewende' has made the country a global renewable energy powerhouse. So why have its carbon emissions gone up? Not because of nuclear closures, writes Melanie Mattauch, but because powerful fossil fuel companies have blocked effective climate action. Now the fight is on as public calls to keep the coal in the ground get too loud to ignore.
The success of the Energiewende in Germany and globally depends on whether we will allow those that want to keep making money from burning fossil fuels, to push us over irreversible climate tipping points.

Governments around the globe are keeping a close eye on how Germany is getting on with its Energiewende - its transition away from nuclear energy and fossil fuels.

So far, results are mixed. The rise in renewable energy led from the bottom-up is staggering.

Yet emissions have failed to drop sufficiently and even rose in 2012 and 2013 due to an increase in coal electricity generation.

Critics were quick to blame the nuclear phase-out for the increase in coal. But in fact, the increased generation from renewables filled the nuclear energy gap. So what happened?

First, it became very cheap to burn coal thanks to low international prices of the fuel itself, and the collapse of the carbon price in Europe's emissions trading system, the EU-ETS. And Germany's generators were perfectly placed to take advantage of the situation thanks to their large number of coal-burning power stations.

Power companies exploited the opportunity in a big way - by cutting more expensive (and lower carbon) natural gas out of the generation mix, and by aggressively exporting their cheap power to neighbouring countries. And so Germany's electricity exports surged from some 40TWh per year in the early 2000's, to over 70TWh in 2013 and 2014.

The battle of a dying industry

So the reason Germany's carbon emissions, and coal burn, have risen under the Energiewende, has nothing to do with the 'failure of renewables', nor with the closure of nuclear power stations, as critics claim. Nor is it a technical or supply issue.

It is, on the contrary, the result of unconstrained market forces, ineffective climate policy both globally and in the EU, and the abject failure of the EU-ETS - all thanks to influential vested interests blocking effective climate action.

Within Europe the fossil fuel lobby, including the big power generators, have successfully blocked a number of proposed reforms to the EU-ETS that would have taken 'surplus' emissions permits out of the market, and raised the carbon price.

This has left Germany struggling to meet its commitment to cut 40% of emissions by 2020. But it can do it - if only it begins, without delay, to phase out the coal that accounts for over a third of the country's greenhouse gas emissions.

And this may be about to happen. Germany's struggle to make its energy transition a success has reached a new climax with the proposal of a climate levy to reduce emissions from the most polluting coal power plants, which the country's big coal players are resisting with all their political might.

The proposal comes from Sigmar Gabriel, Federal Minister for economic affairs and energy, who has presented legislation that aims to reduce emissions from the dirtiest and oldest lignite power plants, which are primarily owned by RWE and Vattenfall. Four of these are in the top five of Europe's largest emitters.

The success of the Energiewende in Germany and globally depends on whether we will allow those that want to keep making money from burning fossil fuels, to push us over irreversible climate tipping points.

Vatenfall, owned by Sweden's government, is Germany's biggest producer of brown coal

In Eastern Germany, the lignite mines and power plants of Swedish state-owned Vattenfall emit twice the amount of Sweden's annual carbon emissions.

Since it turned into a major issue during last year's general elections, Vattenfall is eager to sell off its German lignite portfolio, which includes five large open cast mines and several power station. The proposed climate levy would impact the profitability of such a deal.

Greenpeace, 350.org and Swedish campaign group Skiftet are urging the Swedish government not to leave its lignite to the highest bidder to dig up and burn. Sweden should refrain from selling and ensure these emissions are never released.

In Western Germany, RWE's coalfields in the Rhineland are the biggest source of CO2 emissions in Europe. Similar to other major utilities, RWE failed drastically to adapt its business model to Germany's low-carbon transition and is now seeing its very existence threatened.

One effect of Germany's renewable revolution has been to push power prices down in the domestic market, especially for historically lucrative daytime sales to industry and offices, as solar power floods the power grid. This means that 45% of RWE's fossil fuel power stations are no longer commercially viable. Its net debt stands at €31 billion and since 2007 its share price dropped by 70%.

In response, RWE lobbies for bailouts of its self-inflicted crisis and tries hard to slow down the inevitable Energiewende that is led by citizens and energy cooperatives. It benefits from its close political ties and its historically strong standing in the region.

When you're in a hole, it's time to #StopDigging

Some trade unionists share RWE's stance. Others recognise the huge potential of new, sustainable jobs in a low-carbon economy, which will outnumber those in the fossil fuel sector that are increasingly being slashed.

The age of coal is inevitably coming to an end and it is irresponsible to lead workers to believe otherwise. Nearly all coal plants proposed in Europe in the last five years have now been cancelled.

The first governments have pledged to phase out coal and stop public export credits for coal projects abroad. Investors are increasingly pulling out of coal for moral and financial reasons. Even Vattenfall CEO Magnus Hall recently told Der Spiegel of his "painful realization" that the time of coal mining is gradually coming to an end, and jobs will inevitably be lost.

Instead of trying to keep a few companies' ailing business model going, politicians need to invest in a just transition to an economy based on renewable energy and sustainable long-term jobs. Public money needs to be invested to support workers and their communities that depend on these companies, instead of making further concessions to a dying industry.

People power stops the diggers

Germany can successfully transition to a low-carbon economy. Fossil fuel giants like RWE and Vattenfall are working hard to obstruct the Energiewende, but they are up against an increasingly strong anti-coal movement that is making its voice heard more and more loudly.

Public support for a coal phase out has never been stronger. A recent opinion poll showed that 81% want a coal phase-out by 2040 at the latest. Local communities have been fighting against their forced displacement, environmental destruction and air pollution for decades. This year their fight will go international.

The Rhineland coalfields will become the target of an international mass act of civil disobedience. During the weekend of 14th-16th August, hundreds of people will force RWE to stop the diggers and call for an end to coal.

And in the lead-up to the climate negotiations in Paris, concerned citizens from all over Europe will join to oppose a carbon bomb that affects all of us.

Governments have to keep it in the ground

The UN climate negotiations in Paris can only meet their commitment to keep global temperature rise below 2C, if governments pledge to leave their fossil fuels in the ground. For Europe this means that 89% of coal reserves need to remain unburnt.

Governments like Germany need to step up to the challenge, starting with a coal phase-out now. There is much at stake. A first indication of where the debate is heading will emerge early next month at the 2015 meeting of the G7 at Schloss Emlau in Bavaria, presided over by Germany.

One big item on the agenda is the G7 Energy Initiative for Energy Security, launched at the May 2014 meeting of G7 energy ministers in Rome. This will give Chancellor Merkel the perfect platform to showcase measures to leave its coal in the ground. This would, in turn, give her the credibility to be a driving force for international action at the UN climate negotiations in Paris in December.

The proposed climate levy is far from a coal phase-out. It is the bare minimum to still stand a chance to meet Germany's climate commitments. It is nevertheless an important step that can mark a turning point of international significance.

350.org is calling on Chancellor Merkel to step up as a climate leader by defending and strengthening the proposed legislation, introducing a coal phase-out now and investing in a just transition that will create new sustainable jobs.

The success of the Energiewende in Germany and globally depends on whether we will allow those that want to keep making money from burning fossil fuels, to push us over irreversible climate tipping points.

This question is being decided now. People in the Rhineland and around the world will stand up and fight to keep the coal where it belongs, under the ground.  At stake is nothing less than the future of civilization and the natural world.



Melanie Mattauch is 350.org Europe Communications Coordinator. 350.org is building a global climate movement.

Mass Action to #endcoal in the Rhineland, Germany
14-16 August: 350.org/ende-gelande/ .

Petition: 'Chancellor Angela Merkel, please maintain Germany’s reputation as a climate leader in this crucial year!'

Petition: 'Sweden's political leaders, we call on you to take full responsibility for Vattenfall’s lignite coal reserves. Don’t sell off Vattenfall’s coal to the highest bidder. Keep Sweden’s climate promises and its fossil fuels underground!'


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