Germany’s Coal Phase-Out Plan Is Unrealistic, Lobby Chief Says

(Bloomberg) -- The head of Germany’s industry lobby said the government may fail to phase out coal-fired power plants ahead of schedule because it lacks a strategy to provide incentives for the construction of new gas stations.

“It is extremely annoying that we could find ourselves in a situation where we have to continue operating coal-fired power plants for longer because there is not enough other reserve capacity,“ German newswire DPA cited BDI lobby chief Siegfried Russwurm as saying. 

Russwurm represents companies such as industrials giant Siemens Energy AG. 

Germany is betting on renewable energy from wind and solar power to reshape the country’s electricity supply as it seeks to phase out coal by 2030, eight years earlier than the official target date. 

Robert Habeck, the Green Party’s minister for economic affairs and climate protection, has yet to present a power-plant strategy that includes new gas-fired stations as a back-up for times when there is no wind or sunshine to cover electricity demand. They would run on natural gas initially, and later on climate-neutral hydrogen. So far, however, energy companies have been reluctant to invest.

“It’s going to take private investment, and it has to be worth it - even if it’s just a few operating hours a year,” Russwurm said. “I am a fan of expanding renewables. But honesty requires us to say that we need back-ups. We are a long way from having sufficient storage capacity.”

Two of Germany’s largest energy providers this week said they will keep some coal plants in service longer than previously expected, following a regulator’s decision to prohibit the closure of the facilities before March 2031. Uniper SE and EnBW Energie Baden-Württemberg AG had both sought to phase out units earlier than that date. 

Germany has relied more heavily on coal since the Ukraine war and after shutting its last nuclear plants this year.

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