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Over the first half of the year, more coal power generation capacity has shut down than has started operation around the world for the first time on record, according to a US research and advocacy group. 

The Global Energy Monitor, which tracks fossil fuel development, found that the closure of coal generators across Europe and the US, exceeded stations being commissioned, largely in Asia. 

China, the world’s biggest greenhouse gas emitter, dominates coal power development, having built nearly two-thirds of the world’s operating plants and being home to nearly 90% of generators under construction. 

However, the amount of coal power commissioned in China to the end of June was more than 40% below the same period last year, at 11.4 gigawatts compared to 19.4 GWs, because of COVID-19.

Thankfully, India shut more capacity than it opened. New Delhi commissioned 0.9 GW of coal generation, while 1.2 GWs were closed and more than 27 GWs of proposals were cancelled. 

Christine Shearer, Global Energy Monitor’s coal program director, says that India had reduced the amount of coal it planned to build because it struggled to compete with cheaper alternatives, such as new solar and wind. 

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She adds that the global decline was due to COVID-19 and record retirements in the EU after the carbon price was increased and pollution regulations tightened. Coal-fired generation fell by an estimated 3% last year. 

China and India’s coal fleets were running at barely half capacity before the pandemic started, but China was continuing to grant permits for construction at the highest rate since 2016. 

There is already overcapacity in China’s coal industry. A study from the University of Maryland projected that the average utilisation rate of the country’s coal plants could drop to 45% by 2025. 

“The COVID pandemic has paused coal plant development around the world and offers a unique opportunity for countries to reassess their future energy plans and choose the cost-optimal path, which is to replace coal power with clean energy,” says Shearer.

Globally, 18.3 GWs of coal power was commissioned in the first half of the year, and 21.2 GWs shut. About 8.3 GW of this was in the EU, with Spain shutting half its fleet and Britain going coal-free for two months, and 5.4 GW in the US. 

Japan opened 1.8 GW but plans to retire 100 inefficient coal-fired units and Germany opened the 1.1 GW Datteln coal plant. About 72 GW of planned new coal was cancelled, but 190 GW remains under construction. 

IPCC scenarios suggest that coal power generation must fall 50% below current levels by 2030 to keep global warming under 2 degrees Celsius by 2100. 75% will need to shut over the decade to stay below 1.5 degrees Celsius. 

Despite this, world demand for coal is set for its biggest annual drop since World War II because of COVID-19, according to the International Energy Agency. Additionally, global investment in offshore wind power increased 319% in the first half of the year, with financing approved for 28 new projects totalling USD$35 billion, more than what was approved in all of 2019

Featured image by: Henk Verheyen

Germany will ban the sale of single-use plastic straws, cutlery, cotton buds and food containers from July 2021, aligning with an EU directive intended to reduce plastic waste. 

Federal Environment Minister Svenja Schulze, says, “Many disposable plastic products are superfluous with no sustainable use of resources. In addition, plastics end up too often in the environment or in the oceans. We are taking an important national step in the fight against the plastic flood.” The ban on these single-use plastics in Germany will go into effect on July 3, 2021. 

The German Association of Local Utilities (VKU) estimates that common plastic items make up around 10% to 20% of waste from parks, public places and streets with takeaway packaging for food and beverages made from polystyrene having the largest share. 

Globally, about 1.3 billion tons of trash is generated per year. In Europe, the amount of plastic waste has increased 13% in the last decade and in Germany alone, 3 million tons of plastic packaging waste is produced annually; according to official statistics, 48.8% of this plastic waste is recycled.

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Certainly, Germany’s recycling system is revered worldwide; its ‘green dot’ system earned the country the title of recycling world champion by the World Economic Forum in 2017 and it has the biggest collection system for reusable PET and glass bottles worldwide. Yet, experts argue that Germany doesn’t actually recycle as much waste as statistics suggest, especially when it comes to plastic packaging. 

A lot of waste that ends up in sorting facilities is incorrectly collected; in Germany, up to 50% of general rubbish ends up in bins designated for plastic, including waste that needs to be separated from plastics. 

Automated facilities are also unable to sort food containers made from different types of plastics, meaning that a lot of mixed plastic packaging ends up being discarded. This waste then ends up in landfills or incineration sites, yet it is counted as being recycled.

Meanwhile, the Bundestag and Bundesrat- Germany’s lower and upper houses of parliament- passed legislation in early July that would phase out coal use in the country by 2038 as part of a road map to reduce carbon emissions, after agreeing on the plan in January. The new plan also legislates the closure of eight brown-coal operations by 2022 as the number of jobs in renewable energy increases. 

If the planet continues producing and discarding as much plastic as it does now, by 2050, the plastic industry would represent 20% of all crude oil production, consuming 15% of the global annual carbon budget. Germany banning single-use plastic is a small step in reducing our reliance on fossil fuel, but an important one nonetheless. 

Some of the biggest economies in Europe- Great Britain, Germany and Spain- have recently achieved new records in solar energy generation, in part due to a drop in air pollution as a result of Covid-19 shutdowns, which has resulted in clearer skies and increased production of photovoltaic cells.

Solar Energy in Europe: Statistics

Great Britain’s solar production peaked at 9.68 GW in late April, up from a previous record of 9.55 GW set in May 2019. Germany generated a record-high 32.2 GW of solar power in the same period, accounting for 40% of the country’s electricity needs. 

February became the greenest month on record for UK electricity generation, with average carbon intensity- the CO2 emissions produced per kilowatt hour of electricity consumed- reaching a new low. 

Lockdown measures as a result of the Covid-19 pandemic have seen a significant reduction in electricity demand across the UK. This change in demand, along with favourable weather conditions (sunny and cool- which allows solar panels to perform at their best) and a decline in air pollution, aided in the solar energy generation record throughout not only the UK, but the rest of Europe. The UK has seen at least a 25% decline in nitrogen oxide levels in recent weeks, but the drop is thought to be more pronounced, up to half, in the most polluted places in the country; air pollution can block solar radiation and make panels dirtier. Substances like sulfur dioxide also result in more cloud cover, reducing the output of solar photovoltaic systems. 

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Chris Hewett, chief executive of the UK’s Solar Trade Association, says, “Ideal weather conditions and lower levels of pollution than normal mean solar is providing record levels of cheap, clean power to the grid.” 

In late March, Spain generated 6.3 GW of solar energy, accounting for about a quarter of the country’s electricity needs. This is the result of last year’s boost in installations, which expanded new capacity by 4.7 GW, making it the largest market in Europe.

In early April, Iberdrola grid-connected the 500 MW Núñez de Balboa project. With this extra capacity, the new record may have already been broken; the statistics for April will be released later this month. 

Records are common at this time of year- panels installed in the previous six months make their first significant contribution to the grid. However, the effect is more pronounced this year.

A study published in Nature last year examined how much air pollution impacted the output of solar assets in China.

The researchers found losses of 11-15% between 1960 and 2015. The study also found that if pollution decreased to the levels seen in 1960, an extra US$1.9 billion of electricity could have been generated in 2016. China is forecasted to have 400 GW of installed solar by 2030; the additional revenue could reach US$6.7 billion a year.

In January, government and regional leaders in Germany agreed on a plan to phase out coal -fired power stations by 2038, a big achievement in the fight to lower carbon emissions. It seems to be a done deal- or is it?

Germany’s Coal Phase-Out

The government initially pledged last year to shut down all coal-fired power stations but battled to secure support from the four states which have lignite (brown coal- the dirtiest coal) mines and coal-fired power plants: Saxony-Anhalt, North Rhine-Westphalia and Brandenburg. There are also plans to open a new hard coal-fired power plant this year, muddying the government’s efforts to transition to a low- and eventually zero-carbon future.

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

For hard coal plant operators, the law stipulates auctions for taking capacity off the grid until 2026. Afterwards, there will be forced closures depending on the plants’ age and CO2 output. Operators can apply for compensation payments in auctions where the lowest bidders will be awarded. Hard coal plants in southern Germany will be exempt from the first round of auctions as they are considered to be more critical to supply security. Compensation payments for hard coal plants will be capped at 165 000 euros per megawatt in 2020 and then decline gradually.

The coal exit law also involves a compensation plan of 40 billion euros, which will target the coal states. Much of this money will go into new infrastructure projects for coal-dependent areas and retraining workers for new jobs there. Mines and utilities will also get compensation for lost production and there are plans to move government institutions and military installations to the affected regions to create jobs and revenue. 

Separate from this fund, operators of heavily polluting coal-fired power plants in western Germany will receive 2.6 billion euros, while 1.75 billion euros will go to those with plants in the east. The move shows how expensive it is to stop burning the dirty fossil fuel and how politically motivated it is. 

Germany’s Energy Consumption

Coal currently powers about one-third of Germany’s electricity, and more than half of that relies on burning lignite, of which Germany is the world’s largest producer. The end date for burning lignite could be brought forward to 2035, depending on progress made. 

The government will conduct reviews in 2022, 2026, 2029 and 2032 to determine whether Germany can end coal-fired electricity generation in 2035. 

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germany to phase out coal by 2038
Germany’s coal exit timeline (Source: Clean Energy Wire).

Germany aims to generate at least 65% of its electricity from renewables by 2030.

Wind energy overtook lignite for the first time in 2019, producing 118 TWh, which is also a new record in total electricity production. However, with the number of new turbines falling to unprecedently low levels, Germany has received the worst rating of any wind power market, according to a survey conducted by Wind Energy Hamburg.

Criticisms of the Law

The plan has been met with some criticism. Environmental campaigners criticised the decision, saying that the agreement will see a new coal-fired power plant, Datteln 4- which a report says will alone cause an additional 40 million tonnes of CO2 emissions- go into service later this year and allow for the expansion of the Garzweiler open-cast mine in western Germany. 

Germany’s largest coal state, North Rhine- Westphalia, says that it cannot accept the coal exit law without major amendments, with the state’s regional economic minister, Andreas Pinkwart, asserting that the law treats hard coal power plants unfairly compared to lignite plants. The coal exit law differentiates between lignite and hard coal because a lignite phase-out will have a greater impact on mining regions and workers than the hard coal phase-out (Germany’s last hard coal mine closed in 2018). 

Hard coal plant operators also object to the law, saying that the proposed compensation is insufficient and will result in thousands of job losses.

According to a report by the German Institute for Economic Research (DIW), Germany must abandon coal by 2030 instead of the proposed 2038 to comply with the Paris Agreement. It also calls for a speed-up of Germany’s renewable energy roll-out, and tightening the country’s current target to lower emissions by 65% by 2030.

Concerns from Germans

According to a survey conducted by EuPD Research, 85% of Germans believe that the country’s coal exit will lead to significantly higher electricity prices, while 75% said that they expect the coal exit to lead to an increase in energy imports from outside Germany.

However, a recent study by energy think tank Agora Energiewende, found that the coal phase-out would have ‘very little’ impact on electricity prices. The study suggested that household customers would pay 0.4 euro cents more per kilowatt-hour in 2030, while energy-intensive industries could see decreased power costs. 

How Difficult will the Transition to Renewables Be?

Andreas Schierenbeck, CEO of power company, Uniper, has warned that Germany faces potential power shortages in the next few years as it removes nuclear and coal-fired power plants from the grid. While the company plans to move away from coal (with the exception of the Datteln 4 plant) by shutting down all of its lignite and hard coal plants by 2025 and focus on its natural gas business, Schierenbeck argues that Germany faces blackouts if it does not plan for enough back-up generation from fossil-fuel fired plants even as it shifts to renewable energy, and he proposes that the German government should set up a system to fund and maintain fossil-fuel reserve capacity, similar to the UK. 

However, according to the country’s grid agency, BNetzA, this isn’t a concern. It says that power blackouts are increasingly caused by extreme weather events rather by the transition to renewable energies. In fact, a government report last year found that the German electricity supply would remain ‘extremely secure’ by international standards, even as the country simultaneously phases out coal and nuclear power.  

The parliament hearing on the coal exit law was scheduled for March 25, however it was postponed due to the COVID-19 pandemic. It is unknown when the hearing has been rescheduled to, but the government aims to pass final legislation on the coal exit in the first half of this year (2020).

Energy industry federation BEE says that parts of the 40 billion euros earmarked for the coal phase-out should be channelled into a green stimulus package to help energy companies during the coronavirus outbreak. The organisation’s head, Simone Peter, calls for ‘at least’ 4.3 billion euros to be put into investment premiums as well as to remove other existing hurdles for wind, solar and bioenergy to stabilise renewable energy companies. 

Update July 6 2020: The Bundestag and Bundesrat- Germany’s lower and upper houses of parliament- passed legislation on July 3 to phase out coal use in the country by 2038.

This article is part of an editorial partnership with Impakter.

With the election of German minister Ursula von der Leyen as the European Commission’s new President, the energy industry in Germany, and the rest of the EU, is likely to witness a major transition from coal to clean energy sources.

Germany, the biggest electricity market in the European Union, has become the EU’s poster child for clean energy with its decision to shut down all 84 of its coal-fired power plants by 2038.

A study by the Fraunhofer Institute for Solar Energy Systems had found that renewable energy has already overtaken coal as Germany’s main source of energy in 2018.

The country generated significantly less electricity from coal-fired power stations in the first half of this year. Generation from brown coal was down by 21% and hard coal was down by 24%. Emissions from its power sector fell by 20 million tons of CO2–19% of total emission– pointing at a dramatic shift in the country’s energy industry and carbon footprint.

How much of Germany’s energy is renewable?

Currently, more than 40% of Germany’s electricity generation–approximately 157 terawatt-hours–for the public power supply comes from renewable sources, such as wind, solar, biomass, and hydropower.

Although many European countries have been following Germany’s footsteps, the EU has not so far witnessed a real momentum for renewable energy. But with the election of the European Commission’s first female president Ursula von der Leyen, the first German politician to be selected to the post in the last 50 years, a major shift in the EU’s energy industry might be in the offing.

In her candidacy speech at the EU parliament, Von der Leyen said she intended to make climate and the environment top priorities in all policy areas while pledging to strengthen the EU’s short-term goal on greenhouse-gas emissions.

“Our most pressing challenge is keeping our planet healthy. This is the greatest responsibility and opportunity of our times,” she said. “I want Europe to become the first climate-neutral continent in the world by 2050. To make this happen, we must take bold steps together. Our current goal of reducing our emissions by 40% by 2030 is not enough. A two-step approach is needed to reduce CO2 emissions by 2030 by 50, if not 55%.”

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Ursula von der Leyen wants Europe to become the first climate-neutral continent in the world by 2050.

Von der Leyen, who will begin her five-year term in November, will introduce a Green Deal for Europe in her first 100 days in the office.  She also pledged to unlock €1 trillion (US$1.1 trillion) over the next decade for climate investment and to turn parts of the European Investment Bank into a dedicated climate bank, which would channel private investments to climate and clean-energy projects in every corner of the EU.

As Green parties have already become a political force in the new European Parliament it will be easier for Von der Leyen to push the EU towards renewable energy transition.

Recent energy investment trends in Europe also hold promise. The European Investment Bank (EIB) recently committed €4 billion of financing for renewable-related projects.  Private capital is also mobilising. Investment firm Glennmont Partners has launched an €850 million fund for European green energy while the European Commission and Bill Gates’ Breakthrough Energy Ventures (BEV) have launched a €100 million pilot investment fund to incubate capital intensive startups working on clean energy innovation. The European Commission also has been supporting various member states including Lithuania and Portugal to strengthen their renewable energy infrastructure.

Last year, the EU produced 17.5% of its power needs from renewable sources, moving closer to its 2020 goal of 20% clean energy generation. While 11 member states have met this goal, other members are lagging behind indicating that they might miss the target next year.  

The EU has already set a new renewable energy target of 32% renewable energy generation by 2030.  To reach this ambitious target, it might need to implement stricter policies including tougher fiscal and regulatory interventions to curb further investments in the fossil fuel industry and progressively weed off dependency from it. 


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