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German Energy Plan ‘Schizophrenic’ as Coal Beats Gas, Greens Say

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Sept. 13 (Bloomberg) -- Germany’s renewable-energy drive is boosting carbon emissions by spurring coal-fed electricity generation at the expense of cleaner-burning natural gas, Lower Saxony’s environment minister said.

“What we are seeing is the schizophrenic situation of the renaissance of lignite plants while efficient power plants don’t get a chance to enter the market,” Stefan Wenzel, a member of the opposition Green party, said Sept. 11 in an interview in Munich. Lower Saxony has the biggest share of installed wind farms in Germany, according to wind power lobby group BWE.

German utilities and factories emitted 452 million metric tons of carbon dioxide last year, the most since 2008, as coal use soared, data compiled by Bloomberg show. The nation increased its share of renewable generation to 23 percent last year from 15 percent in 2008, according to AG Energiebilanzen, an association of energy lobbies and research institutes.

Under Germany’s clean-energy law, the government guarantees above-market prices for wind, biomass and solar power generators, driving a surge in subsidized supply that’s helped push wholesale costs down 20 percent in the past year. The price drop is cutting profit at gas-fired plants as utilities turn to relatively cheaper coal to cover demand when wind and solar output slows in Europe’s biggest energy-consuming nation.

Germany’s Green opposition party wants to cut emissions from thermal power plants. Generation from lignite-fired units, which can emit three times as much as gas generators, rose to 161 terawatt-hours last year, the highest since 1990, AG Energiebilanzen data show.

Carbon Floor

The surplus of emission permits in Europe needs to be cut and a minimum price for carbon put in place to reduce the output of coal-fired plants, Wenzel said. Low prices for emissions have cut the penalty for coal-fired production and eroded the incentive to operate cleaner generators, he said.

Europe “needs to make sure that the dirtiest fossil power plants go offline first, along with nuclear plants,” he said.

The profit from burning coal increased 3.4 percent to 8.89 euros a megawatt-hour yesterday in Berlin, based on German power, coal and emissions prices for next year. Gas-fired plants generated a loss of 17.40 euros a megawatt-hour, according to data compiled by Bloomberg.

The Greens want to challenge the current government coalition between Angela Merkel’s Christian Union and the Liberal Democrats in the election on Sept. 22. and may form a coalition with the Social Democrats.

To contact the reporter on this story: Julia Mengewein in Frankfurt at jmengewein@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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