Germany Says It Can't Assure Czechs on Vattenfall Lignite Future

  • CEZ made non-binding offer to buy German lignite operations
  • German government considering phase-out scenarios for lignite

Germany can’t guarantee how long lignite-fired power stations and mines being sold by Vattenfall AB will stay open, potentially crimping interest in a bid for the assets by Czech utility CEZ AS. 

CEZ this week reiterated its interest in the assets in eastern Germany, pitching for German government assurances that it won’t phase out coal-fired electricity generation until as late as 2050. That’s a guarantee Germany can’t give, according to Franzjosef Schafhausen, the Environment Ministry’s Director-General for Climate Policy. 

“No one can give that kind of assurance,” Schafhausen said Wednesday in an interview in Berlin. While Environment Minister Barbara Hendricks has said that a 25-year time frame is feasible, “she’s been very careful not to name a year,” he said.

While lignite fires a quarter of all German power, government support for the industry is wobbling amid the slow pace of carbon emission reductions in heat efficiency, farming and transport. Hendricks sparked a furore in the country’s lignite regions in December by saying that phase-out scenarios must be discussed as Germany prepares its 2050 climate plan for publication this year. Lignite is cheaper and more pollution-causing than hard coal. 

Crucial Coal

CEZ is interested in Vattenfall’s operations as “coal is still crucial for the overall energy supply” in Europe, the company said when it made a non-binding bid on Dec. 21. German and Czech lignite operations “can be very complementary,” CEZ’s business strategist and board member Pavel Cyrani said in the Berlin Tagesspiegel newspaper on Feb. 9.

CEZ’s bid may depend on the lignite units staying open through 2035-2050 as a “bridging technology,” Chief Executive Officer Daniel Benes told reporters in Prague on Feb. 9.

Some 10 percent of all power used in Germany is generated by Vattenfall’s operations in the Lausitz region, according to the company’s web site. About 33,500 jobs depend on lignite mining and power generation in an economically-depressed region south of Berlin.

The German Environment Ministry is targeting top-end carbon-dioxide emission cuts of as much as 95 percent by 2050 from 1990 levels even though the country has made international pledges for corridor reductions of 80 percent to 95 percent, Schafhausen said. “We can’t achieve that with the coal-fired power input we have,” he said.

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