Additional 22 to 55 Million Tonnes of CO2 Reduction from Conventional Power Plants by 2020?

The Ministry of Economic Affairs is working on plans to request an additional reduction of 22 to 55 million tonnes of CO2 from conventional power plants by 2020, several newspapers reported.

Without additional efforts Germany will only achieve a CO2 reduction of approximately 33% by 2020, thereby falling short of the 40% reduction target. This has lead to demands for the shutdown of lignite fired power plants in recent weeks.

He was against ordering power plant closures and was convinced that Germany still needed conventional power plants, including lignite power plants, over the next decades, Minister Gabriel said in line with with previous statements. Yet the power plant sector had to contribute. Therefore the 500 German power plants shall be required by law to save 22 million (and possibly 55 million) tonnes of CO2 in total up to 2020, leaving it up to the operators how to achieve the reductions.

Rheinische Post, who cites from a ministerial paper, says CO2 savings shall be spread “equally” among all conventional power plants. In this context “equally” would mean proportionate to historic emissions so that large polluters would have to save more, the paper says.

He did not fear claims for damages, Mr Gabriel said as the law would not intervene with entrepreneurial freedom and would not constitute an intervention of equivalent effect to an expropriation (which would have to be compensated). As the ministry’s plans have not yet been officially disclosed, it is of course difficult to properly assess the proposal at this time.  However, it is obvious that a CO2 reduction regime already exists in the form of he European Emissions Trading Scheme, and that the new reduction will come on top of this European reduction regime. It would also come on top of existing environmental restrictions already in the immission control law permits for the power plants, effectively limiting those permits. Therefore, the legal analysis may turn out not to be so obviously in favour of this latest CO2 reduction proposal.

Mr Gabriel also firmly rejected demands by the industry and trade association to decide at this point on a capacity market that remunerates non-volatile capacity (mostly conventional power) provided to balance the growing amount of intermittent renewable power input. This would mean that existing over-capacities would have to be paid for permanently by consumers, driving up electricity price, he said, adding that the goal was to come to a market-oriented solution (for more information on a Green Paper for a new electricity market design the government recently presented and the next steps, please click here).

Next Wednesday, 3 December 2014, the government will vote on a proposal for the “National Action Plan Energy Efficiency” (NAPE) which shall also help to reach Germany’s CO2 goal. There is still large potential for CO2 savings in the buildings and transport sector. According to unconfirmed information that emerged in the past weeks the government is planning to tap this reduction potential by setting more incentives for energy-efficient renovations and electric cars (for more information, please see here).

Source: Federal Ministry for Economic Affairs and Energy; Rheinische Post

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