German Coal Plant To Get Massive Clean Energy Facelift

Germany’s giant power firm, LEAG, has announced it will transform its lignite-fired thermal power plants into Europe’s largest green energy hub, with a capacity between 7 GW and 14 GW. The company has a target to install between 7 GW and 14 GW of wind and solar energy capacity, and another 3 GWh of storage capacity and 2 GW for green hydrogen production in the Lusatia region in Eastern Germany by 2040.

It’s one of a series of developments that prove that Europe remains committed to the clean energy transition despite the global energy crisis recently forcing them to do a U-turn on coal generation.

Last year, the Washington Post reported that coal mines and power plants that closed 10 years ago in Germany were repaired and re-commissioned in what industry observers have dubbed a “spring” for Germany’s coal-fired power plants. That’s a big U-turn considering that Germany's goal had been to phase out all coal-generated electricity by 2038.

Germany was among the hardest hit countries by the growing energy crisis after effectively boxing itself into a corner with its energy policies. For decades, successive governments in Berlin pursued a policy of maximizing the country’s dependence on Russian oil and gas, and almost completely ditched nuclear energy with the final two functional reactors set to be turned off in 2022. As a result, Germany became heavily reliant on Russia’s natural gas, with the fuel accounting for 25% of the country’s total primary energy consumption prior to Russia’s war in Ukraine.

Other European countries such as Austria, Poland, the Netherlands and Greece have also started restarting coal plants.

The situation has led to soaring global coal consumption that could reach levels we haven’t seen in a decade, though there will be a limit to growth considering that investment in any new coal-powered plants has stalled. But that only makes the coal market tighter, pushing the energy source into an outperforming category. 

Thermal coal, which is the variety used to generate power, has seen a 170% rise in price since the end of 2021–most of those gains made following Russia’s invasion of Ukraine. 

But Germany has acknowledged that coal is merely a stop-gap solution, and the country must also be clear-eyed about its long-term energy future--a future without Russia’s gas. Nuclear energy is out of the question considering that few, if any, European nations are as opposed to nuclear energy as Germany is. In February 2022, German politicians vehemently denounced the EU’s attempt to label nuclear energy as sustainable.

By Alex Kimani for Oilprice.com

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