In Germany, the decision by 2038 to close all coal plants. The expert on commodity markets, told DW about the possible consequences for the export of Russian coal in Germany.
In 2038, and there may be a few years before, Germany will shut down all power plants, coal and lignite, and stone. The corresponding law adopted on Friday, July 3, first, the Bundestag, followed by the Bundesrat, the chamber of the German Federal States. To support regions whose economies will suffer from the shift away from coal, will be allocated a total of 40 billion euros. Provided compensation and for the firms – owners of coal-fired power plants. In an interview with DW, the head of the analytical Department at Commerzbank commodity markets Eugen Weinberg commented on the made in Germany the decision and shared his thoughts on the prospects of exporting coal from Russia.
DW: Mr. Weinberg, how do you assess Germany’s decision to abandon coal-fired power plants?
Eugen Weinberg: last year coal was the main raw material for electricity generation. Last year, its share in the energy mix has declined and continues to decline in this. The decision to shift away from coal long expected, but in government the coalition had this long argument. The main reason is that companies that own coal-fired plants will need to compensate for the fact that they are in 5-7 years they will start to prematurely turn off, including new and modern.
To understand the importance of the decision, will lead this fact: before the reduction, the share of coal in the energy balance of a coal-fired plant produces about 30 percent of all produced in Germany, electricity. Another 14-15 percent was accounted for by the nuclear power plant. So you can imagine the scale of the upcoming changes, when a couple of years will be closed all remaining nuclear power plants, and then the same thing will happen with coal fired plants. What consequences this will have for the structure of the energy balance, electricity prices and the situation of CO2 emissions is now very difficult to predict, but they will certainly be big enough.
– Germany – the first of the advanced industrial countries, which refuses from coal and from nuclear energy. How do you feel about this fact?
– Indeed, there are few countries which reduced the proportion of coal, and the share of nuclear power in electricity generation. You can call Japan and Sweden, where in recent years, coal was not used very much. World trend is obvious: all developed countries have long begun to abandon coal. What is unusual is the simultaneous refusal from coal and from nuclear power plants that Germany will soon all be closed. Depend entirely on wind and solar in other countries don’t want.
Germany, however, believes that she will become the first country completely switched to renewable energy sources, and thereby give impetus for others to move in this direction. It is noteworthy that despite the crisis caused by a coronavirus, the problem of environmental protection, according to polls, remains for the Germans the main, more important than the risk of losing a job or becoming infected. Most importantly, consider the people of Germany so that their children could live in a clean world. These are the sentiments the country has for many years, and I think that the decision of the Bundestag will further strengthen this trend.
– What is your prediction: will Germany after the rejection of coal and nuclear power plants import electricity or will be able to do with renewable sources?
I think I got partially imported because it is not always the wind blows and the sun shines. Not always enough biomass to use it to generate electricity. Nevertheless, the goal remains: by 2050 to fully switch to renewable energy sources. And to achieve this goal, much has been made, but remain unresolved and some problems. As, for example, to transmit energy from where it is produced where it is consumed. Wind turbines in particular, are mainly in the North of Germany, and the industry, which needs energy, in the South.
I think a lot of this kind of problems can be solved by using gas, because gas-fired plants can be very fast to turn on and again to turn off, when power demand is reduced. So in the future, the base load, which in the past was carrying the coal-fired plants may be shifted to gas. In this case, Russia is one of the main suppliers of gas to Europe and to Germany – will be able to obtain long-term benefits.
– So you predvoditelem demand for gas? It turns out that the decision of the Bundestag about the shift away from coal is good news for the ” Nord stream-2 “?
– “Nord stream-2” is a political decision, this is not to say that it is dictated by economic motives. The fact is that a large jump in gas demand should not happen, existing transportation capacity enough to meet demand, which is likely to be less than expected in past years. But for a certain period the gas, of course, will be not only instantaneous, but also much more environmentally friendly compared to oil and coal energy source.
So some time the demand for gas will increase, and not only in Europe but in the US, in Asia, particularly in China, which is already happening. Competitive will and liquefied gas. At the moment the situation in this market is difficult because many fear a repetition of the gas market in the history of oil prices, I am afraid that gas prices will drop below zero. It really is impossible to exclude, given the oversupply.
– And that Germany’s refusal of coal means for the coal industry in Russia? Will have to cut production?
– It is obvious that the role of coal as feedstock for electricity production will become less. In recent years, however, coal consumption in the world grew. But not in Europe and in America, where the demand for coal decreased, and, for example, in India, in Asia and Africa, for whom the main thing – the cost of raw materials, not environmental friendliness. Coal power station – the fastest and cheapest way to increase electricity production. Therefore, for Russia, it will be important to reorient the export of coal from the European market on the Asian or developing countries of South America, where in the next 10 years will increase the demand for coal and build new coal plants. But in the long-term environmental trend will prevail throughout the world. So coal has no future, I don’t foresee stable growth in demand for coal.