Germany is shutting down more than 1.5 gigawatts (GW) of coal-fired generation by December 8 this year, the country’s energy regulator said on Thursday, announcing the results of a second round of auctions meant to mitigate the cost of closing polluting plants.
The country is running a series of tenders in which operators declare the price at which they would be prepared to close plants that use hard coal. In return, they are offered funds to offset some of their losses.
German utilities had until January 4 to submit tenders under the mechanism aimed at ensuring the country exits coal over the next 17 years.
The regulator sets a maximum price per MW of capacity to cap the public sector bill. The ultimate price takes into account bidders’ offers and the CO2 emissions of the plants in question.
After 2027, compensation will no longer be available, so operators are ready to bid as low as possible to avoid losing out to competitors.
In its first coal phase-out tender, Germany awarded contracts to 4,788 MW of plants that will no longer market their output on the electricity market and no longer burn coal from July 8, 2021.
The value of bids ranged from EUR 6,047 to EUR 150,000 per MW, versus a cap of EUR 165,000 per MW.
With this procedure, the Federal Network Agency is implementing the federal government’s decision to phase out coal. 12.5 gigawatts of hard coal and lignite power plants are to be shut down by the end of 2022. With the auction, a procedure was chosen that was supposed to protect the state treasury when the coal phase out.
Sources: https://www.mining.com/germany-to-shut-1-5-gw-of-coal-generation-by-december/