November 24, 2014 / 10:46 AM / 5 years ago

Coal plant closures would hurt German industry - BDI

* Closing coal plants would cost jobs, BDI group says

* Foreign coal-generated power would be imported

* Climate would not benefit, industry hurt

FRANKFURT, Nov 23 (Reuters) - Shutting more German coal-fired power plants to meet ambitious climate goals would damage industry and cost jobs without helping the environment, the BDI federation of industries said on Monday.

The BDI was reacting to a document seen by Reuters that showed Germany is working on a new law to force energy companies to shut down eight more coal-fired plants - on top of the 50 already marked for decommission - as it tries to reach ambitious climate goals.

Without further coal plant closures, Germany may miss its 2020 CO2 cutting target by between 5 and 8 percentage points, the environment ministry has already warned

But the BDI, Germany’s main industry lobby, said on Monday a study it had commissioned showed that the closed plants’ output would simply be compensated with imports from mostly coal-fired power stations in neighbouring countries

“Foreign, often less efficient coal-to-power plants would take on 95 percent of the production lost from the switched off German plants,” BDI Managing Director Markus Kerber said in a press release, citing the study.

“Plant closures damage the competitiveness of German industry directly, without a benefit to the climate,” he added.

The latest reduction in carbon emissions, if put into effect, would be shared equally between Germany’s power companies, among them major energy firms RWE, E.ON and Vattenfall.

Leading utilities did not immediately comment on the story ahead of meetings between top industry executives and the Economy Ministry later on Monday.

The study, carried out by Hamburg’s economic institute HWWI and r2b energy consulting, said that switching off 10 gigawatt (GW) of installed coal power generation capacity - close to what eight big plants represent - could cost 24,000 jobs by 2020 in brown coal mining and power production alone.

A further 50,000 jobs could be lost because energy-reliant manufacturers would be hit by rising electricity prices due to the closures. BDI put possible wholesale price hikes at nearly 50 percent.

Year ahead power on Monday cost 35.60 euros/MWh, according to Thomson Reuters data, up 1 percent. Traders said the increase was based on expectations for a cold start to December and the new year, rather than the closure plans.

Goldman Sachs said in a research note that phasing out coal plants would not severely harm power companies, especially if they could run more expensive gas plants instead.

“As all older coal plants are cash loss making on a forward mark to market basis, we see no material downside risk for earnings of RWE and EON from closing older hard coal facilities,” it said. (Reporting by Vera Eckert and Chris Steitz, editing by XXX)

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