Germany sets up body to plan exit from coal

FRANKFURT (Reuters) - Germany’s government on Wednesday appointed a commission to decide this year on the timetable for a withdrawal from coal as an energy source, ending a months-long tug-of-war over the line-up of the decision-making body.

FILE PHOTO: A traffic light signals red in front of the Weisweiler brown coal power plant of German energy supplier RWE, in Weisweiler near Aachen, Germany March 12, 2018. REUTERS/Wolfgang Rattay

With brown coal mines being the only truly domestic resource in a country reliant on energy imports, Germany faces a lot of internal wrangling over when to abandon coal-burning to meet ambitious climate goals by 2030, as it also wants to be free of nuclear by 2022.

The cabinet appointed a 24-strong group which includes Matthias Platzeck and Stanislaw Tillich, former prime ministers of brown coal-mining states Brandenburg and Saxony, which are industrially weak regions where losses of thousands of jobs, even if spread out over years, will hurt.

Four ministries - economy, finance, interior and labour - are also involved to reflect the need for interaction on this sensitive task.

Labour minister Hubertus Heil said the goal was to protect but also to develop the regions. “It is about handling structural change and avoiding disruption,” he said.

The commission will help allocate federal funds for bringing new industries into the regions, such as battery cell research and production.

Coal-to-power production both from brown coal and imported hard coal accounts for 40 percent of Germany’s total power production, making the exit from coal difficult while maintaining reliable supply to industries and households.

Utility companies such as RWE RWEG.DE and Uniper UN01.DE say they are prepared, having absorbed declining coal plant revenues due to the competition from renewable power and developed their own phase-out plans stretching into the 2040s.

Environmental groups want to hasten the exit within just a few years, but policymakers will be brokering compromises.

The head of the national energy regulatory authority recently said that half of Germany’s coal capacity might be idled by 2030, provided there are enough transmission networks in place to handle soaring wind and solar power volumes.

The government has also promised to bring in a climate law in 2019 that will demand more action from other polluting industries, such as transport and buildings.

Reporting by Vera Eckert and Gernot Heller, editing by Richard Balmforth