Quick German coal exit would endanger power supply security: RWE

Rising steam from RWE coal power plant, one of Europe's biggest electricity companies, is reflected in a car’s mirror in Neurath, north-west of Cologne, Germany, November 3, 2017. REUTERS/Wolfgang Rattay

FRANKFURT (Reuters) - German coal-biased utility RWE on Tuesday warned of a quick exit from coal power to further reduce carbon dioxide (CO2) emissions, which the Green Party is demanding in talks to form a new coalition government.

Chief financial officer Markus Krebber said such a unilateral move by Germany, which had just contributed to making a pan-European CO2 trading mechanisms much stricter, would harm the economy and undermine the security of supply.

“Focusing on climate protection goals alone is not enough and will lead to fatal misallocations,” he told journalists in a call on Tuesday, adding that coal-based power generation will be declining already in the coming years.

“Exiting coal in the short term would make it impossible to continue ensuring security of supply.”

RWE is due to halve power generation from especially polluting brown coal over the next 12 years, taking more than three gigawatts (GW) of capacity out of the market.

He also said that while some strengthening of gas-to-power generation assets was necessary as part of the overall supply strategy, investing heavily in gas rather than coal did not make sense, as it would burden consumers with higher prices when a focus on renewables remained the long-term strategy for Germany.

Reporting by Vera Eckert; Editing by Christoph Steitz