Key facts
- Germany aims to phase out coal power by 2038 and lignite by 2030.
- Coal currently accounts for 20% of German electricity generation.
- Renewables provided 59% of Germany's electricity last year.
- Germany imports 95% of its natural gas supply.
- A parliamentary committee is reviewing the potential to extend the operation of some coal power stations.
Germany is facing a critical decision regarding its commitment to phasing out coal-powered electricity generation, with soaring natural gas prices and energy security concerns prompting a re-evaluation of existing timelines. The country, which currently derives 20% of its electricity from coal, has pledged to cease its use by 2038, and lignite, the most polluting form of coal, by 2030. However, the recent surge in global gas prices, exacerbated by geopolitical conflicts, has made the abundant and cheaper domestic lignite a financially appealing alternative, especially given Germany's heavy reliance on imported natural gas.
Chancellor Friedrich Merz has publicly questioned the feasibility of the current phase-out plans, suggesting they have become unrealistic. This sentiment is echoed by industry groups like the German Chemical Industry Association, which emphasizes the need for reliable and competitively priced energy to support industrial investment. Energy firm LEAG, a major lignite miner, has welcomed the government's consideration of long-term energy security, highlighting its capacity to increase lignite supply when needed, as demonstrated after Russia's invasion of Ukraine.
Environmental organizations, such as the Öko research institute, advocate for further expansion of renewable energy sources like wind and solar, which already account for 59% of Germany's electricity. A potential compromise being discussed involves allowing six coal power stations that use imported hard coal, currently used only as backup, to operate continuously. The owner of some of these plants, Steag Iqony Group, argues this would strengthen energy security and affordability for millions of homes.
The decision is complicated by the coalition government's differing stances: the center-right CDU/CSU parties are more inclined to extend coal use, while the center-left SPD opposes it. The SPD's energy spokeswoman, Nina Scheer, warns that relaxing coal rules would be counterproductive to the energy transition. Conversely, CDU deputy leader Michael Kretschmer believes the energy transition needs recalculation to prioritize security and affordability. The government is expected to make a decision on the 2030 lignite deadline this year, and a statutory review of the coal phase-out, originally intended to explore acceleration, may now be used to justify a slowdown.