German cabinet backs exit from coal power by 2038 at latest

A government spokesman has said the German government cabinet has backed plans to exit coal as an energy source by 2038 at the latest as part of Berlin’s efforts on climate protection.

The German government has spurred Europe’s largest economy to shift to volatile renewable energy sources like wind and solar power with its decisions to end nuclear power by 2022 and exit coal-fuelled power sources by 2038.

Reuters Newsagency reports Economy Minister Peter Altmaier said last week Germany’s transition to a fossil-fuel free energy mix will be like undergoing “open-heart surgery” as the car, steel and renewable energy industries will need to work hard to stay competitive.

As part of the plan, the government, led by Chancellor Angela Merkel, has agreed to compensate workers, companies and regional governments as it switches off brown coal-fired plants by 2038.

A draft law approved by the cabinet to phase out hard coal-fired power stations envisages maximum phase-out compensation of €165,000 per megawatt in 2020, falling to €155,000 in 2021 and 2022.

Reuters reports the maximum sum would drop by about 25 per cent annually thereafter before reaching €49,000 in 2026.

There will be no further compensation after 2026.

Once the heartland of Germany industry, the coal regions of North Rhine-Westphalia have fallen on hard times as traditional heavy industries have lost sway, while coal regions in the east have yet to fully shrug off the impact of four decades in Communist East Germany.

The far-right Alternative for Germany (AfD) has sought to win votes in eastern Germany from the coal exit with a simple message: jobs are more important than the environment.

Designed to ensure Germany meets its 2030 target for cutting greenhouse gas emissions, the coal exit will be accompanied by heavy investments in renewable energy.