Germany has announced plans to fine coal-fired power plants that breach fixed emission limits, with effect from 2017, in a bid to meet its 2020 climate targets. The plans are aimed at the oldest plants that emit more than 7 million tonnes of CO2 per gigawatt of installed capacity.
Above this level, plants would be subject to a fine of around €18-20 per tonne of CO2 (precise figure to be confirmed), buying them additional EU Allowances for breaching emissions limits.
The measures are backed by EON's CEO, Johannes Teyssen. EON has a large number of gas-fired plants that have been rendered uneconomic by a low carbon price in Europe's Emissions Trading System.
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By focusing on emissions over a certain level, Germany's aim seems to be the closure of the least efficient coal plants. But will this pass the cost of cleaner energy onto the consumer?
The UK think tank IPPR thinks not. It has modelled the impact of introducing an emissions performance standard (EPS), which could be applied to all UK power stations which, in 2017, exceed a carbon intensity of 450gCO2/kWh. It found that an EPS on ‘old coal’ (comparable to Germany's plans) would deliver a controlled phase-out of coal through the 2020s at a lower cost to the consumer than pursuing an extremely high unilateral carbon price, while assuaging concerns over security of supply and affordability.
What role will utilities play in the energy transformation?
Carbon Pulse (2015, March 23). RWE slams German coal plan, says it will cut 70 mln tonnes CO2