Record year for coal funding

The energy and climate newsreel: Future electricity market design, nuclear waste woes, and banks’ deal with coal

The German Federal Ministry for Economic Affairs and Energy (BMWi) is currently considering the future design of the electricity market. Since Friday the "Green Book Electricity Market" which had already been announced as part of the 10-point energy agenda.

The electricity market is in a transitional phase in which overcapacity is being reduced, renewables are being added, and about 12 GW of nuclear power in Germany will be decommissioned by 2022. Renewable energy plants had to be increasingly integrated into this system "ame the same responsibility for the overall system as conventional power plants".

"The overcapacities currently add up to about 60 gigawatts in the electricity market area relevant for Germany", the document states. The information service IWR speaks of 100 GW overcapacities Europe-wide, which had been mentioned in an internal draft of the Basic Book.

The expansion of renewables is reducing the need for base-load and medium-load power plants. Currently, there is still a high minimum generation of up to 25 GW from conventional sources, which must be reduced. "The derating of renewable plants is not a sensible alternative to lowering the minimum generation level."

In the paper, the BMWi mentions various measures that had to be taken irrespective of the future market design. This includes the expansion of the power grids, especially the northern transmission lines in Germany. "Currently, grid capacity in central Germany is at times insufficient to transport electricity traded on the electricity market from generation centers in the north and east to load centers in southern Germany or southern Europe."

Uniform wholesale prices were only possible because this was considered a transitional problem, because in reality the bottleneck caused cost. Recently, there had been speculation in the press about a possible division of Germany into two tariff areas, should Seehofer get his way with his blockade against grid expansion. But urgent action is needed not only on the North-South axis, but also at border interchanges.

There is also a need for action to reduce emissions in the electricity sector. Emission levels have remained roughly the same over the past few years. To achieve the 2020 climate target, greater efforts are needed. In the Green Book electricity market, this is mainly justified by the gross surplus of emission certificates and their low price on the European market.

The German government therefore advocates the introduction of the stability reserve by 2017, into which 900 million backloading certificates are to be transferred. However, even this has removed only half of the surplus predicted by 2020 from the market. The strategy therefore does not sound very promising, especially since this position first had to be pushed through in the EU. "Further concretization of the German position and solicitation of support", is mentioned here in the Grunbuch as the only decrease.

The Grunbuch devotes relatively detailed attention to the question of whether there will be an optimized "Electricity market 2.0" or to provide an additional capacity market. The latter would be necessary if the electricity market did not provide an incentive to maintain the necessary power plant capacities. The BMWi ordered several expert opinions on this ie, which generally advised against the capacity market option. "Practical experience in the USA, for example, shows that it is difficult to get it right, that it takes many years, and that there may be a need for major adjustments to correct regulatory errors. Capacity markets lead to higher system costs and also pose considerable risks for the implementation of the energy transition", there are.

The European Commission also classifies capacity markets legally as state aid, which could make their introduction even more difficult. The basic book will be the basis for a public consultation that will run until March 2015. Afterwards, this will be translated into a female book with more concrete measures and finally into legal regulations.

Nuclear power plant operators do not want to pay

While some are concerned with the electricity market of the future, others are arguing about the legacies of the past.

RWE and Eon have filed suit against bearing the costs of storing nuclear waste at the power plant sites. In this way, they are calling the Site Selection Act into question, even though they themselves are represented in the Final Repository Commission. Environmentalists and opponents of nuclear power were outraged.

"These lawsuits call into question the "polluter pays" principle for the storage of nuclear waste", said BUND deputy chairman Klaus Brunsmeier, who represents BUND in the commission. "RWE and E.With their lawsuits, they are attacking an important point of the political agreement on the site selection law. The ban on further Castor transports to Gorleben was a central point for the political agreement and is important for building confidence in a new open-ended search for a site."

The Anti-Nuclear Initiative .ausgestrahlt states in its October newsletter that the important decisions on nuclear waste are taken outside the commission anyway. "Obviously, the nuclear power plant operators do not want to clear their conflicts with the government and parliament about the law on the search for a final repository in the commission, but in court", writes Jochen Stay. In addition, the commission is not politically competent for many things. The Federal Ministry for the Environment is in charge of the future structure of the authorities, the handling of the provisions for the dismantling of nuclear power plants and the storage of nuclear waste is being discussed behind closed doors in the Chancellor’s Office and in the Ministry of Economics, and the fate of the highly radioactive mull from Julich is being decided by the Federal Ministry of Research and the North Rhine-Westphalian Ministry of Economics. And where the 26 castors that are still to come back from reprocessing went, no one is talking about.

.ausgestrahlt, the Burgerinitiative Umweltschutz Luchow-Dannenberg and Greenpeace have cancelled their participation in the hearing of the Atomic Waste Commission on 3 December.11. cancelled. "We are not prepared to pretend to be statists in a process whose outcome – despite all the well-meaning efforts of individuals in this commission – is already predetermined by the wrong framework conditions", it says in the cancellation.

record year for coal funding

Private banks invest in coal

Anyone who does not want to help finance the expansion of coal against their better knowledge and conscience should definitely not take their money to Deutsche Bank. She is ranked 10th in a list published by Banktrack of financial institutions that financed coal mines and coal-fired power plants through stocks, securities and loans between 2005 and 2014.

Deutsche Bank granted funds and investments with a volume of 15.3 billion euros. At the top of the list is JP Morgan Chase with 21.5 billion euros. Deutsche Bank is the only German credit institution among the "Top 20", which accounted for 73% of investments in coal. The lion’s share of financing in the last three years came from banks in China, followed by US banks. German banks tend to be in the middle of the list, such as Commerzbank, DZ Bank AG, Landesbank Baden-Wurttemberg, Raiffeisen Zentralbank, KfW, Bayern LB and HSH Nordbank.

The report "Banking on Coal 2014" does not claim to be exhaustive, as the banks hardly ever publish figures on their activities in the coal sector, unlike in the case of renewable energies. The emissions caused by these activities are also not disclosed. According to Banktrack, the figures it researched cover just over half of the coal mining sector and half of the coal-fired power plant sector.

Progress has been made by public financiers in the meantime. The World Bank, the European Investment Bank, the EBRD and the U.S. Export-Import Bank have scaled back their coal financing and are now only granting funds under strict conditions such as extremely low CO2 limits. Denmark, Finland, Norway, Sweden, Iceland, Great Britain and the Netherlands have decided to stop financing coal projects through their development banks. In contrast, coal financing by private banks has steadily increased. 2013 was a new record year in this respect with over 66 billion euros. Since 2005, the year the Kyoto Protocol came into force, the amount of money the private banking sector has poured into the coal industry has thus quadrupled.

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