Financial and political risks of coal exit remain high – commentaries

Germany’s coal exit will have economic impacts well beyond the coal industry and regions, Andreas Mihm writes in a commentary in the conservative daily Frankfurter Allgemeine Zeitung. “The coal exit will have consequences for the whole country,” he writes. “Even neighbouring states will notice it, because they will no longer be able rely on German electricity exports.”  To secure a reliable power supply, numerous gas power plants will have to be built at great expense, and electricity prices will rise as generation capacity falls, affecting industry and employment, Mihm argues. Taxpayers and power consumers will also have to spend billions of euros compensating plant operators. “The financial and political risks of a coal exit remain high, even if it is well-founded,” Mihm says.

In a commentary in the Tagesspiegel, Jakob Schlandt says coal regions, environmentalists and plant operators have unwittingly formed an alliance in favour of generous compensation payments to mining areas and plant operators for a rapid coal exit, as well as additional support for industry because electricity will become dearer. “What’s missing is the consumer, an advocate of the remaining population without special interests,” Schlandt writes. Clear market incentives, such as higher prices for emissions, would have been much cheaper, according to Schlandt. “But that did not happen, meaning interest groups are now unscrupulously squeezing the government, which has manoeuvred itself into a tight spot between climate protection and structural change.”