Germany’s coal phase-out goal “seems completely unrealistic” – JP Morgan

The growth in Germany’s renewable electricity output triggered by the country’s energy transition policy is “quite an achievement,” the JP Morgan Energy Outlook 2019 authored by Chief Investment Officer Michael Cembalest finds. Despite the largely increased share in intermittent energy sources, the power grid remains stable but progress is “slower than Germany was hoping for”, especially when it comes to reducing greenhouse gas emissions, the report states. The author lists issues such as the lack of progress outside power generation, e.g. rising emissions from the transport sector, and costs for the urgently needed expansion of the power grid as the main hurdles for the energy transition. In conclusion, the report doubts that Germany will reach its climate targets and says a 65 percent share of renewables in power consumption will only be achievable with “considerable further increases in electricity prices and other economic costs.” Cembalest closes his assessment with the verdict: “Germany’s newly announced goal of phasing out all coal/lignite by 2038 seems completely unrealistic given all the issues explained above.”

A multi-stakeholder commission on the German coal exit presented a proposal on how to pursue such a phase-out in February 2019. German publications that have recently assessed the same issues (climate targets, future energy supply security, coal exit) include: Ecologic et al. (2018), DIW et al. (2019) Öko-Institut, Prognos (2017), Agora Energiewende, Aurora Energy Research (2018).