Grid expansion cld cost 50 bln euros - operators / Deutsche drops coal

Deutsche Bank will no longer grant new financing for thermal coal mining or new coal-fired power plants, Germany’s largest bank said in a press release. The bank will also “reduce its existing exposure to the thermal coal mining sector,” it said. Deutsche Bank cited its commitment to the Paris Agreement’s climate protection measures as the reason for its divestment decision. In a letter to Oliver Krischer, vice-chairman of the Greens in the German parliament, the bank said it was taking part in efforts to “achieve the paradigm shift towards a low-carbon economy and a climate-friendly development model.” It will strengthen its support for renewable energy projects and reduce its stake in the coal sector by 20 percent over the next three years. Krischer welcomed the move but said it could be “only the beginning” of a larger divestment process.

Heffa Schücking, director of German campaign organisation urgewald, said the bank’s announcement was a “long overdue decision” that only addressed “a small part of the problem.” She explained that direct project financing accounted for only 2 percent of banks’ financial flows to the global coal industry. “98 percent of the problem remains as the new guideline does not stop Deutsche Bank from providing corporate loans and investment banking services to companies with aggressive new build plans for coal-fired infrastructure,” Schüking said.

Read the bank’s press release in English here and urgewald’s press release in English here.

For background, see the CLEW factsheet When will Germany finally ditch coal?

Wintershall, Germany’s largest crude oil and natural gas producer, is determined to take part in the Euro-Russian gas pipeline project Nord Stream 2, Frankfurter Allgemeine Zeitung (FAZ) reports. BASF subsidiary Wintershall said that, like its partners - Russian gas giant Gazprom and European companies Uniper, OMV, Shell and Engie - it believed the project “is of central importance to the European energy concept,“ FAZ writes. A participation model in which Gazprom would have held 50 percent of the 10 billion euro project’s shares and the other partners 10 percent each was scrapped last August as Poland’s competition authority singalled it would not issue a license.
Poland and other eastern European states fear that Nord Stream 2 will further enable Russia to circumvent their countries for selling gas to western Europe. Construction is due to start in the second half of 2017, FAZ says.

For background, read the CLEW dossier The Energiewende and its implications for international security and the CLEW factsheet Germany’s dependence on imported fossil fuels.

The Energiewende’s costs cannot be entirely levied on power customers if Germany’s energy transition is going to succeed, Robert Busch, managing director of the Association of Energy Market Innovators (BNE), writes in a guest commentary for Handelsblatt. The main reasons for rising power prices in Germany are the increased Renewable Energy Act (EEG) surcharge and higher grid fees. These, together with other taxes, pushed the power price’s fixed proportion to 75 percent, Busch explains. “The idea to finance the Energiewende via the power price leads into a cul-de-sac,” he writes. Fulfilling the Paris Agreement’s climate targets means the renewables’ share in heating has to grow significantly, but further surcharges could prevent customers from turning away from fossil heating fuels and therefore damage climate protection, Busch explains. “A way out of this dilemma could be to expand the EEG-surcharge to final energy consumption in the heating sector,” which would allow customers to save money if they invest in green heating technology, he writes.

For background, read this CLEW interview with Robert Busch and the CLEW factsheet What German households pay for power.