Operators bid for compensation in first German hard coal phaseout auction

Germany’s first coal phase-out auction aimed at shutting down about 4 gigawatts (GW) of hard coal-based electricity generation capacity ends today (1 September) at midnight, Die Welt writes. The country is offering auctioned compensation in an effort to close hard coal power plants, while avoiding the regulatory or legal difficulties of expropriation or operating bans, writes Die Welt. Several rounds of tenders will be carried out between 2020 and 2027. The compensation will go to whichever operators offer the lowest bids, with a maximum compensation set at 165,000 euros per megawatt. If there is no lower bid, the state would have to pay the maximum of 660 million euros for all 4 GW, Die Welt writes. The Federal Network Agency (BNetzA) is set to announce the results on 1 December. The next auction is scheduled for 4 January.

Germany is planning to phase out the use of coal by no later than 2038. Its parliament approved legislation in July setting out a shutdown schedule for individual lignite power plants, compensation payments for operators and auctions for hard coal plant operators to take capacity off the grid. The coal company Steag, which sees itself as disadvantaged in terms of compensation compared to lignite coal producers, filed an emergency petition to the Federal Constitutional Court, to secure better terms, but the petition was rejected on formal grounds, Die Welt reports.