Low turnout in Germany's final auction for early coal power plant shutdowns

Germany has completed its final auction to provide compensation for the early retirement of coal plants, with fewer operators participating in the tenders than initially hoped for, the Federal Network Agency (BNetzA) said. As a consequence, all of the submitted bids were awarded, meaning that operators will receive compensation for closing their plants early ranging between 45,000 and 85,000 euros per megawatt (MW). The awarded bids made up a combined capacity of some 280 MW, which was short of the 542 MW that were auctioned. The selected facilities can continue to operate until March 2026 and then must stop burning coal to produce electricity or heat. “An important milestone in the coal phase-out has been reached with this last tender,” said BNetzA head Klaus Müller.

“In total, over 40 plants with a capacity of more than 10 gigawatts (GW) will have stopped burning coal” thanks to the auctions, Müller said. Overall, the grid agency held seven rounds of auctions covering some 10.7 GW of capacity. The auctions were introduced to offer operators – largely of hard coal plants – the option of receiving state support if they decide to retire their units early. The measure is meant to help the country phase out coal by 2038 at the latest. BNetzA will now start mandating plant closures based on the age of the facilities, without providing compensation.

Germany officially decided to end coal-fired power by 2038, but the current government has said it aims to bring the phase-out forward to 2030. While the coalition struck a deal with energy company RWE to complete the phase-out in western Germany by that year, eastern German operator LEAG has so far rejected an earlier completion of the phase-out.