Germany's coal exit likely to lower industry power prices – study

Germany's coal phase-out and the continued rollout of renewables will only have "very little" impact on electricity prices, according to a study by energy think tank Agora Energiewende*. Whereas household customers will have to pay 0.4 euro cents more per kilowatt-hour in 2030, energy-intensive industry stands to benefit from the coal exit proposal agreed earlier this year. Agora found that renewables would lower wholesale prices by approximately 0.5 euro cents after comparing two scenarios, one in which coal-fired generation is reduced in line with the coal commission proposal, and a "business as usual" scenario without the coal exit or additional renewables expansion. "The rapid expansion of renewables would thus protect energy-intensive industries from high electricity prices," said Agora director Patrick Graichen.

The study also found that Germany would remain a net exporter of electricity even if renewables were expanded to cover 65 percent of power generation. Over the long term, Germany's cheap renewable electricity "will replace conventional power in other European countries”, Agora added.

Germany has officially set in motion the gradual withdrawal from coal, joining other major economies in the global farewell to the climate-damaging fossil fuel. An expert commission set up by the government recommended shutting the last coal-fired power plant by 2038 at the latest. It is now up to the government to move on the proposal and mould it into legislative drafts before parliament gets the final say.

*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.