Germany's Coal Habit Proves Hard to Kick
(Bloomberg) -- Not far from Germany’s Rhine River, a fight to thwart giant excavators from grinding away what’s left of the 12,000-year-old Hambach forest came to a head this month as thousands of protesters faced off with police in a tense, and at times violent, showdown.
Activists formed a human shield by occupying dozens of self-made tree houses, set up barricades in the woods and threw stones and even Molotov cocktails toward police. The standoff revolves around utility RWE AG’s plans to extend a giant open-pit mine to dig up lignite — a soggy form of coal — for burning in local power plants in a short-term fix for Germany’s energy needs.
The conflict represents another challenge for Germany’s political establishment as it pits the country’s economic interests against goals of becoming an environmental leader in a 500 billion-euro ($590 billion) shift to renewable power. Those competing agendas are now colliding in and around Hambach — a district known as Rhein-Erft-Kreis — where concerns range from lost jobs and soaring electricity prices to the incessant hum of wind turbines and “electrosmog” from new power lines.
“I’ve got it all here, violent militants to law-abiding constituents rightly concerned about their power bills,” said Georg Kippels, a German lawmaker from Chancellor Angela Merkel’s Christian Democrats who represents the area just west of Cologne. “The next phase of the energy shift is an upheaval happening right here.”
The tensions are rooted back in 2000, when Germany put its “Energiewende” in place to overhaul its coal-dominated power infrastructure in favor of sources such as wind, solar and biomass. Then in 2007, the government pledged to slash carbon-dioxide emissions 40 percent by 2020 and unveiled a raft of subsidies and regulations to hit those goals.
Those grand, feel-good aspirations were further complicated in 2011 when Merkel decided to phase out nuclear power. That made coal and lignite, which still account for nearly 40 percent of German electricity, all but indispensable, even though the country wants to exit the fuel. The messy overhaul is now turning into painful reality for many.
“It’s been very costly, but there’s not much to show for it,” said Colin Vance, an energy economist at the RWI research institute in Essen, Germany. “Frustration’s growing among the public, coming to a boil where consumers feel the pinch of rising power prices and their neighborhoods being ripped up for new transmission lines.”
Kippels’ constituency of about half a million people is at the epicenter of the shift. Coal still supports thousands of jobs in the area but is being pushed out to make room for cleaner sources. Towering high-voltage masts are rising as part of a 40 billion-euro ($47 billion) electricity superhighway to transport wind power from the Baltic and North Sea coasts to manufacturing centers in the south.
If the government doesn’t show it can carefully balance climate protection with affordable and secure power, “it’s going to be a big challenge keeping voters on board,” said Kippels, 58, during a tour of his district where he’s increasingly struggling to defend the Merkel’s energy policy.
In last year’s federal election, support in the district for the populist AfD more than doubled to 9.5 percent, while CDU dropped 8.8 percentage points to 33.5 percent. Backing for the far-right party nationally has since surged and is the second strongest in some recent polls. Upcoming state elections will be the next test, with Bavaria and Hesse voting in October and the lignite centers of Saxony, Brandenburg and Saxony-Anhalt holding ballots in 2019.
In North Rhine-Westphalia, where Rhein-Erft-Kreis is located, the AfD’s Christian Loose says he’s watching developments in Hambach very closely and expects voters to become “more and more disillusioned” with climate-linked policy.
“Investors are benefiting, but what does it mean for industry and the ordinary man on the street? Nothing but higher energy costs and less security,” said Loose, the far-right party’s local energy expert, adding that the AfD wants to scrap support programs for clean energy.
RWE employs about 2,000 people at the Hambach mine on the constituency’s northwestern fringe. With two other lignite pits in the region, the company unearths 90 million tons of the low-grade coal annually to feed three power plants nearby. It has warned of potential outages without the expansion in Hambach, where the existing dig is coming dangerously close to the edge of the woods.
“The assumption that the forest can be saved is an illusion,” RWE Chief Executive Officer Rolf Martin Schmitz said on state broadcaster ZDF last week, adding that halting operations at the mine would cost the company as much as 5 billion euros.
Germany’s energy shift has left an indelible mark on the country’s utilities, which have hived off fossil-fuel operations. After completing an asset swap with rival EON SE, RWE will become Europe’s third-largest renewable power generator. Still, winding down lignite too quickly could lead to acute electricity shortages, according to the Essen-based company.
There is no immediate alternative to the cheap power from coal and lignite. Wind and solar energy can be expensive and need to be augmented by other sources when weather conditions aren’t favorable. Meanwhile, electricity generated from gas turbines risks increasing Germany’s dependence on supplies from Russia.
Merkel has asked a commission, including lawmakers from the main political parties, environmental groups, analysts and unions, to study when Germany could finally close its remaining coal stations. It’s due to publish its recommendations by the end of October.
Germany is seeking to produce 65 percent of its power from renewable sources by 2030 compared with 38 percent currently. That sets the stage for further tension in places like Hambach, where police are restarting efforts to tear down protesters’ tree houses after a blogger died from a fall last week.
“We need lignite,” said Kippels. “As long as we’re years away from a clean-power economy, it’s hard to see how we can do without it — not without causing unrest.”
©2018 Bloomberg L.P.