GERMANY NEED COAL

PLATTS - Germany needs to retain half of its coal-fired power generation capacity until 2030 to offset the closure of all its nuclear reactors by 2021/22, economy and energy minister Peter Altmaier said Tuesday.

"No other country getting out of coal is also getting out of nuclear power," the minister said at an energy conference in Berlin, adding that "the ending of nuclear and the phasing-out of coal should not overwhelm each other."

"That's why we have to talk about a longer timetable" for closures, he said.

The government-appointed coal commission is finalizing recommendations this week for the phase-out of coal-fired power stations, which provide 35% of Germany's generation mix.

The commission's final report is due February 1.

Altmaier said half of Germany's current hard-coal and lignite capacity of just over 40 GW would still be operational in 2030, with any agreed phase-out timetable needing a periodic review based on security of supply and affordability criteria.

German power prices could be 8%-13% higher between 2022 and 2030 under an accelerated coal phase-out compared with a base scenario, analysts at broker Bernstein said Tuesday.

Bernstein assumes 5 GW of coal closures by 2022, of which 3.6 GW would be lignite. Some 2.7 GW of the oldest units are already scheduled for the lignite reserve, with the final two units exiting the market this year.

The minister virtually excluded additional coal closures in 2021 and 2022 as over 4 GW/year of nuclear capacity are set to close.

Altmaier warned of blackout risks under various scenarios, but praised grid operators in securing grid stability to date.

The government's priority was to accelerate grid expansion and allow further market integration by 2025.

Planning for a key section of the Ultranet power link, one of five North-South transmission lines, was approved Monday, putting it on track for a 2023 startup, the minister said.

Altmaier flagged the use of gas peakers and hydrogen production from offshore wind as examples of how a future generation system might adapt as Germany moved toward a 65% share of renewables in the power mix by 2030.

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