Germany’s RWE abandons new brown coal generator, and all new coal plans

One of Germany’s “big four” utilities RWE has announced it will no longer invest in new coal-fired power stations, instead focusing entirely on electricity generation from renewable energy sources.

The company’s new direction will see it cancel plans for the BoAplus project, a 1,200 MW lignite-fired power plant at the company’s site in Niederaussem, near Cologne.

Plans for the BoAplus were begun back in 2012, which was intended to be equipped with “cutting-edge and extremely efficient technology”, and which was intended to replace older power plant units with a single project.

However, according to RWE’s announcement published late last week, the implementation of this project “was subject to market conditions, which did not allow for the project to be realised in the last years.”

“We are aware of our responsibility and continue to drive the energy transition with resolve,” explained Rolf Martin Schmitz, CEO of RWE AG. “New coal-fired power stations no longer have a place in our future-oriented strategy. Following the completion of the transaction with E.ON, RWE will be one of the world’s leading renewable energy players.”

The Frankfurter Allgemeine Zeitung (FAZ) newspaper reports that the decision was prompted by this spring’s report from Germany’s coal commission, which recommended that Germany phase out coal entirely by 2038.

“It took a while, but now RWE has realised that new coal-fired power plants in Germany no longer have a future,” Helmut Bünder writes in the FAZ. “With the report of the coal commission…the project was not only economically but also politically finished.”

RWE insists, however, that  its existing coal-fired power stations “will be needed to provide backup capacity” in the future, “given the fact that renewables currently contribute about 40% to the German electricity mix.”

But its announcement came as the French utility Engie announced it will sell four coal-fired power plants in Germany and the Netherlands as part of the utility’s strategy to focus on its renewable energy business.

Engie will sell the 2.3GW of capacity to American private equity firm Riverstone Holdings. The sale means that the share of coal in Engie’s global power portfolio will fall to just four per cent. In 2017, it closed the Hazelwood power generator in Victoria.

RWE, meanwhile, promised to invest in electricity generation from renewable energy sources and storage technologies, but also in “low-carbon technologies such as gas-fired power stations if market conditions allow for it.”

This did not impress the German chapter of Friends of the Earth, Bund für Umwelt und Naturschutz Deutschland, which highlighted their belief that “RWE needs to do more.”

According to BUND energy expert Tina Löffelsend, the cancellation of the BoAplus project was was bound for failure in any case. It has been clear for years that a new coal-fired power plant can neither be justified from a climate perspective nor an economic one.

“The abandonment was long overdue and is in itself not yet a certificate for taking climate responsibility. If RWE is serious about its climate responsibility, it would need to close its old power stations in Neurath and Niederaussem as of 2020,” he said.