Germany Will Shift to Coal Power Reserve in 2016

Germany Will Shift to Coal Power Reserve in 2016Germany Will Shift to Coal Power Reserve in 2016

Utilities RWE, Vattenfall and Mibrag will start shifting coal-fired power plant capacity to Germany's power reserve at the start of the European winter next year as part of a plan to reduce carbon emissions, the government said.

Germany in July abandoned plans for a levy on coal-fired power plants and instead said it would pay companies to shift capacity to a coal-fired reserve to safeguard its target to cut emissions by 12.5 million tons by 2020, Reuters reported. Some 2.7 gigawatts of power generation from brown coal, equivalent to the output from five power plants, will be set aside in case of emergency and then shut down after four years.

"The measure is important for reaching our climate goals and at the same time ensuring that the affected regions don't suffer structural damage," Economy Minister Sigmar Gabriel said.

The lignite-fired units will be taken off grid over four years between 2016 and 2019 and used only as facilities of last resort. Eventually, the reserve will remove some 13% of brown coal capacity from the market.

The IGBCE mining union said eight units with a capacity of 2,700 MW were affected and called for jobs to be preserved.