So far, the federal government’s climate roadmap provides for a coal phase-out by 2038, and the operators are to be compensated for this. But an analysis now shows that the East German lignite power plants will already be uneconomical from 2024 if the CO2 price increases as forecast. The power plant operators would not suffer any financial disadvantages even if they were shut down early – a financial injection from taxpayers’ money would therefore not be justified.
The business is profitable for the operators of the lignite power plants: As long as the CO2 price remains low – at the moment it is an average of 40 euros – they generate ample profits with their kilns. So far, according to the federal government’s climate protection plan, the last coal-fired power plant is to be shut down in 2038. Such a late phase out of coal means cash for the corporations – provided that the CO2 emissions are low in costs. However, if the price of CO2 rises, things could look very different.
Lignite as an obstacle to climate protection
What this means in concrete terms for the East German lignite power plants, analysts from Energy Brainpool have now determined on behalf of the Greenpeace subsidiary Green Planet Energy. The focus was on the Lippendorf power plant near Leipzig and the Schwarze Pump and Boxberg power plants in Lusatia. With an output of 1,840 megawatts, the Lippendorf power plant is one of the largest German lignite power plants – and one of the largest emitters of greenhouse gases in the energy sector. The federal government’s exit schedule currently stipulates that the last block in the Lippendorf lignite kiln will be shut down at the end of 2035, while the Schwarze Pump and Boxberg power plants will not go offline until the end of 2038. The operating company Leag is to receive around 1.75 billion euros from taxpayers’ money as compensation for this long coal exit.
A study recently found that the Lippendorf lignite power station alone would emit 134 million tons of CO2 if it continued to operate until 2035. This corresponds to three percent of the remaining greenhouse gas budget that is still available to Germany within the framework of the 1.5 degree climate protection target set by Paris. The resulting climate damage – for example for extreme weather damage or crop failures – would result in follow-up costs of more than 28 billion euros. In addition, there are 310,000 tons of sulfur dioxide and 220,000 tons of nitrogen oxides. According to calculations by Energy Brainpool, these two air pollutants alone would cause environmental costs of EUR 8.8 billion by 2035.
Power plants in the red as early as 2024
Now the researchers have investigated how the electricity market revenues and operating costs of the three lignite power plants develop depending on the CO2 price if they continue to operate. In the first scenario, they assumed the CO2 price would stagnate at around 40 euros at the current level, and in the second scenario a gradually rising price, which would then reach 105 euros per tonne of CO2 in 2038. The model calculations showed: The operation of the lignite power plants until 2035 or 2038 is only worthwhile if the CO2 price remains low – which, however, is hardly to be expected in view of the global development. Only then would the Lippendorf power plant, for example, still generate enough profit to be worth 271 million euros if it were to be decommissioned early.
But in the more realistic scenario of a moderately rising CO2 price this would look different. Then operating the lignite power plants would no longer be profitable from 2024 onwards. The operator would have to pay more CO2 taxes than the lignite electricity brings in or sell it on the market so expensively that he cannot find any buyers. “In this case, the expected net present value of the power plants in 2030 is zero,” says analyst Michael Claussner. But that means: The compensation estimated by the federal government would not be justified because the operator would not suffer any financial damage as a result of the coal phase-out. He would no longer be able to profitably operate the lignite power plants long before that. An early shutdown of the units as part of a faster coal phase-out would therefore not represent a financial disadvantage for their operating group Leag, which would have to be compensated.
“The planned state compensation for the Leag is not economically justifiable, but has been politically refined,” says Sönke Tangermann from Green Planet Energy. “If the federal government takes climate protection seriously, it must now demand an earlier shutdown date from the operator in view of the increasingly dramatic climate crisis.”
Source: Green Planet Energy