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Can Germany Create a Blueprint for the Developed World to Quit Coal?

Avatar for Dan Hahn
Published on 01/30/2020 in
Updated 02/07/2020

Keeping carbon from coal out of our atmosphere is integral to solving the climate crisis. The entirety of the European Union represents one third of the amount of Earth warming gases and Germany is the largest EU economy.

The country has led the way before on bold energy moves. It spearheaded an innovative nationwide solar feed-in tariff which gave the country a huge leg up in the international solar industry 20 years ago.

Germany is now presented with a unique problem. There is strong opposition to nuclear power in the country, and they are on track to completely shut their nuclear plants down in two years. They also do not have an abundant supply of natural gas, as we do in the United States.

After the country cut off its huge solar subsidy 10 years ago, the once bullish solar economy in Germany has struggled to find a footing and is facing some market instability. Even so, there are now over 300,000 renewable energy jobs in the country.

Without nuclear and natural gas, how will the country meet its electricity demands, stabilize its renewable energy workforce and switch to 100% clean energy before it’s too late? Could the solution provide the rest of the developed world blueprints to a cleaner energy future?

In the last few weeks the German parliament followed through on a plan to completely quit coal by 2038 and be carbon neutral by 2050. The country is pushing most of the coal use reductions to the end of this decade to give the industry time to adjust.

How does their plan work?

Government money. A lot of money. $44.5 billion dollars.

That amount will be spent to provide severance to compensate coal workers, coal companies, and four coal heavy German states. This is not your typical 6 months of pay and you go looking for new work, it’s 18 years worth of compensation and transition planning.

While that decision has caught some flack from German environmental watchdogs for taking too long to unfold, the country has done much more than talk about plans to move completely off of coal, it’s executing.

The coal workforce in these areas totals 40,000 people. The plan forces utilities to shut coal plants down by 2026 if there are not enough voluntary closures. The hope is less supply of coal will lead to more demand from renewable sources, providing some strength to the renewable energy economy and strengthening the outlook for renewable energy careers.

80% of Germans agree with the framework for the plan, and feel the time is right to make it happen. There’s some debate about how to help those in the renewable industry while simultaneously providing a meaningful compensation to coal workers about to lose their jobs.

It’s important to note here that some of the states in our country are also executing at moving away from coal. Here at SPR, we track state policies which mandate clean energy use, called state renewable portfolio standards (RPS). State RPS are a key factor in our rankings for home solar we release annually. Several states have 100% RPS standards, including New York, California, and Maine.

Given that the U.S. uses eight times the amount of electricity than Germany and sources 30% of its current mix from coal (compared to 10% in Germany), the extrapolated expenditure to pull off a similarly sized program to move 100% away from coal in the United States would be near $1 trillion dollars.

While that may seem like a preposterous sum of money, consider the amount in relation to the trillion dollar annual U.S. budget deficit brought on by the 2017 tax cuts for the wealthy.

For that same amount, our country could follow Germany’s lead and make the transition to slowly quit coal. Perhaps the pharmaceutical industry could help out with the marketing (hat tip to the Chantix advertising gurus who came up with the cold turkey above).

In sobering contrast, hugely populous countries India and China are coal addicted for now and are forecasted to increase their demand for coal over the next few years before leveling off.

Australia, currently ablaze with terrifying brush fires, is following through on building a new coal mine to provide fuel to these countries.

That angry mob? Australians who want the PM out of office for his continued support of his nation’s coal export industry.

There’s a lot of work to do, we’ll be watching what happens in Germany with an eye toward responsive bold energy moves in the United States and beyond.

Last modified: February 7, 2020

One thought on “Can Germany Create a Blueprint for the Developed World to Quit Coal?

  1. Avatar for Solidus Techno Power Solidus Techno Power says:

    Thanks for giving us the correct perspective through your article, its really helpful and means to me. I wish to read more articles related to this.

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