Germany is well known for its phase-out of nuclear energy that began as a response to the 2011 Fukushima nuclear meltdown. Now, the powerhouse of the European Union has finally set in motion a gradual coal phase-out in response to the threats posed by climate change. Despite the rapid expansion of renewable power around the world, global greenhouse gas emissions – which drive climate change – are still far too high. In response, German Chancellor Angela Merkel’s coalition government set up an expert Coal Commission to devise a plan for Germany to exit from coal, and the departure holds some key lessons for South Africa.
Much like in South Africa, electricity generation from coal has long served German industry, supplying entire regions with more than 600 000 jobs, and it remains a key pillar of the country’s energy supply. But now the fourth largest economy in the world – and Europe’s biggest coal consumer – will finally complete its energy transition programme and start to phase out coal in addition to nuclear energy.
The key recommendations of the German Coal Commission are that the coal phase out must begin immediately, must be applied as consistently as possible in the coming years, and no new coal power stations should be built in Germany at all. This means that over the next three years more than 12.5GW of coal capacity will be removed from the grid, approximately one third of Germany’s entire fleet.
Perhaps disappointingly, the Coal Commission’s suggested deadline for the end of coal-fired power generation is 2038 (with the ideal being 2035). However, the Commission also stipulated support measures for the transition – compensation and social plans for current coal employees combined with investments for the affected regions would amount to approximately 40 billion euros over the next 20 years. This money would mainly come from existing budgets. Clear plans for a just transition are sorely lacking in South Africa.
The deal proposed by the Coal Commission was welcomed by trade unions, researchers, business associations and most NGOs in Germany, but was also criticised by climate activists who rejected the deal as too slow to fulfil Germany’s commitments to the 2015 Paris Agreement. The growing climate justice movement in Germany – including the Fridays For Future strikes, set up by swedish high school student Greta Thunberg – will continue to campaign for more ambitious climate action that is aligned with the objective of limiting global climate warming to below 1.5 degrees Celsius. This would correspond with a coal phase-out in 2030, instead of 2038.
Nevertheless, many experts expect a much faster coal phase-out to happen in Germany as the percentage of wind and solar energy increase. The country’s renewable target is already 65% of the electricity mix by 2030. Merkel has also signalled that her government is ready to move on the deal agreed by the Coal Commission.
Much like South Africa, power generation from coal has long served German industry, and despite Germany’s international reputation as an ecological role model, the carbon-intensive fossil fuel is still an important pillar of the country’s power supply. Including the loss of purchasing power and effects on suppliers and other associated businesses, the commission estimates that around 60 000 jobs depend either directly or indirectly on the remaining coal economy.
This reliance on coal is the biggest contributor to Germany’s lack of progress in reducing its carbon emissions for the last decade. The fact that Germany’s emissions are not declining rapidly already, with a significant portion of the energy mix being made up of renewables, clearly shows that it is not enough to boost renewable energy if an ageing fleet of coal-fired power stations is left untouched. South Africa could do well to learn this lesson. However, with the coal phase-out in place, this is almost certain to change quickly. The coal phase-out will add the much-needed balance to the German energy transition, which has thus far focused only on phasing out nuclear energy.
Although Germany is still not striving for the first and fastest coal phase-out in Europe, it intends to take more than 40 GW coal capacity off the grid, which is almost comparable to South Africa’s entire electricity capacity. This is a big deal, and there are some big lessons for South Africa to learn.
The global movement to act on climate change is gathering momentum as major economies increasingly act to take responsible action on climate change through phasing out coal and investing in wind and solar power. South Africa’s lack of ambition in terms of implementing an urgent just transition away from coal is beginning to show as the world’s top coal consumers begin to turn their backs on the fossil fuel.
Every day it becomes clearer and clearer that renewable energy is the cheapest and most reliable alternative to fossil fuels and nuclear energy in the 21st century. Major industrial economies (including those with much less wind and solar potential than South Africa, such as Germany) are leading the way towards an energy transition that demonstrates that environmental protection and economic prosperity can coexist.
As a major coal exporter, South Africa must begin to prepare for the reality that coal export markets are shrinking, with further declines predicted by the International Energy Agency. South Africa’s traditional coal export markets in Europe are disappearing and the current biggest export markets in India and China are also threatened by these countries’ pursuit of renewable energy. India, for instance, is currently the biggest importer of South African coal and intends to increase the capacity of wind and solar to 175 GW by 2022, a capacity over three times larger than South Africa’s total generation capacity. At the same time there are discussions and initiatives to ban coal imports and to protect national coal industry.
A high level Just Transition process that brings all key stakeholders together as the German Coal Commission did is a good example of the way forward to find alignment and agreement on a coal phase out in South Africa which puts social and environmental justice at the core. If the Just Transition approach is taken seriously and all relevant stakeholders are involved, such processes can deliver agreements that everyone benefits from.