Coal phase-out – no coal-fired operation bans necessary for 2027 for first time
Year of issue 2024
Date of issue 2024.09.02
The Bundesnetzagentur has not issued any coal-fired operation bans in 2024 under the Act to Reduce and End Coal-Fired Power Generation (KVBG). The reason is that so many coal-fired power plants have already exited the market that the remaining capacity fell below the statutory target level for 2027 by 2 September, the date for issuing any bans.
The target level is the net rated capacity of hard coal-fired and small lignite-fired power plants that the law allows to remain in the market in a given target year.
This is the first time since the start of the coal phase-out process under the Act that it has not been necessary to issue a ban to achieve the target.
Security of supply remains safeguarded
The transmission system operators assess each power plant closure to see if a power plant is essential for the system, in which case the power plant can then become part of the grid reserve. Plants in the grid reserve are available to safeguard the electricity grid in critical situations. This means that security of supply is safeguarded at all times. Further details about the statutory reduction process are available in German at www.bundesnetzagentur.de/Kohleausstieg.
Background
As from 2024, coal-fired operation bans are issued by the Bundesnetzagentur without an auction and without any compensation. A ban issued in 2024 would become effective 30 months after it has been issued. The aim is to further reduce and eventually end coal-fired electricity generation beyond 2027. Orders are issued based on the age of the coal-fired power plants until the annual reduction targets are met. Orders are first issued to old plants and then to newer ones. Operators of hard coal-fired power plants and small lignite-fired power plants will no longer receive financial compensation in future for not burning coal in their facilities.
In seven auction rounds held until 2023 the Bundesnetzagentur put up a total of 10.9 gigawatts of net rated capacity for auction. Successful bids were placed by 41 facilities for around 10.7 gigawatts. The Bundesnetzagentur issued a coal-fired operation ban for three other facilities with a net rated capacity of 1.4 gigawatts.
