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Habeck on power generation: Can coal replace natural gas?

Habeck on power generation: Can coal replace natural gas?


FAQ

Status: 06/20/2022 3:25 p.m

Russia has significantly reduced its natural gas supplies to Europe. Economics Minister Habeck now wants to temporarily use more coal to generate electricity in order to save gas. How is this supposed to work? And what can it bring?

Why should natural gas be saved in electricity production?

In the current crisis situation, natural gas is considered too valuable to be burned to generate electricity. In many industrial processes, the raw material cannot be replaced in the short term. In addition, a significant proportion of real estate in Germany is heated with natural gas. In order to prevent industry from being partially paralyzed in a particularly unfavorable scenario of significantly lower gas supplies and a cold winter, and ultimately restricting private households, the natural gas storage facilities must be filled as quickly as possible. Economics Minister Robert Habeck (Greens) therefore wants to reduce the use of natural gas for power generation and industry. In return, more coal-fired power plants are to be used temporarily.

How dramatic is the situation with natural gas storage facilities at the moment?

According to the Federal Network Agency, the natural gas storage facilities in Germany are currently 57.6 percent full. That is significantly more than a year ago, when the fill level was just over 38 percent. However, there is still a long way to go before the federal government’s goals are achieved. These provide for a filling level of 80 percent by October 1st and 90 percent by November 1st. However, it is unclear whether and to what extent the reduced natural gas deliveries from Russia will slow down the replenishment of the natural gas storage facilities in the coming weeks.

Why is the fill level higher than a year ago?

Apparently, the sharp rise in prices is causing more liquefied natural gas (LNG) to be delivered to Europe. At the same time, consumption has also fallen significantly: Since the beginning of the year, gas consumption in Germany has been well below the comparative value for the respective month of the previous year – in some cases even by 15 to 25 percent, as a current list from the Federal Network Agency shows. Against this background, the filling level of German natural gas storage facilities has been increasing at different speeds since March.

What alternatives to natural gas are there in electricity production?

In the short term, the easiest way to replace natural gas is with lignite and hard coal. Germany has significant lignite reserves, which, according to data from the British energy company BP, will last for several hundred years. Although hard coal is no longer mined in Germany, it is abundant internationally. The remaining power plant capacities play another important role. The lignite-fired power plants that are in reserve could be started up again in a relatively foreseeable period of time, said Kerstin Andreae, Chair of the Executive Board of the Federal Association of Energy and Water Industries (BDEW). ARD morning magazine.

How does the federal government intend to focus more on coal power?

Federal Economics Minister Robert Habeck combined his announcements about cuts in the use of gas in power generation with the statement that “coal-fired power plants must be used more extensively”. According to the Ministry of Economic Affairs, it is planned that certain coal-fired power plants could be used again to a limited extent. This should be made possible by the replacement power plant availability law, which is to be finally discussed in the Bundesrat on July 8th. When presenting his plans, Habeck also said that a gas replacement reserve would be set up – limited until March 31, 2024. In order to be able to operate the replacement power plants, i.e. above all coal-fired power plants from the current reserve, under load again, a technical advance is required . Habeck called on the power plant operators to get ready to get everything ready for use as soon as possible.

How high is the share of natural gas, lignite and hard coal in electricity production?

Last year, 15 percent of the electricity produced in Germany was produced using natural gas, almost 19 percent using lignite and nine percent using hard coal.

To what extent can natural gas be replaced by lignite and hard coal?

The capacity of the natural gas power plants in Germany is 28 gigawatts, with a maximum of 13.7 gigawatts being used in the course of the year, almost half – so the high prices are having an effect.

At the end of May, the active capacity of the lignite and hard coal power plants in Germany was 16.7 and 14.7 gigawatts respectively. For comparison: The maximum capacity of these two power plant types used so far this year was 15.7 and 12.7 megawatts respectively, but not at the same time. In addition, the short-term available, non-active capacity (grid reserve or security standby) for lignite-fired power plants and hard coal-fired power plants was 1.9 and 4.3 gigawatts. In addition, there is a temporarily closed lignite capacity of 0.3 gigawatts, which could only be reactivated after a certain period of time.

Assuming 100 percent utilization of all active lignite and hard coal-fired power plants available in the short and medium term compared to the previous peak values, a natural gas power plant output of around 9.5 gigawatts could be replaced in the best case, and thus a good two thirds of the previous maximum capacities used at the natural gas power plants. For the time being, we will not be able to do without natural gas for electricity generation.

What are the main reserve power plants?

According to the Federal Network Agency, the three power plants with the highest reserve capacity are the Bexbach and Weiher C power plants in Saarland and Bergkamen A in North Rhine-Westphalia. All three plants are operated with hard coal.

What is the environmental balance of coal compared to natural gas?

According to calculations by Volker Quaschning from the Berlin University of Applied Sciences, burning lignite produces around twice as much carbon dioxide in relation to the energy content as burning natural gas. With hard coal, the emissions are only slightly lower than with lignite. The entire chain of energy supply is taken into account, i.e. from extraction to incineration.

In principle, however, the exact emissions always depend on the quality of the type of coal. The age of a power plant can also play a not inconsiderable role. Older power plants are often less efficient than modern power generators.

What is the situation with natural gas prices?

The development of natural gas prices indicates that demand will be particularly high in the near future. The prices over the summer and into the autumn are almost 130 euros per megawatt hour, but in the coming winter the futures contracts on the commodity exchange are already a little lower in the range of 110 euros. According to this, natural gas should cost around 80 euros per megawatt hour in one year and less than 60 euros in two years. The market is therefore currently assuming that the current supply situation will increasingly ease over time, possibly also as a result of the mobile LNG terminals planned on the German coast. However, even with the currently expected decline for summer 2024, prices would still be around three times as high in a long-term comparison.



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