Turning energy around: Coal and the German Energiewende

The document assesses the progress of Germany's Energiewende, noting that while renewable energy shares have grown, coal still provided 42% of power production in 2015. It highlights the economic tension between the 'big four' utilities and decentralized renewables, the social and political challenges of phasing out hard coal and lignite, and the influence of industry unions in blocking a proposed climate levy on power plants in favor of a capacity reserve.

• Germany's energy transition has seen significant progress in emissions and renewable adoption, but coal remains a dominant and stubborn part of the power mix. Between 2000 and 2014, emissions decreased by 13.5%, and the share of renewables in electricity consumption rose from 6.5% in 2000 to an estimated 32.6% in 2015. However, 42% of power production in 2015 still came from coal, and emissions from coal combustion actually rose by 4.7% from 2010 to 2013.
• The 'big four' utilities, which produce more than half of Germany's electricity, have faced financial losses due to the rise of decentralized renewables and low wholesale prices. RWE, for instance, reported a net loss of €200 million and asset impairments of €2.1 billion in 2014. These companies have largely maintained coal dominance because coal remains cheap and EU Emissions Trading System allowances are low, making gas-fired power less profitable.
• The 2016 amendment to the Renewable Energy Law (EEG) shifted support from feed-in tariffs to auctions, which may disadvantage small-scale citizen-led projects. While proponents argue this ensures grid stability and market exposure, critics suggest it benefits large utilities. New solar PV installations fell from 462.7 MW in January–May 2015 to 350.2 MW in the same period in 2016.
• Germany is phasing out hard coal subsidies by 2018, partly due to EU pressure and the fact that domestic hard coal production is nearly three times more expensive than imports. In contrast, lignite remains competitive and is exempt from royalties under the Federal Mining Act, which saved at least €279 million in 2010.
• Coal sector stakeholders successfully blocked a 2015 government proposal for a climate levy on polluting power plants by framing the debate around job losses and regional 'social blackout'. The levy was replaced by a plan to retire 2.7 GW of lignite-fired capacity in 2023, while keeping plants in a 'capacity reserve' to ensure energy security, a move viewed by critics as economically sub-optimal.
• The renewable energy sector has become a major economic force, employing significantly more people than the coal sector. In 2014, renewables employed about 355,000 people, including 130,500 in onshore wind and 48,600 in solar technologies, whereas industry estimates for the coal sector (hard coal and lignite) totaled 33,500 employees.

APA

Stockholm Environment Institute (2016). Turning energy around: Coal and the German Energiewende. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2016-Energiewende-and-coal.pdf

Chicago

Stockholm Environment Institute. Turning energy around: Coal and the German Energiewende. 2016. https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2016-Energiewende-and-coal.pdf.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Turning energy around: Coal and the German Energiewende |date=2016 |url=https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2016-Energiewende-and-coal.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2016turning, author = {{Stockholm Environment Institute}}, title = {{Turning energy around: Coal and the German Energiewende}}, institution = {Stockholm Environment Institute}, year = {2016}, url = {https://www.sei.org/mediamanager/documents/Publications/Climate/SEI-DB-2016-Energiewende-and-coal.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }