The Energy Business Review Online published an article by Matthew Cowie on 8 December titled Carbon caps: German coal faces heat. Apparently the European Commission has figured out that a carbon trading scheme will only reduce carbon emissions if there is a tighter limit on the number of credits that can be issued. After reviewing the plans that its members submitted, the EC has reduced the overall caps for nine of its members.
Because of its decision to shut down its nuclear plants, which currently provide almost 28% of the electrical power generated in the country, Germany will experience a larger impact from that decision than most of its competitor nations. The nation is squeezed by its reluctance to increase its dependence on Russian natural gas and by the fact that its wind capacity is nearing the point where expanding it much further may cause grid instabilities.
The main choice for new power generation is coal, which emits approximately 2 times as much carbon as natural gas and an infinite percentage more than zero emission nuclear power. The EC does not like that choice and is working to discourage it.
I love the way that the article closes, so I will quote it here:
The German government must encourage new power plant build to replace the ageing nuclear fleet as it retires and, to this point, their strategy has been to guarantee any new coal plants the carbon allowances that they require within their National Allocation Plan. The EC has also put a stop to this, as well as slashing Germany’s allowance overall.
As the largest carbon-emitting segment of the largest emitter within the EU, German coal operators may be set to face significant financial challenges. And by steering its energy policy away from nuclear, the German government may have jumped out of the reactor, only to end up in the fire.