The German nuclear and coal exits since 2020 have had a strong influence on the country’s production fleet. In order to identify and illustrate the changes in power generation sources within the last 2 years, EQ has studied the German January power balances for 2020, 2021, and 2022. Initially, we have updated both the exit and capacity plans for the nuclear, as well as the coal-fleet as an introduction to the power balance and production numbers.
Exit plans for nuclear, lignite and hardcoal 2020 – 2023
Between the end of 2020 and the start of 2022, a total of 11.6 GW had been shut down, accounting for about 20% of the available capacity for nuclear, lignite, and hard coal in Germany. Another 8.1 GW is set to be closed down this year. This is shown in the table below, but please note that these numbers do not include plants for grid reserve and security of supply. The closure numbers are based on the official plans for nuclear exit, hard coal exit according to the tenders (1-4), and the reduction plan for lignite capacity.
This reduction in capacity is being partly offset by increased gas-fired and renewable facilities, but this is not included in this story.
Power balance impact of closures from 2020
As detailed in the introduction to this blog, we are using January 2020 as the reference period in our study, before the reductions began.
The average power balance (GW) for Jan-20 - > Jan-22 is shown in the table below. We see the usage of nuclear has reduced for 2022, while hard coal is at it’s highest level over the period in question, despite 4.8 + 1.5 = 6.3 GW (25%) reduced capacity since 2020!
You can find out more about why the hard coal production (GWh) has increased lately despite reduced capacity in our blogpost titled German fuelswitching reversed by the extreme gas prices.
Conversely, the amount of power being generated from natural gas is slightly lower this year than it was in 2020, despite 11.6 GW worth of reduced capacity for coal and nuclear.
It is important to note that the distribution of the production is of course not based on available capacity only - varying wind power and fuel prices are the other main factors used to determine the power balance we are stating in this article.
Spot prices, SRMCs and utilization of the coal-fired production fleet
The table below contains an overview of spot prices and Short Run Marginal Costs (SRMCs), which explains the reversed fuel switch observed this winter. Hard coal has been very profitable lately.
As the production volume for coal-fired generation has increased since before the coal exit started, it’s also interesting to check the utilisation numbers based on the REMIT availability data.
The hard coal fleet for Jan-22 was utilized more than twice as much as it was in Jan-20, which really is an extreme transformation. The lignite fleet, which normally has a much higher utilization rate than the hard coal plants, has seen a moderate increase by comparison (the 2021 numbers are influenced by the rather low wind power output, which was compensated for by coal and gas fired plants).
We can also see that the reversed fuel switch would have become even more prominent if the coal closures hadn’t been carried out. A simple approximation suggests that without the hard coal and lignite exit so far (6.3 + 1.2 GW) the Jan-22 production from hard coal and lignite power plants could have been increased by about 5 GW more!
At the moment, coal fired plants in Germany are running close to their maximum output.
This situation could last for most of 2022 based on today’s fuel costs. EQ will continue to follow the capacity and production development closely and provide updated blog posts and analysis of this topic as the year progresses.
Please contact us if you have any questions, or would like to talk about our data by emailing firstname.lastname@example.org.