How Germany Could Get Rid of Coal

The phase out of coal in Germany is one of the most contentious topics in current discussions on the formation of a new German government after Germany held general elections in September 2017. The  biggest German energy law firm Becker Buettner & Held now issued a legal analysis of the possibilities to phase out coal in Germany. It finds that a phasing out of coal in Germany would be possible and the study highlights ways in which the legal pitfalls encountered with the pase out of nuclear power in the country could be circumvented. The study is available here (German language version only).

The study of August 2017 was commissioned by the thinktank Agora Energiewende. It analyses the ruling of the German Federal Constitutional Court on the German nuclear phase-out that has been discussed earlier on this blog. The law-firm`s analysis features four key findings:

  1. From a constitutional law point of view there does not need to be a consensus amongst energy companies that are using coal and the government on the terms of a coal phase out. The legislator has a wide margin of discretion and even without such a consensus a phase out of coal would be constitutional. The creation of such a consensus was crucial for the appraisal of the German nuclear phase-out by the German Federal Constitutional court last year.
  2. Coal fired power plants, older than 25 years, can be closed down by the government without the need to pay compensation to the owners of these power plants. The study argues that, although a coal phase out interferes with the right to property guaranteed by art. 14 German constitution, this has to be balanced against the public interest in a coal phase out. This balance is struck when power plants that are already written down (usually the case with coal fired power plants after 25 years) do not have to be compensated for. 
  3. Although the owner of coal fired power-plants are entitled to a transition period until the closure of their power plants can become effective, this period usually does not exceed one year. The study claims that `only in rare cases` longer transition periods or compensation payments will become necessary under Germal law.
  4. The repercussions of closing down lignite fired power plans for the adjacent opencast mines needs to be taken into account by the legislator. Lignite open cast mines are protected seperately under article 14 German constitution and if the closure of lignite fired power plants is leading to the closure of adjacent lignite opencast mines, closures upon short notice might lead to the need to allow for transition periods or compensation.


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