Germany

Germany has considerable reserves of hard coal (2 500 million tonnes that are technically accessible of 82 961 million tonnes of known resources) and lignite (40 400 million tonnes), making these the country’s most important indigenous source of energy. However, in the case of hard coal there remain only 37 million tonnes to be extracted following the political decision to end subsidised German hard coal production in 2018.

In 2012, primary energy production totalled 148.4 million tonnes of coal equivalent (Mtce), excluding nuclear. With an output of 68.3 Mtce, coal and lignite had a share of 46 %. The mix of indigenous primary energy production can be broken down as follows: 57.2 Mtce of lignite (38.5 %), 11.1 Mtce of hard coal (7.5 %), 13.3 Mtce of natural gas (9.0 %), 3.8 Mtce of oil (2.5 %), 54.3 Mtce of renewable energy (36.6 %) and 8.7 Mtce from other sources (5.9 %).

Germany’s primary energy consumption amounted to 469.4 Mtce in 2012. Oil accounted for the largest share (32.9 %), followed by coal (24.8 %), natural gas (21.5 %) and nuclear energy (7.9 %). Renewable energy grew to 11.6 %. Within the figure for coal, hard coal accounted for 12.8 % and lignite for 12.0 % of total primary energy consumption. Germany is dependent on energy imports to a large extent, except in the case of lignite. About 87 % of hard coal was imported, in comparison with 98 % of oil and 87 % of gas.

The power generation structure is characterised by a widely diversified energy mix. In 2012, gross power generation of 628.7 TWh output was produced as follows: 44.2 % from coal (of which 25.7 % was from lignite and 18.5 % from hard coal), 15.8 % from nuclear, 12.0 % from natural gas, 22.6 % from renewable energy sources and 5.7 % from other sources. This means that hard coal and lignite, as well as nuclear energy, are the mainstays of the German power industry.

The federal government adopted its Energiekonzept or energy concept in October 2010. It combines a life extension of German nuclear power plants (on average by 12 years, with the last shutdown around 2040) with “green” energy policy objectives. The focus to date has been on ambitious climate protection policies: a CO2 emission reduction of at least 80 % by 2050 with step - by - step objectives for each decade, including a 40 % reduction by 2020, a massive increase in energy efficiency to yield total energy savings of 20 % by 2020 and 50 % by 2050, and the steady development of renewable energies to a 60 % share of final energy consumption and 80 % of power generation by 2050. The Energiekonzept should also be understood as a "Roadmap into the age of renewable energies" and the extended use of nuclear energy as the “bridge” to get there, although 2011 saw the collapse of this bridge.

To implement the new Energiekonzept, an immediate 10 - point programme was introduced for offshore wind and measures in connection with extending the life of nuclear power plants, including the introduction of a new tax on nuclear energy. Coal played only a secondary role in the Energiekonzept, without any specific objectives or long - term perspective. Coal - fired power plants shall, in the future, have the role of swing and reserve supplier to balance the ever - increasing power generation from renewables. Scenario calculations underlying the Energiekonzept foresee a drastic decrease of overall coal use in Germany. The market for hard coal halves by 2020 and then halves again by 2050.

Subsidised hard coal production is to be phased out by 2018, in agreement with national and European regulations. Lignite use, according to the scenarios, remains stable until 2020, but practically disappears as an energy source by 2050.

From a technical point of view, the Energiekonzept is based on a number of doubtful premises: a strong global agreement on climate policy, a perfectly organised European energy market, future technical innovations and efficiency leaps in the energy sector, solutions to all problems concerning public acceptance, and smooth changes to the structure of the energy economy given the assumed economic growth to 2050. Successful implementation of the concept therefore seems to be questionable.

In the meantime, the nuclear incident at Fukushima in Japan in March 2011 re - ignited the debate about extending the lifespan of nuclear power plants in Germany.

The federal government initially announced a nuclear moratorium and wanted to redraft its Energiekonzept during the summer of 2011. All political parties have now set themselves the objective of phasing out nuclear as fast as practicable. A return to the situation prior to the granting of lifetime extensions to nuclear power plants is seen as a minimal objective, together with improved efficiency and an accelerated development of networks and infrastructure across the entire energy sector. Now, there is an agreement among all political parties not to restart the eight nuclear power plants that were shut down during the moratorium, to phase out the remaining nine nuclear power plants in Germany by 2022 at the latest and to speed up the move to a “green” energy economy.

For this purpose, the German government has outlined a package of several new or amended energy laws and further political measures to foster change in the energy sector.

In total, it is expected that German electricity consumers will pay more than € 20 billion of EEG levies in 2013 to promote renewable energy. This is because a dramatic increase in the Erneuerbare - Energien - Gesetz (EEG –German Renewable Energy Act) levy was announced in October 2012. The 5.3 €c / kWh levy has triggered a controversial debate since the public is concerned about how EEG costs are shared. In response, the federal government proposed an “EEG price brake” (Strompreisbremse). However, the proposal was not adopted and it does not address other issues, such as the impact on competition in the electricity market. The way to an “age of renewable energies” has to be smoothed in Germany and elsewhere. Modern coal – and gas - fired power plants represent the technological bridge along this path. To this extent, the prospects for coal in general, and especially for coal - fired power plants under construction or in the planning stage, have become somewhat brighter.

Hard coal

 In 2012, the German hard coal market amounted to 57.0 Mtce, of which 40.1 Mtce were used for power and heat generation, whilst 15.4 Mtce went to the steel industry. The remaining 1.5 Mtce were sold to the residential heating market.

Germany was the EU’s largest hard coal importer in 2012, as well as one of the world’s largest coke importers. Some 45 million tonnes of hard coal (steam coal and coking coal) or 79 % of national consumption were imported in 2012. The biggest suppliers of hard coal to Germany were Russia, with a market share of more than 24 %, and the USA with 25 %, followed by Colombia with 21 %. Exports from Australia accounted for 11 % and from Poland 8 % which was also an important coke supplier.

In the regions of the Ruhr, the Saar and in Ibbenbüren, coal is extracted by RAG DEUTSCHE STEINKOHLE. In 2012, RAG produced 10.8 million tonnes of saleable hard coal (11.6 Mtce).

Restructuring of the hard coal industry continues in Germany which in 2012 still had five operating deep mines, namely the collieries West (which closed at the end of 2012), Prosper - Haniel and Auguste Victoria located in the Ruhr area, the Saar mine in the Saar coalfield (which closed at the end of June 2012) and another deep mine near Ibbenbüren. Production in 2012 from these three coalfields can be broken down as follows: 78 % from the Ruhr area, 4 % from the Saar and 18 % from the Ibbenbüren coalfield.

Employment figures continued to fall steadily. The number of employees in the hard coal mining sector decreased during 2012 by 15.8 % from 20 925 on 31 December 2011 to 17 613 on 31 December 2012. Productivity levels, measured in terms of saleable output per man – shift underground, increased after a crisis - driven decline in the previous years from 6 623 kg in 2011 to 6 876 kg in 2012.

In 2007 and 2008, the formal separation of RAG’s so - called “white” business, the former RAG Shareholding Limited Company, was completed and the new EVONIK INDUSTRIES AG was created. EVONIK, with its commercial activities in the fields of chemicals, energy and property, is now striving to list on the stock exchange as an independent company.

The core business of RAG became hard coal mining, as was the case for the former RUHRKOHLE AG, although it has retained certain related activities, especially in the fields of real estate in mining areas (RAG MONTAN IMMOBILIEN) and in mining consultancy and equipment sales (RAG MINING SOLUTIONS).

The private RAG Foundation, created in July 2007, is the owner of both RAG and EVONIK. Its remit is to bring its assets in EVONIK to the capital market, retaining only a minority stake. Long - term liabilities after the final phase - out of hard coal mining will be financed by the proceeds. The German government has taken the decision to phase out – in a socially acceptable manner managed by the RAG Foundation – all state aid for coal production by 2018. Using its assets, the Foundation will promote training, science and culture in the mining regions.

Lignite

Lignite supply in 2012 totalled 56.1 Mtce, with domestic output accounting for 57.2 Mtce and imports approximately 43 000 tce. Lignite exports amounted to 1.1 Mtce of pulverised lignite and briquettes.

Lignite production, which totalled 185.4 million tonnes in 2012, was centred in four mining regions, namely the Rhineland around Cologne, Aachen and Mönchengladbach, the Lusatian mining area in south - eastern Brandenburg and north - eastern Saxony, the Central German mining area in the south - east of Saxony - Anhalt and in north – west Saxony as well as the Helmstedt mining area in Lower Saxony. In these four mining areas, lignite is exclusively extracted in opencast mines.

Lignite is an indispensable energy source for Germany because it is abundantly available for long - term use and competitive. Furthermore, the lignite industry is an important employer and investor, adding major economic value to the mining regions.

More than 90 % of lignite production is used for power generation (169.4 million tonnes in 2012), accounting for nearly 26 % of total power generation in Germany.

In the Rhineland, RWE POWER AG produced a total of 101.7 million tonnes of lignite in 2012 from its three opencast mines: Hambach, Garzweiler and Inden. Almost 90 % of the lignite was consumed by the company’s own power stations, whilst some 12.0 million tonnes were used for processed products and for private consumption. At the end of 2012, the lignite division of RWE POWER had a total workforce of 11 241.

RWE’s BoAplus project is on track following a decision of the Cologne regional council on 5 July 2013 to amend its regional plan. This Aufstellungsbeschluss is an important milestone in the overall approval process which is expected to be completed by the end of 2014. The selection of bidders for the main components (boiler, steam turbine, cooling tower, electrostatic precipitator and flue gas desulphurisation) is proceeding so that documents Germany required by the BlmSchG (the Federal pollution control act) can be prepared – the final stage in the process.

The generation capacity of RWE POWER consists of five lignite - fired power plants with a total capacity of 10 848 MW. At Neurath, a new lignite - fired power plant with optimised plant technology (BoA 2 / 3) was commissioned in August 2012, boasting a gross capacity of 2 200 MW and replacing old plants. The lignite - fired power output in the Rhenish lignite mining area amounted to some 74 TWh in 2012.

In the Lusatian mining region, where VATTENFALL EUROPE MINING AG (VE - M) is the only producer, total lignite output amounted to some 62.4 million tonnes. The lignite is extracted in Jänschwalde, Cottbus Nord and Welzow Süd in Brandenburg, as well as in Nochten and Reichwalde in Saxony.

Lignite sales to public power plants amounted to 58.6 million tonnes. VATTENFALL EUROPE GENERATION AG (VE - G) is the main operator of lignite - fired power plants in the Lusatian area with a gross rated capacity of 7 581 MW. In 2012, with the opening of the new 675 MW Boxberg power plant, the gross power output from the Lusatian lignite - fired power plants totalled 53 TWh. At the end of 2012, VE - M and VE - G had a total workforce of 7 758.

The Central German mining area around Leipzig yielded a total lignite output of 19.2 million tonnes in 2012. The most important company in this area is MITTELDEUTSCHE BRAUNKOHLENGESELLSCHAFT (MIBRAG), owner of two opencast mines at Profen (Saxony Anhalt) and Schleenhain (Saxony).

In 2012, MIBRAG produced 18.7 million tonnes of lignite, serving the three company - owned combined heat and power plants at Deuben, Mumsdorf and Wählitz with a total capacity of 208 MWe. At the end of 2012, MIBRAG had a total workforce of 1 991.

Another opencast mine operated by ROMONTA is located in Amsdorf (Saxony - Anhalt), in the Central German mining area. In 2012, 0.5 million tonnes of lignite were mined there and processed to extract raw lignite wax. The wax - free fuel is employed for power generation at Amsdorf. At the end of 2012, ROMONTA had a total workforce of 311.

In the Helmstedt mining area, E.ON KRAFTWERKE produced 2.0 million tonnes of lignite. The heat and power generation sector is the only customer for lignite in the Helmstedt mining area. Extraction from the Schöningen opencast mine and operation of the Buschhaus (390 MW) power plant will continue until 2017. The lignite – fired power plant generated a total output of 2.3 TWh in 2012. On 31 December 2012, E.ON had a total workforce of 495.

 It is clear that the coal industry, with its capital investments, operating expenditures and payment of salaries, makes a very substantial contribution to the economy. One of the major criteria for sustainability is to maintain and create employment. The shrinkage of the coal industry and coal use has had a considerable impact on employment in the EU. A study by the EEFA research institute analysed the employment created by the German lignite industry. According to this study, approximately 25 000 direct jobs and a further 63 000 indirect jobs at suppliers can be attributed to the lignite industry. So for each direct job in the lignite industry, another 2.5 jobs are created at companies who supply equipment and services. 

Extraction of lignite from opencast mines changes the natural landscape, so land reclamation is an integral part of any mining project. Mining activities are only complete following the transformation of a former “industrial” opencast mine into a vibrant landscape. There is a long tradition of reclamation in ecologically ambitious ways.

For more than one hundred years, nature has inspired landscape restoration projects, including indigenous flora and fauna. Reclamation involves a learning process, in which there is always room for further improvement. Projects that return land to productive use, often with a high recreational and agricultural value, are typical.

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