Germany's long goodbye to coal despite Merkel's green push

By Vera Eckert

FRANKFURT (Reuters) - Burning coal for power looks set to remain the backbone of Germany's energy supply for decades yet, an apparent contrast to Chancellor Angela Merkel's ambitions for Europe's biggest economy to be a role model in tackling climate change.

Merkel is avoiding the sensitive subject of phasing out coal, which could hit tens of thousands of jobs, in the campaign for the Sept. 24 election, in which she hopes to win a fourth term.

Although well over 20 billion euros are spent each year to boost Germany's green energy sector, coal still accounts for 40 percent of energy generation, down just 10 points from 2000.

To avoid disruption in the power and manufacturing sectors, coal imports and mines must keep running, say industry lobbies, despite the switch to fossil-free energy.

"(Coal) makes a big contribution to German and European energy supply security and this will remain the case for a long time to come," the chairman of the coal importers' lobby VDKi, Wolfgang Cieslik told reporters last week.

He also stressed it was crucial for steel manufacturing in Germany, the seventh biggest producer in the world, that use a quarter of the country's coal imports.

Critics point to the irony in Merkel's tacit support for coal given that she criticised U.S. President Donald Trump for ditching the Paris climate accord after pledging to voters he would lift environmental rules and revive coal-mining jobs.

"Merkel ... has no right to criticise the disastrous climate production policy of U.S. President Trump ... figures in this country speak for themselves," said former Green lawmaker Franz-Josef Fell, referring to Overseas Development Institute (ODI) figures showing the extent of public money going to coal.

Utilities such as RWE, Uniper and EnBW with coal generation on their books fire back by saying their output is covered by them holding carbon emissions rights certificates, while much of their historic profitability has been eroded due to competition from renewables.

Apart from the environmentalist Greens, who want coal generation to end by 2030, none of the main political parties have set phase-out target dates.

Huge vested interests are stifling debate, whether it is potential job losses that alarm powerful unions or the effect on industrial companies relying on a stable power supply.

Industry figures show renewables accounted for 29 percent of power output in both 2015 and 2016, up from 7 percent in 2000. But plants burning imported hard coal still make up 17 percent and brown coal from domestic mines 23 percent of power output.

Cheap coal lets them run at full tilt when necessary while the weather dictates if wind and solar produce anything at all.

Cieslik said he expected hard coal alone to retain a share of 15 percent by 2030.

VDKi warns that nuclear energy, accounting for 14 percent of power, will remove even more of the round-the-clock supply when it is phased out by 2022.

Wind and solar cannot even fill current gaps and a system run mainly on green power would fail to provide guaranteed supply over a winter fortnight, it says.

Power grid operator Amprion has said German networks came close to blackouts during settled and overcast conditions in January when renewable plants produced almost nothing.

Even environmental groups acknowledge the fossil fuel lobbies have a point, arguing there must be remedies to the problem of intermittent renewable supply.

"Old coal plants can be made flexible at a reasonable cost and allow countries with a high share of coal-to-power a soft transition to a climate friendly energy system," said a study commissioned by Agora thinktank, which backs the energy switch.

(Reporting by Vera Eckert, editing by Madeline Chambers and David Evans)