Platts:

Germany plans to close 4 GW of hard coal-fired plants via a first annual compensation auction in June 2020, an energy ministry spokeswoman told S&P Global Platts Tuesday.

Compensation for closures is to be awarded to bidders offering the lowest cost of avoided CO2 emissions with winning plants set to close after winter 2020/21. The federal grid regulator BNetzA is set to run the auctions, according to a second draft leaked Tuesday.

The ministry is finalizing a hard coal exit law to cap hard coal capacity at 15 GW by end-2022. Assuming Datteln 4 comes online, Germany will have around 22 GW of hard coal capacity in operation as the compensation auctions get underway.

The BNetzA is to establish exact volumes required to hit the 15 GW target depending on other closure applications, the outcome of various capacity reserve auctions and startup of Uniper’s 1.1 GW Datteln 4 plant. Commissioning of Datteln 4 is foreseen for summer 2020.

Closure auctions thereafter are set to run annually until 2026, with hard coal capacity declining to 8 GW by end-2030.

Details on 3 GW of lignite closures are expected at a later stage, with Eur40 billion ($44 billion) of support for lignite mining regions already approved. Germany plans to completely phase out coal by 2038.

More: Germany plans 4 GW hard coal closure auction in 2020: draft law