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11 April 2014

Coal is displacing natural gas, undermining the benefits of renewable energy expansion

New Agora-analysis finds that in order to achieve climate protection goals, an energy transition is needed in the heating and transportation sectors, as well as a national "consensus on coal".

Germany is experiencing an "energy transition paradox": greenhouse gas emissions are on the rise, despite an increasing share of power generation from renewables. Just ahead of the publication of the IPCC's report on climate change mitigation, an analysis released by Agora Energiewende comes to the following conclusion: Rising emissions in Germany are not attributable to the country's decision to phase-out nuclear power. Instead, this rise is caused by the increasing generation of electricity from lignite and hard coal, instead of natural gas, as well as a lack of CO2 emission reductions in the heating, transportation, and industrial sectors.

While greenhouse gas emissions fell continuously in Germany between 1990 and 2010, they have been on the rise since 2011. This trend applies to overall greenhouse gas emissions as well as to the energy sector. There are two factors behind this trend, as shown in the analysis. Although the decline in electricity generation from nuclear after the Fukushima disaster was more than offset by the expansion of renewable energy, and while electricity consumption fell in general, at the same time, however, the electricity market witnessed a shift toward lignite and hard coal power plants, and away from natural gas power plants (which produce fewer emissions). Furthermore, electricity exports increased. This increasing reliance on coal has been driven by price declines in the European market for CO2 certificates as well as high natural gas and falling coal prices.

Stalled progress in reducing CO2 emissions in the building, transportation, and industrial sectors. Furthermore, while significant reductions were achieved in past years in other areas – namely, in the building, transportation, and industrial sectors – progress here has come to a halt. The increase in CO2 emissions in the household and commercial sectors seen in 2013 over the previous year is attributable first and foremost to the cold and long winter experienced at the beginning of 2013. Yet slow progress in the insulation of Germany's building stock is responsible for the lasting negative influence that this cold winter has had on the country's CO2 scorecard. In the industrial sector, greenhouse gas emissions have remained relatively constant for years when one discounts fluctuations related to the business cycle.

You may download the analysis as well as the presentation from the press conference on 11 April below.

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