Decarbonization

Your expert for questions

Michael H. Küper
Head of Energy Law for Industry at PwC Germany
Tel: +49 211 981-5396
Email

Shaping a future-ready transition away from coal-based power

Decarbonization is a central element of the energy transition and a key focus area for several sustainability initiatives related to climate protection. In Germany, coal-based power generation is expected to end by 2038 at the latest, and to be replaced by renewable energy. In this way, the Federal Government aims to make an important contribution to sustainable development in Germany and to meet the targets set in the context of the Paris Agreement on Climate Change.

The planned measures have implications for all market participants along the entire value chain – from energy producers through to network operators and end consumers. Energy generated from coal is not sustainable, but it is comparatively cheap. For this reason, there will be a tendency for energy prices to rise as coal power stations are successively shut down. In addition, coal power stations still make a significant contribution to the reliability of the energy supply in Germany.

Decarbonization as a challenge and an opportunity

Germany's transition away from brown and black coal-based electricity generation aims to reduce CO2 emissions and strengthen the supply of low-CO2, renewable energy. In this regard, the end of coal-based power is an important pillar of the energy transition overall. For operators of coal-fired power stations, clear framework conditions and transitional agreements covering compensation for economic disadvantages are extremely important.

End consumers, and companies in particular, must adapt to rising energy prices that will be caused by the focus on low carbon and renewable energy in the future. It is now vital for end consumers and companies to avoid competitive disadvantages and the carbon leakage effect. The process of decarbonization offers benefits for the climate and the environment – and also offers companies the chance to strengthen their focus on decentral energy generation in the future. Cogeneration of heat and electricity will play a central role in this regard.

Your situation

How to get your company ready for the future

The transition away from coal-based power will require far-reaching changes to the way end consumers and power generators think and behave. They must react quickly to maintain their competitive advantage. Companies should consider many questions, including:

• Is my company (power station operator/end consumer) directly affected by the transition away from coal-based power?
• Will rising energy prices be compensated by other measures?
• How can my company react to this development?
• Would operating a facility for decentral power generation (e.g. a facility for cogenerating heat and electricity) create benefits for my company, as well as for the environment?

Our services

From individual questions to large projects – focusing on sustainability and decarbonization

The legal experts at PwC help you to find answers to these questions and many more by providing the following services:

• Supporting operators of coal-fired power stations in responding to the challenges that arise as a result of the transition away from coal-based power ("exit strategies").
• Evaluating available opportunities for industrial end consumers to receive compensation related to rising energy prices.
• Comprehensive conceptual development and implementation support for building new facilities and modernizing existing facilities.
• Consultation about funding for cogenerating heat and electricity.
• Support with claiming funding – for example, for measures that increase energy efficiency.