German officials agree plan to exit coal-fired power by 2038

BERLIN (AP) — German officials have agreed on a plan to shut down the nation's coal-fired power plants by the mid to late 2030s that will involve operators getting billions of euros in compensation, the government said Thursday.

A year ago, a government-appointed panel recommended that Germany stop burning coal to generate electricity by 2038 at the latest, as part of efforts to curb climate change.

However, efforts to translate that into policy had stalled over recent months. Some areas, particularly in the less prosperous east, are heavily dependent on lignite coal mining.

Federal government officials and governors of affected states agreed on a “path to shut down” coal-powered plants at a meeting that ended in the early hours of Thursday, the government said.

It said that reviews will be carried out in 2026 and 2029 to determine whether Germany can exit coal-fired electricity generation in 2035, three years before the final deadline.

Finance Minister Olaf Scholz said that operators of coal-fired power plants will be compensated for switching off those facilities earlier than planned. Operators of plants in western Germany will receive 2.6 billion euros ($2.9 billion), and 1.75 billion euros will go to operators of plants in the east, with the payments being made over about 15 years after the plants are switched off.

“What we have here is a good agreement for climate protection because it makes clear that we mean it seriously,” Economy Minister Peter Altmaier said. He added that the government plans to bring legislation to parliament at the end of this month.

Germany gets more than a third of its electricity from burning coal, generating large amounts of greenhouse gases that contribute to global warming. The country is in the process of exiting atomic power, with the last nuclear reactor set to go offline at the end of 2022.

The federal government already has approved a plan to spend up to 40 billion euros by 2038 to cushion the impact on coal-mining regions of abandoning the fossil fuel. That money is supposed to start flowing once parliament has passed legislation setting out the dates and terms of Germany's exit from coal.

“These were tough negotiations - they lasted a long time, from my point of view too long, but the result is good,” Environment Minister Svenja Schulze said. “We are the first country that is exiting nuclear and coal power on a binding basis, and this is an important international signal that we are sending.”

Schulze said that eight “very old and very dirty” coal plants will be taken offline very quickly, the first this year already. She acknowledged that Germany will need a “massive expansion of wind and solar energy.”

Altmaier said there will be less “excess production” in Germany in the future, “but we are very sure that we can ensure sufficient electricity supply for business but also for private consumers.”