Electrification and Coal Phase-Out in Germany: A Scenario Analysis

Abstract

The electrification of fossil fueled processes and applications is frequently quoted as an essential component for the deep decarbonization of the German energy system. A prerequisite for decarbonization through electrification is low-emission electricity. In the German case, this leads to the so-called “electrification dilemma”, as both a reduction of the emission-intensive conventional power plant park and the significant increase in electricity consumption are driving the demand for RES and guaranteed capacities drastically. In a simulation-based scenario analysis, two measures to reduce emissions in power generation in a high electrification regime are compared: CO2-allowance pricing and a lignite phase-out. Using the DC power flow formulation, the effects on the German transmission grid are determined. The results show that both the coal phase-out and an increase in the CO2-prices lead to a significant reduction in the average CO2-coefficient of power generation. Simultaneously the capacity gap increases significantly, but only for a few hours per year.