• search hit 2 of 2
Back to Result List

Auctions to phase out coal power: Lessons learned from Germany

  • This study assesses the extent to which auctions for compensation payments are a suitable policy instrument for ending coal-fired power generation at minimum cost and thus achieving national climate targets. Germany is the first country to apply such a market-based mechanism. Evaluating the effectiveness and efficiency of the auction, we find that the first five of seven auction rounds will retire 10 GW of coal-fired capacity at a cost of 68 ± 5 EUR/kW, corresponding to an additional carbon price of 2.4 ± 0.2 EUR/tCO2. The possibility of administratively shutting down power plants from 2024 and a decreasing ceiling price have ensured that average compensation payments are well below the ceiling price, and low compared to other policies, even though there was no competition in two of five auction rounds. As the government cancels the freed emission allowances, the policy will result in lower emissions, even though the carbon intensity of the German coal power fleet increased slightly by 2%. Thus, the German auctions can serve as a model for national phase-out strategies in countries with similar institutional frameworks and provide a reference case for integrating conflicting policy objectives into auctions.

Export metadata

Additional Services

Share in Twitter Search Google Scholar
Metadaten
Document Type:Article
Language:English
Author(s):Silvana Tiedemann, Finn Müller-Hansen
Parent Title (English):Energy Policy
Publication year:2023
Publishing Institution:Hertie School
DOI:https://doi.org/10.1016/j.enpol.2022.113387
Release Date:2023/02/14
Volume:174
Article Number:113387
Hertie School Research:Publications PhD Researchers
Centre for Sustainability
Licence of document (German):Metadaten / metadata
Verstanden ✔
Diese Webseite verwendet technisch erforderliche Session-Cookies. Durch die weitere Nutzung der Webseite stimmen Sie diesem zu. Unsere Datenschutzerklärung finden Sie hier.