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ABSTRACT
This paper contributes to the political economy of low-carbon energy transitions by highlighting the importance of capital and coal devaluation in the destabilisation of incumbent energy regimes, which has been understudied by the energy transitions in social sciences literature. Empirically, it examines Germany’s coal exit plan, the world’s largest in terms of power capacity. By putting theories of capital devaluation into conversation with regulation theory, this study reveals the continuities between Germany’s exit plan and its long tradition of delaying the devaluation of coal. This paper engages with relational political-economic approaches to analyse the German coal exit plan beyond the dualistic market vs policy-based interpretation, which has been promoted by the coal industry to capture compensation payments. Rather, it will be argued that this plan, which in its current form is based on generous financial compensations to coal companies, can be understood as a way to regulate the ongoing devaluation affecting the energy industry and manage a dual legitimation crisis affecting the federal government.
Acknowledgements
I would like to thank Kelly Kay, Pao-Yu Oei, Philipp Herpich, Hanna Brauers, and Chris Hauenstein for their useful comments and suggestions. This research project was approved by the Office of the Human Research Protection Program (OHRPP) at the University of California, Los Angeles.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 A snowball sample approach was followed, through which different stakeholders related to the coal phase-out process were contacted. The interviews were semi-structured and focused on the conditions, timing, procedures, and outcomes of the Coal Commission and Coal Exit Law.
2 Interview with energy expert, Öko-Institut, 31 September 2019.
3 Interview with energy policy officer, DGB (Deutscher Gewerkschaftsbund – German Trade Union Confederation), 15 August 2019.
4 Interview with policy officer, utility company, 18 July 2019.
5 Interview with member of the Commission and representative of environmental organisation, 31 July 2019.
6 Interview with member of the Commission and representative of environmental organisation, 31 July 2019.
7 Rheinisch-Westfälisches Elektrizitätswerk Aktiengesellschaft (Rhenish-Westphalian Electricity Corporation).
8 Lausitz Energie Kraftwerke Aktiengesellschaft (Lausitz Energy Power Plant Corporation).
9 Energie Baden-Württemberg (Energy Baden-Württemberg)
10 Interview with energy expert, 7 June 2019.
11 Interview with labour expert, Mercator Research Institute on Global Commons and Climate Change Berlin, 21 April 2021.
12 Despite being among the poorest in the country, these lignite regions have experienced slight improvements in terms of economic growth and employment since the 2000s (Walk and Stognief Citation2021).
13 Interview with energy consultant and member of the Commission, 23 July 2019.
14 Interview with member of the Commission and representative of a mining region, August 2020 (conducted by Coal Exit Group); Interview with labour expert, MCC Berlin, 21 April 2021.
15 Interview with energy consultant and member of the Commission, 23 July 2019.
16 Interview with energy scholar, Leibniz Institute for Research on Society and Space, 8 August 2019; Interview with energy consultant, Agora Energiewende, 23 July 2019; Interview with energy expert, Öko-Institut, 31 September 2019.
17 Interview with member of the Commission, November 2020 (conducted by Coal Exit Group).
18 Interview with representative of Heinrich Böll Foundation, 22 April 2021.
19 This paper focuses on the financial compensation for utilities (€ bn 5–10), setting aside others forms of compensation that are important in this model, including the structural support for regions (€ bn 40), compensations for the increased electricity prices (€ bn 16–32) and early retirement compensation for workers (€ bn 5–7) (See Litz et al. Citation2019).
20 Recent estimates show that Germany must shut down all coal capacity by 2030, not 2038, to meet its climate obligations under the Paris Agreement (Yanguas et al. Citation2018).
21 Interview with environmental lawyer, 9 July 2021. (See also Flunes Citation2022)
22 Interview with policy officer, utility company, 18 July 2019.
23 Interview with member of the Commission, 21 April 2021.
24 Interview with energy consultant and member of the Commission, 31 May 2021.
25 See for example the case of Datteln 4, in which RWE and Deutsche Bahn have to pay for the operational costs, even if power is not produced; Interview with representative of environmental organisation in charge of several litigations against coal power stations in Germany, 09 July 2021.
26 Interview with representative of Heinrich Böll Foundation, 22 April 2021.
27 Interview with energy expert, Potsdam Institute for Climate Impact Research, 16 July 2021.
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Andrea Furnaro
Andrea Furnaro is a social scientist and Ph.D. candidate in the Geography Department at the University of California, Los Angeles. Her research focuses on the social and political aspects of the low-carbon energy transition, with a particular interest in the political economy of phasing out fossil fuels. Her dissertation research explores different governance mechanisms being discussed and implemented in Germany and the formation of public and private discursive and financial strategies to address the economic costs involved in the premature devaluation of physical and financial assets in the energy sector. Her research also includes studies on the political economy of extractive industries, especially copper mining in Chile.