Coal Phase Out in Germany: The Role of Coal Exit Auctions

The German governing parties of the 20th legislative period (2021–2025) agreed to phase out coal “ideally by 2030”. A gradual phase out of lignite and hard coal is already planned and enshrined in law. This policy note answers many questions about the German coal exit auction process. It summarises the phase out of hard coal and small lignite powerplants in Germany.

  • Project Duration: 12/2021 - 04/2022

The coal phase out announcements by multiple countries in 2019–2021 have created a crucial momentum. The question now is how best to implement the phase outs. There are several instruments available for their facilitation. Reverse auctions are one option, although not a universal solution applicable in all circumstances

The German governing parties of the 20th legislative period (2021–2025) agreed to phase out coal “ideally by 2030”. A gradual phase out of lignite and hard coal is already planned and enshrined in law.

This policy note answers many questions about the German coal exit auction process. It summarises the phase out of hard coal and small lignite powerplants in Germany, beginning with a short historical overview. It then identifies the primary factors that make auctions suitable in the German context. It also describes how auction design interacts with adjacent regulations, and presents the auction results and lessons learned with the goal of being useful for an international audience.

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