Germany to Phase out Coal, Boost Share of Renewable Energy to 80% by 2030

Two months after the general election in Germany, the Social Democrats (SPD), Alliance 90 (The Greens), and Free Democrats (FDP) have agreed on a coalition treaty that pledges that Germany will phase out coal-fired power generation by 2030.

The coalition partners also plan to increase the share of renewable energy to 80% by 2030.

The coalition plans to introduce a program that will ensure that 2% of the country’s land area is available to expand onshore wind energy and increase the capacities for offshore wind energy to at least 30 GW by 2030.

The coalition also said that it will ensure that the CO2 price in industrial production and electricity generation does not fall below €60 (~$67.60) per ton of CO2.  In addition, 50% of the heat will be generated in a climate-neutral manner by 2030. The coalition plans to roll out comprehensive municipal heating and expand heating networks with renewables.


Among other commitments, the coalition plans to abolish the EEG (renewables) surcharge. The EEG surcharge has long been at the center of the German debate on electricity prices. The EEG surcharge is used to finance the expansion of renewables, such as onshore wind power and PV. The surcharge is collected from consumers via their electricity bills.  The abolishment of the EEG surcharge will also eliminate subsidies that burden the state budget.

The coalition also outlined the importance of the transport sector in climate protection. The coalition agreement states that at least 15 million fully electric cars will be registered in 2030.  For the switch to CO2-neutral production to succeed, the coalition plans to bring carbon contracts against international climate dumping, such as a CO2 border adjustment mechanism.

According to Federal Network Agency Bundesnetzagentur, Germany installed 1.43 GW of solar capacity in the second quarter (Q2) of 2021. In a quarter-over-quarter comparison, solar installations in Q2 marked an increase of 113 MW (8.56%) from 1.32 GW in Q1 2021.

In July this year, Germany announced the auction results for ground-mounted and rooftop solar projects. In all, 95 ground-mounted solar projects with 513.25 MW capacity, with an average quoted price of €0.050 (~$0.059)/kWh, were selected. The lowest bid quote for ground-mounted solar tender was €0.046 (~$0.055)/kWh, and the highest was €0.059 (~$0.070)/kWh.