Structural Change in the Rhenish Mining Area

 

Possible European Model Region For Energy Supply And Resource Security

The last coal-fired power plant in Germany is set to close down by 2038 at the very latest. The accompanying structural change will thus become a generational project aimed at achieving an economic, ecological, socially acceptable, and sustainable transformation. 

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The decision to phase out lignite is primarily based on energy and climate policy. Germany has set itself a major goal with the energy transition, where renewable energies are to be used instead of nuclear and fossil fuels. With the fundamental conversion of its energy supply, Germany is thus one of only a few countries in the world to phase out both nuclear and coal energy.

Massive Changes That Need Societal Approval

The goals established call for a far-reaching transformation process lasting many years – one which will not only affect the energy sector but also social and economic areas too. This can only succeed if it receives widespread support. In 2018, the German government set up the Commission on Growth, Structural Change, and Employment, KWSB for short, formed of representatives from politics, business, environmental associations, trade unions, and the affected federal states and regions.

The Commission should ensure that the various different interests of those affected are taken into account, and it should help to reach the greatest possible consensus in society regarding the design of the phase-out and the resulting structural change. The phase-out design poses a major challenge since it must reconcile goals such as climate protection, economic efficiency, and security of supply.

A large number of employees will lose their jobs in the beginning. It is a matter of creating new prospects for the future, an attractive location for new companies to settle in, and equally appealing living and leisure opportunities. Structural change confronts many people in the affected regions and communities with an uncertain future. This, too, must be taken into account.

Rhenish Mining Area to Become a Model Region for Energy Supply and Resource Security

A fundamental requirement for successful structural change in the mining area in the Rhineland and elsewhere is the creation of a nationwide legal framework. With the support of the German federal and state governments, the mining area should develop into a model region for energy supply and resource security that is exemplary not only for the region, the state of North Rhine-Westphalia, and Germany but also for other countries.

 

A Milestone for the Energy Transition in Germany

A milestone for the energy transition in Germany: Coal Phase-out Act and the Structural Development Act for Mining Areas

The farewell to coal-fired power generation has been decided with the Act on the Reduction and Termination of Coal-Fired Power Generation, the so-called Coal Phase-out Act. It was passed by the German Bundestag and Bundesrat on July 3, 2020 and came into force on August 14, 2020. It stipulates that the phase-out in Germany must be "completed in a planned and economically reasonable manner" and that the "conversion of the energy supply to sustainable energy must be driven forward".

The Coal Phase-out Act follows the energy policy recommendations of the Commission on Growth, Structural Change and Employment (KWSB) and creates a binding framework for successful structural change. The aim of the gradual reduction in coal-fired power generation is to generate 65 percent of electricity requirements from renewable energies in 2030.

At the same time, support for combined heat and power generation will be extended and further developed, thus facilitating the conversion to a flexible and more enviornmentally friendly power supply. The German government intends to examine whether power plants can possibly be shut down three years earlier on three occasions: 2026, 2029, and 2032. This could enable Germany to finally phase out coal-fired power generation as early as 2035.

Mining areas to perform better than ever thanks to structural change

The KWSB structural policy recommendations are implemented via the Structural Development Act for Mining Areas, which also came into force on August 14, 2020 with the Coal Phase-out Act. The Structural Development Act for Mining Areas is a so-called omnibus act which, on the one hand, created a new parent law with the Investment Act for Mining Areas, and, on the other hand, amended various "transportation route laws". The Structural Development Act for Mining Areas is intended to give the affected regions a real chance to perform even more successfully after the phase-out compared to before. Structural change can be seen as a unique opportunity for a better future, also in economic terms, with the creation of new high-quality and sustainable jobs. Mining areas are to become regions of the future so that new companies can settle and young people have prospects for their future.

It is not just a matter of cushioning the consequences of the phase-out. The coalfields are to be given the chance to develop into modern energy and economic regions with structural change. Under the Investment Act for Mining Areas, the lignite regions will receive financial aid of up to 40 billion euros by 2038. Of this, 37 percent (up to 14.8 billion euros) will go to the Rhenish mining area.

14 of the 40 billion euros are earmarked for particularly significant investments: The states can invest this sum in business-related infrastructure, local public transportation, broadband and mobility infrastructure, or environmental protection and landscape conservation.

Within its own jurisdiction, the affected regions are supported by the federal government with further measures with financial aid of up to 26 billion euros (from a total of 40 billion euros). These include, for example, the expansion of research and funding programs, the development of transportation infrastructure projects, or the relocation of federal facilities and with them numerous new jobs.

Another 240 million euros in emergency aid

The German government also complied with another KWSB recommendation with an emergency program of an additional 240 million euros in aid, with 88.8 million euros benefitting the Rhenish mining area.

The sum was intended to send out the first visible signals of change at an early stage. The funding served projects already selected in 2019 from existing nationwide funding guidelines until summer 2021.

The first approved projects, in which researchers from RWTH Aachen University are also involved, were:

Really good ideas should become projects – multiple participation desired

With its structural aid of up to 40 billion euros, the Investment Act for Mining Areas creates plenty of scope for outstanding and efficient ideas that can become projects that can move the affected regions forward efficiently and sustainably. If structural change is to succeed, not only is good cooperation between the federal and state governments needed, but also the successful involvement of the people in the mining areas, the numerous stakeholders from the mining areas. Their cross-disciplinary knowledge and ideas will be included in finding and decision-making processes.

Rapid coal phase-out – the state of NRW shows the way

North Rhine-Westphalia is taking a pioneering position in the phase-out of coal mining and the accompanying structural change. On December 31, 2020, the first unit (Unit D) at RWE's lignite-fired power plant in Niederaussem with a capacity of around 300 megawatts was taken off the grid. Unit C is to follow in Niederaussem by the end of 2022, as well as four units at the Neurath power plant and one unit in Weisweiler. By the end of 2022, the Termination of Coal-Fired Power Generation Act will require a reduction in lignite-fired power plant capacity of just under three gigawatts throughout Germany. This will be realized exclusively in the Rhenish mining area.

Nationwide, the Termination of Coal-Fired Power Generation Act requires the following by 2038: "The target level for the reduction and phase-out of coal-fired generation is 30 gigawatts by December 31, 2022 (target date 2022), 17 gigawatts by April 1, 2030 (target date 2030), and 0 gigawatts of remaining net rated capacity of hard coal plants and lignite plants in the electricity market no later than December 31, 2038 (target date 2038)."

 

The Rhenish Mining Area Can Become Europe's First Climate-Neutral Region

Becoming the first climate-neutral region in Europe is a great opportunity. But the structural change in the Rhenish mining area poses major challenges for the state of North Rhine-Westphalia. For the people, especially those from the affected communities, shaping structural change is crucial – they want social security and prospects for the future. These are precisely the situations that the structural funds provided by the German federal and state governments are intended to create via numerous different projects on key future issues, such as the energy and transport transition, climate protection, and digitalization.

 
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