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The past and future of energy are colliding in Germany’s coal country. The town of Spremberg, population 22,000, sits about 85 miles southeast of Berlin, nestled between several active open-pit coal mines and power plants. Lignite, a highly polluting brown coal, is abundant in this region of former communist East Germany, known as Lausitz, and mining has been a major pillar of the economy for more than a century.
But coal’s days in Lausitz and Germany are numbered. In January, the German government passed a new “coal exit” law laying out a timeframe for eliminating coal and its mines from Germany’s energy portfolio. By 2038, Germany’s coal industry – the source of 28 per cent of its net electricity generation – will disappear. For coal-linked towns like Spremberg, it’s a slow-motion existential crisis. It’s also the kind of hard deadline that spurs action.
“2038 is a very short timeframe,” says Spremberg mayor Christine Herntier. She explains that the local industry park, Schwarze Pumpe, is the source of 5,000 well-paying jobs. Half are directly tied to coal, and most of the others are indirectly linked to the industry. Unless something can take their place, the loss of these jobs may mean the end of this community and others like it in the region. “If we are not able to quickly create other jobs for our people in our city, in our region, then these people will become unemployed and these people will migrate,” Herntier says. “This is the biggest threat to cities like Spremberg.”
Herntier is intimately familiar with the 2038 deadline because it’s a deal she helped create. As a member of a coal commission convened by the federal government, she spent much of 2019 developing the country’s coal exit playbook. The law, which was formally approved on July 3, imposes a gradual drawdown of coal production, with its first milestone a decrease in production at brown and black coal power plants from 42.5 gigawatts in 2017 to 30 gigawatts by 2022 and 17 gigawatts by 2030. The law also includes €40 billion (£36bn) worth of funding for the “structural change” of the country’s three main coal regions. Lausitz is expected to receive the largest share, roughly €14bn. Herntier and other officials are now trying to figure out how this money can kickstart a brand new industrial economy in less than two decades.
The phaseout of coal is not really new for Lausitz. After the reunification of East and West Germany in 1990, most of the region’s open pit mines and several of its power plants closed almost immediately. Job losses in Lausitz were stark. In 1989 there were an estimated 80,000 people working in the coal industry. Coal and nuclear made up roughly 90 per cent of Germany’s power production. By 2019, that number had fallen to less than half, with renewable energy sources replacing most of the capacity and now accounting for 46 per cent of the country’s energy production. Today the Lausitz coal industry employs just 8,000 people.
But unlike the awkward changeover from the East’s communist past, the current transition is expected to be less of a shock. “I think it’s important to know what’s not happening is lots of people becoming unemployed and looking for work,” says Luke Haywood, who’s been researching the economic consequences of the decline of coal at the Mercator Research Institute on Global Commons and Climate Change, a Berlin-based think tank. A key element of the coal exit plan is a subsidy for coal companies to provide early retirement programs. In Lausitz, the average age of coal industry workers is 45.8, according to Haywood’s research, meaning that many will naturally age out of the workforce by 2038. Those on the younger end of the spectrum will likely need to change sectors in the years to come.
“This is happening no matter what,” says Pao-Yu Oei, head of a research project on coal phaseouts at the Technical University of Berlin. For environmental reasons, but also for economic ones, coal is starting to struggle to compete with renewable energy, he says. Across the EU, black and brown coal consumption has fallen from 1.2 billion tonnes in 1990 to around 600 million tonnes in 2018. Great Britain is in the midst of a record stretch of coal-free electricity generation, with wind and solar providing nearly half is energy, and coal’s share of the US energy mix continues to drop, as production is expected to decrease 25 per cent this year. Facing this reality, and soon, is essential if coal regions are going to be able to adapt to a post-coal economy, Oei says. “Those communities that start kicking off this transition that is anyhow happening, they will be the ones profiting from this. And those regions on the contrary that will be too defensive and that will not want to engage in this transition, they will be the ones left behind.”
The government’s €40bn is a lifeline for Germany’s coal regions, particularly Lausitz, a mostly rural peripheral area without many economic alternatives. The goal, broadly, is to help these regions reinvent themselves, replacing a dying industry with something new – or ideally multiple things. Ideas for the transition in Lausitz include opening community and job training centers and turning closed mines into lakes and developing tourist infrastructure on their shores.
Herntier has been instrumental in bringing this money to the region, both as part of the coal commission and also as the co-speaker of Lausitzrunde, a regional body of local officials who have joined forces to advocate for their shared interests in this uncertain future.
“Usually mayors are down there at the bottom of the food chain. They have to deal with what they get from above,” says Johannes Staemmler, senior researcher at the Institute for Advanced Sustainability Studies in Potsdam. “But they have been really outspoken, they have been really vivid and active to make their point to the national government that they need compensation in terms of money and that they need recognition by the national government.”
A variety of groups and programs are trying to help shape the region’s new identity. One program, Innovationsregion Lausitz, launched five years ago to help entrepreneurs adapt to new economic conditions. CEO Hans Rüdiger Lange says the organisation has worked with an estimated 150 startups and small companies, guiding launch strategies or helping established companies to expand beyond their primary focus serving the coal industry. The change has been gradual. “We have to look for opportunities and we have to be much more entrepreneurial than in this large-scale, big business thing they have specialised in before,” Lange says. “So that’s a huge turn in terms of attitude.”
Another group, Lausitzer Perspectiven, has been convening civil society organisations from around the region to ensure locals are as involved as business and industry in informing funding priorities. They have been participating in a government funded project to draft a regional development strategy for the year 2050 that will create a “future-proof and livable Lausitz.”
“We have a German saying, ‘whatever’s in writing stays,’” says Dagmar Schmidt, one of the group’s founders. “So basically if this is going to be the backbone of the transformation activities to come in the next 30 years, we will make sure that we have it in writing that public engagement and participation is a continuous institutional part of the transformation process, and citizens have meaningful engagement with the transformation process.”
What all this means for the region is still unclear. “I think what they are struggling with at the moment is about finding a new, or several new narratives for the region,” says Staemmler. Haywood at the Mercator Institute says the billions of structural change funds aren’t being targeted as strategically as they could be, and are instead spread out on local pet projects and “buzzword” ambitions like artificial intelligence, big data and biotech – “everything that every region wants to have,” he says.
It remains to be seen how those funds will be distributed, but the future of Lausitz may turn out not so different from the past. The most significant projects shift the region’s focus from coal energy to alternative energy. The chemical company BASF is opening an electric vehicle battery facility in the town of Schwarzheide, 25 miles west of Spremberg. To the north, in Jänschwalde, construction is underway on a power plant running on natural gas, which, although still a fossil fuel, creates only half as much carbon emissions as coal.
And in Spremberg, a new hydrogen power plant is being built at Schwarze Pumpe, the town’s existing industrial park. A relatively new type of power plant, it will convert and store surplus renewable energy in the form of hydrogen that can then be converted back into electricity through a turbine or fuel cell – all without carbon emissions. Though it will not completely offset job losses from the drawdown of coal, the plant is expected to create between 600 and 800 jobs by the time it opens in 2025. Herntier says that two other plants are slated to follow, positioning Spremberg and its neighbors as a new kind of hydrogen region. “We think that will have a similar effect in the future as coal in the past hundred years,” she says.
Bullish as she is about this hydrogen-based reinvention, Herntier is also cautious about how her town and her region take advantage of the infusion of funding coming their way. “We really have to be careful that this money is not wasted,” she says. The coal exit may be stretching out over the next 18 years, but for Lausitz, it’s a one-time chance to find a future beyond coal.
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