Germany emissions agreement could see 10 GW of coal power closed

Chancellor Angela Merkel’s cabinet has agreed to cut carbon emissions by 78 million metric tonnes by 2020 and the decision could see up to 10 GW of coal-fired power plants in the country being shut down.

Analysts from Sanford C. Bernstein & Co made the prediction following Wednesday’s decision with the possibility of Germany’s biggest utilities EON SE and RWE AG (FWB: RWE) shutting the coal power plants, potentially boosting prices.
While a reduction in supply could lead to 2017 power prices rising as much as 24 per cent, the policy may damp the price of carbon permits within the Emissions Trading System, according to Pira Energy Group, quoted in Bloomberg.

Germany used coal to generate 45 per cent of its power last year, its highest level since 2007, to help replace atomic reactors shut after the Fukushima nuclear disaster in Japan in 2011.

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