Rising oil prices to boost German coal-fired generation: report

Freiburg (Platts)--22Aug2006


If oil prices continue their bullish trend, Germany expects more power
generation through coal plants, a higher share of renewables, falling energy
demand and high dependency on energy imports by the year 2030, the German
economics ministry said Tuesday.
The updated report, commissioned by the ministry from the energy
institute of the University of Cologne and Swiss Prognos Institute, said the
impact of higher oil prices on energy markets is estimated at $102/bbl
(nominal) or $60/bbl (real) to the year 2030. During times of high oil prices,
the study shows energy demand will fall to 2030to 17% lower than demand in
2005. Furthermore, the report shows structures of demand to change, with
significance of oil and gas to fall and coal-fired generation to rise over
gas.
"The findings on generation show high oil and gas prices mean nuclear
decommissioning would have to be largely evened out by increased coal
generation. This in turn would mean higher CO2 emissions, despite the arguable
expansion of renewable power generation," said Michael Glos, the federal
economics minister. Glos said the impact on the climate was one more reason to
reconsider decommissioning of nuclear power. The market share of renewables in
primary energy demand is expected to rise to 15% from the current 5% by the
year 2030. At the same time, the report noted German import dependency to rise
to 69% by 2030 (2005: 62%). The previous report had estimated that to be 72%.
Emissions meanwhile are expected to be 29% below the values of 1990.
Higher emissions from power generation wll be balanced out by falling
emissions from the traffic sector.

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