Price and Employment Effects triggered by a German Coal Phase-Out — A Discourse Analysis

Abstract

Despite significant increases in low CO2-emission electricity generation from renewable energy sources, Germany seems off-track for reaching national climate targets for 2020. Therefore, in addition to a debate on price-based instruments to reduce emissions, a more interventionist, mandatory phase-out of coal-based power plants is discussed in Germany. For this paper, we analysed more than 30 studies on phase-out pathways, dates and other aspects of a coal-phase-out in Germany. We focus our analysis on wholesale electricity prices and employment effects. We show differences in the literature regarding both aspects and explain the causes of these differences. Our analysis reveals that the choice of a reference case, e. g. whether a retrofit option for coal power plants is practicable, and methodological differences in the form of additional constraints, e. g. the enforcement of a national secured capacity, have a crucial influence on the resulting effects from a coal phase-out.