German energy giant RWE has begun dismantling a wind farm to make way for a further expansion of an open-pit lignite coal mine in the western region of North Rhine Westphalia.
I thought renewables were cheaper than coal. How is this possible?
The original contract with the company RWE was made in the 1990s and included destroying whole towns for the coal mine, which was planned to be in use until 2038.
What we see now is a compromise between RWE, the state of North Rhine-Westphalia and the federal government to save the remaining towns and close the mine earlier (in 2030). The wind turbines are from 2001 and are nearing the end of their lifecycle.
Why not introduce a coal tax of 1million per ton, no need to modify the contract at all. If they want to pay 1million per ton to mine the coal, RWE is more then welcome to do so. It is their legal right after all.
This would likely end up hurting consumers more than RWE, because the “merit order” pricing system sets electricity prices depending on the production cost of the most expensive unit of electricity that is being consumed at a given time (usually coal). So raising the production cost of coal-based electricity sadly will also raise electricity prices, so long as renewables don’t take over a larger share of the market.
I mean of course it would hurt consumer absent government intervention, that is the design of the market system. Socialize costs, privatize the profits. But it doesn’t HAVE to be that way if Germany actually wanted to go green.
the force is strong with you
