Home
Hostname: page-component-684899dbb8-gblv7 Total loading time: 0.589 Render date: 2022-05-23T21:34:01.252Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "useRatesEcommerce": false, "useNewApi": true }

# 7 - Coal in a Climate-Constrained World

## The Last Gasp?

Published online by Cambridge University Press:  06 November 2020

## Summary

Chapter 7 takes the historical analysis into the present day and charts a significant unravelling in the coal-industrial complex. Investor uncertainty about the future viability of energy installations has shifted into a dramatic (and long-awaited) process of capital flight from coal to renewables. Perhaps most revealing, the coal sector itself has begun hedging its losses by investing in renewables. The chapter discusses the reasons for this shift. The Paris Agreement’s 2050 deadline for ‘net-zero carbon’, which, at the time of writing in 2019, was well within the investor horizon for coal-fired power plants, has imposed a growing perception of risk associated with coal facilities. It has also precipitated an unexpected realignment of low-income economies to seek new industrial strategies linked to the renewables sectors, creating a new state-renewables nexus to rival coal.

## Keywords

Type
Chapter
Information
Beyond the Coal Rush
A Turning Point for Global Energy and Climate Policy?
, pp. 196 - 214
Publisher: Cambridge University Press
Print publication year: 2020

In its 2018 Coal Report, the IEA reiterated its assessment that peak coal was in evidence, but that this had to be qualified because ‘the story of coal was a story of two worlds’. World coal production had declined over the 2016–2017 period, the result of the multiple challenges to coal that have been noted in previous chapters and a massive upsurge of investment in renewable energy technologies. Despite this upsurge, the magnitude of coal produced increased in 2018. It was predicted to have peaked, reflecting the Paris Agreement commitments and the ensuing redoubling of efforts to reduce coal consumption in the old industrial heartlands – and a slowdown in the pace of expansion of consumption in China following its signing of the Paris Agreement and in response to the domestic pressures of atmospheric pollution and its related health effects (BP Energy Outlook 2018). Coal production and consumption in India are expected to increase at an accelerating pace through to 2040, notwithstanding an investment surge in renewable energy technologies. By contrast, the magnitude of world investment in coal is predicted to fall – with some exceptions, including in Australia, which is anticipated to maintain current export levels, expand existing mines and developing new sources, and likewise in India, which is allocating coal blocks with the objective of increasing production (IEA Reference Kelly2018).1 Yet this tells only part of the story, because investment in renewable energy in both Australia and India currently exceeds investment in coal.

The story of coal is certainly being overshadowed by the increasing investment in renewables, but rather than conceive of this as the story of two worlds, our analysis of Germany, India and Australia suggests a more complex dynamic at work, and this is largely because coal remains such a contested commodity. The contest can be characterised as being arranged around four poles that reflect the political and material purchase of the different forces that have been seeking to chart the future course of energy production and consumption. One is framed by the ambitions to maintain a future for coal and to secure the power and institutional arrangements that have defined the coal–industrial complex and the system of energy-intensive capital accumulation. A second is defined by a reluctance to abandon coal as the driver of economic momentum. A third response is premised on exponents of coal-fuelled energy accepting or even embracing renewables but promoting a transition that defers the coal exit deadline, as can be observed with Germany’s proposed 2038 exit date. The fourth advocates a much shorter time frame for exiting coal.

The role of the state has been critical to how each of these scenarios has unfolded. In Germany, a program for transitioning away from coal had been set as a result of public pressure to abandon nuclear power and transition to a low-carbon economy. This became embodied in the Energiewende, which was captured in the 2010 legislative commitment to reduce emissions by 80–95 per cent by 2050 relative to 1990 levels.

In contrast, governments in Australia and India defending the coal–industrial complex have tended to pursue more heavy-handed approaches, restricting the exercise of democratic rights by communities and ENGOs opposing the expansion of mining and displacement. In Australia, for instance, some state governments have introduced, or are proposing to introduce, laws that restrict the rights of citizens and climate NGOs to protest against the expansion of coal mining or the use of coal to fuel power stations (Donaldson Reference Hannam2014; Napier-Raman Reference Napier-Raman2019; Slezak Reference Marshall2016a, Reference Slezak2017b). The federal government has been exploring measures to restrict the eligibility of environmental and other NGOs to make donations tax-deductible. Donations would be classified as supporting either advocacy work or activities deemed ‘political’, with the latter not entitled to tax write-offs. In India, the Modi government moved to block climate activists from travelling to speak at international forums, and to ban local ENGOs from receiving financial support from international organisations (Bidwai Reference Bidwai2015; Bhalla Reference Fuller and Ingall2016; Doshi Reference Doshi2016). Commitments to honour environmental standards and protect threatened ecologies by strengthening environmental approval processes are being frequently overridden in all three countries (Aggarwal 2017, Reference Aggarwal2019; Brändlin Reference Ghosh2016; Hannam 2018; Watts 2017).

At the international level, pressure against coal from climate policy has been growing. The 2015 Paris Climate Agreement requiring net zero emissions by mid-century clearly signalled the death-knell for coal. Post-Paris, a range of contrasting scenarios for coal’s future were laid bare. One grouping of fifteen national governments among those at the November 2017 COP meeting in Bonn formed the ‘Powering Past Coal Alliance’ and commited to phasing out coal-fired power generation before 2030. India and Australia did not sign, nor did Germany, which stated it would join once its Coal Commission had reported (discussed in Chapter 8) (Darby Reference Darby2019). By 2019, there were more than fifty signatories, including a number of sub-national regional, state and local governments – including the cities of Melbourne and Sydney – several US states, as well as ENGOs and other international organisations.

Against the growing post-coal bloc, the rhetoric of ‘clean coal’ and the dream of CCS remains the sector’s lifeline. BHP, the world’s leading mining company, for instance, has charted a pathway for itself as a ‘responsible’ miner: it has announced its exit from thermal coal, embraced CCS for metallurgical coal, resigned from the World Coal Association and questioned the adversarial pro-coal advocacy of the Minerals Council of Australia (Janda Reference Janda2017). Technology is to solve coal’s emissions problem, maintaining it as the world’s ‘energy foundation’ (even as the world’s climate collapses) (Evans Reference Evans2018). This approach is reflected in the claim that coal is crucial for renewable energy, to produce steel turbines or to fuel electricity for hydrogen production (Constable Reference Constable2019). Here, coal becomes a complement to renewables and, remarkably enough, comes to depend on the renewable transition (Bloomberg News Reference Gammage2017; Chowdhari 2018; Gray Reference Gray2019; Iannucci 2019; Jamasmie Reference Jamasmie2019; Latimer Reference Latimer2016; Macdonald-Smith Reference Macdonald-Smith2016; Yeates Reference Yeates2019; Wild Reference Wild2017a, Reference Wild2017b).

### Australia’s Coal Capital against Renewables and Climate Policy

At the UN COP meeting in Paris in 2015 and since, the Australian government remained an unapologetic champion of the old coal order. As then Minister for the Environment and Energy and now Treasurer Josh Frydenberg told the 2017 COP, ‘Tens of thousands of Australians … rely on our coal industry and it does help lift people out of energy poverty in other parts of the world and provides billions of dollars of export income to Australia’ (Bloch Reference Bloch2017). A year later, at the 2018 COP24 meeting held in Katowice, the Australian government attended a US-organised event promoting fossil fuels, intended as a precursor to a new ‘Clean Coal Alliance’ (Doherty Reference Doherty2018; Mathieson Reference Mathieson2018; Merzian Reference Merzian2018). Only the US, Australia and COP host Poland attended.2 While the US under President Trump did not attend any UNFCCC events, having frozen itself out with its decision to withdraw from the Paris Agreement, Australia valiantly sought to span the contradiction between coal and climate, maintaining an inside–outside stance.

Similar contradictions have paralysed domestic energy policy in Australia. After returning to the leadership of the Liberal Party in 2015 and winning the 2016 federal election, Malcolm Turnbull sought to re-establish consensus on energy policy, commissioning a report from Chief Scientist Alan Finkel, who recommended a ‘clean energy target’ consistent with emissions reduction. This was forced off the agenda by the conservative coal lobby, and Turnbull moved to ‘Plan B’ with a National Energy Guarantee (NEG) that would legislate for emissions reduction in the electricity sector as well as ‘guarantee’ affordability and reliability. The NEG was exhaustively developed by the government through 2017, but when it was introduced into Parliament in September 2018, it offered the trigger for a new revolt by climate sceptics in the Liberal Party, which then ousted Turnbull and installed a new neo-conservative, Turnbull’s Treasurer, Scott Morrison.

These twists and turns have been remarked upon as signalling a new political instability in Australia (Eckersley 2015). The coal–industrial complex is proving signally resilient, to the extent of making it impossible to legislate on climate change, in the process threatening the legitimacy of democratic institutions. The coal upsurge, along with the wider mining boom, has brought a long-running resource curse that is eroding democratic values (Goodman Reference Goodall2008). Yet, at the same time, the fossil fuel sector has become increasingly isolated from wider business and commerce, especially the burgeoning services sector, which has become more orientated towards the renewable energy sector and associated industries. The imminent (and now actual) closure of Australia’s privatised ‘fleet’ of ageing coal-fired power plants, as they literally become a danger to workers and too costly to repair or retrofit, has been a major precipitating force in this debate (Burke et al. Reference Burke, Best and Jotzo2019). Here, ironically, it is Australia’s privately owned generating companies, along with some state governments, that have become the chief agents in forcing the debate on energy transition.

Renewable energy is swiftly becoming a key focus. By 2018, renewable energy in Australia was cheaper than even existing coal-fired power: the coal lobby needed a rationale for government intervention to overcome this price differential, and found it in the notion of reliability.3 The NEG sought to achieve this by simply requiring generators to buy a proportion of ‘baseload’ or ‘dispatchable’ power, mainly from coal-fired stations, to supplement what was assumed to be intermittent renewable power. With the demise of the NEG, the government simply offered to directly subsidise the construction of new coal-fired power stations, again on the pretext of reliability (Karp Reference Kirkwood2018). However, this proposal remains to be tested against the power of popular sentiment, which in Australia has been staunchly in favour of renewables (Murphy Reference Murphy2018a; Parkinson Reference Parkinson2018a).

Meanwhile (and partly reflecting this sentiment), there has been a surge in investment in renewables. The downward spiral in the cost of renewable energy has allowed households and businesses to use renewables to insulate themselves from unpredictable price variability on the grid. This alternative renewable energy dynamic has been in place for some time: Australia has the world’s highest proportion of household rooftop solar, at 15 per cent, which has both reduced uptake and increased supply on the grid (Energy Australia n.d.). As energy demand has failed to grow as fast as predicted, plans for new fossil fuel power stations were being quietly shelved from the late 2000s.

Those national renewable energy agencies established under Gillard that survived Abbott’s policy cull have played a key role in this transformation. Established in 2012, the Australian Renewable Energy Agency provides financial and other support for innovation and application of renewable energy technologies; and since 2013, the CEFC has provided debt financing for twenty major solar farm projects, which will add 1 GW of power-generating capacity (Clean Energy Finance Corporation 2017). The CEFC has supported a host of other clean energy projects, including wind power and hydro. State governments are also playing an active role in cementing the transition, by setting much more ambitious renewable energy targets than the federal government does. The previous South Australian Labor government, for instance, made substantial investments in wind and solar energy and electricity storage batteries, with the objective of generating 75 per cent of the state’s power requirements from renewable sources (Parkinson Reference Parkinson2018b).

AGL’s decision in 2018 to proceed with the planned 2022 closure of its Liddell power station in defiance of the enormous pressure exerted by the coalition government is emblematic of a transition under way. Considered in the context of the acceleration of investment in solar and wind farms being undertaken by domestic and international financiers, households and small businesses – what one review described as a ‘solar “tsunami”’ – there has been a significant cultural shift in Australia with respect to energy generation that seems unstoppable (Hannam and Latimer Reference Hannam and Latimer2018; Reuters Reference Macdonald2019). The same cannot be said about the mining of coal for export. As outlined in the previous chapter, domestic energy policy and the steps being taken to transition from reliance on fossil fuel are a small part of the story of Australia’s coal conundrum. In general, Australian coal production is closely articulated with export markets, and thus with the success or failure of global climate policy. Barring the unlikely possibility of a domestic coal moratorium, the future for Australia’s export coal hinges on the success or failure of climate policy in the countries it exports to. Failure would doom the planet, though it would be a boon for coal–industrial interests. To the contrary, should there be a significant transition from coal-fired power to renewables, and especially in countries such as Japan, China and India, then the Australian export coal trade would finally be forced to close down. The prospects for this will be determined far beyond the communities now fighting the march of coal across Australia’s (still) booming coalfields; but as we have argued, their struggles have become articulated with the broader struggle for global climate action.

### India’s Rush for Energy, with and beyond Coal

For the government, ironically enough, poverty reduction offered a ready mandate for intensifying the existing model and expanding coal: according to the established developmental script, prosperity depended on energy access, and this required coal-fired electricity (Sant and Gambhir 2015). Yet, by the late 2000s, with India’s growing engagement with climate concerns, ever-expanding coal-fired power was increasingly being put into question. Debates about responsibility were increasingly superseded by a sense of necessity in the face of direct anticipated climate impacts. And most important, with growing access to low-cost renewable energy, the coal–prosperity nexus was starting to unravel. National policy shifts meshed with challenges on the ground; with coal being challenged both ‘from above’ and ‘from below’, there was some indication of a structural shift.

By the late 2000s, UN preparations for a new post-Kyoto climate agreement had sparked a growing debate about India’s role. In 2007, the prime minister established a high-level Council on Climate Change involving representatives from the government, industry and civil society to coordinate plans for assessment, adaptation and mitigation of climate change. It reported in 2008, immediately prior to the 2009 UN COP in Copenhagen, and was tasked to develop proposals for the post-Kyoto scenario. The resulting ‘Climate Action Plan’ emphasised the need to maintain annual growth rates, for ‘inclusive and sustainable development’ while ‘also serving specific climate change objectives’ through a range of national initiatives for industrial efficiency and renewable energy (Government of India 2008: 13). The plan recognised the need to constrain emissions but stated it would only limit India’s per capita emissions to OECD levels (though this made no sense for climate stability). Citing the 2006 Integrated Energy Policy, the plan proposed a threefold increase in coal consumption by 2032. Most significant, the 2008 plan still stressed uncertainties about the ‘magnitude of climate change impacts’ and throughout stated it ‘could’ or ‘may’ (not ‘would’ or ‘will’) have serious impacts, asserting that there was ‘no firm link’ between documented impacts and anthropogenic climate change (Government of India 2008: 15).

India’s drive for coal was intensified with the 2012–2017 National Plan, which proposed expanding domestic production from about 660 million tonnes in 2010 to 980 million tonnes by 2020 and explicitly sought to achieve this by targeting ‘[e]nvironmental and forest clearances of coal projects’ with a ‘special mechanism for inter-Ministerial coordination … to accelerate processing of these projects’ (Government of India 2012: 33). But, as with Germany and Australia, the collision between expanded coal and climate change was starting to shift the policy agenda. A key aspect of this was the recognition that climate change was already having an impact on India, and as a result, the framing definition of ‘climate justice’ in terms of post-colonial carbon debts and development rights was substantially revised ‘from within’. The resulting shift in climate policy redefined conceptions of energy justice based on fossil fuels (Bickerstaff et al. Reference Bickerstaff, Walker and Bulkeley2013).

The new position emerged in 2014 with the report of the ‘Expert Group on Low Carbon Strategies for Inclusive Growth’, which argued that to prevent further climate disruption, it was ‘of utmost importance’ that India ensure the emergence of an effective global agreement (Expert Group 2014: 5). The Expert Group tabled a proposal specifically for slowing India’s emissions growth, principally by reducing dependence on coal and expanding renewables. This, they argued, could ensure that emissions would only double rather than triple by 2030 (i.e. grow from 1.7 billion tonnes to 3.2 billion tonnes, rather than to 5.2 billion tonnes, between 2007 and 2030; Expert Group 2014: 27). This was reflected in a doubling of the reduction in emissions intensity (from the business-as-usual −22%, to −42% between 2007 and 2032; Expert Group 2014: 27).

Elements of the Expert Group model were reflected in India’s ‘Nationally Determined Contribution’ (INDC) under the 2015 Paris Agreement, which aimed to reduce in energy intensity by 35 per cent by 2030 and to increase ‘non-fossil fuel based’ energy to 40 per cent of electricity generation by 2030, allowing coal to fall to 53 per cent (Government of India 2015). The country’s 2017 Draft National Energy Policy then projected a further reduction to 44–50 per cent in coal generation by 2040 with a slower increase in energy demand (NITI 2017). In this context the government embarked on a twin-track energy strategy, of continued expansion in coal-fired generation and coal mining on the one hand whilst at the same time seeking to greatly expand the fledgling wind and solar energy sectors on the other. With the difficulties in gaining access to domestic coal – acknowledged by the government in the 2012 National Plan – renewables started to substitute for coal expansion (Goodman 2016).

Certainly, climate concerns were being forced onto the national political agenda. Post-2008, in the context of growing international and domestic debates, climate issues gained some traction. Thaker et al. (Reference Thaker, Maiker and Leisowitz2016: 3, 12) found a diversifying agenda, with ‘climate change providing a space to engage with the government on broader governance issues’: this was reflected in the language of ‘co-benefits’, and a focus on domestic vulnerabilities, especially for the rural poor, which ‘has led some to reassess India’s development strategy’. Dubash and colleagues demonstrate the unfolding agendas and highlight the resulting downward pressure on the coal industry (Dubash et al. Reference Dubash, Khosla, Kelkar and Lele2019). The structural context for coal was shifting, and this was having impacts on the ground. Global Coal Tracker, for instance, finds that between 2010 and 2018, 491 GW in planned coal power was cancelled in India, more than twice the current operating capacity of 220 GW; only 57 GW was still planned to go ahead (Shearer et al. Reference Scott, Fruendt and Schöning2019).

Government efforts to boost coal were being re-contextualised. In 2019, the government was still seeking to boost coal production, encouraging private mining companies, allowing them to sell on the coal market and boosting private generation. There was a focus on further corporatising and commercialising CIL to expand production (Carl 2015; IEA 2012; Jain Reference Jain2018). In 2018, the government was still fast-tracking mining approvals, aiming to produce 1 billion tonnes annually by 2020, in part to replace imports but also to feed rising demand (PTI 2018a). But the industry faced continuing logistical problems, in terms of transport especially; many coal-fired power generators under the NTPC were ageing and near retirement, and the coal itself was poor quality.4 Over-hasty approval of large power plants had resulted in legal blockages over environmental or other development approvals; several of the plants are planned to rely on coal imports, and as a result were put into question by policymakers (Dave and Jai Reference Hannan2017). The anticipated upsurge in the demand for power was not manifesting, and instead, many coal-fired power plants were operating below capacity and new plants, as noted, were being shelved. Not surprisingly, in this context, there was flagging interest from the private sector, whether for mining or generation (Darby Reference Darby2016; Jain Reference Jain2018).

Most important, the development of new mines had not proceeded at all as planned. There were continuing disputes over allocations cancelled following the ‘Coalgate’ exposé and related disagreements over land rights (Energy World 2016). Community resistance to displacement remained a critical impediment (McDuie-Ra and Kikon Reference McDuie-Ra and Kikon2016). Further, legal rights covered by environmental safeguards were being vigorously pursued. In response, the federal government with the sub-national states in coal-mining regions sought to dismantle or sidestep many of the provisions that protected local peoples and environments, including under the Forest Rights Act (as outlined in Chapter 2; Aggarwal Reference Aggarwal2019; Kohli Reference Kohli2012). Some projects were advanced: Jindal Steel and Power, for instance, was able to expand operations in Chhattisgarh by overcoming ‘road blocks’ (Mohan Reference Mohan2015).5 For others, such blockages could simply be sidestepped or ignored. Remarkably, in 2014, CIL itself was found to be operating two-thirds of their mines without environment clearances (BankTrack 2014).

In sum, the attempt at again recasting the coal–industrial complex was not delivering. Despite efforts at reinvigorating the coal–industrial complex, there has been little in the way of increased coal production or increased power capacity (PTI 2018c).

#### Towards a Renewable Energy–Industrial Complex?

While the interest in expanding coal production for thermal power stations appears to be wavering, the same cannot be said for renewable energy. Following Prime Minister Modi’s declaration of a ‘saffron revolution’ in 2014 to spearhead the pace of economic development, there has been a sudden rush of enthusiasm from the domestic private sector and from international investors to invest in renewable energy projects. The seeds for this transition were sown with the establishment of the Jawaharlal Nehru National Solar Mission (NSM) in 2010 by the government led by Prime Minister Manmohan Singh.

### Germany’s Energiewende: A Low-Emissions Accumulation with Coal?

India’s turn to renewable energy has emerged as an industrial strategy to ignite the momentum of economic development and capital accumulation. The old coal–industrial complex has to a large extent been set aside, although coal will continue to be important in India’s energy future. The transition is being engineered by the state and, in many respects, mirrors the German model for Energiewende. It too was designed to reinvigorate industrial capitalism and to globalise that dynamic by becoming a world leader in the manufacture and export of renewable energy technology.

For almost two decades, through the Energiewende, or ‘energy transition’, the state in Germany has sought to demonstrate leadership in setting the most ambitious emissions reduction targets in Europe. There were a number of important milestones on what Felix Christian Matthes calls the ‘long political road’ to the Energiewende, including the passing of the Renewable Energy Law (Erneuerbare-Energien-Gesetz [EEG]) in 2000 and the 2010 Energy and Climate Policy Package, which set out Germany's ambitious emissions reduction targets (Fabra et al. Reference Fabra, Matthes, Newberry and Colombier2015: 51). Responding to strong and determined popular opposition to nuclear reactors, in 2000 the Schröder-led SPD–Green coalition government introduced a feed-in tariff system to encourage investment in renewable energy and negotiated with nuclear power utilities their eventual exit. Crucially, the Energiewende policy was not simply about setting an agenda for transitioning away from reliance on nuclear power and decarbonising the economy. It was also an industrial strategy, characterised by several observers as ‘an innovation-oriented ecological modernisation project’ designed to provide a new industrial focus for reinvigorating German manufacturing industry (Hillebrand 2013; Jänicke and Jacob Reference Jänicke and Jacob2004).

The promise was delivered with assurances of the long-term commitment to the feed-in tariff and an increase in the value of the tariff in 2010, and there was a fivefold increase in renewable energy-generating capacity over the following decade. Renewable energy created an industry that employed almost 400,000 workers and consolidated a ‘highly developed national innovation system’ (Jänicke and von Prittwitz 2010, in Buchan Reference Buchan2012; Hillebrand 2013; Hospers Reference Hospers2004). This established German manufacturing industry as a lead producer of renewable energy technology and, as a first mover, a significant exporter of renewable technology. As Hillebrand argues, the new eco-industry developed into one of the most dynamic sectors in Germany’s manufacturing industry. Enjoying ‘first-mover advantage’ established a substantial competitive advantage in the supply of renewable energy technologies in international markets; it was also ‘accompanied by the emergence of business associations that lobby for strict environmental regulation’ (Hillebrand 2013: 668). With strong state backing and continuing support from the anti-nuclear movement and the Green Party, the new eco-industry presented an answer to concerns about energy security given the volatility of coal prices and reliance on Russian gas supplies, and thus represented a real challenge to the hegemony of the coal–industrial complex.

The development of the Energiewende also translated into a global industrial export strategy, underpinned by Germany’s foreign aid program. The government-owned development bank, the KfW banking group, provided financial support to assist the development of the renewable energy sector in India in its early stages (KfW n.d.), and it has played a lead role in providing further funding for the development of the renewable energy sector in India following the Paris Agreement (ET Bureau Reference Harlan, Pello, Timmons Roberts, Bell, Holt, Nagel, Dunlap and Brulle2017). Paradoxically, the ‘first-mover advantage’ is being lost to newcomers to the field, especially in the manufacture of photovoltaic panels, which has seen China assume an ascendant position. The upside to this is that Germany is benefitting from the import of cheaper Chinese-produced photovoltaic panels (Wehrmann Reference Wehrmann2017)

At one level, the Energiewende has been a resounding success: Germany has already achieved the target set in the energy transition laws, and renewables now account for 34.9 per cent of gross German power production, only just behind lignite and hard coal combined at 35.4 per cent (CEW 2019). In the first half of 2019, that figure rose to 44 per cent, well ahead of coal-fired power (BDEW 2019). But the adoption of the Energiewende did not mean the government was deserting coal. On the contrary, it became apparent following Chancellor Merkel’s decision to expedite the closure of nuclear reactors after Fukushima that reliance on coal could not be abandoned so easily. It is generally agreed that the staged phase-out of nuclear power resulted – at least temporarily – in increased reliance on coal-fired power, as lignite became the only power source cheaper than renewables. Despite the introduction of the capacity reserve, Germany is still responsible for 35 per cent of total EU coal-fired power generation. One consequence is that Germany will likely miss the 2020 emissions reduction target of reducing emissions by 40 per cent from 1990 levels.

The reluctance to hasten the reduced reliance on coal also reflects the political pressure brought to bear by the union representing mineworkers, which has made a point of demonstrating the depth of opposition to closing mines and the loss of jobs that would result (Abraham 2017). Nor did the hesitancy simply reflect the desire to maintain the industrial accord that defined the corporatist system. The government was also responding to political pressure exerted by the lignite industry and coal-based communities. DEBRIV Bundesverband Braunkohle, the industry association representing German lignite producers, including RWE and Vattenfall, lobbied the government not to phase out coal production prematurely, and to maintain lignite mining and power generation to fill an anticipated power capacity gap when Germany’s nuclear reactors closed in 2022 (Euracoal 2015). At the time, in 2014, the production of lignite in Germany had reached a record level, and even the government was sending signals that it did not want a too-hasty retreat from coal. Responding to rumours circulating that Vattenfall was assessing the future of its investment in lignite mines in Brandenburg and Saxony, the German Vice-Chancellor and Economy and Energy Minister, Sigmar Gabriel, wrote to Sweden’s newly installed prime minister, appealing for his support to persuade Vattenfall not to withdraw from mining lignite to generate electricity (Clark et al. Reference Chubb2014). Gabriel observed that Germany remained committed to phasing out nuclear power, but that ‘we also strongly believe that we cannot simultaneously quit nuclear energy and coal-based power generation’, and accordingly the phase-out of fossil power generation would have to proceed ‘at a gentler speed’ (Clark Reference Chubb2014).

With a view to reconciling the government’s failure to meet its 2020 emissions reduction target with its long-standing commitment to renewable energy, in 2015 the Merkel government sought to reassert its green credentials, launching the ‘Climate Action Programme 2020’. This included specific measures for the electricity sector to decrease the use of black (or hard) coal and lignite. In 2016, the ‘Climate Protection Plan 2050’ was unveiled, setting out strategies to reduce greenhouse gas emissions by 61–62 per cent compared to the 1990 levels by 2030. The Protection Plan was intended to reinvigorate emissions reduction efforts but was confronted with some opposition. A proposed levy that would be imposed on, and result in the closure of, coal-fired power stations commissioned before 2000 was strongly opposed by the industry and unions (Abraham 2017). The peaceful transitioning that had distinguished some fifty years of coal industry restructuring appeared to be in jeopardy when the IG BCE announced plans for 10,000 mine workers to protest in front of the chancellory. The Economy and Energy Minister Sigmar Gabriel responded by assuring the industry that the plans ‘would be phased in in a socially acceptable way’ (Franke Reference Franke2015). The levy was abandoned and in its place the government established a reserve system that would involve subsidising eight lignite-fired power stations to stay on standby – in ‘cold capacity reserve’ – able to refire should renewables energy capacity not meet demand. The Jänschwalde-Nord power plant in Lusatia, just a few kilometres from the threatened villages which were the subject of our case study, immediately had two of its five blocks placed on standby, and is expected to be closed altogether by 2033, if not sooner.

Notwithstanding this opposition, there have been some positive signs that the energy industry is engaging with the Energiewende more constructively. Each of the ‘big four’ energy giants has begun to invest in renewable energy projects. Vattenfall’s decision to sell its interests in Lusatian lignite mines is held up as an exemplar for the future under the Energiewende. In a comparatively short time, there were also quite noteworthy shifts in the operational plans of the four major energy corporations.8 EnBW9 had announced in 2013 that it planned to produce 40 per cent its energy from renewable sources by 2020 (Appunn et al. 2015). At the end of 2014, E.ON reported that it was spinning off its nuclear and lignite-generating assets with a view to focussing on renewals and energy distribution. Vattenfall, pressured by the Swedish state, was withdrawing from fossil fuel–based power. Finally, in mid-2016, RWE, Germany’s second-largest electricity generator and biggest CO2 emitter, announced its intention to follow the lead of E.ON and separate its renewable energy business from its fossil fuel generation in order to raise the capital to fund its transition (Amelang and Wettengel 2016).

However, corporate engagement with the Energiewende should not be overstated. Vattenfall’s divestment of its East German assets was almost a necessity if the company was to retain a presence in the German energy market as a leading power producer and distributor. The reluctance of the major energy companies to embrace Energiewende was demonstrated in E.ON, RWE and Vattenfall taking legal action against the German government for bringing forward the end-date for closure of nuclear reactors (Chazan 2016). While much has been made of the sale of Vattenfall’s Lusatia mines to the Czech energy company EPH (Energetickẏ a Pr myslovẏ Holdings) at a peppercorn price, and Vattenfall transferring funds set aside for mine rehabilitation to EPH,10 one feature of the sale contract that received almost no attention was that all forward coal sale contracts would be honoured with the revenue flowing to Vattenfall (Chazan and Foy 2016). This, in effect, meant that Vattenfall would continue to have skin in the game of lignite mining in Germany well after it had exited the industry and rebuilt its green image. E.ON meanwhile applauded the decision by the incoming Coalition government to postpone the 2020 emissions-reduction target (Clean Energy Wire 2018). RWE’s decision to separate the renewable energy business from its fossil fuel operations had not, however, stopped the company from proceeding to clear parts of the Hambach Forest in order to extend mining at Germany’s largest open-pit lignite mine and expand lignite production in Western Germany, and in 2018 dismantle what remained of the village of Immerath to expand its mine north west of Cologne (Brändlin Reference Ghosh2016; Kuruvilla Reference Kuruvilla2018).11

The upshot is that, for the immediate future, coal lives on in Germany, and this is engendering an intriguing scenario. With the increased generating capacity resulting from investment in renewable energy, and especially wind, Germany is now experiencing periods when energy supply considerably exceeds demand, and it is exporting energy to Austria and Switzerland (Agora Energiewende 2015). More investment in grid networks is enabling an even greater scope for exporting surplus energy (Agnihotri Reference Fogarty2015; Richardson 2015). The substantial consolidation of the Czech energy company EPH in the German energy sector following its purchase of Vattenfall’s Lusatia interests will enhance its profile as a transnational energy corporation. It is unclear what the company’s future plans are with the Lusatia investments, but it is not beyond question that it could use the lignite mine and power plants as a springboard for strengthening its European presence by expanding electricity supply into the broader European energy market. This could well manifest in Germany becoming a transnational electricity exporter based on the coupling of lignite-fired power and the more variable generating capacity of the renewable energy sector, which would clearly have an impact on Germany’s and Europe’s commitment to accelerate emissions reduction.

The Energiewende, the transitioning to renewable energy, is occurring alongside the continuing commitment to coal as an energy source: energy security in this context has become a central basis for keeping the coal industry alive. The difference between Germany and Australia is that whereas the time frame for exiting coal in Germany is set in terms of years, the tendency in Australia has been to posit the time frame in terms of decades. This time frame becomes even more ill-defined when forecasting turns to Australia’s future as a coal exporter, and when the justification for the continued production of coal and its export is reframed in terms of Australia’s contribution to the economic progress of the developing countries of Asia, in terms of helping to relieve energy poverty and providing a cleaner fuel for energy than that that can be sourced locally (Hogan Reference Hogan2015; Milman Reference Milman2015). The rationale for coal mining shifts with the rationale for renewables in what has now become established as an ongoing struggle over energy and climate policy. That struggle is now spreading across the globe as the climate crisis intensifies, and this is refiguring coal in new ways as a contested commodity.

### Conclusion

We have argued here that the hegemony of the coal–industrial complex is being seriously challenged. With mounting evidence that the atmosphere’s increasing concentrations of greenhouse gases are disrupting the global climate, the political mood has shifted in the direction of meaningful action. The current economic calculus of the costs of our reliance on coal as the premier energy source is clear. The risks of maintaining that reliance are increasingly acknowledged and are seriously affecting patterns of investment, be these in the corporate world or among households. Yet, as much as coal is being overshadowed by the enthusiasm for investing in renewable energy technologies, coal holds on, albeit subject to increasingly determined contestation.

Conservative political forces in Australia retain a confidence in coal as a key driver in the momentum of the economy, although the reach of this confidence is being challenged. Households and businesses are revolting against the inflation of electricity bills and are leading the world in the scale and magnitude of investment in the installation of rooftop solar panels and battery storage systems. State and territory governments are supporting this transition because of its political appeal. This foregrounds a process of energy democratisation, liberating energy users from the monopoly of the transnational energy conglomerates that themselves are having to concede some ground with respect to the place of energy consumers in the industry.

Still, this transition has not brought an end to coal as a primary source of energy. The defence of baseload power is as much about diversifying the spread of investment in power plants as it is about reliability of power supply, but the energy conglomerates acknowledge that there will not be any further investments in large-scale coal-fired power plants, including the much talked-about ultra-mega-plants. The cost of building new power plants and the time it takes to build them does not pass the economic calculus test as compared with renewable energy technologies. The issue that is now on the agenda is the timeline for writing off coal power plant assets.

The question of mining coal for export is a different concern, but even that is being re-assessed and contested by prudential regulatory advisors and environment and planning authorities, and development approvals have been extensively delayed and, in some cases, withheld. Indeed, in the wake of the Paris Agreement, there appears to be a fracturing of purpose within the state with respect to its historical role in cohering the coal–industrial complex. In Western Australia, for instance, the Environmental Protection Authority issued new guidelines on emissions management in 2018 that, according to the EPA chairman, were ‘necessary for Australia to meet its international obligations under the Paris Agreement’: these guidelines would require big greenhouse gas emitters that produce more than 100,000 tonnes of carbon dioxide a year to offset their emissions on new and expanded projects.

This was viewed as a potential barrier to the rapid growth of the oil and gas industry, and energy corporations demanded that the guidelines be rescinded (Garvey and Williams Reference Garvey and Williams2019b; Latimer and Hastie Reference Latimer and Hastie2019; Macdonald-Smith Reference Macdonald-Smith2019a, Reference Macdonald-Smith2019b; Macdonald-Smith and Thompson Reference Macdonald-Smith and Thompson2019). Within a day, the Western Australian Labor Premier advised that the state government would not be endorsing the guideline – because such restrictions would place new projects at a competitive disadvantage compared to existing projects and to coal and gas extraction on the east coast – and the EPA was pressured to withdraw the guidelines (Garvey Reference Garvey2019a, Reference Garvey2019b; Garvey and Williams Reference Garvey and Williams2019b; Hastie and Latimer 2019; Hewett Reference Hewett2019; Macdonald-Smith and Thompson Reference Macdonald-Smith and Thompson2019). Yet the guidelines have not been abandoned: it may well be the case that the Australian government’s Paris undertakings has robbed the Australian Petroleum Production and Exploration Association of much of its ability to exercise leverage to minimise emissions offset obligations (Thompson and Macdonald-Smith Reference Macdonald-Smith2019b).

The scenario in India is not much different, with investment in renewable energy overshadowing investment in new coal-fired power plants. Investment in coal is beginning to falter, with some of ultra-mega-plant proposals being mothballed. The assumed link between coal, development and poverty reduction is starting to break down. With renewable technologies able to be designed to meet a range of different scale needs, the engagement of renewables offers the prospect of meeting needs that hitherto have been overlooked or disregarded. While the Indian state has adopted an authoritarian demeanour in fostering the interests of coal, the ascendancy of renewables is being driven by an economic calculus more accommodating of a variety of interests. The success or otherwise of local coal contestation has become structurally articulated with these shifts in national energy planning. In India, as noted, climate change discourses were impinging on national-level policy, and with the growth in renewables there is a growing delinking of coal from development. Climate organisations that sought alliances with anti-coal movements were seen as a threat by the central government, but it was becoming increasingly difficult to take action against them.

The long campaign against coal in Germany has focussed on similar objectives, challenging the coal–industrial complex in the interests of combatting climate change and of scaling back energy production to democratise energy production and consumption. The debate on exiting coal also brings forward the issue of timing, with energy corporations petitioning for delaying the exit, as do many residents in East Germany such as in Lusatia where alternative employment options are less available and the plants are not as old as those in the Rhineland. This raises the critical issue of maintaining the dynamism of Germany’s renewables industrial complex, both as an engine for economic development in Germany and for German leadership in global emission reduction efforts (DIW Berlin 2018).

You have Access

# Save book to Kindle

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

# Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

# Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×