Saturday 15th May 2021
Deliberate mistakes in the ministry?
Energy giants are getting too much money
The Ministry of Economic Affairs apparently calculates compensation payments for the energy companies RWE and LEAG that are clearly too high. The reason is a formula that, among other things, is based on a CO2 tax that is far too low. NGOs criticize the process, Altmaier’s ministry contradicts.
According to a media report, when calculating company compensation for the premature phase-out of coal, the Federal Ministry of Economics used a formula that contains advantageous assumptions for energy companies. As reported by “Spiegel” and the Correctiv research network, the ministry based the calculation of the compensation in January 2020 on a CO2 price for European emissions trading of around 17 euros per tonne of CO2, although this had already been 22 euros at the end of 2018 . In the meantime it has even risen to over 50 euros.
According to the report, the formula used by the Ministry of Economic Affairs is available to “Spiegel” and the Correctiv research network; This results in compensation amounting to 4.35 billion euros for the energy companies LEAG and RWE. The formula shows that the federal government made improbable, but very advantageous assumptions for the LEAG and for RWE. The decisive factor for the amount of the sum was what profits the corporations missed by the legally enforced shutdown of power plants. The state should compensate for the lost profit.
According to Correctiv, how much money a power plant operator earns depends on many factors: the dollar price per tonne of coal on the world market, the German electricity price and how much the company has to pay for its climate-damaging emissions. The energy companies have to buy certificates in order to offset their emissions – the price for the paper is regulated in the European Emissions Trading Scheme (ETS) – and has been rising steadily for years. The ministry’s formula contains both variables, the CO2 price and the expected profit of the corporations from the sale of their coal-fired electricity. However, a CO2 price that was already too low at that time was assumed for the calculation. That means lower costs – and correspondingly higher profits, which then have to be compensated. Altmaier’s experts assumed the certificate price of around 17 euros per ton of CO2 in 2020. They calculated this from the average price over the past three years. However, they looked into the past, but did not take into account the prognoses for the future.
Greenpeace expert calculates 350 million euros in compensation
“The unrealistic calculations made by Altmaier will hardly stand before the EU Commission,” believes Greenpeace expert Smid. Greenpeace had commissioned the Ember research institute to conduct a study on the matter. Conclusion: Of the approximately 4.35 billion euros, just 343 million euros are covered by the formula, even if a conservative CO2 price of around 25 euros were used as the basis – at 50 euros the total would be even smaller. If the expenses were significantly higher, the profits of the energy companies would have been smaller, and so would the compensation.
Environmental expert Felix Matthes from the Öko-Institut also presented his own report in 2020 to calculate the compensation. He shares Ember’s assessment, although his report presented in June came to slightly different figures. He assumed a CO2 certificate price of 40 euros per ton in 2030. Together with other factors such as significantly lower conversion costs for the opencast mine, the compensation is overestimated by up to two billion euros, according to the Matthes report. The LEAG would only be entitled to 0.77 billion euros instead of 1.75. RWE has a claim between 1.66 and 2.66 billion euros, depending on the conversion costs of the opencast mines.
Matthes also sees the greatest mistake of the Ministry of Economic Affairs in the fact that revenues from coal companies were expected that would not exist in the following years. However, Matthes suspects that the larger item in the compensation calculation is the additional open-cast mining conversion costs, which were simply estimated without any evidence.
Has the calculation really not been taken into account?
According to the news magazine, the Ministry of Economic Affairs said that the early calculation of the compensation had “not found its way into the cabinet version” of the coal phase-out law. According to “Spiegel” and Correctiv, the amount of compensation planned according to the law for the East German LEAG and RWE roughly corresponds to the value that results from the formula mentioned. According to the coal exit law, LEAG is to receive 1.75 billion euros in compensation, RWE 2.6 billion euros.
The vice-head of the Green parliamentary group, Oliver Krischer, criticized the high compensation payments. “When it comes to the interests of RWE and Co., Peter Altmaier is every means right,” he said according to the “Spiegel”. The formula proves that the federal government is only concerned with shoveling as much money as possible into the coffers of RWE and LEAG.
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