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E.ON chief attacks government on carbon price failure

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The head of E.ON, Johannes Teyssen has launched a scathing attack on the German government for its failure to deliver an effective carbon reduction strategy.

Meanwhile the head of rival firm RWE has stated that gas-fired power will be the most used fossil fuel in Germany within two decades, at the expense of coal.
Johannes Teyssen
Speaking at a Handelsbatt energy event in Berlin, Teyssen urged adoption of a carbon floor price to incentivise everyone from utilities to carmakers to do more to reduce emissions. He said the carbon trading scheme in Europe had been a failure because the price for carbon credits has collapsed and no longer encourages investment to reduce emissions.

The price for a ton of emissions has fallen to just €7 ($8.60) to €8.

“At such prices, no one will invest in climate change,” Mr. Teyssen declared. The price needs to be €25 to €30 to be effective, he suggested. “Emissions trading needs a carbon dioxide floor price,” he said.

Teyssen’s remarks came just a week after E.ON ended its interest in fossil power through selling off its stake in Uniper to Fortum.

Teyssen added that the decision by parties negotiating Germany’s next government to weaken the country’s 2020 climate protection goals was an “appropriate” move that took “courage”.

“A lot has happened” since Germany set its target of reducing greenhouse gas emissions by 40 percent by 2020, he said, citing the country’s sustained economic growth and influx of migrants in recent years, “but the market and technological development will decide how quickly we move”.

Mr Teyssen also referred to the newly forming government, saying that Chancellor Angela Merkel’s conservative CDU/CSU alliance and the Social Democrats (SPD) still had to show ambition to meet the goal.

“So far, solutions to this are absent in negotiations,” he said, arguing that the European emissions trading system (ETS) was “a failed instrument” that could not do to enough to reduce emissions, and that “an effective CO2 price” on a European level, backed by a national carbon tax would be “the most powerful instrument” for climate protection.

Meanwhile, his contemporary and boss of RWE told Handelsblatt that he expected that natural gas will become the most-used fossil fuel in Germany’s electricity supply within two decades,.

RWE boss Rolf Schmitz told the same conference that gas-fired power plants will be the only economically viable option to back up renewable power generation – replacing coal.

He added that a German coal exit would “come one way or another” as renewable power gradually replaced the country’s coal capacity. Schmitz said the replacement of coal by renewables already under way would make a politically enforced coal exit unnecessary.

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