The Act to Reduce and End Coal-Fired Power Generation aims at gradually reducing and eventually phasing out from hard coal and lignite power generation. Its goal is to phase out from coal in a socially responsible and economically viable manner. It thus created an adaptation fund as well as new state funding guidelines for energy-intensive businesses. It also created a funding programme for GHG neutral heat generation and use.
The schedule is as follows:
- Reach 15 GW of hard coal and 15 GW of lignite power generation capacity in 2022
- Reach 8 GW of hard coal and 9 GW of lignite power generation capacity in 2030
- The rest must be decommissioned by 2038.
The law stipulates several years in which the government will evaluate whether the decommissioning can be moved up to 2035.
The first tendering phase for hard-coal power plants phase-out took place in September 2020 and 11 bids were awarded a total amount of 4.8 GW, to be closed by the end of the year. The German government also committed to cover a total of 4.35 billion EUR in payments to utilities for the country's operators of lignite-fired power plants. This would accelerate the shutdown of their assets and waive operator's rights for future lawsuits once they agree to receive the payments.
A second tendering phase took place in January 2021, with a volume of 1,500 MW. The third round, scheduled for April 2021, awards a total of 2,480 MW.
18 August 2021, the German government considered that an earlier coal phase out was possible, given the success of coal phase-out tenders, leading the government to envision an exit from coal before 2038.