Coal phase-out: no coal-fired operation bans necessary for 2028 due to plants exiting the market
Year of issue 2025
Date of issue 2025.09.01
The Bundesnetzagentur is again not issuing any coal-fired operation bans this year under the Act to Reduce and End Coal-Fired Power Generation (KVBG). The reason is that so many coal-fired power plants have already exited the market that the remaining capacity fell below the statutory target level for 2028 before 1 September, the date for issuing any bans.
The target level is the net rated capacity of hard coal-fired and small lignite-fired power plants that the law allows to remain in the market in a given target year. This is the second time since the beginning of the process to phase out coal-fired generation under the KVBG that no bans had to be issued to meet the statutory targets.
Security of supply remains safeguarded
The transmission system operators assess each power plant closure to see if a power plant is essential for the system, in which case the power plant can then become part of the grid reserve. Plants in the grid reserve are available to safeguard the electricity grid in critical situations. This means that security of supply is safeguarded at all times.
Further details about the statutory reduction process are available at www.bundesnetzagentur.de/Kohleausstieg (in German).
Background
With effect from 2024, coal-fired operation bans are issued by the Bundesnetzagentur without an auction and without any compensation. As from 2024, a ban becomes effective 30 months after the date in September for issuing bans. The aim is to further reduce and eventually end coal-fired electricity generation beyond 2027. Orders are issued based on the age of the coal-fired power plants until the annual reduction targets are met. Orders are first issued to old plants and then to newer ones. Operators of hard coal-fired power plants and small lignite-fired power plants will no longer receive financial compensation in future for not burning coal in their facilities.
In seven auction rounds held up to 2023 the Bundesnetzagentur put up a total of 10.9 gigawatts of net rated capacity for auction. Successful bids were placed by 41 facilities for around 10.7 gigawatts. The Bundesnetzagentur issued a coal-fired operation ban for three other facilities with a net rated capacity of 1.4 gigawatts.
