Submission No 248 SUSTAINABILITY of ENERGY SUPPLY AND
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Submission No 248 SUSTAINABILITY OF ENERGY SUPPLY AND RESOURCES IN NSW Name: Professor Barbara Praetorius Position: Environmental and Energy Economics, HTW Berlin / University of Applied Sciences Date Received: 14 February 2020 To the attention of Mr. Alex Greenwich, Chair of Inquiry on "Sustainability of energy supply and resources in NSW" **** Dear Mr Greenwich I would like to draw your attention to the final report of the "Commission on Growth, Structural Change and Employment" of the German government that was issued in January 2019. In this report, the Commission proposes a stepwise decline in coal-based electricity generation in Germany. I personally was a Co-Chair of this commission. I consider our process of consensus-finding round table as a role model for designing a just transition towards a sustainable energy system and a strong economy and society. The Commission consisted of 28 members from electricity industry and business associations, unions, non-governmental associations, local governments in the regions affected by coal mining and/or an earlier phase-out, and scientists (engineers, climate physicists, economists). They unanimously (27 votes, 1 anti-vote from a town to be destroyed anyway) agreed that a phase-out will lead to a future that is advantageous to all of them. Germany has large resources in lignite with mines concentrated in two regions (mostly Northrine-Westphalia and Lusitia). At the time of the Commission (June 2018-January 2019), about 20 Gigawatt installed capacity in lignite power generation and about 23 Gigawatt of hard coal power plants were active in the electricity supply system, delivering approximately 37 Percent of the total electricity in Germany. Germany actually closed down its hard coal mines in another "just transition" of stepwise decline and ended hard coal mining in December 2018. The main arguments are economic and social. The business associations cleary state that renewable energy will become cheaper than fossil energy soon. Consequently, they insist on increasing the share of renewables in electricity as proposed by government (65% of electricity to come from renewables in 2030, and 80% in 2050). The unions and regions worry about their future (jobs, regional welfare) and will be compensated for income losses as well as with infrastructure investment to attract new industry in time. A stepwise, foreseeable decline in coal seemed more acceptable than continued struggles and fears around an insecure future. I attach an electronic copy of the report in English which can also be found on the website of the German Ministry for the Economy: https://www.bmwi.de/Redaktion/EN/Publikationen/commission-on-growth-structural- change-and-employment.html Australia has abundant coal reserves and abundant solar and wind potential at the same time. Climate change will change the economics of coal in the near future. We highly recommend that Australia starts a similar societal consensus / commission process to start the transformation of the energy sector in time. Please do not hesitate to contact me if you have further questions. Kind regards, Barbara Praetorius -- Prof. Dr. Barbara Praetorius Environmental and Energy Economics HTW Berlin / University of Applied Sciences Treskowallee 8, 10318 Berlin [email protected] https://people.f3.htw-berlin.de/Professoren/Praetorius/index-eng.html Commission on Growth, Structural Change and Employment Final Report Imprint Publisher Federal Ministry for Economic Affairs and Energy (BMWi) Public Relations 11019 Berlin www.bmwi.de Text Commission on Growth, Structural Change and Employment Status January 2019 Print MKL Druck GmbH & Co. KG, D-48346 Ostbevern Design and production PRpetuum GmbH, D-80801 Munich Illustrations Fotosearch / GettyImages / title This publication as well as further publications can be obtained from: Federal Ministry for Economic Affairs and Energy (BMWi) Public Relations Email: [email protected] www.bmwi.de Central procurement service: Tel.: +49 30 182722721 Order fax: +49 30 18102722721 This brochure is published as part of the public relations work of the Federal Ministry for Economic Affairs and Energy. It is distributed free of charge and is not intended for sale. The distribution of this brochure at campaign events or at information stands run by political parties is pro- hibited, and political party-related information or advertising shall not be inserted in, printed on, or affixed to this publication. 1 Content 1. Introduction . 2 2. Commission on Growth, Structural Change and Employment . 6 2 .1 . Appointment resolution and brief . 6 2 .2 . Composition . 6 2 .3 . Consultation and technical experts . 7 2 .4 . Benchmarks . 7 3. Baseline . 12 3 .1 . Climate policy baseline . 13 3 .2 . Energy industry baseline . 19 3 .2 .1 . Underlying European conditions . 19 3 .2 .2 . Energy markets . 20 3 .2 .3 . Electricity prices and electricity costs . 27 3 .2 .4 . Security of supply . 36 3 .2 .5 . Mining area plans . 40 3 .3 . Baseline for growth, employment and innovation potential . 49 3 .4 . Structural policy baseline . 51 3 .5 . Statutory framework . 58 4. Measures in the energy sector . 60 4 .1 . Protection of the climate . 62 4 .2 . Energy market and electricity prices for . 66 4 .3 . Reliability of the supply . 67 4 .4 . Grids, storage, sector coupling and inno vation potential . 69 4 .5 . Value creation and employment . 70 4 .6 . Consideration of open-cast mining and safe remedial treatment of closed open-cast mines . 71 5. Prospects for existing, new and future-proof jobs . 73 5 .1 . Effects, structural policy impact and future visions for mining areas . 73 5 .1 .1 . Helmstedt mining area . 73 5 .1 .2 . Lausitz mining area . 74 5 .1 .3 . Rhineland mining area . 76 5 .1 .4 . Central German mining area . 78 5 .1 .5 . The Federal Republic as a whole . 81 5 .2 . Principles for a structural development strategy . ..