Germany’s Newest Coal Plant Becomes Focal Point of Climate Protests

(Bloomberg) -- Uniper SE's controversial new German coal plant is opening at a time when the fuel has never been more unpopular.

Datteln-4 has drawn international condemnation from teenage activist Greta Thunberg to Greenpeace at a time when many countries are trying to slash their emissions . The environmentalists aren't buying the argument that the new plant is more climate friendly than it's older units, and the move is at odds with Chancellor Angela Merkel's plans to quit coal by 2038.

But after a delay of almost a decade because of technical problems, Uniper was scheduled to switch on the 1.5-billion euro ($1.3 billion) facility on Saturday. While it'll be the nation's last plant burning the combustible rock, it's starting up just months after a deal between the government and the industry over how to exit the dirtiest fossil fuel was struck.

Anti-coal groups including Ende Gelaende have vowed to disrupted the start. Activists have successfully knocked German coal plants offline in the past, most recently LEAG's Jaenschwalde plant in east Germany's Lausitz region.

The demonstrations ``will grow and grow against Datteln,'' said Ronja Weil, spokeswoman and veteran of the ``Ende-Gelaende'' movement which helped drive successful opposition to RWE AG's plans to expand its Hambach Forest lignite mine in the same state. ``The nerve of opening a new coal plant in Germany is just incredible,'' said Weil by phone Friday. ``Datteln will become the new Hambach.''

Coal is the fossil fuel on which Germany's industrial was built. While other European countries like the U.K. have almost eliminated it from their power mix, it still accounts for about one third of the electricity output in the region's biggest economy. Concerns over coal jobs and the lackluster construction of renewable energy infrastructure have prevented a more rapid closure of Germany's remaining plants.

There are also question marks over how profitable the plant will actually be in the years ahead. Solar, wind and other forms of renewables already have become Germany's biggest source of electricity by capacity and will cut deeper into coal's share in the next few years. The government forecasts that green power will make up about 80% of the electricity mix by 2038, compared with just over 40% now. Higher carbon prices may gut profit for whatever plants are still able to run.

An early closure of Datteln wasn't possible after Merkel's government balked at the cost of compensation it would have to pay to Uniper not to open it, according to people familiar with the matter. Uniper has said the plant will be a major source of income when it opens, adding they expect it to run until the 2038 exit date.

Uniper is majority owned by Finnish utility Fortum Oyj. With a stake of more than 70% accumulated over the past few years also comes the headache of Datteln. More than a thousand miles away from the plant, Greenpeace activists on Friday also targeted the utility's office outside Helsinki. The Finnish state in turn holds just over half of the company.

``This is a true national shame for us Finns at a time when the world should be shutting down coal plants, '' said Olli Tiainen, a campaigner for Greenpeace Finland. ``The German government, The Finnish government, Fortum itself and its subsidiary Uniper could all have said no to this. Instead they have all said yes.''

Fortum understands the concerns and agrees that coal must be phased out, the company said on Friday in a statement.
``Our next step is to agree on a common strategy with Uniper and set ambitious climate targets that apply to all our operations, it said. ‘'We understand that many would like us to make faster commitments and act in a more agile manner.''

The Finnish state owns 50.8% of Fortum and the start of Datteln is an operational decision for Uniper, said
Maija Strandberg, senior financial counselor at the Government Ownership Steering Department at the Prime Minister's Office. But she said the department follows the strategy execution of Fortum and Uniper very closely, and has an active dialog with Fortum's management about sustainability goals.

The protests are the latest sign of climate change shaking Germany's business and political landscape. Record-breaking heatwaves, the dwindling of the Rhine river and a series of powerful storms have turbocharged the climate debate in Germany and lifted the environmentalist Green party to second place in election polls before the Coronavirus crisis.

Uniper has said it will close its older, less efficient coal plants by 2025, reducing the firm's overall carbon dioxide emissions even as Datteln-4 burns coal right up to the deadline.