German Utility STEAG Lacks Coal Exit Plan With 4.1 GW Still Operating

STEAG, a German municipalities-owned coal power utility, has yet to publish a coal phase-out strategy despite operating 4.1 gigawatts of coal-fired generation and facing a national coal exit deadline under the Energiewende framework. An IEEFA report warns the company's planned sale to a private buyer risks extending coal plant lifetimes until the 2038 compulsory decommissioning date.

STEAG has operated coal-fired power generation from Germany's industrial heartlands in North Rhine-Westphalia, Saarland, and Baden-Wuerttemberg since the 1930s. The company still holds 4.1 GW of coal-fired capacity with no binding decommissioning dates in place. Although three plants were awarded decommissioning auction contracts, only one German coal plant has been shut down to date. The company has split into two entities: ICONY GmbH, covering renewables and grid investments, and STEAG Power GmbH, which holds all legacy coal generation assets.

The company's six municipal owners put STEAG up for sale in late 2022 to take advantage of high power prices. IEEFA warns that a private buyer focused on profit maximisation would likely operate the coal fleet to its compulsory 2038 decommissioning limit, potentially causing Germany to miss its target of reducing operating coal capacity to 9 GW by 2030. STEAG is identified as the second-most polluting power utility in Europe, with a CO2 emission factor of 927 kilograms per megawatt-hour in 2021.

IEEFA called on the six municipal utility owners — Stadtwerke Duisburg, DSW21, Stadtwerke Bochum, Stadtwerke Essen, Energieversorgung Oberhausen, and Stadtwerke Dinslaken — to either postpone the sale until binding decommissioning dates are in place or restrict the sale to buyers who publicly commit to implementing the coal phase-out strategy. The coal phase-out plan was expected in early 2023 but remained unpublished at the time of the IEEFA report, and in North Rhine-Westphalia there were discussions to advance the coal exit date to 2030.

Key figure — 927 kg/MWh — STEAG's CO2 emission factor in 2021, making it the second-most polluting power utility in Europe