A range of energy issues has been debated in campaigning ahead of the German elections this Sunday, but frustratingly little detail on the key challenge facing the next administration: how to hit ambitious 2020 CO2 reduction targets.
While Chancellor Angela Merkel's CDU/CSU has a strong lead in the polls, the party looks unlikely to achieve a clear majority.
With the far-right AfD and the far-left Die Linke parties, both polling around 10% of the vote, certain to be excluded from any coalition talks, only two coalitions look likely to achieve an absolute majority.
These are a continuation of the current Grand Coalition of CDU/CSU and the Social Democrats (SPD), or a new coalition of CDU/CSU with the center-right FDP and the Green Party, dubbed the "Jamaica" coalition because of the various party colors.
However, it could take some time for any coalition to emerge. Talks on Merkel's first three coalitions (2005, 2009 and 2013) took an average of 61 days after election day, according to data from the lower house of parliament, the Bundestag.
With Germany's nuclear exit set for end-2022, the political focus -- especially of the Greens -- has shifted to an exit for coal, which still dominates German power generation, with a 40% share both from domestic lignite and imported hard coal.
Merkel has been circumspect, promising to find ways to achieve Germany's national emissions target (a 40% cut on 1990 levels by 2020), but avoiding any details on plant closures, only saying that more plants will close in the future.
Potential coalition partner the Greens are in no doubt about the solution: in its energy-specific position paper, closure of Germany's 20 most polluting coal plants is the number one priority.
The FDP, which generally opposes state intervention, has been accused of climate-denial by the Greens, which would have to bury the hatchet in any coalition talks.
A recent study by think-tank Agora Energiewende said that, based on current policies and market conditions, a 30% cut was realistically achievable by 2020.
SECURITY OF SUPPLY, JOBS KEY ISSUES IN COAL EXIT
All parties agree any coal phase-out would need to pay particular attention to jobs in domestic lignite-mining areas with lignite plants providing almost a quarter of German power with over 20 GW installed capacity and just 2.7 GW of the oldest units "ordered" to move into a reserve.
In hard-coal generation, however, there needs to be differentiation between old coal plants, already under market pressure to close, and some 8-GW of modern capacity that came online over recent years and expected to provide baseload power for many years to come.
In the German coal plant fleet, there is a gap of 20 years between the new generation of 45% efficiency coal plants and the previous generation of plants from the mid-1970s to mid-1990s with around 14 GW of capacity and some even older units adding up to over 3 GW, but only needed as reserve plants, data from Platts Powervision shows.
Uniper's Datteln IV unit currently undergoing final tests ahead of commissioning next year is set to be Western Europe's last ever coal-fired power plant to come online.
CARBON FLOOR COULD LIFT GAS
Another route to coal closures would be a carbon price floor, roundly rejected during the campaign by the CDU/CSU and the FDP, with the SPD starting to warm to it but not at the national level. Any involvement of the Greens in a coalition would at least reopen this option.
In an interview with S&P Global Platts, the economy and energy spokesman for the CDU/CSU parliamentary group, Joachim Pfeiffer, has said that his party rejects the idea of a minimum CO2 price and will protect large power consumers as well as preserve a single power price zone.
Merkel herself has started to acknowledge industry concern about high energy costs with especially energy-intensive sectors like steel and petrochemicals under pressure.
One of the next government's priorities for renewables and networks will be to overcome rising North-South imbalances and grid congestion, which includes limiting the wind boom in the North until the power grid can deliver the power into the industrial demand centers in the South.
Overall, however, all parties agree on increased carbon-cutting efforts from other sectors, notably transport, which is the only segment expected to have higher emissions of CO2 by 2020 than in 1990.
On gas, meanwhile, the key debate over the next legislative period will be the go-ahead for a second pipeline under the Baltic Sea from Russia (Nord Stream II), further reducing any need for transit through Eastern Europe.
With the government targeting an increase from cogenerated power to 110 TWh by 2020, there is scope for additional gains for gas-for-power.
Add Germany's nuclear exit and the urgency of reducing CO2 emissions, and gas' role in balancing the 'Energiewende' is surely set to rise.
Germany's modern gas-fired power plants are on the brink of profitability for the first time since 2011 after a rally in global coal prices has lifted German year-ahead power by 75% from last year's 12-year-low to similar levels seen before the last election in 2013, while European natural gas prices are lagging gains for coal amid a global oversupply from LNG, Platts data shows.
