@article{a1e685291a57442390d6be49857c50ab,
title = "Stranded Asset Risk and Political Uncertainty: The Impact of the Coal Phase-out on the German Coal Industry",
abstract = "We assess the value of stranded coal-fired power plants in Germany in the light of the critical decision to phase them out by 2038. In a Monte Carlo simulation, the scenarios under consideration (slow decommissioning at the end of the technical lifetime in 2061, the highly probable phase-out by 2038, and an accelerated phase-out by 2030) are additionally assigned distributions to display the uncertainty of future developments. The results show an overall stranded asset value of €2.6 billion given the phase-out by 2038 and an additional €11.6 billion if the phase-out is brought forward by 8 years. This study also describes the impacts of carbon pricing and the feed-in from renewable energy sources on the merit order and eventually the deterioration in economic conditions for hard coal and lignite power plants. Lastly, we discuss the immediate concerns for the share prices of the affected companies and help to close the research gap regarding stranded physical and financial assets.",
keywords = "Coal Phase-Out, Energy Transition, Germany, Stranded Assets",
author = "Miriam Breitenstein and Carl-Philipp Anke and Nguyen, {Duc Khuong} and Thomas Walther",
note = "Funding Information: We are grateful to James L. Smith (editor) and four anonymous reviewers for their critical remarks and valuable suggestions on an earlier version of this study. We thank Sven Lo{\ss}agk, Christian Opitz, Philipp Rubner, Wolf-Peter Schill, Philipp Thaler, and Rolf W{\"u}stenhagen as well as the participants in the School of Banking Conference (2020, HCMC) and the WROFIN Conference (2020, Wroclaw) for their valuable remarks and discussion. Part of the work was conducted during Thomas Walther{\textquoteright}s research time as Assistant Professor at the Institute for Operations Research and Computational Finance, School of Finance, University of St. Gallen. This publication is part of the SCCER CREST (Swiss Competence Center for Energy Research), which is supported by Innosuisse (Swiss Innovation Agency). Thomas Walther is grateful for the funding received to conduct this research. Publisher Copyright: {\textcopyright} 2022 by the IAEE. All rights reserved.",
year = "2022",
month = sep,
doi = "10.5547/01956574.43.5.mbre",
language = "English",
volume = "43",
pages = "27--50",
journal = "Energy Journal",
issn = "0195-6574",
publisher = "SAGE Publications Ltd",
number = "5",
}