The last subsidy: regulating devaluation in the German coal phase-out

This paper contributes to the political economy of low-carbon energy transitions by highlighting the importance of capital and coal devaluation in the destabilisation of incumbent energy regimes, which has been understudied by the energy transitions in social sciences literature. Empirically, it examines Germany’s coal exit plan, the world’s largest in terms of power capacity. By putting theories of capital devaluation into conversation with regulation theory, this study reveals the continuities between Germany’s exit plan and its long tradition of delaying the devaluation of coal. This paper engages with relational political-economic approaches to analyse the German coal exit plan beyond the dualistic market vs policy-based interpretation, which has been promoted by the coal industry to capture compensation payments. Rather, it will be argued that this plan, which in its current form is based on generous financial compensations to coal companies, can be understood as a way to regulate the ongoing devaluation affecting the energy industry and manage a dual legitimation crisis affecting the federal government.