© State Chancellery of Saxony / Matthias Rietschel

The coal phase-out is an issue Stanislaw Tillich is quite familiar with – not just as a politician. During his time in office as Saxony’s Minister-President, Tillich, a native of Sorbia, concerned himself in depth with the structural change taking place in Saxony and other parts of Germany. He was also one of the chairs of the Federal Government’s Commission for Growth, Structural Change and Employment. Born and bred in a coal-mining region, Tillich has experienced first-hand how Germany has been turning away from coal. He is familiar not only with the economic and political context of structural change, but also with its immediate ramifications affecting the people on the ground.

In early December, he was appointed Federal Government Commissioner for Structural Change in the Ukrainian Coal-Mining Regions. Later that month, he made an appearance at the First German-Ukrainian Energy Day. The Energy Day is the key annual event within the framework of the German-Ukrainian Energy Partnership, which is founded on a joint declaration signed by the two countries on 26 August 2020 with a view to sharing experience and working together more closely in the energy sector.

Mr Tillich, what challenges is Ukraine going to face in the coming years and what kind of support can it expect from Germany?

Ukraine was one of the first countries to sign the Paris Agreement, a global climate accord (in German only). The signatories to the convention commit themselves to taking action to make the world economy more climate-friendly. By 2040 at the latest, Ukraine’s energy industry is to abandon the use of coal to generate electricity. By 2070, the nation wants to become carbon-neutral. The Ukrainian government is therefore planning to shut down the country’s coal-fired power plants and hard coal mines, which are becoming increasingly unprofitable and dependent on heavy government subsidies. Of the 33 mines run by the government, only four are deemed profitable. I am referring primarily to hard coal, given that Ukraine has one of the largest bituminous coal reserves in Europe. Also, Ukraine has an energy-intensive economy and relies heavily on oil and gas imports.

The challenges faced by the Ukrainian government over the coming years will be manifold. Most importantly, it will have to make sure that the coal phase-out goes hand in hand with a sustainable, socially acceptable and economic transformation without jeopardising national energy security. This will be no easy task. Ukraine has more than 41 million inhabitants. Even today, up to 700,000 people are still working in the power stations and in the government-run and private mines. Therefore, the government has developed a national programme for the coal phase-out and an energy strategy, setting the stage for fundamental reforms in the energy sector.

This is where the Federal Republic of Germany can provide support, notably in the context of our Energy Partnership with Ukraine – and we can do so not only with a view to the coal phase-out, but also by placing a focus on greater energy efficiency and renewable energy in order to make Ukraine’s energy industry fit for the future.
We can draw on the rich experience of Germany’s mining regions. We have our own share of experience with issues such as depopulation in former mining areas and we have drawn vital lessons from this.

What will the support from Germany look like on the ground?

Together with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), which has been operating a country office in Kyiv since 2009, we are going to support Ukraine by providing legal and strategic expertise. For example, this includes assisting policymakers in developing exit strategies and the necessary legal framework. We are also discussing how Germany can help Ukraine to set up and manage a structural transformation fund, possibly with participation by the European Commission. Ukraine has established a coordination centre. Also, on behalf of the Federal Ministry for Economic Affairs and Energy, a country secretariat has been set up to facilitate the implementation of the Energy Partnership.

This means that we have a solid foundation on the ground from which we can set about supporting a variety of pilot projects for regional structural change. These projects are to explore and demonstrate possible ways of shaping a successful transformation into a post-coal economy. The pilot regions of the GIZ project include the city of Myrnohrad in the Donetsk region of eastern Ukraine and the city of Chervonohrad in western Ukraine.

What are your responsibilities as Federal Government Commissioner and what are your personal goals for this mission?

I want to make an active contribution to the sucess of structural change processes in Ukraine. We would like to promote expertise and increase awareness of issues linked to the energy transition, and to propose solutions for transforming energy systems. All of this works best if I am able to visit Ukraine as often as possible. Unfortunately, this is still difficult at the moment due to the coronavirus pandemic. The appointment of a Federal Government Commissioner has added a political dimension to the support for regional projects and their implementation. This makes it easier for us to initiate processes of structural adjustment where they are needed.

People should always be at the very core of policymaking. It is my wish that Ukraine will manage to offer long-term future prospects for the inhabitants of today’s mining regions and their children, and to involve them as actively as possible in the process of structural change. Instead of being mere background actors, people should be convinced and ready to strike out in a new direction. Once you realise the extent to which a working life in mining can be a source of pride and identity, you understand how critical it is that these people become protagonists of such a transformation and that new prospects for their home regions be created. To make a difference with this vision in mind will be one of my major tasks.

How could Ukraine’s energy sector develop in the long term and what is the country’s significance with a view to the global energy transition, particularly for Germany and Europe?

As I said, Ukraine’s economy offers tremendous potential for energy efficiency and renewable energy. The current priorities of our Energy Partnership include increasing energy efficiency, modernising the electricity sector, expanding renewable energy and reducing carbon emissions.

Going forward, the focus will be on the urgent task of transforming the mining regions, and on the integration of renewable sources of energy as well as green hydrogen. Ukraine has rich supplies of solar, wind and hydroelectric power, which is why it is well suited to the use of hydrogen technologies. This is also of interest to German companies on the Ukrainian market and their export opportunities. And of course, the energy transition does not stop at national borders, which is why Ukraine’s climate targets, its orientation to the EU’s Green Deal and its commitments under the Paris Agreement are also a European issue.

You were born and grew up in one of Germany’s largest mining regions. As Minister-President, you presided over Saxony’s departure from coal. What are your most enduring memories in this context and what does the energy transition mean to you personally?

I have always been greatly impressed by the way living and working in a mining region shapes people’s sense of indentity. Often, entire generations and even successions of generations have spent their working lives in the mining sector. They had to make sure that people were able to heat and light their homes in the winter. Driven by a fundamental can-do spirit, they knew what to do in the case of occasional disruptions. Our handling of the coal phase-out has been quite successful, but we have also made mistakes. We have been particularly successful whenever people retained their positive outlook and were offered a long-term future prospect in their home region, one that they were really able to identify with. The way I see it, this is an essential precondition of a successful energy transition.

Thank you very much for talking to us, Mr Tillich. The interview was conducted by Dana Hesse.

From 2008 to the end of 2017, Stanislaw Tillich was Minister-President of the Free State of Saxony. Since 1999, he had previously held various offices in the Saxon state government, including those of State Minister and Chief of the State Chancellery from 2002 to 2004, State Minister for Environment and Agriculture from 2004 to 2007, and State Minister of Finance from 2007 to 2008.