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Merkel's CDU Wins Regional Vote in Key State for Coal, Steel, Utilities



By Andreas Franke and James Leech

May 16, 2017 - German Chancellor Angela Merkel's CDU party has unseated a coalition by the Social-Democrats (SPD) and the Green Party in Germany's most populous state, North-Rhine Westphalia (NRW), reaching 33% in Sunday's vote, seen as a final test ahead of federal elections in September.

For the SPD this was not just the third regional election defeat in a row but also one of its worst ever results in the state with only 31% of the votes in Germany's industrial heartland held by the SPD for 45 of the past 50 years.

The Green Party, which has dropped to a 15-year low in national opinion polls also fell back sharply, reaching just 6% of the vote and putting an end to the red-green coalition in Duesseldorf.

Germany's liberal FDP party which dropped sharply after being the junior coalition partner in Merkel's second term, continued its comeback with 12% of the vote in the state and giving a potential coalition of CDU and FDP a small majority in the state assembly.

The region is Germany's traditional coal mining area as well as home of its major steel and energy firms with hard coal mining operations being phased out next year, but lignite mining still an important regional factor.

The issue of a potential coal exit therefore hangs above the state, which generates over three quarters of its power from coal including some of Europe's biggest lignite-fired power plants operated by RWE and with Germany's last new hard-coal power plant expected to start operations next year -- Uniper's 1 GW Datteln IV unit.

The impact of the state government on such issues is limited, but includes long-term planning for new lignite mining with both major parties (SPD and CDU) in the state refusing to talk about an end date for lignite mining and power production in the region.

Regional opposition from Germany's main mining regions watered down plans by the federal government in 2015 to introduce a so-called climate change levy with Germany's continued strong dependency on coal -- which remained above 40% in the 2016 power mix -- also endangering its own national climate change targets by 2020.

Germany is facing federal elections on September 24 with its national energy policy often hindered by regional considerations amid a rising imbalance between an oversupplied North and an undersupplied South amid very slow progress and rising costs for the national grid expansion plan.