Europe’s Coal Power Is Going up in Smoke – Fast

20 April 2017 | Mitigation

The long goodbye for coal in Europe is accelerating as the cost of shifting to green energy plunges.

“It’s an entirely different fuel-price world,” said Johannes Truby, an analyst at the Paris-based International Energy Agency. Since 2012, the agency has cut its outlook for European Union coal use in 2030 by 12 percent and now expects just 114 gigawatts of capacity will remain by then, compared with 177 gigawatts in 2014, the latest annual data available.

Countries including the U.K., France, Portugal, Austria and Finland are phasing out coal with policies in place to end its use in power generation. Elsewhere in the world, the fossil fuel is in a life-or-death struggle because green energy produces cheaper electricity and employs more people. Even in the U.S., where President Donald Trump vowed to cut environmental standards to revive coal jobs, many plants can’t compete with abundant and low-cost natural gas.

At Europe’s biggest coal-fired plant in the German city of Voerde, three chimneys soaring as high as 250 meters (820 feet) stand dormant after belching steam and smoke for more than half a century. It used to generate 2.2 gigawatts of power for 4.5 million homes before utility owner Steag flipped the switch off within the last few weeks.

The government’s policy of Energiewende is shifting the country to more solar and wind power, which has created a glut of renewable power and sent electricity prices plunging. Just this month, the electricity-grid regulator awarded construction contracts for offshore wind farms that, for the first time, are expected to be profitable without subsidies. All that has undercut the viability of Voerde, which once employed 550 workers.

About half of the record 10 gigawatts of European coal closures in 2016 took place in the U.K. after the government doubled its carbon price and companies including Drax began taking steps toward converting or phasing out facilities. Britain’s greenhouse gas emissions from power fell by almost a fifth, according to the government.

Third Quarter

The U.K. is expected to announce plans before the third quarter to end the use of coal by 2025, according to a government official familiar with the talks who asked not to be identified because the person isn’t authorized to speak publicly. 

“Once you set a firm date, sensible people actually do it more quickly,” John Gummer, chairman of the U.K.’s Committee on Climate Change and a member of the House of Lords, said in an interview. “Stupid people tend to leave it to the last moment, and then you’re in trouble.”

As recently as December 2013, the Union of the Electricity Industry in Europe, or Eurelectric, said that “the expansion of renewables is going hand in hand with an expansion of coal-fired generation.” Four years later, the group this month announced it has no intention of investing in new coal beyond 2020.

Natural Gas

The environmental requirements on coal and falling costs of renewable energy mean it’s already cheaper to build a brand new wind farm or solar project in Europe than a new coal plant or gas plant, according Bloomberg New Energy Finance.

“Not very long ago all the coal plants were raking it in and it was all the gas plants that were at risk of getting shut down,” said Jonas Rooze, a BNEF analyst. “Now we’re starting to see it tip the other way in terms of the at-risk plants. We’ve tipped quite quickly from one state of affairs to another.”

By 2030, it will be cheaper to build a wind farm than to keep an old coal generator running, and by 2036 it will be less expensive to build a solar farm, according to the London-based researcher.

When used for power generation, coal is the most carbon-intensive of the fossil fuels, producing twice the level of carbon emissions as natural gas, according to the U.K.’s Department for Business, Energy and Industrial Strategy. While carbon capture and storage could make coal more environmentally friendly, those technologies need more time and money to develop, even as green power prices keep falling.



Source: Bloomberg