Europe's coal renaissance – the end is nigh
An unpublished briefing paper drawn up by the European Climate Foundation (ECF) takes a look at charges of a "coal renaissance" in the EU and confirms our recently published findings for Germany, where a slew of coal plants were planned in the second half of the previous decade, but they are largely not moving forward.
Over the past year, Germany has come under fire for allegedly switching from nuclear power to coal power. While most of the comments have been critical of German policy, one recent article argued that it is better for the environment if the US exports coal to the EU because the EU at least has an emissions trading platform.
Renewables International has already put the current construction of coal plants in Germany into perspective. Essentially, the coal plants now going up were planned between 2005/2008 and therefore have nothing to do with the unnecessarily sudden nuclear phase-out of 2011 – and everything to do with the poor beginning of emissions trading in Europe during those years.
Now, the unpublished ECF briefing provided to Renewables International confirms these findings for the EU as a whole. Over the past two decades, coal consumption is not only down considerably in Germany, but also throughout the EU.
While the share of coal power in Germany increased by roughly 4 percent in 2012 year-over-year, coal consumption in the UK is also currently peaking. According to the latest figures for the UK (PDF from DUKES), coal production and imports rose in the UK considerably in 2011 because, our sources at ECF tell us, the country officially has a policy to phase out coal, so coal plant operators are racing to get as much money out of their plans as possible before they have to ramp them down.
The ECF finds that there was a "utility investment boom" from 2005/2007 within the EU, leading to a “mini-wave” of new coal plant capacity (14.6 gigawatts) starting in 2008. But at the same time, net coal capacity fell within the EU from 2000-2012 (see the EWEA chart).
In early 2008, an astonishing 112 coal plants had been newly announced, but ground has only been broken on two of them (in Poland and Slovenia), with 73 having been abandoned and one under construction but in limbo (EDF wants the French and Polish governments to provide subsidies); the remaining 36 are still "announced" or "planned." Of the 20 plants already under construction in early 2008, 14 have since been built, five are still entangled in courts, and one was switched to natural gas.
The ECF points out that the coal plant that German Environmental Minister Altmaier personally opened last year (for which he drew international criticism, but which was seen in context within Germany) was the only one added in the EU last year. Going forward, the ECF says that 60 percent of existing coal capacity in the EU does not comply with the Industrial Emissions Directive, which has a window of 2016-2020 – meaning that coal capacity in the EU is set to plummet by the end of this decade. Almost all of the compliance coal capacity is, however, in Germany, where roughly half of coal capacity is compliant.
The ECF concludes that:
- the "coal renaissance" expected since 2005 for the EU has not come to pass
- the current slight increase is largely driven by three temporary effects: 1) UK plants racing to make money before the minimum carbon tax takes effect; 2) Spanish coal subsidies, which are to be phased out at the end of 2014; and 3) the gap temporarily left behind by German nuclear plants
- future policy changes at the EU level and at the level of member states (coal taxes in Belgium, the Netherlands, and the UK, for instance) will remove a lot more coal capacity than is added
- Europe will continue to fill the gap left behind by coal largely with renewables.