EU electricity companies to cut investment in coal plants after 2020

The European Union of the Electricity Industry (EURELECTRIC) on Wednesday (April 5) announced the sector does not intend to invest in new-build coal-fired power plants after 2020.

EURELECTRIC is the sector association representing 3500 companies across Europe (including 28 EU Member States, current EU accession countries and other European OECD countries) with an aggregate turnover of €200 bln.

“The European electricity sector believes that achieving the decarbonisation objectives agreed in the Paris Agreement is essential to guarantee the long-term sustainability of the global economy. EURELECTRIC’s members are committed to delivering a carbon neutral power supply in Europe by 2050, and to ensuring a competitively priced and reliable electricity supply throughout the integrated European energy market”, the statement says. It was adopted by EURELECTRIC’s Board of Directors, with explicit notice that Polish and Greek member associations do not support the intention to call off investment in new coal plants.

The statement also indicates market-based mechanisms such as carbon markets as the most cost- effective and efficient tool for mitigating greenhouse gas emissions and stimulating low carbon investments, calling for “a combination of an effectively reformed EU ETS and improved EU electricity market design” in order to achieve “sustainable and credible carbon price signals”.

EURELECTRIC Secretary General Kristian Ruby  urged policy makers to go for a balanced, market-based approach to the energy transition: “The challenge for policy makers in the next two years will be to target the political instruments, ensure that they are complementary and advance decarbonisation and electrification at the same time”, Ruby said.

“The power sector is determined to lead the energy transition and back our commitment to the low- carbon economy with concrete action,” said EURELECTRIC President and CEO of the Portuguese energy group EDP, António Mexia in the official press release. “With power supply becoming increasingly clean, electric technologies are an obvious choice for replacing fossil fuel based systems for instance in the transport sector to reduce greenhouse gas emissions,” he added.

According to a recent report by the environmental groups Sierra Club, Greenpeace, and CoalSwarm, new coal plant constructions fell by almost two thirds across the world in 2016, with coal plant retirements in the European Union and the US (64 gigawatts in the past two years, corresponding to nearly 120 large coal-fired units) contributing to the global downsizing.

However, coal remains an important energy source for many European member states. According to the most recent EURACOAL data analysis, in 2014 EU indigenous coal and lignite production exceeded indigenous natural gas production by 28 percent and indigenous oil production by 78 percent.

 

A recent research by Climate Analytics identified 300 coal-fired power plants with 738 separate generating units in the European Union, with Germany and Poland jointly accounting for 51 percent of the EU’s installed coal capacity and 54 percent of emissions from coal.

If all existing coal plants continue operating to the end of their full life span, Climate Analytics highlights, the EU will by far exceed the level of emissions from coal compatible with the Paris Agreement’s commitments. For the EU to remain within its carbon budget, 25 percent of currently operating coal-fired power units need to be shut down by 2020, rising to 72 percent by 2025, before a complete shutdown by 2030, the study finds.

 

(Image: Tagebau Garzweiler coal mine, Germany. Photo credit: Bert Kaufmann/Flickr)