The coal invasion: how can Europe turn the tide?

24-09-2014

Europe has formulated ambitious renewable energy targets for 2020 and 2050. Various European countries made haste with the implementation of measures, which has resulted in a fast increase in sustainable energy and a reduction in greenhouse gas emission. However, we shouldn’t cheer too soon. The CO2 emission of coal-fired power stations has only gone up in recent years, with 6 percent since 2010. These power stations produce 18 percent of the total CO2 emission. Faced by the relatively high price of gas compared to coal, energy companies choose to use cheap coal for electricity generation and have reduced the use of or even closed gas-fired power stations. In the meantime, more power stations are being built. RWE and Vattenfall have invested heavily in new power stations in 2012, adding around 3 gigawatts in capacity. Conclusion? The European policy to reduce the CO2 emission of coal has failed.

Coal-fired power stations running at full speed

In 2010, renewable energy forerunner Germany committed itself to reduce greenhouse gas emissions by 40 percent in 2020, compared to 1990 levels. The desired share of sustainable energy in the electricity sector was increased to 35 percent, while the energy consumption was to be reduced by 20 percent compared to 2008. At the moment, Germany is on its way to achieving these goals. Electricity from sustainable sources has gone up from 7 percent in 1990 to 25 percent in 2013. Sustainable sources are being used more and more often, making Germany less dependable on fossil fuel. However, Germany is still the biggest consumer of coal for energy in Europe. Nine of the 30 most polluting coal-fired power stations in Europe are located in Germany, and coal-generated electricity production for households peaked in 2013, with 162 TWh. After Germany, England and Poland are the biggest consumers of coal in Europe.

Inadequate European policy

The current European policy on climate, energy and air pollution contains insufficient provisions for a switch from coal to other (sustainable) energy sources and energy-saving. To achieve the energy targets set, the share of coal-fired power stations for energy production has to be reduced. The first step would be phasing out the 30 dirtiest coal-fired power stations in Europe. Renewable sources and natural gas as back-up can take over the role of coal in electricity production. This requires restructuring of the ‘Emission Trading System’ (ETS), which has companies pay for the CO2 emission of their business processes. The economic crisis and the free distribution of CO2 rights in the run-up phase have created a surplus of rights in the market, resulting in a lower CO2 price. This has affected the efficiency of ETS negatively. As a reaction, the European Commission has proposed a number of reforms, such as back-loading and market stability reserve. However, this is not enough to get the system back on track. To achieve the desired effect, a minimum of 2.2 billion in emission rights has to be withdrawn from the market before 2021.

Another option is the introduction of an Emission Performance Standard (EPS) for CO2 emissions of existing and new coal-fired power stations. Europe should also discourage investments in obsolete coal-fired power stations and all EU members should have a clear policy linking in with the European climate policy. If Europe does not take measures, all the positive developments, led by the German ‘Energiewende’, will not be sufficient to achieve the target of a 40 percent reduction in CO2 emission in 2020.

Want to read more?

Download the two reports about this topic that were recently published:

  1. Europe’s dirty 30, How the EU’s coal-fired power plants are undermining its climate efforts
  2. Coal Emissions in Europe: A report by Sandbag Climate Campaign