Europe's Coal-Fired Power Will Choke On New Emissions Rule

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe's power industry body has warned against proposals by the European Commission (EC) to introduce stricter emissions limits that would rule out coal-fired plants being used for back-up power.

The proposal is to introduce a limit of 550 grams of CO2 per kilowatt-hour (KWh), which would block coal-fired plants from receiving payments under capacity market mechanisms. These mechanisms are used in countries to pay thermal plants to remain available to provide essential backup or peaking power when needed. As renewable energy such as wind and solar power is weather-dependent, thermal backup power is vital for grid stability in many countries and is most often supplied by coal- and gas-fired plants.

Eurelectric is the European power sector association that represents 3,500 utilities with a combined value of $235 billion. The measure "will make almost all thermal peaking capacity in Europe ineligible for capacity mechanisms such as strategic reserves" it stated. It added that if it is implemented into law, it will lead to additional abatement costs on the power sector of around 50 billion euros ($60 billion) between 2020 and 2040, which will translate into a 30 euro-per-tonne ($36) additional cost on top of the European Union's Emissions Trading System (ETS).

"Utilities across Europe are investing billions in renewables and other transition-critical solutions", said Eurelectric Secretary General Kristian Ruby, adding that conventional assets are necessary for security of supply in the transition. "If this rule is applied to existing assets, it will divert investments and do a disservice to Europe's efforts in delivering the clean energy transition."

The association said that with coal excluded, new gas-fired plants will have to be constructed, which it claimed will reduce the amount many utilities are spending on renewable projects and on converting coal-fired plants to sustainable biomass.

"Applying the rule in the middle of the next decade will force baseload assets to leave the market earlier," Eurelectric said. "Arising security of supply issues risk locking-in new, conventional power generation assets. This new conventional capacity, which will consist of gas assets, will lead to a 40% increase in gas consumption in the power sector between 2020 and 2040, with a major impact in Eastern Europe. This investment in new conventional power generation assets will divert investments away from renewables and other clean transition enabling technologies in the range of 20 billion euro ($24 billion)."

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