No New Coal Plants After 2020, EU Utilities Promise, But Policy Challenges Remain
Power utilities from all but two EU countries have promised to stop investing in new coal plants after 2020, as part of the continent’s push to meet its emission reduction targets under the Paris agreement.
“The power sector is determined to lead the energy transition and back our commitment to the low-carbon economy with concrete action,” said António Mexia, president of Eurelectric, an industry association that represents 3,500 utilities across the continent with combined value above €200 billion.
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“Europe’s energy companies are putting their money where their mouths are,” said Eurelectric Secretary-General Kristian Ruby. “History will judge this message we are bringing here today. It is a clear message that speaks for itself, and should be seen in close relation to the Paris agreement and our commitment to provide 100% carbon-neutral electricity by 2050.”
“It is now clear that there is no future for coal in the EU,” said Climate Action Network-Europe (CAN-E) Director Wendel Trio. “The question is: what is the date for its phase out in the EU, and how hard will the coal industry fight to keep plants open, even if they are no longer economically viable?”
Euracoal Secretary-General Brian Ricketts said the continent will rely on “conventional sources” of energy until “we see a new energy system—with lots of energy storage—that works at an affordable price.” But a renewables industry insider told The Guardian “the debate about coal is over,” though “it would be good to see a phase out of existing coal plants.”
Ricketts is the coal executive who famously warned his members their industry “will be hated and vilified, in the same way that the slave traders were once hated and vilified” in the wake of the Paris agreement. Climate analysts say Europe will “vastly overshoot” its Paris target if it fails to phase out all its coal plants by 2030.
Only the power companies from Poland and Greece declined to sign on to the Eurelectric initiative, The Guardian reports. The Eurelectric initiative also faced initial opposition from Germany, “which is relying on coal to bridge a move away from nuclear energy to renewables under the ‘energiewende’ transition.”
In an opinion piece this week on Euractiv, CAN-E Coal Policy Coordinator Joanna Flisowska argues that coal must no longer be subsidized under the continent’s updated Emissions Trading Scheme (ETS). The redesign was the subject of a “trialogue” this week among representatives of the European Parliament, the Council of Ministers, and the European Commission.
“The scheme is in dire need of improvement in order to remain relevant,” Flisowska writes. “Tackling the large surplus of unused allowances and increasing the annual reduction rate are crucial elements of such a repair.”
But coal funding has been a stumbling block in negotiations so far, she writes.
“This is because the redesign offers a unique opportunity to finally exclude investments in the modernization of coal power plants from the ETS transition funds. But those who profit from the current subsidies for coal power put up a fight to defend the status quo.”
The transitional rule that allowed those subsidies was supposed to support modernization and diversification of electricity generation in Central and East European states, but produced €12 billion in coal subsidies between 2013 and 2019. It was only to run until 2020.
The failure of that provision, known as Article 10c, “cannot be a surprise,” Flisowska states. “The experience to date clearly demonstrates that the funds are being largely misused to subsidize fossil fuels, including coal. According to the Commission’s own calculations, in 2013, only about 10% of the investments through Article 10c were related to clean technologies or the diversification of the energy systems.”
Poland got nearly €7.5 billion out of the total subsidy and directed some of the funds to the Belchatow power station, the EU’s biggest emitter of greenhouse gases and other air pollutants.
The Eurelectric action and the CAN-E critique were backgrounded by a climate scoreboard released yesterday by the Brussels-based MaxiMiser low-carbon development project. It found that only 11 EU states published 2050 emission reduction strategies by 2015, as required by EU law. Only two of the 11 were what MaxiMiser considered “actionable”, only three contained ambitious climate and energy goals, only six were data-driven, and only three had adequate scope.
“Strong decarbonization strategies for 2050 and beyond are the backbone of EU climate action, so the fact that we are missing several key vertebrae is worrying,” said Imke Lübbeke, head of climate and energy at the WWF European Policy Office.
“A good low-emissions strategy should be in line with our Paris agreement climate goals, enforceable, transparent, and developed with business and civil society input. A few countries are getting it partly right, and some—for example, Germany—have already produced updated plans which are a good deal stronger than the 2015 versions. But a lot more must be done to ensure others catch up.