Coal set for comeback but decarbonisation remains target
Coal is heading for a short-term comeback as Europe looks to cut its reliance on Russian gas and oil but the Ukraine crisis could hasten decarbonisation in the long run, according to energy analysts.
European Union leaders will meet in Versailles in France over the next two days to discuss their joint defence policy. They will also agree at the summit to phase out the EU’s dependence on imports of Russian gas, oil and coal, according to Reuters.
But it is a tough task as the EU sources about 40 per cent of its gas imports and one-third of its oil imports from Russia. It also sources about half of its coal from Russia but oil and gas are the main sources of thermal energy for many European countries.
Concerns over energy supplies have prompted calls on the continent to postpone coal phase-outs while quickly ramping up clean power.
Italian Prime Minister Mario Draghi said last month that the country could reopen some coal plants to help bridge its looming energy supply gap and cut its dependence on Russia. The Polish government has also approached Australia for alternative coal supplies.
In Germany, where coal-fired power plants were to be phased out by 2038 at the latest, the economic ministers of the 16 German states called for the operations of both coal-fired and nuclear plants to be extended.
German Vice-Chancellor and Economy Minister Robert Habeck said late last month that coal plants could run beyond 2030 but the country’s ultimate goal was greater energy independence through renewable power.
Michaela Holl, a senior associate at the German think tank Agora Energiewende, said there were discussions in several countries to slow the phase-down of existing coal capacity while ramping up renewables faster.
“This could see greenhouse gas emissions from coal-fired generators decline slower than anticipated … but it would not compromise Europe’s climate ambition as the EU Emission Trading System sets an absolute emissions cap on the sector.”
Lauri Myllyvirta, a lead analyst at Centre for Research on Energy and Clean Air in Helsinki, said there was a chance that the Ukraine crisis would increase emissions from existing power plants in the next one or two years, but over the rest of this decade, the phase-out of fossil fuel power plants would happen faster than expected.
“The impact of the conflict and the sanctions on fossil fuel markets has been a dramatic increase in prices … However, the increase in the price of fossil gas relative to coal means that power generation is shifting from gas to coal, which increases emissions in the short term,” he said.
Gas prices in Europe hit an alltime high on Monday in the aftermath of Russia’s invasion of Ukraine.
Oil and other commodities prices soared as the United States said it was willing to ban Russian oil imports.
But Myllyvirta added that Russia’s assault had created a new determination in Europe to reduce reliance on fossil fuel imports from Russia in the future, a direction consistent with Europe’s decarbonisation goals.
“Germany already announced targets to get to 80 per cent renewable electricity by 2030 and 100 per cent by 2035, which also means a complete phase-out of coal and gas-fired power generation,” he said.
The EU aims to reduce carbon dioxide emissions by 55 per cent by 2030 and become carbon neutral by 2050. To achieve its climate targets, it needs to bring down its fossil fuel use and imports.
“Today’s crisis raises specific questions about imports from Russia and what policymakers and consumers can do to lower them,” the International Energy Agency said in a report last Thursday.
The report suggested 10 points to reduce the EU’s reliance on Russian natural gas, from supplies, to the electricity system and end-use sectors.
The measures include no new gas supply contracts with Russia, replacing Russian supplies with gas from alternative sources, and accelerating the deployment of new wind and solar projects.