A report by the Institute for Energy Economics and Financial Analysis (IEEFA) has forecast that one third of the European Union’s coal-fired power plants could close by 2021.
EU thermal plants face the prospect of closure if unable to meet the expenses involved in costly upgrades, in order to meet new limits on sulphur and nitrogen oxide emissions, introduced by Brussels last month.
To comply with the new rules by 2021, utilities will either have to invest in new technology to retrofit coal plants, restrict operating hours to under 1,500 a year or close the facilities, the IEEFA said.
“These regulations will further undermine and in many cases shatter the fragile economics of coal generation across the EU compared with gas and renewables,” said Gerard Wynn, a London-based IEEFA energy finance consultant and co-author of the report, “Europe’s Coal-Fired Power Plants: Rough Times Ahead: Analysis of the Impact of a New Round of Pollution Controls.”
“The cost of compliance will be prohibitive for many of these installations, given the market outlook and other headwinds,” he added.
The sector is already reeling in Europe, with a record 10 GW of capacity shut last year, along with pledges by governments to phase out the fuel.
To meet EU emissions targets under a global climate pact, the Paris Agreement, a quarter of current EU coal capacity needs to shut by 2020 and all of it by 2030, the Climate Analytics think-tank said this year.
Energy and environment economic research organisation IEEFA analysed around 600 installations in Europe which burn coal, lignite and biomass.
It found that 108 of those, totalling 56 GW of electrical capacity and a third of EU coal-fired generation capacity, are responsible for the most SOx and NOx emissions and are at least 40 percent above the EU limits.
Polish power companies PGE and Tauron, Italy’s Enel, Spain’s Endesa, France’s EDF, Czech Republic’s CEZ, Britain’s Drax and Greece’s PPC operate more than half of those plants.
These operators will have to use NOx abatement technology which would add 2-4 euros per megawatt hour to the cost of power generation and/or SOx abatement which would add 6-7 euros/MWh.
When plants exceed both NOx and SOx limits, retrofitting could add 8-11 euros/MWh to generation costs.
Bulgaria to request exemption from EU law on coal plants