Europe: More Coal, Then Less

New Coal Rush Forecast

A new study by German energy consultancy ecoprog GmbH forecasts that coal’s share of electricity generation across Europe will decrease slightly over the next decade. But, says ecoprog, loss of existing nuclear and coal capacity, falling subsidies for renewables, and volatile gas prices will trigger a large amount of new coal capacity in the next few years.

In late 2011, according to ecoprog, Europe had about 330 coal-fired power plants with a combined capacity of 200 GW from almost 950 units. Between 2012 and 2020, the firm says, approximately 80 new coal units will be built, with a capacity of about 50 GW (Figure 2). From 2003 to 2011, by comparison, only 40 units totaling 10 GW were built.

2. Coal rush begins. Coal-fired power plant construction in Europe is forecast to rise sharply in the years up to 2017 following the closure of old coal plants and nuclear plants, notably in Germany. Source: ecoprog GmbH

An important driver for this new capacity is the need to replace old equipment, ecoprog says. The average age of Europe’s coal power plants is 34 years, and by 2020 around 55 GW to 60 GW of coal capacity will have reached the end of its operating life. The LCPD alone will account for the loss of 35 GW by 2016. The loss of nuclear power plants in Germany and Switzerland, oil-fired plants in Italy, and gas plants in the UK will further add to the pressure.

Germany’s Transformation

Germany faces considerable challenges in abandoning nuclear power (the Atomausstieg) and moves its energy production to sustainable sources (the Energiewende). With indigenous lignite (brown coal) and hard coal already fueling one-third of Germany’s 155 GW generating capacity, coal could be seen as an obvious choice to fill the 20-GW hole left by the nuclear exit.

Despite much media talk of money earmarked for climate protection being diverted to build new coal plants, a 2011 report for the German federal ministry of economics and technology suggests that this is an oversimplification. Yes, Germany is likely to build several new coal plants in the near future, but the country’s share of coal-fired generation will decline rapidly—with or without an exit from nuclear power.

The report was prepared by two research organizations in Germany and one in Switzerland: the Institute of Energy Economics (EWI) at the University of Köln, the Society for Structural Economic Research (GWS) in Osnabrück, and Prognos AG of Basel. As far as coal and lignite are concerned, it suggests that generating capacity will fall from 55 GW now to 20 GW by 2030, even if the Atomausstieg decision were somehow to be reversed. Instead, the gap created by growing demand and loss of coal and nuclear capacity will be made up by gas, offshore wind, and especially solar photovoltaics. Similar predictions have been prepared by BNerzA, Germany’s Federal Network Agency (Table 1).

Table 1. Nuclear exit strategy. Germany is considering several approaches to fulfilling energy demand in the absence of nuclear power. Shown are three suggested scenarios for Germany’s energy future developed by BNetzA, Germany’s Federal Network Agency. Scenario A assumes all of the German government’s priorities for climate and energy policy will be implemented and includes a moderate rise in coal-fired energy production. Scenario B starts with the assumptions for Scenario A but assumes a larger portion of renewable power, as well as more natural gas–fired energy production. This would make the system more flexible and reliable, due to a diversified mix of energy sources. Scenario C, the least realistic scenario, assumes Germany will have explosive growth in renewable energy, nearly tripling such resources between 2010 and 2022. It assumes that Germany will not continue to build new fossil fuel–fired power plants through 2022. Source: BNetzA

Other work by the Prognos/EWI/GWS consortium suggests that ecoprog’s forecast coal boom may be overstated. A scenario study published by the consortium in August 2010 showed around 14 GW of new coal capacity planned or under construction. In another study published a year later, however, the researchers lowered this estimate to less than 11 GW and suggested that no investment in new coal capacity was likely before 2020.

Acting against investment in new German coal capacity is public opinion in favor of the Energiewende, backed by the country’s strong coalition of politicians—including conservatives—and environmental activists. BUND (Friends of the Earth Germany) sets up highly organized protests against new coal plants and claims to have halted 11 coal power projects in the past three years.