This briefing analyses the worst case scenario impacts of recent announcements by Germany, the Netherlands, Austria and France regarding emergency gas saving measures that may increase coal-fired power generation over the coming six to eighteen months.
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Limited increase in coal power in Europe
The war and gas crisis in Europe underline the importance of energy resilience and self-sufficiency. As the Russian invasion of Ukraine rages on, Putin continues to use fossil fuels as a weapon. It now seems highly likely that Russian gas supplies to Europe will be futher cut prior to winter.
In response, several EU countries have announced plans to ensure that their gas storage facilities are filled as quickly as possible to avoid a shortage of supply over winter. To achieve this, gas currently used for electricity generation may need to be injected into storage, with electricity produced by burning coal instead. These are temporary measures and will not jeopardise Europe’s longer-term climate commitments. However, this crisis demonstrates that fossil fuels do not bring energy security.
Minor increase in coal planned
14 GW of coal-fired plants have been placed on standby in Europe. Running at 65% capacity throughout 2023, they would generate 60 TWh of coal-fired electricity, which is enough to power the EU for about one week.
Limited impact on emissions
The increase in emissions in 2023 would be 30 million tonnes of CO2, representing 1.3% of the EU’s total CO2 emissions in 2021 and 4% of annual power sector emissions.
Key coal exit deadlines still on track
No European country has reversed its commitment to phase out coal by 2030 at the latest. The current crisis has acted as a catalyst for an accelerated European clean energy transition.
Senior analystEurope finds itself in this urgent situation due to past energy policy mistakes. Despite numerous warning signs, EU member states ignored the risks of over-reliance on imported gas and neglected the need to rapidly replace this with domestic renewables. Consequently, it now faces the difficult, emergency decision of temporarily relying on coal while substantially ramping up its clean energy deployment. Mistakes Asia cannot afford to repeat.
Limited increase in coal power in Europe
The consequences of Europe’s over-reliance on imported fossil gas
Putin’s energy blackmail has left the EU with few options. Had renewable energy capacity been rapidly expanded, Europe would not need coal to keep the lights on.
Germany, Austria, France and the Netherlands have recently announced plans to enable increased coal power generation in the event that Russian gas supplies suddenly stop. This would allow gas that was being used for electricity production to be diverted elsewhere, in particular into gas storage facilities so they can reach the required 90% full levels by November.
In total, 13.5 GW of coal-fired plants will be placed on stand-by in supply reserve facilities, adding 12% to the EU’s existing coal fleet (109 GW) and only 1.5% to its total installed power generation capacity (920 GW).
Germany’s parliament passed a new energy law on 8 July. This includes the Replacement Power Plant Provision Act, which will enable 8.2 GW of coal-fired plants to be placed on stand-by in a supply reserve facility – both hard coal (6.3 GW) and lignite (1.9 GW). The lignite plants will only be reactivated as a last resort if the hard coal units are not sufficient to meet electricity demand. The new energy law also includes a higher renewable energy target of 80% by 2030.
The Netherlands has amended existing legislation that, since January 2022, had prevented its hard coal plants (4.5 GW) from running above 35% of their maximum capacity. They will now be permitted to run at full capacity until the end of 2023.
France will reopen its 595 MW Emile Huchet 6 coal unit but only for this winter.
Austria’s 246 MW Mellach plant will temporarily come out of retirement and run on coal rather than gas.
These plants will only generate electricity in emergencies. At other times they will remain on stand-by.
Short-term measures will not have long-term negative impact
The use of coal is only a last resort, short term measure, with consensus in Europe that the only way to extricate itself from cost and security crises is to get off fossil fuels. Germany remains firmly committed to its coal exit plan. The government has reiterated, “the coal exit in 2030 isn’t wobbling at all. It is more important than ever that it happens in 2030.” The Netherlands is not amending its 2029 coal phase-out date. France is only allowing Emile Huchet to be in reserve for this winter. And Austria has clearly stated that the Mellach plant is coming out of retirement “so that in an emergency it can once again produce electricity from coal (not gas)”.
These temporary measures will only result in increased coal burning if Russia cuts gas supply further. If this does not happen the coal plants will not come back online. If all the plants do operate and run at 65% of their 13.5 GW capacity, it would result in 60 TWh of additional coal power generation in 2023. This equates to 14% of 2021 EU coal electricity production and 2% of 2021 EU total electricity production. From a climate perspective, the net additional CO2 emissions in 2023 would be approximately 30 million tonnes, representing 4% of 2021 EU power sector emissions and 1.3% of total 2021 EU CO2 emissions. So while it would be preferable to avoid any increase in emissions, the temporary uptick will not derail the EU’s longer-term climate goals.
Demand for Asian coal is overestimated
While coal-producing countries in Asia may see the fossil gas crisis as an opportunity, a closer look at the energy landscape in Europe shows that could be premature. It was recently claimed that Indonesia’s Ministry of Energy and Mineral Resources revealed a plan to increase its coal production target following a supposed request from Germany to buy up to 150 million tonnes from Indonesia this year. A more up-to-date communication from the Indonesian embassy in Berlin states the figure is only 5-6 million tonnes. And Ember’s analysis does not see Germany requiring the initially reported amounts of hard coal to compensate for Russian gas being cut off.
For one, the currently operational hard coal plants have been generating at maximum capacity since the second half of 2021 due to skyrocketing gas prices making coal power generation in Europe economical for the first time in years. This means that they will have little scope to increase generation and any additional coal power will need to come from the plants included in the German government’s proposed gas replacement reserve plan.
The total hard coal capacity that will be moved into this new German supply reserve is 6.3 GW. If all those power plants run at a load factor of 65% throughout 2023, that would result in an additional 36 TWh of hard coal power generation. This equates to an approximate increased coal requirement of 13.5 million tonnes. For October 2022 to March 2024, this would be 54 TWh and 20 million tonnes. Germany imported 39 million tonnes of hard coal in 2021, around 50% from Russia.
In addition, EU power plant operators started stock-piling hard coal early this year (in March rather than June) in anticipation of Russian coal sanctions and increased power production. And northwest European coal inventories have risen to 6.6 million tonnes, their highest levels since November 2019, as vessel arrivals outstrip withdrawals. These cargoes are predominantly from Australia, South Africa and the US. All these findings raise the question why Germany would need 150 million tonnes of hard coal from Indonesia. Total annual EU coal imports are not even that high.
As one of the world’s largest LNG exporters, Indonesia is also considering efforts to allocate gas to Europe. Although it is understandable that countries direct resources towards rising demand, any profits from additional coal deliveries will be short lived. And many Asian countries are likely to be detrimentally affected by Europe’s demand for global LNG supplies.
The EU is accelerating its clean transition
The current crisis has acted as a catalyst for an accelerated European clean energy transition. Fossil gas is no longer viewed as a viable transition fuel and instead Europe is implementing a much faster transition away from both coal and gas.
In May, the European Commission published its updated REPowerEU communication. In those plans, it had already incorporated an increase in coal power (+105 TWh) and falling gas power (-240 TWh) without derailing EU climate objectives.
“Despite temporarily higher coal use in power generation, the climate ambition levels are reached since REPowerEU leads to investments in renewables and energy efficiency beyond the Fit for 55 proposals.”
The proposals include a massive ramp-up in wind and solar deployment, with renewables accounting for 69% of electricity production by 2030. And a recent Ember report shows that nineteen European governments have accelerated their decarbonisation in response to the Covid-19 pandemic, gas crisis and Russia’s aggression
Dave Jones Ember’s Global Programme LeadThe COP26 announcement of ‘coal power phasedown’ still stands strong, even though there may be a short term uptick in Europe. What has changed is that Europe is now focused on a coal AND gas power phasedown.
The EU finds itself in this incredibly difficult situation as a result of historic energy policy mistakes. Instead of driving a rapid increase in renewables deployment years ago, gas was hailed as the ideal bridging fuel as Europe transitioned (slowly) from fossil fuels to clean energy. This over-reliance on imported energy supplies exposed the region to huge economic and geo-political risks.
The impact of this crisis is being felt across the world and the consequences of Europe’s past mistakes should be a valuable lesson to other regions, especially Asia. Cripplingly high fossil fuel prices are here to stay. Domestic renewables can deliver energy security and economic resilience, whilst reliance on fossil fuels creates risks of instability and energy poverty.
For the additional net CO2 emissions calculations it has been assumed that any additional coal-fired power generation will be replacing an equal amount of gas-fired power generation.
Carbon intensities used are:
Hard coal = 0.83 tCO2eq/MWh
Lignite = 1.1 tCO2eq/MWh
Fossil gas = 0.37 tCO2eq/MWh
Other fossil = 0.7 tCO2eq/MWh
2021 EU-27 CO2 emissions = 2,400 million tonnes (source: IEA Global Energy Review 2021
2021 EU-27 power sector CO2 emissions = 720 million tonnes (source: Ember analysis of EU-ETS data)
A factor of 1 tonne of hard coal = 2.65 MWh of electricity has been used to calculate the additional hard coal consumption.
65% has been chosen as the worst-case scenario capacity factor as this is a high annual capacity factor for European hard coal and lignite plants, especially those that are old and/or coming out of retirement. To put it in context, in 2021 the average capacity factors for EU plants were 36% and 57% for hard coal and lignite respectively. It is assumed that plants in the Netherlands are already running at 35% of their coal-fired capacity so the increase in coal generation will only be 30%
2.4 GW of the listed German hard coal plants are currently operating so not all their generation and associated CO2 emissions will be additional to current levels. Consequently, their inclusion in the analysis may actually over-estimate the additional impact of those plants.