Coal phase out in the European Union

CONTEXT

By signing the Paris Agreement, the European Union has joined the international community in officially committing to the goal of limiting global warming to “well below 2°C and to pursue efforts to limit temperature increases to 1.5°C above pre-industrial levels.”

For the EU to achieve this goal, it will need to rapidly decarbonise its power sector. A significant portion of the EU’s emissions comes from coal, particularly coal-fired power plants, and phasing out coal in the electricity sector is one of the most cost-effective methods to achieve emissions reductions. Reducing coal usage will also provide significant benefits in terms of air quality, health and energy security.

The EU has over 300 power plants (as of July 2016) with 738 separate generating units. These are not evenly distributed across the individual member states and those most reliant on coal are Poland, Germany, Bulgaria, the Czech Republic and Romania. Germany and Poland alone are jointly responsible for 51% of the EU’s installed coal capacity and 54% of emissions from coal.

This map was made using data from the EU coal-fired power plants database hosted and coordinated by Climate Action Network (CAN) Europe. To view a full page version of the map click the chain icon in the bottom right hand corner or simply click here.

THE TASK AHEAD

Continued use of coal for power generation is not compatible with sharply reducing emissions and the EU needs to develop a strategy to phase out coal at a faster rate than it is currently doing. According to modelling completed by Climate Analytics, the EU will exceed its Paris Agreement-compatible emissions budget for coal based electricity generation by 85% in 2050 if all existing coal-fired power plants continue operating to the end of their full life span. If currently announced and planned plants are built in the coming years, this number will rise to almost 100%.

For the EU to remain within its carbon budget, member states must first shelve plans for any additional coal-fired generating capacity and secondly, must start actively shutting down currently operating units at an increased rate. Analysis suggests 25% of currently operating coal-fired power units need to be shut down by 2020, rising to 72% by 2025, before a complete shutdown by 2030.

DEVELOPING A COAL EXIT STRATEGY

Climate Analytics developed a methodology to determine a phase-out schedule for coal power plants in the European Union. The critical question is: which criteria should determine when individual units are switched off? From an Earth’s atmosphere perspective, this choice is irrelevant as long as emissions are being reduced at the pace required. However, from the view of the policy makers, plant owners and other stakeholders, this is a decisive point.

The report suggests two possible strategies for how the EU could achieve a complete phase out of coal use in electricity generation, proposing a shutdown date for each coal-fired power generating units.

Both methods evaluate units on emissions performance and profit generation potential. The first approach, a so-called Regulators Perspective, prioritises shutting down the most carbon intensive plants first, where as the second approach, the Market Perspective, prioritises shutting down the least valuable plants in terms of revenue generation potential.

TOP 20 POWER PLANT SHUT DOWN YEAR COMPARISON

Below are the top 20 coal-fired power plants (as of July 2016) by generation capacity and their respective shut down year based on business as usual (BAU), and Paris Agreement compatible Regulator and Market strategies. More detailed information on coal phase out unit by unit is available here.

(1) Note: many “plants” are on the same “site” or in the same “complex.” Sometimes they are considered different plants – sometimes with different owners – and in other cases they are considered the same plant. Financial ownership shifts all the time and, with this, the number of “plants” may also change. Our estimate is 315. This analysis is based on the number of actual units: 738 (operating and under construction).