Up to a third of Europe’s coal-fired power plants are facing costly upgrades or closure with the arrival of stricter European Union (EU) pollutant limits.

NEW EMISSIONS REGULATIONS

At the end of April, stricter limits on pollutants were approved by most EU member states. Pollutants it concerns include sulphur oxides (SOx), nitrogen oxides (NOx) mercury and particulate matter. Approval was given on the basis that emissions from large combustion plants lead to increased air pollution and respiratory diseases. The so-called Best Available Techniques (BAT) for large combustion plants sets out the environmental performance standards for large industrial plants. The BAT policy will be in place by 2020. Countries that are heavily reliant on coal, such as Poland, Germany, Bulgaria and the Czech Republic, were opposed to the new limits.

Last month, Bulgaria tried to protect its coal-fired power and mining industries by seeking an exemption from EU plans to introduce stricter pollution laws for thermal power plants. In Bulgaria, coal-fired power plants supply 40% of the country’s total power. The Bulgarian government claimed the cost of retro-fitting or replacing coal-fired power plants would destabilise its economy.

COAL-FIRED POWER PLANTS UNDER PRESSURE

According to a report by the Institute for Energy Economics and Financial Analysis (IEEFA), the stricter standards will decimate the already struggling European coal-fired power sector.

“These regulations will further undermine and in many cases shatter the fragile economics of coal generation across the EU compared with gas and renewables.” Gerard Wynn is 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. Owners will either have to make significant investment and technical changes in just four years, or decide to close the plants altogether or significantly restrict their operating hours. Whichever way they turn, additional cost is unavoidable” Wynn adds.

LOW-HANGING FRUIT

The report identified the biggest polluters, what it called the “low-hanging fruit,” that will face the costliest retrofit investments. A total of 108 power plants with a combined 187 gigawatts (GWth) of thermal capacity are included. They represent about 35% of all larger coal, lignite and biomass power plants by capacity. These plants account for around 18% of the EU’s total power output. They were considered to be low-hanging fruit because their emissions are 40% higher, or more, than the new limits. Companies highlighted to suffer most include Enel SpA (Italy), Électricité de France SA (France), CEZ AS (Czech Republic) and Drax Group plc (UK).

Paolo Coghe, report co-writer, commented: “Cracks are starting to appear in the strategy of investing in old polluting plants to keep them alive with government-backed regulatory schemes. Driven by economic and technological trends, as well as by targeted policies such as BREF, old coal plants are increasingly performing all sorts of acrobatics to keep running.”

Source: Industrial Info Resources – 9 May 2017