Phasing out coal in the EU by 2030 at the latest

What happened to coal power amidst Europe’s winter crisis of 2022/2023, and what lessons can we learn for this winter.

The Europe Beyond Coal campaign (BFF) has analysed the way that seven European countries (Bulgaria, Czech Republic, Germany, Greece, Hungary, Poland and Romania) responded to the fossil fuel crisis of winter 2022–23. It finds that despite many headlines trumpeting a return to coal, European coal power generation fell during the crisis-ridden cold season compared with the previous winter – yet many countries are persisting with disproportionate emergency coal measures, which, in most cases, are not necessary to meet electricity demand. A briefing published by BFF proposes a series of structural measures that offer cheaper, safer, and healthier means for countries to secure their energy supplies based around wind, solar, energy efficiency and smart consumption measures.

BFF finds that total European coal power generation was lower last winter than the previous one. The BFF study analyses country-level measures and find that in most instances they were disproportionate. This is owing to a significant drop in power demand driven by mild temperatures during the winter as well as demand-savings delivered by businesses and households, and record electricity generation from solar and wind.

The evolution of the power sector during winter 2022–23 illustrates that fossil gas and coal dependence can be rapidly reduced with a mix of actions to maintain or reduce power demand and enable fast deployment of solar and wind power. These achievements were largely the result of an acceleration in the deployment of renewables, as well as massive cuts in power and energy consumption, which led to a considerable drop in fossil gas use overall. It is particularly noteworthy that citizens in various countries (e.g. Poland, Hungary, Greece, Germany) played a significant role in this progress by either installing renewables to cover their own electricity needs or replacing their fossil fuel-based heating systems with heat pumps.

The EU significantly overachieved its
15 per cent fossil gas consumption reduction target set in July 2022. Even member states that requested and obtained derogations to lower the reduction requirement, such as Greece, managed to significantly exceed the target (-20.9%). But Europe was also undeniably fortunate that a mild winter lowered potential energy demand.

Nonetheless, the lessons are clear: Europe has many other means to secure its energy than relying on burning more coal. It is able to deploy other measures to ensure it does not need to import Russian coal and fossil gas, nor resort to expensive fossil gas imported from elsewhere. Europe has to build more wind and solar and implement efficiency and smart consumption measures ahead of the coming winter. These structural measures are the only permanent and sustainable answer to the energy crisis.

The 2022–23 winter proved that increasing coal-fired power generation – which is a distinct threat to Europe’s climate targets, public health and national economies – was, in most cases, unnecessary to meet electricity demand. With such high carbon prices further boosted following the revision of the EU ETS Directive in 2022 – reliance on coal is bound to exacerbate electricity bills in the coming years. To address this threat going forward, national decisions to prolong coal use need to be thoroughly justified. Any decision to prolong coal use in any European country should fulfil the following criteria – including those units which had their capacity limits lifted or retirement postponed since 2022:

A Resource Adequacy Assessment is performed using the methodology developed by ENTSO-e and shows that the prolongation of the lifetime of coal plants is necessary to ensure security of electricity supply.

If coal prolongation is deemed necessary through a Resource Adequacy Assessment, then the additional coal plants that are necessary should operate under a strategic reserve scheme, i.e. they should not participate in the electricity market. This measure is necessary in order to prevent any operation of the coal plants beyond what is needed to ensure security of supply, with the aim of gaining profits from the electricity market.

Europe’s power sector needs to be free from coal by 2030 and from fossil gas by 2035. These are necessary milestones towards limiting global warming to 1.5°C, to ensure predictable and affordable energy, and to decrease energy-related air pollution which will help reduce health costs. In order to get there, we need to be investing significantly more in wind and solar power, efficiency and savings, energy storage, as well as upgrading and expanding our electricity grids. The recently published BFF report, Freedom from Fossil Fuels, details how this can be achieved. The following section provides a summary of the report’s main findings.

If we deploy the proposed package of measures described in the report and below, paired with enabling measures such as grid expansion, demand response and flexibility, we can reduce our fossil gas and coal use by 35 per cent and 44 per cent respectively by 2025, compared to 2021 levels. This is similar to the amount of fossil gas and coal that Europe imported from Russia in 2021. More than half of this reduction can be achieved based on the transformation of the power sector.

European governments, municipalities, financial institutions, utilities and businesses, as well as citizens should deploy an extra 481 GW of solar (459 GW in the EU-27), 102 GW of new wind capacities (78 GW in the EU-27) and nearly 29 million heat pumps (24 million in the EU-27) between 2022 and 2025. This means that every day, Europe needs to install 14 wind turbines and 37 large solar plants to cover areas where they have the lowest environmental impact, such as car parks and/or degraded land. In addition, nearly 54,000 homes need to either be solarised, equipped with heat pumps or deeply renovated each day. This scale of industrial project is achievable in a continent where each day nearly 45,000 new cars are manufactured, and more than 12,000 gas boilers are installed in homes.

Despite the significant potential that wind power presents, the rate of deployment over the past ten years – stagnating at an annual rate of 12–18 GW – remained well below the 30 GW WindEurope says must be installed every year to meet the EU’s 2030 renewable energy target. New wind projects have been facing growing difficulties in recent years, including long and complex permitting processes, a lack of spatial planning, underinvestment in grids, and even governments actively hindering new investments. These hurdles have led to permitting times ranging from 30 months to 10 years in European countries. For these reasons, WindEurope foresees a cautious deployment of 26 GW annually on average in Europe.

The RE Power EU Plan aims to shorten the average permitting period across the EU (up to 1 year) and proposes that member states should give priority status to certain types of renewable energy projects and frame them as overriding public interest initiatives. While there is an urgency to accelerate the deployment of renewable energy, it must be done with the full involvement of citizens and communities while ensuring the protection of nature.

There are a number of measures that need to be quickly embraced by national and European decision-makers in order to ensure energy security and significantly bring down coal and gas demand, while eliminating the continent’s dependence on Russian fossil fuels:

Accelerate solar PV deployment: Cross-sectoral policies are necessary in order to secure coherent and robust deployment frameworks that remove existing barriers, including permitting, grid modernisation, workforce training, supply chain build-up and financial support – especially at the national level. These frameworks should include specific provisions to support installations by households (prioritising vulnerable households), communities, and small and medium enterprises (SMEs).

Urgently fix the barriers slowing down wind project deployment: National and local governments, grid operators, wind developers and utilities must come together to solve existing barriers and ensure wind (in addition to solar) is identified as a strategic priority, in particular onshore wind. This means investing in transparent, digitalised, and well-staffed planning, and faster permitting procedures, including community energy projects, without compromising biodiversity, community participation and social safeguards. Decision-makers must also develop a stable electricity market, which would in turn restore investor confidence in the European wind market. Boosting community support through shared financial benefits is equally important.

Maintain emergency measures to cut energy demand: Targeted, temporary emergency measures aimed at reducing energy demand for the coming two winters must be continued. In 2022, EU governments agreed to a set of voluntary energy reduction targets: a 15 per cent reduction in fossil gas demand, which was recently extended until 31 March 2024. This should be transformed into a structural measure (to be increased gradually to achieve a 2035 fossil gas phase-out), including an obligation to reduce electricity demand by at least 5 per cent during peak hours through demand-side flexibility and energy savings. Combined with the structural measures proposed in the Freedom from Fossil Fuels report, they would reduce European hard coal demand by 44 per cent and fossil gas demand by 35 per cent, a level at which there would be no need to build more gas import infrastructure in Europe, such as gas pipelines and LNG terminals.

Unlock public and private finance for the transition: Governments, banks, investors and insurers must deliver the necessary investments in the energy transition (renewable energy, efficiency in industry, building renovation etc.) that will secure deployment at an unprecedented scale. This includes funding for enabling technologies (e.g. grids, storage, demand-side flexibility, digitalisation), as well as workforce training and the expansion of the European supply chain.

Coordinating author
Alexandru Mustață

Source: Text is from the summary and conclusions of Beyond Fossil Fuels Campaign briefing.

Link to briefing: https://beyondfossilfuels.org/wp-content/uploads/2023/04/What-happened-t...