The European Union expressed determination to eliminate domestic demand for Russian fossil fuels by 2030, but it implies slowing down the coal phaseout process at least in the short term.
As the energy crisis escalated last autumn, high gas prices prompted utilities to fire up coal power plants that were held in reserve, increasing pollution and greenhouse gas emissions. Now, after Russia invaded Ukraine, the European Union rolled out a plan to cut demand for Russian gas by two thirds this year alone and to become independent from fossil fuels from the country by 2030 at the latest.
European Commission President Ursula von der Leyen even said yesterday that the date should be pushed forward to 2027. Top officials in Brussels and EU member states have acknowledged it would require turning back to coal on a temporary basis. Germany already announced it would work on setting up strategic coal reserves.
Germany requires massive investment in fossil fuel infrastructure to become energy independent of Russia
Furthermore, the European Union said it would replace some of Russian gas imports with liquefied natural gas (LNG) from other sources. All the measures under preparation imply more investments in infrastructure such as pipelines and LNG terminals.
Nord Stream 2 is completed, but it has now been put on hold indefinitely. Giving up on the pipeline, which was supposed to carry gas from Russia to Germany, means it has become a stranded asset.
Two opposing priorities
If the EU, its member states and the industry invest in fossil fuels to end their reliance on Russian energy, the decarbonization process and the energy transition must suffer. The European Commission did say it would also accelerate energy efficiency measures and the deployment of renewables and green hydrogen, but it is difficult to believe it can prioritize LNG and coal at the same time as green energy.
On top of that, more coal translates to higher CO2 emission costs and a rise in prices for households and firms.
The ongoing energy crisis and the economic fallout from the war in Ukraine are likely making the already sky-high inflation worse, eating away at energy investment potential. The giant Next Generation EU funding plan for the recovery from the pandemic, worth EUR 750 billion, was already an emergency measure, so it is questionable whether the EU administration and member countries can fund their newest ambitions.
Renewable energy industry groups and international organizations have been warning that the rate of green energy investment is much too slow for the EU to meet its 2050 decarbonization goal and for the world to avoid the worst effects of global warming.
Germany leads energy policy turnaround in EU
German energy companies are already considering the possibility to get retired coal-fired thermal power plants back online, use those in reserve more and delay the scheduled decommissioning of some facilities. Handelsblatt reported that the overall capacity could jump by 8 GW to 34 GW by next winter.
The German government intends to phase out fossil fuels entirely in the energy sector by 2035
The trouble is also that just under half of the country’s coal comes from Russia, but Germany’s coal plants in reserve run mostly on domestic lignite. In last year’s coalition agreement, parties making up the current government vowed to phase out coal by 203o. Recently, in light of the Ukraine war, it said it would work to decarbonize the energy industry altogether by 2035, compared to the previous “well before 2040” goal.
Slovenia and the Czech Republic declared in January that they would both end coal use by 2033. According to the pledges of other European countries, coal will be used after that only in Poland, Turkey, Serbia, Montenegro, Bulgaria, Bosnia and Herzegovina and Kosovo*.
Romania to bring coal units out of retirement
Minister of Environment, Water and Forests of Romania Barna Tánczos said this week that his country would temporarily restart idle coal-fired power plants, citing a force majeure and the plans to reduce dependence on gas and oil imports from Russia. All power plants that are close to completion, of which most are renewables, must be brought online by the end of the year, he added.
Romania earlier said it would phase out coal by 2032.
Local media learned that the Mintia coal plant, which was closed last year, would be restarted.
Troubled coal plant operator Complexul Energetic Oltenia will increase capacity by 300 MW in May, Minister of Energy Virgil Popescu revealed. The government also approved EUR 2.66 billion in restructuring aid for the company after years of disputes with the European Union on the legality of the support package.
Italy doesn’t rule out boosting coal power capacity utilization
Italy’s Minister for Ecological Transition Roberto Cingolani said the country’s two active coal-fired power plants in the country would temporarily be “brought up to full capacity” if there is “an absolute lack of energy.” He stressed that getting retired facilities back online, which Prime Minister Mario Draghi suggested earlier, would be too costly.
The scheduled closure of a coal plant in Germany and another in the United Kingdom has already been delayed, S&P Global’s analyst Glenn Rickson noted and estimated that there would be more such decisions.
The United States Energy Information Administration said it expects the country’s coal exports would rise over the next two years.
Western Balkans stalling coal phaseout process
Most countries of the Western Balkans are heavily dependent on coal. Serbian President Aleksandar Vučić said the government is looking to import lignite to make up for the shortfall from a series of outages and delays at coal mines.
North Macedonia declared a state of energy crisis last year and turned to coal imports to increase the utilization of its power generation capacity. The country recently pushed back its coal phaseout date by three years to 2030.
The Federation of BiH delayed the shutdown of two coal power units indefinitely
Kosovo* produces a whopping 94.8% of its electricity from coal. Both its coal power plants are old and are experiencing frequent outages, and the government left the plans to reconstruct them in play.
The House of Representatives of the Parliament of the Federation of Bosnia and Herzegovina voted to prolong the operation of one unit each in state-owned Elektroprivreda BiH’s coal plants Tuzla and Kakanj. They were scheduled to be shut down at the end of next year. The company is also not giving up on the construction of the Tuzla 7 plant.
In the Republic of Srpska, the country’s other entity, the Center for Environment filed a lawsuit against the government for approving the environmental impact study for coal plant project Ugljevik 3. The plan to build it was revamped last year.