Coal, No Longer Shunned, Keeps Europe’s Lights on Through Frigid Weather

By Paul Homewood

 

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European demand, especially in Germany and Poland, is one reason why the world is on track for record coal consumption in 2022
Europe passed its first winter test without Russian energy, keeping the lights on through this month’s cold blast. The secret to its success: burning more coal than it has in years.
Consuming large amounts of coal represents a difficult choice for European nations that had promised to ditch the carbon-intensive fuel to contain climate change. Russia’s cut to natural-gas supplies after invading Ukraine and outages at French nuclear plants have spurred the revival.
European demand is one reason why the world is on track for record coal consumption in 2022, the International Energy Agency said this month. “Coal will continue to be the global energy system’s largest single source of carbon-dioxide emissions by far,” the intergovernmental organization said, adding that it expects global demand to flatline before falling after 2025.
The effects of war have turbocharged coal’s comeback. But a flaw in Europe’s approach to the transition toward renewable sources of energy has also played a role.
The continent has invested in wind and solar energy while closing dozens of coal-fired power plants over the past decade. When it is cloudy or the wind is low, and demand is high, Europe doesn’t have the capacity to maintain electricity supplies from clean sources.
At that point, power prices rise to encourage utilities to fire up fossil-fuel plants. Gas mostly filled the gap in recent years. But coal has taken the lead of late—partly because Germany and other countries brought plants back online, and partly because gas is so expensive that it is more profitable for utilities to burn coal.
“Whenever there’s higher power demand, you ramp up coal as much as possible and it jumps into the system before the gas plants,” said Paweł Czyżak, analyst at Ember, a think tank that aims to expedite the shift away from coal.
Coal use rose this month when icy, calm weather quieted wind farms and strained the electricity system. The European Union generated 22% of its power with coal and its sister fuel lignite, also known as brown coal, in the first two weeks of December, said Mr. Czyżak. That is up from 17% in the same period last year and from the 15% average for the whole of 2021.
In Europe’s interconnected market, coal power flowed across borders.
At times, Great Britain meets more than half its power demand with wind. On Dec. 11, that fell to less than 4% just as demand jumped, according to National Grid ESO. The power-grid operator ordered two standby coal units to warm up in case they needed to generate power the next day.
National Grid stood the generators down after high U.K. prices pulled in power from the continent and Norway along subsea cables. Some came from France, which passed on power it had imported from Belgium, Switzerland, Spain, Italy—and in particular Germany, where coal and lignite plants were running full throttle.
In the first two weeks of December, Germany generated 49% more power with coal and 6% more with lignite than in the same period a year ago, according to EnAppSys Ltd.
“It’s a security of supply issue across Europe and the Germans had some plants that they could bring back, so that’s what they did,” said Jean-Paul Harreman, a director at the data analysis and consulting firm. “If the Germans didn’t deliver, then the French would have a problem.”
Wind speeds and temperatures have since picked up while several French nuclear reactors have come back online. But finding ways to meet demand when renewables flicker is one of the biggest challenges facing governments and companies over the next decade, energy executives say.
Neither hydrogen nor batteries, which could store power to be released when wind speeds drop, are ready to be produced or deployed at scale. “I find it hard to say at this point which is the likely winner,” said Pieter de Pous, program leader for fossil-fuel transition at think-tank E3G. Building more grid connections so renewable power can be funneled across borders is also key, he said.
Europe was on track to consume more coal for the second year running before the recent freeze. It has imported the fuel from far-flung producers including Colombia, Indonesia and South Africa after banning Russian coal as part of sanctions on Moscow.
Poland’s pro-coal government, in particular, has touted the fuel as a way to keep the economy running while war rages in neighboring Ukraine. The country accounts for more than 40% of EU hard-coal demand, and has clashed with Brussels over its desire to stick with coal plants and mines.
In April, after Russia cut gas supplies to Poland, the government dropped a ban on burning lignite and poor-quality coal at home. At an election rally in September, Jarosław Kaczyński, leader of the ruling Law and Justice Party, encouraged voters to “burn whatever was necessary to keep warm, except for tires.”
Meeting demand is difficult because Poland no longer imports Russian coal. Prices for the fuel leapt, prompting the government to cap energy bills for 2023. Analysts say pollution levels will worsen if coal prices keep rising, encouraging people to turn to alternatives to warm their homes.
“Whether or not Poland will have sufficient amounts of coal really depends on how severe this year’s winter will be,” said Robert Tomaszewski, an energy analyst at Polityka Insight.
Across Europe, industry is leaning on coal, as well as oil, to keep operating at a time of high gas and power prices. Evonik Industries AG extended the life of the coal-fired power plant at its factory in Marl to March 2024 after the invasion of Ukraine. The German chemicals maker had planned to close the plant, which mainly generates steam for chemical processes, in the summer of 2022.

https://www.wsj.com/articles/coal-no-longer-shunned-keeps-europes-lights-on-through-frigid-weather-11671705322?mc_cid=99b2ce913b&mc_eid=4961da7cb1

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December 23, 2022 at 04:03AM

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