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Your monthly insight into the energy market December 2015
Coal-fired generation faces renewed pressure, while Belgian nuclear plants extended Despite a growing role for renewables, CO2 emissions from power generation in most European countries have not fallen significantly. This is the economic attractiveness of running coal-fired power plants has increased, as coal prices have fallen and the EU’s Emission Trading System (ETS) has failed to make a significant impact on the avoidance of carbon emissions. At present there is a clear drive among politicians and policy makers alike to phase-out coalfired power plants at clearly specified dates. For example the UK has pledged to close its coalfired generation by 2025 and the Dutch lower house has voted in favour of phasing out coal generation, which followed a letter by Dutch academics calling for a closure by 2020. This unprecedented pressure historically only came from environmental lobbyists and green political parties, but has become mainstream in a short space of time. The debate on reducing CO2 emissions is complex, where system and
social costs and benefits need to be considered in a balanced manner. Focusing on the largest polluters reduces the complexity but may not be the most effective. A coherent set of policies and measures need to be developed where longer-term certainty is given to investors and operators alike.
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Meanwhile on nuclear, Engie - parent of Belgium’s Electrabel - has signed an agreement with the Belgian government that revises the tax contribution paid by the country’s nuclear operators. It also allows for a 10-year life extension for units 1 and 2 of the Doel nuclear power plant. Under current Belgian law, nuclear power is to be phased out by 2025. Of the other units now in operation, Doel 3 and Tihange 2 look set to close when they reach the end of their 40year lives in 2022 and 2023, with Doel 4 and Tihange 3 along with the life-extended Tihange 1 following suit in 2025.
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“Despite a growing role for renewables, CO2 emissions from power generation in most European countries have not fallen significantly.”
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