Coal surge in Europe temporary, says consultant
By Marie-Martine Buckens | Wednesday 13 February 2013
The massive use of coal seen in recent months in the EU is not expected to last, according to Nigel Yaxley, consultant and director of the Association of UK Coal Importers, Coallmp, and former head of the Euracoal lobby. This is so for several reasons, one of which is the obligation for member states to comply with EU environmental regulations, which are expected to force many coal-fired power plants in the EU to shut down.
“Coal is still used widely in Europe,” Yaxley told
Europolitics.“Around 28% of the electricity generated in the EU comes from coal-fired plants and this percentage probably increased in the last few months of 2012, although we do not have all the data yet.” There are three reasons for this recent trend: the sharp increase in the price of gas, a considerable decrease in the price of coal, correlated to the collapse of the price of carbon. In the UK, which has a reasonable balance between gas and coal, coal is being used increasingly. The situation is relatively comparable in Spain, adds Yaxley.
Asked what he thought about recent statements by Jean-François Cirelli, president of Eurogas (see
Europolitics 4582) criticising the massive influx of cheap coal from the United States that is forcing gas-fired plants to operate only at peak hours, the consultant reversed the question: “How do we explain the rise in the price of gas? The price of coal has always been relatively low thanks to an extraordinarily liquid global market that functions well. For gas, on the other hand, there is an oligopoly of gas suppliers that continue to link the price of gas to the price of oil.” This situation could change over the longer term judging from the policy put in place recently by Norway’s state-owned energy company, Statoil. Although gas demand in the EU dropped by 10% between 2008 and 2012 due to the economic crisis, the Norwegian firm announced a week ago that its natural gas sales in Europe rose by 10% in 2012. It claims its success comes from offering more flexible prices than its main competitor, Russia’s Gazprom.
The price of carbon is also an important factor. If it rises, electricity producers will switch from coal to gas, said Yaxley. Euracoal, the lobby of European coal producers and users, has strong objections to the Commission’s proposal to postpone the allocation of 900 million tonnes of CO
2 from the years 2013-2015 to the years 2019 and 2020 under the Emissions Trading System (ETS). Its point of view has struck a chord with MEPs.
According to the consultant, another factor will come into play in Europe’s changing energy landscape: the implementation of EU environmental regulations. Yaxley particularly mentioned Directive 2001/80 limiting polluting emissions from large combustion plants and Directive 2010/75 on the most polluting installations, which will replace the IPPC Directive (2008/1/EC). In the latter case, the final cut-off date is 2026.
Germany ranks first in coal consumption, followed by Poland and the United Kingdom, according to the latest figures (2011) from Eurocoal (see link below). The leading producer of lignite (176.5 million tonnes), Germany also produces 13 mn tonnes of hard coal and imports 42.6 mn tonnes. Poland produces 62.8 mn tonnes of lignite, 75.7 mn tonnes of hard coal and imports 15.5 mn tonnes. The United Kingdom still produces around 13 mn tonnes of hard coal and imports 31.7 mn tonnes. Greece produces and consumes only lignite, but in large amounts, ie 56.8 mn tonnes. Countries like the Netherlands, France, Belgium and Italy are totally dependent on imports. Coal consumption is very low in the Baltic states, less than 0.3 mn tonnes. Tables are available at
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