Renaissance of coal or 15 minutes of glory?
According to The Economist, Europe has some kind of golden age of coal or coal renaissance. Since coal is by far the most polluting source of electricity with more greenhouse gas produced per kilowatt hour than any other fossil fuel, this is making a mockery of European environmental aspirations to reduce (compared to 1990) gas emissions of the EU Member States by 20 percent. Pursuant to theStatistical Review of World Energy 2012, in 2011 consumption of coal in the EU Member States has increased by 3,3 percent compared to 2010, and during the year 2012 by another 3 percent. Today Europe consumes more coal compared to coal’s share in the U.S. electricity production; whereas the amount of electricity generated from coal is rising at annualised rates of as much as 50 percent in some EU Member States.
How did it happen? Reduced coal price was the main factor when America shifted to shale gas, a relatively cheap source of energy. When coal demand slowed down in China, the U.S. exporters had to look for new markets and proposed cheaper coal to the EU Member States.
It was good news for Europe. Quite a number of European states seem give preference to cheaper though most polluting fuel over more expensive but „cleaner“ natural gas from Russia. Many European gas contracts were negotiated years ago with the RussianGazprom; when gas prices have dropped after the „shale gas revolution“ in the U.S.,Gazprom promised to cut contract prices by around 10 percent. Yet gas prices have stayed high. In November 2012, according to Bloomberg New Energy Finance, power utilities in Germany were set to lose 12 Euros when they burned gas to make a megawatt of electricity, but to earn 14 Euros per MW when they burned coal.
High coal consumption rates are also determined by low CO2 allowance prices in the EU. Although the EU plans to increase price of emission allowances, some EU Member States are against these plans. One of them is Lithuania’s neighbour Poland. Today the country produces 92 percent of energy from coal and plans to invest 24 billion Euros for the construction of coal-fired plants. Germany is also considering construction of the above power plants. Although they will comply with the new standards, plans of the EU leader would even more increase tolerance to coal.
The EU plans to become the leader in promoting clean coal technologies and expects quite a lot from CO2 decontamination technologies capable of reducing harmful emissions by 90 percent. So far it is not clear on whether these plans will be realised in all plants (and when). Under a European Union Directive which comes into force in 2016, utilities must either close coal-fired plants that do not meet new EU environmental standards or else install lots of expensive pollution-control devices.
However, one of the main arguments in favour of coal is that coal reserves would last 120 years, gas – 60 years, and oil reserves only 40 years.
Coal to replace nuclear energy?
Many EU Member States want to get rid of nuclear power. At the beginning of January German environment minister Peter Altmaier said “never again” to nuclear power. Similar moods are observed in Switzerland and Belgium. Lithuania held a referendum on the construction of Visaginas Nuclear Power Plant (VNPP); so did Italy. Nuclear power referendum in Bulgaria (27 October) has become non-binding since turnout didn’t pass the required threshold. Fukushima Daiichi disaster (Japan) has been taken as a serious argument against nuclear power, but Japanese Government expects to resume works of all nuclear power plants.
If Lithuania refuses plans to construct Visaginas NPP it could use coal to partially meet its energy needs (90 percent of coal is imported to Lithuania from Russia).
The position of the Greens would be very important for the decision-makers. Although the Greens don’t support nuclear power, they realise what harm could be made if majority of EU Member States chose coal – the most polluting of all the fossil fuels. Therefore some of them give preference to the risk-related NPP’s over environmental damage caused by coal. According to the article of the environmental activist George Monbiot published in The Guardian, “the energy source to which most economies will revert if they shut down their nuclear plants is not wind, water, wind or sun, but coal.” So, what is worse for the environment?
The interest in the shale is increasing in our region (especially the possibly to generate gas). Lithuania is currently involved in the exploration works and imports electricity generated by Estonian oil shale fuelled plants. The share of the Estonian energy is growing in the Lithuanian energy market: per year it has increased from 13 to 18,7 percent. According to representative of Eesti Energia Dmitri Lipatov, shale would be useful as long as price of the greenhouse gas emission allowances does not exceed 30 Euros per MW.
Thus, shale is also a pollutant but governments take all efforts to address this problem. It seems that Estonia managed to solve it. EUR 110 million investment to reconstruction of the Narva Power Plant has considerably reduced the amount of sulphur and carbon dioxide emissions and oil shale ash.
Let me remind that major share of the Estonian power is generated from the oil shale-fired power plants: 1600 MW Estonian Nuclear Power Plant and 1620 MW Baltic PP.