Spain Shuts Down Half of Its Coal Power Stations
Dr Jody Muelaner posted on September 01, 2020 |
Advanced economies abandon coal while global use continues to grow.
(Image courtesy of Getty Images.)
(Image courtesy of Getty Images.)

In June 2020, Spain shut down seven of its 15 coal power stations. Another four have given notice to cease production, putting Spain on track to be free of coal within the next few years.

This is a common trend around Europe. In 2015, the UK pledged to phase out coal and started shutting down coal-fired power plants, converting them to gas or co-firing them with biomass. Inspring 2020, the UK went for more than a month without using any coal to generate electricity and the country plans to completely stop using coal by 2024. Belgium has moved more quickly, eliminating coal from its electricity generation in 2016—followed by Austria, which ended coal use earlier this year. Other countries with commitments to end coal use by 2030 include France, Canada, Denmark, Finland and Hungary.

Germany has committed to stop using coal by 2038 but is continuing to build more coal power stations. While Europe and North America are moving away from coal, globally its use continues to rise. Rapidly growing Asian economies, including China and India, are relying on coal to fuel their development. Coal is maintaining a relatively constant share of electricity generation at about 38 percent, and is growing in absolute terms as energy demand increases with economic growth. Today, coal remains the largest source of electricity and heat for many industrial processes including steel production.

Coal is often considered the dirtiest form of energy. For every unit of electricity or heat that coal produces, it releases more carbon dioxide than almost any other fuel. This disproportionate impact on climate change is often seen as the major reason to move away from coal, but it also releases a range of toxic airborne pollutants. These include mercury, lead, sulfur dioxide, nitrogen oxides, particulates, and other heavy metals.

This air pollution kills over 300,000 people a year in China alone. In the United States, where coal is also a major source of power but air pollution regulations are much stricter, the deaths caused by burning a ton of coal are about 10times lower. Despite this, coal still kills around 15,000 people a year in the U.S. The economic impact of healthcare costs is a huge reason to abandon coal. For every person killed by coal, there are many more living with chronic health conditions it causes, with a massive impact on the economy. These are hidden costs borne by society that aren’t directly seen when comparing the cost of electricity from coal to other sources. For example, the annual cost of producing electricity from coal in the U.S.is approximately $200 billion, but the hidden healthcare costs of coal are between $350 billion and $880 billion. This means there is a very sound economic case to be made for removing subsidies and increasing taxes on coal.

The move away from coal is driven predominantly by fundamental economics, although these are amplified by emissions trading schemes and other measures. The major economic problem for coal is competition from renewables such as wind and solar. Both coal and renewables involve significant capital expense, which must be paid for through the sale of electricity. The issue for coal is that there is also the cost of buying the coal, meaning that when the electricity price drops below the coal price, it is cheaper to shut down the plant. Because renewables have no fuel costs, when energy is available, they can lower their price until they can sell their electricity. The more renewables come online in different locations, the more frequently coal power stations will be priced out of the market and must shutdown, meaning that an even smaller amount of operational time must cover their capital costs. Fossil fuels are set to get increasingly expensive.

A number of incentives are making coal particularly uncompetitive in the European Union and its regional trading partners. The European Union Emissions Trading System (EU ETS) mandates that heavy emitters such as coal must carry additional emissions trading costs. Strict air quality regulations also increase the operational costs of running coal power plants. Measures include a ban on subsidies for coal mines and power generation—although countries such as Georgia, Serbia and Ukraine appear to be ignoring these rules regarding state aid. The pressures have resulted in the closure of many coal power stations and mines across Europe.

Although it may seem that developing nations such as China and India are falling behind on decarbonization efforts, it is important to remember that they are actually largely on track according to the Paris Agreement plan. This major global agreement recognizes that developing nations may not yet have reached peak emissions. Each country is expected to publish intended nationally determined contributions (INDC) and progressively reduce them. For example, by 2030 China plans to be only just reaching its peak of emissions, while Norway will have already cut its emissions by 40 percent. China is still at the stage of increasing its fossil fuel use as it modernizes its economy, and has been focusing its efforts on expanding electric railways as well as wind and solar production. In fact a recent study suggests that China may achieve peak emissions between 2021 and 2025.

Carbon Intensity

Fossil fuels contain hydrogen and carbon in different ratios, meaning that different quantities of CO2 are released when they are burned. Other combustion products such as nitrous oxides (NOx) are also released in smaller quantities but can be much more powerful greenhouse gases and may therefore make a significant contribution to the global warming potential of the emissions. Quantities of NOx emissions and other pollutants are strongly influenced by the quality of the power plant and any scrubbing equipment used to clean up its emissions.

The efficiency of the power plant in converting the chemical energy in fuel into electricity also affects carbon intensity. Embodied carbon in the power plant infrastructure and the transport of any fuel also impact carbon intensity, indicating that even fully renewable power generation may have some positive carbon intensity. Only generation that involves some sequestration of carbon can achieve negative emissions.

These factors all mean that the carbon intensity from a particular fuel can vary widely. The median carbon intensity of electricity generated from coal is about 1,000 g CO2eq/kWh, but it can range from 675 g to as high as 1,690 g. Natural gas has a considerably lower median carbon intensity of about 470 g CO2eq/kWh, but this can be as high as 930 g, meaning the worst performing natural gas generation has significantly higher emissions than the best performing coal power. Natural gas contains less carbon than coal and it also often operates at higher efficiencies. Most combined cycle power plants are powered by natural gas. The major reason some natural gas generation performs poorly is when significant leakages occur. Natural gas is predominantly methane, an extremely powerful greenhouse gas. Methane leakages occur at every stage in natural gas extraction—from transport to storage—and the bulk of emissions occur during extraction. There are particular concerns over leakages in shale gas extraction and widely differing estimates for how much leakage occurs. However, carbon capture and storage (CCS) can greatly reduce the carbon intensity of coal and may provide an important bridging technology to help meet climate targets.

Carbon intensity of electricity production. (Image courtesy of IPCC.)
Carbon intensity of electricity production. (Image courtesy of IPCC.)

Future-Proofing Energy Investments

Although the rise of coal in developing economies may cause concerns, the picture is not as bleak as it may seem. Although power plants are long-term investments, in many cases the fuel source can be changed. It will be possible for many of the traditional coal power plants being installed in China and India to be reconfigured. For example, the UK’s largest power station Drax has been converted from coal to biofuel and also fitted with a pilot carbon capture system that currently captures a ton of CO2 every day. Ultimately, it is hoped that the plant will capture over 16 million tons of CO2 each year.

Similarly, the natural gas fueled combined cycle gas turbine (CCGT) plants being installed in advanced economies will be reconfigured to run on hydrogen. In both cases, these power plants will provide vital functions such as stabilizing grid frequency through inertia and frequency response, and acting as dispatchable or peaking power plants to plug the gaps in supply from intermittent renewables. These ancillary grid services will be in great demand when the bulk of our energy is supplied by wind and solar. Although energy storage methods such as pumped storage hydroelectricity and batteries can provide energy buffering and frequency response, they add considerable costs and their availability is resource limited.

With both economic and environmental factors, coal is likely to have a limited role in the future energy system. Carbon capture and storage may, however, extend its relevance somewhat to provide dispatchable power to supplement renewables.

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